[Age of Reason]

Aside from the fact that this will be a tax on the poor, it would be insane to punish people for spending money in a consumer economy.

[Principled]

Poor people pay less tax than those who spend more. By virtue of the FCA, poverty level expeditures are exempted from taxes.

Look here for a quick rundown on the FCA.

BTW isn't it insane to punish people for working? The nrst doesn't punish spending any differently than our current system - but the NRST does't punish earnings...

[tgusa]

No, read the many excellent links posted. The Fair Tax proposal exempts the poor with a 'prebate' paying them up front the expected tax up to the poverty level. And has been explained, you ALREADY pay 'embedded tax' on everything you buy because the companies that produce the goods are taxed.

[ancient_geezer]

Aside from the fact that this will be a tax on the poor,

All legal residents will receive a demogrant called the Family Consumption Allowence(FCA) equivalent to the FairTax paid on essential goods and services. The FCA will be paid in advance, in equal installments each month. The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate paid to all households regardless of income or actual expenditure.

A family of four, for example, could spend $24,980 per year free of tax because they will have received over the course of the year a demogrant totaling $5,745. $5,745 is the amount of sales tax paid on $24,980 in expenditures. That family spending double the "poverty level" or $49,960per year will effectively pay tax on only half of their spending and, therefore, have an effective tax rate of 11 ½ percent or half the FairTax rate.

The beauty of the FairTax is that you can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, you can get your effective tax rate below 9%.

To illustrate examine the tax burden that a family of four will have at various annual expenditure levels as compared to that same family under the current system:

 

H.R.25 "The FairTax Act

it would be insane to punish people for spending money in a consumer economy.

Hmmm.

"A hand from Washington will be stretched out and placed upon every man's business; the eye of the federal inspector will be in every man's counting house....The law will of necessity have inquisical features, it will provide penalties, it will create complicated machinery. Under it men will be hauled into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of federal inspectors, spies, and detectives will descend upon the state."
-- Virginian House Speaker Richard E. Byrd, 1910, predicting the consequences of an income tax.

 

From Thomas Hobbes, Leviathan it is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income.