And I have even offered a solution to them:
If the Fair Tax takes effect, have all prior after-tax savings put into special accounts that can be accessed with special Debit Cards and all purchases with that already-taxed money will be exempt from the Fair Tax when you purchase an item.
Simple solution, right?
Yet, the reaction I get from them is that nobody has savings or that it really doesn't matter because prices will drop and...yadda, yadda, yadda.
They refuse to even address the issue.
Well, screw 'em. Until they start addressing this very real issue they will get nowhere with their Fair Tax.
The reason that your idea will not work is because if they exempted all that money, the FairTax rate on the rest would have to be even higher to make up for the loss of revenue.
John Linder has admitted that one of the beauties of the FairTax is that it is a “tax on accumulated wealth” so it isn’t likely that they will turn around and exempt accumulated wealth is it?
Think about the opposite situation, someone who is a big debtor and owes $75,000 in credit card bills, two car loans for a total of $50,000 and a $500,000 mortgage balance and a home equity line of credit. Every single one of those items would now be paid off in the “new dollars” so all debtors would right off the bat owe about 15-25% less “work hours” to pay off their debts.
Does this seem possible without the whole thing being a big free lunch scheme?