No. The Fair Tax is the name of a proposal to replace all income taxation, including Medicare and SS withholding, with a national sales tax.
The points of the plan, in brief, are:
(1) All other taxes on income- income tax, corporate tax, capital gains tax, Medicare, SS, unemployment, and estate tax- are eliminated. (I personally would retain an estate tax on liquid assets only- money and negotiable stocks and bonds- at 50% for liquid assets above $1 million, inflation-adjusted.)
(2) National tax of 23% on all sales of new merchandise in the USA levied on the seller, NOT the buyer. Wholesale sales exempt. (There's a bit of voodoo in the proposal there, in that the writers call it 23% invisible in the price of goods. If you calculate it the way Texas sales tax is done- as a percentage levied on the pre-tax amount- it's about 30%. I'd rather do it the Texas way.
(3) Sales of used goods not taxed. (Unworkable, IMHO. I'd rather institute a level of sales below which the requirement of a merchant to pay in the tax is waived.)
(4) To make the sales tax progressive instead of regressive, a "pre-bate" check representing the sales tax paid on about twice the poverty line in purchases is sent to every man and woman in the USA every year. No requirement is made to prove that you spent it- you get the check no matter how much or how little you buy. (Absolutely the only way this could ever get passed, and even then it's problematic. Liberals say no amount of rebate, prebate or exemption could make a sales tax non-regressive, and conservatives say that the wealth redistribution involved would require a bureaucracy larger than the IRS. I deny both positions.)
(5) The IRS, as we know it, is abolished, leveled, flattened to the ground. (Impossible. Oh, you'll make enforcement easier by about an order of magnitude, and the much simpler regulation system will reduce expenses still further, but somebody still has to operate and enforce the Flat Tax, and even if you change the name, it'll still be a heartless, uncaring, uncooperative IRS to those who have to deal with it.)
There are a number of advantages cited for the plan- it makes our exports cheaper, since they aren't taxed; it cuts loopholes and corporate benefits, since you're taxed on what you spend, period; consumption is a more moral form of taxation than claiming a percentage of all citizens' labor. My personal favorite advantage, though, is that it gets rid of hours and hours of paperwork and gut-wrenching terror of making a mistake.
Of course, the tax preparer industry and the $4 billion per year they charge to prepare returns each year have a strong interest to prevent it going through...
no subject
The points of the plan, in brief, are:
(1) All other taxes on income- income tax, corporate tax, capital gains tax, Medicare, SS, unemployment, and estate tax- are eliminated. (I personally would retain an estate tax on liquid assets only- money and negotiable stocks and bonds- at 50% for liquid assets above $1 million, inflation-adjusted.)
(2) National tax of 23% on all sales of new merchandise in the USA levied on the seller, NOT the buyer. Wholesale sales exempt. (There's a bit of voodoo in the proposal there, in that the writers call it 23% invisible in the price of goods. If you calculate it the way Texas sales tax is done- as a percentage levied on the pre-tax amount- it's about 30%. I'd rather do it the Texas way.
(3) Sales of used goods not taxed. (Unworkable, IMHO. I'd rather institute a level of sales below which the requirement of a merchant to pay in the tax is waived.)
(4) To make the sales tax progressive instead of regressive, a "pre-bate" check representing the sales tax paid on about twice the poverty line in purchases is sent to every man and woman in the USA every year. No requirement is made to prove that you spent it- you get the check no matter how much or how little you buy. (Absolutely the only way this could ever get passed, and even then it's problematic. Liberals say no amount of rebate, prebate or exemption could make a sales tax non-regressive, and conservatives say that the wealth redistribution involved would require a bureaucracy larger than the IRS. I deny both positions.)
(5) The IRS, as we know it, is abolished, leveled, flattened to the ground. (Impossible. Oh, you'll make enforcement easier by about an order of magnitude, and the much simpler regulation system will reduce expenses still further, but somebody still has to operate and enforce the Flat Tax, and even if you change the name, it'll still be a heartless, uncaring, uncooperative IRS to those who have to deal with it.)
There are a number of advantages cited for the plan- it makes our exports cheaper, since they aren't taxed; it cuts loopholes and corporate benefits, since you're taxed on what you spend, period; consumption is a more moral form of taxation than claiming a percentage of all citizens' labor. My personal favorite advantage, though, is that it gets rid of hours and hours of paperwork and gut-wrenching terror of making a mistake.
Of course, the tax preparer industry and the $4 billion per year they charge to prepare returns each year have a strong interest to prevent it going through...