Fair Tax questions

[Keelty]

OK, I see people posting how the fair tax puts a bigger burden on the middle income folks.

Could yall explain this?

I would like to see the pros as well as the cons

 

[inactive]

This site is definitely biased, and I can't vouch that the numbers are 100% accurate, but the principle is there:

http://fairtaxfraud.com/fair.asp

Notice that we didn't bring up the whole prebate thing. We are talking about what percentage of consumption is taxed, not individual dollar amounts. We are concerned with what percentage is left over and can be tax free. We are not going to distort this moment of clarity. The working poor, the middle class and the rich all get exactly $187 as a prebate so they all cancel each other out in this comparison. Maybe if we use dollar amounts and the prebate, this unfairness can be illustrated with sparkling clarity.

BREAKDOWN OF FAIRTAX RATES INCLUDING PREBATE

1. Working poor person - earns $30,000 a year - works paycheck to paycheck - spends it all on necessities - has 0% to invest tax-free under FairTax.
2. Middle class person - earns $70,000 a year - spends 80 percent on necessities - has 20% to invest tax-free under FairTax.
3. Rich person - earns $10,000,000 a year - spends 5 percent on necessities - has 95% to invest tax-free under FairTax.

       (INCOME    plus   PREBATE X 12   minus  NECESSITIES)   divided by   INCOME   mult by 100  equals  PERCENT LEFT    TAX RATE
1.    ($30,000    +     187 x 12            -        $30,000)            /            30,000            X    100        =      7.5                      92.5% working poor
2.    ($70,000    +     187 X 12            -        $56,000)            /            70,000            X    100        =      23                       77%    middle
3.    ($10M        +     187 X 12            -        $500,000)            /            10M              X    100        =       95                        5%    rich

 

[tntrex]

Problem is that the current system has you believe income is wealth, when it is NOT.

 

[Shootin 4 Fun]

A fair tax will not work because middle and lower income would experience a huge increase and the wealthy would enjoy a huge decrease.

 

[Hobbes]

A fair tax will not work because middle and lower income would experience a huge increase and the wealthy would enjoy a huge decrease.

Then why do they call it the "Fair Tax"? Doesn't sound very fair.

Tryin to hoodwink us or something?

 

[XD-9Guy]

I don't think I have a problem with that math and I'm poor according to that example. If you make 30k a year and you are living paycheck to paycheck you are doing it wrong; live on less, free up money to invest and better your situation. Don't continue to live paycheck to paycheck, effectively preparing yourself to be financially crippled by even the smallest fiscal speedbump.

 

[XD-9Guy]

A fair tax will not work because middle and lower income would experience a huge increase and the wealthy would enjoy a huge decrease.

Are you sure? Back when Huckabee was running for POTUS and pushing the idea of a flat tax I read a couple different articles that indicated that it would result in a descrease for lower income family but an increase in overall tax revenue.

 

[Garand]

It looks like that previous quote is a bit misleading..

Here are the numbers straight from the fairtax site:

 

[tntrex]

A fair tax will not work because middle and lower income would experience a huge increase and the wealthy would enjoy a huge decrease.

wait

You're telling me its not fair if we all pay the same %? Please don't pizz on my leg and tell me its rainin.

again wealthy is not=income people.

 

[Garand]

wait

You're telling me its not fair if we all pay the same %? Please don't pizz on my leg and tell me its rainin.

again wealthy is not=income people.

Exactly!

Here are the Fairtax FAQ's
They're pretty high level but they'll get you better informed.
http://www.fairtax.org/site/PageServer?pagename=FAQs#1