The FairTax, Join in!

[Andir]

Ah, here we go: http://weblog.larrydburton.com/archives/2006/09/26/ron-paul-and-the-fairtax

The Fair Tax is something you would pay every time you went to the store and bought a CD, TV, Clothes, etc. It's a consumption tax instead of something that comes out of your income. In simple terms, you'll get your entire paycheck and have more money to spend when you go to the store and buy the products that you want. It kind of shifts the idea of tax brackets to an equal and "fair" tax percentage. It's actually better for the "poor" since they wouldn't be buying as much and (edit: likely) worse for the "rich" as they would be buying more (and more expensive) items.

Edit:  It sounds bad the way I put it originally.  Think of it this way. (Not real numbers)

Someone getting paid 15,000/year is getting hit for 20% taxes in an income tax system.  They take home about 12,000.
Someone getting paid 150,000/year is getting hit for 40% taxes in an income tax system.  they take home about 90,000.

They are both in different tax brackets, but the 150,000/year person has more buying potential.  They are taking more home even though they pay more in taxes.

The Fair Tax would give both of these individuals their entire paycheck and based on their purchases, would be paying 23% of whatever they buy into taxes.  So the 150K personbuying their $80,000(base) car would be paying $98,400 for it where the person making 15K a year buying the 12,000 car would be paying 14,760.  The "richer" person is paying 18,400 in taxes where the "poorer" is paying 2,760.