[Kellis91789]

In 2009, the top 1% of taxpayers paid 17% effective income tax rate. The prebate is insignificant at that level of income, so the FairTax is equivalent to a 23% income tax rate for them, since all income is eventually spent. The only way for them to lower their tax burden would be to spend their money outside the country. You can bet that is what they’ll do, and it will leave a $500B/yr hole in the tax revenues HR25 expects.

Check it yourself at http://fairtaxcalculator.org/ and plug in $1M income and $0 savings.

On the other hand, if the FairTax rate was just 10%, all those high income people really would come back to the country the way you thought. Without the Prebate and the misguided attempt to wrap SS/M into it, a 10% rate would be enough to completely replace all the income taxes. Like I said, all the advantages and none of the disadvantages of HR25.

[Defend Liberty]

In 2009, the top 1% of taxpayers paid 17% effective income tax rate. The prebate is insignificant at that level of income, so the FairTax is equivalent to a 23% income tax rate for them, since all income is eventually spent.

You're right. The prebate, as a percentage of income, decreases as income rises as is by design since people with higher incomes will be able to afford purchases more than those who have lower incomes. However people of all income levels will experience an increase in purchasing power since no federal taxes will be deducted from their paychecks, applied to their dividend checks or interest on savings etc...

On the other hand, if the FairTax rate was just 10%, all those high income people really would come back to the country the way you thought.

They will return for the reason stated above. The Fair Tax rate is set to collect as much tax as is currently collected. Ten percent will not fall short compared to what is currently collected.