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Monday, April 23, 2007
Fair Tax Follies
The Atlanta Journal-Constitution
Under the proposed Fair Tax, low-income Americans won’t pay taxes; corporations won’t pay any taxes either. Yet its advocates guarantee that the Fair Tax will generate the same amount of revenue as today’s system. Basic arithmetic requires that somebody’s taxes increase. Who will that somebody be? To read Jay Bookman’s column, click here
At the main Web site of the Fair Tax movement, I plugged the Bookman family financial data into the FairTax calculator. The model reported that the Fair Tax would save me $7,500. As it happens, I also had access to the 2006 tax return of a rather wealthy couple who reported an adjusted gross income of $765,801 and paid $203,021 in federal taxes. What would this couple, a certain George and Laura Bush, pay under the Fair Tax?
Plugging their data into the calculator, I learned that the Fair Tax would cut their federal tax burden by $74,596.
I then began to punch invented numbers into the model, determined to find somebody, even a theoretical somebody, who would pay more. A family with $1.5 million in income, with a $4.5 million mortgage? Nope. Under the Fair Tax, they would save $436,624.
So who would pay more?
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