A FAIRTAX PRIMER

self | May 14, 2006 | self

[bordergal]

Since they will be paying the 30% FairTax on every item.

The Fed govt doesn't pay sales tax now on items they purchase. I see no reason for them to do it with the Fairtax either.

[RobFromGa]

Read the bill, it's another part of the scam to make the Fairtax rate lower than it really is. The government pays 30% FairTax to itself and counts it as revenue. Another double-counting error by the FairTax crowd...

[PizzaDriver]

Yes, there is a "Dole" quality to the Prebate. The dole goes to Resident Citizens ONLY. There is no Corporate Dole or "prefered industry" Dole.

JUMBO Spenders want the FRUGAL Families to overlook the Prebate. Big Spenders are spinning this one.

[xcamel]

That particular "bullet" is fatal enough to sink the fair tax. There are many others hidden behind "warm and fuzzy" language within the bill. Not the least of which is general "You haven't read..." or "You just don't understand..." malarkey.

Some of us have a deep knowledge of the current system - and don't hate it any less than the next guy - we're just not willing to drink the koolaid.

A few of us pay more income tax per year than most people earn in a lifetime.

Ever heard of a "little green card" the IRS will make you sign if the statute of limitations is running out on them; else be prepared to be audited every year for the rest of your life...

Better plans have been proposed - are in use around the world (Flat Tax) but FT's would rather spend nearly all their time and energy shouting down the voices of reason - and experience - instead of debating the hard facts of how society functions, how government was "born to steal", and how 2 simple things can fix it.

A )Flat Taxation.

B) Constitutional limitation on all spending, not just the 10-15% the public is told about. (in ways meant only to scare, not to inform.)

[goldstategop]

Its fascinating the same people opposed to paying less in taxes want to keep the IRS around. I'd rather not deal with them but to each his own.

(Denny Crane: "Every one should carry a gun strapped to their waist. We need more - not less guns.")

[GSlob]

I am with you on this one. It is not the main, but only hangup for me. And even if - by decree- all already taxed moneys are up-indexed at the moment of transition, so that the savings account which used to be $10000 becomes $12500, such a development would be wildly inflationary.

[HitmanLV]

The post tax savings problem is fatal to the FT as far as I am concerned. Nothing even remotely 'fair' about it.

I'm open to it, though, if that problem can fairly be addressed. To be blunt, the problem is not even really acknowledged, let alone addressed.

Maybe a flat tax is better. I'm open.

[HitmanLV]

I agree. Maybe set up a kind of debit card account account where charges against it are not subject to the Fair Tax? A technological conundrum, maybe. The idea is to make things easier, not harder! ;-)

[lewislynn]

Its fascinating the same people opposed to paying less in taxes want to keep the IRS around.

Where is that written? The Fairtax is revenue neutral. The only ones paying less tax would be corporations and businesses not dealing in retail sales. My service business, hence my customers would be paying MORE not less tax.

[goldstategop]

I agree we should limit spending but that's no reason not to limit the way the government collects revenue. The FairTax would put that process in the open. You would know exactly how much the government takes from you every time you spend for a good or service. Can you say that about the income tax? I doubt any of the anti-FT posters on here have the foggiest idea of just how much the government withholds from their paychecks or what the true level of taxation in this country really is. Simpler is both fairer and better.

(Denny Crane: "Every one should carry a gun strapped to their waist. We need more - not less guns.")

[RobFromGa]

A good deal of what makes prices so high in this country are all those embedded taxes. And the corporate income tax gets paid by consumers. If we could eliminate all those taxes and pay ONE TAX ONE TIME, we'd pay a lot less than we do now. And our paychecks would go a lot further.

Let's see your analysis of how prices are going to be a lot less than what they are now. I showed mine in the opening post and I say prices are going up 20%+ or thereabouts if people keep their full paychecks and businesses keep the employer half of FiCA.

Where are your calculations showing the price decline? Wishful thinking does not substitute for the truth.

[goldstategop]

Well if we drop the fictitious pretense corporations and businesses pay taxes, why wouldn't we not see them pass on the savings to their customers? Every one knows individuals pay taxes. That's the problem with the economic illiteracy in this country - people like to think some rich imaginary corporation will foot the bill, not them. The FairTax is revenue neutral since in the real world, the politicians are not going to give us back everything we'd like. So its understandable there are trade-offs.

(Denny Crane: "Every one should carry a gun strapped to their waist. We need more - not less guns.")

[xcamel]

Real life example is gas prices... Low gas prices, nobody complains about the profits, or how it's spent, or where the money goes. High prices, every worm comes out of the woodwork to bitch about things they can't pray to comprehend.

If the worms had been making hay getting greater energy independence (more exploration, alternate fuels, more refining) we wouldn't be suffering high prices now.

Once [government] spending is controlled by law, tax reform is a walk in the park.

[RobFromGa]

I doubt any of the anti-FT posters on here have the foggiest idea of just how much the government withholds from their paychecks

To the dollar, I know how much income tax I paid, it's one line all added up on a tax form each year. And how much I withheld is shown as a YTD amount on every paystub.

I doubt that a single FairTaxer can estimate to within 25% what they paid in cumulative sales taxes last year.

[RobFromGa]

people like to think some rich imaginary corporation will foot the bill, not them.

Some people may think that, I am under no such misconception. But only C corporations pay corporate taxes and the amount of revenue collected as income and payroll taxes dwarfs the corporate taxes.

I am in favor of eliminating all corporate taxes within the present system, along with spending reductions.

[xcamel]

I would bet they do, and every nickle too. Otherwise, they wouldn't be nearly as skeptical of the fair tax, and willing to bank known patterns of human behavior against the concept. If it sounds too good to be true, it is, and when the hair stands up on your neck, you'd better pay attention.

Please note I did not say limiting spending is a reason not to change taxation. I said spending must be limited before meaningful tax reform can even begin.

Anyone who robs Peter to pay Paul can always count on the support of Paul...

[goldstategop]

It stands to reason that when a plethora of taxes are eliminated, this should reduce the cost to businesses. Instead of having to factor taxes into the prices, they can set the price they think it would be in the absence of all those taxes before the FairTax comes into play. And don't forget market competition and where consumers spend their dollars. What I'm talking about isn't wishful thinking but rather patterns of human behavior and economic rules that have driven life for thousands of years. We really don't know if taxes will rise under a FairTax system. No, I don't think it will be a low-tax utopia but it will be a lot better than what we have in place today.

(Denny Crane: "Every one should carry a gun strapped to their waist. We need more - not less guns.")

[RobFromGa]

It stands to reason that when a plethora of taxes are eliminated, this should reduce the cost to businesses

But they aren't removing a plethora of taxes. The primary taxes that are being removed are being given to the employees in the form of "keep 100% of your paycheck". I've listed the taxes that will be removed and they don't add up to even 10%. Let's see your analysis rather than your platititudes.

We really don't know if taxes will rise under a FairTax system.

We do know they plan to start by adding a 30% tax on every retail purchase, that is a tax rise.

[Principled]

We do know they plan to start by adding a 30% tax on every retail purchase...

No, they plan to start by eliminating the taxes that the nrst will replace. Further, the tax is not on every retail purchase.

[lewislynn]

Well if we drop the fictitious pretense corporations and businesses pay taxes, why wouldn't we not see them pass on the savings to their customers?

I guess you're going to ignore the fact that I said my customers would pay (30%) MORE for my service not less...what savings are you talking about exactly?

I would still have to pay tax when I spend my money...That's why they call it a "replacement" tax.