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Depends on what gets defined as "consumption" (to be fair, our current tax scheme has no shortage of problems with what gets defined as "income"). Wikipedia gives a description and the big one that jumps out at me is investments are not taxed, which makes sense, but buying companies for control over them is something the very wealthy spend their money on, which would not be taxed at all under FairTax. Lower down the economic ladder, tuition is also excluded and is something wealthier people spend a lot more money on (both college and private school). Strangely, health care is taxed under the proposal, despite it currently often coming out of pre-tax money in our current system (at least if you have an HSA). It also applies only to personal purchases, and pretending personal purchases are business purchases is already a way people evade taxes, and would continue to be so under FairTax.
On top of that, "used" goods don't get taxed and I'm not sure exactly how much of a loophole that is. I'd expect poorer people probably buy used goods more often, not sure how that shakes out, although cars are a particular big ticket item that could mean people buying new cars would be paying a lot more tax. But I'd also be worried about games getting played with the definition of "used", just like games get played with the definition of "personal" vs. "business" purchases that are technically illegal but poorly policed.
The definition is very clear in the proposed legislation: retail goods sold for the first time to a consumer, with caveats more carefully worded than a genie’s least favorite wishes.
One of the goals of the law is to ensure any goods are only taxed once, ever. After that, refurbish it and resell it if you wish. Thrift stores will pay zero in FairTax. Used cars, used homes, used skyscrapers, etc., will be zero tax at point of sale; refurbishment services get taxed, so feel free to price that into your asking price.
Yeah, it's more a question of exactly what workarounds would get invented once the tax is in place and how well the legislature adjusts to them.
For another example, if used items aren't taxed but services are, then buying a (used) plane which and hiring someone to fly it would be untaxed (erm, what is the difference between paying for a service and hiring an employee such that the former is taxed and the latter isn't, anyway?), but buying plane tickets would be taxed.
Similarly, wealthier people buy "used" houses to live in which would be untaxed while poorer people pay rent which would be taxed. I assume no individuals buy skyscrapers new or used, so they would never be taxed in whole, although the rent (or pieces of them sold to individuals as condos) would be.
I guess the idea is that the tax should be set high enough that the "used" cost prices in the tax that had to be paid when it was new, so buying something "used" you're still sorta paying the tax indirectly?
I'm not any kind of expert in business or tax evasion and I can come up with a list of ways that FairTax is far more regressive than it looks at first glance. I'm sure the experts can come up with more, which is a general problem with any attempt at a simple tax proposal; having multiple taxes makes it harder to evade all of them, which part of why we have consumption+income+property+excise taxes (there's currently no consumption tax at the federal level, but FairTax covers a similar set of transactions to state level sales taxes).
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