FairTax Comments: Badly Misinformed, Badly Biased or Simply Lying

Filed in Tax, Savings by on March 20, 2011

I got FairTax Comments from two people opposing the FairTax. Actually, they look like they came from one person using two names. They (he) did not leave an email, so I could answer.

I will eagerly post FairTax Comments or Comments on almost anything. I gladly admit to my share of mistakes and correct posts. My Internet Explorer post was only the most recent example of this. However, opponent FairTax Comments are almost always badly misinformed, badly biased or simply lying.

For example, the FairTax Comments link to web pages saying that hidden fine print makes the FairTax apply to government purchases and medical services. There can be no hidden fine print in a public law, when everyone can read the FairTax here or in many other places. Therefore, anyone referring to hidden fine print is either badly misinformed, badly biased or simply lying.

It is foolish or deliberately misleading to say government will pay the FairTax. That is because governments collectively get 99.75% of FairTax receipts. We may need some federal, state and local spliting of tax collections, to allocate any FairTax government pays. However, there will be no extra net FairTax on government purchases (except for a tiny 0.25% merchant collection allowance, which I personally oppose). Governments collectively simply pay any FairTax paid to themselves. That is why the person(s) making the FairTax Comments was badly misinfomed, badly biased or simply lying.

It might be better if the FairTax excluded government purchases, except to the extent government competes with private enterprises. However, this is a 0.25% VERY MINOR issue (25 cents on $100), unless you are badly misinfomed, badly biased or simply lying.

There will be no significant extra tax on medical services. The FairTax rate adjusts to be revenue neutral. That is, it will only collect the approximate amount we already pay in income and Social Security taxes. However, the FairTax also gives us a giant free dividend. Businesses start by saving 100% of the income and social security taxes taxes they now pay. They also stop wasting the extra 50%+ of these taxes they now pay in tax administration and tax planning costs. The FairTax cuts these costs by 95%, by having states collect it with sales taxes. For small businesses, with less than $1 million in sales (which may cover most medical service providers), extra tax administration, etc., costs are $382 for every $100 in tax. Without these taxes and extra costs, medical services will cost around 22% less under the FairTax.

This will make total consumer prices, with the FairTax, almost a wash. That is what revenue neutral means. Personal income tax, Social Security, tax administration and tax planning costs are now ridiculously more than any extra medical service or other costs will be with the FairTax. Besides, insurance covers a large share of medical costs. With the FairTax, it will now cover a large share of medical costs plus the FairTax. That is why the person(s) making the FairTax Comments were badly misinfomed, badly biased or simply lying.

Some CPAs and most lobbyists are among those whose FairTax comments show they are badly biased. They want you to keep wasting blood money for accounting and tax returns that no one will need with the FairTax. Many are not thinking about what Reagan and JFK said about a rising tide raises all boats.

CPAs should realize that we all will do far better in much better economic times. We can guarantee these better times by ending $1.2+ trillion in income tax administration and planning waste. Then again, most opposition FairTax Comments are badly misinfomed, badly biased or simply lying.

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