September 6, 2007 Leave a comment
The so-called “Fair tax,” endorsed by virtually all Republicans running for President, is a joke. Whatever exemptions there may be, a 23% national sales tax and the abolition of the IRS would lead to a massive shift of the tax burden from the wealthy to the the poor and middle class. What I had never heard before, however, is that the role that the (Cult of) Scientology has had in pushing this plan– not all that surprising since the IRS refuses to give them the tax exempt status of a real church. Bruce Bartlett has the details in The New Republic:
tenets of the Church of Scientology are well known: a fanatical hatred
for psychiatry coupled with a creation myth that involves an evil alien
ruler named Xenu and his sundry galactic allies. The basic tenets of
its tax policy are somewhat less familiar. But Scientologists
promulgated and, at one point, heavily promoted a proposal that would
replace all federal income taxes with a national retail sales tax (nrst).
And the theology and tax policy aren't entirely unrelated: Xenu used
phony tax inspections as a guise for destroying his enemies.
proposal happens to be nearly identical to one of the trendiest
conservative tax proposals of the year, the so-called FairTax, which
has been endorsed by John McCain and Fred Thompson, as well as
second-tier presidential candidates Mike Huckabee, Tom Tancredo, Duncan
Hunter, and Democrat Mike Gravel. Georgians John Lindner and Saxby
Chambliss have introduced FairTax legislation in the House and Senate
that would establish a 23 percent national sales tax.
And, just in case you think it is a good idea to have Scientologists make our tax policy, it's not:
For starters, the FairTax is
deceptively calculated. When you think of a 23 percent sales tax, you
think of paying an extra 23 cents on the dollar. That's how every sales
tax in the world works. The FairTax, on the other hand, doesn't
represent 23 percent of the pre-tax value of the item you bought, but
the post-tax value of the item. So, under FairTax, you wouldn't pay
$1.23 for a $1 widget–but $1.30, since the 30-cent tax is 23 percent
of $1.30. How straightforward!
The legerdemain doesn't end there. Unlike every other sales tax in
the world, the FairTax actually applies to everything–every pencil,
every tank–the government buys. Unfortunately, the FairTax proposal
doesn't take into account this increase in government spending. Thus,
it will either provoke a massive cut in federal spending or a massive
increase in taxes.
And what about the poor who bear the brunt of this highly regressive
tax? The FairTax would track every household's monthly income and then
cut checks to minimize the pain, a logistical challenge that will
ultimately resemble some welfare state nightmare. What's more, this
would cost gobs of money, forcing further cuts in spending.
For these and other reasons, every reputable tax expert who has ever
looked at the FairTax has concluded that the true tax rate would have
to be much, much higher than 23 percent (or even 30 percent) to
work–and, even at that unrealistically low rate, the plan would
inspire massive tax evasion. In short, the FairTax is a crackpot scheme
from beginning to end. That would be true even if the Scientologists
hadn't authored it.