GOOGLE RON PAUL

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Because it effectively punishes you for making more money than someone else

You're not quite framing it in the correct manner. See it like this way, taxation is an investment (albeit a mandatory one) in the government. The wealthier who are taxed more, and therefore ending up contributing a far larger portion of the total investments than those less wealthy, are the majority shareholders. Therefore, governmental control should go towards those who have a larger stake in it: the wealthy.

Originally Posted by Night Phoenix

Yes, the wealthy do allow their money to sit in banks and invest it more than others, but that's only because they have more money to work with. It does not, however, mean that because the wealthy tend to invest more that they do not spend money on the retail level at a far higher rate than the lower income brackets, because me and you both know that's not the case.

The savings rate in the U.S. is in the negative, and the people skewing that number are not the ones in the top 1%.

The point is not that the wealthy do not spend money at retail, the point is that as a percentage of their income, consumption for the wealthy is not nearly as much as it is for lower income earners. This basically means that middle income earners pay higher rates of taxation than the wealthy do.

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Actually, I'm not even sure if that's true, because under the Fair Tax system, since they aren't getting hit with payroll taxes, their purchasing power actually increases (maybe, I'd have to look at the figures more thoroughly) because they get all of their money instead of having it looted before it gets to them. When you factor in the prebate, I really don't see how you can say that their purchasing power is effectively reduced.

If the Fair Tax is intended to replace the current income tax system then it will reduce their purchasing power because the government will attempt to achieve similar levels of collection. Imagine being taxed 33% on all of your purchases.

In everything is politically realistic fantasy land, I don't see how the Fair Tax is more appealing than, say, setting a flat tax rate on all income above 90,000.

Originally Posted by Night Phoenix

...once people realize they can continually vote themselves more and more services at someone else's expense, it's a never-ending cycle.

Isn't that why it's mostly the wealthy that run the government? They make up their minority in the population by being disproportionately represented in our government.

The Fair Tax wouldn't shift the burden to the impoverished. They would benefit from monthly "tax rebates" that would essentially constitute a form of social welfare. Hence some liberals support the legislation. This isn't a liberal/conservative issue.

I don't see how it is even a class issue. It would even out the tax burden based on personal consumption habits. Not discriminating against how much you make, but how much you spend. Except for those that are in poverty and of need of social assistance. It would also abolish redundant taxes, and simplify the tax system. I would like the Fair Tax system more if I didn't think it was a knee-jerk reaction to current economic events.

That being said, I'm not too comfortable with the Fair Tax. It absolutely reeks of the ideology of some neo-liberal economist. It also might make it easier for local/state/federal governments to jack up tax rates across the board. Simplicity has it's drawbacks.

Originally Posted by a lurker

FairTax punishes people for spending their money.

So?

Capital gains taxes punishes investing.
Payroll taxes are redundant. In that they're already taxed as an income tax.

I can keep going if you want. Pointing out flaws in the current system is easy.

I don't understand how so many people equate taxation with punishment. If the money you give to your government isn't being used the way you want, it's a pretty clear indication that there are far greater problems at hand than the taxation rate.

There's no way to track the money that's been taxed from you in the first place. Not to mention that government projects are not always financed from a tax pool.