I was chatting with Jim last night and he told me that he had been watching CSPAN and saw them debating the FairTax on the floor of the House. I was dubious – I read about FairTax several years ago and never got the impression it would go anywhere – companies wouldn’t put up with losing their legal loopholes.

During our conversantion Jim put some of my concerns to rest, and raised others. I’m going to spend some time looking at the website and see what details I can find. What is the FairTax?

Simply put, the FairTax replaces the way we’re currently taxed – based on our annual income – with a tax on goods and services. The FairTax is a voluntary “consumption” tax: the more you buy, the more you pay in taxes, the less you buy, the less you pay in taxes.

From my onversation with Jim, I think they’ve worked out a pretty decent and (dare I say) fair taxation system. A coworker pointed out the added benefit that as a sales/consumption tax, those who currently operate outside the tax system (tax evaders, illegal immigrants, etc.) can no longer do so.

Links: * Thumbnail sketch of the FairTax * The impact on various industries * The impact on charitable giving * A bit more detailed overview

BTW, I’ve discussed flat taxes and the FairTax before, here and here.