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Yes, I've been told that before and I've read the book which ignores the problem. I have money in the bank saved after paying income tax. Money will also be saved when there is no income tax. However, both the "before" and "after" money will be taxed the same way when it's spent. This means the "before" money will be taxed higher than the "after"..
Yes, it's good in theory.. The problem is how to convert from a combination of income and consumption taxes to just consumption taxes. I keep asking this question but there's no response other than "it will only be a problem once".
This so-called "fair tax" is just another way to raise taxes. It's a good idea in theory, but no one has figured out how to change from an income tax to a consumption tax without double taxing existing assets.
Currently you are taxed when you earn money and when you spend it. This new tax plan will shift both taxes to when you spend money. This means the money you already paid as income tax will be charged again when you spend it (which is addition to the existing sales or consumption tax) This is clearly double taxation. When I contacted John Linder (who was my congressman) his office said "yes, but it will only happen one time". A one time double charge is one time too many.
Last login: Thursday, March 28, 2013