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I thought I heard of this as the consumption tax?


Is that something similar or completely different?

I strongly disagree with the concept of the so called "Fair-Tax." A sales tax like this hurts the poorest among us the most, who spend almost everything they have on the basic necessities. A lot of solutions have been proposed, but they all involve rebates or certain exemptions, and all basically mean a massive beurocratic mess, similar to the system we have now.

I tend to think that the only "fair" tax is one that treats everyone the same, for example, a flat rate tax. Say we take the poverty level, the minimum amount of money you need for life's daily needs, such as food, housing, ect.. and triple it. That would be the Living expenses exemption, and the only one. Anything ABOVE that mark would be taxed at a flat rate of 10%, no ifs, ands, or buts. No exceptions. Let me give you an example. The poverty level in this case will be $5,000 a year. (Its just an example, don't tell me nobody could expect to live on that, or thats way too high.)

Person A is very poor. He works at a low paying job, and can barely afford lifes neceesities. he makes about $7,500 a year. Taxation starts at $15,000 a year, so he pays no taxes.

Person B is middle class. He has a fair paying job, but nothing spectacular. His yearly salary comes to about $18,000 a year. Taxation starts at $15,000, so he pays 10% of $3,000. He pays $300 in taxes.

Person C is in the super upper class. He is the CEO of a major international firm, and his salary is a whopping $3,000,000 a year. Taxation starts at $15,000, so he pays 10% tax on $2,985,000. His tax bill comes out to $298,500.

As you can see, the people who make the most money pay the most in taxes, yet they are not treated any differently than the middle or lower class people. Everyone pays 10% on all money over $15,000, 3 times the poverty level of $5,000. The poor pay little to nothing. This is the only fair tax system I can think of. If we MUST have an income tax system, this is the way to go.

I'm liking the taxing of illegal immigrants.


What are some of the downsides of Fairtax though, I feel it's a little too good. Just something that arouses suspicion.

There's a such thing as a fair tax?
Since when was it fair to take money by force?

Ok, lemme address a few points you might not have thought of.

All valid Social Security cardholders who are U.S. residents receive a monthly prebate.

So, if you do not have a social Security card, you get no rebate. Forieghn exchange students, for example, would pay these taxes and recieve nothing to offset the cost.

Furthermore, you must consider the wonderful management of the stimulus, (or perhaps it was another fund) in which millions of dollars in checks were sent out to DEAD people. Plus, it requires the government to maintain a database containing the addresses of every single person in the United States, (so they know where to send the checks.) Not exactly a liberty friendly concept there.

Then, theres the problem of Identity theft. Its a rampant problem now, with credit ratings at stake. Throw in "free" government money, and this problem will skyrocket. So you need a "Department of Oversight & Verification" to make sure you are who you say you are. Proving your identity will likely involve reams of paperwork.

Identity theft isn't the only kind of theft we would have to worry about either. Property theft will also likely skyrocket as some people try to avoid paying the tax by buyig used goods, maybe from some not so reliable sources. Then there's under the table deals and Enron accounting practices to avoid paying the tax as well. So you need an auditing arm of the taxation authority to make sure everyone is reporting their sales accurately.

Oh, and need I bring up money laundering? The income tax system is one of the primary tools to detect the laundering of illicitly earned money. Certainly the government isn't going to turn a blind eye to the problem because "they'll be taxed when they buy something," especially those earning money by selling drugs, which are presumably bought new.

Finally, I have to point out that the poor aren't the only people who will buy things used to avoid the tax. People who are rich didn't get there with poor money practices. Just because they can afford to buy things new doesn't mean they will. For the middle class, its also a better deal to buy things used than to buy them new. This means there will likely be a rather severe shortage of used goods for the poor to choose from, since everybody will be looking to buy things used to avoid the tax.

So there you have it. The Fairtax will basically cause a litany of crimes to escalate, and the only way to effectively combat them is with HEAVY government oversight and involvement.

I still disagree with you labelling it "fair." It's not fair. It's theft. Don't call it what it's not - that's how we got into this mess, by pretending and trying to play it off as if our real problem was anything but taxes.

And there is an alternative way to make money, and it's voluntary taxation. If the government provides ONLY the services needed to defend rights, meaning a court system, police, and military, the cost of running the government is significantly reduced. Further, when those services are ONLY offered to those who pay a small tax, I assure you that there will hardly be a sane man who wouldn't pay.

I believe I did an adequate job discribing my objections in my last post, but let me try to condense it into some bullet points.

Government maintains a database containing the adresses of every citizen.

Non Social security card holders do NOT get a rebate.

Identity theft likely to skyrocket.

Black market in stolen goods likely to increase.

Combating above two requires identity and ownership verification, leading to massive paperwork and government intrusion.


Please address these issues for me. I'm kinda coming around to the idea, but I'm still not convinced.