There has been a lot of talk about the Fairtax this year. The Huckster has brought it up several times. I wasn’t sure what to think of it, but I assumed (and I was right) that it was just another way for rich folk to shelter their investments and wealth from taxes. I have always been for a flat income tax, across the board.
Under the current tax system I am curently paying about: $4,960 in taxes a year (Income, SS, Medicare, retail) under the Fairtax which is a flat retail tax I would be paying $6,210 a year. These numbers don’t include property taxes. I am assuming property taxes would still have to be paid to fund education.
You will notice that wealthy Republicans are supporting the FairTax because they spend less of their income on goods and services and put most of their income in investments then the middleclass does, in turn paying less in taxes then the middle class. A retail tax is regressive. Period. A flat income tax is the only FAIR tax that makes sense.
scott, i used to be an advocate of the single-rate income tax, too. but after much study, i became a fair tax advocate.
read this from federalist paper #21:
. . . Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.
It is a single advantage of taxes on articles of consumption, that they contain in their own nature a security against excess.
I somewhat agree with it, except I think retail luxury taxes make more sense. Taxing food and clothing isn’t right since there is no way someone can control their spending on food. But the problem with taxes currently isn’t the system in which we pay them, it is how they are spent. I’m all for simplification, but I think spending is out of control in Washington and Pierre. I think lawmakers need to learn how to curb spending then we can look at a system that would work.
i agree that the real problem is spending. bush introduced the first 3-trillion-dollar budget. that’s outrageous.
but i think it’s wrong to say that “there is no way someone can control their spending on food.” i agree that it’s inescapable to pay some taxes on food, but there are ways to limit consumption. in fact, you’ll notice that poor people tend to struggle more with obesity. (or maybe it’s that obese people tend to be poorer.)
but the whole point of taxing necessities is moot with the fair tax because of the rebates that go to people who earn, i believe, under 35k.
though, i don’t necessarily like the rebates. (i despise government handouts.) i’d rather see food and clothing sales taxes reduced or eliminated under the fair tax.
regardless, my point stands that the founders preferred a consumption tax to an income tax.
i think i misspoke. the “prebates” of the fair tax go to all people, for the first 35k of their income. if we have to have government handouts, they should be handed out indiscriminately, in the spirit of the general welfare clause.
it would be nice, though, if all people could afford to pay taxes on food. but as long as the state and feds continue to spend like kids with a no-limit credit card, we’ll have to settle for these stupid prebates.