Tuesday, February 9, 2010

Why a Fair Tax is so Scary!

  1. #1   How high is high enough, when it comes to the fair tax? There is no natural place to stop.  With the income tax at least you can imagine approximately how much of your yearly income ought to be sent to the Feds.  As in 50% is too high.  10% is probably too low. But what percentage of your yearly spending should you send the feds? Weird question. Hard to imagine. I fear that there is no natural place to stop and that is why it is already the tax of choice for the Euro-nanny states.  
  3. #2  It is not fair!  The "Fair Tax" is not fair! Even slightly!  One of the perks of being rich is that you simply don't have to spend that much of your income.  The rich get to save and invest most of their pay. This means that the "fair tax" will cause the rich to send the Feds less of a percentage of their annual income than the Middle Class  relative to their annual income.  Much less!
  5. #3  I also fear that the Fair Tax will come in to being very much not according to the plan of those who advocate it.  As in, we'll still have the payroll tax and we'll get the fair tax too! Ouch!  Obama dreams of this.
  7. #4  It is a given that when you tax something you get less of it.  And especially right now, American stores and manufacturers need more purchasing and spending, not less.
What I'm for is a flat tax where if a guy make 5 times as much as I do he pays 5 times as much in taxes, not 100 times. A very American system the flat tax.  But Paul Ryan's plan is probably more politically doable for now.