More FairTax Problems

Volokh’s Ilya Somin points out another problem with the FairTax: It doesn’t provide an easy, efficient way of figuring out exactly how much your total tax liability is:

For all its flaws, the income tax system at least gives taxpayers a fairly clear indication of what their total income tax liability is: every April you have to calculate it, or hire an accountant to do it for you. In a sales tax system, by contrast, you don’t really know how much money you’re paying the federal government in all. To be sure, you can calculate the amount by keeping close track of all your purchases and then multiplying by 0.23 at the end of the year (assuming the proposed Fair Tax rate of 23% is the one enacted). However, given that most voters are “rationally ignorant” and have little incentive to keep close tabs on government policy, it’s unlikely that many will do so. Moreover, as Bartlett explains, Fair Tax supporters intend to supplement their basic proposal with a complex system of rebates that would make the total tax burden even more difficult to calculate. The net result of the Fair Tax would be to make the true cost of government less visible to voters. That, I would argue, has been one of the effects of the somewhat similar value added tax (VAT) by which many European countries raise a large part of their revenue.

FairTax supporters often tout the policy as the best small-government solution because of how it would (supposedly) get rid of the IRS.  But enacting it would also be a pretty serious blow to government transparancy as well.