Paul Thomas: Accountant debunks 'Fair'Tax

A Wednesday letter to the editor, "Column wrong on FairTax," is riddled with false and misleading claims.

A national sales tax is an honest representation of what is being promoted by the Wednesday writer and other supporters of the FairTax. But it's not "fair"; taxes hardly ever are.

In relation to the supposed stability of a national sales tax, the writer says "every person - legal or illegal, gardener or doctor, hooker or drug lord - who buys something is paying into the tax system." I seriously doubt anyone believes someone in the drug trafficking or prostitution "business" will charge, collect, account for, report and remit the national sales tax. So the reality is that you have shifted the nonreporting and nonpaying of the income tax to the nonreporting and nonpayment of a sales tax.

The writer also contends the FairTax is "a system where one really decides how much tax he or she wants to pay." But one can't just "decide" not to eat, or not pay his or her utilities or rent. Today, under the income tax system, you get to "decide" how much income tax you want to pay. Make less - get taxed less. Yet I see no one who turns down a pay raise.

The letter further contends "(c)ompanies will want to locate factories in the United States, and job growth would be historic." Businesses react to consumers' demands; that fact will never change. Consumers demanded cheap stuff. To get their wage and benefits cost down, the jobs that could be moved to a lower-wage country were moved "offshore." It helped the decision if those countries were close to raw materials sources, and had less-stringent employment, safety and environmental laws. Sadly, a national sales tax won't bring jobs back to the United States if workers demand higher wages and benefits than can be found elsewhere.

Also, the letter notes that with a national sales tax, "you'll never have a Washington politician try to use the federal tax policy to control behavior. Lobbyists and corporate lawyers would have very little influence." Congress sets laws, and I doubt it'll write a law prohibiting it from changing the law at some future date. So a national sales tax will be ripe for changing to influence the public's behavior. "Evil" things such as alcohol, tobacco, junk food, low-rider pants and any other goods or services will be taxed at some punitive rate in some effort to change behavior. And lobbyists will work to lower or eliminate sales taxes on at least some goods or services. There is nothing in the proposed bill that would prohibit lobbying or changes in the law.

I don't have a Web site or a book pimped by a radio personality to point you to, but there seems to be little need to do anything but ask you to look no further than your own experiences and your own knowledge and apply your common sense to any proposed laws, tax laws or otherwise, to see if they make sense.

Paul Thomas

Watkinsville

• Paul Thomas is a certified public accountant.

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