I’ve given this problem some thought, and it seems easy to fix. What would have to be done is that on the date of the changeover, say January 1, 2010, or whatever, if you had $100,000 in savings, stocks, etc., and the tax rate was pegged at 23% exclusive, you would be issued $23,000 worth of Fair Tax Vouchers, which could be used only to pay FT on future purchases.Simple enough...But where would the money come from?...Higher rates?
I suppose so. But if you don’t do it you can’t maintain parity between income-tax-era and fairtax-era earnings, so it’s not like an extra burden, it’s the rate everyone should have anticipated in the first place.
And don’t forget too, that many dollars that are now saved are pretax dollars anyway, and so would not need to be compensated with FT vouchers.