Friday, August 31, 2007

Money for Nothing

The Current Tax System takes money from me in the form of higher prices for goods (because corporations pass on the expenses to me, the consumer) as well as income tax and various other federal taxes I might have to pay from time to time.

The Fair Tax eliminates that in favor of a 30% increase in the prices of goods (or a 23% rate on the total price of goods if you prefer). In theory I buy a steak sandwich, and the government takes its cut, 23% of that money goes to government. This is ok, because the companies involved will, under the pressure of the invisible hand of Adam Smith, be forced to lower the prices on their goods. Ian responding to a post down the page, claims that prices will drop 20 to 30%. That's a pretty big drop, in exchange for an increase of 30%. In fairness I've seen other people using 15% as the amount prices will drop.

And of course you won't be paying income tax anymore, so your paycheck will get fatter. And you get a prebate, which in my case would be an additional $196 a month (since I am single).

So prices would go up a little, maybe. But after the invisible hand steps in, they would be maybe 15%, maybe 10%. Heck they might even be about the same as they are now. And I'll have a lot more income, and a prebate.

Hmmm. Maybe this fair tax is pretty good after all. It's too bad I'm the sort of person who doesn't believe you can get something for nothing.

Oh if you are looking for a good website on Fair tax policy, you might check out Americans for Fair Taxation's website. By Fair Taxation, of course they mean the Fair Tax. Whether or not that is really fair, is hard to say.

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