Quote:
Originally Posted by dessin d'enfant
It will be a massive tax cut for the rich. For it to be revenue neutral somebody else has to be taxed more. It was passed over by GWB of all people for being too regressive. Nobody competent takes it seriously, so I guess it makes sense its being pushed by Johnson.
It taxes people that pay only capital gains tax (15%) more because when they buy things they have to pay 30% on them instead. If Mitt Romney wants a new yacht, he would sell some stock and buy the yacht. The stock he sells he'd pay only 15% on the capital gains. Under the Fair Tax, he'd pay 30% of the value of the yacht (because he'd have to pay $130,000 for a current price $100,000 yacht - nominal percentage is 23%). This is much more. Mitt Romney and Donald Trump would probably pay more under the FairTax.
It taxes people who receive a multi-million dollar salary less. So the football player will get to keep much more of his salary than with the current tax system. This is because he would be in a much higher tax bracket when he's playing and in a much lower tax bracket when he retires.
It taxes the people who are close to retirement more because they'd be paying the consumption tax while having paid the income tax under the current system. It taxes the people who are young and don't have a lot of savings less for the same reason.
You can't just say "nobody takes it seriously" and just expect the argument from authority to stand here. There are serious pros and cons of this proposal and it's quite interesting.