It is nonsense to say that before tax savings will get a big gain, instead of paying the income tax on it as it is withdrawn, one would be paying the NRST, probably a greater tax liability - particularly in retirement years.
Personally, I see this scheme as a way for the "going broke fast" government to exploit the retirement savings of the baby boomers, who will be spending their lifetime of savings, and get marginal benefit from the elimination of income tax.
Should something like the NRST be at risk of becoming law, I'll cashier my savings and invest in housing, or other protected classes of "savings". So will many other investors - what havoc would that create? Eh? (That is a new issue)
Then you are sadly mistaken. Most invested retirement assets are sitting in IRA's and 401(k)'s, 403(b)'s, TSA's (why in the hell do we have to have so many %$^%$%plans anyway?). So your theory is kaput from the start. All of these plans would lose their future tax liability. The greatest windfall of the FairTax plan.
"My issue is the immediate reduction in value of after tax savings to the holders of that class of savings."Obviously your issue is nothing of the sort but to try your claim by crafting an example to fit the point. There IS no "reduction of after tax savings". There is a tax when things are purchased under a consumption tax just as there are taxes under the income tax when certain accumulations of money or assets are converted into cash but the FairTax savings are untaxed as well as the income from them. Which is more beneficial to the taxpayer depends upon the exact situation - which you choose to not describe.
"For instance, long term capital gains will be taxed at a much higher rate (when spent of course)."
A truly odd claim since there's no way for anyone to judge that without more information so I'll not play that silly game further. I showed you one scenario where the opposite was true - particularly so when considering embedded income tax costs that you're not considering. That's fine with me, but you'll pay them on all that you buy whether you believe it or not.
"Personally, I see this scheme as a way for the "going broke fast" government to exploit the retirement savings of the baby boomers, who will be spending their lifetime of savings, and get marginal benefit from the elimination of income tax. "
Quite obviously THAT is your "issue" and you plan to push it regardless of any facts. But no matter where your money comes from if you choose to blow it big time you'll pay the sales tax on it. As I pointed out you'd be well ahead of the game by taking advantage of the tax free environment and even increasing your savings but that is your choice; spend your money and cry about it rather than gaining further. You're free to make the choice as are others and many would probably make a different choice. As I illustrated with the example, the effective tax rate varies with each taxpayers situation and his proclivities. Guys like you who "have to" spend large sums are just fine and when you do you'll pay the FairTax.
"Should something like the NRST be at risk of becoming law, I'll cashier my savings and invest in housing, or other protected classes of "savings". So will many other investors - what havoc would that create? Eh? (That is a new issue)"
That's our choice too - and be sure you're not "investing" in what you think is a "protected class of savings" (investment, really) only to find out it, too, responds to the laws of supply and demand and that instead of wreaking havoc on the economy you've shot yourself in the foot and outsmarted yourself by buying into a housing collapse. That's your choice, too, but I know of few "protected classes of investments". Perhaps you do.
And don't forget to pay your capital gains taxes which will undoubtedly be greater than under the FairTax - where there are none.
You're wrong.
You brought up the issue of net gain or loss after nrst implementation. Your position was ignorant to the exclusion of pretax savings, pretax investments, capital investments, estate taxes, among others.
These are not "many more issues", gregoryful. They are parts of the issue you claim to be your deciding issue.
It is preposterous to believe that you would make this a deciding issue without including all components affecting the outcome.
I suppose you're just blowing smoke.
Pointing out real flaws in their fairytale is not allowed. So what if retirees have to pay taxes again on savings that have already been taxed. They have economists who they pay to spin this so it is a good thing. Why don't you believe what their paid for shills tell you? The fairytax has no flaws.