Fair tax anyone?

C

Cowman

New member
http://www.fairtax.org/

Dump the IRS, dump income tax, go to pure federal sales tax. No more filing, no more corps getting around paying taxes through various loopholes. No more illegal immigrants getting out of paying taxes.

And yes, you'll end up paying less!

Discuss.
 
That doesn't sound very fair to me, If I make 50,000 spend 40,000 I get taxed on 80% of my money. If Bill Gates makes 100,000,000 and spends 20,000,000 and banks the rest he only gets taxed on 20% of his. I would prefer a flat tax of 20% or so on all earnings over say 25,000 no deductions allowed.
 
It doesn't sound very fair to me. Why should rich people pay a higher overall tax rate? I didn't realize that people should be punished for being successful.

Rich people buy more, but do they consume more of our government resources? Is the guy driving a Mercedes using more of the road than the guy in a Corolla?

We need proportional taxing, just can't get away from that, but I would also think a fair tax to be:

Yearly government spending / 300 million = tax each person pays.

This is obviously bad for poor people, but it's also bad for rich people, who are basically shoring up the inadequate contributions of the poor. Now these people want to charge them even more! It's ridiculous.

Another problem is that rich people, proportionally speaking, don't spend as much of their income on goods as poorer people do. I think they would end up paying a lot less tax than they do now.

Seems like a bad idea.
 
I would say that a flat percentage with no floor, no exemptions, no exceptions would be the most fair and the easiest to regulate.
 
The main advantage of a sales tax is that it encourages (or at least doesn't discourage) savings and investment.

The rich don't bury their money in a jar, they invest it (which grows the enconomy).
 
I catch Neil Boortz occasionally on the radio and this is one of his pet projects. I tend to like the idea. Don't ask me to answer all of the objections you can come up with because I haven't studied nor am I a tax lawyer.
 
I agree with the idea of fair tax. We need down size government and many social entitlement programs first.

Otherwise we still end up with a tax/spend of 3 trillion yearly operating budget and an operating debt of 500 billion.

A grand national debt of 9 trillion, and growing!

No tax system will help us until we get this INSANE spending under control.
 
Philosophically, I like it. But practically, you're going to need a governmental agency the size of the IRS to regulate the definition of "sales", and I think the transition from one system to the other would cause a depression.

Americans are fairly illogical in their dealings with money, and this system assumes that consumerism would charge on due to us "sensibly" realizing that the astronomical sales tax should be ignored. I think it will make people curb spending and borrowing, which is very bad for us.
 
Sorry guy, I've got to call BS on this.

All taxes are unfair once the parasites figure out how to tax us poor working slobs for their own benefit. You can call it whatever you want, it is extortion. I'd give you 15 minutes of 'fair tax' before the parasites would figure out how to steal from it. :rolleyes:

I pay my taxes because the government holds a metaphorical gun to my head. The same would be true if they taxed income or sales or the leaves of the trees in my yard or whatever. :(
 
Abolish everything but State sales taxes (to fix roads N such) and let the gubmint make its own money. It's huge and many ways of making all sorts of money.

They're just being greedy with the income tax and plus don't want us mericans to have extra money to enrichen our lives and/or possibly cause them trouble politically or otherwise.

They'd rather keep us so busy making them money that we don't have time for anything else like politics.:mad:
 
Yeah, that's the cliche. If we stop paying, the country will fall.:rolleyes:

If you think that the gubmint isn't large enough to be self sustaining, then you either haven't thought it through well enough or have bought into their lies unknowingly.

With all due respect.;)
 
Well, I read those FAQs, and none really addressed my points:

1. The necessity to change the way we view money may (probably) lead to a change in the manner we spend and borrow it. Which could be disaster in our consumer driven economy.

2. The IRS is a huge beauracracy dedicated to enforcing how taxable income is calculated. It would have to be replaced by another huge entity that defines and enforces what constitutes a "sale", or everyone will either become a business (wholesale is not taxed), or they will rent everything. What people don't bother much for 5% of a purchase, they will definitely jump through hoops for at 25%. So the 95% savings estimate seems a bit optimistic.


It may be a better system - too bad we didn't start out with it.
 
And yes, you'll end up paying less!
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I don't think so. The only way everyone ends up paying less is if the usual deficit goes up.

If I understand it right, when FairTax works properly, the lower class above the poverty line pay more. They spend nearly 100% of their income on perceived necessities, and 23% of nearly 100% of their income is more than their current net (weighted) tax bracket.

Meanwhile, upper middle and upper class, who consume a lot, also pay more.

Everyone else pays less, because they limit consumption and their current effective income taxes are larger than 23% of their spending.

There are other consequences: since only retail goods and services would be taxed, I would think there would be a sudden increase in the market for person-to-person sales of used goods.

Even though FairTax might not substantially affect the GNP and/or government's collected taxes, it would dramatically change the structure of the economy, and it would reduce the government's ability to crack down on "evil" things like gambling and drugs. Without income reporting for individuals, there would be no need to launder money. Drug and gambling enforcement would become much more difficult, and the prospect of being able to tax drugs and gambling directly might make the government decide to legalize them.

Taxing gambling is extremely problematic, though. If you lose $50k of $100k one day, and turn your remaining $50k into $150k the next day, you've made 50% overall. However, if you're not a professional gambler, technically your gain according to the IRS is $100k. In other words, your losses aren't tax deductable, but your gains are taxable.

There's the same problem if the government taxes gambling winnings directly. When do you tax them? And how would the casino be able to report such things in a meaningful way, so that the IRS would know the casino wasn't skimping on taxes (and passing those savings on to the gamblers)?
 
Problems

It is an appealing idea, but there are many problem is execution. How big a Fed sales tax? Will ALL other Fed taxes go away? Like the gas tax? The excise tax on guns and ammo? What about State taxes? Property taxes? School taxes? Some states don't have an income tax. Some states don't have a sales tax. Some states have both. If I had to pay all my state taxes, and then had to pay a HUGE Fed sales tax, I'm not sure that what I give the Feds for income tax will cover it, let alone leave me with money left over.

And even if you could get it to work, just how long do you think you could keep the government pigs out of the trough? How long before they started adjusting, amending, and re-writing the tax code to benefit their patrons/pet projects?

I think it could wind up like communism. An appealing idea in theory, and an appalling idea in practice!
 
don't mention a federal sales tax

because some jerk in Washington will think it's a great idea and we'll have that in addition to all the taxes we're saddled with now. Look at Canada, income tax with federal and local sales taxes as well.

Seems the only realistic possibility is to find ways of slowing the growth of government and reducing the rate of increase of the tax burden.
 
I think it could wind up like communism. An appealing idea in theory, and an appalling idea in practice!
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How did you manage to compare a simple, 23%, national flat tax to communism?

44amp, it's all detailed at the fairtax site, in the FAQ (previously linked multiple times, so I'm not going to repeat them).

The point is not that it saves everyone money. The point is that it's simple, and it's equitable. Who cares whether your state has sales tax or income tax or property tax or a tax for searching for extra-terrestrials? This proposal is a federal sales tax, and it would replace all current federal income/estate/gains/corporate/payroll taxes. They worked out the math. Even if they fudged numbers and it has to be 25% or 28% instead of 23%, I think it's superior to the current system.

It has kinks, but they're in relatively minor areas that are already messes (like gambling).
 
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