Replies

quote "Apparently I'm not explaining the Fair Tax very well. Everyone of all economic classes will get a rebate. The rebate will vary depending on the income and size of the family household. "

I Think I understand you, but your missing my point.

Everyone will get a rebate based upon the poverty level (basically). So a poor family will get all the tax money they spent back, and a rich one will only get a small portion of what they paid in taxes back. The problem is the democrats will just try and manipulate the system to artificially raise the government defined poverty level so that only the top 10% will be paying taxes while the other 90% get all their money back in the form of rebates. All the dems would have to do is to declare that anyone who earns less than $500,000 a year is poor and are entitled to all their taxes paid to be refunded to them in the form of a rebate.

quote "I agree with you spending is out of control but there is no correlation between increasing taxes and less spending. In fact it is just the opposite. Increasing taxes will provide more money to Congress. More money means more spending. The Fair Tax is revenue neutral. This means it will collect the same amount of money as the current system. "

You misunderstood me, I don't want tax revenue increased I want the number of people who pay taxes to increase. Right now something like 10% of the population pays 90% of the taxes or something like that. And the bottom 50% pays almost zero. I would shift some of the tax burden in other words to the poor. The poor then would have a reason to be interested in lowering taxes.

Right now poor people could care less about taxes, because they don't pay them.

If A poor person who earns $10,000 a year has to pay $1,000 of that in taxes that he doesn't get back later from some sort of rebate, he has an incentive to vote for people who will cut government spending so that tax rates can be lowered.

So a poor family will get all the tax money they spent back, and a rich one will only get a small portion of what they paid in taxes back.

That is incorrect. No one will not get back all the tax money they spent. The rebate will not cover goods that are not neccessities. Many services are not covered in the rebate. Therefore people of all economic classes will have to pay taxes. The amount of taxed paid is determined by the individual. A person won't have to pay a tax if they don't want to buy a good or service. As a rule of thumb, the more money people have,the more they tend to spend. The more they spend, the more they pay in taxes. Congress could raise the poverty level but that would only give back more money and reduce the tax base. I doubt the Democrats would support that idea. The current tax system makes it easier for people not to pay taxes than the Fair Tax because of all the deductions allowed by the IRS. Whatever amount people pay in taxes with the Fair Tax will not effect you because you will still get 100% of your paycheck.

You misunderstood me, I don't want tax revenue increased I want the number of people who pay taxes to increase.Right now something like 10% of the population pays 90% of the taxes or something like that. And the bottom 50% pays almost zero. I would shift some of the tax burden in other words to the poor.

The tax base will increase if more people pay taxes. You are correct when you state the percentages paid with the current system. The tax burden will shift and be more balanced because all the deductions allowed by the IRS would be eliminated. The difference in the amount of taxes paid by any economic class will be based on how much people decide to spend.

Right now poor people could care less about taxes, because they don't pay them.

You're right. Many people don't pay taxes with the current tax system based on all the allowed deductions. Those deductions would be eliminated. They would have to pay taxes when they make a purchase. As I stated in my previous post, the tax will be revenue neutral but the important difference is compliance will improve.

I never thought of the rebate in this manner. You make a good point. The point you make is that the Democrat Party can mess up any good plan.

Seriously, I also just thought of all these checks going out every month and how many will get "lost". The IRS will become a customer service venue trying to hunt down misplaced checks.

Fair Tax would be a good option minus the rebates, but the more I think about the system, I think one reason for the rebates is to tax the crap out of people who do not have a legit SSN, i.e. illegals.

You misunderstood me, I don't want tax revenue increased I want the number of people who pay taxes to increase. Right now something like 10% of the population pays 90% of the taxes or something like that. And the bottom 50% pays almost zero. I would shift some of the tax burden in other words to the poor. The poor then would have a reason to be interested in lowering taxes.

The President's Tax Reform Panel recently released distribution analyzes on several tax reform plans, including a NRST with a "prebate." With the NRST, the bottom 20% of the population paid a negative 2.5% tax rate compare to 0.4% under the current system. So they actually profit from taxes. If you raise the rate, they profit more.