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FairTax: The Truth: Answering the Critics | 
 enlarge | Authors: Neal Boortz, John Linder
Publisher: Harper Paperbacks
Category: Book
List Price: $14.95
Buy New: $5.18
You Save: $9.77 (65%)
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Rating:  128 reviews
Sales Rank: 10122
Media: Paperback
Pages: 272
Number Of Items: 1
Shipping Weight (lbs): 0.5
Dimensions (in): 7.9 x 5.1 x 0.8
ISBN: 0061540463
Dewey Decimal Number: 336.271
EAN: 9780061540462
ASIN: 0061540463
Publication Date: February 1, 2008
Availability: Usually ships in 1-2 business days
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Product Description
In 2005, firebrand radio talk show host Neal Boortz and Georgia congressman John Linder created The FairTax Book, presenting the American public with a bold new plan designed to eliminate federal taxes and the IRS, jump-start the U.S. economy, bring back lost industries and jobs, and recapture billions of untaxed dollars hoarded by criminal and offshore businesses. Their book became an immediate #1 New York Times bestseller, propelling a powerful grassroots tax reform movement that's spreading like wildfire across our nation. Now, three years later, the authors are back to answer the outspoken and misinformed critics of their innovative proposal. Offering eye-opening new insights not covered in the original book, FairTax: The Truth debunks the negative myths and gross misrepresentations of this groundbreaking idea. The FairTax plan is simple, brilliant, and it will work—enabling you to keep all the money in your paycheck; eliminating the fraud, hassle, and waste of our current system; and revolutionizing the way America pays for itself.
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| Customer Reviews: Read 123 more reviews...
 Read the FairTax Book first January 9, 2009
rjgsphinx (Marietta, GA)
This is a GREAT book of arguments but you have to have the basics as illustrated in "The Fair Tax Book: Saying Goodbye to the Income Tax and the IRS" to make it really enjoyable.
This is by far the best idea out there of how to fix our current, screwed up, tax system in a way that gives the people the power.
I highly recommend this as a second book for those who are either excited by the FairTax and want to learn more, or by others who may not completely agree but are willing to keep an open mind. As you can tell I am excited.
Highly recommended, enjoy.
FairTax Reference December 2, 2008
P. D. Davidson (Portsmouth, VA)
0 out of 3 found this review helpful
Answers questions that one may have had after reading the first FairTax book. Written well.
 A dream and a fairy-tale December 1, 2008
Miro (Atlanta, GA)
3 out of 4 found this review helpful
To paraphrase a famous quotation, "Fair Tax" is a dream, wrapped in a fantasy, inside a fairy-tale. It is amazing and perhaps disheartening that so many seemingly intelligent and educated people have been deceived by the dream. Most of the defenders are people who have never looked beyond the fairy-tale: A simple tax, replacing the insane complexity of the current system. The only excuse one can find for them is that these people look at "Fair Tax" as if it were an abstract concept. If there were no economy, no people earning money and using them for purchasing, and we just created a society, then a consumption tax for the new economy might be worth considering.
A book review, however, is not the right place for a discussion of the fundamental merits of a tax system. Let's leave that to the economy theorists. For the sake of the discussion (only), let's grant the authors the premises about embedded taxes and their (debatable) role in setting the price of goods. Most definitely, let's set aside the endless, asinine arguing about whether to cite the consumption tax inclusively or exclusively, and even what the actual percentage would be. Who cares? As the authors correctly state, the only thing that really should matter to people is the purchasing power, and the generated revenue.
It is appropriate, however, to evaluate the way the authors are making the case for "FairTax", the validity of their arguments. They write not about an abstract concept, but about a real switch to a new tax system.
Perhaps the most insidious and deceitful feature of Boortz and Linder's book and arguments is the use of averages. It starts with the "embedded tax." "In The FairTax Book we wrote extensively about a Harvard University study that showed that, on average, about 22 percent of what you pay for any consumer item or service represents the embedded costs in that item ..." (p. 29). The authors briefly mention, in this and the first book, that the actual embedded costs vary from industry to industry, but they do not bother to tell us how much. A simple consideration would tell them and us that the range must be considerable, and that it also must vary widely from product to product in the same industry, and is different for the same type of product made by different companies.
Why is that important? Because if those different percentages of embedded costs were replaced by a single, constant "FairTax" percentage, it would cause an unbelievable upheaval of the market as well as redistribution of the purchasing power of the population. Since, according to the authors, the embedded costs are mostly due to the tax burden of the employees involved, industries or companies with high mechanization and therefore low embedded costs would see their products burdened with a higher consumption tax than what their previous embedded costs used to be, while those with high embedded costs because of a large workforce would be at an advantage. The switch would penalize productivity.
Let's consider a simple example of two companies, making the same type of product, and let's assume that the production costs, excluding labor costs, are the same and that the final products are equivalent in quality. One company has a more efficiently organized production line, requiring a minimum of workers, and thus has lower labor costs, and therefore lower "embedded tax costs". Because of the competitive pressure both products sell for the same price, so that the more productive company shows higher profit. What would be the effect of replacing the "embedded tax costs" with a universal "FairTax" percentage? With the same purchasing price again, the relative profit margin of the more productive company would fall.
What about the effect on the purchasing public? Are we all just averages, everybody buying the same things? If products with currently high embedded costs satisfied your needs and lifestyle, you might perhaps see prices go lower, but if you preferred mostly the low-embedded cost products, you would be out of luck. Is that supposed to be fair and reasonable?
One of the most deceitful claims, which I heard Mr. Boortz to make on radio, and which is repeated in the book, is about the effect on retirees, who live on their savings. On radio, Mr. Boortz assured a caller that since FairTax would just replace the embedded tax, the prices would remain the same, so that there would be no change for his retired parents. In the book (p.190), the authors breezily assert: "... either you're going to pay the embedded taxes that lurk in every product and service you consume, or you're going to pay the FairTax. Six to one, half-dozen of the other." And: "Everything you buy with those savings is going to cost pretty much the same - plus you'll have that prebate check every month."
Here one must note that the authors certainly are not guilty of consistency. Throughout the book you can find any and all predictions about the change in the costs of products if "Fairtax" were instituted. Side by side with this "pretty much the same" statement repeated several times the authors mostly claim that the prices would get lower. But occasionally they slip: "For example, one macroeconomic study of the FairTax- a study that assumed that the employer's share of the payroll tax is the only savings that will be used to lower prices - estimated that prices would rise by 24.8 percent but wages would rise by 27.4 percent, more than compensating for the increase in prices." (p. 144).
If the study is correct, what will be the effect on the retirees living on fixed income from savings, who do not have wages that might rise? Somewhere recently Mr. Boortz has faced this question, and played a little different tune: The retirees mostly get money by withdrawing from their investments, and they pay income tax on those withdrawals, so they get the relief there. Really? What about those who have invested in Roth IRA, or another form of non-taxable savings? Even if many or even most people paid some income tax as retirees, could we simply write out those who do not, "let them eat cake"?
Even people with IQ in the range of low Lottery numbers must wonder how the "FairTax could be "revenue neutral," when the government loses the major source of revenue - the income taxes - while collecting a sales tax that replaces the "embedded taxes," which presumably are derived in part from income taxes, but cannot account for all of them, and the prices get lower. But then we learn that, of course, services will be taxed. Retirees take note: you will be paying more for those, many of you without the benefit of an income tax relief. And again we hear the argument: The cost of services includes "embedded taxes." How much and how variable? Do you use and need services with currently low embedded tax costs? Tough luck.
When it comes to fairytales, the Boortz/Linder prediction about what would happen with prices and wages if "FairTax" were instituted takes the prize. Following are, summarized, their conclusions (pp. 75-76):
Scenario one: Employees will be getting the same "take home check" (net salary). Employer would save the amount withheld for federal income taxes, SS taxes. Medicare taxes. This will result in reduction of price of products or services.
Scenario two: Paychecks will be increased by the previous matching contributions. Employees will keep withholdings. The price "wouldn't be reduced by the full amount of the embedded taxes."
And then we get from the authors the astounding prediction (pp. 77-78):
"Actually, it would most likely be a combination of the two [scenarios]: In some workplaces the savings would be passed down the line and the cost of the final products would be reduced accordingly. In other cases, the workers would retain that tax burden plus their share of the Social Security and Medicare taxes. Their businesses wouldn't see prices go down quite as much."
Are the authors joking, or are they certifiably insane? The workers of the second (scenario) group would see increased paychecks, and get an enormously increased purchasing power for the products made by the first group workers, the prices of which are supposed to drop substantially. The workers of the first group would be totally out of luck. They could buy the products of the companies that had made the decision to use the savings to lower the prices, but could hardly afford to buy the products of the other group. Do the authors assume that people purchase only products of the companies they work for?
Logical, rational? In your dreams!
Neek Boortz speaks the truth December 1, 2008
O. J. Avila (Yulee, FL)
0 out of 3 found this review helpful
As a regular attendee to the church of the painful truth I was looking forward to this book coming out. It truly does answer the critics and give plenty of ammo to us "FairTaxers"!
Wake up and stop endlessly funding Leviathan November 28, 2008
Bunson Honeydew (White Plains, NY)
0 out of 3 found this review helpful
This is a great idea for an tax structure. At first I thought it was stupid and you couldn't sell this to me. Then I started listening to Neal Boortz'sshow, and I decided to educate myself.
Neil explains how little people understand the current tax system in our country. To quote neal from his program: "If we had a fair tax (or something similar), Barack Obama would not have been able to use the lie that 95% of American will get a tax cut." The problem is many people confuse payroll taxes with income taxes.
Neal goes through a list of response for the critics of this system. The things I want to hilight are how our government uses the tax code to play favorites, and that the current income tax system subsidizes debt and penalizes savings.
I have no idea if the Fair Tax will ever come to fruition, but all Americans who care about their own liberty should read (or listen) to this book. You'll be able to sniff out the BS artists every election year. Hopefully one day enough of us will wake up and tell the government to go back to your powers that are in the Constitution.
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