NCPA - National Center for Policy Analysis


October 20, 2006

Junking the current tax system in its entirety would create a modestly graduated tax system with a very broad base - consumption -- says economic columnist Scott Burns. 

By replacing both the income tax and the employment tax (among others) with a single sales tax, we would accomplish these good things:

  • Eliminate the fastest-growing and most regressive tax in our lifetime -- the employment tax.
  • Massively broaden the tax base from only some income to all consumption.
  • Eliminate the corporate income tax and the entrenched, corrupting lobbies that it has engendered.
  • Make visible, for the first time, the size of our collective tax burden.
  • Save the incredible amount of time and money wasted on tax planning and scheming.
  • Create a path for dealing with the unfunded liabilities of Social Security by increasing the tax base that supports it.
  • End the biannual festival of finger-pointing and envy that has become the hallmark of every election cycle.
  • Remove the embedded expense wedge that reduces the competitive position of American-made goods.

The Fair Tax proposal calls for giving all households a so-called pre-bate of what they would pay in sales taxes for the necessities of life.  The pre-bate would be paid to households monthly, eliminating the burden of taxes on our poorest families.

Because of the pre-bate, the new tax would amount to a graduated tax, says Burns.

Source: Scott Burns, "Some call Fair Tax plan unfair," Dallas Morning News, October 19, 2006.


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