Fair Tax

[Todd33]

This tax system is otherwise called "Put the tax burdon on the middle class while the rich have a party and laugh their a$$es off".

Progressive tax is the only real solution, despite what the rich want to peddle on us as "fair".

 

[EatSpam]

Originally posted by: Codewiz
The rich still won't pay taxes. They will simply import everything they buy. It will be cheaper and won't feed into our tax system.

This "fair tax" will be the biggest gift the rich have ever seen, simply for that reason. It'll make Dubya and Reagan's administration look like slavery (from a rich guy perspective.)

 

[Dissipate]

Originally posted by: ntdz

Originally posted by: Dissipate
BTW, here is a video where Harry Brown debates the "Fair" tax.

Text (click the "This Week in Liberty" link on the right).

As a side note, I find the name "Fair" tax to be highly ironic. Do we call robbery, theft and extortion "Fair?" I know I don't.

Government doesn't steal, it just takes more than it should

Some government services, such as police, protection, etc, are essential. Most of it, however, is worthless.

Food is essential but last time I checked I didn't need to be taxed and have some government bureaucracy dole it out to me though.

 

[zendari]

Originally posted by: Todd33
This tax system is otherwise called "Put the tax burdon on the middle class while the rich have a party and laugh their a$$es off".

Progressive tax is the only real solution, despite what the rich want to peddle on us as "fair".

Good. Since we have a "progressive" tax system i take it you agree the rich are paying their fair share of tax.

 

[homercles337]

What about corporations? Currently, every citizen pays double what they would if corporations werent so sneaky about their fair share of taxes.

 

[Dissipate]

Say goodbye to the IRS?! Hahaha, Neal Boortz is in in la-la land. The IRS would go nowhere under the "Fair" Tax. They would just call it something else, and it instead of auditing individual taxpayers it would just go around harassing and auditing businesses and business owners.

Oh yeah, and the fact that the tax would be 23% is fvcking insane. Just think about that. In order to buy necessities for your children, or anything else you are going to have to pay 23% to the Federales back in D.C. Just goes to show how far our country has come since it started off as laissez faire.

 

[OrByte]

I wonder what Milton Friedman has to say about this.

so is there a bill out which introduces this new tax system? or is it all just talk and speculation?

 

[piasabird]

The problem is that you are taxing the hell out of groceries, a major cost for the poor under this plan.

I go to church and pay Tithe A mere 10%. The perfect flat tax. We manage to run the Church on this and the collections are voluntary. We also collect Fast Offereings where people fast for 2 meals and offer the cost of one meal as an offering to our welfare system.

We manage to do a lot of good on this voluntary system.

 

[EatSpam]

Originally posted by: piasabird
The problem is that you are taxing the hell out of groceries, a major cost for the poor under this plan.

I go to church and pay Tithe A mere 10%. The perfect flat tax. We manage to run the Church on this and the collections are voluntary. We also collect Fast Offereings where people fast for 2 meals and offer the cost of one meal as an offering to our welfare system.

We manage to do a lot of good on this voluntary system.

But your church doesn't spend hundreds of billions of dollars on warfare and corporate welfare. I'd pay a voluntary tax if I knew it was going for universal healthcare, R&D, and education. OTOH, I wouldn't pay a dime if I knew it was going to end up spent on killing brown people, making the rich richer, and propping up Israel.

 

[5LiterMustang]

I could make a strong argument for an NST or a Flat Tax but after reading steve forbes book I'm becoming convinced on the flat tax. I've read probably a dozen books on NST's and Flat Tax reforms but this one is by far th ebest and most convincing. Either would be a huge improvement though.

 

[Todd33]

Originally posted by: zendari

Originally posted by: Todd33
This tax system is otherwise called "Put the tax burden on the middle class while the rich have a party and laugh their a$$es off".

Progressive tax is the only real solution, despite what the rich want to peddle on us as "fair".

Good. Since we have a "progressive" tax system i take it you agree the rich are paying their fair share of tax.

No, but feel free to put words in my mouth. Even Bush said it, the rich don't pay taxes, they have accountants to get them out of it. We need to shut down all loopholes, off shore accounts, bring back the inheritance tax, etc. I love how the rich in power can just scrap any tax on themselves and shove the burden onto to the middle class. As soon as the red states wake up and realize how screwed they are getting, they will start to realize that the wedge issues like gay marriage exist only to get them to vote for corporate A-holes who do everything for money.

 

[Dissipate]

Originally posted by: Todd33

Originally posted by: zendari

Originally posted by: Todd33
This tax system is otherwise called "Put the tax burden on the middle class while the rich have a party and laugh their a$$es off".

Progressive tax is the only real solution, despite what the rich want to peddle on us as "fair".

Good. Since we have a "progressive" tax system i take it you agree the rich are paying their fair share of tax.

No, but feel free to put words in my mouth. Even Bush said it, the rich don't pay taxes, they have accountants to get them out of it. We need to shut down all loopholes, off shore accounts, bring back the inheritance tax, etc. I love how the rich in power can just scrap any tax on themselves and shove the burden onto to the middle class. As soon as the red states wake up and realize how screwed they are getting, they will start to realize that the wedge issues like gay marriage exist only to get them to vote for corporate A-holes who do everything for money.

*ahem* Sorry to interrupt your diatribe, but isn't it more logical to scrap all taxes for everybody, including the middle class than playing the "They tax me, I tax them even more," game?

 

[Todd33]

Originally posted by: Dissipate

Originally posted by: Todd33

Originally posted by: zendari

Originally posted by: Todd33
This tax system is otherwise called "Put the tax burden on the middle class while the rich have a party and laugh their a$$es off".

Progressive tax is the only real solution, despite what the rich want to peddle on us as "fair".

Good. Since we have a "progressive" tax system i take it you agree the rich are paying their fair share of tax.

No, but feel free to put words in my mouth. Even Bush said it, the rich don't pay taxes, they have accountants to get them out of it. We need to shut down all loopholes, off shore accounts, bring back the inheritance tax, etc. I love how the rich in power can just scrap any tax on themselves and shove the burden onto to the middle class. As soon as the red states wake up and realize how screwed they are getting, they will start to realize that the wedge issues like gay marriage exist only to get them to vote for corporate A-holes who do everything for money.

*ahem* Sorry to interrupt your diatribe, but isn't it more logical to scrap all taxes for everybody, including the middle class than playing the "They tax me, I tax them even more," game?

Yes, then we can all go live in the woods and build mud houses. The progressive tax system is the only tax system that has worked in the history of mankind.

 

[Dissipate]

Originally posted by: Todd33

Originally posted by: Dissipate

Originally posted by: Todd33

Originally posted by: zendari

Originally posted by: Todd33
This tax system is otherwise called "Put the tax burden on the middle class while the rich have a party and laugh their a$$es off".

Progressive tax is the only real solution, despite what the rich want to peddle on us as "fair".

Good. Since we have a "progressive" tax system i take it you agree the rich are paying their fair share of tax.

No, but feel free to put words in my mouth. Even Bush said it, the rich don't pay taxes, they have accountants to get them out of it. We need to shut down all loopholes, off shore accounts, bring back the inheritance tax, etc. I love how the rich in power can just scrap any tax on themselves and shove the burden onto to the middle class. As soon as the red states wake up and realize how screwed they are getting, they will start to realize that the wedge issues like gay marriage exist only to get them to vote for corporate A-holes who do everything for money.

*ahem* Sorry to interrupt your diatribe, but isn't it more logical to scrap all taxes for everybody, including the middle class than playing the "They tax me, I tax them even more," game?

Yes, then we can all go live in the woods and build mud houses. The progressive tax system is the only tax system that has worked in the history of mankind.

Bwahahaha. Your ideology bores me (probably because I have heard it a thousand times). Basically you are saying that taxing some rich guy and pumping the money into some faceless, inept government bureaucracy is the "glue" of modern society? That is the nuttiest thing I have ever heard.

Government programs don't benefit anyone except politicians and the special interests that line their pockets with the stolen loot all the way down the line. Just look at the public schools, which are a complete joke and cost taxpayers at least twice as much. So who benefits? Definately not working families that get the privilege of paying property taxes and getting a crappy education for their kids to boot.

 

[Whoozyerdaddy]

Originally posted by: Bowfinger
Sales taxes are fundamentally regressive. They place the greatest burden on people with the lowest incomes because they are the ones who have to spend the greatest percentage of their income. If the government gives "prebates" to offset this effect on the poor, it merely moves the greatest burden farther up the income scale, to the lower middle class. Either way, the wealthy pay the least in proportion to their income.

Not true. Under the Fair Tax plan those with the lowest income would be completely free from taxation. Most tax cuts don't affect the poor because the poor don't pay income tax. They do, however, pay social security and medicare taxes. Under the Fair Tax plan they wouldn't even pay that. So now the poor have more money to spend on goods and services (that don't cost any more than they do now - even with the tax figured in) and with the prebate check they don't even pay the sales tax. This plan is more than fair to the poor.

Another problem with such a steep sales tax is it encourages people to evade taxes. The higher the price of an item, the more incentive there is to evade the sales tax. We already see this today on cigarettes, for example, where bootlegging is common and people in high-tax states slip across the border into lower-tax states to buy their fix. This will be magnified a hundred-fold when you start talking serious dollars.

Come on... There have been tax cheats as long as there have been taxes. Five minutes after the world's first tax was levied there was a guy figureing out how to get around it. No tax plan will ever stop tax cheats. Tax evasion is not a reason to not try something else.

We would also see a boom in bartering, not just to evade taxes initially, but also as a business model. For example, Shady Guy A trades a new, $10K retail diamond ring to Shady Guy B for a new, $10K plasma TV. Both "open" the items, then sell them as used, tax-free, for $11K -- above the normal retail price, but below the after-tax price. Each makes an extra $1,000 (above the original retail profit) by gaming the tax system.

See above about tax cheats. And relly, in an $11 trillion economy, how often is that going to happen?

In fact, now that I think about it, such a steep sales tax would hurt retail sales in general, and would probably damage the economy. Used goods would suddenly jump in value by 23% compared to new goods. There would be a surge in demand for used goods, and a corresponding drop in demand for their new counterparts. Retailers could justifiably complain about government interference in the free market. Americans would become less wasteful, a good thing in concept, except business depends on wasteful consumption. Production would drop due to lower demand, unemployment would increase, and the global economy would slump.

Let's not get too doom and gloom here. First, right now, on average 22% of every dollar you spend on a retail purchase or service goes to the IRS. By eliminating all federal tax from the business model, prices would efectively drop by 22%. (There are real world examples that show this is not only true, but that it happens very fast) Now, add in a 23% inclusive sales tax and you are right back where you started. New goods become no more expensive to the consumer than they were before the tax. Add to that the fact that people have more money to spend because they aren't paying incoe or payroll taxes and the items become, in effect, cheaper.

As for used goods being more popular than new goods. We have a flourishing used car market and a used home market right now. Bearing in mind that the sales tax doesn't increase the fianal cost of an item and you effectively have created a market where new goods are at no more disadvantage than they were prior to the tax.

Finally, such a steep sales tax would also increase the incentive to steal and smuggle by 23%. There would be a surge in demand for off-the-books, tax-free illicit goods, with a corresponding increase in the number of enterprising capitalists willing to obtain them. One would expect to see a resurgence in organized crime, and an (ineffective) government "War on Theft" analagous to our current "War on Drugs". Welcome to Prohibition Release 3.0.

See above. The tax doesn't raise prices and people have more money to spend. How does this encourage theft?

No thanks. I agree the income tax is a convoluted mess, terribly flawed, rife with loopholes for every special interest under the sun. It is, however, fundamentally the right approach. Much better to fix it than replace it with a fundamentally flawed system (which in a few years would be equally convoluted and rife with loopholes for special interests).

I think it's better to start over fresh. The thing with income tax (specifically the withholding part of it) that makes it so powerful to those in charge is that most people don't even know what they pay in income tax. If you asked 100 people how much they paid in income tax last year most of them would tell you they didn't pay anything.. They got a refund! Aaack. When people don't even know how much they are paying politicians can jack the system six ways from sunday and nobody will even notice.

With a sales tax, the tax is printed right there at the bottom of the receipt. Everybody sees it when thy buy anything. History has proven that when their tax is placed right in front of their face, the people demand accountability.

 

[Whoozyerdaddy]

Originally posted by: piasabird
The problem is that you are taxing the hell out of groceries, a major cost for the poor under this plan.

I go to church and pay Tithe A mere 10%. The perfect flat tax. We manage to run the Church on this and the collections are voluntary. We also collect Fast Offereings where people fast for 2 meals and offer the cost of one meal as an offering to our welfare system.

We manage to do a lot of good on this voluntary system.

Remember... Right now 22 cents of every dollar that anyone spends... rich or poor... goes to the IRS. Even on groceries.

Eliminate all federal taxes and the cost of goods nd services drops by 22%. Throw in the sales tax and you're right back where you started. So for starters, the cost of goods and services stays more or less the same.

Now... Since all federal taxes are eliminated, the poor no longer have to pay ANY tax. No income tax and most importantly, no payroll tax. Payroll tax is the biggest tax burden on the poor. Now it's gone. They now have more to spend on goods and services (which have not increased in cost!) Sounds pretty good right? Now add in to all that a prebate check to help them effectively avoid paying tax. This plan is great for the working poor.

 

[imported_tss4]

This plan is fantastic for the poor, bad for the middle class and great for the rich.

 

[Whoozyerdaddy]

Originally posted by: tss4
This plan is fantastic for the poor, bad for the middle class and great for the rich.

How so? Have you even looked at the plan?

 

[Fern]

Gentlemen, This is truly a "pig with lipstick" :disgust:

There are a lot of wonderful marketing phrases like "You keep every penny you earn" etc.

Bottom line is the government still needs to be funded, it is not self-supporting. The neccessary funds will still come from us.

So, IMHO this all a shell game, the real focus should on how to reduce the amount of money the government needs from us. This doesn't address that in anyway I can see.

And of course there are all the other valid concerns mentioned above (regressive nature of the proposal, opportunity for fraud etc.). BTW, for those thinking that this will eliminate the IRS and accountants etc wasting time on tax issues, should think again. When I worked in Europe (I'm a tax CPA) the largest tax/legal departments in firms were those that dealt with VAT (or national sales tax). This country has no experience with a national sales tax. Europe does, and their VAT rates aren't too far off the one proposed here yet they have income and other taxes out the wahzoo. And large buracracies (sp) to deal with them

Fern

 

[imported_tss4]

Originally posted by: Whoozyerdaddy

Originally posted by: tss4
This plan is fantastic for the poor, bad for the middle class and great for the rich.

How so? Have you even looked at the plan?

Yeah, I have actually. This plan is nothing new. I've checked up on it at their web site and I've seen them talking about occasionally on the TV. Here's my take on it . Obviously, those below the poverty live and porbably those within 2 to 3 times the poverty line will turn out better using this plan. Those above this will actually pay a higher rate. However, those that are wealthy have a much higher savings rate. Income that is not spent, is not taxed. Therefore, those with high savings rates have effectively lowered thier tax rate. The wealthy are able to save at a much higher rate then the middle class. I figured it up one time and my tax rate would go up about 3%.

Just look at it logically, in order to be revenue neutral we must take in as much money under this plan as the current system. Clearly, the poor are taxed less, so that leaves the middle class and rich. The rich are only taxed on what they spend while under the current system they are taxed over invesement income and job income. There fore they pay less over all than under the current plan. Logically, some one has to make up the shortfall if the poor and rich are paying less.

Look, I'm not neccesarily saying this is bad or we shouldn't adopt it. But you need to go into it with your eyes open. Its mathematically impossible for everyones tax rate to go down while still bringing in the same revenue. Anyway, all options are worth exploring.

 

[kylebisme]

Originally posted by: Dissipate
*ahem* Sorry to interrupt your diatribe, but isn't it more logical to scrap all taxes for everybody, including the middle class than playing the "They tax me, I tax them even more," game?

If we scrap all taxes we leave the govenment without any funds to do even the simplist things like run traffic lights and the right, eh?

 

[IronWing]

Originally posted by: Whoozyerdaddy

Remember... Right now 22 cents of every dollar that anyone spends... rich or poor... goes to the IRS. Even on groceries.

Eliminate all federal taxes and the cost of goods nd services drops by 22%. Throw in the sales tax and you're right back where you started. So for starters, the cost of goods and services stays more or less the same.

Now... Since all federal taxes are eliminated, the poor no longer have to pay ANY tax. No income tax and most importantly, no payroll tax. Payroll tax is the biggest tax burden on the poor. Now it's gone. They now have more to spend on goods and services (which have not increased in cost!) Sounds pretty good right? Now add in to all that a prebate check to help them effectively avoid paying tax. This plan is great for the working poor.

Current Tax system:
Goods: $1.00
Cost w/o tax: $0.78 (accepting your 22% for sake of argument)
Gov revenue from sale of goods: $0.22
Gov revenue independent of sale of goods: ~$0.15-$0.35
(Based on personal income tax and assumption taxpayer spends all post-tax income).
Total Gov revenues per dollar of income: $0.37 - $0.57

"Fair" Tax system:
Goods including tax: $1.00
Gov revenue: $0.22
Total gov revenue per dollar of income: $0.22
(Based on personal income tax and assumption taxpayer spends all income).

The Fair tax system will not replace current revenues.

 

[Dissipate]

Originally posted by: TheSnowman

Originally posted by: Dissipate
*ahem* Sorry to interrupt your diatribe, but isn't it more logical to scrap all taxes for everybody, including the middle class than playing the "They tax me, I tax them even more," game?

If we scrap all taxes we leave the govenment without any funds to do even the simplist things like run traffic lights and the right, eh?

Who needs a government to do something as mundane as run traffic lights? I know I don't need the government to run the lights in my house. I certainly don't need it to run lights for my car.

But in any event, most of the government today is welfare and warfare. Cut those out and the government could subsist on corporate taxes alone. No more income tax, no more sales taxes etc. etc.

 

[IronWing]

Originally posted by: Dissipate

Food is essential but last time I checked I didn't need to be taxed and have some government bureaucracy dole it out to me though.

Bet? You do know that the US food supply is run on a socialist system don't you? Without taxpayer subsidies the system would collapse.

 

[Dissipate]

Originally posted by: ironwing

Originally posted by: Dissipate

Food is essential but last time I checked I didn't need to be taxed and have some government bureaucracy dole it out to me though.

Bet? You do know that the US food supply is run on a socialist system don't you? Without taxpayer subsidies the system would collapse.

There is hardly any human endeavor now that the state doesn't subsidize or interfere with in some way. But the truth is that food is still largely a free market enterprise.