- Mountain River
(Fair Tax vs. Income Tax): Which is better?
We are already taxed heavily based on consumption. Somehow, the idea of a fair tax of 25% is still terrifying to many of us. Why? The unknown is scary! Also, we already have a working system. We know that the economy can thrive under the current tax system when it isn't tampered with.
The idea behind the fair tax is to erase the possibility of the tampering occurring. I admit, I'm quite frightened by the 23-25% trade tax it requires, but the model has promise.
Perhaps there is a fear that it wouldn't provide as much revenue for the government as the combined Income tax & trade tax, and put the nail in the coffin on our economy. I think it is a good idea. It just seems like the intuitively better choice to give the people their full income & tax on spending.
I'm sure there must be some economics literate people here that know statistics. I have a hunch that the GDP could be used to provide an accurate estimate of how much revenue the "fair tax" could produce. That's without figuring in the revenue raised by higher incomes...
What are your thoughts TED?