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Subject:  Re: Are retirement accts really the best strateg Date:  5/13/2007  12:55 PM
Author:  ziggy29 Number:  57337 of 88772

>> This is NOT inherrently true. State sales tax programs are regressive, but that does not have to be the case. The (horribly named) FairTax is not regressive in nature because of the rebate checks that everyone receives regardless of income or spending level. <<

Not only that, but most sales taxes exempt food. Some also exempt items like clothing and medicine. Since the lower-income households tend to spend most of their money on these "essentials" -- which are often not taxed -- it's not a foregone conclusion that they are spending a greater percentage of their income on sales tax.

Just the same, any such concern can be alleviated with some form of a rebate to offset the first $X typically spent on sales taxes. It's sort of like creating a 0% bracket in the federal income tax through the standard deduction and personal exemptions.

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