This proposal is called a fairtax. It makes perfect sense to me. What do you think. You can learn more at:
http://www.fairtax.org/site/PageServer
2007-12-28 04:03:22 · 5 answers · asked by sgersch26 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
It is an awesome idea.....if you are wealthy.
Not such a great idea for the poor and middle class.....
2007-12-28 04:12:51 · answer #1 · answered by Wayne Z 7 · 4⤊ 0⤋
In reality, it's just a consumption tax, not a "fair tax". "Fair tax" is just a marketing term used by its promotors to help sell the idea. You'll have a tough time persuading lower income people that a consumption tax is "fair" to them.
There are positive aspects to a consumption tax. For example, it could encourage savings and investment by removing taxes and interest, dividends, and capital gains.
On the other hand, it can be argued with some justification that this favors wealthier people. Someone who is trying to raise a family on $30,000 spends pretty much everything that they make. They have no choice. And this consumption gets taxed at a 23% federal rate. Their interest and investment income doesn't get taxed, but they probably have little or none.
On the other hand, someone who makes $200,000 a year doesn't have to spend all of it to survive. He likely spends a lower percentage on consumption than the $30k earner and saves and invests the rest. The income from these savings and investments now becomes tax free. He gets a double benefit.
Like every plan, this one has pros and cons. Whether it is genuinely "fair" is strictly a matter of opinion.
2007-12-28 07:34:57 · answer #2 · answered by The Shadow 6 · 2⤊ 0⤋
If you are referring to a retail or wholesale sales tax, you need to kill the income tax stone dead first with a constitutional amendment, otherwise you will end up with both.
You do not want a value added tax, because that involves paying tax and claiming input credits. It is a paper nightmare and gives government huge access to interest free loans. It also requires registration of the whole economy.
If you mean a progressive consumption tax, that is like an income tax, with investments being deductible, it is a good idea, even though its advocate with a socialist economist - Kaldor.
2007-12-28 04:18:48 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Every day someone posts this question--it's certainly not new and borders on spam.
If you want the opinions on this site, do a search on fairtax.
2007-12-28 04:07:00 · answer #4 · answered by Anonymous · 2⤊ 0⤋
Great idea if you're hideously wealthy.
Bad idea if you're part of the middle class.
Terrible idea if you're poor.
2007-12-28 05:31:25 · answer #5 · answered by Bostonian In MO 7 · 0⤊ 0⤋