You can be sure that the liberals in this country will do everything necessary to put the FairTax in bad light.

One thing they never address out in the open is the word Freedom. I'm talking about Freedom in the sense the Founding Fathers meant it. The main reason they did not permit an income tax by our Consitution was to keep us a Free people. They had a pretty good idea what kind of tyranny and abuse could be wreaked against our Freedom if an Income Tax system were ever allowed in the hands of politicians. I don't even have to distinguish between liberals and conservatives. We've had 97 years to correct a bad mistake, but it just gets worse every year.

Every school kid, college professor, and elected politician should be required to sign off on what Tax Freedom was intended by our founders.

Here is the best treatise I've read on the subject and it was written 56 years ago. You can access it on the Internet through the following link:

http://www.theunfairtax.us

Dusty Rhodes

Replacing the final consumption tax with a VAT, while maintaining the other tenets of the FairTax (abolishing the income tax, prebates to every household up to poverty level) would close some very glaring loopholes and maybe bring enough momentum to get it passed.
The first loophole is the black/ grey market. For a 23% discount, consumers will seek out vendors that don't charge the VAT. These goods could be illegally imported, stolen, "lost" due to organized crime rings, resold as used goods, or produced in the underground. That's 100% lost tax revenue. Some will be caught, but do you trust the government that spawned Medicare, Medicaid, Social Security, and hundred-dollar DoD toilet seats with sound auditing? With a VAT tracking production, finding the leaks will be easier, and at least some of the tax will be recovered. By allowing business to receive a refund or credit on VAT paid for raw materials that are resold (another point of the FairTax), the net effect is the same as the FairTax and taxes are not cumulative.
The second loophole is the business exemption. Corruption will run rampant when corporate executives discover that they can give themselves tax-free perks purchased through the business. The FairTax fights this corruption through increased policing of a smaller pool of businesses. What happens when the pool inevitably grows? A VAT will reduce the potential for fraud by only triggering a refund when the final product is sold. Capital outlays will still be taxes, but perhaps a form of the current depreciation scheme can be carried over as a stopgap until a better solution can be found.
These are compelling arguments to merge a VAT into the FairTax. I'd be glad to debate Neal on the air about the merits and pitfalls... heck, I'd be honored to travel to Atlanta to do it in-studio (even despite the fact that he's a lawyer). I'll even bring breakfast.

you are not a Conservative. Guess what?! Glenn Beck supports the VAT as do a handful of other Republicans.

It's a simple tactic to give the Fairtax the unpopularity of the VAT. Funny that Fortune (et tu?) would do it.

My only trepidation with the Fairtax is they'll make it a VAT, and reenstate all their other taxes as soon as they can get away with it. Sort of like they did by removing exemptions in exchange for lowering the tax rate, then jacking the rate right back up with a sunset on the rate cuts, with the exemptions now gone forever. All they did in the end was remove a bunch of exemptions and writeoffs.

Pssst, Cottonmouth, you, FDR, and the dp are walking backwards. Socialism is a regression from freedom, not a progression.

A liberal is a person with two perfectly good legs and wants to be carried everywhere.

Shawn Tully, editor at large - Fortune Magazine

Sir,

Regarding your article published on CNN Online (http://www.mutualfundsmag.us/2010/02/05/news/economy/vat_deficit.fortune/index.htm)

You said: "Nancy Pelosi has spoken admiringly of a VAT, and on the Right, former Arkansas governor Mike Huckabee wants the levy to replace the income tax."

After a detailed google search, I could find NO reference anywhere to Mike Huckabee supporting a VAT. In fact, I've found several of his commentaries where he was vehemently AGAINST a VAT. Please note that Gov. Huckabee is a supporter of The FairTax, which imposes a national sales tax only on the final retail sale of a new product or service to the end user. This is very much different from a VAT that charges a tax on each step of production.

For example the dairy farm that milks its cows is charged a VAT when it sells that milk to the processor, and the processor is charged a VAT when it sells its finished products to the retail grocery chain, and the end user again pays a VAT when it purchases the product at retail.

With the FairTax, all of those "B-to-B" transactions are not subject to the FairTax...only the final sale to the end consumer. The FairTax is visible. The VAT is not.

In addition, the FairTax has a provision that refunds all FT sales taxes paid up to the poverty level. The VAT does not. The FairTax is predicated on the abolition of the 16th Amendment abolishing all federal income and employment taxes. The VAT does not.

The FairTax would replace not just income taxes, but also capital gains taxes, corporate income taxes, estate (death) taxes, AMT taxes, 'embedded taxes' that are hidden within production costs, and every other tax on earnings, wealth or asset accrual. The VAT is just another hidden tax that would be added to all of our other existing taxes.

Please either correct your statement or provided support for your claim that Mike Huckabee is a supporter of a VAT.

With kind regards,

Adakin Valorem

"Support the Candidates that Support the FairTax!"

Conservative:
A conservative is a man with two perfectly good legs who,however,has never learned to walk forward! FDR

While I'd rather have no tax increase anywhere at all, at least a VAT will:

a) Be across the board and affect everyone rather than just raising the percentage on the upper income tax levels. Seems fair to me.

b) Impact those who voted for the current administration, and will perhaps get them to think a 2nd time on how they vote the next time they enter the ballot box.

All this will do is hurt the middle and lower income people more than the upper income people.

Backlash 2010 - coming to a polling station near you!