THE FAIR TAX

I must admit that I have never really understood how the Fair Tax could benefit the average American. Sure, I want to see the Internal Revenue Code simplified. But I'm not sure that the Fair Tax is the answer. The Wall Street Journal has a thoughtful editorial by Bruce Bartlett in which Mr. Bartlett argues that the Fair Tax is a flawed tax. According to Mr. Bartlett legislation has already been introduced in Congress to implement the Fair Tax. Under this legislation, a rate of 23% would be utilized. Mr. Bartlett argues that the Fair Tax rate is not 23%. He also argues that the Federal government would have to pay taxes on itself on all of its purchases of goods and services, as would state and local governments. According to Mr. Bartlett, Congress's Joint Committee on Taxation, in a 2000 estimate , found that the tax-inclusive rate would have to be 36% and the tax exclusive rate would be 57%. What do you think? Do you favor the Fair Tax?