To be fair, Kasz, ridiculous failures like the 360's RROD are bad for the company in any case. But yeah, you could expect a lot more "planned obsolescence" from any company that doesn't stake its reputation on having its stuff last forever.

On another note, I would prefer you didn't complain about the FairTax not creating a Utopian paradise singlehandedly. I feel like you're just a human strawman for Eomund to rip into.

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.

That's just an objection to the name. Nothing can create an utopian paradise as they don't exist, and couldn't exist atleast not in my view. Hence when discussing it using the name "Fair tax" is kinda stupid.

I'm not particuarly against the fair tax, i just generally think it won't do a lot of what proponents will think and in reality will end up with about as much problems as the current system, if not more depending on how a few key areas work out. It might turn out slightly better or slightly worse, who knows.  After all the prebate system would need quite the goverment agency behind it and would seem quite suseptable to fraud.  As would  some companies underwriting shipements and marking sales as ones that arn't taxable when they should be.

I'd probably be better off as i'm pretty thrifty aside from my love of videogames.

1) Not anymore than the VAT affects Tourism in Europe.

2) Not sure about this.  You'll likely see a falloff at the get go, but I think other benefits may arise.  It's a good question really and I don't have an answer.

3) I don't see how it would be any easier to sell something in the"underground" market.  You still have imports being monitored and all that.  The interesting part is the secondhand market that would go untaxed.  It would have an affect (I think) in a sharp burst, then a slow decline as the economy gets used to it.

4) Again, this has the same effect as the VAT.  Manufacturers in foreign countries would have to lower costs if they wanted to keep the demand.  On the other end of it, US labor might become viable again.

See your answers (and they're basically the same as those who're proposing this kind of tax) really bother me.  For example you never explained what kind of benefits charities would get in question 2.  I mean they're already nonprofit in the current system so how would less money coming in help them?  Basically wouldn't the Government have to step in and help with shortfalls? 

Also the VAT is affecting tourism in Europe, that's why countries are fighting to reduce the VAT on tourism.  But those proposing the FairTax in the U.S. are ignoring that and saying that large amounts of revenue will be generated from tourists.  If the FairTax ever goes through I'm betting tourism will start dropping drastically and the Government will have to step in and do something which will result in a lot of lost taxes.

And I noticed you never really commented on the fact that corporations would be paying far less in taxes.  Where do you think the shortfall will be made up?  How is it possible everyone will benefit and the Government will still be able to collect the same amount of taxes?  I just don't get it, it's like there's a lot of wishful thinking involved.

Oh from what I can see this system seems to encourage people to save their money, but that would be even harder on this kind of tax system since it wouldn't see anything from that money.  Wouldn't this kind of thing make the economy more susceptible to serious problems, especially recessions?  What happens if consumer spending starts dropping?  In the current system it's a serious problem, in the FairTax system it would be far more dangerous a problem.  The U.S. under FairTax would be pretty much completely controlled by the whim of consumers with absolutely no kind of safety net that income tax, corporate tax, estate tax, and many other taxes help to give the government.

Replies

1.  People are saving money typically do so by buying stocks.  These are not taxed until they are sold.  People usually only sell stocks when they want to buy something.  As such, I don't see a big change due to savings.

2.  This is why their is a cost of living difference.  A janitor in NY may make 75,000 while a janitor in Colorado may make 45,000.  As such, yes, I expect a NY janitor making 75,000 to pay more in tax than a Col executive making 75,000. 

3.  There is the prebate based on family need to even out more dependents.  Further more, when did having more kids get a person "ahead" in life.  If you can't afford kids, don't have them.  It's not the "rich's" responsibility to pay for a person to have kids.

 Pros

1.  More even distribution.  Our country leans too heavily on Rich individuals.  Plus it is more fair than the current system.  Why should a person making more money only get .50c of the next 1.00 he earns while a low income earner receives .90c of the next 1.00 they make?

2.  Less complex.  Many people have to pay tax professionals and still don't know what they are getting.

Cons

Still many issues.  I would much rather have a flat tax on income. 

1.  As far as I can tell, state/local/county taxes on income/sales/and property would still remain in effect.  Meaning that while 23% of the "sales tax" would be federal, I would still pay another 7% for state local.  I would still have to do an income tax from the state.  And I would still pay property tax on my house. 

2.  If this becomes close to passing, how many people are going to go on a buying binge right before it becomes in effect and not buy anything for 6 mos afterwards?  I know this would be my plan.  Christmas presents, needs, canned foods.  I would buy as much as I can now and as little as possible later.  Thus creating an initial drag effect on taxes received until consumers can no longer "wait it out". 

3.  Is 23% enough?  We won't really know until we see if buying/spending habits change.  It may end up being a much higher rate.  Or at least a very poor first year, until consumers get used to paying much higher prices.

4.  While Corporate taxes typically drag down a corporation, a Company that experiences a couple of years of losses can actually get money back from the government for losses. 

"Why should a person making more money only get .50c of the next 1.00 he earns while a low income earner receives .90c of the next 1.00 they make?"

The reason "why" is that people who earn $20,000 a year need a much bigger percentage of that to survive and thrive than people making $200,000 a year or $2,000,000 a year.

Just for the record, a lot of very wealthy Americans are already moving out of the country to various non-extradition South American countries. The rich have the means to pick up and leave, all you have to do is give them a motive.

This whole idea that 10% of people should pay for 90% of the taxes or whatever the percentages are is going to fail once that 10% says "F this!". I actually know people who plan on moving to Ecuador, they invited me to come down and help pick a house with them. These people aren't filthy rich either, together they make about 240k a year. Where did they get the idea? Other wealthy people they are friends with.

The idea that the minority pay for the majority is great so long as you're majority. Just keep on pushing these people away, lets see what that does to the economy.

I agree, I mean how is someone supposed to live with only 3 houses?  And only 5 SUVs?  Seriously how can anyone function with only 5 SUVs?  And now those bastards in Washington are coming down hard on the illegal immigrant hired help?  How dare they?!???!  Why in hell can't the Government just keep it's greedy hands out of their pockets?  That need to survive to ya know...