Okay, so I am back to my original concern which is retiring the OASDI trust fund IOUs and getting a privitized saving system (although I believe that under a consumption tax the incentive will be to save to avoid paying taxes) that workers have rights to, as with SS they have no rights to there “retirement savings” (I cringe every time I use these terms), which I believe is the only reasonable SS reform. These are critical issues with Fair Tax, and politically it will be a tough fight.
The issues of privatized savings for retirement are important issues but are ancillary to the FairTax.
For sure people will be incentivized again to save under the FairTax even in the face of price stability. The act of saving was at one time a very much larger part of American culture. Today it is in so many cases a luxury even if there is a will to follow a saving discipline.
But these are broader issues involving monetary policy and the Federal Reserve. They are indeed important for they are joined at the hip with the Income Tax and have been so since 1913.
Most people ‘in the know’ are aware that Social Security will be insolvent and next year for the first time social security collections will run at a deficit. Despite all, Social Security revenues have been added to the general budget and have been spent. Social Security surpluses exist on ledger paper only. The spending of Social Security surpluses for general purposes shows up as an increase in the National Debt.
The entire problem behind the failing Social Security system is caused by shifting age demographics. As the number of elderly Americans has increased, the number of Americans in lower age demographic strata has not kept up. A civilization can only thrive if there is an encouraging environment for families because it falls to them to bring forth children that will eventually stabilize the age demographics.
France and other countries have responded to this aging problem by encouraging child bearing. The tax burden on French families is incrediibly light with each child they add. France is now in the process of slashing tax rates in many areas as well as following Sweden’s lead in abolishing inheritance or death taxes. These countries are swinging away from socialism through tax reform.
Americans have an opportunity to go one even better with an innovative transparent efficient and unintrusive consumption tax.
The reason the consumption tax was not thought of earlier in American history from 1913 to the 1990s, is because computer technology was not easily available for businesses to tabulate transactions and provide for an NRST accounting.
But today it is entirely feasible to implement a national consumption tax. In other words the FairTax is a byproduct of the information and technology revolution.