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@Lulubelle: The above poster pretty much sums up my feelings about the exemptions.
There have been some interesting estate tax cases where the courts have determined that a Lexus and country club dues are necessities and tax exempt in certain trusts because they are part of a style of life that the beneficiary of the trust became accustomed to. They said that you are able to put a dollar value on style of life accustomed to but not happiness. So happiness is taxable but style of life is not. Anyways...
There have been some proposals where middle class and lower class families would get a monthly credit equal to a certain percentage of their income to try to offset the taxes on necessary items. But then you have to decide what their income is and what is a necessary item because the items will be different for each family.
The one thing I do like about the fair/consumption tax is that people who earn income illegally (drug dealers, etc.) or other people who fail to claim income that they should claim (eBay sellers, etc.) would get taxed on their income when they spend it.
The main issue is that you can take any tax system in the world or any proposed tax system and there will always be at least one group who thinks that it is unfair to them.
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