Re: Fair Tax Follies - The American Spectator | USA News and Politics
Re: Fair Tax Follies

It’s worth mentioning something that Bartlett wrote when he was guest-blogging for Andrew Sullivan a few weeks ago:

I do think it would be worthwhile to shift to a pure consumption-based tax system. I would do it by exempting all saving from taxation. This could be done by consolidating all existing tax deferred savings accounts–IRA’s, Keoghs, 401k’s, etc.–into one savings vehicle. All contributions would be tax-deductible, all withdrawals would be fully taxed at ordinary income tax rates. Money inside the account compounds tax-free until withdrawn. There would be no limit on contributions, no limit on withdrawals; no age restrictions and so on. Since there are only two things that can be done with income–either save or spend it–all taxation would necessarily fall on consumption if such accounts existed.

Expanding tax-free savings accounts (though not necessarily to the maximal end that Bartlett suggests) happens to be a key tenet of Rudy Giuliani’s tax plan. It seems to me that Giuliani might be able to get some mileage by arguing that while the FairTax people have their heart in the right place, he has a much more practical and politically attainable way of shifting the tax burden toward consumption. It would be, simultaneously, a sales pitch to people intrigued by the FairTax idea and a subtle jab at candidates who endorse the FairTax — which includes Fred Thompson (or at least it did at one point).

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