Changes

Although proponents suggest that necessities are effectively relieved from the tax by virtue of the prebate, the fact remains that necessities ''are'' taxed. Furthermore, once an individual's spending on necessities exceeds the poverty level, the prebate no longer offsets the tax, and the tax ''operates fully'' as an unapportioned Direct tax, in violation of the Constitution. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it." Regardless of whether the FairTax is called an "[[excise]]," it is, in substance, a Direct tax which cannot be apportioned among the states. It is therefore unconstitutional.

Although proponents suggest that necessities are effectively relieved from the tax by virtue of the prebate, the fact remains that necessities ''are'' taxed. Furthermore, once an individual's spending on necessities exceeds the poverty level, the prebate no longer offsets the tax, and the tax ''operates fully'' as an unapportioned Direct tax, in violation of the Constitution. In ''Brushaber v. Union Pacific Railroad Co.'' (1916), the Supreme Court ruled that whenever any "[[excise]]" morphs into a tax on items of common right (such as anything necessary to preserve and carry out a normal life) "the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it." Regardless of whether the FairTax is called an "[[excise]]," it is, in substance, a Direct tax which cannot be apportioned among the states. It is therefore unconstitutional.

Finally, the FairTax shares a major flaw with the current income tax system: There is no cap on the rate that Congress may impose. If the FairTax were to become law, the rate might be initially established at 23%, as proponents believe. But nothing in the FairTax proposal prevents Congress from raising the rate to 30%, or even higher. Given the government's proclivity for spending money, an eventual increase in the FairTax rate, were the tax to become law, seems inevitable.<br />

Finally, the FairTax shares a major flaw with the current income tax system: There is no cap on the rate that Congress may impose. If the FairTax were to become law, the rate might be initially established at 23%, as proponents believe. But nothing in the FairTax proposal prevents Congress from raising the rate to 30%, or even higher. Given the government's proclivity for spending money, an eventual increase in the FairTax rate, were the measure to pass, seems inevitable.<br />

Another complaint is that a sales tax will not effect overseas purchases, or money from investments, encouraging hoarding.

Another complaint is that a sales tax will not effect overseas purchases, or money from investments, encouraging hoarding.