Review of FairTax Book in Crain’s Detroit Business
Here’s a favorable review of The FairTax Book just published in the Crain’s Detroit Business paper:
Some fairly good reading on taxes
By Christopher Crain
October 24, 2005One of the reasons Delphi collapsed is its heavy legacy costs, shared by much of the U.S. automotive industry. The costs hurt its ability to be globally competitive.
The high cost of health care is a serious issue, one I don’t have a solution for.
But what if we could help reduce another cost with perhaps an easier fix?
The cost I refer to is the federal income tax.
On Oct. 31, U.S. Treasury Secretary John Snow will speak to the Detroit Economic Club about ideas for tax reform. A panel of academics will react to his remarks.
If you’re interested in the topic, I suggest that you read The FairTax Book before you go. I know “taxes,” for most people, means dense and dull reading. But authors Neal Boortz, a radio talk-show host, and U.S. Rep. John Linder, R-Georgia, offer an eye-opening look at an alternative tax.
Boortz proposes repealing the federal tax code, the whole schmear: individual income tax, alternative minimum tax, corporate and business income taxes, capital gains, social security, Medicare, payroll taxes, estate and gift taxes. Not a bad start: No more IRS!
Instead, “consumers would pay an embedded personal consumption tax of 23 percent on all goods and services sold at the retail level.” That means from a sandwich to a Ferrari 360 Spider, we’d pay taves on everything we buy. It’s slightly more complicated than this (it also includes a monthly “pre-bate” to all households, including low-income families, to compensate for sales taxes on the necessities).
This could help companies like Delphi and GM compete globally.
The federal income tax that comes out of our paychecks is not the end of the story. For every retail dollar we spend, 22 percent represents embedded federal taxes that are passed along from the manufacturers to the consumer. Add to that the enormous cost to individuals and corporations just trying to adhere to our insanely complicated tax code, a cost estimated at $500 billion (or one-third of what the IRS generates each year).
These costs get passed along to consumers in higher prices. And our companies are at a significant tax disadvantage compared with companies abroad, which don’t have the same oppressive tax code.
The “FairTax” would level the playing field and significantly reduce the cost of manufacturing in the U.S.
Found via today’s Nuze.
