Classic Robert Gauntlet Tournament: The current tax system should be replaced by the fair tax.

Thank you YYW for your prompt response last round. I'm going to attempt to quote portions of my opponent's arguments which are representative I larger portions of his argument. I'll elaborate on the quote when necessary. Impact to Individuals "It would go equally to those with zero income and those who buy nothing in the course of a month, as well as to billionaires like Warren Buffett and Bill Gates." By implication, the "prebate" proposed to correct for FT's inherent regressiveness amounts to the creation of a "national welfare program" " It's funny that Warren Buffett is brought up here. Warren Buffett is commonly quoted as saying it's unfair his secretary pays a higher tax rate than him. This plan would actually fix those loopholes Buffett uses to avoid paying as much as his secretary. The prebate wouldn't amount to a national welfare. One of the reasons for the rebate ( besides providing a progressive tax element) is to insure nobody pays taxes on basic necessities. It doesn't matter if it's Bill Gates or a family living below the poverty level. Nobody should have to pay the government for the most basic stuff they need to survive. The prebate just happens to be the fairest and most economical way to insure nobody has to pay to live. Right now a family living at the poverty level pays 22 cents on every dollar they spend on imbedded taxes. This isn't even taking into account FICA social security etc. coming out of their payroll check. Under the FT plan, they would pay Zero percent. I repeat. Exempting people from paying taxes on basic necessities isn't welfare. It's just good policy. "there is essentially no relationship between the rebate and the cost of living" Actually there is. The prebate is based off of what somebody spends at poverty level. Poverty level spending is a cost of living index. The prebate does more than the current tax system to make sure families don't get taxed on basic necessities. The 22 percent imbedded tax is no longer there for poverty level spending. "Even still, FT's revenue neutrality rests on the erroneous assumption that "no matter how large a family's income, 100% of it is consumed every year," which is not the case. In reality, the percentage of a person's income being consumed by expenses falls as income rates rise." The FT revenue neutrality uses no such assumption. The plan exempts used goods from being taxed. Which is a key indicator that it isn't assuming 100% of income is taxed. Not to mention 100% of income not being used for tax exempt things, such as used cars, used houses, thrift shop purchases etc.. One of the attributes of the plan often promoted by FT proponents, is the fact that savings and investments will be untaxed. These are things not included in the calculations used to determine if it was revenue neutral. Even if we forget about what I just stated, money earned is typically spent at some point. If the millionaire doesn't spend his money then his unappreciative children or grandchildren will blow his money after he dies. Hell Paris Hilton isn't even waiting for her dad to die to blow his money. "By implication, were FT was implemented, however, retirees who supplement their income with savings accumulated during a time when personal income was taxed would in effect be subject to double taxation" This is only during the adjustment phase, and remember the prices already include an imbedded tax, so they are double taxed anyway. If you take away that 22% imbedded tax, add in the 23% fair tax and take into consideration the prebate than retirees are actually coming out ahead. Let's not forget retirees actually are triple taxed in the current system anyway. They get the tax on investments, typically taken out immediately or upon withdrawing. They also are responsible for corporate taxes because they're share holders, plus they pay that imbedded tax. I'll take double taxation over triple taxation any day. "the FT's implementation would disproportionally harm young workers in the process of establishing their livelihoods as they purchase first cars, homes and pay for childcare." Most young workers just starting out would buy used homes and cars. These are things exempt from the fair tax. As far as child care is concerned, the imbedded taxes would be removed from that and a lot of subsidies already in place to help families afford child care would remain in place. There would be minimal to no impact on these individuals. "an enormous shift in the tax burden from the wealthy to those with lower and middle incomes." Nope, even if Uncle Sam isn't taxing your paycheck, you still pay that 22% imbedded tax and with the prebate that would kill any taxes you paid on products up to the poverty level. So in reality poor people would pay zero taxes as opposed to the 22% imbedded tax and the payroll tax. Faulty Economic Logic ". The reality is that you can't have both gains in post-tax income and depreciating prices once embedded taxes are vacated," That's just a misunderstanding of what FT proponents are saying. Once the FT is implemented prices would immediately increase by the 30%. Obviously companies will try not to reduce prices once the tax is implemented, so they can easily keep their profit margin. However once their competitors start making market share grabs, the price will settle back to what it originally was before the FT was implemented. Incomes should remain the same. However the prebate when factored in would mean that less of your money will go to pay taxes. The FT is dangerous "what is there to prevent a [federal] income tax from being from being imposed after a national sales tax has been enacted?" Nothing! There is actually systems in place to insure this doesn't happen here is a quote from the following website.http://www.fairtax.org... "No current supporter of the FairTax would support the FairTax unless the entire income tax is repealed. Moreover, concurrent with the repeal of the income tax, a constitutional amendment repealing the 16th Amendment and prohibiting an income tax will be pushed through Congress for ratification by the states (filed as HJR 16 in the 110th Congress)." So this the FT has a companion bill that always goes to vote with it. If a fairtax got implemented, we wouldn't end up with some 2 headed snake. "Similarly, due to the increased transactional costs the FT would impose on state and local government, it is entirely foreseeable that the FT would actually necessitate states increasing their income tax rates just to achieve revenue neutrality. " This isn't true either. The fairtax actually doesn't require states to collect it on the federal governments behalf. If states do collect it they will be paid a portion of the taxes collected to make up for the cost of collecting it. http://www.fairtax.org... I actually did this argument at the last minute. I hope this rushed first draft is easy to read and comprehend.