I like the Fair Tax concept, I just have one question about what happens when you take it to the logical extremes.
Under a Fair Tax system, what mechanism would limit the unhealthy consolidation of assets?
Where "assets" broadly includes property, money, salaries, etc.
I'm not talking about or interested in communism or socialism, just looking at it from a functional "don't mess everybody else up" perspective. I don't like property tax. I really don't like it on a primary residence. But property tax is useful in that it makes it harder for someone (or a small coalition of folks) to assemble rental-only land monopolies. Similar arguments can be made for inheritance or income taxes -- positive and negative in both extremes.
The filter that I am using to look at this is that there will always be somebody who lives under a bridge because it just isn't a priority to change and there will always be somebody that works 120+ hours a week to get ahead and really earns every dime they make. Those are the extremes of the working people bell-curve.
The logical extents of a progressive income tax (higher rates on richer, lower rates and assistance on poorer) are easy to see. The Fair Tax has mechanisms for the bottom extents (prebates, food vouchers or exemptions, etc.), but I am not clear what the logical extent is on the high end of the bell-curve. Does the Fair Tax apply to stock purchases? What about the purchase of whole companies? In other words, is there a limiter or some mechanism that would prevent an asset snowball for a lucky few at the eventual expense of everyone else later?
Under a Fair Tax system, what mechanism would limit the unhealthy consolidation of assets?
Where "assets" broadly includes property, money, salaries, etc.
I'm not talking about or interested in communism or socialism, just looking at it from a functional "don't mess everybody else up" perspective. I don't like property tax. I really don't like it on a primary residence. But property tax is useful in that it makes it harder for someone (or a small coalition of folks) to assemble rental-only land monopolies. Similar arguments can be made for inheritance or income taxes -- positive and negative in both extremes.
The filter that I am using to look at this is that there will always be somebody who lives under a bridge because it just isn't a priority to change and there will always be somebody that works 120+ hours a week to get ahead and really earns every dime they make. Those are the extremes of the working people bell-curve.
The logical extents of a progressive income tax (higher rates on richer, lower rates and assistance on poorer) are easy to see. The Fair Tax has mechanisms for the bottom extents (prebates, food vouchers or exemptions, etc.), but I am not clear what the logical extent is on the high end of the bell-curve. Does the Fair Tax apply to stock purchases? What about the purchase of whole companies? In other words, is there a limiter or some mechanism that would prevent an asset snowball for a lucky few at the eventual expense of everyone else later?