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One of the aspects of The Fair Tax, which is basically a flat tax, is the idea of a "prebate" - a sum of money (between $4-7K if I recall) that is paid to each
by Zelphyr 10y ago
One of the aspects of The Fair Tax, which is basically a flat tax, is the idea of a "prebate" - a sum of money (between $4-7K if I recall) that is paid to each taxpayer every year to help cover the basics like bread and milk.
- OrwellianChild 10y agoI mean, great, but now you're back to tax brackets... May as well stick with the graduated system.
- Zelphyr 10y agoI encourage you to read up on The Fair Tax. There are no brackets. There would be a single sales tax rate on all retail purchases. Nothing else. No deductions, no loopholes.
- OrwellianChild 10y agoI understand the concept but can't get behind it because it disproportionately taxes the poor (as a portion of their income). Taxing consumption gives the more wealthy a break since spending doesn't rise 1:1 with income.
- twblalock 10y agoSo it's not really a flat tax -- it's just a tax system with tax credits and fewer brackets than we have now. I'm sure there will be other popular proposals for tax credits and deductions: EITC? Charitable donations? Investment losses? Mortgage interest? If we adopt a flat tax, we will eventually turn it back into the same tax system we have now, for the same reasons we ended up with our current system in the first place -- people like all of the credits, deductions, and exclusions they get now, and they would vote to restore them in a heartbeat.
- laughfactory 10y agoI get your point, and I agree nothing short of something really catastrophic will drive any change. And then there will be pressures to corrupt it all over again. But imagine if it was a constitutional amendment. It wouldn't be impossible to pervert, but it would be harder than it is now.
- dragonwriter 10y agoA preemptive rebate check only makes a difference in the first year of the system. If it's actually a advanced refundable credit, then suddenly you don't really have a flat tax, you have a flat marginal tax with a refundable credit (or a flat tax with an exempt UBI.) Of course, then you need an even higher marginal rate to achieve revenue neutrality.