WSJ: "Fair " Tax--from Church of Scientology to Mainstream Republicanism

[BurtWorm]

Interesting economic skepticism from Bruce Bartlett, one of conservatism's earliest defectors from Bushism.


http://www.opinionjournal.com/extra/?id=110010523


MONEY MATTERS

Fair Tax, Flawed Tax
Does adding 30% to the price of every house sold sound like a good idea to you?

BY BRUCE BARTLETT
Sunday, August 26, 2007 12:01 a.m. EDT

Former Arkansas Gov. Mike Huckabee's unexpectedly strong second-place showing in the recent Iowa Republican straw poll is widely attributed to his support for the FairTax.

For those who never heard about it, the FairTax is a national retail sales tax that would replace the entire current federal tax system. It was originally devised by the Church of Scientology in the early 1990s as a way to get rid of the Internal Revenue Service, with which the church was then at war (at the time the IRS refused to recognize it as a legitimate religion). The Scientologists' idea was that since almost all states have sales taxes, replacing federal taxes with the same sort of tax would allow them to collect the federal government's revenue and thereby get rid of their hated enemy, the IRS.

Rep. John Linder (R., Ga.) and Sen. Saxby Chambliss (R., Ga.) have introduced legislation (H.R. 25/S. 1025) to implement the FairTax. They assert that a rate of 23% would be sufficient to replace federal individual and corporate income taxes as well as payroll and estate taxes. Mr. Linder's Web site claims that U.S. gross domestic product will rise 10.5% the first year after enactment, exports will grow by 26%, and real investment spending will increase an astonishing 76%.

In reality, the FairTax rate is not 23%. Messrs. Linder and Chambliss get this figure by calculating the tax as if it were already incorporated into the price of goods and services. (This is known as the tax-inclusive rate.) Calculating it the conventional way that every other (This is called the tax-exclusive rate.)

The distinction is confusing, but think of it this way. If a product costs $1 at retail, the FairTax adds 30%, for a total of $1.30. Since the 30-cent tax is 23% of $1.30, FairTax supporters say the rate is 23% rather than 30%.

This is only the beginning of the deceptions in the FairTax. Under the Linder-Chambliss bill, the federal government would have to pay taxes to itself on all of its purchases of goods and services. Thus if the Defense Department buys a tank that now costs $1 million, the manufacturer would have to add the FairTax and send it to the Treasury Department. The tank would then cost the federal government $300,000 more than it does today, but its tax collection will also be $300,000 higher.

[hfojvt]

1. I would not call it skepticism

just common sense.

Skeptic is "a person inclined to doubt all accepted opinions". Unfair tax is not really an accepted opinion except upon a small group of rich people and other anti-tax goofballs, such as Mike Huckabee, Mike Gravel, and agent Mike.

Hmmm, awful lot of Mike's there. I wonder if Tyson, Jackson, and Jordan are supporter the unfair tax too? :tinfoilhat:

[FormerDittoHead]

2. Thank you (and WSJ) - The "FairTax" people like to suggest they're a "grassroots" movement.. n/t

[beemer]

3. Factual errors in this "report."

Bruce Bartlett seems to know nothing about the Fairtax and one
can only wonder where he got his information.  The
organization founded by Scientololgy to get rid of the IRS is
C.A.T.S. - Citizens for an Alternative Tax System.  The
FairTax group has nothing to do with C.A.T.S.  

Two big proponents of the Fairtax were approached by C.A.T.S.
- Rep. John Linder and Neil Boortz - in order to solicit their
support in the mid-nineties.  After quickly backing off his
association with C.A.T.S., Boortz joined up with Linder to
help found and promote the Fairtax organization.

There is a rumor that Linder is a Scientologist but I haven't
seen nor heard any evidence.

This kind of factual checking is so easy to do that it makes
me wonder what Bruce Bartlett is thinking in writing this
article.  As for the rest of his claims, they can be rebutted
by reading the Fairtax book.

[fairtaxfraud]

4. FairTax is a fraud

I think Bruce is absolutely right. If you think the Scientology thing is strange, the FairTax has many unpublished "Dirty Little Secrets" that haven't seen the light of day in the press. For a quick guide to them see fairtaxfraud.com.

[ourbluenation]

5. True That! Fair tax is only fair if everyone has the same income. n/t

[FormerDittoHead]

6. Welcome to DU. Great link. n/t

[BurtWorm]

7. Nice Web site.

Thanks for joining DU to post in this thread. Hope to see you around.

:toast: