[RC2]

What do you want to bet that if Obama went for the Fair Tax, he would have the tax rate set so high it would break everyone. Becareful what you ask for.

[Man50D]

What do you want to bet that if Obama went for the Fair Tax, he would have the tax rate set so high it would break everyone. Becareful what you ask for.

One fundamental strength of a consumption tax is the taxpayer ultimately determines the rate. If Congress critters set the rate too high then the people will offset the excessive rate by decreasing their purchases. Less purchases translates into less tax collected and less taken in by the federal government. This principle is reflected in Alexander Hamilton's Federalist Paper #21. To quote:

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.

[Mojave]

What do you want to bet that if Obama went for the Fair Tax, he would have the tax rate set so high it would break everyone.

And the prospect of the creation of the largest entitlement payment system in history, the FairTax "Freebate," should have Obama salivating.