The Conversation

Sound your trumpets, Fair Tax legions

I've always been more of a Flat Tax guy, but this is really the perfect moment for the Fair Tax legions to sound their trumpets and rally support for their idea.  

Doubtless many twists and turns await in the IRS scandal, but we've already learned things that should make many Americans receptive to a discussion of dramatic tax reform.  Even under the most (absurdly) benign explanation of the scandal, you've got a swarm of low-level employees simultaneously deciding to impose their political preferences through tax code enforcement, while a very long, expensive chain of veteran supervisors remained clueless for months.  Some of those supervisors demonstrably misled Congress after they found out what was going on.  And there are loads of other non-scandalous ways our behavior is controlled through the tax code, including our politics.

In this context, the great virtue of the Fair Tax - a national sales tax that replaces all other forms of taxation - is that it disconnects the IRS from individual lives.  There's no need to monitor our activities, and no way to penalize or subsidize individuals through the tax code.  It's true that the Fair Tax turns businesses into tax collectors, but they already serve that purpose, and frankly they're better equipped to handle it than individual citizens.  The Fair Tax would be a simple levy that's easy to calculate, unlike the unholy nightmare of collecting Internet sales taxes for thousands of state and municipal governments.  Businesses are naturally interested in tracking their sales carefully, and most of them are already well-accustomed to collecting sales taxes.  

I fear that the Fair Tax would inadvertently disguise the burden of taxation by breaking it down into many small portions, paid each time citizens purchase something, as opposed to the quarterly payments that would be made under a Flat Tax that also abolishes paycheck withholding.  But I suspect citizens would still be keenly aware of proposed tax increases under a Fair Tax system.  And the government would have a natural incentive to stay the hell out of the free market's way, because its revenue would be directly and entirely dependent on the national level of commerce.

I'd suggest Fair Tax proponents pitch their idea in the context of the current scandal, and invite us to imagine a day when the IRS doesn't really monitor individual behavior at all.  All that matters is what you spend, and there would be no obligation for record keeping on your part.  Businesses would take it from there, working with a vastly smaller, less powerful Internal Revenue Service.  A Constitutional amendment abolishing the taxation of income would be necessary to implement the Fair Tax, and it would be wise if that amendment also prevented politicians from warping the national sales tax to suit their agenda - no special sales tax exemptions for favored constituents or preferred industries.  Couple that with a balanced budget amendment, and you've got the ultimate software program for restrained government.  It's a tall order, to be sure... but are Americans ready to accept that such dramatic, constructive change is impossible?


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