Replace All Federal Taxes on Income with the Fair Tax Act , HR 25 and S 122

I Could Use Some Open Discussion From Valuable Supporters Of FairTax

I have read the FairTax books and studied them. I have read the Fair Tax Act of 2009. I feel comfortable answering questions in my personal life and on Twitter.

If the idea of "progressive" starts and ends with the prebate then that answers my concern. It doesn't satisfy the potential misconception for others that have never read the books or had FairTax explained to them. A sales tax on consumer goods and services or the exemption of tax (prebate) may be described as having progressive effects as it increases a tax burden on high end consumption or decreases a tax burden on low end consumption respectively. This should be explained to a greater extent, or enlighten me by telling me where I missed the explanation.

If you are politically motivated as I am and are conservative to boot, just the word "progressive" has a negative connotation. What we have now is progressive taxation, and I don't need to explain how bad that is. Progressive can have a negative impact if it refers to a specific political ideology, or if it refers to taxation. One word can make or break a deal, and we need every positive possible.

The opening line in explanation of the FairTax on the website states :

“including a progressive national retail sales tax”

This can be very misleading when it actually is a fixed 23% sales tax on goods and services, so the mention of progressive seems out of place.

With Obama-nomics and his unprecedented spending, how solid is the 23% when we are on the hook for a $24 trillion deficit? I have a Congressman who shows an interest, but I will not push if I cannot be convinced there is no ambiguity in the legislation or promotional media.

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Permalink Reply by Ron Teidel on October 30, 2009 at 9:56pm

It might be preferable we didn't add complication to the common sense approach FairTax is. The prebate is a level playing field for every American and is based solely on the government published poverty level and family size, and it's blind to what your earnings are. I'm not sure if it was the intention of FairTax to accomplish the outcome, but it has eliminated class distinction which I'm sure would make the statists extremely angry. There is no need to apply a percentage to the prebate, it is what it is. What everyone spends above the prebate is a matter of ability, way of life, and personal choice. If you want to go off in a dark corner to see how much of a percentage you paid of your income in taxes that's fine, but your prebate won't change. The other thing that won't change is that the more an American consumes the more in taxes he/she will pay. Remember, if you are really frugal in your way of living you will be able to keep what you earn.

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Permalink Reply by Sean Fagan on October 30, 2009 at 10:08pm

"...it has eliminated class distinction..."

Here! Here! Well said! IMHO, your best post thus far.

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Permalink Reply by Ken Hoagland on November 3, 2009 at 12:53pm

All sales taxes are regressive because those with less pay a higher percentage of their total income on taxes than those with more discretionery income-- that is not spent. The FairTax is "progressive" in the sense that the more you spend, the more taxes you pay except that the prebate and elimination of the highly regressive FICA (flat tax) make the FairTax--a retail sales tax--far more progressive than the current income/FICA tax system.

This must be emphasized because this must be a campaign for all Americans (It's an American thing). The FairTax cannot win enactment nor can we win the repeal of the 16th amendment without pressure from across the political spectrum. That means getting past the wrong characterization of THIS sales tax as "regressive".

No purely flat tax on spending can be "progressive" without elements similar to the FairTax that protect the poor and the middle class from an undue and unfair burden of taxation. This important distinction is critical to our progress because most on the left, unfamiliar with the FairTax, likely won't even consider such a profound change in public policy if they believe this change unfair to low and middle income Americans. It's not and that's why its called "progressive".

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Permalink Reply by David Harbert on November 4, 2009 at 2:53pm

Progressive means to progress and with FairTax we will have economic progression as we have never had it before. That's why it is progressive!

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Permalink Reply by Eileen on November 4, 2009 at 4:07pm

progressive –adjective
1.favoring or advocating progress, change, improvement, or reform, as opposed to wishing to maintain things as they are, esp. in political matters: a progressive mayor.
2.making progress toward better conditions; employing or advocating more enlightened or liberal ideas, new or experimental methods, etc.: a progressive community.
3.characterized by such progress, or by continuous improvement.
4.of or pertaining to any of the Progressive parties in politics.
5.going forward or onward; passing successively from one member of a series to the next; proceeding step by step.

6.noting or pertaining to a form of taxation in which the rate increases with certain increases in taxable income.

7.of or pertaining to progressive education: progressive schools.
8.Grammar. noting a verb aspect or other verb category that indicates action or state going on at a temporal point of reference.
9.Medicine/Medical. continuously increasing in extent or severity, as a disease.

Nine definitions and people tend to relate the word “progressive” to definition #6!