Would the “Fair Tax” be Fair?

23 Apr

As I understand it, the so-called “Fair Tax” proposal is essentially a national sales tax.  Different goods and services might be taxed at different rates (for example, tax on basic food items would be lower or non-existent), but everyone puts some “skin in the game” by paying their “fair share” of the tax collection revenue.

Now — I like this, up to a point, but I just don’t see it working.  I admit that I have not studied the proposals — at all — but having been a paid tax preparer for a couple of years, and undestanding full well the massive outlays from the tax system back to filers in the form of Earned Income Credit, I have to wonder how “Fair Tax” would deal with this?  Surely, nobody would have the audacity to cut these transfer payments?

Also, on the surface it seems like “Fair Tax” would be retrogressive against people with larger families.  The more kids we have, the more expenses we have, the more “Fair Tax” we pay?

I know — I could study this more.  But I’m taking the lazy way out.  I’m posting my major concerns here.

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2 Responses to “Would the “Fair Tax” be Fair?”

  1. semmie2616 April 23, 2012 at 11:39 pm #

    What do you think of Herman Cain’s 999? I don’t know all that there is to know about it, but it sounded pretty good to me…

    • illero April 24, 2012 at 1:29 am #

      I have to admit that I never studied the 9-9-9 proposal to any extent. I do know that Mr. Cain appeared to be a little bit stumped when specific questions about it would arise. I think as a concept it might work, though it may wind up 7-10-8, or anything somewhat different than 9-9-9. I don’t think the CBO scored it particularly well at 9-9-9 (but, then, I don’t think the CBO has scored anyone else’s tax reform proposal very well, either).

      It seems like there still may be the objections, though, of it being harsher on the less well-to-do than the current system is. And I think Mr. Cain acknowledged that something would have to be done about the people now getting Earned Income Credit — this is HUGE.

      I just seriously don’t think our elected officials in Washington can bring themselves to pass anything that sounds this simple — complication, obfuscation, and accommodation are more like their modes of operation.

      If we’re lucky, maybe someone more knowledgable will come along and comment on the details of something like 9-9-9.

      ff

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