Is a "Fair Tax" Really Fair?

So I've been catching up on old episodes of The Daily Show, and while usually I just play it in the background, I actually listened to Stewart's interview with Bill O'Reilly. It was pretty interesting, because while O'Reilly got in a few good zingers, Stewart was surprisingly gentle. (At least much more so than I would've expected.) Anyway, I went ahead and found the link to the rest of the interview on the main site, and they start talking taxes.

Now, I haven't finished watching the interview, but O'Reilly started mentioning a federal consumption tax - I don't know if he means instead of raising the top marginal tax rate(s), or if he means instead of federal income taxes at ALL, but whatevs. Not my point. (Yet, anyway.)

Quick note - I wasn't real clear on what a consumption tax is, so I googled it, and Wikipedia says that it's a category of different types of taxes based on spending rather than earning. Sales tax is probably the type that we're most familiar with, but the wiki article lists other types as well. Quite helpful. But also not my point.

MY POINT is that I am a teacher. A teacher who works with teenagers. And as such, I may not know a whole heckuva lot about high finance, but I know an awful lot about WEASELING.

According to the wiki article, investments are not taxed. Nor are the proceeds, until they are spent for consumption. "That house in the Hamptons? No, that's not a luxury... it's an investment property. The yacht? It's part of the company's client development budget."

I mean, I get it. It's not THAT different from the way things are now; there's an awful lot of stuff that us regular schlubs have to fork over to get that if you're rich, people will give to you for free to get on your good side so that maybe later you'll do them favors. Rich people are good at that - how do you think they GOT rich in the first place?

On the other hand, it might make college at least a little more affordable - after all, that's money you wouldn't have to pay taxes on, because isn't that an investment?

Image thanks to http://www.uproxx.com/