The WSJ has a great editorial today (temp free link).
The distributional effects of the FairTax have been extensively studied, and although the proposal has distinct advantages for investors and wealth creation across the income spectrum, the greatest benefit of the FairTax is to low- and moderate-income Americans. The effect of eliminating regressive payroll taxes is commonly overlooked when analyzing the FairTax, but it would have a very significant impact, as these taxes represent the single largest tax burden on these income earners.
Significantly, the FairTax eliminates all loopholes, gimmicks, exemptions and deductions from the federal tax system. Under the FairTax, Congress would no longer be able to reward friends, punish enemies or manipulate behavior through the tax code. The FairTax would also eliminate the lucrative tax lobbying practices that represent more than 50% of all lobby dollars spent annually in Washington.
Clearly there would be short-term impacts, positive and negative. We need to, in all things, be able to look beyond the next three to five years and see the real effects. Learn how the FairTax would impact real estate here (archived: 2014).
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I have been been representing buyers and sellers in Charlottesville, Albemarle, and Central Virginia since 2001. Get local insight born of experience.
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