Adakin’s rebuttal presupposes that the tax rate under the FairTax would be (and remain) at the 23% “tax-inclusive” rate. That flies in the face of every independent analysis of the FairTax, each of which have concluded that the tax rate would need to be much, much higher.
It’s easy to sing the praises of a tax where the rate is set so artificially low that we would all save money. Unfortunately, it doesn’t work that way in the real world.
In order to replace our existing burdensome tax system, any new system would need to be equally burdensome and would require high tax rates. Since a consumption tax system with a “pre-bate” would shift most of the tax burden on the middle class, it would by definition raise the tax burden on the middle class.
However, at the magical 23% rate, nobody would pay higher taxes. We’d all get a free ride. Again, it just don’t work that way in the real world.
