Politics
Out of context: Reply #11909
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- ukit0
Sorry, but there's a reason Mike Huckabee and fringe right wing radio hosts are the only ones pushing this idea - it's bullshit. It's basically a huge tax cut for the rich with a massive entitlement for the poor to paper over that fact.
http://www.factcheck.org/taxes/u…
"Sometimes sales taxes are called regressive, meaning that the poorest pay higher rates than the wealthy. Strictly speaking, sales taxes are flat, since everyone pays the same rate. But because the poor tend to spend a high percentage of their income on basic consumer goods such as food and clothing, sales taxes do require the poor to pay a higher percentage of their income in taxes.
The FairTax plan, however, helps to alleviate this difficulty by exempting sales taxes on all income up to the poverty level. Taxpayers would receive a "prebate," which Edwards calculates to be about $5,600 annually.
The Treasury Department estimates that the prebate program would cost between $600 billion and $700 billion annually, making it the largest category of federal spending. With the prebate program in effect, those earning less than $15,000 per year would see their share of the federal tax burden drop from -0.7 percent to -6.3 percent."
So if people not paying taxes is something you're concerned about, this would seem to make it even worse.
They then go on:
"Of course, if the poorest Americans are paying less under the FairTax plan, then someone else pays more. As it turns out, according to the Treasury Department, “someone else” is everybody earning between $15,000 and $200,000 per year. The chart below compares the share of the federal tax burden for different income groups under the current system and under the FairTax. Those in the highest and the lowest brackets will see their share decrease, while everyone else will see their share of taxes increase."
So as part of the 100-200k bracket here, I would see my percent of federal taxes go up by 4% a year, whereas Paris Hilton and Bill Gates would see theirs drop almost 7%. Of course, for me, that 4% is worth thousands, whereas their 7% is worth millions. Yeah, I think I'll pass on this "fair tax" plan.