With the fair tax, you would recieve your full pay and the taxes would be collected when you spent your money not when you made it.
I posted a youtube link that's worth listening too on that.
How can you say the revenue would decrease when all the folks who cheat on their taxes or do not pay taxes at all would pay taxes every time they spent money now?
Whatever the states receive from the federal government they would lose under a "Fair Tax" system so in turn the states would have to make up this shortfall by increasing their taxes on the people.
FairTax - Wikipedia, the free encyclopedia
the FairTax would be progressive on consumption, but would also be regressive on income at higher income levels (as consumption falls as a percentage of income)
Good for those at the top...horrible solution for those in the middle and at the botttom....
As the link suggest...It would eliminate other taxes collected for various social safety nets. And as I've said...it will decrease or completely eliminate funding to the states leaving the states to collect their own taxes at a higher percentage on sales and services. Again....this is something similar to what Bobby Jindal recently proposed. He had to scrap the idea because it was too expensive. I believe his state already has the highest combined taxes in the country (will have to check again on that)...
Bobby Jindal's New Tax Plan Could Crush Poor People In Louisiana - Business Insider
The plan is consistent with the libertarian "FairTax" proposal. It's recieved heaping praise from the Louisiana GOP, the conservative Tax Foundation and state legislators.
However, making the primary state tax a consumption tax rather than an income tax could have a number of potentially undesirable effects on the state.
First, this type of tax compels citizens to save rather than spend, which has the potential to slow an economy. People spending money cause a state's economy to grow as economic activity accelerates.
Secondly, this tax could compel citizens to buy out-of-state when making significant purchases, potentially harming sectors of the Louisiana internal economy.
But even more significantly, this action makes the state taxation scheme more regressive. A regressive tax means there is a higher effective rate of taxation the less money a taxpayer has.
Note:
emphasis mine.
Another thing to take into account is that people and families will flock to Costco, Sams Club etc...to buy their food and household items in
bulk to reduce their trips to the stores. These places already offer some of the cheapest gas per gallon as they don't have the high advertising overhead cost such as Exxon, Shell, BP etc. So fewer trips to the store through bulk shopping and a one stop shopping for gas means bad business for other businesses in the area. Consumer spending as I see it will actually go down. Makes me think of the movie (Idiocracy).
And observe the charts at the Business Insider link I provided. I've been saying that the Tea Party message is off. They rail against the federal government about being "Taxed Enough Already"...even though the Bush tax rate remains in effect for them but what they don't seem to understand in their quest for "states rights"...is that it's the states that are raising and collecting the most taxes from its people.
I found this to be very informative....
FactCheck.org: Unspinning the FairTax