[Final Authority]

The question about savings was never savings at all, it was the statement made that both income and savings would increase. If everyone saves everything they earn starting tomorrow, then how long would the economy stay afloat?

BTW, there is no incentive to save under the consumption tax like there is with an income tax. Under the income tax, savings are often spent at a time where the individuals tax bracket status is much lower than when the individual is earning. If one spends down an IRA then it is much cheaper tax-wise. Under the proposed consumption tax, spending an IRA is taxed equally. But I suspect, for the generationally envious crowd supporting the fair tax, those who have been know ass X'ers and the like, those who haven't saved for retirement, see the fair tax as an opportunity to finally get even with the greedy and mean Boomer generation, who have done so many evil things, like earning, and owning, and living the American dream.

[kjam22]

Just stick a 50 cent tax on gasoline right now and see how many people curtail their driving.

A consumption tax has the same effect as supply and demand pricing.

A consumption tax will really hurt our economy.

[hripka]

The question about savings was never savings at all, it was the statement made that both income and savings would increase. If everyone saves everything they earn starting tomorrow, then how long would the economy stay afloat?

This is why I mentioned that retail sales would decline. Hopefully income and exports would increase.

BTW, there is no incentive to save under the consumption tax like there is with an income tax.

Wow, I thought that the income tax hurts income (i.e. interest). The FairTax consumption tax at least doesn't tax that.

[phil_will1]

"If everyone saves everything they earn starting tomorrow, then how long would the economy stay afloat?"

How long do you realistically think that Americans would go with zero consumption under the FairTax?

[phil_will1]

"BTW, there is no incentive to save under the consumption tax like there is with an income tax."

So BOTH savings and consumption would decline under a consumption tax? What would Americans be doing with their money?