FairTax good idea

The Joplin Globe ^ | April 25, 2006 | Staff

[Eaglewatcher]

Americans are disenchanted with the federal income tax system. And why not? Only accountants and agents of the Internal Revenue Service understand the 8 million words on the 60,000 pages of the complex Tax Code. Given some of the horror stories over the years about conflicting interpretations from one IRS office to another, even that assumption is suspect.

According to an Ipsos Poll, eight out of 10 people recently surveyed think the system is unfair. Indeed, the only clear common ground for agreement between the various income groups in the poll appears to be their unhappiness. And they are echoing the sort of complaints heard a year ago when Uncle Sam held hearings on simplifying the code.

Any tinkering with the current system by Congress likely will be perceived as political manipulation in response to pressures exerted by special interests. For despite congressionally mandated, administration-recommended reforms, the code remains cumbersome and intimidating, complete with social engineering breaks and loopholes. So why not eliminate the unfair, distrusted and generally despised code and replace it with something far more equitable and efficient and less labyrinthian like the FairTax.

Taxpayers wouldn't have to worry about being audited by the IRS or making mistakes on their income tax forms. Gone would be corporate taxes, self-employment taxes, gift taxes, estate taxes and capital-gains taxes as well as the income tax. Yet, the bottom line for federal revenue would remain the same.

Everyone would contribute to the national sales tax. Collections would be made at the point of purchase. A system of monthly rebates could be set up for the poor making less than a federal income threshold. Much of the paperwork required by the IRS would simply disappear, replaced by sales tax collection forms. Such efficiency and simplicity would be an economic spur.

One would think that politicians whose jobs depend on being popular with voters would leap at the opportunity to get rid of the disliked tax code. Some day, they will.

[Eaglewatcher]

Even in Joplin they think the time has come!

[Andy from Beaverton]

Fair tax is a fair idea.

[xcamel]

Fair tax is still a really bad idea.

[FloridianBushFan]

There is a website that explains the whole process of the Fair Tax.

http://www.fairtax.org/

They are hosting an information session and Volunteer workshop in Orlando this Saturday.

[FloridianBushFan]

Here is the information on the workshop this Saturday in Orlando.

Dear FairTaxers,

Did you know that FairTax.org is coming to Orlando to train volunteers in your area?

National headquarters will be sharing recent successes and giving you an opportunity to meet like-minded FairTax supporters in your community.

In addition you will receive training in the areas of:

* Media
* Lobbying
* Grassroots politics

The date is Saturday April 29, 2006.

The Orlando workshop is being held Saturday morning at the located at Courtyard Orlando Lake Buena Vista in the Marriott Village 8623 Vineland Avenue Orlando FL, 32821. Registration begins at 8:30 a.m.; the workshop starts at 9:00 a.m. and ends at 4:00 p.m. We have room for 100 so sign up today!!


This training is free, however if you would like to make a donation to help cover the cost of break-time refreshments, a meal, all materials and conference room expenses, donations will be accepted at the door. A contribution of $25 is suggested.

If you would like to be a part of this exciting opportunity please R.S.V.P. by e-mailing Megan at megan.kinnell@fairtax.org or by calling 1-713-963-9023 ext. 9614. Don't forget to tell us which workshop you will be attending. Include your full name, telephone number, and e-mail address. A free meal will be provided so when you R.S.V.P. please tell us if you have any special dietary needs such as diabetic, vegetarian, or kosher.

Space is limited so don't wait!

FairTax Grassroots Team
713-963-9023 (Houston)

[GSlob]

"Fair"? It is a double taxation fraud, pure and simple. Say, you have 2 otherwise identical people, one with X (say, $100K - the number does not matter) in a 401k, and another with the same $100K, but in a Roth or in a regular savings account.
Both start withdrawing and spending their money under "fair tax" system. The former would be paying consumption tax, but that would be instead of the previously deferred income tax he has not paid to get his 401k. The double taxation issue concerns the latter: he will be hit with the consumption tax on top of the income taxes he has already paid to put that same 100K into his Roth or in the saving account.
Thus, unless there are specific compensatory provisions, like up-indexing of all after-tax accounts, it is a double taxation fraud.

[PubliusMM]

Ping for later.

[trebb]

"Fair"? It is a double taxation fraud, pure and simple. Say, you have 2 otherwise identical people, one with X (say, $100K - the number does not matter) in a 401k, and another with the same $100K, but in a Roth or in a regular savings account. Both start withdrawing and spending their money under "fair tax" system. The former would be paying consumption tax, but that would be instead of the previously deferred income tax he has not paid to get his 401k. The double taxation issue concerns the latter: he will be hit with the consumption tax on top of the income taxes he has already paid to put that same 100K into his Roth or in the saving account. Thus, unless there are specific compensatory provisions, like up-indexing of all after-tax accounts, it is a double taxation fraud.

So, what really irks you is that those with traditional IRAs might "get away with something" while those with ROTH IRAs would have already paid taxes on what they donated. While that may be a grievance, it is hardly a huge problem or cause to call the Fair Tax a "double taxation fraud". Using your reasoning, we should scrap all possibly good things if they don't first level the playing field to ensure some folks don't benefit because of existing conditions, no matter how much good the new ideas might effect. Sounds real similar to the Dims always wanting to lay more and more taxes on the "rich" because they have more than the poor. How dare someone have more and/or benefit more, even in the short run....

[GSlob]

Roths are like nothing in comparison with the total pool of already taxed money - besides Roths it includes savings AND the capital cost basis of every taxable investment in the country. And the double taxation fraud would apply to all of these, not merely to Roths. So it's a bit more than a "grievance".

[layman]

I don't believe 23 percent will be enough to result in revenue neutral federal tax receipts. Here's why.

Of the 23 percent, 15.3 would still have to go to the Social Security fund, leaving 7.7 to generate about two trillion which is the amount currently generated by all federal taxes other than Social Security. This means annual expenditures on new items at the retail level would have to be about 26 trillion. This converts to about $180,000 for each of the 144 million persons currently employed in the country. This seems very unlikely to me.

[trebb]

So, because we won't get refunds for taxes already paid to investment accounts, we should continue with our insane system? That's like saying that you paid for a hamburger, to be picked up some time in the future, and now you have a chance to save enough to buy a thousand hamburgers, but must dcline because you want the hamburger you already paid for. I'll take the thousand...

[GSlob]

This double taxation fraud will not fly - you have a vested "investor class" interest squarely against it. Flat rate income tax is fair enough, and does not present double taxation problems.

[FloridianBushFan]

Remember with this tax it would not be just people who are employed paying the tax. Since it is a national sales tax, anyone who goes and buy things would be paying the tax. That includes all Americans, those working and not working, and and anyone else who is here in the country.

[Chances Are]

Of the 23 percent, 15.3 would still have to go to the Social Security fund...

Where does this come from?

CA....

[Chances Are]

Just to clarify, I want to know where the 15.3% figure in your example comes from? What is it's origin, and what source(s) do you cite for this figure?

CA....

[Chances Are]

These are issues that can be addressed and worked out. No need to throw the baby out with the bath water.

I don't hear you complaining about the triple taxation that confronts Social Security recipients under the current scheme. What gives with that?

CA....

[layman]

Of the 23 percent, 15.3 would still have to go to the Social Security fund... Where does this come from?

From the 'Americans for Fair Taxation' website ... The FairTax proposal is a comprehensive plan to replace federal income and payroll taxes, including personal, gift, estate, capital gains, alternative minimum, Social Security/Medicare, self-employment, and corporate taxes.

[ops33]

I am deeply skeptical of any reform of the tax system and adoption of a sales tax type system that does not include repeal of the XVI Amendment.

[layman]

Remember with this tax it would not be just people who are employed paying the tax.

Well, even if you base it on all 300 million in the population, which includes 60 million children under age 15, it still works out to about $87,000 for every man, women, and child.

[GSlob]

Under the current scheme they somehow calculate and tell you what part of your SS is the return of your taxes already paid, and what is the taxable part, don't they? One could question their assumptions on the "investment return" there [and thus their calculations], but not the principle.