The Instigator
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The Contender
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FairTax is a viable tax reform option and should be adopted.

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Voting Style: Open Point System: 7 Point
Started: 4/1/2013 Category: Economics
Updated: 4 years ago Status: Post Voting Period
Viewed: 1,135 times Debate No: 31957
Debate Rounds (3)
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I am a long time supporter of fairtax. I believe that it is the future of America if the government ever adopts it.
First round is acceptance, the rest is fair game.


I accept your challenge, and I will be arguing that the Fairtax tax system will not work. I look forward to a fun and informative debate.
Debate Round No. 1


FairTax, to provide background, is a twenty three percent sales tax rate and the elimination of all national taxes other than the national sales tax. In the plan, a check would be sent to each household at the beginning of each month to cover the estimated taxes on life's necessities like food and water. Furthermore, only new items would be taxed and only the final product would be taxed.
This is why the plan works.
You get your pay check. The pay check is significantly larger because you keep all of the money that you earn. You go to the store. You pay your taxes just like you would when you pay for anything today. You go home. You do not have to worry about April 15th. No problems.
2. Everyone pays
The hookers, drug dealers, and illegals, who do not pay income taxes, would pay taxes.
3. Increased revenue
According to, the United States revenue would increase by 352 Billion dollars in the first year alone.
4. It would cause unemployment to decrease.
Businesses will not have to pay taxes on their products but instead, tack on the tax when selling to the consumers. Thus, businesses have more money to pay employees.
5. Deflation
Businesses will no longer have to pay more because the vendors have to sell for higher prices to cover the cost of taxes.
6. People can choose how much taxes to pay.
Now, you make more, you pay more. You are punished for working hard. With this system, you don't want to pay, you don't have to pay. Just cut back on purchases.
I am going to leave the debate at this for now to see where you want to take your argument.
Go FairTax!


I had never previously looked into the FairTax system, but after extensive research, I have concluded that it is not a very effective or well-thought out tax reform system. I believe it would not work, not even getting close to providing the kind of money the Government needs, as well as hurting businesses and the economy.


1. Simpler
Yes, it's simpler.

2. Everyone Pays
Yes, everyone pays.

3. Increased Revenue
These calculations are based on the amount spent in the country last year. It is assuming that people would spend the same amount under the FairTax system. With such a high sales tax, people would not spend nearly as much, and instead invest and save their money.

4. Lowers unemployment
Your argument here makes little sense. First off, you do realize the tax does not go to the business, right? The business would pay tax on its purchases and get no bonus from the extra sales tax. Even if they did, they would have no obligation to pay their employees more.

5. Deflation
Again, what? The business will have to pay more to purchase their inventory from the vendor, forcing them to raise their prices, forcing even higher amounts on the sales tax.

6. People can choose how much taxes to pay
Yes, people can and will cut back on purchases, meaning less money for the government, and for the business. All around pain.

Arguments against FairTax:

1. The system will drive spending into the ground:
With such a high sales tax, even if people have more money, they would not be willing spend with that kind of tax, while they could be saving and investing. People will buy necessities, but nothing else. As said above, this hurts the Government and businesses.

2. Who would pay for those checks?
I assume the Government would be paying the necessity checks. This is rather counter intuitive. The consumer cost of necessities is about or more than 25% of the total non-necessities. In other words, the Government would be losing money on this deal, and as there is no other tax, the Government would actually net an annual loss. Feel free to calculate it yourself.


3. Discourage American businesses
Due to the greatly reduced spending on non-necessary inventory, or at least the threat of it, many American corporations would be forced to make cutbacks, including layoffs and pay reductions. Also, many of the enterprises would be moved out of the country to pursue other, more charitable overseas markets.

My conclusion is that FairTax is very flawed, and would not work if implemented in the United States.
Debate Round No. 2


I am going to refute your refutes now.
3. Increased revenue
American citizens will all take home more money. Thus they have more to spend. Actually, if all Americans spent the same with FairTax as they do now, almost every person of every socio-economic class would pay less in taxes by the end of his or her life. Yet, the government still makes more money because of the lack of loopholes.
4. Lowers unemployment
I understand that your research into FairTax is not as extensive as mine and your knowledge on taxes may not be complete, as with most Americans. Yes, I know that taxes do not go to the businesses. Currently, businesses have to pay taxes when they get the products that they are going to sell to make a profit. With FairTax, no taxes would be paid on any good until the final consumer gets this product. With this, businesses would save money from not paying these taxes and it could go towards hiring people.
5. Deflation
Again, with FairTax, businesses will not have to pay taxes when they receive the goods from the vendor as they do now. Thus, the products would be cheaper.
6. People choose how much taxes to pay
The purpose of this point is to show that people would not be penalized for working hard. They could pay a lot or a little. Still, they would take home more money to spend. For example, a person who makes 60,000 dollars a year takes home only 45,000. With FairTax, they take home 60,000 dollars. People will not cut back because they have more money to spend.

Now I will refute your claims.
1. The system will drive spending into the ground.
People will not just take home a little more money, they will be taking home significantly larger amounts, as shown above. While, I grant you, the receipt may have a larger total number, their paychecks will have a much larger total number.
2. Who would pay for those checks?
Easy, the people who get the checks pay for those checks. The equation is... poverty level spending for size of said household in a year X the sales tax rate / the twelve months...this is how much a family will get on a check in a month. The reasoning behind this is poverty level families spend money only on the basic necessities which these checks would cover. Now you have background. When Bob goes to the store and buys a tomato, the cost of the tomato is multiplied by the sales tax rate and that number is added to the cost of the tomato. This is a basic necessity, food, but it would still be taxed. The check simply ensures that the cost of the taxes on this necessity is cancelled out. The reason this system has these checks instead of not taxing the food and water is because the government can limit the amount of tax free food. I hope you can follow this because this part of this tax plan is hard to explain.
3. Discourage American businesses
I have disproved the reasoning of this point already.

At this time, I will include additional points.
1. Out of attempt to make you happy, I will say, for the purpose of this point, Fair Tax made national revenue the same. This system will help with real-estate sales, thrift stores, used car dealerships, and pawn shops. According to FairTax, the same item can only be taxed once. Therefore, any house that is not brand new would be tax free. This boosts the number of Real-Estate agents who will pay taxes with their new found money. Thrift stores will be completely tax free thus making stores like Goodwill more profitable. These places will get more employees who will pay taxes. Used car dealerships will benefit because the cars would be tax free. This will spark the car business and will encourage selling cars to the dealerships because the dealerships would be willing to pay more because they would need more inventory. Pawn shops would be the same. Even if, after all this, the national revenue did not change, the quality of life in the US would improve because more people would have money because they would have more jobs.
2. No loopholes
I don't need to explain this any further.
3. Encourage hard work
People would no longer be penalized due to the flawed tax bracket system for working harder. And these people would spend more.

If, after all of this, you still find fault, please post what system America should go by for taxation(it bothers me when people shoot down one idea but does not provide an idea of his or her own).

Go to for answers to any questions you may have about FairTax.


For my final argument, I'll let the rest of the debate sit, and just say that this whole debate comes down to one question:

Will people spend the same amount with a 23% sales tax?

If the answer is yes, FairTax could work, and if the answer is no, it invalidates all their points.

It's up to the voters.
Debate Round No. 3
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