With the exception of autos and houses. A significant part of the economy.
If I start house hunting , find a $200k new home, I'm looking at a $46k+ sales tax.
There is no way I'm going to buy that house.
Either I have to come up with a 30% down payment or I'm going to finance the sales tax.
The same with autos.
The new car and home market will be a thing of the past.IMHO
I would love to see the end of the income tax and IRS but I don't think this is the answer.
Another thought on the Fair Tax.
As I understand, lower income families will get a rebate check monthly from the government. That means middle income and up families will be footing the tax. Basically what we have now.
Also, how is that income computed? Who is going to compute it? The IRS? Is interest income and all the other similar sources considered 'income'?
I can see loopholes in the proposal that will require all kinds of 'amendments', resulting in a bloated tax law similar to present.
At the very least, lower the tax rate and apply it to everyone.
And no interest payment deductions.
You already finance amounts similar to the nrst in today's home and car prices (and everything else). Today's price inflation is the result of the costs of our income tax system... business income taxes, payroll taxes, compliance costs, etc.
THere will be no significant change in after-nrst prices. They'll be about where they are today.
You have a misunderstanding. The nrst has nothing to do with income - only with spending.
The rebate check goes to any legal resident with a valid SSN who chooses to file for it. It is optional. It is not based on income, it is based on the amount of money spent on necesities for a family of a given size (similar to the wqay today's deductions work - but today's deductions are based on income - not spending - and filing today is not optional, it is mandatory).
I can get the rebate, if I choose to do so... and it will offset the money I spend on taxes paid on my necessities of life. You can get it, bill gates can get it.
Now, not everyone has the same level of necessity spending. But this is the best option IMO - it minimizes governemnt intrusion while providing a good way to eliminate tax on necessites.
Before you go off the deep end on housing, I'd suggest you read this:
http://www.fairtax.org/pdfs/FairTax_and_Mortgage.pdf
to find out the actual costs. You should, if you're interested in becoming a homeowner, be very much in favor of the FairTax to help you out.
You're also ignoring the effect of removing the present costs of the tax systemn which cause everything to be a good bit more expensive that it sould be under the FairTax. Both the new house and car markets will do just fine, thanks.
As for the prebate, you seem to misunderstand that it is based somehow on income. Nothing could be further from the truth; it is based only on family size and everyone is eligible to receive it (it's optional, though). Also, there IS no more IRS (or income tax etc.) as you would realize if you had read the bill. I suggest you do so. THEN come back and tell us all of the "loopholes" you think you seem.