Sarah C., on 11 March 2012 - 07:49 PM, said:
This kind of thing is why I am for fairtax. Do away with income taxes and have a tax on everything we purchase, except food. The more people spend, the more they pay in taxes. A wealthy person has a lot more money to spend, thus they will naturally spend more. This is so much more fair in my opinion.
But consider this Sarah... someone making $20,000 a year or even $30,000 a year is likely to spend close to 100% of their income. That would in turn mean that 100% (less the re-bate/pre-bate on food and other limited items) of their income is subject to taxation.
(Also, there still seems to be some discussion as to how the pre-bate/rebate would be calculated... I forsee some wrangling by politicians to ensure the pre-bate/rebate falls well short of people's actual expenses further demonizing and marginalizing those low income households.)
If on the other hand, you are at the very top of "wage earners", making $50 million a year... how much of that can you realistically spend year after year on goods and services? They are certainly not going to be forced by necessity to spend 100% of their income. The Fair Tax serves only to remove the tax burden and public scrutiny of dodging taxes and sitting on your dragon hoard. It also seems to be a convenient scheme for getting millions of Americans excited about something that is against their own best interests.
I think it is also important to point out that under CURRENT tax law, many of the wealthiest Americans are already only paying a 15% tax rate on the bulk of their earnings under the capital gains tax.
Sometimes I wonder if proponents of the Fair Tax have ever bothered to read the "Fair Tax Act of 2005"... do they even realize the 23% federal sales tax will be levied ON TOP of any state, county, and city sales taxes they are already paying? There is also nothing in the bill to address gas taxes, cigarette taxes, or lodging and service taxes, etc... these additional special taxes are outside of the taxation areas that the Fair Tax would replace.
The Fair Tax also effectively creates a system where EVERY seller of a good or service could be forced to become a tax collecting entity. So, consider how much you might enjoy paying 23% sales tax on healthcare services. And since many more businesses will be collecting sales tax, the Fair Tax will absolutely do no such thing as "abolish the IRS"... unless of course you think the government is going to institute this fantastic tax scheme without any oversight and regulation and allow tax dodging to become rampant at all levels of society, not just for the upper crust.
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