New York Times Reviews FairTax Book
The Gray Lady has published its review of The FairTax Book, and it’s about as bad as you would expect. Here are the most relevant paragraphs:
In “The FairTax Book,” the syndicated radio host Neal Boortz and Representative John Linder, Republican of Georgia, claim that replacing all federal taxes - income, payroll and estate taxes - with a national sales tax would increase the average household’s purchasing power by about 20 percent, end the need for the I.R.S. and turn April 15 into just another spring day. “Once the FairTax takes effect,” they declare, “you’ll be receiving 100 percent of every paycheck, with no withholding of federal income taxes, Social Security taxes or Medicare taxes - and you’ll be paying just about the same price for T-shirts and other consumer goods and services that you were paying before the FairTax.”
For a book that claims in its introduction to be “about honesty,” this statement falls far short. No reputable economist of any political stripe would support it. The honest truth is that replacing the current tax system with any system that raises the same amount of revenue (as Boortz and Linder claim their plan does) may make us better off, but only by redirecting our resources away from dealing with complex filing requirements and improving our incentives to work, save and innovate - not by creating the kind of free-lunch miracle suggested here.
As for “saying goodbye” to the I.R.S., the authors’ plan does so only by passing the responsibility for tax collection to the states. And what a responsibility it would be. In order to fully replace all federal taxes, the sales tax would probably have to be at least 40 percent - possibly even more than twice the 23 percent rate the authors claim, and certainly far higher than anything ever levied by any country. The enforcement problems would be different than those the I.R.S. now faces, but they would not necessarily be smaller. Even at an average rate of around 5 percent, state sales taxes are difficult to administer. Apparently the authors have not talked much to administrators who have to deal with, among other things, ineligible people declaring themselves to be businesses to qualify for the business exemption.
Oh, yes, Boortz and Linder’s claim that their plan would make April 15 another ordinary day is true, because no individuals - just retail businesses - would have to file tax returns. Instead, every day is tax day as people pay their taxes on every trip to the grocery store, the car dealer or even the doctor, since the FairTax base extends to services that nearly all states exempt.
There’s one more problem. Moving to a national sales tax would drastically shift the tax burden away from high-income families and toward low-income families. To remedy this, under the FairTax plan the government would send each taxpayer a monthly “prebate” based on family size, which would amount to $492 per month for a married couple with two children. But Boortz and Linder offer few details about the costs and complications of this vast system of transfers.
In my book, this doesn’t count as a review. It’s just a trashing. It provides little objective information about what the plan would consist of, what the public reaction has been so far (#1 on NYTimes Bestseller list, anyone? Just how often does that happen for a book on tax reform?), or where these contentious counterclaims (like that “the sales tax would probably have to be at least 40 percent”) come from.
And they don’t give any better treatment to Forbes’s book on the flat tax, which they “review” in the same article. Notice a trend here?
Sigh.
now, my question for the gray lady is:
“did you even read the book or did you just read the back and the inside flaps?”
seriously, if this person had googled “fair tax” for five minutes they would be able to find the resources to dispute everything they commented on. a good trashing indeed.
Remember this is the same publication that tried their best to hush-up news of the Holocaust during WWII, and called Stalin a great humanitarian. I’m never surprised by their stances anymore. All I have to do is imagine “what would help Americans most in regaining the freedom we had under the Constitution as written?”, and then think the exact opposite to plot what the NYT is going to write.