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Small-Scale Question Sunday for September 3, 2023

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

Culture war topics are accepted, and proposals for a better intro post are appreciated.

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@DuplexFields how does the FairTax proposal work?

Epistemic status: Not DuplexFields.

(I read the Neil Boortz book over a decade ago and briefly looked at the FairTax website just now.)

In a nutshell: If we adopt the FairTax, many taxes are gone, replaced by a 23% sales tax on new products and services. Taxes that no longer exist include income and payroll. As a side effect, the IRS is abolished and the 4 million word tax code is shredded, which warms my directionally-libertarian heart.

Also, everyone gets a monthly prebate (pre-rebate). Everyone gets the same amount. Not sure what the exact figure is, but I'm fairly certain it was 4 digits It's just under $300, thanks Duplex. Basically, that's to keep the tax progressive. A poor family that spends responsibly might end up making money off of taxes due to the prebate. A mega-rich guy throwing a big-ass cocktail party pays taxes on all of it, and gets the exact same monthly prebate.

Another term for the prebate is "Universal Basic Income," now that I think of it.

Excellent recap! Thanks for taking the initiative with a clean and sound summary. The prebate was calculated at just under $300, last time I checked, which is 23% of Federal poverty-level income (the point at which someone must spend all their income in order to just survive). However, it does lay the groundwork for a potential universal basic income which can be reached by total “universal welfare” reform, the semi-libertarian idea of removing all bureaucrats from welfare decisions, and rolling their salaries into automatic universal flat welfare. I believe with current spending levels, universal flat welfare + prebate would be around $1000 a month.

One of the things I’ve recently learned has a name is tax pyramiding, where business-to-business gross-receipts taxes boost the retail prices of some products because of how many stages of production are taxed. Subtly, all products and services currently are tax pyramided by income tax.