"Fair" tax is very UnFair

Recently there has been a rash of "Fair" tax proposals (as if the label "Fair" would make them so), mostly around the idea of an across the board flat tax on sales, and the elimination of the Income tax, and the abandonment of Corporate taxes. This is a position favored by many on the Right, but also Senator Mike Gravel who is running for the Democratic presidential nomination.

How far we have come when it was proposed that a Corporate taxes could be raised to the point that income and sales taxes could be eliminated! If the resulting wealth caused demand to rise to pay for the extra tax so be it, if not then the Paris Hiltons of the world could afford the difference.

In any case the point needs to be made-ALL Sales taxes are regressive! You can game the system to make them a bit less so by eliminating them on Food, Rent and perhaps a few other things, but a Poor person paying 5% tax on a $100 car is paying exactly the same PERCENT tax as a rich person paying 5% tax on a $100,000 car. What they are not paying is the same PERCENT of their total income, as the $100,000 car is likely to be a very much smaller percent of income than the $100 car, and there will have to be many more $100 cars as they will not last well or hold value as the very expensive case.

Encourage the Poor or even Middle Class to save? They cannot, rising prices and stagnant wages leaves most struggling on the edge of disaster, while debt of all sorts chews away at the bit of edge they have. Any preference to save or invest will go vastly to those who already have no financial problems.

Collecting a sales tax also involves hugely more paperwork, and/or will be hugely more scammed, as it already is where there is a state sales tax, and mostly by the rich who can get winks as the do so.

How to do you do a fair tax? it is very easy! Everybody gets zero tax on the first $10,000, no matter your total, add 1% on each of the next $10,000 so 20k pays $100 ( 0 + 100), 30k pays $300 (0 + 100 + 200), 100k pays $4,500 ( 0 + 100 + 200 ...+900) still a total rate of only 4.5%. Only those people with incomes larger than most countries would pay huge taxes as the taxes on the smaller amounts would be taxed exactly the same for everyone who made it to that place.

Corporations might have slightly different numbers but would also be similarly taxed according to the size of the total corporation, that way the smaller corporation would have a competitive advantage in taxes to offset the disadvantage of the power that scale confers. (if you think that scale is efficiency and not power, think of efficiency of scale as a ten acre hamburger stand, and power of scale as McDonalds)

There is no magic market, Money provides power and power provides money, it is a one way ticket to a feudal system. Only by Government intervention to act as friction where needed at the top and oil where needed at the bottom can a balance of real civilization be found. Money at the top is power and needs only to be restrained, it will still prosper in spite of restraint. At the bottom is pent up energy that can explode in creativity if only it is enabled, it is the only place that really good ideas come from, they will never come from the self satisfied.