Quote:
Originally Posted by NatCh
That's why the FairTax proposal includes a Constitutional Amendment to repeal the Amendment that allowed income taxes in the first place (they were originally prohibited by the Constitution). At the time, there was a proposal that the income tax be capped at 6% (I think it was), but it didn't pass because "everyone" agreed the rate would never go that high. 
If they need more money under the FairTax plan, they have to raise the rate, but that would be quite visible to the public (very few are so out of it that they don't notice their prices at the register jumping) so it would have an automatic pressure to lower it again. That's the idea, anyway. The explanation on their site is, of course, much more detailed. |
You might also like to see opposing views
here and
here. A case in point, "Further, the FairTax proposal can be passed by a simple majority of both houses of Congress plus the President's signature. But the much-touted repeal of the 16th Amendment, which authorizes the income tax, requires a much more demanding 2/3 vote in each house and then approval by ¾ of state legislatures. The likelihood of ending up with both the 23% federal tax and the current income tax is therefore all the greater."
I might add that the definitions of "new goods and services" is not explicitly stated. For examples if one purchased a new apartment building as an investment, is that included as "goods"? If so then it could be resold without taxation since it would no longer be "new". If the so called "fair" tax was a tax on everything sold, including things from a loaf of bread to a luxury yacht or an office building bought for investment or stocks and bonds, i.e. on everything sold (whether old or new) by anyone (individual or corporation), then "maybe" it would be fair (i.e. poor, rich & middle class would all pay their "fair" share). This should result in a much lower percentage tax as well, making it easier to enforce.