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on February 14, 2008
First off, I'm actually going to write a review of the book as a book (which is what the section is really for). Then I'll add to the other commentary.
***
I enjoyed this book, just as I did the first FairTax book. It is nice read, and I enjoy Boortz's writing in particular. Probably one of the biggest flaws of the book is the extreme length of what is probably the most important chapter in the book: that is, the chapter that deals with what the authors consider legitimate criticisms to address. Even as an ardent reader and supporter of the FairTax, getting through this chapter was a bit tough. Surely they could have broken it up a bit.

There is nothing abstract in the book. Examples are clear cut and well explained. Having the footnotes in there also really helps, as the authors have highlighted for you, the reader, the same things they read.

All in all, a good read, and highly recommended to both those who support the FairTax and even those who don't. For those that do, this will clear up the major issues, and give you, as the authors say, the ammunition you need to refute some of the claims. For those that don't support the FairTax, you'll have a better understanding of your enemy's idea.
***

Boortz and Linder "ignore" the reviews by various organizations that alter the FairTax in some way. In other words, these organizations established guidelines for their reviews of proposed tax plans that change how the FairTax would work. Imagine it like this: an independent organization is going to rate every car on the road in terms of safety features, but in their guidelines, they state that solid steel bars running down the sides of a car shouldn't be considered. My car, and all the others like it, take a hit in those safety ratings. Why? Because someone decided to cut out an important feature.

The FairTax only deals with Federal income taxes. Excise taxes, such as those levied on alcohol and tobacco, will likely still be there. Asides from almost always being state mandated taxes, excise taxes are exclusive (that is, they are not reflected in the price you see at the counter; you see it only after it is added at the register). Any tax levied by a state, whether it be on income or your various property and licenses, is still valid. The FairTax does not deal with the 50 individual states and taxes they choose to levy.

The thing that will stop Congress from raising the tax rate is the collective displeasure of the American people. Right now, tax increases (when they do occur) often only impact the rich because the current tax code allows politicians to selective target groups with tax breaks and increases. Implement the FairTax, and everyone is paying the same rate (though, as I'll address soon, not the same amount); now Congress would be trying to raise the tax burden of every American. That's a sure fire way to find yourself booted out of office.

Pay as you use items (phones, vending machines, etc) already have embedded taxes factored into the cost of each item. Gambling and lottery winnings get double taxed already: first upon receipt of them (they are a form of income) and then when you spend them (those nice embedded taxes again). Ditto for internet purchases. I purchased my copy of this book off of this website. Rather than drive to a bookstore, I chose to make the retail purchase online: all the embedded taxes that the FairTax would replace are still there.

I admit I'm surprised at the number of people who argue that the FairTax would drive people into a "used" buying frenzy, including things like used gasoline (not sure how that one works, though), and say that is a bad thing. Is it a bad thing for you to save your money by buying used? That's money you can invest, or save to send your kid to college. I work in retail, and people have a voracious appetite for new things, even if they aren't always necessary. Kids want new toys (video games). How many women want to buy used cosmetics? Your favorite author puts out a new book: are you going to wait to try and find it used? Yeah, some people might, but overall,

Now, the FairTax has everyone pay the same rate: 23% (AND REMEMBER, THAT COST IS ALREADY THERE under the current system as companies are just passing their tax burden onto the consumer). There is no difference in a millionaire buying a mop for his maid to use and the stay at home mom who will buy the same mop for herself: they both pay 23%. I've often thought, however, that the class warfare folks should be jumping on the FairTax bandwagon, and here's why:

Ask yourself, who is more likely to buy a new car: the rich guy, or the middle class guy? Who is buying a personal sailing yacht? Rich people will get shafted under the FairTax, even as they are now, but at least now, they will have a choice in the matter. Poor people will see a rise in their bring home income, the prebate to cover necessities, and little or no change in overall prices (with embedded taxes gone, some prices go up, others go down, and some stay where they are. Even those that would change would not change much).

Oh, and one final thing. I've heard it said, and seen it here, that one reason not to support their FairTax is simply because of whom some of the proponents are. Well, first off, the movement is big, and growing, and it includes plenty of normal, everday Americans. Not giving the FairTax any thought because you don't like Boortz and/or Linder is stupid. It reminds me of the comment I heard back in 2000. A friend of mine, rather conservative himself, stated he wasn't going to vote for George W. Bush because we already had one president with the last name Bush. That was his sole reason.

Is that not moronic? I mean, it is one thing to disagree with candidates, and to vote against them because of that. It is a similar, though admittedly not identical, situation here. Boortz and Linder may not be your favorite people in the world, but they are carrying a message. Judge the message for itself, not based on who carries it.
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VINE VOICEon February 12, 2008
If you didn't get (grasp) the Fair Tax idea in the first book, or if you listened to the fearful, or the misinformed, or those who have no understanding of how the economy works and how the present tax system acts as a brake on the economy, then Fair Tax: The Truth: Answering Critics by Neal Boortz and John Linder is a must read for you. In fact this should be required reading on the part of every American who considers himself literate.

One by one, the questions are answered in a logical, calm manner. The misunderstandings and intentional misrepresentations are taken on by Boortz and Linder in a point by point response. While I do have disagreements from time to time with Mr. Boortz when I listen to him on the radio I am 100% on the same page with him on the tax issue. His and John Linders system makes so much sense I can't see how anyone doesn't get it.

This isn't just a rehash of the first Fair Tax book either. There is new information contained in Fair Tax: The Truth.

Well done Neal and John.
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on February 12, 2008
I have a degree in economics and I spent almost 7 weeks in college working with the economic effects of tax policy! Fair-Tax is awsome!!!

This is the best book by far on this topic, far better than the first one explaining the entire concept. Just as with anything else in life, if you are to have an educated opinion on anything, you must first fully research the facts revolving around what you want to talk about. Unfortunately this is not what the pundits, critics, and media surrounding the Fair-Tax have done.

95% of people against the Fair-Tax don't fully understand or have not properly researched this topic before opening their mouth. And the other 5% of people against the fair tax are against the Fair-Tax because they want the government to have a vice grip on the America Public and Private sector in some way, shape or form.

What you really need to do, is just to borrow this book, and read the last chapter. I do want Boortz to get #1 on the best seller list, but for those of who do not want to spend the proper time to educate themselves as they should in this matter, should look to the final chapter. This gives a perspective view of what life would be like if you lived under the fair tax. If you read the last chapter and still are in favor of the Federal Income Tax when you are done, you clearly cannot grasp the full benefit of the Fair Tax to yourself, your loved ones, your friends, your company (or your employer), and your country.

I bought about 30 books to give to people when the first book came out, I am sure I will do the same this time.

Andy,
Atlanta, Georgia
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on July 22, 2011
Since I consider myself more or less an economic moderate who accepts the fundamental proposition that our tax system is fundamentally flawed and needs reform, I figured this "well reviewed" book was worth a look. Rather then give just an overall review, I decided to give an analytical breakdown with direct quoting of the text more or less chronologically.

On xxi on the introduction, the book makes a key point that the Fair Tax proposal is "revenue neutral", claiming that the Fair Tax would simply be a more efficient mechanism for collecting X revenue. Fair enough. But then the book proceeds, on page 18, to wax philosophic of the halcyon days of generations past, when taxes were much lower. It fails to acknowledge that the government provides a lot more services than it did when "the parents of today's baby boomers" worked. So yes, taxes will naturally be lower when not paying for Medicaid/Medicare, veteran's health care, affirmative action programs, great society anti-poverty programs, a military industrial complex developed despite Eisenhower's warnings back in the 1950's, etc. I think criticizing any of these programs is fair game, but mentioning such points strays from the original "revenue neutral' point expressed earlier. Pages 23-25 and 61-65 focus on spending criticisms, many of which are valid, of how tax money is wasted (though implying all welfare recipients buy brand new cars on page 23 is a bit "disingenuous", a term of which the authors seem to be fond). However, I bought this book to learn more about the equity and efficiency inherent in a national sales tax, so the anti-spending rants aren't relevant to this stated purpose (and some sections, such as the nostalgic reminiscences of when "our troops were on the side of the Lord", are completely irrelevant to the supposed point of the book - the authors seem keen on periodically slipping in their own socially conservative values which I don't appreciate in a book I thought was about economic policy). Yes, on page 96 the authors reaffirm they are just focusing on tax reform, not spending reform, but many of the anecdotes shared in the book contradict this message.

On page xxiv, the fair tax suggests that education should be taxed as an investment instead of consumption, which I find to be a sound idea. The only minor quibble is the inevitable lobbying sessions that will take place as various leisure training programs try to fight to earn that label and thus receive tax exempt status.

The book argues that the income tax serves as a disincentive to work, as oft explained by the Laffer Curve. Of course, this assumes workers' demand for a certain level of income is elastic - if a worker's need/preference for $50,000 worth of disposable income is inelastic, that worker arguably may even work HARDER with higher taxes, in order to achieve that income threshold. The same argument of elasticity could be applied to the Sarkozy plan praised on page 52; his plan makes sense because the hours worked after 35 hours are elastic, since working above 35 hours for most people is optional and thus they respond to "price" changes (by which I mean changes in income taxes.) But to apply that same logic to someone's first hour of work fails the elasticity test - since everyone (who does not live off government handouts or inherited wealth) must work at least one hour a week, reducing taxes on one's first hour of work would not have any negative impact on productivity. Furthermore, the authors fail to note other benefits that come with a progressive income tax, such as the fact that it serves as an automatic stabilizer which helps lessen the inflationary effects of economic expansion as well as helps to cushion the blow for all people when the economy contracts (and if you are unfamiliar with such terms as "elasticity" and "automatic stabilizers", I recommend taking Econ 101 before taking the authors at their word on their economic claims and blindly joining this movement, or any other.) The book also loves to repeatedly compare a progressive income tax to the Communist Manifesto, failing to recognize that a progressive income tax not only characterizes nearly all of the most developed countries, but that most economists support it. Even Adam Smith, the "father of capitalism", said " It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion." Furthermore, on page 29, the book implies that people who make more money work harder; this is only a possible and partial explanation, the kind of explanation someone like Sean Hannity would like you to wholeheartedly embrace. The big disparity in income is not one's work ethic and man hours clocked at work, but rather the rarity of one's skill set. I know several people who work in IT that make close to six figure salary while only working about 20 hours a week. But nonetheless, I think a case can be made for significantly lowering income taxes (and offsetting them with a national sales tax), especially the payroll tax.

However, on xxv, the book also states the estate tax should be eliminated. I don't see any justification for this. It seems to rather rely on the emotional language of `being taxed at death' (p207) rather than rationally explain the societal benefit of such a repeal as it does with its analysis on its national sales tax. With the exception of a small group of less wealthy farmers (who can be exempt with a reasonably high income threshold), the repeal of the estate tax does only serves to concentrate wealth in a perpetual aristocracy. I have no problem with a hard worker, a risk taking entrepreneur, or someone exceptionally athletic or creative making and keeping millions of dollars, but a society can not advance if a notable percentage of people have millions of dollars handed to them just because they were lucky enough to be born exiting birth canal A instead of birth canal B. An estate tax helps prevent this in addition to providing additional revenue from those who have not earned the income themselves, and I did not find the book in any way explained how such a tax is harmful to the United States overall (only to those "interest groups" of the exceptionally wealthy, and I understand the FairTax to be opposed to the influence of interest groups.) In fact, the book itself, on page 45 and elsewhere, argues that a key principle of the fairtax is that is "taxes wealth instead of wages" - as the estate tax also targets wealth instead of wages, I would presume a FairTax supporter should also be supportive of it as well.

On xxvi, I did not notice any mention of property taxes. Are the authors in favor of eliminating, reducing, stabilizing, etc. property taxes? This is not a criticism; I was just hoping this question could be answered.

On page 2, it mentions famous people like Sean Hannity who are behind the proposal. Word of advice: if you trying to broaden your appeal of your tax proposal on its merits, probably best to avoid mentioning such polarizing and ideologically driven figures. For the FairTax to ever become a reality, it would require the support of liberals, moderates, and conservatives alike, and thus it is only relevant to mention supporters who have valuable economic insight, such as Milton Friedman. And when it discusses "some very serious people have begun exploring (the Fairtax") on page 12, it probably doesn't matter that no names are actually mentioned or even footnoted, because this "appeal to authority" is a logical fallacy to begin with and doesn't emphasize the merits of the fairtax proposal directly.

On page 14, when it says a "fair tax" should treat everyone equally, is it addressing excise taxes? Taxes on things such as alcohol and cigarettes should be higher (granted, a normative statement) because they engender negative externalities; since their consumption makes society worse (air pollution for cigarettes, higher correlation with criminal activity for alcohol, higher health care costs for both, etc.), it is FAIR to tax these products more than, say, buying a book, to attempt to reduce their overall consumption. Though I suspect that since the fairTax authors believe the tax code should not be used "to do more than simply raise money for the government" (page 93), I suppose we'll "have to agree to disagree."

On page 16, the book claims revenues to Social Security and Medicare would double under its proposal, but does not provide any references or footnotes documenting research that would support these claims. Failure to provide such documentation makes such claims as useful as similar claims made in books by Michael Moore.

On page 21, a footnote discusses federal spending over decades. But if figures are not adjusted for inflation, the stats are much less useful. It's like concluding that Americans are better students now than in 1790, because back then there were only thousands of high school graduates while in 2011 there are millions.

On page 26, the authors tie in a national sales tax with the idea of "dollar votes"; in other words, that a FairTax would enable people to influence policy by choosing what to buy. This is only partly true - if you don't like the way money is spent, you can opt to purchase less to send the message you're not happy with government policies. But all this can do is influence HOW MUCH revenue the government receives, not HOW it chooses to allocate its funds.

I found pages 30-38 to raise valid points and worth reading. I would only add that companies are not only looking for the lowest tax rates; other variables such as low crime, good infrastructure, and an educated local workforce are often important as well (and these, of course, often require taxes in order to create - though admittedly sometimes the private sector may deliver on these quasi-public goods). It should be noted, though, that many of the countries who have been praised in the book for lowering their income and/or corporate taxes (pages 49-50) are currently in a state of financial ruin, most notably Ireland.

Pages 55 - 58 raises good points about the "prebate" incentive for immigrants to want to be legal, and the money that can be gained from foreigners paying sales tax. Minor points: there's no evidence that becoming a "predominant tax haven" will automatically make the US a key tourism destination, nor is this connection explained. And it should be noted that, just as Americans are exempt from paying much of the VAT when they spend more than a certain amount of money during their trip, the same would also apply to foreigners, so the windfall gain from tourism would likely not be as high as optimistically anticipated.

Pages 87 - 108 is a good explanation of the group's goals, amusing obstacles encountered, and some very specific interest groups' reasons for supporting the current tax code, but in my opinion the targets were too specific; I would have preferred the authors address in detail more generalized critiques.

Pages 109 - 128 contain a relevant discussion on how taxes are levied. The idea that a supermajority vote is needed before Congress can exclude or exempt any service from the Fair Tax, as suggested on page 127, is a very good idea; I hope the threshold is set very high, like 90% or so. Furthermore, pages 129-130 has a very persuasive chart suggesting how consumption patterns are more stable than income patterns, though at some point I would like to see an updated chart reflecting the recent financial crisis, which may have altered this.

Pages 134- 141 has a fair discussion as to why Internet products should be taxed as well as to why the government itself should be taxed.

On page 145, the book argues that post-implementation of the fairTax, "American workers would have more purchasing power in the domestic marketplace." This is only partially true - the truth is workers would have more purchasing power in the WORLD marketplace. I have worked with many Venezuelans who make frequent trips to buy things in Miami to avoid the 30% inflation in Venezuela. Similarly, with more purchasing power, there is no guarantee Americans will spend this increased income proportionally in the United States. Vacations abroad may become more popular (especially since as a foreigner you are often exempt from paying the VAT levied by other countries) and people may opt to buy more goods at home, people living within a few hours drive of Mexico and Canada might make more border runs to buy goods (certainly not a majority of the country, but a factor nonetheless). Of course, to prevent people from buying above their importation limit, customs agents will have to become more active in searching through Americans' purchases when they return home - which would of course entail higher costs and need for more taxes to off-set that bureaucratic cost.

Another point is that individualized retirement and health savings accounts, advocated by many conservatives and economists alike, would not be easy for the government to arrange if medicare and social security taxes were abolished; this, of course, is a whole other topic too long to address here.

Pages 193 - 208, like much of the intro and the preface, is mostly cheerleading - feel good reading if you're a supporter. I gained nothing by reading it.

In short, I found this book often lacking in providing ample research footnotes to support its claims. The book makes a strong case of the need to reform our current tax code, as "investments should be made based on growth and earnings potential, not on gaming the tax code." (page 90). Though the FairTax idea might have potential, but this book intended "to answer its critics" has only served to make me more of one; I went from someone with no set opinion on the matter and even quite open to the proposal, but finds that if this is the "authority" on a national sales tax, I am quite far from being convinced. If a Fairtax supporter is reading this, I would be happy if you could recommend a book/author/economist advocating its principles which addresses most of the aforementioned criticisms and has more specific documentation for its mathematical claims. I could still potentially be on board "the movement" if some key changes were made to the current bill and/or supporters can rationally (and preferably politely) address these concerns.
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on February 19, 2016
This book goes into the National Sales-Tax idea and explains it thoroughly. It could use a little editing for readability. It's written with a lot of information and may be hard to get through for some people. The basic idea is that our income tax is a disaster. Too complicated, too many loopholes for both rich and poor, and extremely difficult to administer. Income taxes take incentive away from top-earners. The more money you make, the more you get taxed. FAIR tax would do away with that. The TEA party has been maligned by the press when its' major theme is that we are Taxed Enough Already! Easy enough to understand. A consumption tax on NEW RETAIL goods and services would bring in a lot of money and allow people who buy used, recycle, make and grow their own necessities to pay almost no tax! So it would reduce a lot of waste. The poor would receive a rebate on any necessary food, clothing, et cetera up to the poverty line. So the poor would not be over-taxed and everyone would be encouraged to be thrifty. Those rich who enjoy the newest, latest and greatest would pay most of the taxes. It would be up to them how much tax they paid, based on how much they purchased. A genius idea, that is better than the flat tax, which still taxes income.
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on February 25, 2008
Just look at the reviews who give it one star. Claiming lots of attorneys and IRS employees will loose thier jobs. Basically the reviewers are saying, ME,ME, ME. What about being fair? This book sums it up in one simple go. So some attonerys will loose there jobs. Some IRS employees. What about the small businesses who have been put out of business by the IRS in error. Or the small business owners (2007 it was 23)who were so stressed out by IRS audits that they killed themselves. 15 of those had done nothing wrong. It will save the planet as we dont need to keep copies and tons of paper.
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on December 24, 2015
This is mostly an advertisement for the "FairTax" With a lot of rah rah, but not much in the way of specifics. Little to argue with here, but when I downloaded the actual bill, there are a bunch of holes and questionable assumptions, and even though it says it is progressive it is only to the extent of the family rebate, then it is one of the most regressive tax proposals I've ever seen.
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on December 19, 2012
It doesn't take long, in reading this book, to find where it went off the tracks. Instead of asking tough questions like "What exactly is the so-called "income tax"?, where did it come from?, under what authority?, and why?", ..they ask a bunch of businessmen how to make the "income tax" better. Huh? One needs to ask constitutional and legal scholars the questions: "What is the nexus of jurisdiction of the Income tax?" Article 1? The 16th? Is the "income tax" a direct tax, apportioned to the states? Or is it an indirect tax (excise, impost, duty) subject to the rule of uniformity? Is it neither a direct nor an indirect tax? Is it constitutional as written? As implemented? Why or why not? No, this book simply tosses aside any underlying controversy/questions about the tax, and accepts the conventional wisdom- that taxes (any of them), are like death, they apply to all, end of story. Would a "fairtax", or a "flat tax" be any more or less constitutional than the "income tax"? All such questions are swept under the rug, tossed down the memory hole. The audacity of these authors is in the lack of respect for current law, and the fanciful foolishness that we can implement any tax scheme we please, so long as it meets the so-called needs of the business community or the people. Government is force. Without knowing from whence we came, how could we possibly think it would be as simple as tossing the existing regime in the toilet and starting from scratch? This problem is best solved by asking the right people (Constitutional, legal, historical scholars) the right questions. Assume nothing. The title 27 code is all there.
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on February 15, 2008
After reading this book you will ask yourself, why hasn't Washington passed this plan! If our elected officials and soon to be elected officials truly care about the people, the country, and really want to change things for the better, what then is the possible reason the FairTax has not been passed? This plan is amazing and the most fair for all people, not to mention the most researched tax plan out there. Plus, best of all, it gets the government nose out of our personal lives. No IRS should be music to everyone's ears.
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on March 5, 2008
Tried and true conservative here that loved the snippets of wit and humor riddled throughout the book. However, i was surprised at how slowly the book developed. It felt as though the entire first half of the book was hearing about how good the book was going to be and how far our socks would be knocked off if we continued reading. Finally, upon reaching the chapters that directly address common criticisms of the proposed tax system, you get some real meat and potatoes. Solid arguments, heck of a fantastic tax replacement idea - but I noticed far too many reviewers reviewing and rating the actual Fair Tax on here instead of the book. Admittedly, it's hard to separate the two when rating, but really I'd place this book somewhere between 3 and 4 stars due to its slow developments, constant contradictions (none vital to the basis of the Fair Tax at least), and far too much "sales" language in the text although the authors attest to the exact opposite approach no less than nineteen times throughout.
If you're tired of the IRS and ridiculous tax system we all are enslaved to, this book can't possibly fill your head with any poor notions; let's make it a reality instead of just a best-seller.
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