Bartlett: Fair Tax is Cain's "Ace in the Hole"

Bruce Bartlett writes:

On Saturday, the pizza magnate Herman Cain announced that he was running for the Republican presidential nomination. While he has to be considered a long shot, he has something going for him that could make him surprisingly viable: his strong support for the so-called Fair Tax.

The Fair Tax is a proposal that has been kicking around for at least 20 years. It would replace all federal taxes, including income and payroll taxes, with a national retail sales tax similar to those levied by the states. Indeed, a prime virtue of the Fair Tax, in the eyes of its supporters, is that it would be collected by the states, thus allowing for abolition of the hated Internal Revenue Service and an end to filing tax returns or keeping financial records.

The rate would be set at 23 percent — but only if you accept the unconventional way in which Fair Tax supporters insist on calculating it. If calculated the way state and local sales taxes are calculated, the Fair Tax rate is actually 30 percent.