[konaice]

Quote: "The time for "fairtax" -- retail sales tax, instead of income tax has come."

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I tend to agree, but I can hear it now...

Oh, but thats so "Regressive" (/sob)

The modification of a sales tax which passes the "liberal" test (mostly because it confuses them) is the VAT, where a little bit of tax is added all along the way from raw material to purchased product.

It has some detractors too, because you end up taxing tax in all but the first step of the process. The upside of that is it makes it hard to cheat - buy all your goods thru some bogus business who's only purpose is to get you tax free goods supposidly for "resale".

But either a Vat or a Sales tax does away with the IRS as far as Joe Citizen is concerned.

Businesses have to keep better books, and pay more taxes but they do this all by computer these days and already do it for city and state sales tax. Its not an insurmountable problem.

[GeronL]

The VAT is a terrible idea, consumers won't have a clue how much they're really taxed/

[RustysGirl]

Interesting. Am I right in assuming that if you replace income taxes with a national sales tax or VAT system, then tax-sheltering options like IRAs and tax-free bonds become obsolete (at least from a tax-shelter standpoint). And what happens with unearned income, like interest, dividends, and capital gains? Would they be tax-free? Wouldn't that be lovely!

On the other hand, from articles I've read about VAT systems in Europe, the tax code can get pretty ridiculous. My favorite: an undecorated cookie sold in a bakery was exempt from the last VAT tack-on, but the same cookie decorated with an icing "face" was not exempt.

[numberonepal]

Businesses have to keep better books

Under the Fair Tax businesses do not pay taxes. Retailers only collect taxes just like that already do for the state.