The UnFairTax

The Washington Post has a good editorial on the many, many problems with the FairTax. Much of it will be familiar to those who’ve seen Bruce Bartlett’s writing on the idea — the distortions involved in calling a 30% tax a 23% tax, the unlikelihood that even a 30% tax would be sufficient — but they do make at least one point worth quoting in full:

Finally, the FairTax would hit the middle class the hardest. Consumers would receive a monthly “prebate” on expenditures up to the federal poverty level, providing a cushion and probably even a modest benefit for those with the lowest incomes. The top earners, those with incomes greater than $200,000, would see significant tax cuts. So who makes up the difference? It’s likely that taxpayers with incomes in the middle range — about $40,000 to $100,000 — would pay more. And they call that a FairTax?

This is exactly right. The FairTax is incredibly regressive. It’s not an equalizer, and, whether they realize it or not, it’s likely to hit its prime supporters — middle class tax activists — the hardest.

Missing from the Post’s editorial is that, beyond all of the technical problems with it, the FairTax is a fantasy. It won’t happen, and, in fact, it can’t — not without a repeal of the 16th amendment, which is about as likely Hillary Clinton switching parties.