A commission? That’s your solution? You want to limit the power of government, by having the government talk about wether or not it thinks it’s too big? That’s like having the murder suspect be the judge in his own trial. The people in power are not going to decide that they have too much and give it up.

Agorism and Mr Konkin’s theories aside, I prefer to deal with the world the way it is. As I previously wrote, there are no “used” services and services are half of our economy. Do you really think it plausible that you and your dentist can work out a barter arrangement in order to screw the federal government? I grant you that there are 20 million retail businesses for the Fed to monitor, but the penalties for getting caught are substantial.

There are no used groceries or restaurant meals, no used gas for your car or heating gas/oil for your home. And, there is nothing used at the big boxes which make up 80% of retail sales. How are you going to barter with Wal-Mart?

My opinion is that not many of us would be willing to lower our standard of living just to spite the federal government. My concern over the Fairtax and the illegal evasion issue is that the retailers will decide that 30-43% sales tax revenue is too juicy a target to ignore. Because there is no dual reporting for retail sales, isn’t there a ready market for clever business book keepers?

By the way, I certainly agree with you that the real problem is spending, not taxes. Somehow or other, we need to get the federal government back in a box where they are only responsible for the 18 enumerated powers given them under the Constitution. We need a 10th Amendment Commission to sort everything out!

Cheers!

I call my plan Fairtax-Lite, and it is basically a broad based, 10% consumption tax that just replaces the income tax, with no exclusions, no taxation of governments, no inventory tax credits, a targeted prebate, and phases in over five years or so. I now believe that the consumption tax ought to be a VAT due to the proven less evasion due to the “self policing” nature of the collection process. If 10% is good enough for God, then it ought to be good enough for the federal government!!!

Stay tuned!

In the first place, it can’t work. No nation in the world has ever successfully funded their central government with such a broad based retail sales tax. Six have tried and quickly switched to a VAT. Economists have shown that any sales tax over 10% or so will quickly fold. And, to make matters worse, that 30% sales tax will quickly rise to 43% when the Supreme Court confirms that it would be inappropriate for the federal government to tax State and Local government consumption. We are a republic with a federal form of government, and sovereign powers do not tax each other.

The Fairtax Family Consumption Allowance (prebate)would be the largest cash grant entitlement in our history. Surely Libertarians don’t support another giant welfare program?? And, the Fairtax would also create a group of tens of millions of lower income workers that may never pay any net federal tax due to the prebate, yet they would all qualify for federal government retirement benefits. Is that the kind of “nanny state” that Libertarians support?

As for Charlotte’s claims, if we are to get 100% of our pay/pensions, then retail prices will have to rise by 15-20% on average. There is no free lunch! And as for choosing how much tax to pay, all services would be taxed and services make up roughly half of the family budget. There are no “used” groceries, no used restaurant meals, no used gas for the car or gas/oil to heat homes, nothing used at Wal-Mart, etc. The opportunity to buy used stuff is quite limited unless you are willing to buy your underwear at Goodwill?

Charlotte thinks that investments won;t be taxed, but she needs to read Section 801-806 of HR25, This section sets up a significant implicit service charge (tax) on investment instruments such as CD’s, as well as debt instruments such as mortgages and credit cards. Check it out!

Her claim that there would be no change to Social Security other than funding from the sales tax is wrong. Today, workers pay into the Trust Funds during their work years, and when eligible, receive benefits without making any more FICA contributions. Under the Fairtax, everyone pays into the Trust Funds for all their life. In addition, today’s benefits are based on income, but the Fairtax is funded by taxing consumption. How will benefits be calculated under the Fairtax? Look for a majot change in our current SS concept.

A federal consumption tax may have merit, but the Fairtax scheme is not the way to go. The Fairtax isn’t fair!