Necessities are not taxed. Neither poor people nor rich people will pay for their necessities of life, as it should be IMHO.
You are aware of this, so why do you say it would "gouge" poor folks with no discretionary income? Those with no discretionary income would pay no tax.
Under the FairTax plan, no American will pay taxes on necessities. Every household will receive a rebate that is equal to the FairTax paid on essential goods and services, and wage earners will keep 100% of their paycheck. and there will be no payroll tax either.
So how would it be bad for poorer folks?
For those that earn more, the maxium rate ever paid would be less than 23% (compared to income tax rates) due to the untaxing of necessities. It is surely possible that you pay less than that.
I am going to end up paying about the same - but I would like to eliminate the income tax for the reasons mentioned above, among others: lower prices of US exports, higher prices for imports, and most importantly by far is that capital would flow to the US like crazy.
The flat income tax is infinitely better than the graduated income tax imho, and the nrst is infinitely better than the flat income tax imho. The capital flow to the US would occur with a flat tax, but only slight. The nrst would open the floodgates for folks to keep their money here...hence our jobs are safer.
Back to NRST, who decides what "necessities" are? Regular state sales taxes once exempted "services", but then these were taxed as well. All grocery store items were once exempt, but now some of THEM are taxed. I don't trust "the bastards" to define "necessities" to anyone's advantage except the taxman's. As far as I'm concerned, for example, transportation is a "necessity" (how else ya gonna get to work?) - betcha "they" will tax the heck out of any car you buy under this system!
Additionally, I have trouble with car prices as they exist - no way on earth I can afford 1/5 again as much - and there is no way on earth the car scum are gonna lower prices!!!!!!
Give me a flat tax and make some kind of exemption for capital investment, and I think you might have some of the best of each world. Additionally, ANYTHING which allows demolishing the IRS and going to a much simpler oversight function would save billions of dollars all by itself.
As for keeping jobs here, I can't see ANY system reversing the giant swing to outsourcing which is currently gutting this nation's job opportunities in many areas. As long as the profit-mongers see cheap labor elsewhere, the US is hosed in that regard. I don't have a problem with "reasonable" profit but, like the 600% petroleum industry example, SOME profit margins are obscenely out of line - no way will "profit mongers" change their "whatever the traffic will bear" approach to accomodate changes in the tax system. There is too little honor or integrity left out there for me to believe anything good about big business!
It's all well and good to say a NRST will eliminate double taxation, but I don't believe for a microsecond that the tax mongering liberals will allow this to happen under ANY system.
I'll admit it - many of my objections are due to my cynicism regarding whoever will administer whatever system might replace the crap we currently have. Mostly, however, I object to paying more than I currently do, which is WAY out of line already, and the NRST makes me worse off rather than better off. A flat tax, on the other hand, HELPS me out.
oh, well!