The federal government already is administering the EITC with no problems. My alternative to a targeted prebate would be to simply retain the EITC, a very popular program aimed at basically the same low income folks. Both are estimated to cost $59 billion annually, a far cry from the Fairtax plan to increase the sales tax rate by 5% in order to redistribute $600 billion annually. Madness!

Please come on over to Fairtaxblog and lets put your prebate plan on the table. Many of the same stalwart participants are still there, both pro and con Fairtax. Blogs such as Fairtaxgroups, Fairtaxnation and ZaptheIRS are great for sitting in circles and holding hands, but they aren’t interested in putting forth a valid message. They just drink the Kool-aide and regurgitate error filled stuff from the Boortz/Linder bibles. No dissent is ever allowed which is why I appreciate the moderators of Fairtaxblog so much. All of this Fairtax propaganda is sure to catch up with AFFT if any hearings are ever held by the W&M Revenue subcommittee. There is no place for marketing BS on Capitol Hill, imho.

I understand your proposal. At first blush, it would seem to be a huge administrative problem. Would all family members get a card, or just the primary contact? Can all 20 million businesses adapt their checkout systems to the card? What is the potential for fraud/counterfeit cards? If the card represents something of value, wouldn’t it still be an entitlement? (Medicare does not increase income, but is an entitlement. Maybe I shouldn’t have used the term “income” as the measure of an entitlement. Perhaps “value” would be more to the point?)

I think you may be on to something and would like to suggest that you come on over to “fairtaxblog.com”, an active site that allows Fairtax pro and con discussions with no character assassinations. If you don’t want to do that, would you mind if I put it to the blog experts for an opinion? There are some pretty sharp minds there and they might provide some excellent input.

Sorry if I seemed to take a snipe at you, but your insistance that the current problems were caused by my generation gets a little tiresome.

I’m afraid we will have to agree to disagree about Social Security, but it saddens me that your generation takes such a dim view of what has been a very successful program. Do I wish we hadn’t allowed Congress to spend the surplus? You bet, and that needs cleaning up sooner rather than later.

As for the prebate, let me try one more time to convince you that the prebate is simply a cash grant entitlement that works as an income supplement to be spent and taxed or saved as needed. Characteristic of an entitlement is if that government check (or whatever payment method is used) increases your annual gross income, then it’s an entitlement. You are correct that income tax deductions, exemptions and “loopholes” are not entitlements, but they are features in the IRC that reduce the amount of taxes owed. But, those IRC items don’t increase your gross income by one thin dime.
There is just no way of getting away from the basic truth that the prebate is an entitlement, and it is being proposed at a time when entitlements are leading to a federal government train wreck. I still believe a targeted prebate or perhaps simply keeping the EITC, a very popular and inexpensive program, would be far better than increasing the Fairtax rate by 4-5 percentage points in order to raise the necessary $600 billion- and counting!