From reading this article, I am not clear whether the author has read the FairTax book (see also www.fairtax.org). This book can easily be read in an afternoon, and may clear up some of the misunderstandings the author has.
In the section "FairTax - Who loses?", some important factors are left out. For example, while seniors may not have an income that can be taxed, the currently hidden (and embedded) taxes in consumer goods is in effect a tax on any consumer, including seniors. Therefore, the FairTax would not increase their burden, since they are already paying it. Secondly, many seniors have investment income through capital gains, which is taxed, and would no longer be taxed under the FairTax proposal. The boost to the economy from investments and savings would likely increase the value of their current stock portfolios, and therefore levels of income.
This article also claims the bottom 90% will pay more tax, while the upper 1% would receive a tax cut. According to government statistics, the upper 50% income earners pay 96% of all federal income taxes. Therefore, I am not opposed to this group of hard working Americans getting some tax relief. But what this article ignores is the increase in real income that all Americans would experience. Economist for the FairTax proposal estimate an increase in real income of approximately 9% resulting from the increased economic activity, in spite of the amount of sales taxes paid.
I would like to see more articles debating the merits of tax reform proposals like the FairTax.
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