The Fair Tax
March 12, 2007 10:54pm CST
Has anyone read the book called, The Fair Tax. It's about getting rid of the income tax and other like taxes and just having a consumption tax. It is similar to the VAT tax but the Value Added Tax taxes everyone at that rate. A consumption tax would only tax people who buy stuff at the lowest level. Just a one time tax. What does everyone think about this?
2 people like this
11 Sep 08
This is a terrible idea. Here's just two reasons why: 1. Direct taxes (taxes on consumption goods) distort market prices. The more you use direct taxes, the more you will mess with the price mechanism and prevent markets clearing efficiently. (Note: I have assumed you wish to keep overall tax revenue constant from before and after this switch). Taxing income does distort the wage market, true. But the effect currently is minimal, especially given the distortion already caused by the (laudable) minimum wage. 2. Taxation on consumption hits the poor worst. They pay more as a fraction of their income in tax than rich people. Income tax is deliberately progressive to ensure that people who can afford to pay more contribute more, and those who can least afford to contribute pay least. "The Fair Tax" is such a disgusting misnomer for this idea.
6 Oct 07
I haven't read the book, but it sounds like an interesting concept. I would personally be interested in using a VAT instead of income taxes. It would be nice to tax people based on their consumption of goods, not based on how hard they work. If you're living a more lavish lifestyle by buying more expensive goods/more volume of goods, then you'll pay higher taxes. I think that's fair.
• United States
4 Sep 07
I'm a member of the Florida chapter of FairTax.org. I wish everyone would go to that site, read what's it's about, sign up and then active to help get this legislation passed. Everyone needs to contact their congressmen about voting for passage of the Fair Tax Act. If we don't let them know we're in favor of it, how will they know? Some of them haven't even studied the bill.