Consumption, Fair tax negative income tax.docx -...

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Consumption/Fair tax Negative income tax Can be progressive (benefits as go up in income) – it is designed to be even. It taxes based on what you spend so those who spend more pay more taxes and these are the people who can afford to pay these taxes. Those who don’t spend as much do not pay as much and these are the people who can’t afford to pay as much. Government used it and switched - the government’s plan was not developed like our plan. Discourages spending- fair tax does not discourage spending because everyone must buy the basic necessities of life, and the fair tax rate is very reasonable. Fair tax also encourages saving and investing which income tax do not. (All taxes discourage something) Decreases business revenue - does not because everyone must buy the basic necessities of life, and the fair tax rate is very reasonable. Could put people out of work - all businesses need accountants for some purpose like paying employees. Accountants do more than just taxes so they will not be put out of work. Lowers amount of tax that can be collected when economic activity decreases - everyone has to spend money, .23 is not that bad because have full income that you make Might alter spending habit-
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