2006-11-03 03:45:05 · 4 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ Other - Taxes
If I understand the Fair Tax proposal correctly, it's essentially a national sales tax, with a rebate to everyone to cover some base amount of tax, which theoretically would protect people below the poverty level from paying the tax. There seems to be substantial debate on what the rate of this tax would have to be to generate the same net revenue as the current income tax does - I've seen numbers ranging from a low of 23% to over 50%.
The biggest "pro" that I see is that it taxes the underground economy. While nobody really knows how big that is, it's huge, and consists of people getting away without paying their share to support he country.
Cons:
For people below the poverty level, they don't pay tax now and wouldn't pay a net tax under Fair Tax, So it would seem that they'd break even to now. But they'd get their rebate up front each month, then pay the tax throughout the month - how many of these people would invest the rebate, collect interest on it, then have it to pay the higher prices throughout the month? Or would it be spent right away, then struggle even worse than now the rest of the month to pay the much higher prices for what they buy? But overall, they'd at least break even.
Middle class: Since a pretty large percentage of their income is spent on items which would be subject to this new tax, would likely pay more through the year even with the rebate. And according to the fairtax.org website, residential home purchases would be subject to this tax, pricing many middle class people out of the market for home purchases.
High income: Many people in this situation invest a lot of their income, so don't spend anywhere near all of it, so would make out well under this plan.
2006-11-03 12:11:20 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
I don't know what the Fair Tax is (In our state we are voting on TABOR) but how can a person be nonbiased about taxes?
2006-11-03 11:52:58 · answer #2 · answered by Kacky 7 · 0⤊ 0⤋
Fairs should not be taxed. They are a place where families should go to enjoy themselves, and perhaps nosh on a caramel apple and a pulled pork sandwich.
2006-11-03 13:43:59 · answer #3 · answered by jinenglish68 5 · 1⤊ 0⤋
there is none. everyone thinks the only fair tax is what someone else pays
2006-11-03 12:43:06 · answer #4 · answered by waggy_33 6 · 0⤊ 0⤋