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Grst said 03/01, 01:16 AM
At the heart of this debate is the question of just what it means to be ???fair???. Furthermore, an analysis which considers the Fair Tax in a vacuum would be incomplete. It is not only the particulars of the Fair Tax that must be considered, but also how it differs from the present system. In other words, would the Fair Tax be more, or less, fair than the current tax system? I will attempt to address this question over the course of my three arguments.

There is legitimate debate over what it means to be fair. Some only think a system is fair if wealth is relatively evenly distributed across the population; thus considering low inequality to be fair, while high inequality is unfair. Those who hold this view (egalitarians henceforth) believe that a tax code is fair only if it actively works to increase the overall fairness of the economic system, which means redistributing wealth to reach their egalitarian goals. Thus, a highly progressive tax, which places a disproportionately high burden on a small fragment of the population, is considered fair. I roundly reject this notion. In fact, this is a very dangerous social arrangement. I will explain further in my next installment.

Grst said 03/04, 07:28 PM
You made the debate about fairness, so the fact that the fairtax will eliminate the unfairness of the present system is absolutely relevant. The current tax code is inherently prone to carve outs for special interests. At over 66,000 pages long, it is a law which no one can possibly follow. The rich can afford to slip in special provisions without anyone noticing. Meanwhile, individual citizens are forced to bear the brunt of compliance costs of this over complicated system (estimated at $140 billion in 2001) through higher prices. The fair tax would eliminate all these problems, and is thus more fair.

There???s more to fairness than just measuring who pays what, though I will address those questionable numbers in my final post. A system is not unfair simply because it doesn???t sufficiently serve the ends of egalitarians by sticking it to the rich. They are free to argue for that outcome, but defining fairness to mean pursuing that end is a disservice to the word. In the American traditional, fairness has meant equality under the law. The Fair Tax would treat everyone equally and provide openness to the tax system. No special carve outs. No hidden taxes. That is fair.

Grst said 03/07, 02:59 AM
Income taxes are typically given as tax inclusive. An accurate comparison of the fair tax to the present income tax requires using the 23% tax inclusive number. No one will be paying 40% of their income under the fair tax. Under the FairTax the lowest incomes would pay less of their income than the wealthiest. The prebate is calculated to make all spending up to the poverty level tax free and will reduce the taxes paid, by % of income, more for lower income than higher income earners. This is a progressive structure.

The Brookings Institution did not analyze the fair tax as it was introduced, but looked at a generic sales tax. One recent report out of Suffolk University noted, "When households are sorted by expenditure per capita...then the FairTax (with prebate) turns out to be highly progressive..." And they concluded that the FairTax "is more progressive than the current tax law."

Fairness is subjective, but should a reasonable person consider it unfair to make open the tax process, reduce special carve-outs except to the poorest, prevent government from using the tax code to engage in arbitrary political arrests; all while maintaining a progressive structure? One should not.