The Fair Tax thing is one of the great scams of all time. However, the one way to shut up the serious Fair Tax proponents is to tell them that unearned income will be taxed at the same rate as earned income. Then they run for the hills. It's pretty funny to watch, actually.
in what context do you make earned ve unearned income argument?
Not so durasell - and it is not income (earned or unearned) that is taxed but certain types of consumption as it says in the bill.
However, the one way to shut up the serious Fair Tax proponents is to tell them that unearned income will be taxed at the same rate as earned income. Then they run for the hills. It's pretty funny to watch, actually.
Really, I haven't seen that at all. Obviously unearned income spent on consumption is taxed under any tax system classified as a consumption tax. Including the Flat Tax.
For it is a point of fact any income or returned capita, whatever its source, that is spent for personal consumption instead of being re-invested obviously is taxed under any retail sales tax. That just means the Tereza is going to be taxed the same for her consumption as the guy sitting on wealfare, same rate, regardless of her source of funds for her purchase of goodies to support her lifestyle.
The whole point of a retail sales tax is to tax consumption, the source of the funds that are applied to said personal consumption being irrelavant.
By the way the same claim is made by the Flat Tax folks. That all income is taxed once either at the business level where the imposition passes down to the individual in higher prices, lower wages or loss in returns on investment pretty much hidden from the perceptions of the voter, and at the personal level directly by taxing wages and retirement income per current bills before Congress.
The following is the basis from which all Flat Tax proposal derive their genesis, with variations in who remits tax on what business or citizen according to what the of the authors of the specific bill submitted figure they can sell to the public.
The Flat Tax; Chapter 3, by Robert Hall and Alvin Rabushka
| In our system, all income is classified as either business income or wages (including salaries and retirement benefits). The system is airtight. Taxes on both types of income are equal. The wage tax has features to make the overall system progressive. Both taxes have postcard forms. The low tax rate of 19 percent is enough to match the revenue of the federal tax system as it existed in 1993, the last full year of data available as we write. Here is the logic of our system, stripped to basics: We want to tax consumption. The public does one of two things with its income—spends it or invests it. We can measure consumption as income minus investment. A really simple tax would just have each firm pay tax on the total amount of income generated by the firm less that firm’s investment in plant and equipment. The value-added tax works just that way. But a value-added tax is unfair because it is not progressive. That’s why we break the tax in two. The firm pays tax on all the income generated at the firm except the income paid to its workers. The workers pay tax on what they earn, and the tax they pay is progressive. To measure the total amount of income generated at a business, the best approach is to take the total receipts of the firm over the year and subtract the payments the firm has made to its workers and suppliers. This approach guarantees a comprehensive tax base. The successful value-added taxes in Europe work this way. The base for the business tax is the following: Total revenue from sales of goods and services less purchases of inputs from other firms less wages, salaries, and pensions paid to workers less purchases of plant and equipment The other piece is the wage tax. Each family pays 19 percent of its wage, salary, and pension income over a family allowance (the allowance makes the system progressive). The base for the compensation tax is total wages, salaries, and retirement benefits less the total amount of family allowances. |
This one won't! In fact, to me, that is one of the greatest features of the FairTax! It doesn't care what, or how many, the sources of ones income may be which, when you really think about it, shouldn't be any of the government's business in the first place in a free society.