I think there has got to be a better solution to preserving small business in America than by crippling the consumer. This is a regressive tax any way you slice it. The rich will get richer and the poor will get poorer. I'm not saying I'm happy with the way the tax system is today, I'm just saying that there has got to be a better way than a so-called "Fair tax." Maybe interview a person who qualifies for a tax refund check each year and ask them how they spend it. See if the nation can really afford such a large percentage of people left to plan for their retirement.
Linda, I share your concern about regressive taxes. For example, currently social security tax totaling 6.2% from the employee and another 6.2% from the employer (12.4% total) are paid by everyone down to the poorest working people in America. This tax is capped to about the first $90,000 of income. That's a highly regressive tax and we live with it year after year. FairTax eliminates that regressive tax on the poor. In addition, the tax that these people pay on basic needs is refunded each month by the government BEFORE they even spend it. The neediest people will either pay NO taxes or profit from the FairTax. I'm open to hear evidence to the contrary, but so far no one is giving me any numbers or proof to show this is wrong. Why do you think the Fair Tax is regressive?
I think you also need to ask that same person who is getting a refund check some more questions. How much of your earnings did that goernment take from you before you even got it? What is the the difference in what the government took from you and what they are "giving" back to you?
I completely agree that regressive taxation would be bad for america and our economy. And the proposed FairTax definately has flaws. The most glaring one I see is that retired persons, who have already paid the large federal tax on what they've made (the income tax), will be expected to take the tax burden again when they spend the money that they've already paid huge amounts of taxes on.
However, I don't think you can call FairTax "regressive" in any justifiable way. "regressive" means that wealthier people will pay a smaller percentage of their income in taxes than poorer people. Considering that people at the poverty level pay essentially zero taxes with FairTax, and that someone who spends 4 times the poverty will pay 3 times as much in tax as someone who spends twice the poverty level, progressivity has been maintained.
Besides, the greatest goal of the fairtax is to improve the international competetiveness of american business, and to substancially improve capital formation. With lots of available capital and a more advantaged position against foreign companies (since american companies wouldnt have to pay profit tax, their investors wouldnt have to pay capital gains, and their shareholders wouldnt have to pay dividends tax) they would be much more inclined to invest in the means of production, increasing productivity, and therefore increase wages.
I was skeptical at first too... but I've researched it and economically, FairTax is pretty solid. Endorsed by Alan Greenspan himself (well, the change from income tax to a consumption tax anyway).
"And the proposed FairTax definately has flaws. The most glaring one I see is that retired persons, who have already paid the large federal tax on what they've made (the income tax), will be expected to take the tax burden again when they spend the money that they've already paid huge amounts of taxes on."
The FairTax would not be any worse for retired people than the current system. The current system hides taxes in the cost of goods - corporate income tax, social security, etc are added into the cost of goods. The final price that retired people will pay will be essentially the same as what they would pay under the current system. Either way, they're paying taxes. The benefit for those retired people is that they would receive a prebate each month which would actually improve their standard of living.
Your idea of what a person's tax refund check is is fundamentally flawed. No one should expect a "refund," "tax refunds" are an individual's money that the government has "borrowed" without paying interest.
Pure propaganda. The point of the Fair Tax is to let the rich completely off taxes on income and investments. How much do Bill Gates and Warren Buffett pay to the Federal government under this plan on their tens of billions of income? The name "Fair Tax" is as much Newspeak as "Death Tax".
You didn't read the book did you.. The Fairtax completely illiminates the taxes all "poor" families would pay.. it is the only proposal out there to do that (prebate). As far as the rich getting richer... sounds like wealth envy. People who work hard and get paid well for their services deserve to keep it. But figure it this way... when they spend their money they will be paying a lot in taxes (like they do now)...(the top 20% pay 50% of the taxes now)... The only thing that can hurt the lower income is they won't be getting a check from the "government" every year called "earned income credit". Please tell me when they earned it.
It's amazing to me that the majority of negative posts regarding the Fair Tax clearly evidence that the authors of these posts have never bothered to read the book.
I am finishing my law degree and work pro bono helping low-income taxpayers sort out their problems with the IRS. My experience tells me that the current system is fundamentally flawed, flawed to the point that only a radical change, such as the Fair Tax, has a chance of fixing it. I favor the Fair Tax.
I will say that when I asked my tax professor what he thought about the Fair Tax, he cryptically answered: "I think the Fair Tax is a Trojan Horse." And he left it at that.
I would like to see the Fair Tax movement grow from a grass roots level to a point where the politicians, most of whom seem so out of touch with the American people, have no choice but to respond and at least give serious consideration to passing it.