TinyURL for this page: re593htl
For this to have been added to my blog should say alot. This is my response to those people** who continue to claim the FairTax is not-progressive by arguing “it is not progressive, as their own research shows (tinyurl 593htl, page 30 on), those making from $15,000 to $150,000 would on average pay more in federal taxes than they do now and those who make more than $150,000 would on average pay less than they do now.” Their continued claims have been refuted multiple times and they continue to make the claims.
The faulty claim is also based on the notion that the FairTax is not progressive based on the statement on page 33, “Households in the top income category, with more than $150,000 in annual income, would also gain as they do not have to pay their highest marginal tax rates. Mid-income category households would lose because the FairTax would impose a relatively higher tax rate on them.”
The problem with this faulty claim is that it was based on an unrealistic, hypothetical situation. Look at the 1st sentence of the paragraph immediately following that “Now let us consider a more realistic scenario“, then goes on to state in the following paragraphs “The conclusions reported in Tables 9 and 11 are correct only if every household remains in the same income bracket throughout its life, which is of course not the case. In practice, there is considerable income mobility.”
PLEASE READ THE ENTIRE DOCUMENT. The Section being taken out of context (pp 30-35) will appear more relevant. By taking things out of context you are ruining your chances of benefiting under the FairTax. Furthermore, completely ignoring the summary is detrimental to your outcome: “In sum, while not everyone would gain from the introduction of the FairTax, gainers would outnumber losers by a factor of more than ten to one, and none of the losses would be large. There are few, if any, policy opportunities in the U.S. that offer such large gains to so many people. Moreover, households in all income groups would, on average, experience increased welfare under the FairTax.”
** List of people known to make this faulty claim.