The "Fair Tax" isn't really fair but helps the rich and hurts the poor.

Fair Tax Debate: "The Fair Tax would be "progressive" in the sense that it would avoid taxing financially challenged (i.e., poor) people for basic necessities" True, those below the poverty line would be exempt from most of taxes on necessities. However, what about those with to much money to be poor but not enough to get by anyway? The woman making $50,000 a year with two children, how is she going to make it? Between the cost of items plus the tax she would mathematically be better off quitting her middle class job and taking a minimum wage job to be under the poverty line in order to avoid paying taxes. Under the current system the poor are exempt from taxes anyway, there is a stable middle class, and a very small but wealthy upper class. "Since the tax is only applied to new (not used, secondhand, etc.) items at the point of sale, a relatively frugal person could avoid paying taxes on most things, and might even make money because of the prebate" It takes a lot of research but just Google: Statistical Abstract of the United States. This has any information one could need. Any way, this number is a little old, but the average family spent approx. $35,500 including taxes. Taxes only accounted for 3,068 on average. The average household also made only $43,000 in 1994 (also in 1994 dollars). The numbers are based of four person families. Sources: http://www.census.gov... http://www.stretcher.com... Even without taxes, the average household wasn't able to make enough money to cover their expenses in 1994. Today it's even worse with higher gas prices and inflation, not to mention stagnant wages. It's harder for Americans today to pay their bills than in recent years. If the Fair Tax were enacted in 1994, the math would look like this. Average expenditures 32,500 (without taxes). 32,500 + (32,500 x 23%) = 39,975 This tax has inched closer to consuming the whole family's income, but that's not all. Now add the 28,000 set yearly payment for a family of four, that makes the total cost of expenditures approx. 68,000. But including the rebate, it becomes $61,700. This is way more than the family earned for that same year. Even if this family manages to buy everything second hand, thereby negating the 23% sales tax, they still won't be able to make more than they spend. With the current tax system, most families can live comfortably with more money to spare for savings, under the fair tax, this would not be the case. "Since the Fair Tax only taxes consumption, it would not punish businesses for expanding and creating more jobs." I would argue that it isn't punishing business but instead making them pay more because they can afford to. "The base price of goods and services (that is, their cost of production before adding any taxes, profits, etc.) would be lower because the embedded costs of the current income tax system would no longer be a factor. This would partially offset the increase in the total price of new products and services that would result from the Fair Tax." Products would not be any cheaper, in order to make products one has to have certain tools to create them. You can't build a house without a hammer, cars without the assembly line, clothes without sewing kits etc. All of these tools needed to create new products will be bought with the 23% sales tax. "From the standpoint of government revenue collection, the "problem" of tax evasion would be reduced because people who currently resist paying income taxes and/or derive their income from black market sources would be taxed automatically at the point of sale whenever they purchase new goods and services" People could still avoid taxes with the new system and do it with even more ease than before. They can still avoid the monthly payments based on family size and steal items from stores thereby committing two crimes, making tax evasion and theft an even bigger problem. "A national sales tax such as this would be much more transparent than the current tax system. There would be no more loopholes, special exemptions, payroll taxes, embedded costs, or other factors that allow people under the current system to avoid realizing how much tax they are actually paying. With the amount of taxation clearly visible to the general public, people (hopefully) would be less likely to tolerate wasteful spending, corruption, and inefficiency in government, resulting in lower levels of taxation and a stronger economy overall." I will give you the first point, but not the fact that people would be less tolerable of wasteful spending or corruption. The reason people are so tolerant of these practices is because of ignorance. They choose not to know what really is going on and swallow whatever is fed to them. How they pay their taxes wouldn't change people's beliefs about how little government affects their lives. A false belief might I add. Finally my favorite argument, my opponent invokes "voodoo economics." We went through this with Reagan and we're going through with it now with Bush. I am running out of room so it's gonna be brief. The rich don't increase pay for their workers they buy more stuff and give bigger Christmas bonuses to top executives. Employees get nothing. That's why the economy was bad for the middle and lower classes then and the same goes for today. Wages are stagnant and the rich are getting richer.