I have a few questions that maybe someone advocating FairTax can answer...
1) Wouldn't this seriously harm tourism dollars flowing into the United States? I mean since the tax burden would be shifted from income, corporate, etc, into a consumption tax wouldn't tourists be spending a lot more? Florida for example makes over $55 billion a year from tourism, what incentive would there for people to go there if they could go to the Dominican Republic and other destinations for far far cheaper?
2) Wouldn't it seriously harm donations to charity? I realize many people are kind of heart and give simply for that reason but there are a lot of donations given as simply tax writeoffs. Is the Government going to make up for the large shortfalls?
3) Wouldn't underground economies be even harder on the system since the Government would be seeing no tax revenue at all here at least they had some income tax from many people who participate in such systems?
4) Wouldn't this kind of tax remove a large tax burden from corporations that would have to be filled by private citizens?
5) Some people who propose this tax argue that the price of goods would come down a bit to compensate for the higher prices but wouldn't that only be for goods made in the United States? Since a massive amount of goods are actually manufactured outside the United States wouldn't they actually become more expensive because of this tax? Basically they're imported at the same cost as before but with a higher tax placed on them.
