Herman Cain, GOP hopeful for president in 2012, is a strong believer in the Fairtax proposal. Fairtax supporters, in addition to lying about the amount of money the rich are paying now in taxes, also like to say that the poorest Americans will be better off with Fairtax. However, these claims just don't add up with reality. Let's take a look at the facts:
The Fairtax proposal eliminates income taxes and institutes a flat 23% sales tax. Even when you look at the other figures, this is basically the gist of the plan. Now, the poorest Americans already don't pay federal income taxes because they don't make enough to qualify, so eliminating the income tax won't save them a penny. However, they do pay sales tax, which in some cases would triple under the Fairtax plan. This will result in the poorest Americans, those who are most strapped for cash; paying even more of the burden. Meanwhile, the richest Americans tend to invest or store much of their money away. Only the money they spend would get taxed, whereas a disproportionate amount of their money would remain untaxed; money that would currently be taxed under current income tax laws. Therefore, the poorest Americans would find their tax burden increase while the richest Americans would find their tax burden decrease dramatically. What is so fair about that?
One Fairtax supporter insisted to me that my logic was wrong. All I had to do was input my numbers into the Fairtax calculator and it would show that I would pay less in taxes under the Fairtax system. Now seeing as how the calculator and it's algorithm was created by the Fairtax people, it's accuracy was already suspect, but I decided to play along anyway and gave it a test run. Somehow, despite me inputting that I made $0 in income, the final results showed that I made $2,100 in income. I don't know where this calculator found this magical number, but I assure you; that additional spending cash it says I'd have under Fairtax doesn't actually exist. If the Fairtax calculator hadn't been playing with the figures, it should have shown that my spendable income under both plans was the same, zero. So, that leaves all figures the Fairtax calculator gives highly suspect, since I've proven it plays with the figures.
If all you've got to show that Americans would be better off with a Fairtax system is a calculator that has all the reliability of the death clock, then you will lose
Updated by SixDollarLiberal at Tue May 17, 2011 at 11:31 PM PDT
After examining the proposed Fairtax bill a little closer, I've found that it seems to shift the largest amount of tax burden on illegal immigrants, who will be forbidden from collecting any rebates on taxes. This would create an environment that would encourage allowing illegals into the country, as they would be the biggest source of revenue for the federal government.