“How can the FairTax be enacted?”
The immediate results would be dramatic with respect to Federal taxation; no payroll withholding, no taxing of poor Americans, no more filing tax returns, no more escaping taxes because of loopholes, and a substantial reduction in tax payments for at least 90% of all tax-paying Americans.
The longer-term results may prove even more dramatic; Social Security and Medicare would be fully-funded at current levels for the foreseeable future, interest rates decrease, saving rates increase, American exports increase and foreign imports decrease.
The answer to the strategy question of “How can the FairTax be enacted?” is both simple and hard: one Congressional district at a time with each step forward reinforcing the grassroots works of others.
The larger answer is that only the full participation of the American body politic has the power to overcome the entrenched interests in Washington, D.C. that surround the income tax system.
The good news–and bad news– is that the benefits of the income tax system are largely confined to those in and around Congress while the disadvantages and destructive effects of direct taxation affect the entire nation.
Implicit in such strategy questions are two more fundamental questions: can the many overcome the politically powerful few and, most significantly in my view, does our form of democracy still work when the majorities’ interest requires change by the political elite?
The FairTax is, seen in this light, is nothing less than a test of the fundamental promise of the Framer’s vision of a representative democracy.
Even the potential of the FairTax to solve the current economic crisis by restoring consumer confidence, allowing distressed home owners the increased take home pay to satisfy mortgage obligations and attract a predicted $10-$15 trillion of foreign investment into our economy does not trump the power and profit motives of income tax system defenders.
