I know that I give 15% of my total income PRETAX (gross income) to a charity. I know there isn't much of a tax incentive for me to give that much. I also know that America is the most generous nation in the world because the people are the most generous. Look at the terrible disasters around the country this past year. People are very generous and are always ready to lend a helping hand. We saw this even during the aftermath of Hurricane Katrina. (PLEASE DO NOT GO ON A RABBIT TRAIL ABOUT WHOSE FAULT THAT WAS...)

Ok, I gotta take a break but i should be back tomorrow at the latest.

Eomund said: Final-Fan said: Final-Fan said: FactCheck.org is about as neutral and accurate as they come. Here's what they have to say about the FairTax: http://www.factcheck.org/taxes/unspinning_the_fairtax.html This is the Treasury Department's graph of who will pay what percentage of tax revenue under the FairTax as opposed to current tax law. Notice how everyone is actually paying MORE except for the extremely poor and very rich?  Ok, the tax plan they used in this graph was the HR25 aka the FairTax. It was a modified version. They excluded items from the FairTax and therefore had to raise the rate of the FairTax making this chart invalid.

The fact remains that earners making $15k and less and earners $200k and up are better off than everyone in the middle. This basic trend WILL NOT change unless you change the rules to charge rich folks more in taxes, which [edit3: defeat the purpose of] the FairTax. [edit: Oh, and what were those excluded items? [edit2: I hope they weren't things like "food" that poorer people spend a much larger share of their incomes on because that would totally destroy your point.] While you're at it, please refute the criticisms leveled by the good people of FactCheck.org in their article. [edit2: Such as assuming 100% compliance instead of the (estimated) current 85%.]]

@redspear

Though I am not for the FairTax, your assumption is wrong. You are missing the rest of the taxes the the FairTax would eliminate, not just income.

Isn't teh idea that this tax is applied to NEW goods bought? Not second hand? There are plenty of perfectly serviceable places where you can buy second hand goods, and then you don't get taxed at all.

Eomund said: @Avinash America's basis for the economy is Capitalist. If it isn't Capitalist, whose fault is that? THE RULING CLASS! THE POLITICIANS! @Superchunk The States could switch to a similar system. Right now the majority of the states model their tax system on the federal system. It wouldn't be hard for each state to switch to a smaller version of the FairTax. Most states already have some form of sales tax. The States would collect the taxes from the companies and then send it to the Federal Government. The companies that collect the FairTax at the Retail level get a small handling bonus for the taxes they collect, something like $200 or 0.5% whichever is greater. The States also get a small handling bonus for collecting the FairTax from the companies. I am not sure how the local level would handle the tax, but since they very rarely have an income tax to begin with, I do not think this is a problem. They could simply embed the sales tax in the price of the goods as well. The FairTax is Federal Tax reform, not local or state tax reform. However I understand that reformation at the Federal level impacts the lower levels as well.

 I'm glad its not purely lassiez-faire capitalist, as a purely capitalist economy would result in greater income disparity and less mobility

Grey Acumen said: Isn't teh idea that this tax is applied to NEW goods bought? Not second hand? There are plenty of perfectly serviceable places where you can buy second hand goods, and then you don't get taxed at all.

 Second hand goods suffer from adverse selection, not a good thing

Avinash_Tyagi said: Grey Acumen said: Isn't teh idea that this tax is applied to NEW goods bought? Not second hand? There are plenty of perfectly serviceable places where you can buy second hand goods, and then you don't get taxed at all.  Second hand goods suffer from adverse selection, not a good thing

Also, expect used goods to suddenly become a lot more in demand for exactly that reason, and thus more expensive, until the price stabilizes at what I strongly suspect would be a LOT more than you think, Grey Acumen. P.S. You can't buy used food and gas. [edit: And don't expect great workmanship out of companies that know they're facing such stiff competition from their own secondhand product.]

Eomund said: I know that I give 15% of my total income PRETAX (gross income) to a charity. I know there isn't much of a tax incentive for me to give that much. I also know that America is the most generous nation in the world because the people are the most generous. Look at the terrible disasters around the country this past year. People are very generous and are always ready to lend a helping hand. We saw this even during the aftermath of Hurricane Katrina. (PLEASE DO NOT GO ON A RABBIT TRAIL ABOUT WHOSE FAULT THAT WAS...)

I can only imagine yoyu think America is the most generous nation in the world because that is the country you live in.  Every once in a while a disaster can convince a majority of people to donate money, however this is a very rare case.  More often then not this money goes to wherever and is eaten up by processing costs etc, to the point of where it's not even useful really outside of bigger donations.  Even private charities are burdened by bueracracy.

Without being able to write it off, corporations would not give to charity, or at the very least would give much less.  They have little reason to other then the good PR.  Corporations are run to generate profits.

Also, i object to the name "Fair Tax" in general since...

1) Everyone has a different definition of fair.

2) Income even in a purely captialistic let the market decide factor is unfair because of outside circumstances.  Therefore ANY tax even one based on consumption is unfair. 

 Reasons for this are

A) Where people are born.  Identical twins seperated at birth one living with a rich man, the other with a poor man likely will not end up in the same pay grade.  An equal tax is unfair, because their incomes are unfair.

B) How people are born.  Nobody chooses to be born stupid, yet some people no matter how much effort they put towards it just can't be successful.  Given the choice i'm sure everyone would wish to be born a genius.   However we live in the universe of the all mightly bell curve.

C) Numerous other factors that occur with no fault of the persons own that can effect both positivly and negativly ones income and career path independent of how much effort one actually puts forth.

 A Fair tax would never truely be fair unless we were like some genetically altered babies taken away from their parents at birth to be raised like some sort of spartan warriors sent out on our 21st birthdays all of us with an equal amount of money... and who would want to live like that. (Not to mention enviromental and happenstance situations would likely STILL alter things.)

 or as the short version.

Nothing in life is fair, nor will anything in life be fair.  When people claim something is fair, it likely means that it is most preferencial to them and their viewpoints, and not fair on a universal whole.

Also, i don't understand why sales tax wouldn't be put on "used" items.  I mean it will anyway, as whenever someone sells something they bought "new" they would put a portion of this tax on anyway to recoup there losses.

If a buy something for 77 dollars today, and sell it for 30.  I'm going to sell it for more then 30 if i have to pay 100 for it.  Even more so if i'm a middle man company. 

Which, if i've got the definition of "new" correct are the people who will be paying a lot of these taxes.  People in the supply distribution chain.

I just thought I'd mention that this prebate scheme sounds expensive to administrate and vulnerable to exploitation. Not that there isn't plenty of cost and fraud associated with the current tax system, but for those of you hoping to cut down on the expensive professionals who get paid under the current system, I'm not convinced you'd actually reduce administration costs with the 'fair tax' scheme.