Reply #14: I think that is true for many people, but I wouldn't say it was all of them

[stahbrett]

A pure sales tax is regressive. That throws a lot of people in the camp that doesn't like the concept of a "fair tax", which gives out monthly rebates to cover the sales tax on some level of spending. That automatically makes it a progressive tax, rather than a regressive one.

For example, if you spend $40,000 in a year, and the monthly rebate offsets the taxes on $20,000, then you're effective tax rate is cut in half. Someone who spends $120,000 in a year, with the same rebate that offsets the taxes on $20,000, would pay a higher effective tax rate. So the more you spend, the higher the effective tax rate. Anyone spending up to and including the rebated amount would have an effective rate of 0%. Plus it means that companies who move manufacturing offshore are not avoiding taxes when they bring those products into the country to sell them, taking away an incentive to move those jobs overseas.

Like I said in an earlier post, the exact "Fair Tax" plan that is being advocated by Boortz is not what I'm supporting - but I think that conceptually it has some good parts, which could be potentially be used to created a much better tax system than we have now.