Changes

*Republican presidential candidate [[Rudy Giuliani]] criticized the FairTax when he addressed a group at the [[University of Florida]] in July, 2007<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>."  

*Republican presidential candidate [[Rudy Giuliani]] criticized the FairTax when he addressed a group at the [[University of Florida]] in July, 2007<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>: "I don't think a Fair Tax is realistic change for America. Our economy is dependent upon the way our tax system operates<ref> “Giuliani Jeered For Opposing Flat Tax”, Associated Press, July 2007, http://www.forbes.com/feeds/ap/2007/07/07/ap3891710.html</ref>."  

*Aside from a lack of enthusiasm among most politicians, the FairTax also suffers from serious constitutional infirmities. Supporters have tried to paint the tax as an "[[excise]]". But this is wrong. The constitutional definition of an [[excise]] is a tax that is strictly limited to '''privileged''' or '''luxury''' goods and activities. The writings of the Founding Fathers, as well as numerous U.S. Supreme Court and lower court rulings, confirm this definition.<ref>http://www.conservapedia.com/Excise</ref> However, the FairTax encumbers '''necessities''' ''in addition to'' privilege and luxury items, thus making it a '''Direct tax''' within the constitutional meaning of the term. Unlike true [[excise]]s, the FairTax cannot be "avoided" because it taxes things which are necessary to live. These include food, clothing, housing, transportation, medicine, health care, arms for self-defense, phone service, sundries, education, etc. Any tax that encumbers such items must be apportioned among the states, or it violates the Constitution.<br />Although proponents suggest that necessities are effectively relieved from the tax by virtue of the prebate, the fact remains that necessities ''are'' taxed. Furthermore, once an individual's spending on necessities exceeds the poverty level, the prebate no longer offsets the tax, and the tax ''operates fully'' as an unapportioned Direct tax, in violation of the Constitution. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it." Regardless of whether the FairTax is called an "[[excise]]," it is, in substance, a Direct tax which cannot be apportioned among the states. It is therefore unconstitutional.

*Aside from a lack of enthusiasm among most politicians, the FairTax also suffers from serious constitutional infirmities. Supporters have tried to paint the tax as an "[[excise]]". But this is wrong. The constitutional definition of an [[excise]] is a tax that is strictly limited to '''privileged''' or '''luxury''' goods and activities. The writings of the Founding Fathers, as well as numerous U.S. Supreme Court and lower court rulings, confirm this definition.<ref>http://www.conservapedia.com/Excise</ref> However, the FairTax encumbers '''necessities''' ''in addition to'' privilege and luxury items, thus making it a '''Direct tax''' within the constitutional meaning of the term. Unlike true [[excise]]s, the FairTax cannot be "avoided" because it taxes things which are necessary to live. These include food, clothing, rental and new housing, transportation, medicine, health care, arms for self-defense, phone service, sundries, etc. Any tax that encumbers such items must be apportioned among the states, or it violates the Constitution.<br />Although proponents suggest that necessities are effectively relieved from the tax by virtue of the prebate, the fact remains that necessities ''are'' taxed. Furthermore, once an individual's spending on necessities exceeds the poverty level, the prebate no longer offsets the tax, and the tax ''operates fully'' as an unapportioned Direct tax, in violation of the Constitution. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it." Regardless of whether the FairTax is called an "[[excise]]," it is, in substance, a Direct tax which cannot be apportioned among the states. It is therefore unconstitutional.

*Another problem with the FairTax is that it would not close all loopholes. For example, any purchases made overseas, including money spent on investments, would not be subject to the tax. This could lead to the movement of U.S. dollars offshore, accompanied by individual and corporate "hoarding," and a loss of revenue for the government.

*Another problem with the FairTax (although less serious than any constitutional challenge) is that it would fail to close all loopholes. For example, purchases made overseas, although subject to the tax, would be difficult to track. This could lead to the movement of U.S. dollars offshore, accompanied by individual and corporate "hoarding," and a loss of revenue for the government.

*Further, in an effort to avoid the tax, many people would be inclined to buy only second-hand goods. This would reduce the demand for new goods and affect the growth of the economy.

*Further, in an effort to avoid the tax, many people would be inclined to buy only second-hand goods. This would reduce the demand for new goods and affect the growth of the economy.