So, as I understand what has been said so far, the suggestion is raise the same amount of tax, just by a different method.

This is a debate which is as old as taxation. Moving to a system of indirect taxation such as being proposed here means that there is an inverse relationship between the percentage of income a person is taxed on and their ability to pay.

Keeping figures simple here - if the 'fairtax' is set at say 30%, a person with a high income who say spends 50% of their income, will have an effective tax rate of 15%, leaving them with a large residual income for investment, which is obviously good for the economy. A person on a low income, who has to spend every bit of it on essentials will be taxed at an effective rate of 30% regardless of how low that income is, which, unless there is the provision of an infinite government funded safety net could lead to a level of poverty which should be unacceptable in a first world country.

Even with the proposed tax rebate and zero rated items this is a method of taxation which favours those who already have.

Both systems of taxation work, which one supports is a question of ethics and politics.

cariad