False. You just magically declare education an investment and not consumption. The Fair Tax does exactly that. It has the same exact effect of exempting everyone providing education (teachers, suppliers of schools, etc.) from paying an income tax. Now who wouldn't want to be exempted from the income tax? Expect every industry to demand to be an "investment" rather than consumption.
"False. You just magically declare education an investment and not consumption. The Fair Tax does exactly that. It has the same exact effect of exempting everyone providing education (teachers, suppliers of schools, etc.) from paying an income tax. Now who wouldn't want to be exempted from the income tax? Expect every industry to demand to be an 'investment' rather than consumption."
False. It can't be done "magically"; it requires legislation. If that weren't the case, we would just "magically" pass the FairTax.
In the event that the exceptions that you fear are incorporated into the FairTax via legislation, the overall rate for the rest of us would have to be increased to make up the difference. Do you think there might be political resistance to that?
"It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, 'in political arithmetic, two and two do not always make four.' If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them."
Alexander Hamilton in Federalist #21