The ‘Fair Tax’ isn’t.
It is as stupid and rife with pitfalls as the current system, only it makes it easier.
They (the ‘Fair Tax’ proponents) always insist on two horrible things: Tax-inclusive pricing, and a ‘prebate’.
Both of which are the exact opposite of what you want to do when reforming a tax system to make it simpler.
In the current system, the richest 10% pay 90% of all taxes. The poorest pay nothing EXCEPT FOR all corporate taxes, and excise taxes on things like cigarettes and alcohol.
And the stupidest people don’t realize how much ‘corporate tax’ they pay, because they think the evil corporation pays it.
They don’t understand the concept of ‘cost of goods sold’ (an accounting term) which means that all costs are rolled up into the the final cost of the item, so you know if you are selling at a profit or not.
The ‘Fair tax’ is also normally quoted at 27%. (??? Do you want to give a third of your income to the government, poor people?) But with a ‘tax-inclusive’ system that rate is hidden. You know what the price of an item is, but you don’t know how much of that is taxes.
Think of the price you pay for gasoline. How much of that price per gallon is taxes? You don’t know because it is ‘tax inclusive’ price. If you knew that $35 of the $50 you just spent for a fill-up was taxes, you would be even less happy with the price.
Sure you could calculate it, but it requires you to not be stupid. I could go on for an hour on how bad the ‘tax inclusive’ rate is’
And the ‘prebate’ is a nightmare. All Democrats will be trying to out-do each other promising bigger and bigger prebate at every election, until it becomes a guaranteed minimum income.
In short, the ‘Fair Tax’ (as it has been proposed) is a liberal’s dream
Refunds of tax credits except for PPACA probably should be eliminated.
Someone who actually gets it!!
I have not read through the current version of the legislation, but I expect, that like previous versions, each receipt would be required to break out the federal, state, and local taxes at the bottom so that every knows exactly how much of their purchase is going to the government.