The response I received to this article was overwhelming. I've gotten hundreds and hundreds of e-mails on the article, every last one of them from a FairTax supporter. While many of the supporters had something negative to say about the article (and its author), one FairTax supporter wrote a number of intelligent, passionate e-mails about the benefits of the FairTax system, and pointed me towards studies supporting the FairTax. That supporter is Al Ose, author of the book "America's Best-Kept Secret: FairTax." I was quite impressed with Al's e-mails, so I invited him to write a pro-FairTax article for Economics at About.com. This is that article.
I have not changed my opinion greatly on the FairTax. I do not think it ever has a chance of being passed and I do not think it will have the great benefits to the economy that its supporters claim. However, I want my readers to have access to the largest amount of information possible, so I'm happy to provide them with alternative points of view.
If you have a question that you'd like answered or a comment on this article, you can contact me by using the feedback form, or by sending an e-mail to economics.guide@about.com. I can pass along any comments or questions you have for Al.
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What do Americans Want in a Tax System?
After spending seven years and $22 million Americans for Fair Taxation found that these were the most important things people wanted in a tax system.
- A tax system that they are able to understand, and is easy to deal with.
- Fairness. They would like to know that everyone is going to be treated the same.
- Clarity. They would like to know all of the taxes they are paying. If it could be shown as one number, in one place, that would be best.
- Compassion. They would like to be sure that the poor and elderly are protected from paying federal taxes.
- A tax system that doesn't change and won't have thousands of lobbyists donating money to legislators' campaign funds to make changes.
- A tax system that doesn't harm our economy or keep our workers from getting ahead.
How does our current system meet these wishes?
Our current tax system violates all of the wishes of the people surveyed.1. No one understands our current tax code. IRS agents have admitted that it is almost impossible to calculate a tax return correctly. Money Magazine has 50 tax professionals determine the taxes for a fictitious family of four every year. Each year they get 50 different answers. According to the IRS you may get money back even if you paid no income taxes, if you meet these qualifications:
"Income and family size determine the amount of the EITC. To qualify for the credit, both the earned income and the adjusted gross income for 2002 must be less than $29,201 for a taxpayer with one qualifying child ($30,201 for married filing jointly), $33,178 for a taxpayer with more than one qualifying child ($34,178 for married filing jointly), and $11,060 for a taxpayer with no qualifying children ($12,060 for married filing jointly). The EITC Eligibility Checklist on the last page of IRS' Publication 596, Earned Income Credit, may be used to quickly determine eligibility for the credit."
Keep in mind that if you make more than $27,700 you're in the top 50% of income tax payers, according to the IRS, and that your group pays 96% of the income taxes.
According to a recent study 60% of congressmen have their taxes done by a professional, while 57% of Americans do not understand the tax code well enough to calculate their own taxes.
Be sure to continue to page 2