[Smokin' Joe]

Your wife gets cancer. The medical services and oncology drugs she needs to stay alive are taxed at the prevailing Fair Tax rate. This isn;t optional, now, it isn't a consumer tax, it is do or die.

People are already taxed on medical expenses. Corporations also pay income taxes. Income taxes are a cost to businesses. That cost is passed onto the consumer in the form of higher prices. Eliminating that cost by eliminating corporate income taxes will be a cost savings. Overtime they will pass at least some of the cost onto the consumer due to competition or risk losing business

Yes, people are taxed on medical expenses, but they also have the option of deducting extraordinary medical expenses from taxable income, and the costs of insurance, and with an MSA many other costs as well are taken from untaxed income. That is with our current system. While I am not advocating that system, I must admit that many of the pages of tax laws are there just to mitigate extraordinary disasters and reduce the tax burden on those who suffer them. more on that later.

People will also have more dollars to pay for medical expenses since they will no longer have income taxes deducted from their paychecks. Also factor in the prebate that will cover the cost of necessities up to the poverty level.

First off, I am happy that no one in your family has apparently required major surgery, chemo, radiation, etc. for cancer. If they had, you would be aware that the people in the above scenario are already down by one income. Under the current system, they would be taxed on less income, reduced by the amount of deductible medical expenses, reduced by any prepaid MSA deductions or the costs of the employee's partial payment for insurance.

That alleviates a fraction of the economic burden while someone is fighting for their life.

Under the 'fair tax', however, as they would be taxed on expenditures, not income, they would pay substantially more tax, even though their income was reduced by one paycheck, on top of whatever co-pays and uncovered medical expenses they have to pay--just to stay alive.

The prebate for the average 'poverty level' medical expenses' taxes (whatever "poverty level medical expenses" are) wouldn't hold a candle to the taxes on the costs of oncology drugs. In short, with a reduced income and additional catastrophic expenses, the fair tax would hit these people even harder.

You claim that eventually costs saved by industry would trickle down, but this is a time sensitive situation. There is no choice: do or die.

In addition, most of the cost of new pharmaceuticals is the attempt by the drug companies to recoup development costs in the five years they have before the drug goes generic. Don't expect much for savings in that sector.

Oncology drugs are especially expensive, often due to their composition, but also because of the reason cited above.

These factors will result in more affordable medical care in the long run compared to the income tax.

Actually, in the example above, that statement is wholly unsubstantiated.

Next example. Someone's house burns down. They have suffered a catastrophic loss. They can document the contents, their value, etc. Their insurance only covers a fraction of the value of those contents (not unusual), and what they pay for the house covers most of the replacement cost.

What it does not cover is the "fair tax" on all the replacement items. Again, the "fair tax" will kick them while they are down.

I suppose they could live in the street waiting for the savings to trickle down, but in reality, again, this is something which will not wait for that.

They have to have a place to live, and all their stuff, from toothbrushes to clothing to shoes, furniture, appliances, bedding, the works, all has to be replaced.

I suppose they could buy used toothbrushes and underwear and avoid the tax, but in reality, the tax will compound their catastrophe by tagging them another 23-30% (or more) for things they need, far over and above any prebate for 'average poverty level' purchases because they have to replace everything.

Again, when the chips are down, the 'fair tax' hits those hit hardest as if they were purchasing Rollex watches when they are purchasing things normally considered necessary to life.

Which is one of the reasons I oppose it.

Eliminate the tax on necessities (food, primary residence, medical care, energy), and scratch the Gubmint check which gives the whole idea the appearance of a Socialist 'gimmie', and I might be able to support it.

One other thing, that is the Government double dip. If a person has saved for their retirement, stashed their cash carefully, loaded their savings account and their Roth IRA, and this were to be enacted, they would pay taxes on that money a second time when they spent it (income taxes were paid once). That stinks, too.

in fact, it is unfair.

YMMV, but I remain unconvinced.

If we are going to replace the income tax, let's get something better. But before we do that, let's cut the Government, reduce the scope and spending thereof, not create more Government to redistribute monies which should never have been collected in the first place.

[Man50D]

Yes, people are taxed on medical expenses, but they also have the option of deducting extraordinary medical expenses from taxable income, and the costs of insurance, and with an MSA many other costs as well are taken from untaxed income.

You're referring to taxes seen. I'm referring to the embedded value added taxes(VATS)imposed at each stage of production. The purchase of food, clothing, and medical services is made from after-income-tax and after-payroll-tax dollars, while their purchase price hides the cost of corporate taxes and private sector compliance costs. You are in effect taxed much more than twice for each purchase. Your response proves no one realizes how much or how often they are taxed beyond the visible taxes. No tax deduction/loophole will offset these hidden taxes.

The loop holes that allows these so called deductions are the direct result of lobbyists who distort the true economic cost of goods and services. The Fair Tax eliminates the loopholes and thereby the power and influence of lobbyists.

If they had, you would be aware that the people in the above scenario are already down by one income. Under the current system, they would be taxed on less income, reduced by the amount of deductible medical expenses, reduced by any prepaid MSA deductions or the costs of the employee's partial payment for insurance.

Again you are not factoring the unseen costs of hidden VATs under the current system! Getting rid of VATs will overtime reduce the costs of these medical expenses along with having more dollars in people's paychecks thanks to the Fair Tax federal income taxes from their checks and the prebate.

Under the 'fair tax', however, as they would be taxed on expenditures, not income, they would pay substantially more tax, even though their income was reduced by one paycheck, on top of whatever co-pays and uncovered medical expenses they have to pay--just to stay alive.

Under The Fair Tax they will only be taxed once up front as opposed to multiple times at each stage of production under the current system! That tax will be more than offset by the prebate, more money in paychecks and elimination of embedded taxes!

In addition, most of the cost of new pharmaceuticals is the attempt by the drug companies to recoup development costs in the five years they have before the drug goes generic. Don't expect much for savings in that sector.

You are describing businesses attempt to make a profit. That called capitalism and is happening under the income tax! It will happen under any tax system but The Fair Tax will reduce the cost of those expenses to less than they are with the income tax for the above reason regarding VATs.

Next example. Someone's house burns down. They have suffered a catastrophic loss. They can document the contents, their value, etc. Their insurance only covers a fraction of the value of those contents (not unusual), and what they pay for the house covers most of the replacement cost.

What it does not cover is the "fair tax" on all the replacement items. Again, the "fair tax" will kick them while they are down.

Any and all hypothetical scenarios your create The Fair Tax will lower the costs due to cost savings passed onto the consumer with the elimination of corporate income taxes and all the compliance costs associated with those taxes not to mention the extra cash people will have in their pockets.

I suppose they could buy used toothbrushes and underwear and avoid the tax, but in reality, the tax will compound their catastrophe by tagging them another 23-30% (or more) for things they need, far over and above any prebate for 'average poverty level' purchases because they have to replace everything.

This statement clearly shows you have not read The Fair Tax. The rate will not be 23-30% as you erroneously claim. The total of the VATs currently under the income tax isslightly less than 23%. The Fair Tax rate will take these VATs and make them transparent by adding the tax separately from the true cost of the item and not including it in the cost of the item. A $100 item today is actually &77 with a $23(23%)embedded tax(rounded up). This is a tax inclusive rate. The 23% Fair Tax is the quote of this inclusive rate. The Fair Tax is a tax exclusive rate as it is separated from the cost of the item. The tax exclusive rate is 23$/$77 or 30%. The dollar amount collected feom the tax is the same regardless of which rate is quoted and will equal the VATs under the income tax. The effective tax rate (after the prebate) will lower the Fair Tax rate.

YMMV, but I remain unconvinced.

You remain uninformed.