snow-
Even a flat tax would be better than the monstrosity we have now.
Why should the rich pay an even greater share of the income taxes than they do now? You do know that the top 1% of wage earners pay nearly a THIRD of all income taxes and that the bottom 50% of wage earners pay less than 4%, don't you?
At some point, a high rate of income taxation results in the achievers not being as willing to put their money to work, gowing their businesses, hiring new workers and investing in the stock market. After all, why risk your money when you know the end result is that you'll have a majority of it taken in taxes? They'll put their money in non-taxable investments instead and the end result will be an actual decrease in the revenue to the Feds.
What the Fair Tax is is a sort of consumption or value added tax such as many European countries have. It totally abolishes ALL Federal taxes- not only income but Social Security and FICA taxes as well. If you earn $500 a week, your employer pays you $500 a week.
Revenue to the Federal Government comes from what you buy. The Government would tax purchases of NEW goods at roughly 23%. There would be NO tax on used goods (including used cars, pre-owned homes, etc.).
Not only would there be no taxes at all on used goods, but the government would cut you a check every month- called a "prebate"- that would credit you with the taxes you would pay on the so-called "necessities of life"- food, medicine, clothing- based on the poverty level for your size family. For a family of 4 making $20,000 a year, the prebate would be around $600 a month. So the tax burden would be virtually eliminated for those at the lower levels of the economic scale, but they'd be decreased on just about everyone except the really, really wealthy- but even they could affect what they pay by not buying a yacht this year or whatever.
But wouldn't prices on new goods go up, seeing as how we're adding a 23% tax to the price? Well, no...because the Fair Tax would also eliminate all the embedded taxes that companies put into the final price of their goods. The embedded taxes pay for such things as corporate income taxes and the like. Economists say that these embedded taxes add roughly 20-22% to the end price of goods...so the net would be an increase in price of 1%-3%.
In the income tax overhaul commission that President Bush created to make suggestionas as to how to overhaul the tax system, ONLY the fair Tax was proven to be "revenue-neutral", meaning that revenue to the government would not decrease if it were implemented and that it could fully fund all discretionary and non-discretionary spending.
For more details, pop over to the Fair Tax website at
Fair Tax 
What do u think the 28th Amendment will be?
Sep 25 2006, 05:58 PM
