This is my main hangup with the Fair Tax and have yet to see it really addressed. It's very clear to anyone who looks at it clearly can see the problem with post tax savings.
Whenever I raise this on FR, I am consistently told that I don't understand, that I am missing something, etc. No real attempt to explain this problem, though.
One advocate of the FT on FR a few weeks ago was honest and point blank said that it would just be a bullet that people would have to bear. I have no interest in taking that bullet, but at least he was honest and direct about it. KUDOS to that Freeper (who's name escapes me, sorry)!
It wouldn't be an issue if the "prices will stay relatively the same" with the FairTax included had been true, because then there would only have been inflation on imported items. It is only because that was a lie and prices are really going to have to go up by 20%+ that the after-tax savings take a hit.
Amd that hit all by itself is enough to kill the plan.
Rep. Linder is fond of calling his plan a "Tax on Accumulated Wealth" and this is exactly why it is so.
Typical FairTaxer tactic, every once in a while one will admit some part of the truth but the rest will disagree with obvious facts staring right at them.
Some of us have a deep knowledge of the current system - and don't hate it any less than the next guy - we're just not willing to drink the koolaid.
A few of us pay more income tax per year than most people earn in a lifetime.
Ever heard of a "little green card" the IRS will make you sign if the statute of limitations is running out on them; else be prepared to be audited every year for the rest of your life...
Better plans have been proposed - are in use around the world (Flat Tax) but FT's would rather spend nearly all their time and energy shouting down the voices of reason - and experience - instead of debating the hard facts of how society functions, how government was "born to steal", and how 2 simple things can fix it.
A )Flat Taxation.
B) Constitutional limitation on all spending, not just the 10-15% the public is told about. (in ways meant only to scare, not to inform.)
I am with you on this one. It is not the main, but only hangup for me. And even if - by decree- all already taxed moneys are up-indexed at the moment of transition, so that the savings account which used to be $10000 becomes $12500, such a development would be wildly inflationary.
And perhaps a link to the particular post you mention escapes you, too?
The 20% devaluation mentioned is not going to occur and there have been many examples to show this (including some on this thread). Overall the disposable personable income for most taxpayers (including those with legacy savings from the former tax system) will be greater, not less.
This is partly due to the prebate which lowers the effective tax rate considerably even for someone spending at twice the poverty level or even more and the fact that you may invest this money and receive untaxed gains thereby boosting the amount. It is only if spent for taxable items that the money is taxed. The income it earns can accumulate untaxed.
Since prices will drop with the advent of the FairTax anyone also receiving wages will have a large wage increase in addition. Even after adding in the FairTax after the price decrease there will be little if any purchasing power decrease. It could very well increase and there are ongoing studies to try to assess this.
Claiming that no one has addressed the point, however, is not accurate.