The national sales tax is bunk.

But what if Fairtax didn’t work? What if, for example, half of the money it says it can collect, turns out to be uncollectable? WOuld then the fairtax have to be 46%?

And if so — would the fairtax have to be 46% or more to make up for it?

Do you know that fairtax taxes the federal government, to pay for the federal government?

Neal Boortz wrote “The federal government itself will become a major taxpayer” (Page 148 in his Fair Tax Book,)

Tax the federal government to pay for the federal government. ??

Isn’t that a bit like me, pretending I can pay myself 10,000 to cut my own grass? I can write the check, I can even deposit the check. And I can do this every day. But at the end of the month, I don’t have 300,000 dollars.

Fair tax advoates want to claim the government “will become a major taxpayer” — but it can’t possibly be so. And the REASON fair tax has to pretend to tax the federal government —they need to show, on paper, that they can collect 2.3 trillion in taxes.

So Fair tax would have to be higher than 23% to remain revenue neutral, just for this one fallacy.

Are there any other fallacies?

Fairtax can only work IF it gets people to pay 460 billion in taxes — on their health care costs. People who get heart bypass surgery, cancer surgery — people who are in nursing home. Famlies fighting leukemia and other expensive illnesses will get incredily hard by the “fairtax”.

One family, who has a child with leukemia — could get a 40,000 SALES tax.

One nursing home patient, who gets by on her social securty — would get a sales tax of 25,000 a year — plus more tax for any other medical costs.

One cancer patient, with surgery, chemo, and radiation, could have 50,000 in “sales taxes”.

So you will have the absurdity of a person who is actually taxed MORE sales tax than they have income.

Therefore, one way or another — these patients will get exemptions, either defacto exemptions — by not paying it. Or dejure exemptions – by getting an official exemption.

EIther way, the Fairtax can’t possibly collect 460 billion-dollars from these folks.

Most likely, the outcry from even attempting to tax an 80 year old stroke victim in a nursing home, would result in Congress exempting all health care cost from the “fair” tax.

Fair tax has to get 150 billion in taxes — from people as a tax on their rent.

Fair tax has to get 150 billion by taxing people who buy new cars — and pretend that new car sales won’t drop because of the high taxes.

Fair tax has to pretend it can collet 200 billion by taxing people who buy new houses — and pretend the huge tax on new homes wont diminish sales.

Group after group will scream bloody murder — and get exemptions.

So with all these inevitable exemptions — Fairtax rate would have to be 60-80%.

Plus other absurdities, like taxing cancer surgery, chemo, nursing home patients. All medical cost would be taxed — can you say irate folks calling congress?

Plus – taxes RENT. Won’t renters be surprise.

Fair tax is not a little nonsense — its a lot of nonsense. It would be hated by 50-80 million people if enacted,and they see what it really does.

Therefore, you may like the consumption tax, but it will not eliminate the Service. And you know better.

I still wholeheartedly endorse the Fair Tax. Simply eliminating the hopelessly confusing tax code and the IRS should be enough to recommend it.

One cannot buy a loaf of bread without paying the income taxes of the baker. …

… Those income and payroll taxes cascade through the production process and eventually make up more of the cost of that loaf of bread than the profits of any of those who worked to produce that bread.

But you’re saying that personal income taxes have nothing to do with the calculation that yields the 22% “embedded tax”– just the employers’ half of the payroll tax, plus the corporate income tax and whatever else. Right?

Even Boortz admits that the 22% calculation includes all income and payroll taxes paid to employees:

We write in The FairTax Book that the competitive pressures of the marketplace will force prices down when embedded taxes disappear from the cost of retail goods and services, and we cite 22% as the average amount of those embedded taxes. Does this 22% include the income and payroll taxes that are paid by employees? Yes, it does.

Also there are direct taxes on businesses. This is not hocus pocus; there are levels upon levels of taxation, all of which is applied to the cost of goods that we buy. Take a look at the taxes that would be eliminated by the Fair Tax and you begin to get an idea.

One added benefit is that because the employer no longer pays the employer portion of the payroll tax, it is possible that wages will increase for Bob and Maragaret OR that their employers will be able to hire more employees. Either way, wage growth or employment growth is a boon to the economy.

Assumption 1: employers will keep all of what was previously income tax withholding and payroll taxes after FairTax. Therefore, the “embedded tax” in products is eliminated.

Assumption 2: employees keep what was previously taxed under the income and payroll taxes. Therefore, Bob and Margaret take home $74,000 each year.

How does the FairTax fairy dust allow both of these assumptions to be true?