It would get rid of a whole pile of accountants and lawyers that specialize in tax accounting and tax law...

I'm all for it!

Is this for the US?
i really have no knowledge in this but from what i understand,
Wouldnt this be bad if people horded money?
sure theyll spend it someday but the flow of tax to the government would be much more eratic.

that said i like this idea.
we get to spend more money while buying items that seem to be at an inflated rate, thus making us more concious of how much we spend.

though would this suck for tourists?
people from other countrys wouldnt pay 23% taxes from the things they buy here in the US...

anyway(rant)

the only problem i found with the US government is how they give lots of money away to the lazy unemployed... and the single mothers (yeah i said it >.

 no i didn't.  if tax revenue is to stay constant, economist would generally encourage increasing income tax and lowering sales tax.  sales tax tends to hit the poorest the hardest.  that's why the recent GST reductions in canada are not widely applauded by economists.  fairtax would remove income tax and slap a flat 23% sales tax on everything, exactly opposite of what economists recommend.  

 that is of course we assume the nation taxes the rich heavier than  the poor, like we currently do (different tax brackets).

i'm not really interested in politics, but my impression is that republicans tend to want to cut income taxes, which tends to benefit the richest.

 But that would leave a lot of lawyers looking for other work... I might have to change my stand.

 My few concerns on your perspective here are that there a very few people (percentage wise) that are in the very high tax bracket and those with money will likely find a way to spend it (or whoever inherits it will.)  In essense, the money will be spent in one form or another, those that save their money for a later date re-inforce the economy later when it's needed.  If they are out of a job and not contributing to the income tax, they are most likely still spending money and paying the consumption tax.  In effect, those that save for a rainy day are protecting the economy in the grand scale of things.

And about the cost of living.  The 23% you would be spending on everyday things would likely be less than you pay out in taxes unless you are one of those that lives with your credit card maxxed out and every penny goes to repay that month to month.  The poor will likely be those that spend the entire paycheck as you noted, but the percentage going out is less than that being spent in income taxes, add that to the "prebate" and you'll likely have more money in the "less fortunate" people's hands year to year. 

I think it's ridiculous.

On one end, it rewards people for not spending money, which does nothing but slow down the economy. It's not unlike the terrible VAT in the EU, which helps businesses and is mostly paid by poor and middle class people.

It also lowers the effective tax for higher incomes.

Look at it this way: If the only thing you change is the tax system, and don't want to change anything else, the government will want to collect pretty much the same amount of money. Therefore, some people will pay more than they do now, some will pay less. How are the ones that will pay more going to love this new system? They won't.

There's also the part about not creating a ruling class which an income that dwarfs their expenses, so they are barely taxed, and can safely continue owning a larger percentage of the country, and pass it on to their kids. But Republicans don't care about that.

Cdude the difference is that you get your entire paycheck. Add the prebate and you have more purchasing power. The Advantage is the tax system is more fair for everyone. Since corporations will no longer be taxed they can create more jobs. This will unleash the business prowess of American Small Businesses.

Jman I will answer your 4 concerns next. It is kinda long I would wager.

What was that all about... wierd...

Hello again FinalFan.

Your argument that $23 is 30% of $77 is correct when talking about an EXCLUSIVE tax rate. This exclusive tax means that the shelf price of the item is $77 and then the effective tax rate at the sales counter is 30% or $23. You have a point if we are talking about an EXCLUSIVE tax.

However the FairTax is an INCLUSIVE tax. This means that the shelf price of $100 already includes the tax rate. It is embedded in the price of goods and services. This means that the rate is 23%. When you take the item to the sales counter NO EXTRA TAX IS ADDED as a part of the FairTax.

Using this 30% vs. 23% argument is now invalid as it has just been answered. Attempts to reuse it will result in the same response.

Let the Fair Tax begin now!!!!!
BTW- what's the difference between fair tax and consumption tax? Or are they the same thing?

Researchers also say that fair tax will encourage companies to lower their prices as well. It makes perfect sense.
Fair tax + capitalism = Joy!!!!