While your idea to tax different consumables at different rates sounds good in theory, it would very soon have us back at a horribly complex system. Do you know that if you buy a donut in Florida you pay sales tax on it, but if you buy a dozen you don’t? If a drink has at least 20% fruit juice it isn’t taxed, but 19.9% or less and you pay sales tax. Should all food be taxed at the lower rate? The hamburger I feed my kids and the fillet mignon you serve your friends are both necessities? Are you sure an iPod shouldn’t be on the necessity list? I bet I can find 40 lobbyists who can convince 220 congressmen to put it there. But not the knock off mp3 players–keep them on the taxable list so Apple gets a real business advantage.

If you want to make the FairTax even more progresive, lobby to raise the tax threshold. If we all get a prebate check for let’s say $100,000 times the rate, then nobody would pay tax on the first $100,000 they spend. It would certainly be more progressive. The problem is, the rate for all spending above the threshold would have to be in the 300% range. The challenge is to come up with a threshold that is fair without placing an undue burden on spending above the threshold. I think the poverty level is a good starting point, but I’d like to see the poverty level adjusted to a number that can actually sustain a family of the stated size.

It’s been fun.

My poor roth ira tho~~

I thought it was funny how you started out with saying you were annoyed by “wasted resources and needless complication”. The first thing I thought of was the IRS.

I help prepare taxes here towards the end of the season for people, so I spend a lot of time thinking about the system as a whole.

Great read!

If people educate themselves and knowingly choose the current income tax system over the fair tax with full disclosure and knowledge, then so be it. But it’s good to at least know what we’re choosing and the alternatives available. Thanks for presenting them.