What are your feelings on the fair tax?

Question

The fair tax is a concept written about by neal boortz and congressman john linder. it provides for the elimination of the irs and all withholding taxes and replaces it with a 23% national sales tax on all goods/services. what do you think about it? (personally, i love it!)

Answer 1

The FairTax has my full support. For those who think it hurts the poor more, you haven't studied it enough to argue. There will be a "prebate" sent out monthly to cover the amount of taxes that would be paid on a poverty level income.

That money that some argue would "just sit" in bank accounts, doesn't "just sit". It is loaned out and recycled into the economy to create businesses and jobs.

John Ross Hendrix for United States Senate
http://www.hendrixcampaign.com

Answer 2

Sales taxes are never "Fair" to the poor. If you are barely making enough to get by, you are spending 100% (or more!) of your income on goods/services. If you have enough money to save stuff, you are of course spending less than 100% on good and services. If you're making so much money that you can't possibly spend more than half of it, then the "fair" tax would effectively allow 50% of your income to be tax-free.

However, if you're making so much money that you can't possibly spend more than half of it, what happens to the other half? Currently, the government taxes that portion of your income, so that it goes to public services, including aid to the poor. With this "Fair tax" concept you mention, that obscene sum of money would just sit in a bank earning you more interest, which would also sit in a bank. Since banks must keep a certain portion of the money that they hold for you available, this "fair tax" would eventually make it impossible for the poor to obtain any actual spending money. They would instead have to rely upon writing checks, using credit cards, etc, all practices which tend to foster going deeper into debt, as well as all being traceable. Currently, these sorts of transactions are sometimes traced in order to improve targeted marketing, which the poor would then be subject to at a greater degree than the rich.

I think that this "Fair tax" will be a great way to completely eliminate the middle class, and encourage class warfare similar to the railroad strikes of the late 1800s. I think that the "fair tax" is anything but fair, and is a good way to make people think the Communist Manifesto was right after all.

Answer 3

I love it. I think it is very very well thought out, and a great answer to the many shortcomings of our current system.

Edit after reading some other responses: Those of you talking about the poor are unfairly commenting on this, since had you read the fair tax book, you would know that the poor would be exempt from this tax.

Answer 4

Many countries have some version of this type of taxation which is also called a Value Added Tax (VAT). One of the upsides is that it does not tax profits made from investing which is inherently good for the economy and encourages a positive behavior which is saving money. If one is frugal, and invests his or her money prudently, then it is a great system. If one is an irresponsible spendthrift and leverages one's life to the hilt, then this system hits them right where they live.

Answer 5

A fair tax must be lower than the present tax and not high as 23%.

Answer 6

Replacing income taxes with consumption taxes is inherently regressive. Poor people have a higher propensity to spend, and so wind up paying a higher % of thier income in taxes. As such it is even more inisidious than the proposals for flat income tax rates.
Obviously something that is so unfair would have to be dressed up with the word fair in its title.

Answer 7

I love the idea, but worry that 23% would have a negative affect on sales. But, ...anything is better than what we have now.