Responding to the Response to the Response

Should I keep kicking the Fair Tax? Why Not?

The FairTax does not increase the price of everything you buy by 30%

It almost certainly will, owing to wage inflexibility.

The FairTax does not put an increased burden on the poor. It literally “untaxes” them.


The FairTax does not destroy the middle class.

However, the middle class is where the saving rate and Fair Tax intersect to the produce the maximum effective tax rate.

Scientologists had nothing to do with it.


What is the truth behind the “you get to keep your whole paycheck” concept

Either you get your gross pay cut down to your current net or the price of everything your employer sells goes up 30%. There is no free lunch, no matter what the Fair Taxers try to tell you. And given the reality of wage inflexibility, the prices will almost certainly go up.

Retired Americans living on their investments and savings are not “double taxed” by the FairTax.

See above.

The FairTax rate will not have to be 40, 50 or 60 percent.

The idea that the Fair Tax rate will be 23% is based on a single paper that no one beside Jorgenson has ever seen.

The FairTax will not “destroy” our economy, no more than nutritious food would damage a starving child.

No, but it is certainly going to cause some shockwaves. Where do people get this idea that you can radically upheave 20% of our economy without a ripple?

This is standard nonsense from the Fair Tax crowd. But here’s what go me laughing:

Don’t you just love the idea of watching the moving vans pull up to those law offices on K Street after the FairTax is implemented? All those thousands of lawyer-lobbyists packing their gear to move off to greener pastures somewhere else … weeping at the loss of their six-figure incomes earned by manipulating the current tax system for the benefit of their clients.

Hahahahahahahaha. Hohohohohoho. Heeheeheeheeheehee.

Neal, do you think the lobbyists got rich by giving up? Do you think they won’t still be lobbying for every subsidy and regulatory exemption under the Sun?

And do you really think they won’t immediately try to monkey with the Fair Tax? To get certain industries exempted? To get the rate lowered for “important” industries? With the Fair Tax, the sugar industry will be screaming for rate cuts to protect them from “unfair” Mexican sugar. The steel industry will demand exemptions as an “anti-dumping” maneuver. The idea that we can use a magic bullet to curtail the influence of lobbyists — whether that bullet is called McCain-Feingold or the Fair Tax is childish nonsense.

The Fair Tax has become the rallying point of those who hate our current tax system. I sympathize. For a while, I was with them. I can’t stand the current system either. But this is not the way to fix it.