How does the FairTax affect the economy?

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  News & Politics

[1969was1969]

Investment in the stock market, commodities markets, money markets, and precious metals generally do not create jobs. The low tax rates on capgains currently encourage such investment and cashing out into gold, etc. Higher tax rates on the wealthy encourage them to find direct investments which are deductible from income rather than just to pay in the money as higher taxes, and thus the higher rates incentivize direct investment in business infrastructure, which does create jobs.

[brad21dmb]

Due to the amount of money they have to pay to the government if they do make money from an investment/risk that they take. When rich people take those risks, they are investing money towards a business or company in belief that they can expand and prosper. When this happens, the business or company that is being invested in has money to do what??? Hire people.

[1969was1969]

The interest rates argument can be shown to be false simply-- interest rate are lower now than they have ever been, is our economy booming?

Most middleclass people would not save more, as they would be paying more in federal taxes than now. The wealthy would not save the boon they would receive undser this tax, but instead would buy stock, real estate, precious metals, mansions in the Bahamas, castles in Germany-- all US tax free. Think Lang's Metropolis, or Soylent Green, for a visual.

[1969was1969]

It would destroy the economy nearly overnight, as it would stifle sales with the imposition of an extra 10-25% on the price of everything (no, the "embedded taxes" canard has been disproven, if you bring that up you are way behind) as it shifts the tax burden onto those making from $15,000 to $150,000 a year (the mass of consumers) and the wealthy get richer and sock more money away, as they are doing with the low rates they have currently -- not hiring, because low taxes= cash out.

[B17Boy]

- Yes, foreign business will locate here because there won't be an income tax. This is why gov't fears a FairTax; they won't be able to control business and people as they have. The foreign gov't may raise tax rates because if a company opens a plant here, they would pay no U.S. taxes. So, that business would be a new convert to get their home country to pass a FairTax.