Friday, July 03, 2009

FairTax in A Minute How does the FairTax affect income tax preparers, accountants, and many government employees?

There are, of course, still some people who are involved in sales tax return preparation and sales tax administration under the FairTax, but many fewer than those involved with the income tax today. Those tax preparers, tax lawyers, and Internal Revenue Service employees, who are typically well educated and well equipped with transferable skills, will have to find other, more productive work. The projected 10.5 percent growth in the economy during the first year of the FairTax will provide plenty of new jobs.

But the heavy compliance costs of the income tax are like an anchor holding back economic growth. We have nothing to show for the $265 billion (greater than the current federal deficit -- $205 billion) that we spend each year measuring, tracking, sheltering, documenting, and filing our annual income. Surely these valuable labor and capital resources can be employed more productively -- for example, in following the money trails left by terrorist, drug, and other criminal enterprises, rather than in tracking everyAmerican wage earner.

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