Fair Tax

May 8^th 2015

          A reader writes in support of the "Fair Tax"  advocated by David Perdue and other conservatives and claims that it would be fairer on trade but fails to mention the crippling effect on the poor, and the middle classes. The so called "Fair Tax" concept would remove all current corporate, income, and payroll taxes and replace them with a nation-wide sales tax that in the proposal could be 30% but may range much higher.

          The impact would be devastating to the poor in our midst, and the middle class would lose a lot of purchasing power. The rich of course would benefit since  the percentage of money they spend on necessities is much less, and a large portion of their income is dividend or capital gains which would no longer be taxed.

          Social security and medicare would feel an immediate negative impact as the programs would lose their payroll tax funding mechanisms.  They and other important social programs such as medicaid and welfare would be subject to the whims of the elected officials, most likely resulting in cuts and elimination of benefits.

          There is no doubt that the current tax system is complex and onerous. It needs reform in a manner that helps the country, the people, and business. But, there needs to be more discussion and modeling based on real empirical knowledge to streamline and improve the system before we make such knee jerk decisions. We can’t rely on politicians to make such an important call. It needs to be determined by unbiased, intelligent expert analysis and fully tested before any nation-wide steps are taken.

          Our country runs on taxes. Without a well established and consistent revenue flow to federal, state and local governments our services will suffer, our infrastructure will further deteriorate, and our very way of life will fall behind the standard we all expect.  The "Fair Tax" proposal is not a fair proposal in any sense and we need to think long and hard before taking such a draconian step.