Date: 2008-10-02 12:00 am (UTC)
never, ever doubt the ability of people with money to spend it. : p.

if you can only afford a $10grand car, you might pay $2k in Fairtax on it. If you splurge and buy one of those $50grand car, you're paying $10k in Fairtax. same rate, more Fairtax from the rich. If you buy a $200 sofa, how much Fairtax are you paying? Vs remodeling and outfitting your entire basement... who's paying more raw dollars in Fairtax?

turn this around and instead of saying, "the poor are paying at the same rate as the rich," say, "the rich are paying more raw dollars than the poor." If you buy a $10grand car and your neighbor buys a $40grand car, $12k in Fairtax will be paid, but you will only have paid 1/6th of that ($2k/$12k). if 5 people buy $10grand cars and 1 person buys a $40grand car, 5/6th of the people have paid %50 of the tax between them (or 10% each) and 1/6th of the people will have paid the other 50% of the tax.

the rich are still paying more. going back to the beer analogy, either the rich man is going to buy more beers at a cheaper price, or he's going to buy more expensive beer. Either way, he's paying more raw dollars in Fairtax... even though it's at the same rate.

If you woke up tomorrow and you had a million dollars in your bank account, untaxed.... how much of it would you save? how much of it would you spend?

let's say you put half a million into a bank account somewhere. what does the bank do with that money? they could loan it to someone starting a business (current economic woes aside). let's say someone gets a loan to start a mcdonalds. your half-million -- that you personally haven't spent -- is going to pay someone to do work and get a paycheck. they're going to take that money that they didn't have before and go buy shoes at target (on which they pay Fairtax).

You take some of that other half-million and buy a house (and have some left over that's still in the bank). You'll pay a certain amount of Fairtax on the house and no more. as time goes on, you might start running a bit low on the half-million that's not in the savings, so you take a bit out of your savings and go spend it.... and pay Fairtax on it only then.

Your money isn't taxed until you spend it. that's the basis of the Fairtax. No matter how much you make, earn, save... your money should not be taxed until you spend it at the retail level, consuming a good or a service.
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Kageisuke

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