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Politics & ReligionWell Since every damn forum has one. Might as well leave it out there. This place is loosely moderated and should not be entered if you're weak of heart.
As John Linder is my representative, and Neal Boortz is a local celebrity, the Fair Tax gets a huge play here in Atlanta.
I've read more than I care to admit on fairtax.org, have read Boortz/Linder's book, and have written just about every politician in Georgia a letter explaining why they should be supporting it for their district.
It's a pretty easy sell once you understand the entire Bill, and how the tax system is defined.
What I'm interested in is the people that completely understand the Bill, and are still opposed to the system change. For what reasons are you against the change?
Most arguments that are made against it that I've heard are based in misunderstanding of how the consumption tax works. The only other argument that *may* hold true is that the rich aren't paying their "fair share" (but I doubt the rich will stop buying huge houses, Ferraris, and yachts).
Otherwise, this thread is to educate any of those that do not know or understand the Fair Tax. This is one thing I truly care about - abolishing our oppressive, unnecessarily complicated, and politically-based tax code.
- Income tax is eliminated. Corporate income tax is eliminated.
- Consumption tax at the retail level is established at the rate of ~22% (retail sales tax). This is only for new goods purchased at the retail level. Used goods are not taxed.
- Monthly "prebate" check on essential goods is delivered to every citizen with a SSN. This ensures that no one is paying tax on the necessities of life, the amount is based on taxpayer situation (number of kids, etc) and is set at the national poverty level.
Effects if the bill is passed:
- Cost of goods will go down (or remain the same after the consumption tax) due to embedded taxes eliminated. This simply means companies stop passing the federal taxes onto the consumer good price.
- Manufacturing jobs and international businesses will see the US as a tax haven.
- Savers are not taxed on money they have invested
- The poor do not pay a dime on essential items (food, clothing, etc) due to the monthly prebate check.
- Politicians lose lobbying power.
- The billions spent every year on tax preparation are put back into the economy.
- The beloved IRS goes bye bye.
- Drug dealers, illegal aliens, and even tourists contribute to our taxes.
id hafta trust these economists judgement since thats their profession, but this just doesn't sound feasible. I'll do some reading tho.....
are they thinking the consumption tax will replace income tax, cause i dont see how the gov't will make enough money to eliminate individual and corporate income tax.
Valid question. My take on it is that people do not stop spending, they consume regardless of what's going on in life.
Some of my most successful friends run bars. As one put it: "People celebrate, they drink. They're down and out, they drink. They want to wind down after a hard days work, they drink."
Not to mention how many more people we capture in lost/mis/underreported earnings on income tax. Think about how many illegals, tourists, bartenders, or other cash-based people you now capture that weren't reporting their income previously.
Here's the answer from fairtax.org:
Is consumption a reliable source of revenue?
Yes, in fact, consumption is a more stable source of revenue than income. A recent study by American Farm Bureau economist Ross Korves shows the FairTax base is less variable than the income tax base. Why? Because during difficult times due to loss of a job or an inability to work, people may not have as much income, or may have no income at all. They borrow funds or use savings. They may not have earnings, but they still continue to consume. Korves’s Figure 3 below shows the yearly changes in the tax base, adjusted gross income (AGI) under the current tax system for 1972-2002 and changes in personal consumption expenditures (PCE) of the same time period.
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So, where is the money coming from?
If corporations don't pay taxes and workers don't pay taxes? You're saying a 22% tax across the board on consumer products will replace that?
Also, no mention of local and or property taxes. As space becomes more expensive it the US, it would be cheaper to go to a less expensive country.
Worker's salaries may also be much higher in the US, in order to compensate for the 22% "fair" tax. Again, not taking into account local taxes added on top of that. You may wind up with a near 30% tax on items after it's done.
If you eliminate income taxes, people will spend, but no guarantee it will not lead to huge debtl. Remember, we are the most debt ridden country in the world, as far as individual debt.
If corporations don't pay taxes and workers don't pay taxes? You're saying a 22% tax across the board on consumer products will replace that?
What company pays a tax? Whoever buys a company's products or services is paying the tax, the company simply collected it for the government.
You should know that companies simply pass on the tax as an added line to the overhead.
And no, I'm not saying that. The people who drew this up, who are far more educated in the field of economics, are saying that. And from the data that is presented, based on consumer retail sales over the last 20 years, supports the idea.
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Also, no mention of local and or property taxes. As space becomes more expensive it the US, it would be cheaper to go to a less expensive country.
Straight from the source:
How are state tax systems affected, and can states adequately collect a federal sales tax? No state is required to repeal its income tax or piggyback its sales tax on the federal tax. All states have the opportunity to collect the FairTax; states will find it beneficial to conform their sales tax to the federal tax. Most states will probably choose to conform. It makes the administrative costs of businesses in that state much lower. The state is paid a one-quarter of one percent fee by the federal government to collect the tax. For states that already collect a sales tax, this fee proves generous. A state can choose not to collect the federal sales tax, and either outsource the collection to another state, or opt to have the federal government collect it directly. If a state chooses to conform to the federal tax base, they will raise the same amount of state sales tax with a lower tax rate – in some cases more than 50 percent lower – since the FairTax base is broader than their current tax base. States may also consider the reduction or elimination of property taxes by keeping their sales tax rate at or near where it is currently. Finally, conforming states that are part of the FairTax system will find collection of sales tax on Internet and mail-order retail sales greatly simplified.
Keep in mind that two of the largest single economies in the world operate almost solely on this tax system.
They're Florida and Texas.
The FairTax does not address locality taxes. Neither does the federal income tax, however. The FairTax is a replacement for that system.
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Worker's salaries may also be much higher in the US, in order to compensate for the 22% "fair" tax. Again, not taking into account local taxes added on top of that. You may wind up with a near 30% tax on items after it's done.
Not exactly.
Your paycheck doesn't have 20-35% of it taken out anymore. If you read the notes above, you'd see that market forces would make the prices of goods and services drop about 18-25%, effectively negating the sales tax increase. The reason is because the companies have far less overhead with embedded taxes.
Realize that a widget that comes to you may have gone through 15 companies making parts for the widget. Every one of those parts were taxed at the individual companies, then Company X delivers the product to you.
Those embedded taxes are eliminated.
Social Security taxes are also eliminated from your paycheck, and companies no longer have to match those or other taxes from the employee. The cost of the employee dramatically decreases.
Social Security is funded by the broad, larger FairTax, rather than a limited payroll tax.
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If you eliminate income taxes, people will spend, but no guarantee it will not lead to huge debtl. Remember, we are the most debt ridden country in the world, as far as individual debt.
There's no guarantees anywhere in anything in life. Replacing the tax code with a flat one like in the 80's will just have us end right back where we are now. And there is no shortage of spending in debt now, anyway.
The government does not want the Fair Tax to happen because it will be the largest transfer of power from the government back to the people since the Revolutionary War.
Realize that a widget that comes to you may have gone through 15 companies making parts for the widget. Every one of those parts were taxed at the individual companies, then Company X delivers the product to you.
I always thought that there is no tax at that level as long as it's not being sold yet to a consumer- thus business licenses and "wholesaling".
I'm all for it as written by bzb. I know politians, and they will find a way to f'ck it up. The libs will of course start their infamous class warfare statements like "the rich aren't paying their fair share". The republicans will of course try to pacify the libs and put some kind of exemption in the bill somewhere to allow "poor" people to enjoy tax exempt status. So once again the more "well to do" people will be carrying the lazy.
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I always thought that there is no tax at that level as long as it's not being sold yet to a consumer- thus business licenses and "wholesaling".
businesses pay income taxes. We pay many taxes, large portions of which are the other half of your payroll deductions.
I'm a huge fairtax supporter. I'll lay it out with this simple example. About 22-23% of anything you buy is covering the taxes paid by the companies producing and selling it. If you buy a $100 pair of jeans, $23 of that is covering tax expenditures paid out by the corporations involved in production, transport, and sales. Remove all that and you have a $77 dollar pair of jeans, add the fair tax at an exclusive rate of 32% and you have a $101.64 item. That averages out to an effective income tax rate of 1.64%, and that is only if you purchase exclusively new items as used merchandise is not taxed.
Yes homes and cars wi
The Fair Tax - Why Are You Against It?
