[Final Authority]

It maybe a backdoor approach to abolish congress but in reality the farttax is a way to impose sales taxes on retirees who have post tax investments to spend and have planned on financing their retirements otherwise at a very low marginal income tax rate.

Already members of congress have considered how to compensate in advance those who have put aside money post tax if in fact such a sales tax was implemented. It has been labeled a pre-index payment. Such a payment would totally bankrupt the US treasury as the payments would be in the many hundreds of billions. Because of that, and the effect of not doing that, the farttax is DOA in congress.

[pigdog]

Please give us a link to where your "members of congress" have considered such compensation. There's no such provision in the FairTax bill - and none needed in fact.

Anyone planning to live off the financing of their retirement with their post income tax investments can certainly do so since income from those investments isn't taxed under the FairTax. Spending of the amount from these investments is likely to result in quite a bit lower effective tax rate than the Marginal FairTax rate (in the bill now that's 23% tax inclusive but it may end up lower).

These folks will have untaxed money from their post FairTax investments and prices will be lower to boot so they will do quite well. And don't forget, they'll receive the prebate also.

If these folks were to remain and spend the money under the income tax they would also be paying some tax on the income typically plus the higher prices due to hidden tax effects as well as having to actually earn more to pay a given priced item due to the income tax. A $100 sale price under the income would require a person still working to earn something like $149.90 using the tax exclusive figures the FairTax opponents like to quote or $133.30 tax inclusive.

[Kellis91789]

FA,

Could you please provide an example of one of these

"retirees who have post tax investments to spend and have planned on financing their retirements otherwise at a very low marginal income tax rate."

Please provide the amount of their investments, the type of investment, how much of the investment gain is still unrealized, how much depreciation has been taken on real estate rental property, the average post-inflation rate of return, SS income and single/married status, and how their money will be spent in retirement. Also, their current income and what year they plan to retire, if they are not already retired.