Consumption tax remains the fairest
By Donald Koop
Over the years, Rep. Bob Goodlatte has written about taxes and tax reform. Tax reform is a hot topic and is inevitable. I’m interested in tax reform, too, and prefer the Fair Tax as the replacement for the current income tax.
I have communicated with Goodlatte numerous times, but he remains at best lukewarm about the Fair Tax. He has said he would “vote for it tomorrow” if it came to a congressional vote. This is a safe position for someone who doesn’t really want to support it.
Koop is a year resident of Roanoke County, having retired as an engineer in western New York, and is an activist with special interests in tax reform and constitutional governance.
January 2, 2013 - 6:13 AM
Geez Mr. Koop, the IRS has an annual cost to the taxpayor in the teens of billions. It’s been found that American individuals and businesses spend hundreds of billions in time/money to comply with the current taxcode. It’s also thought that hundreds of billions of tax revenue is missed/not collected in our current system.
Are you claiming that something could actually work better than what’s in place now? But watch as some will come forward to defend the status quo.
First!!
Actually I won’t defend the current tax system. There are lots of problems with it. But I feel the need to point out, the “fairtax” isn’t everything it’s advertised to be either. There is an entire web site devoted to pointing out the problems with the claims made by the “fairtax” people.
http://fairtaxfraud.com/
A couple years ago when this idea was being pushed hard, I looked the thing over and discussed it pretty intensely with a co-worker who is middle of the road conservative. He eventually came to the point where he agreed the system as proposed wouldn’t work and then started arguing against it himself with his fellow conservatives.
The problem with both the current and fair tax systems is that they start from the premise of maximizing revenues, and NOT from identifying and funding only what the national government is authorized – via the Constitution – to provide.
First, identify what you need; THEN figure out how to fund it. With a more limited government, revenue requirements would be lower, which means there may be a whole lot more options.
If we all had the same income, then sure “The Fair Tax” on “consumption at a single rate” would be the fairest of them all. That is not the case, so neither is it the fairest. Far from it. The idea that “The Fair Tax” or any other “requires no paperwork” is truly ludicrous and in no way will it eliminate the IRS. The political machinations for a “pre-bate” should tell you of the inherent inequality in the system. And yet it appears not to. Such a tax would not be “transparent” and would not be any more “difficult to manipulate” than the one we have now. “The Fair Tax” isn’t.
“There are lots of problems with it. BUT….”
Why does your income determine what tax you pay on consumption? We buy a gallon of gas and the tax is the same..when we buy a gallon of milk or paint the tax should be different?
The tax wouldn’t be transparent?? Your sales tax is right on the receipt- how would/couldthis be different?
89 HOO..the Constitution dictates what the fed gov provides? Lovely sentiment but one that is less prevalent as time goes on and going back some 7 decades or so. Look at this past election and its results. Is the majority of the electorate anywhere near parting with SNAP, unemployment benes, gov provided healthcare, housing, transportation?
89 HOO..what way forward to only funding what the constitution recognizes do you see? I see only revolution.
Bud, yes, we have deviated far from the Constitution, and I am an advocating we move back in that direction. Yes, I know it could not happen overnight, and not completely, but I would like to see more than one or two of our elected officials pay more than mere lip service to the Constitution. If that is a revolution, okay; revolutions do not HAVE to be violent.
BUD, It is not that your income can or should determine what tax you pay on consumption per se. But it is clear as crystal that the more income you have, the more you have left after you consume the basic necessities. That is where the tax only on consumption (which would necessarily be high) will impact the poor, working poor and working class the hardest. THAT is what makes it unfair. And the “pre-bates” will be the fight of the century, so buy tickets early.
BUD, I am sorry to tell you this news, but not every transaction in our economy creates a “receipt” and they do not all clearly show the tax “right on the receipt” now. Why will that change if the system does? The ways around it now, will still be the ways around it then and with even more incentive to do it. Will the IRS invade every business and look at every receipt to be sure all sales tax is reported? Another reason the IRS is going nowhere too. Remember the hue and cry over requiring 1099′s to determine actual income and expenses? Or do you think everyone already does those too?
You are right that our over extension and getting things as wrong as could be (if that is your view) goes “back some 7 decades or so”. No, “the majority of the electorate” or those who try to control us, is not “anywhere near parting with” the safety nets, tax abatement, incentives, deductions and whatever services they get.
I believe it would indeed take a real and true revolution to do what 89Hoo and some others have expressed as their ideal. It is just not going to happen.
From #4…”if we all had the same income, then sure the FairTax on consumption at a single rate would be the fairest of them all. That is not the case, so neither is it the fairest..”
From #7…”it is not that your income can or should determine what tax you pay on consumption….”
Alllllrighty then!
Not for nothing, but you might get the point if you read the whole comment instead of parsing it for exploitation. Your #8 is not what I meant.