Letters to the WSJ about consumption tax

[question everything]

FairTax Is a Stealthy Double Hit on Boomers

The proposed consumption tax is a thinly disguised effort to double-tax the baby boomers in their retirement years. Beware of anybody who calls this the "fair tax," as does Laurence Kotlikoff in his March 7 editorial-page commentary "The Case for the 'FairTax'."

Calling this taxation of funds that have already been taxed when they were earned is eminently unfair and follows the venerable Washington tradition of calling something "fair" when the opposite is in fact true.

For baby boomers who paid heavy income taxes for their entire careers and managed to save enough to provide for a comfortable retirement, the consumption tax is the crowning insult as they are now asked to pay the piper again if they want to spend their hard-earned after-tax savings during their retirement years. The proposed consumption tax will tax them a second time -- and the burden will be the greater the more the baby boomers followed the advice to save enough for their retirement.

Why do we suddenly hear about the wonderful things to be accomplished by a consumption tax? Willie Sutton knew the answer long ago: Because that's where the money will be once the baby-boomers start to retire.

H. Robert Heller
Tiburon, Calif.
(Mr. Heller is a former member of the Board of Governors of the Federal Reserve System.)

Prof. Kotlikoff asserts that his FairTax is "fair" because it taxes wealth as well as wages. He fails to concede that wealth arises from savings that in turn arise from income that already has been taxed. He points out his plan redistributes from "rich" older spenders to young savers. I don't think he will get much support from either camp when the older plutocrats realize what he wants to do to them, and the young folks learn that he has the same thing in store for them too.

Furthermore, he wants his consumption tax to replace Social Security taxes. I doubt many Social Security recipients will appreciate having to pay for their benefits twice.

James Cottle
Tuolumne, Calif.

The case for a national retail sales tax is a proposal that legislators on both sides of the aisle can champion and still not compromise their principles. And what better way to be seen as a champion by one's constituents than sponsorship of such progressive legislation. A rare moment of opportunity in the annals of legislative cooperation. One hopes they can nail it as well as Prof. Kotlikoff has nailed it. Let's make April 15 just another day.

Herbert Moran
Chula Vista, Calif.

http://online.wsj.com/opinion/letters?mod=2_0048

[mcscajun]

1. Interesting batch of letters.

That third writer (Moran - omigod the irony!) has his head up his ass.
Framing a regressive tax as progressive and suggesting a bipartisan pass without compomising principles. This guy wouldn't know a principle if it smacked him upside the head with a 2x4.

But Mr. Heller nailed it paraphrasing Willie Sutton: That's where the money is.