I don’t think under our Federalism system the Federal government could prevent the states from taxing as they see fit (there are a few exceptions in the Constitution)
It’s even implicit in the name they gave the bill (and in the thread title).
Similar schemes were called “flat” tax plans in the past but that was essentially admitting they were not progressive by income, hence the rebrand to “fair”. Pointing out that one (desired) purpose is to redistribute tax burden downward is not an ad hominem. It’s an intended feature, after all.
Not if implemented properly. For example everyone under $50,000 pays 0% then the rate increases at a constant rate until the people making $300,000 are paying 30%. Basically a progressive tax until you get to the rick folk.
ETA: Yes I get that a progressive tax is not a flat tax but I think that idea maintains the spirit of a flat tax.
Getting back to the renting question which we left unresolved, according to the Wikipedia article:
Personal services such as health care, legal services, financial services, and auto repairs would be subject to the FairTax, as would renting apartments and other real property.
FairTax - Wikipedia
So renting something is not a get-out-of-tax-free solution.
Where are you getting this idea? I don’t see that in the bill. There is no ‘rebate’, just a flat amount of money sent to each person every month regardless of spending.
Excise taxes have always been allowed under the Constitution.
Furthermore, contrary to popular myth, the 16th Amendment did NOT provide any new taxing power to Congress. BRUSHABER v. UNION PACIFIC R. CO. , 240 U.S. 1 (1916), called that view “erroneous.”
That doesn’t contradict the earlier problem, which was precisely that renting is taxable. My point is that if buying real estate isn’t taxable while renting it is, that’s massively regressive. People with enough money can choose whether to rent or to buy. People with little money very often have to rent, because they can’t come up with the necessary down payment and fees to buy instead.
According to your description buying real estate is a get-out-of-tax-free solution. That’s where the problem is.
It’s been a while since I’ve read one of these “fair tax” proposals, but are they still doing that thing where the proposed sales tax rate as quoted is a percentage of the final cost, rather than the initial price (like sales taxes are usually quoted) so the number looks smaller?
E.g. The tax on $100 would raise the price to $130, but is still called a 23% tax because (130-100)/130 ~= 0.23, whereas the usual “sales tax” calculation would call it a 30% tax because (130-100)/100 = 0.3.
So if you’re comparing to NY’s tax rate, you should be comparing 8% against 30%, not 8% against 23%.
If you’re going to try that kind of dishonesty, you must at least call it a “business revenue tax” of 23%.
It’s only retail sales of new products, so that would be a very inaccurate name.
Well, 23% is a very inaccurate percentage.
Wait what? If this is indeed part of this proposal, this makes it (IMHO) insane. Exactly what you said - this tax would impact poor folks much more.
As an example, a friend of mine is divorced, and due to health circumstances, does not own and never will be able to afford to own a house (over 1,000,000 average in my area.) She is very low income, and currently spends a huge proportion of that income on rents (also high in our area). I own a house, and have a good job, and am able to put a chuck of money into savings each month. Under this plan, my friend who is close to the poverty line would be paying more tax than me. And that would be insane.
As far as I can tell, rents are taxed, land is not, houses are not, except new construction houses are.
From the point of view of the tourist, you’d be comparing 8% against 31% or 40%; because the state and local taxes aren’t going away.
Reading the link I posted above, that draft would require a family to register with the taxing authority in order to receive their credit. One of the requirements is that they provide their address. Homeless people do not have an address.
It will still have hearings in committee.
So it will serve its purpose as wildly misleading propaganda, allowing Reps to deliver enormous false statements to the cameras to make them look good, without any need to actually explore real-world consequences.
Except a thousand more of these.
And, it isn’t gonna be 23%, more like 30%.
Yes, which is why every harebrained loony tax scheme that benefits the wealthy is called (like this one) “Fair Tax act” when is it the opposite of being fair.
Exactly, good points.
They already are, those are “investments”. 
Contrary to your assertion, the 16th Amendment does empower Congress to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. Furthermore, Congress did not have this power prior to the 16th Amendment.
Now, it occurs to me that the Fair Tax Act as proposed may violate Art. I, sec. 9:
No Tax or Duty shall be laid on Articles exported from any State.
~Max
“Export” means export to a foreign country.
Suppose Alice is a U.S. citizen who grows and sells oranges in Florida. Bob is a Bahamian citizen who wants to take some Florida oranges home for personal consumption. Alice wants to sell Bob USD$20 worth of oranges. How much tax must she pay?
ETA: For convenience, an excerpt from Fair Tax Act covering the exception for exports,
SEC. 102. […] No tax shall be imposed under section 101 on any taxable property or service purchased for a business purpose in a trade or business. […] For purposes of this section, the term ‘purchased for a business purpose in a trade or business’ means purchased by a person engaged in a trade or business and used in that trade or business— (1) for resale, (2) to produce, provide, render, or sell taxable property or services, or (3) in furtherance of other bona fide business purposes.
Bob’s purchase is not for resale, it is not to produce/provide/render/sell the oranges, and it is not for any other bona fide business purpose. It is for his personal consumption.
~Max
If it’s a consumption tax, it’s technically the buyer who has the liability, but the vendor is obliged to collect it. The way this situation is usually handled is that Alice collects the usual amount of tax, and Bob keeps the receipt and can apply for a refund if he can demonstrate that he is taking the oranges home.