Fred, Government and Taxation

As I was driving today I happened to be listening to the Sean Hannity when he took a call from a Fair Tax supporter. Now I do not have anything against the Fair Tax. I have some questions about it, but it may be a very good solution for our convoluted tax system. My issue is actually with some of the Fair Tax disciples. For them it has become the litmus test issue. Sooner or later most all issues turn into a discussion of the Fair Tax.

This particular caller was concerned about Fred’s lack of commitment to push the Fair Tax given his statements for reducing the size of government. To him, the easiest way to reduce the size of government is to implement the Fair Tax.

Similar logic has landed here in Indiana. We have been hit with very significant increases in property taxes and the solution, to the disciples, is to implement the Fair Tax.

The problem with the logic is that the simply changing the taxing methodology does not make the spending change. A “spending cap” is part of the proposal will, by itself, doom the taxing plan to failure.

To be perfectly clear: taxing and spending are two separate problems.

On taxes, Fred has been outspoken in his support of lower taxes and a reformed tax system. He is willing to accept most any reform so long as it achieves his larger goals. I like that. If proponents cannot muster support for the Fair Tax, but others can get support for the Flat Tax, then that will work toward his goals.

On spending, he has published two significant volumes on waste in government and how to fix it. He is a strong supporters of Federalism and returning many areas of responsibility to the states.

Two problems. Two sets of solutions. And on the taxing issue, there are several acceptable ways to fix the problem.