It’s a regressive tax.
People who, in the course of the year, spend all their income on living will be hit the hardest, and the people who spend tiny fractions of their total income on living will be paying a tiny fraction of their current tax liability - and that will require the % of tax charged to be hiked even higher, hurting the lower income earners more.
If they were to do this I’d hope it’d be accompanied by a law that required that businesses posted prices be after taxes.
This is the “UBI like” provision I was talking about in the OP.
What don’t you like about it?
The truth is, as we all no, millions of working Americans pay virtually no federal taxes because their earnings are too low. I suppose that provision is trying to keep them from paying any taxes.
But to my mind, that just shows you that this isn’t the ‘simpler’ solution it’s billed as. Already getting complicated.
I can see them being cheap. Never being a true measure of what is owed. Politiions will make all kinds of promises how they will change it up or down.
Already answered HERE
It creates a new entitlement, the “Family Consumption Allowance” [a monthly government check sent to every “qualified family” in the U.S.] that would become another political partisan wedge-issue used during election time to buy votes.
I understand that. But think there is a better way somehow because this will be abused by government and civilians
No system that replaces income taxes with a higher sales tax will ever pass if it doesn’t include some sort of stipend for the poor and lower middle class.
Let’s not forget we are comparing this new bill against are current system.
Are you suggesting the current system is better than the proposed?
It might but it would take a miracle to actually pass this legislature into law.
It’s definitely not a bill designed to actually pass the Senate. This is not much different than all those times the House passed a bill to abolish Obamacare.
Good point.
What is being proposed, the alleged FairTax, essentially enlarges the federal government’s taxing reach as explained HERE
What do you find attractive about the FairTax?
JWK
Yeah, that is a good point.
And the middle class loses too.
Round number and off the cuff.
One family of four combined income of 100K.
They consume 50K a year, and on that pay 30% or 15K in taxes for a total of 65K leaving them 35K for their mortgage property taxes and utlitlies (are they taxed as well?) 35% of their income.
One family with a combined income of $10,000,000.
Sure, of course they are going to consume more, but honestly, how much more could they? 10 times? 650K a year in consumption? 20x? 1.3M? Ok, say they consume 1.3 M a year. They pay 390K in taxes for a total of 1.69M leaving them 8.31M or 83% of their income.
This tax is regressive.
I think it would be good for middle class. They can control their tax expenditure. Especially if food and essentials are tax free. Also is an incentive to save money.
Not regressive everyone pays same rate accept below the line.
I think any time you ask someone making 10% of the top to pay the same as the top, it results in regressive taxation and increases the wealth gap.
It’s just like gas tax. What does 10% (or whatever it is) on gas mean to the guy making 10M a year? Absolutely nothing. What does it mean to the guy making 20K? A lot.
It’s regressive in effect.
Think about gas tax. Who does that hurt more? Everyone pays the same rate, but the folks at the top could care less about it, while the folks at the bottom feel it.
There is not a thing in this world that is not true about.
