Good heavens, we are now attacking trusts, which have been around for centuries prior to the tax code. I am afraid I am a little overwhelmed by hyperbole here, and please don't anyone start using the phrase "fat cats."

How many lower and middle class families set up trusts? What kind of tax rate do the Heinz-Kerrys and Kennedy's pay as a percentage of their income and how does that rate compare to the top marginal rate? How many average American families have offshore accounts?

 

Although the term "fat cat" might be applicable to Ted Kennedy in more ways than one, I do not begrudge him or anybody else more wealthy than me. My problem is with fat cats who advocate higher tax rates for the "wealthy," knowing full well that their own personal fortunes will continue to grow, unaffected by the legislation that they help fashion.

How many lower and middle class families set up trusts? What kind of tax rate do the Heinz-Kerrys and Kennedy's pay as a percentage of their income and how does that rate compare to the top marginal rate? How many average American families have offshore accounts?

Why would a lower or middle class family need to set up a trust and what does it have to do with this discussion?

Why would a lower or middle class family need to set up a trust and what does it have to do with this discussion?

My point is this. A simpler tax system is not in the best financial interests of wealthy politicians. They have the means to exploit a needlessly complex system by taking advantage of financial tools that are beyond the reach of most of us. A Fair Tax that would provide no exemptions would make tax avoidance by the wealthy far more difficult than the current system.

 

The Fair Tax would not necessarily be a regressive tax, assuming that the monthly rebates would essentially make those earning less than around $30,000/yr. exempt from the tax. Unless the wealthy suddenly decided to live in modest homes, drive used cars, and forego most luxuries, everybody who should be paying taxes would be paying taxes.

 

Make no mistake, I am not bashing rich Americans. The top 50% of wage earners pay almost all of the federal taxes and the top 3% bear a staggering share of the current tax burden. I deeply appreciate the contributions of the wealthiest among us make to this economy and to the government.

 

However, some very wealthy people, some of whom are members of Congress, pay a far lower percentage of their income than other affluent Americans. The higher the marginal tax rate climbs, the more incentive that those people have to shelter their incomes.

I've been doing quite a bit of reading on this and I am curious to see if it would work.

 

Is this realistic? And also, I'm confused as to how this is supposed to strengthen the economy- more people will be inclined to save but doesn't that mean less spending in general. Less people will depend on the government which is good but I am unsure if it will work.