Adding fuel to the fire: Fair Tax

I mentioned, in today’s Open Post, that the Fair Tax could both provide a (small) disincentive for “undocumented workers” and recoup some of the costs in social services caused by illegal aliens. Here’s this week’s Fair Tax Blogburst post dealing with some aspects of that in detail:

In light of the recent events transpiring over the course of the last two weeks, Terry and I thought it would be prudent to discuss the implications of the Fair Tax and how it would possibly cooperate with the immigration discussion. Rest assured, we strive to remain non-partisan, as we both firmly believe that the Fair Tax is an issue that liberals, conservatives, and libertarians can all come together on. This is why I will attempt to refrain from inserting some of my beliefs into this week’s burst as it pertains to the immigration policies Congress is grappling with.

What is one of the most explosive issues within this raging debate? Personally, and I am sure most of you share the concern with what, and to what extent do “illegal immigrants” or “undocumented workers” enjoy in entitlements and governmental resources? Whether you believe that this is a problem or not is somewhat moot, for it is an argument that is infused within the debate.

Insert the Fair tax into the equation, and this argument is nearly gutted in its entirety. With the Fair Tax, and as Mr. Boortz and Congressman Linder state in a better manner than I:

The underground economy, which currently escapes taxes on about $1.5 trillion, would no longer enjoy its tax-free status. The illegal activities in which they engage would not be legalized, but every retail purchase the criminals made – whether a mochachino or a Mercedes – would be taxed the same as yours and mine.

Herein, Mr. Boortz and Congressman Linder are specifically addressing such activities as tax evasion, drug dealing, et al; however, it is not outside the realm of imagination to see just how this would correlate to the problem of “illegal immigrants” not paying their “fair share” of taxes. It is undisputed that they pay little or no taxes based on the arrangement they have with their employers. It is argued frequently that many of them do pay portions of their taxes via fake and counterfeit social security numbers, but this is just a portion and it pales in comparison to what many hard-working Americans pay year in and year out under our current tax system. The Fair Tax would be a definitive solution, for it ensures that every new purchase or service would generate tax revenue. Furthermore, it would arguably create an incentive for these immigrants to seek the legal recourse for they would more than likely be precluded from the “prebate” we have discussed before.

Thus, with the advent of the Fair Tax, much of the political rhetoric and strife may be gutted since a tremendous concern of many Americans would be alleviated in the short term.

The FairTax Blogburst is jointly produced by Jonathan of Publius Rendezvous and Terry of The Right Track Blog. If you would like to join us, please e-mail Jonathan or Terry. You will be added to our mailing list and blogroll.

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