Mr. Worstall makes sweeping assumptions which have nothing to do with the current FairTax bill before Congress. First of all, no retailer can come in and decide ahead of time what he is going to sell and pay quarterly. That is not how the FairTax works. Any retailer must be licensed and prove to the state sales tax division what his inventory on hand is and how much he as sold. The sales tax is remitted daily to the state and the retailer keeps .25 percent for collecting as does the state.
Obviously there is no tax system that is perfect however, if you compare the current system with evasion as high as 40% not accounting for the dilatorious affect on business with over 12 Trillion U.S. dollars sitting off shore as a result and the highest corporate income tax in the world driving business offshore. I’d take the FairTax option any day.
Again, a VAT taxes the means of production and only people pay taxes, not businesses or corporations which was clearly spelled out by Alan Greenspan in Congressional committee.
Of course, their will always be people like Mr. Worstall that have the criminal mindset that will think of ways to avoid the tax or game the system. However, under the sales tax, it is much harder to game than the current system which is rife with inconsistencies, benefits the most wealthy and punishes hard work, savings and investments — the life blood of any economy.
For instance, WalMart will not be complicit with you or me to sell you items under the table. If they do they loose their license. Furthermore 45 states have sales tax agencies to monitor this activity already in place.
With the income tax it only takes one person to cheat and as one great American stated “The income tax makes more liars out of Americans than the game of Golf.”
Right now most of our necessities and purchases are from the top big box stores unlike in Europe. 90 percent of all of our purchases is from large companies like Target, Home Depot etc…They will not be cheating as it will be to their advantage to sell and receive their .25 percent for sales.
The FairTax is truly the best system which gives me power over how much I pay government due to my spending habits and since we have now broadened the base to such an extent that it will certainly be an improvement over the current progressive income tax that is strangling the U.S. economy and individual incentive.
The FairTax will unleash productivity and allow small business and large to flourish and will become a tax haven for companies from around the world who will headquarter in America with no corporate income tax.
America is founded on the principels of individual initiative and freedom. The FairTax restores the functional relationship between government and the governed and once again puts the individual in the position of sovereign as it was until 1913.
America became a super power with no income tax. Ever since, we incorporated the progressive income tax we have been growing government exponentially. It is time to bring reason and sanity back and a system that cannot be gamed by the lobbyists, special interests and the politicians at the expense of the people they are elected to serve.
I am sure Adam Smith if he were alive today would approve.
Sincerely,
Lori Klein
