Another FairTax Supporter Speaks Out - 1

The FairTax is a superior tax system for a multitude of reasons. However, the three primary arguments cited against the FairTax are (1) Some people will pay more in taxes (the "regressive" argument) (2) sufficiency of tax resources or (3)prices of products and services would go up. (1) Regressive? Obviously any significant change in the method of taxation will result in some people having their taxes go up and others having their taxes go down. The federal tax code is too complicated, costs too much to administer, and is rife with loopholes which benefit interest groups to the detriment of most citizens. The current income tax system also uses "smoke and mirrors" to hide the total amount of taxes collected. Fair Tax is not regressive, because it un-taxes those living below the poverty level. However, as a middle class income earner, I cannot imagine a more regressive tax system than the current income tax system. As my income rises, my taxes increase at a disproportional rate. I cannot get ahead and cannot break into the next economic level so that I can take advantage of all the tax loopholes - like tax credit for oil investment, etc. So, who will pay more and who will pay less? In my opinion the rich will likely pay a bit more and everyone else will either pay the same or less. However, the extra burden placed on those who are well off will be largely mitigated by simplification of the tax code affecting their business and investments. It will also be mitigated by reducing the cost of administering the tax code (billions of dollars in savings here). And, it will be mitigated by bringing in taxes from previously untaxed sources - for example, visitors who come to the US and buy products or services, and money which has been earned through illegal and otherwise untaxed activities will be taxed as it is spent. (2) Sufficiency of Tax resources: Under either system, the government will collect enough money to operate. That is a simple fact. However, the government will ultimately collect less under the Fair Tax system because they will need less. Removing the huge burden of the internal revenue service will save billions. Business will not need to invest as much toward compliance either, because the code is simple and doesn't require an army of tax accountants and lawyers to interpret and litigate. One change that will suppress taxes is that the Fair Tax system will remove the "smoke and mirrors" of the current system and people will actually see how much they invest in supporting the government - just like with the state sales tax. The government may have to work harder to raise the tax level. Obviously it would be simpler to pass a tax bill if they could fool the people by claiming that they are going to tax the local phone or utility companies instead of the people. Not all people understand that every penny of taxes paid by a business ultimately come out of the pocket of those who are customers of that business.