Fair tax would apply the tax 1x.
"For instance, if one were to buy a car from say Canada, one would presumable save several thousand dollars from the price in the USA which would have a fair tax added to it."
Here in NJ, you would have to pay the sales tax. I would presume that is where they would hit you with the fair tax too.
I'm not so sure you will save anything buying in Canada since the exhange rate is near 1:1 today.
As I said before, I am skeptical of the fair tax and think it is a big risk to try it, but other than that, I like Huckabee.
First, if not already obvious, I'm not the least persuaded by single-minded polemics (i.e., the "fairtax" website). I'm skeptical of what's essentially an infomercial and you should be too--the same way you would be skeptical of, say, answergenesis.
Just a brief glance at some of their claims should put you on guard. For example, they say that taxes would be based on what a person spends, not what they earn (as if the logical value were self-evident. It's not.). And they argue that the wealthy spend more than the poor, so this is fair. Well, I wasn't born yesterday. The other part of that reality, which they conveniently ignore is the fact that the poor spend a greater proportion of what they have. So they're purposely showing only part of the picture. I say: bs. At another point, they pose the question: what was the income tax started? Then they don't really answer their question except in the most cursory manner. Why should I believe anything at their site?
Unlike the website, I don't pretend to be a tax policy expert, so I don't have all the answers, but I have two basic questions (the first which has been mentioned by Contini):
1. What is fundamentally wrong with the current tax system that it should be overhauled?
Inconvenient?--It may be a burden to business people or those who own multiple properties, but frankly they represent a small portion of the public. No that their interests aren't important--they are, but the tax system is meant to serve the entire public not a small minority. As an individual, I've done them on my own, gone to H&R or their equivalent, or, now, do them on-line with Turbo Tax.
Costly?--It seems we collect most of the taxes due.
Unfair?--The current scheme for individuals is basically progressive. I'm all for that.
If it isn't broke (unlike our health care system for example) I say, why institute wholesale change?
I'm all for simplicity. However, there's a reason our taxes are complex, which leads to my second question.
2. The U.S. system has long been used as a tool to implement public policy, basically using the carrot or the stick. If we toss the whole system, how will we support said policies?
For example, if I'm not mistaken, employers get tax breaks for providing employer benefits (a carrot). If that incentive is taken away, what happens?
I believe industry, even individuals, are given tax breaks for environmentally sound practices. Arguably this is a better (at least more politically palatable) approach, than, say, legislating punishment of polluters.
Mortgage holders get a huge tax break. I would guess the majority of Americans think this is a good idea. What do we do when it goes away with a "fair" tax?
The manufacturers are taxed on the pieces they use, and they pass on that cost on us the consumer.
Simplistic and misleading argument. There is no direct correlation between what an entity is taxed and what they charge. Moreover, manufacturers (or let's say corporations) benefit, as a corporation (not as a collection of individuals), from public services. Their presence imposes certain costs on a community. Why shouldn't they be taxed?