Your Opinion: Fair Tax unfairly favors wealthy
Thursday, February 24, 2011
The so-called Fair Tax is one of the biggest frauds to come down the pike in a long time. The proposed new tax scheme is not fair and to so label it is simply an attempt to garner unwitting support.
Constitutional amendments now being proposed for placement on the 2012 ballot would eliminate Missouri income taxes on both individuals and corporations and replace these taxes with a large and widespread sales tax.
The new sales tax would take the current state sale tax up from 4.225 percent to 7 percent. The state sales tax on a $20,000 car, for example, would now be $845. Under a 7 percent sales tax that would go to $1,400. To millionaires that extra $555 may mean nothing, but to most people it is important.
The current tax applies only to “goods” but the new tax would apply to both goods and services, e.g. to payments to doctors, hairdressers, lawyers, etc.
The effect of the new scheme is to relieve millionaires of taxes paid on income where they pay more than most people and to shift the burden to the middle class who will pay more of their money in taxes than they do now.
One way to put some fairness into the fair tax would be to impose the 7 percent sales tax on intangible goods, things like stocks and bonds, as well as on tangible goods, things like cars, televisions, clothes and computers. But the fair tax doesn’t do that. It is limited to tangible goods. The things that millionaires buy disproportionately like stocks and bonds are excluded from the tax. That is not fair.