Back in 1999, Rep. John Linder made headlines with his FairTax proposal. Intrigued by his talking points, I did some research, made my calculations and figured out that his so-called “fair” tax would cost me more than what I was already paying in Federal income taxes.
I took the time to write Rep. Linder and expressed my concerns about his proposal. In return, I received a very polite letter in which he basically explained the FairTax was the greatest thing since sliced bread and that I would benefit tremendously from its passage.
At that point, his letter went straight to my circular file and I put the FairTax out of my head even though I agreed with Linder’s assessment that the current tax code needed to be changed.
After all, it is beyond ridiculous that Title 26 of the Code of Federal Regulations has 20 volumes comprised of thousands of pages of tax rules and regulations which the average American has absolutely no chance of fully understanding. For that matter, I doubt anyone in Congress understands it either.
What Congress does understand is that this huge and confusing tax code is a powerful tool. The ability to tap into what politicians see as an unlimited supply of money at will has created a climate of fiscal irresponsibility in Washington that simply must end.
John Linder’s FairTax may not be the answer, but it is a good place to start a serious discussion about tax reform. Though flawed and unpassable in its current form, the FairTax does have several strong points.
First, the FairTax would abolish the Internal Revenue Service and eliminate the need to file a tax return. The closer we get to April 15, the better that idea sounds. There was a time, many years ago, when I could still do paper tax returns. Then, about six years ago, I reached my breaking point. After two days of work, I found myself staring at a dining room table covered with numerous schedules, forms, instruction manuals, receipts, etc. and I was still not finished with my taxes. Now I, like millions of other Americans, must rely on tax preparation software or paid preparers in order to reduce days of work to mere hours of work.
FairTax would also eliminate all income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes. What’s not to like there? Like many people, I look at my paycheck and can almost hear the clerk in Raising Arizona saying, “Government do take a bite don’t she?” At least with a consumption based tax, I would feel as if I had some small measure of control over how much money I send the Feds each year.
There are problems with the FairTax though. The whole prebate system is a costly, bureaucratic nightmare. The proposed tax exempt expenditures are also a problem. When any exclusion exists, the door is open for other exclusions and, before you know it, you are back to 20 volumes and thousands of pages of indecipherable tax jargon.
Questions also remain about the true tax rate and its economic impact on the middle class. Until those questions are answered conclusively, building adequate public support for the plan will be difficult.
Still, the American public would benefit from a more reasonable, more fair tax plan than the one that currently exists. We may not need FairTax, but we do need a fairer tax.
Kristi Reed is a reporter for the Barrow Journal. She can be reached at kreed@barrowjournal.com.