In reality, the FairTax rate is not 23%. Messrs. Linder and Chambliss get this figure by calculating the tax as if it were already incorporated into the price of goods and services. (This is known as the tax-inclusive rate.) Calculating it the conventional way that every other (This is called the tax-exclusive rate.)
The distinction is confusing, but think of it this way. If a product costs $1 at retail, the FairTax adds 30%, for a total of $1.30. Since the 30-cent tax is 23% of $1.30, FairTax supporters say the rate is 23% rather than 30%.
This is only the beginning of the deceptions in the FairTax. Under the Linder-Chambliss bill, the federal government would have to pay taxes to itself on all of its purchases of goods and services. Thus if the Defense Department buys a tank that now costs $1 million, the manufacturer would have to add the FairTax and send it to the Treasury Department. The tank would then cost the federal government $300,000 more than it does today, but its tax collection will also be $300,000 higher.
I first noticed Bartlett taking aim at the Fair Tax proposal and other value-added tax schemes when he was subbing for Andrew Sullivan at the Daily Dish, and I meant to write that up here. Something must have come up, I can't remember. I notice WSJ has added the Sphere feature, which is kind of like a Technorati widget, I guess. You can check that to see who is talking about the article online, and don't forget to see what people are saying in their direct responses.
Dave Weigel at Reason took the chance to question Huckabee's sincerity in believing in the Fair Tax.