Fairtax

[born2]

Hi Everyone I've been reading alot about the Fair Tax--just wondering what thoughts were on this. It really does seem fair to everyone.

fairtax.org

[CitySearcher]

fair tax is an oxymoron.... :nod

just my opinion.....

[Cameron]

The fair tax and the flat tax are great ideas, but I doubt we will ever see it. Politicians are addicted to spending and they will take every penny from every source available to get their stash to buy their votes and stay in office.

The IRS is "our" agency, yet politicians are afraid of them. Senators are saying that we need to get rid of the alternative minimum tax, yet they will not bring a bill and a vote to do it. Why? They gotta have their money to fund useless projects back home.

I saw somewhere a few days back, that only 1/3 of our tax revenues come from the income tax. If so, it would be simple to eliminate the income tax and have a national sales tax. That way, everyone would pay at the register when they made a purchase. Drug peddlers, thieves, embezzelers and those on the government dole.

But don't hold your breath.....:kickcan

[Vonne]

I saw somewhere a few days back, that only 1/3 of our tax revenues come from the income tax. If so, it would be simple to eliminate the income tax and have a national sales tax. That way, everyone would pay at the register when they made a purchase.

What about those successful enough to not need to spend all of their earnings though? Will the lack of paying taxes on those "unspent/invested" earnings, shift more of a burden to those whom by necessity or choice spend all of their money?

:idunno I'm still pretty darn torn on the whole idea of a national sales tax versus an income one...

[Enlightened]

It's just another rich Republican scheme to get out of paying taxes. It would fuel inflation and create an underclass of bartering.

[Old 33]

The reality of a national sales tax (or a flat income tax) is that the poor and middle class would end up with a huge tax increase, while the upper middle class and wealthy would get a huge tax decrease.

We can debate the benefits of a sales tax, but we need to keep in mind what going to one would practically mean.

[Vonne]

We can debate the benefits of a sales tax, but we need to keep in mind what going to one would practically mean.

But the "prebate" the "prebate"! It'll... :yay

I'm still :idunno about the whole idea, I do really welcome discussion on an alternative to the current tax system though :nod

[Enlightened]

The reality of a national sales tax (or a flat income tax) is that the poor and middle class would end up with a huge tax increase, while the upper middle class and wealthy would get a huge tax decrease.


Yep.

Since you only get taxed on things you consume it will hit the middle class and the poor disproportionately compared to the wealthy. The middle class's income is spent mostly on necessities like food, clothing, insurance, utilities, auto, etc. that takes up most of their income. They are lucky to save 10% a year. The rich also have these expenses but after these necessities are paid they have loads of money leftover.

The "fair tax" will let you keep all of your income (no income tax) but would tax goods and services 25%-27%. Thus, your gallon of milk that now costs $2.99 would cost $3.79. Your $25,000 auto would cost $31,750.

What do the rich care about the price of a gallon of milk? They would be partying like crazy if this gets through--notice it is a Republican proposal--because they would no longer have 35% of their income lost to taxation. For a person making $1 million a year, that is a tax savings of $350,000 A YEAR! Do you think the rich spend $350,000 a year on food, clothing, utilities, etc? No way.

Since this tax is a tax on purchases, people will be reluctant to spend money. Remember, everytime you want to buy something you will have to mentally add on 27% of the cost of the item. The ecomony would slow down because people will realize that everytime they spend money it is taxed. Buying something = 27% tax. That's a huge mental stumbling block. Also, since bartering for goods and services aren't taxed they would become commonplace. Why would I pay the mechanic $100 (plus $27 to the government = $127.00) to fix my car if he will do it if I paint his garage? Or, if I were a restaurant owner and you were a barber, I'd give you a free lunch if you give me a haircut. etc. etc. There would be an active avoidance of purchasing things. Ecomomies do not prosper when people do not spend money.

This is probably the biggest attempt to lay the burden of taxation on the poor and middle class I've ever heard of. It would undoubtedly be the biggest tax cut in the history of mankind for the rich. Consider the guy making $1 million a year in income and getting taxed $350,000 a year. Under this "fair tax" plan he would have to purchase things worth $1.3 million at the 27% consumption tax to replace the $350,000 he used to be paying as income taxes to the government. Do you know anybody that spends more than their incomes? I don't. Meanwhile the rare time that my family goes out to dinner, I get to pay a 27% tax on the meal. No thank you.

[WarGamer]

I don't make alot of money. At 27% sales tax, you can bet I'd be buying things from friends/black market/garage sales instead of off the shelf.

[Vonne]

What do the rich care about the price of a gallon of milk? They would be partying like crazy if this gets through--notice it is a Republican proposal--because they would no longer have 35% of their income lost to taxation. For a person making $1 million a year, that is a tax savings of $350,000 A YEAR!

Thats' assuming, that a person earning one million a year isn't spending any of it. If you're earning a million a year; the thoughts of vacation homes, mansions, private planes, etc... all would likely be dancing in your head. I know they would be if I was in that earning bracket :nod While it could be quite a bit of a tax reduction from a fiscally, "Rich Dad, Poor Dad" sorts... how many of those won't be in turn spending to increase their business empires, being taxed in the process... I'm not really sure. Remember, a big aspect of this proposal includes the near elimination of tax write-offs!

...The ecomony would slow down because people will realize that everytime they spend money it is taxed. Buying something = 27% tax. That's a huge mental stumbling block.

Surely it is, but using the studies presented by the fairtax org and unrelated economic essays, that would be offset by a reduction in the price of goods! I'm iffy, on their instance that they would approximately equate... but surely, payroll taxes, corporate tax avoidance tom foolery, etc. play a significant part in the cost of goods and services.

Also, since bartering for goods and services aren't taxed they would become commonplace. There would be an active avoidance of purchasing things. Ecomomies do not prosper when people do not spend money.

Yep, along with a great incentive for people to purchase through the underground economy... which always finds away in... How much it'll play apart, :idunno

Do you know anybody that spends more than their incomes?

This is AMERICA!!! :lol2 Is there not frequent MSN, Yahoo, etc. front page new stories on the rampant consumer spending, credit card debt, etc of our country. :panic

:scratch I really am unsure about the whole Fair Tax misnomer, Consumption/National Sales Tax prospect... but surely there are enough powerful stakeholders to put up a harsh fight against its implementation though.