I no longer support the FairTax as advertised at http://www.fairtax.org. You can check out

http://fairtaxgoofy.blogspot.com for the truth about the fairtax. I know we need tax reform but the fairtax just isn’t it. They want to replace all federal income taxes including personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes. The FairTax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption.

One of the arguments is that embedded in the price of all goods and services are 23% of taxes that are just passed on to the consumer. Businesses do not pay taxes but just pass on all their costs and then must charge a little more in order to make a profit. Well if that was the case then why do businesses object to paying taxes? And there’s your consumption tax right there already embedded into the price of the product or service. So you choose when to pay taxes by choosing when to consume.

They’ve been pushing this fairtax thing for over 10 years. Mike Huckabee even made it a central piece of his bid for the presidency. Now Libertarian candidate Gary Johnson has latched onto it. I supported it for about 8 months when I signed a petition to adopt it on President Obama’s white house web site. But I was basing my opinion on how the fairtax was described at the web site fairax.org. I didn’t actually read H.R. 25:Fair Tax Act of 2011, the current bill in the house of representatives. It’s sponsored by Representative Rob Woodall (GA-7) and has 69 cosponsors. So apparently I’m not the only one who hasn’t read the bill. But you’d think some of these congressmen would have. At the very least the guy who is sponsoring it should have read it with a fine tooth comb. I emailed him the link and advised him that I no longer support the fairtax and suggested he might want to rethink his support for it. I also sent  emails to info@fairtax and FairTaxNation@aol.com, two of the web site’s email addresses and haven’t heard anything from them yet. I’ve also sent an email to Larry Walters at repeal_16@earthlink.net

I also advised Gary Johnson about it via his contact form at his web site. I also filled out a contact form at President Obama’s white house web site. He had already rejected the fairtax simply because it raised taxes on the middle class. Now he has a lot of other good reasons for not supporting it. I won’t go into all the reasons that the link gives. I’ll just site one example. If you’re a renter then you’re already getting the shaft. And now you’re supposed to pay a 30% sales tax on top of that rent? As the site points out, where is the calculator where you simply could plug in all of your consumption for the year to figure out how you’d do under the fairtax?

One of their arguments is that we’d eliminate and save all the time and expense that we put forth filling out our income taxes. Wealthy people would stop leaving America to protect their fortunes from inheritance taxes. And what a boost it would be for businesses not to have to pay any income taxes. They could bring back overseas profits now to the US instead of keeping these profits in foreign banks. The same forces that caused a business to charge $130 prior to the implementation of the fairtax would cause that business to only charge $100 (23% less) after the fairtax was implemented because the business no longer had to pay income taxes or matching 7.65% payroll taxes. My concern is that instead of filling out an income tax form we’d end up filling out a consumption tax form in spite of what they were saying to the contrary.

You know how high healthcare bills are. Now tack on a 30% consumption tax to that bill. Do you think there would be a collection problem much greater than what we have when it comes to collecting income taxes? I think so. At least you know the government is getting their money because it comes out before you even get your check. True, it gets a little more complicated for non wage earners or the self-employed. But when you are taxing consumption, well people can be jobless but will still be consuming. So the fairtax argument about collecting the fairtax at the point of purchase just doesn’t hold up. What a scam these people continue to run. So I guess the next best choice is a flat tax. At least we’d all be paying the same rate if we simply applied the same rate to all income instead of for example only taxing capital gains at 15%. Personally I’d like to see everyone just pay the same rate on all income once your income is past the poverty level. So once you’re past survival then we all should pay our fair share. End the social engineering. Just keep it simple and fair and people will pay it.