If consumption is proportional to income (which seems reasonable) then the greater consumer pays the greater tax.
Poor people are probably consumers of fewer goods so it seems reasonable that they would pay fewer taxes. Concerning whether the tax bites mid and lower income, the site that you provided below addresses that question directly beginning at the subheading: The FairTax: Is It Regressive? (second paragraph ...) The FairTax plan, however, helps to alleviate this difficulty by exempting sales taxes on all income up to the poverty level. Taxpayers would receive a "prebate," which Edwards calculates to be about $5,600 annually. The Treasury Department estimates that the prebate program would cost between $600 billion and $700 billion annually, making it the largest category of federal spending. Americans for Fair Taxation disputes the Treasury Department numbers, claiming that the actual cost would be closer to $485 billion per year. The Treasury Department has so far refused to release its methodology, making it difficult to determine whose estimate is correct. The site (Factcheck) goes on to offer detailed and appropriate criticism of the proponent's methodology and ends with acknowledgement that real wages of middle and lower income would likely rise with the "FairTax". The arguments appear to be very "provincial" in that they target the unique characteristics of income, taxation, and consumption of the USA. I doubt these various arguments can be generalized to the various economies of the world. Having said that, I'll adopt an appropriately provincial attitude and argue that our current (USA) system of taxation defies reason, is intellectually and politically dishonest, is more complex than all of the religious texts and toy assembly instructions ever set down by the hand of man and offers about the same redemptive qualities. To quote a famous American (who incidentally, opposed Fair Tax), it's all fuzzy math. ---chris Christopher J Wells, Geographer National Wetlands Research Center, USGS 700 Cajundome Blvd Lafayette, LA 70506 Office: 337 266 8651 Cell: 337 288 0737 [EMAIL PROTECTED] Jonathan Greenberg <[EMAIL PROTECTED]> Sent by: "Ecological Society of America: grants, jobs, news" <[email protected]> 12/03/2007 03:49 PM Please respond to Jonathan Greenberg <[EMAIL PROTECTED]> To [email protected] cc Subject Re: 'Fair tax' and the environment Factcheck.org has a decent analysis of the fair tax: http://www.factcheck.org/taxes/unspinning_the_fairtax.html In terms of specific to environmental impacts, the fair tax is supposed to be revenue neutral compared to our current tax system, so the federal government (in theory) should have no more or less money to work with, so it still comes down to congressional decisions on where to direct federal funds. It could be argued that since consumers SEE a higher amount of taxes on goods (some of which can be considered environmentally unfriendly, e.g. gas), they may be less inclined to buy it. On the other hand, many environmentally friendly items are pricier than their less sustainable counterparts, so this may be counterproductive as well. The more important issue is that the "fair" tax appears to raise taxes on the middle class, and lower the highest and very lowest income brackets. This leads to more economic disparity between haves and have-nots, which has its own social and possible environmental consequences. --j Wes Bickford wrote: > I am hoping to gain some insight into the 'Fair Tax' and it's > potential effects on the environment and environmental legislation. I > have heard the argument that by heavily taxing new products but > imposing no tax on used goods, an incentive is created to reuse and > to buy more durable products. However, I have yet to fully understand > what would be the fate of many environmental laws that rely on tax > breaks and penalties as incentives for compliance. This is the basis > of much of our current environmental legislation and the 'fair tax' > seems to take away this sort of accountability from polluters. > > I have heard this come up in presidential campaigning and it seems to > have the potential to 'sweep voters off their feet' with promises of > no income taxes in the future, but I hope that we would not be > compromising the important functions of income tax in this new tax > structure. Does anyone have significant knowledge about the 'fair > tax' and the environmental pros and cons of adopting it? > > Thanks for your thoughts. > > Wes Bickford > > -- Jonathan A. Greenberg, PhD Postdoctoral Scholar Center for Spatial Technologies and Remote Sensing (CSTARS) University of California, Davis One Shields Avenue The Barn, Room 250N Davis, CA 95616 Cell: 415-794-5043 AIM: jgrn307, MSN: [EMAIL PROTECTED], Gchat: jgrn307
