Addressing two small design flaws in the FairTax.


The FairTax would benefit from two small (but not insignificant) changes:

1) Individual, rather than ‘households’, should be the recipients of the monthly check.
2) The government should hold in trust a minor’s monthly checks until his 18th birthday.

Let’s look at each suggestion in a bit more detail.

1) Directing checks individuals rather than ‘households’.

Directing the monthly check to each individual citizen, is the intuitive way to go about basic income, in line with this reform's fundamental simplicity. No point entangling a straightforward system with the complex, controversial, and religiously charged concept of ‘family’.

Taxes are a matter between the state and its citizens, not between the state and the personal associations citizens decide to engage in. Sending the check to a household will dramatically limit the freedom of individuals trapped in an abusive family situation. And what about individuals who do not have a domicile?

It will also add a costly layer of bureaucratic complexity. The government will need to track the composition of households to avoid fraud, which is particularly onerous given that household's composition and location changes.

There’s really no benefit in sending the check to some ‘head’ of household, instead of each individual member.

2) Holding checks in trust until 18th birthday.

For very poor families, a monthly check for each child might work as an incentive to have many children. This would be a grave error. Bringing children into this world is a great responsibility. The cost of raising a child to adulthood has the benefit of discouraging couples who aren’t really willing to commit the effort and dedication required. A monthly check to each child would turn this on its head, with sad consequences.

For most young adults (particularly those from poor families), an endowment upon turning 18th will be of great help at the most appropriate of times (the start of their adult life), allowing them to study, start a business, learn a trade, or buy a place. Such an endowment should do wonders to alleviate poverty.

Moreover, overpopulation is an extremely serious problem, as no amount of economic growth would compensate for a population spiraling out of control (1000 trillion people crammed on one planet would feel like being in jail). Lowering the cost of raising children, will not help with this critical objective.

The proposed changes will benefit, and enhance the FairTax.