Fair Tax?

[Mick3411]

Originally Posted by photogbill

I vote a strong NO ...on the 'fair' tax! Who came up with the 23% 'fair' figure? Why did they come up with 23%? Why not 20% ....why not 18% ...how about 10%? Isn't Huckabee a Christian? Why does he think 10% is 'fair' for God ...but 23% is 'fair' for the Govt!? What makes anyone think they can trust the federal govt. to keep the 'fair' tax at 23%?

What happens when they continue to spend our tax dollars like drunken sailors? (no offense meant to sailors) What is there to stop them from spending into deficits?

So ...what will their solution be ....to raise the 'fair' tax to 25% ...of course! ..the when that doesn't work ....it will go to 30% ...and on ...and on!

The 'fair' tax would also be destructive to business and normal commerce! It would hurt the economy by making some purchases too expensive for consumers!

I know Huckabee thinks he's brilliant for his support for the 'fair' tax ....but it's one of the reasons I didn't trust him during the primaries. It's not 'fair' to commerce or consumers and a 'hairbrain' idea, IMO ...with no safeguards to what the fed. govt. will decide what % is 'fair' in the future!.

I'd be more in favor of a 'flat' tax ...somewhere in the 10% range ...where everyone above a certain minimum income level ...would pay the exact same rate! Period!

Folks there are several books out on the Fair Tax. You need to at least look through them and read them before jumping to these conclusions. I am no expert, but the conclusion you are drawing are 180 degrees off from the design of the Fair Tax

[winnet22]

After reading the above posts, it amazes me how many people are still uninformed about the FairTax; even though this bill (HR25) has been reintroduced each year for the past 10 years. I think everyone who has posted so far should do a little more research on the FairTax by going to www.fairtax.org or by reading the FairTax Book.

Many of you are concerned about the burden the FairTax would have on the poor because it would tax necessity items such as food. At the beginning of each month each family would receive a prebate to offset the tax on necessity items. The prebate is determined by taking the tax rate, 23%, times the poverty level for each size family. For example, the current poverty level for a family of four is $29,140. This means that every family of four would receive a prebate in the amount of $559. This not only un-taxes the poor, it also creates a progressive tax system.

The FairTax will replace Income, Capital Gains, Estate, Corporate, Payroll and Gift taxes. You will receive 100% of your paycheck. It is designed to be revenue neutral; meaning it will collect no less nor more than our current tax system. To prevent double taxation all used items will not be taxed.

Reno 82 ~ Some poor don’t pay income tax, but they all pay payroll tax (7.65% for SS and Medicare). The prebate will completely un-tax the poor.

Kevwyo ~ Under the FairTax you will receive 100% of your paycheck so why would need deductions and exemptions? The FairTax is not designed to curb government spending; that is a completely different subject. Even though it is designed to be revenue neutral, the transparency of being able to see the cost of government on every sales slip may indirectly reduce government spending. Taxpayers may start pressuring their congressmen to vote for bills that would reduce government spending.

Photogbill ~ After a few million dollars of research and the efforts of over 50 top economists, the FairTax rate was determined to be 23%; this would make the FairTax revenue neutral.

Trusting the government to keep the rate at 23%; I don’t think so. Do we currently trust any congressman who says the will never vote for a tax increase? I don’ think so. What is the safeguard under our current system that prevents our federal government from raising taxes? Under our current system taxes can be raised a thousand different ways without us even realizing it. Under the FairTax, the only way to raise taxes is to raise the 23% which everyone will be aware of. Any congressman who votes for this increase will be out of a job come election time.

How do you figure the FairTax would be destructive to business and normal commerce? The FairTax eliminates all corporate, payroll and capital gains taxes. By eliminating these taxes along with the billions of dollars in compliance costs, consumer prices will drop; not 22% as some suggest, but there will be a drastic drop. Under the FairTax we will finally be able to compete with foreign manufacturers.

You may see a slight increase in home and car prices, but it will not be the full 23%. As I mentioned above, prices will come don’t once all the taxes and compliance costs are eliminated. In many cases the combination of the prebate and the increase in take home pay will make many house payments. In my son’s case he figured he would be able to make his house payment and have $200 per month left over. Now I call that a stimulus package.

Being against the FairTax is like being against a cure for cancer because it won’t cure acne.

[Dutchman3]

Mick is correct--sort of? However, reading the two Fairtax books written by a radio talk shoe host and an obscure Georgia Congressman will give you only half of the story, along with many misstatements made about the Fairtax. Try Fairtaxblog.com, and review the Research library for the many studies both pro and con.

A few quick corrections to some concerns expressed by blog members so far.

(1) The sales tax rate expressed in terms every American can understand is 30%. That is the sales tax percent added to a retail business costs plus profit to arrive at the retail price. Fairtax advocates would have us believe that the rate is only 23% which would be the rate including the 30% tax.

(2) The sales tax is not in addition to current retail costs. Costs will be reduced because of the removal of current income tax and payroll contribution costs. Using 2007 federal revenue data, with retail sales of $9.5 trillion, retail business tax related costs averaged 10% of sales. Remove 10% and add 30% and retail prices will rise by 17% on average.

(3) The only exemptions are for education tuition. All other new goods and all services would be taxed.

(4) There would be an implicit tax on interest bearing investments, and debt instruments such as mortgages and credit cards. The amount would depend on the difference between the Treasury rate and the rate earned/charged.

(5) Fairtax claims about "choosing how much tax to pay" should be viewed with suspicion. There are no untaxed services which make up half of the average family budget. There are no untaxed groceries, restaurant meals, gas for the car, home heating oil, nothing untaxed at Wal-Mart, etc. etc. Untaxed purchases would be limited to used cars, boats, houses, appliances, etc. which are occassional purchases. If you want to live, you will pay the tax. And, what isn't generally understood is that buying a used car, for instance, won't save any extra money over that saved today. True, no tax revenue would go to the Federal Treasury, but the price of used stuff will quickly adjust upward towards new prices until the used/new price relationship is reestablished.

There is much else wrong with the Fairtax scheme, but it may not matter. If you have been paying attention, the Obama tax reform commission appears to be headed towards recommending a Value Added Tax, something that is used successfully by over 130 other countries. The chances are good that a VAT along with the elimination of income taxes for families earning less than $250,000 may be adopted. Stay tuned!

[joeythefish]

Originally Posted by gsh341

The Fair Tax is a great idea.

The best part is that you pay no tax unless you actually spend your money.

Some advantages to this are;

1. No tax on retirement investing or dividends earned.

2. No annual income tax filing.

3. No more IRS as we know it.

4. Tax cheats would virtually disappear and they'd be easier to locate and audit since the government would only have to look at businesses and not every citizen.

5. EVERYONE gets taxed equally.

The one thing there needs to be is a way to make sure that the poor can get needed tax breaks by allowing certain essential items to be tax free. Things such as generic food, basic clothing and low-cost or government subsidized housing. Non-essentials such as coffee, tobacco products, candy and any non-basic clothing would remain taxable.

[doctor_ew]

30% sales tax (which is what you get if 23% of the final price is tax) will go a long way to making the black markets and barter markets in EVERYTHING flourish.

Any tax scheme (and they're all schemes) overhaul that doesn't, as a primary goal, seek to reduce the amount of our money that the government vacuums out of our wallets is useless. Many of the Fairtax groupies that I've heard and read even tout as a selling point the fact that these scheme won't reduce the government's receipts.

[Y2bad4u]

Uhhh, the one we have doesn't work so lets try something else. You wont reduce government spending until you replace those people. We have to have some form of tax to pay for the stuff we need that the government supplies, so you wont ever get rid of one. But I hate seeing I paid the government 20k last year just because I worked my butt off. I'd rather give it to them for blowing my money on the 30k cars and 200k home I want but prob don't need. At least I have a choice on how much I want to give them and know up front. Most of us don't need half the stuff we think we do.

[RocTrac]

I am about sick of "What about the Poor"....BS, your concerned with your own pocket book.

[winnet22]

A vat tax will be a big mistake. This is just another way to hide and manipulate taxes without making waves. Since the vat tax will not eliminate corporate, capital gains, and payroll taxes, prices will definitely increase. The poor will really suffer. They may be exempt from paying income taxes but not only will they be paying more for everything they buy, they will still have 7.65% deducted from their paycheck for Medicare and S.S.

I get so sick of the 23% 30% argument. This is getting old and worn out. 23% inclusive, 30% exclusive; this is a simple concept. I don’t care if it takes a 50% tax to revenue neutral, taxing consumption is better than taxing productivity. What if your electric bill was based on your income rather than how much electricity you used.

Yes, education tuition and used goods are the only things that will not be taxed, but the prebate is designed to offset the tax on necessity items. This is much easer than having a list of non-taxable and taxable items; plus lobbyists can’t bribe congressmen into voting to non-tax their special interest.

[winnet22]

I want to laugh when I read “I’m not for the FairTax because it doesn’t reduce government spending.” Does our current tax system reduce government spending? NO! The only way a “Tax System” will have any affect on government spending is it transparency. The FairTax is the only system with total transparency.

[winnet22]

Good by black market! Under our current system, the underground economy pays nothing to support our government nor do illegal aliens. The Internal Revenue estimates that 30% to 40% cheat on their tax returns resulting in over $250-billion in lost revenue. Not only will the FairTax be easier to monitor due to fewer returns, it will take two to tango if you want to defraud the government; the consumer and the merchant.