Steve, thanks for being fair to Sen. Gravel -- and for letting me dial in to the discussion. I hope Sen. Gravel's silence at the end just meant that we lost his phone connection, and not that the Senator didn't like being graded on his libertarianism. :-) It's incredibly exciting that the increasing relevance and core principles of the LP are calling home such longtime advocates for peace and liberty as Mike Gravel.
I don't think it's impossible for Sen. Gravel and Rep. Barr to sell a Fair Tax to the LP . What's bad about the Fair Tax is
- the new prebate entitlement
- the possibility of ending up with both a federal income tax and a federal sales tax
- the creation of a uniform nationwide federal sales tax infrastructure
- the uneliminated deadweight loss of taxing a good (consumption == unsaved production) rather than a bad (e.g. pollution, congestion, extraction of resources from the commons, free-riding subsidies to land value through municipal services)
What's good about the Fair Tax is
- a switch from taxing income to taxing consumption is effectively the untaxing of savings and investment -- something every libertarian should favor
- it eliminates the IRS and 60,000 pages of requirements for reporting income
- it has a built-in ceiling on tax rates, since compared to income it's easier to take consumption underground or just postpone/move/cancel it. (That its Laffer Curve thus peaks at a lower tax rate and lower level of revenue is a good thing, not a bad thing.)
One way to sell the Fair Tax to the LP might be
- link it -- weld it! -- to repealing the 16th amendment
- link it to an interim/fallback tax-cutting plan, such as Kubby's annual increase in the personal deduction
- call it a Federated Fair Tax and say D.C. will bill the states by their population, tempting the 45 states with sales taxes to pay the bill by increasing their sales tax rate
- point out that it would take many decades for state consumption taxes to become as loophole-ridden as the current 60,000-page federal income tax
- point out that it's much easier to move your consumption (or residence) to a low-tax state than to hide from a federal tax
Ideally, the five states without sales taxes would pay their bill using a Land Value Tax, and thus would begin the competition among the 50 "laboratories of democracy" . As a good geolibertarian, David Nolan correctly tried to steer Gravel toward property taxation. The list of libertarian economists who call a Land Value Tax the "least bad tax" starts with Milton Friedman and is longer than I have space to include here.
Decentralize taxing authority, and cut taxes all the way down to the ground!