Most economists’ view is that rich people spend less of their income, and save more, so as a share of income a sales tax takes less from them than it does as a share of poor people’s income. Sales taxes are regressive, right? Won’t this hurt low-income people?įlat sales taxes like the FairTax are probably regressive on their own. It’s 30 percent! And it would apply to just about everything, from groceries to health care to rent and home purchases to interest on your credit card. Here’s everything you ever wanted to know about the FairTax but were afraid to ask. It somehow just keeps coming back again and again, despite its many obvious weaknesses. I’ve been following the idea since 2004 or so, when I was 14, because I was not an athletic child. There’s something oddly comforting to me about the return of FairTax discourse. “Any House Republican who backs this bill can accurately be accused of voting for … raising the price of everything by a huge amount at a time when inflation is already high shifting more of the tax burden to the middle class instituting a large new wealth tax on senior citizens increasing federal spending by a massive amount increasing the deficit and creating large black markets.” Here’s what National Review’s Ramesh Ponnuru had to say about it: But so are many enthusiastic conservative tax-cutters, like the Wall Street Journal editorial board and Grover Norquist. Not surprisingly, liberal groups who judge the proposal regressive are against it. Prominent party figures like Ted Cruz, Mike Huckabee, John McCain, Rick Perry, and Herman Cain have all championed the idea over the years. Buddy Carter (R-GA) already has 23 co-sponsors for the current iteration. It’s a radical idea, but one which since its first introduction to Congress in 1999 has been a favorite of conservative Republicans. Virtually every American would get a monthly check from the government to cover the cost of paying the tax on essentials. The FairTax, at its heart, is simple enough: It would take almost every federal tax and replace them with a fat 30 percent sales tax on everything. But one of the more important was a concession to hold a vote about a radical tax reform proposal known as the FairTax. Kevin McCarthy had a hell of a time getting elected as House speaker, and a list of all the concessions he made to the most conservative members of his party wouldn’t fit here.
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