1. It isn't income until you realize the income. When you realize the income, now you've got capital gains and a fairly high tax rate at that. Under the fair tax, this still wouldn't be taxable. And to say people don't sell their stocks until they want to buy something is being ignorant. Sorry, that just isn't the case. People move their money around for a number of other reasons, sometimes because another stock looks more attractive, sometimes because they want to prevent losses, etc.

2. I think you made a typo and meant a NY janitor making 75,000 should be paying more tax than a col executive making 45,000. But in either case, if the NY Janitor has to spend 74,000 to acquire the same "goods" as the executive that only has to pay 20,000 due to the lower cost of living, then no, it isn't fair that the NY Janitor has to pay more tax.

3. "If you can't afford kids, don't have them." Who decides if you can "afford" kids? The government? I know, people irresponsibly bring kids into the world without being able to send them to an IVY league school. After all, isn't that "affording" a kid? My point: "Affordability" is subjective. Some people can't "afford" to lose their spouse to a heart attack, but that doesn't stop it from happening. My point stands: People with higher expenses shouldn't be forced to cover a larger portion of the tax burden, especially when their income is barely enough to get by.

So basicly your saying to tax at the consumer level on things like electronics, cars, and luxuries?

is that all or is there more im missing?

Edit*  shoulda read the whole thread lol

your basicly opening up a huge can of worms with this

your fairtax is good on paper but sadly itd be bad for many

example i live in Delaware where we have tax free shopping which is a major factor in our states economy cause it attracts people from so many areas around us and attracts Cooperations into the state. If you take that away it would kill a state like ours.

Also Fairtax would not work on the streets where people sell anything so the government would not make money off of that.

A tax on everyone is fine what they need to do is a straight standard tax thats the same for everyone through paychecks but what REALLY needs to be fixed is the governments REDICULOUS spending.

 i believe so.  the US has one of the most complicated tax codes in the world, and a reform is often brought up, so that's the motivation for the proposal, which clearly goes way too far.

In Oregon there is also no sales tax, that is one of the main reasons why I like living here.

What would happen in Oregon, or Delaware, under fair tax?

Since it is on a federal level, wouldn't thatmake Oregon have sales tax?

That would severely piss me off.

Paragraph by paragraph:

No they do spend their money, but they don't spend it on frivolous things, they invest it in business, real estate, bonds, etc....  and it is very healthy for the economy.  There aren't rich people who simply have a giant vault of $100 bills or anything. Now, Ideally there would be incentives to get all people to invest some of their extra cash but those details can get sticky very quickly.

You would very likely pay less taxes because the government would be spending less. The government would be spending less because they would not be propping up one of the most expensives beaurocracies in the world...the I.R.S..  I'm sure someone could rustle up the expenditure statistics for the IRS, and I bet they aren't pretty.  

As ugly as the IRS expenditure sheets are, I don't think they make a significant dent in the overall budget.

I agree about rich people spending their money and helping the economy, though.  Also, I don't understand why rich people getting richer by saving their money is a bad thing for the economy.  Sure, they're accumulating wealth by saving most of their money, but they're still spending more money than the middle class, and as long as their wealth continues to grow, they'll continue to spend even more money.

1.  Capital tax rate is 15%.  Most of the time people are elated if they qualify for this rate as they don't have to pay 28-39% tax on it as you would "ordinary" income.  The assumption is that if an individual is trading stock->stock that they qualify to keep their original basis and claim a "larger" gain when they ultimately sell the stock and cash out. 

2.  No, I didn't make a typo.  I'll try to explain it a different way.  In NY, there is a wage premium due to the higher cost of goods.  Adding a 23% tax to all goods keeps the ratios the same.  So for example:

Worker A lives in New York.  They make 50,000.  There is a 20% premium (cost of living difference, i.e. rent, food ect. on average cost 20% more in NY than Colorado).  There is another individual in Colorado making 50,000. 

In all reality, the person living in Colorado already makes 20% more money. 

As such, if the person in Colorado and New York have the same consumption patterns, I would expect the person in New York to pay more for living expenses and taxes (its already figured into their salary).  In the current system the Col individual would still pay less in living expenses but theoretically the same in income taxes if all other deductions are the same for federal purposes.

3.  Affording an Ivy league education is not "affording a kid".  I'm simply noticing a trend that the lowest income areas of the country are typically the areas where you will see families of 10 + kids.  I'm personally tired of paying for these individuals and hearing the welfare stories about individual x whose never had a job, never gotten married, has 10 kids, and receives a large sum from welfare monthly to support said kids.  When do hold people accountantable for their actions?  In most cases, sadly, these are the individuals likely to have a large TV set, a PS3 and nice car, while they pick up free clothes for their kid from goodwill and the only decent meal their kid will receive is the free lunch at school.  Really though this rant should be on a different topic.  My point is we have welfare, why are we trying to make fair tax = welfare. 

The big key here is why should the rich pay for the poor?  That seems to be the biggest criticism is that the rich would be paying a slightly lower overall percentage of their income (still they would pay the lionshare of taxes). 

In my mind, I think person x getting paid 10 times person B, should:  Pay 10 times as much tax as person B, and still take home 10 times as much as person B.  They still pay a heck of a lot more tax.  The market has decided they are worth 10 times more than the market for whatever reason.  They should pay more taxes, which they would if they pay at an even rate.  This is a capitalistic society after all.  Do we want a communist society where every makes and pays the same amount of money?  Are people entitled to the earnings of other individuals?  I understand the need for government assistance programs, but I feel we should make it difficult to get these perks and while being "middle class" I don't feel sorry for the middle class to have to pick up some of the tax burden from the rich. 

 $11 - 11.6 billion to run the IRS each year according to: http://www.gao.gov/new.items/d07719t.pdf  (page 7)

 One of the proposed Federal budget numbers I've seen for 2008 is $933 billion.  IRS would be 1.2% of that ($11.6 billion.)  The sad part is that 54% of that is given to the Pentagon, but we won't even get into that here.

Here's another chart.  I'm not sure what all is included in "Income Security" (and don't have the time to look it up right now) but it amounts to 5% of the national budget.

http://www.nationalpriorities.org/Proposed+Discretionary+Budget

edit:

 Oops.. my bad.  I was looking at discretionary spending.  I wanted the total spending which includes mandatory spending as well:

This is more negative than positive I feel.  While tax is too complicated, and I'm all for a smaller government.  The biggest expense in that $11 billion is salaries of IRS individuals.  To have that many individuals lose their job all at once will create a negative effect on our economy and worsen the credit crisis that currently affects our country.  Not just IRS individuals either though.  How many corporations accross the country have tax accounting staffs that are in 10s, 20s, or higher individuals?  These people will lose a job overnight.  Whether or not you feel they add any value to society this is alot of individuals to become jobless all at once. 

Notwithstanding with that many accounting/finance people looking for jobs, expect existing jobs in accounting/finance to have significant pay decreases as the market goes from excellent to poor all in one fell swoop. 

I also think that even a fair tax will eventually have most of the deductions/exemptions that current law has.  It starts out simple enough, just a tax on sales with an exemption for families (i.e. standard deduction).  But what happens when charities start complaining?  Well, it wouldn't hurt to add an exemption for 10% giving would it?  Even the old tax law had that.  What happens the housing market continues its downward spiral?  Well it wouldn't hurt to give individuals paying taxes a benefit for the interest they are paying on a house would it?  The old system had that too after all.  Taxes are too complex, and often on the surface don't make much sense.  But when you did into the details a lot of thought has gone into the laws.  Not always the best reasons for certain exemptions/deductions, but no system is going to be perfect.