3 ms·

This would definitely put the brakes on the consumption a bit. Do you think it would get to pass? Yeah.. no.

• anigbrowl 14y ago
  Consumption might go up between the monthly prebate and the lack of income tax deductions from paychecks. Although this would be a one-time boost, it would be a pretty significant one. A 23% sales tax isn't as awful as all that; the average rate of VAT in Europe is about 20%, on top of income tax. I've been rather skeptical of the fair tax proposals before, but I wasn't aware of the prebate concept which is the old idea of a guaranteed basic income under a new name, and somewhat reflective of the existing incentives. This bears further consideration and I'll spend some time this weekend playing with the numbers. It's interesting to me that it's engineered to be progressive, which a flat tax most certainly is not. I also think the mind-numbing complexity and warped incentives of the existing tax code create a huge drag on the economy. It's monstrously inefficient.
  • intelliot 14y ago
    You're right. I hadn't thought to compare with the average rate of VAT in Europe. Additionally, I don't really see how people could say that the FairTax rate is awful, considering that its rate was chosen to make the tax approximately revenue neutral.
  • dragonwriter 14y ago
    Its a 23% tax-inclusive rate, which is equivalent to a 30% sales its much higher than European VATs.