Nationally, and in Georgia, there is a push for FairTax legislation, and I am concerned about that.
The concept of a fair tax is to eliminate the income tax and replace it with sales taxes. On the surface, this may sound reasonable, but I believe it shifts taxes to lower income groups and away from the wealthy.
The lower a person’s income, the greater percentage of that income will be spent. That means the poorest among us will have 100% of their income taxed. If they go into debt to make ends meet, more than 100% of their income will be taxed, because the borrowed money would be taxed too.
The reverse happens the greater the income. Income that is saved or invested would not be taxed and the more one makes, the ability to save and invest increases, and when that happens, the effective sales tax rate for those individuals goes down because they are only taxed on what they spend.
I want taxes to be fair but am against the FairTax being proposed. Current attempts to change our tax structure are misguided. It is fair when higher incomes pay more taxes in real and percentage terms because it will not adversely impact their standards of living.
When taxes are increased on the poor and lower incomes, it forces them to make financial choices that impact how they live. The one thing this isn’t, is a fair tax.