The Fair Tax concept floated a decade or so ago
by 88_92WSND (2024-02-17 14:41:20)
Edited on 2024-02-17 14:53:39

In reply to: "Fair" is one of those loaded words. Fair to who, exactly?  posted by Barney68


included a prebated stipend for everyone which offset the tax burden for a pre-determined portion of spending to offset the regressive nature of a consumption tax. So if the cost of the tax on food, lodging, transport at the baseline level is $300, each month all individuals get $300. Lower levels of consumption result in savings, higher levels get taxed equally regardless of income level.
Since it is done at the point of transactions, there is no longer a distinction between business, individual, investment.

A benefit is that it directly pegs tax revenue to the GDP - there is less need to jack with tax rates, since revenue floats up as GDP grows.

You could look at the prebate as a form of UBI -- ie the tax system by default partially subsidizes the cost of living for all residents.

The proposal floated in the 00's also deals with your concern about the increase in prices. First - the taxes are already included in prices - if you are running a business, and you are paying taxes, you set your prices to cover that part of your cost of doing business. Second, since the Flat/Fair Tax is the source of revenue, all payroll taxes and deductions go away - it is not on top of existing taxes.
In any event, all of the items listed in the original post will have an impact on someone, since it means more money being taken out of the economy for use by the government. If you want to increase revenue, someone is going to pay more. The question is whether you make it broad and simple or narrow and complex.