Would the Fair Tax Lead to Double Taxation?
by Shirley Spellerberg on July 29, 2010 at 9:09 AM
The Fair Tax is far more complex than the name implies. Everyone is for fair taxation and is sick and tired of the Progressive Income Tax. The Fair tax is not as simple and “fair” as one might think.
If the Fair Tax Bill were to pass, permanent elimination of income taxation would not be guaranteed because the Sixteenth Amendment would remain in place. Cases decided by the U.S. Supreme Court after the ratification of the Sixteenth Amendment have established that Congress has the power to enact an income tax even if the amendment did not exist. The elimination of the possibility that income taxation would return, through a separate Congressional bill, requires a repeal of the Sixteenth Amendment to the U.S. Constitution along with expressly prohibiting an income tax. This is referred to as an "aggressive repeal." The Constitution does not require an income tax, it only allows one. Separate income taxes enforced by individual states would be unaffected by the federal repeal.
The other problem is that passing a Fair Tax would only require a simple majority in each house of Congress and the signature of the president, whereas enactment of a constitutional amendment to repeal the Sixteenth Amendment must be approved by two thirds of each house of Congress and three quarters of the individual states. Therefore, it is quite possible that passage of the Fair Tax bill would simply add another system of taxation. There is nothing today preventing the addition of a national sales tax, or VAT tax, on top of today’s income tax system!
You may not have heard about some of the quirky aspects in the Fair Tax bill, such as the Pre-bates before the taxpayer purchases anything (another expensive entitlement program.)
As for eliminating the IRS if repeal of the sixteenth amendment should occur, another bureaucracy by a different name would be required to collect the sales taxes.
Regardless of a few attractive aspects of the Fair Tax, implementation and the risk of double taxation is cause to halt the headlong plunge into the Fair Tax system. Signing the TV petition calling for a Fair Tax would be a mistake.
A Flat Tax should be seriously considered if deductions allowed under the income tax are to be preserved.
The source for this information in much more detail can be found at