Some good points, but consider this: 40 million woking Americans pay no income tax. They still pay FICA, though. I would think a consumption tax could be very fair if you adjusted for those that spend an inordinate amount of their income to live. Besides, wouldn't a consumption tax encourage savings, thereby reducing int rates? An indirect benfit to the working family looking to buy a house? I think the current system is so screwed up, anything would be an improvement.
I don't know about the 40 million working poor not paying taxes: I paid taxes when I earned minimum wage. Maybe those with children get enough deductions to not pay any taxes. As far as FICA: for the vast majority of people in this country it is the single best 'investment' that they make. Consider that, by the third year of receiving social security payments you have already received more than you paid in. Also, this 'investment' is life-long, adjusted for inflation, secure from legal seizure, and usually tax-free. A consumption-based tax that is mitigated by credits or exemptions for food, medicine, and whatever other item that lobbyists can secure would not generate enough revenue. In the example of 200K a year, my tax bill was slightly less than 38K. If I am taxed on only what I spend (50K) you would need almost a 100% tax rate to generate the same tax revenue. Start throwing in exemptions for food and whatever and the situation gets worse. Then we would have the problem of people choosing to buy less 'stuff'. Now, as an environmentalist, I'm all for reducing consumption & materialism but can you imagine the decrease in the purchase of luxury goods if they were the only things taxed!?!? The 'Fairtax/Flattax' could not be sold by blue-blood Yankee Forbes and it can't be sold by redneck Southern Baptist Hickabee. As usual, the middle ground is the proper ground.
So why don't you spend any of your money if you have so much? What is the purpose of saving it all? It is true the Fairtax will only tax what you spend, but I see that as a good thing, because then it gives people a choice. They won't not spend to avoid the tax. But they will see all of their income and get to CHOOSE what its spent on or not. The Fairtax has an up front rebate for the entire amount the tax would be if all income were spent up to the poverty level, so anyone at or below that level pays zero tax, and anyone near that level pays minimal tax. With all changes there would be winners and losers. The winners would be anyone that works. The losers will be the companies that produce overseas to ship here, because American companies would instantly be a lot more competitive with no payroll taxes to pay. It would reduce the cost to have or hire employees here in the US, but provide no such benefit to importers. It isn't a question of who gets taxed that makes the democrats against it. Its that they would no longer have tax breaks to hand out to their buddies, the buddies that have cost all working Americans their decent jobs in the name of outsourcing and cost savings. No Pain, No Gain. We need to reduce our consumption to the level of what we produce, because if we keep buying imports and borrowing to do it, and selling off America a company or chunk thereof at a time, pretty soon we will all just be serfs in a land buried in debt where everything is owned by foreigners, or the dollar will be worthless (not worth less). Pick your poison, because those are the choices.
Forbes was advocating a flat tax on income, not a tax on consumption. The only thing better about that than what we have it that it would be simpler. It would still leave the poor paying tax and American companies uncompetitive and either outsourcing or dying. Under the current system, I noticed that John Kerry and his wife, who OWN the majority of HJ Heinz, paid less tax than my family. Its called tax sheltering. The tax system is designed to keep them rich no matter how high on the hog they live. FICA is a Ponzi scheme, and whatever payment you get will have to be worth less than what you paid in as adjusted for the REAL rate of inflation. If you think inflation is 3%, feel free to believe it. We'd be a lot better with a system like Chile's where each person's contributions go into a private account under their name, leaving no way for the politicians to steal it like they have been doing since the 1960's. You are delusional if you think it will be any better. Sure, they will send us all checks, but what will we be able to buy with the money???
You're right Ivan, I've always respected your viewpoint. I agree with you. I think their main weakness lies in the fact they are too ignorant to stop drinking the Kool-Aid. Years and years of conditioning have led them to be the way they are today.
I bet most of those brainwashed morons voted for the OIL MEN who rule the white house. HINT HINT one of them is even a recent oil company CEO. So stop complaining about oil prices and start impeaching.
What is quite obvious? Why do you say it's "quite obvious" I would feel different about it if it were my family members? Are you dense? Do you feel faint? Did you skip over my post and go straight to the reply button? Hey asshole I already said I grew up poor as shit and my dad worked three part time jobs to put food on the table. He always had good credit and never filed bankruptcy or any of that shit back during those times. Don't say foolish things, and don't make ignorant assumptions about people. Try reading the post you are responding to next time. It is a matter of values, everyone today seems to have some sort of entitlement complex. Back even 20-25 years ago things were so different. Back then it was fly or die, sink or swim. At least in my family. Now it's cry loud enough, long enough, and in a big enough group that gummint bails you out. Keep on with your dumb shit, and I'll embarrass you. Fuck off.