Posted on 01/28/2008 11:08:03 AM PST by BplusK
Please explain.
Savings would be discouraged under a Fair Tax system because most savings methods tend to be more of less “fixed” income, in that they don’t increase with, or at least much faster, than yearly cost of living increases. Hence, a person relying on savings (such as many retirees) would see the relative value of their savings reduced by 23% by the Fair Tax. Keep in mind that, were we to go immediately to a Fair Tax model tomorrow, there would still be people for the next 20-30 years who earned at least part of their money under the present income tax system and who would then see an additional 23% of what was left go to the government via consumption tax. They might as well have not even saved 23% of what they did, for all the good it did them. And younger workers will be more inclined to go ahead and spend now rather than saving, since they’re going to lose 23% either way, and that will not be compensated by the growth rate of their savings.
Inflation will increase more under a Fair Tax system because as people save less and spend more, the relative money supply will grow, which fuels inflation. Increased consumer spending (which Fair Taxers tout as a selling point) will also create an increase in overall aggregate demand for goods and services, which also fuels inflation.
Like saving is encouraged now? Please.
I’d save a heck of a lot more if the IRS weren’t hovering over my every financial decision trying to figure out how to nullify it and take my hard-earned (self-employed, no benefits, 18 hour days) cash. With the Fair Tax, I can control what I spend and thus what I pay in taxes. With the IRS, I can’t do a darn thing.
You should read the FT book. I think it will change your mind.
...with only 2 cards and no nut..
LOL
A book on taxes by a radio comedian... yup... that’s gonna work real good now... ya’ll enjoy, come back real soon...
Birds Fly, Planes Fly, therefore Planes must be Birds.
Hey, Huck. How’d that FairTax thing work out for you in Florida?
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