Thanks to Mike Lowry for his Letter to the Free Liberal.

Lowry's characterizations aside, let me be clear that I find the Fair Tax conceptually interesting, and perhaps a superior long term solution. Tax reformers tend to fall into 3 camps:

1) Consumption taxes, like the Fair Tax
2) Flat tax
3) Rate and base reducers

I completely agree with Lowry that the "prebate" idea is a brilliant idea for consumption taxes. My problem with the practicality with the Fair Tax is that the rate must be set so high -- perhaps 30% -- that that makes its chances weak in the short term.

I'm a short term base reducer. I support Wesley Clark's idea of raising the personal exemption to a much larger number, perhaps his $50,000. I also support expanding IRAs, making the first, say, $3000 excludable -- vs. deductible -- for all taxpayers. And I support similar treatment for charitable giving.

Strategically, I suggest this is a direction that is both free market AND "progressive." It unburdens everyone, but does so disproportionately for the less well to do. This has a populist appeal, and therefore is more sustainable than other approaches I'm familiar with.

With that in place, we could THEN chip away at the Federal programs, which would then be less "necessary."

If we accomplished those 2 things, THEN perhaps the Fair Tax starts to make some sense, at far lower percentages.

-Robert Capozzi