[AreaMan]

It is fairer to tax people on what they extract from the economy, as roughly measured by their consumption

I agree. I would ratther have a national sales tax vs. a progressive income tax any day.

Let me suggest a point the opposition will raise. From the article:
Indeed, there appears to be a threshold level, perhaps around $70,000 a year, at which households seriously begin to invest significant amounts of earnings. Those making less money typically spend most, if not all, of their income on consumption.

Ahh..the liberals will scream, you are imposing a tax that mostly the "poor" will have to pay you heartless conservative!

How would you counter this?

[kevkrom]

Those making less money typically spend most, if not all, of their income on consumption. Ahh..the liberals will scream, you are imposing a tax that mostly the "poor" will have to pay you heartless conservative! How would you counter this?

1. Most people are unaware that they are already paying taxes on everything they buy, embedded in the cost of the materials and labor of the goods and services. This tax burden is roughly equivalent to the proposed sales tax.

2. The NRST proposal provides for a monthly family consumptin allowance (FCA), also referred to as a "rebate", that allows any non-incarcerated citizen to receive a tax credit check for the amount of sales tax on poverty-line (subsistence) spending. This removes any regressiveness from the system, and indeed even makes it somewhat progressive based on consumption.

[ancient_geezer]

Those making less money typically spend most, if not all, of their income on consumption.

Ahh..the liberals will scream, you are imposing a tax that mostly the "poor" will have to pay you heartless conservative!

How would you counter this?

The way the proposed NRST legislation in H.R.25 does, we recognise the need for a mechanism to take the place of the personal exemption of the income tax, at the same time it is necessary to assure everyone at least participates at the retail register level and there there be no exception as to what is taxed, the solution the Fair Tax authors came up with:

All legal residents will receive a FCA equivalent to the FairTax paid on essential goods and services. The FCA will be paid in advance, in equal installments each month. The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate.

Every year, the Department of Health and Human Services [HHS] determine the "poverty level" for each family size.

The 2001 "FairTax" Family Consumption Allowance Figures
Family Size	HHS Poverty Level	Annual FCA	Monthly FCA
One	$8,590	$1,976	$165
Two	$17,180	$3,951	$329
Three	$20,200	$4,646	$387
Four	$23,220	$5,341	$445
Five	$26,240	$6,035	$503
Six	$29,260	$6,730	$561
Seven	$32,280	$7,424	$619
Eight	$35,300	$8,119	$677

1) Federal Register: February 16, 2001, Pages 10695-10697).

[ The monthly FCA for each adult is .23 * (HSS poverty level for a single person)/12 to assure no marriage penalty due to the manner in which the poverty level is dependant on family size. The monthly FCA for each child is .23 * (the incremental increase of HSS poverty level for a family with one child over no child) ] A. Geezer

A family of four, for example, could spend $23,220 per year free of tax because they will have received over the course of the year rebates totaling $5,341. $5,341 is the amount of sales tax paid on $23,220 in expenditures. A family spending double the "poverty level" or $46,440 per year will effectively pay tax on only half of their spending and, therefore, have an effective tax rate of 11 ½ percent or half the FairTax rate.

The beauty of the FairTax is that you can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, you can get your effective tax rate below 9%.

[71] To illustrate the plan's progressive nature we can examine the tax burden that a family of four will have at various annual income levels (or in this case, annual spending levels).

The FairTax Act