Should a “Fair Tax”/Sales Tax System Replace the Current Tax System?

FactCheck.org in May of 2007 mentioned the following:

• The President’s Advisory Panel on Tax Reform “calculated that a 34 percent rate on the actual price of consumer goods would be necessary to make the program revenue-neutral.”
• “William Gale, director of the economic studies program at the Brookings Institute, calculates that a 39.3 percent exclusive rate would be necessary for revenue neutrality.”
• “Boston University economist Laurence Kotlikoff – working from Gale’s formula and adopting the same basic assumptions – determines that a 31.2 percent exclusive” rate would be revenue-neutral.
• “We found that including all the taxes that the FairTax would replace (income, payroll, corporate and estate taxes), those earning less than $24,156 per year would benefit.”
• “It will collect more money from those earning between $15,000 and $200,000 per year and less from those earning more than $200,000 per year.”
• Therefore, “those in the highest and the lowest brackets will see their share decrease, while everyone else will see their share of taxes increase.”

To read the entire article, click on Unspinning the FairTax.

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Pat Regnier in Money Magazine in February 2008 made the following assertion:

• “Let’s say a hedge fund manager has a good year and earns $1 billion. If he can somehow manage to scrape by spending, say, $100 million, the other $900 million is tax free. He’ll have paid about 2% of his income in taxes that year.”

To read the entire article, click on Behind Huckabee’s radical ‘Fair Tax’.