hile you are an articulate proponent of this system, I feel compelled to reiterate my chief objections thereto.
The prebate/rebate or what ever name it goes by, is an effort to refund the amount the poor spend on taxes on necessities.
As an average, it starts off unfair, but is especially so to those whose misfortune it is to reauire more expensive medical care or pharmacology.
I propose that the tax on medical care, food, shelter (primary residence), and energy be done away with. Then the prebate could be done away with as well.
Nor would I tax military uniforms or the various equipment items necessary to tha trade.
You may disagree, but the potential for defrauding the rebate system, the need to issue rebates, and all the positions that entails--all an expense to the government and ultimately us, would be eliminated.
I would also find a way to safeguard the already taxed savings of those who have lived prudently, especially for their retirement, who would again be taxed as they bought items which they might need. The first part of this, eliminating the tax on medical care, food, primary residence, and energy would go a long way toward removing the imbalance present in the system: the elderly are most likely to require medical care, and expensive procedures at that.
If, as a result of the fair tax, prices would come down, so much the better.
Most of the early taxes were either tariffs or consumption taxes levied on things which were not mandatory for life. Tea, nice, but not a necessity, even for Englishmen, liquor, ditto. We still have those excise taxes on a wide variety of goods, and they are included in the price. Would the fair tax eliminate those too, so purchasers of tires and other goods would not pay taxes on taxes?
The prebate/rebate or what ever name it goes by, is an effort to refund the amount the poor spend on taxes on necessities.
You're close. It's not actually a refund. It's payment in advance of taxes people will pay on necessities
up to the poverty level. Many will still pay some tax on necessities but the prebate will lower the tax rate (effective rate) to a much more reasonable level. Only a very small percentage will pay no tax on necessities.
As an average, it starts off unfair, but is especially so to those whose misfortune it is to reauire more expensive medical care or pharmacology.
How so? I'don't understand your reasoning without more detail.
I propose that the tax on medical care, food, shelter (primary residence), and energy be done away with. Then the prebate could be done away with as well.
Well now you're talking exemptions/loopholes. That is one of the problems with the income tax. Lobbyists for businesses in one industry get tax exemptions for their clients causing lobbyists for businesses in other industries to also demand exemptions. The result is lobbyists distort the economy with numerous exemptions and loopholes. Also the wealthy spend much more on unprepared food, clothing, housing, and medical care than do the poor. Exempting these goods, as many state sales taxes do, actually gives the wealthy a disproportionate benefit.
Fair Tax FAQ #4 The Fair Tax eliminates all the exemptions and loopholes by taxing everything up front. Failing to compensate people by not providing the prebate after abolishing the exemptions would put an undo hardship on taxpayers.
Would the fair tax eliminate those too, so purchasers of tires and other goods would not pay taxes on taxes?
The Fair Tax is designed only to replace Federal income taxes.