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Financial Planning / Tax Strategies
|Subject: Re: FairTax||Date: 1/23/2013 9:03 PM|
|Author: joelcorley||Number: 117514 of 119653|
You wrote, I too was very interested in the FairTax known as H.R 25 and S 25. ...
Actually it's H.R. 25 / S. 13. And there is a pretty good write-up on Wikipedia at http://en.wikipedia.org/wiki/FairTax
Personally I wouldn't have too much of a problem with a FairTax. But as I get older, I have more and more pre-existing assets to consider. Switching to a "FairTax" would benefit people that have been spendthrifts relative to savers in prior years because the savers would have had to pay taxes on both earnings and purchases, while the spendthrift would not.
Of course this is obviously why getting such a tax through Congress is so difficult. The transition means that "wealthy" individuals will be double-taxed on existing assets - at least once they go to spend their money. And in general, it's the wealthy that control Congress so passing such a tax is asking the same people that would vote on the issue to take a huge haircut on their existing net worth.
Much of the populate might respond by saying, "So what? They're rich! They can afford it!" But the real problem with the FairTax is with people of modest means that are approaching their retirement goals. (Like me.) You're asking us to give up our goals and retire much, much later. Worse, people that have just entered their retirement years would have to either scale back their spending drastically or they'd need to go back to work.
The number of people in such situations is actually pretty substantial. In fact it's probably about 80% of all middle class Americans that are in their late 40's and up. That's probably at least half the voting population. So unless you can fix this issue, you would probably never be able to pass this measure. I really don't understand why the backers of the FairTax have never understood (or at least addressed) this crucial point.
Who's been a FairTax supporter in years past.
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