I never read your article until now, but I can see how so many FairTax supporters disagreed. There is no point in listing errors, as I see them, in your analysis of the FairTax, but I would like to point out that a large number of the grassroots support is from average middle and upper-middle income individuals and small business owners like myself. I believe we have reviewed the details before lending our degrees of support and I do not believe we have been misguided in our understanding of the proposal. Some of your worst case scenarios are potentially probable, but as you have already had rebutted by others, most of those senarios are covered or economically less likely or impactful as compared to the current system's tax avoidance.
I have been a tax preparer of my financial planning clients for many years and know well the wall created by the current system for the average individual in acquiring wealth vs. the ability to minimize or avoid taxation by those already asset wealthy despite the intent with the current system to punish the most wealthy with the tax on assets and passive income through a redistribution taxation policy. That is the most unfortunate part of the current system. The constant political push to make the wealthy pay their fair share harms the average much more because it inhibits productive behavior and reduces its rewards for the middle brackets relative to the cost of continued taxation on someone with amassed wealth. Ironically, the wealthy indeed get richer under the current system because it is harder for the ones lower on the rung to amass wealth as quickly in the middle brackets because of the tax policy on saving and investing. Holding on to the wealth is costly but still more productive than starting out with little or none.
Also, politicians often admit during this debate that they prefer the hidden nature of Federal taxation as is current because many misunderstand the nature of the amount of taxes they pay. Often a person receiving a small refund of federal taxes comments that thay did not pay taxes this year. They neglect to recognize the money left on the table. They completely disregard the FICA withheld in their view of taxes to their income on tax day. This lack of transparency aids policy makers in increasing GOVT's role.
I agree with you that it will be difficult to gather the needed political courage to approach the debate, but if those with much to lose by removing the current system lobby their normal way, it only re-enforces the need to make our Federal Government more transparent in tax revenue policy and more broad in tax accountability for its citizenry. And those who claim the unfairness on the poor often are speaking merely from the point of not transfering enough from the wealthiest to level the economic playing field. That is the core of every debate on tax policy. What is the role of Government and how can it increase wealth through its tax policy? That is the error. Government is often the problem and never the solution.
