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THE FAIR TAX AND HUGH

August 15, 2007

Talk radio host and blogger Hugh Hewitt has run afoul of fans of the "FAIR Tax" national retail sales tax plan:

Since dismissing the idea of the fair tax on my program on Monday, I have received about 100 e-mails denouncing me for my ignorance and demanding that I "read the book!" I of course believe in tax simplification and lower taxes as the key to economic growth, but a plan that begins with abolishing the mortgage interest deduction and the charitable deduction will not pass the Congress any time soon, and I am uninterested in crusades based on great leaps into the dark with only the flimsiest chance of success.

This illustrates two things: the misguided fervor of the FAIR Tax folks, and why real tax reform is so difficult.

I remain puzzled why anyone could possibly think a 30% national sales tax could be a good idea (and it is 30%, not the 23% advertised), or that it could ever happen.

It's not so puzzling that Mr. Hewitt takes two of the biggest tax breaks off the table in any tax reform debate. Economically, there's no justifying the home mortgage donation; the charitable deductionis also hard to defend strictly on economic terms. I'd trade these breaks in a heartbeat for a 15% rate, but Mr. Hewitt doesn't even want to talk about it out of fear of a backlash. That's sad, because it's such sacred cows that make our tax code the nightmare it is.

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