The FairTax

Jim Scarantino wrote about the FairTax recently in The Alibi. While I did not really disagree with anything that Jim said, I think free market conservatives and libertarians are misplacing their energies by focusing on tax reform. The letter which was published in the most recent edition of The Alibi

I read Jim Scarantino’s article on “The Fair Tax” [Re: The Real Side, April 17-23] with great interest. I spent nearly eight years in Washington working on tax reform and advocating for taxpayers. Like Jim, I believe America’s tax system is broken. Unfortunately, the political will to seriously reform or abolish our income tax system is sorely lacking in Washington.
The problem is that each loophole and tax shelter now written into the Tax Code was put there because a powerful interest group successfully lobbied to put it there. The home-owners tax deduction is just one popular provision that, rightly or wrongly, will be extremely tough to eliminate in the name of tax simplification.
As if entrenched special interests were not enough of a problem with any fundamental tax reform, the Fair Tax faces the additional obstacle of being untested. On the other hand, more than 20 nations, especially rapidly growing states of the former Soviet Union, have adopted flat taxes. It might work, but making the leap will be a serious challenge.
Rather than focusing on reforming how we collect taxes, we instead need a philosophical shift away from the belief that government is a tool by which one person can live at the expense of others. Indeed, government can insure our lives, liberty and property, but redistributive government policies inevitably destroy wealth rather than produce it.
Simplifying the Tax Code is a good idea, but until we change our view of government, such reforms will remain a distant dream.
Paul J. Gessing
President, Rio Grande Foundation