FairTax

The problem with the FairTax system is that it increases the tax burden of those people who spend the bulk of their income and have little or no discretionary income to save - in other words, those people who can afford it least. Fair in a sense, but it's not a tax system I want to see implemented.
 
FairTax Progress

I just heard to day the John Linder's gotten 58 co-sponsors for HR25. Maybe it won't be much longer.
 
ismi said:
The problem with the FairTax system is that it increases the tax burden of those people who spend the bulk of their income and have little or no discretionary income to save - in other words, those people who can afford it least. Fair in a sense, but it's not a tax system I want to see implemented.
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Under the FairTax plan, poor people pay no net FairTax at all up to the poverty level! Every household receives a rebate that is equal to the FairTax paid on essential goods and services, and wage earners are no longer subject to the most regressive and burdensome tax of all, the payroll tax. Those spending at twice the poverty level pay a tax of only 11.5 percent – a rate much lower than the income and payroll tax burden they bear today.
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Americans For Fair Taxation: Frequently Asked Questions Answers
 
Tousi said:
Dennis, the rich don't spend? If they have, say, a 5 million dollar home, you can bet they will spend at least a half million just in furniture alone.
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Let's see..... Warren Buffett's one good example:

- Forbes.com

Warren Buffett
Omaha, Nebr.
Rank: 2
Net Worth: $44 billion

The "Oracle of Omaha" lives in mighty modest digs, given the size of his fortune. He still resides in the gray stucco home he bought in 1958 for $31,500.



If the cost of goods goes up due to tax, rich people have more options -- they can choose to buy their goods out of the country, they can change their habits to live more frugally, they can use their wealth to pick different goods.

I guess the best analogy I can give is, if the price of gas goes up, who really suffers? The wealthy person with a gas guzzling car who only drives a few miles a day because they can afford a house close to work, or the middle class person who can't afford a close house and has to commute quite a distance? A wealthy person could just buy a new econo-car, reducing their tax burden. What options does the middle class person have? Buying a new car for work isn't always an affordable option. So they have to pay more tax. What if we give them rebates? Well, then if the middle class person qualifies, the middle class person gets the money back later -- not now! The wealthy person is already paying less tax.
 
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