Think of what such a tax system might encourage. Federal taxes should provide only for what is constitutionally necessary for the nation as a whole - not for regional politics or special interest group politics.
No argument that our tax system needs an overhaul. I just don't trust the clown car in the House to do anything useful about it, and fully expect them to do something counterproductive.
Something else to address is the history of the "Fair Tax" push: it started with Scientology, mainly because the IRS would not recognize them as a valid religion for tax exemption. Here's a 2007 CBS article on it: https://www.cbsnews.com/news/scientologys-fair-tax-plot/. Note that the point is to eliminate the IRS, not really to make things work well. Also note that, as you said, it's a tax on the post-tax value - and that it likely will result in the government having to pay much more for good/services as well, which will require higher taxation...If there are exemptions to the "Fair Tax", then that will require higher tax levels for those items that are not exempted.
Let's have a little "laboratory of democracy" in action and let a less populous state that is interested in having a "Fair Tax" try it out for a while before trying to make a massive change to the current system.
It might be a good idea for a few states to try it out although at least three states (TX, TN and FL) already get by with no income tax and a sales tax in the 7% range which is the same as Georgia which also has a 6% income tax.
There is no reason that the government would have to pay more for goods and services. Government exemptions could be built in and made part of the procurement and contracting documents.
Texas also uses higher property tax rates (7th highest in the US), and each mentioned also have varying levels of reliance on the Feds to provide dollars as well: so saying they "get by" is a bit lacking in context.
“(2) PURCHASE BY STATE GOVERNMENTS AND THEIR POLITICAL SUBDIVISIONS.—Purchases by State governments and their political subdivisions of taxable property and services shall be subject to the tax imposed by section 101 [same as above].
So: either the bill will need to be amended to exempt the Federal and State governments from the tax or the governments will be paying more for goods/services: I think in either case it would result in higher tax levels being set than those proposed in the bill.
The studies I have looked at over the past few years include federal payroll and payments in lieu of taxes (for federal lands, military bases, agencies such as CDC, etc.) in the total federal return to the states. Those are just part of the cost of doing business in a state. A more meaningful statistic is the portion of state revenues derived from federal assistance programs. According to a 2020 study, TX and FL rely on the feds for a slightly smaller percentage of their revenue than NY and PA. TN percentage is slightly more than NY and PA. I was surprised to see that the percentage for CA, OR and IL was a little lower than that for TX and FL. Don't know if that is because of high state taxes or less federal assistance - probably a little of both and changes year-to-year.
A federal sales tax to replace the federal income tax is a great idea. It might even be the start of funding the federal government to provide only the services required by the Constitution. Maybe the states with a high cost of living and a large population would quit whining about paying more into the system than they get back from the feds. It would be a tax on individuals who choose to live where they do for their own reasons. Beyond funding national defense and a few other constitutionally mandated agencies, the feds would not meddle in affairs reserved for the states. Any other amenities would have to be funded by the individual states within the constraints of their own tax system and whoever they elect to govern the state.
Total brain-dead messaging bill with a message that's not that great.
I'll reconsider as soon as we see the CBO score this. I doubt we'll get to that point though.
Think of what such a tax system might encourage. Federal taxes should provide only for what is constitutionally necessary for the nation as a whole - not for regional politics or special interest group politics.
No argument that our tax system needs an overhaul. I just don't trust the clown car in the House to do anything useful about it, and fully expect them to do something counterproductive.
Something else to address is the history of the "Fair Tax" push: it started with Scientology, mainly because the IRS would not recognize them as a valid religion for tax exemption. Here's a 2007 CBS article on it: https://www.cbsnews.com/news/scientologys-fair-tax-plot/. Note that the point is to eliminate the IRS, not really to make things work well. Also note that, as you said, it's a tax on the post-tax value - and that it likely will result in the government having to pay much more for good/services as well, which will require higher taxation...If there are exemptions to the "Fair Tax", then that will require higher tax levels for those items that are not exempted.
Let's have a little "laboratory of democracy" in action and let a less populous state that is interested in having a "Fair Tax" try it out for a while before trying to make a massive change to the current system.
It might be a good idea for a few states to try it out although at least three states (TX, TN and FL) already get by with no income tax and a sales tax in the 7% range which is the same as Georgia which also has a 6% income tax.
There is no reason that the government would have to pay more for goods and services. Government exemptions could be built in and made part of the procurement and contracting documents.
Texas also uses higher property tax rates (7th highest in the US), and each mentioned also have varying levels of reliance on the Feds to provide dollars as well: so saying they "get by" is a bit lacking in context.
To quote the bill from https://www.congress.gov/bill/118th-congress/house-bill/25/text?r=18&s=1#HBDDC31578EF7466BBD34CFB607EA253E (I also added the link to sec 101 in-line):
“SEC. 703. GOVERNMENT PURCHASES.
“(a) Government Purchases.—
“(1) PURCHASES BY THE FEDERAL GOVERNMENT.—Purchases by the Federal Government of taxable property and services shall be subject to the tax imposed by section 101 [https://www.congress.gov/bill/118th-congress/house-bill/25/text?r=18&s=1#H60BD76845CFD42ED91F8694AB701C646].
“(2) PURCHASE BY STATE GOVERNMENTS AND THEIR POLITICAL SUBDIVISIONS.—Purchases by State governments and their political subdivisions of taxable property and services shall be subject to the tax imposed by section 101 [same as above].
So: either the bill will need to be amended to exempt the Federal and State governments from the tax or the governments will be paying more for goods/services: I think in either case it would result in higher tax levels being set than those proposed in the bill.
Fl, TX and TN have no state property taxes.
The studies I have looked at over the past few years include federal payroll and payments in lieu of taxes (for federal lands, military bases, agencies such as CDC, etc.) in the total federal return to the states. Those are just part of the cost of doing business in a state. A more meaningful statistic is the portion of state revenues derived from federal assistance programs. According to a 2020 study, TX and FL rely on the feds for a slightly smaller percentage of their revenue than NY and PA. TN percentage is slightly more than NY and PA. I was surprised to see that the percentage for CA, OR and IL was a little lower than that for TX and FL. Don't know if that is because of high state taxes or less federal assistance - probably a little of both and changes year-to-year.
https://taxfoundation.org/state-federal-aid-reliance-2020/#:~:text=In%20fiscal%20year%20%28FY%29%202017%2C%2022.9%20percent%20of,payments%2C%20education%20funding%20assistance%2C%20infrastructure%20assistance%2C%20and%20more.
A federal sales tax to replace the federal income tax is a great idea. It might even be the start of funding the federal government to provide only the services required by the Constitution. Maybe the states with a high cost of living and a large population would quit whining about paying more into the system than they get back from the feds. It would be a tax on individuals who choose to live where they do for their own reasons. Beyond funding national defense and a few other constitutionally mandated agencies, the feds would not meddle in affairs reserved for the states. Any other amenities would have to be funded by the individual states within the constraints of their own tax system and whoever they elect to govern the state.