It would favor the grasshoppers over the ants.
It would favor the grasshoppers over the ants.....Mojave
Exactly.
If you are just starting out or have gone through life without accumulating any savings worth mentioning, the Fair Tax is great......assuming you are not one of those Americans that pays little or no taxes.
If you have gone through life building up a hefty nest egg, it will double-tax every post-tax dollar you have managed to save when the Fair Tax takes effect.
There is a simple way to deal with the problem and I posted it a on Fair Tax thread a while back. I'll let you think it over. ....Polybius
The first thing the Fair Tax proponents have to do is acknowledge that there is a double taxation issue instead of tap-dancing around it.
It then has to be addressed and it is not that difficult to do.
If the Fair Tax takes effect on, say, 1 January 2008, the Government can create regulated accounts (along the lines of current Government regulated accounts such as SEP's, IRA's, etc.) into which individuals with post-tax savings can transfer those savings. Let's call these accounts "PTS Accounts" (Previously Taxed Savings Accounts).
As of 1 January 2008, individuals with these PTS Accounts could then spend that PTS money, tax-free, by the use of special PTS Debit Cards that tap the money in the PTS Accounts.
As of 1 Januar 2008, if you pay with cash or with a check or with a VISA, you pay the 23% Federal Fair Tax.
As of 1 Januar 2008, if you pay with your PTS Debit Card, the purchase is tax-free in regards to the Federal Fair Tax.
Any money earned on or after 1 January 2008, would not be allowed into PTS Accounts and would be spent subject to the Federal Fair Tax.