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Locked on 02/18/2008 10:17:33 AM PST by Religion Moderator, reason:
Childish behavior |
Posted on 02/16/2008 3:30:21 PM PST by xcamel
One solution to the nation's long-term fiscal problems that has gained support in recent years is the idea of replacing all federal taxes with a 23 percent national retail sales tax called the FairTax. Unfortunately, the administrative problems inherent in this proposal make it impossible to take seriously, says Bruce Bartlett, former deputy assistant secretary for economic policy at the U.S. Treasury Department.
For example, under a FairTax scheme: A worker now netting $800 per week would immediately get a $200 raise and start taking home the full $1,000 gross wage that he is paid; instead of paying income and payroll taxes, workers would pay their taxes when they buy things.
The FairTax would impose a 23 percent tax on all goods and services (this is not really correct, but for now we'll accept it at face value for analytical purposes).
Whether he is better off or not depends on what his effective tax rate is: Assuming he spends all his income and no more than that, he will be no worse off if he now pays 23 percent of his income in taxes. That is, his effective tax rate is 23 percent; in this case, the FairTax is a wash, the worker is no better off or worse off in terms of taxes than he is now.
But what if the worker is now paying less than 23 percent of his income in federal taxes? In this case, he is clearly worse off, says Bartlett: The prices of the things he buys will rise by more than his income rises from the elimination of income and payroll taxes. Conversely, if one is wealthy and in a tax bracket above 23 percent, that person would be much better off. His income and payroll taxes would fall by much more than the prices of goods and services he consumes would rise.
Source: Bruce Bartlett, "Why the FairTax Won't Work," Tax Notes, December 24, 2007.
For text:
If I pull money out of savings it won’t be for a vacumn cleaner:’) Whatever I buy though I expect to pay the 8 plus % in taxes. That is in addition to everything I pay in to IRS.
Don’t be a “stuffing your mattress” hypocrite.
bookmarked
well.. that brings up a very interesting conundrum..
item cost $77, +$23 fairtax = $100 + $8.50 sales tax which means you will be paying 1.995 sales tax on the fair tax portion, or 11.03% sales tax on the cost of the item.
Well doesn’t that just “suck rocks”...
C,mere. What’s that in your eye?
An image of irate poster hoisted on her own petard.
Adding 50 million non taxpayers might help. I don't like the prebate myself. It just creates the possibility of more fraud and deceit.
If that was their argument, I would let it go. But their argument is that everyone will have more money and prices will stay the same. The reality is, if it is revenue neutral, there will be winners and losers but overall people will be about the same. But reading the fairtax propaganda, it is the ultimate fairytale. Everyone wins big.
Income tax is avoided by working "off-the-books", by tips, by "gifts", by barter, by cash businesses, etc. Sales tax is avoided by used items, "off-the-book" sales, barter, etc. I would suspect that avoidance is driven by liklihood of being caught and the amount of the tax.
No one shops garage sales to avoid a 9% sales tax. People may buy used stuff to avoid a 30% tax. (40% if the local tax is added on top.)
That is not to say that something does not need to be done. Gas taxes are nearly impossible to avoid, VATs are difficult to avoid. Property taxes are difficult to avoid.
If it were not for the fact that government raises every tax they have, I'd like to have small taxes on everything. Alabama is taxed somewhat like this. Single-digit income tax. Single-digit sales taxes (state, county and local total.) Probably a small gas tax. Low property taxes. Somewhat low "sin taxes".
I like it because tax decisions do not control our lives.
Ok, what did I post that offended you? What's wrong with you? You usually don't post like this. Can't I have an opinion about this too?
The way I understand your example, there are no brackets...
there are two ways to interpret:
from $0 to $7,825 10%
from $7,826 to $31,850 15%
For a $30k income, the tax is either $4500 (wrong, most likely)
or $4108.75 (more likely)
I wasn't offended. YOU were the one playing the victim, not I.
I could see more bartering but that isn’t necessarily a bad thing.
They certainly are, if they are based on a percentage of total income, even if you call them "wheelbarrows"...
I see now, thanks.
Perhaps this isn't the same thinking, but I can see an argument that costs will go down due to the reduction in accounting overhead. This would be the case in my business if I no longer had to do payroll taxes.
I could also see government cost going down due to IRS. And I could see revenue increases due to taxes collected on income/expense transactions not currently collected such as black market, drugs..
Now, whether the tax rate were lowered if/when these revenue streams occurred is another question.
I also could see it being more politically popular to lower taxes (and avoid raising them) when people see and pay the tax every day.
Thanks for your reply.
“Section 103(f) of the Fair Tax Act (reintroduced in the 110th Congress on January 4, 2007) makes bartering under the FairTax a taxable event enforceable by penalties...”
http://www.fairtax.org/PDF/Lamar_Smith_rebuttal_letter1-11-07.pdf
I am a victim and so are you. You should be upset about it too. If anyone else took from us like the government does it would be robbery and people would go to jail. My biggest support for this tax is that I want people to see what is happening. Do you think a 30 or 40% tax would be accepted cheerfully? People would be furious to see what has been going on (which is why congress will fight this IMO)
http://www.fairtax.org/site/News2?page=NewsArticle&id=9493&news_iv_ctrl=1541
Just wondering if you only read articles against the Fair Tax?
Someone mentioned the other day rhat we have so many laws on the book that we probably break several unintentionally a day. Another subject though.
Those taxes compound! Do you know how many times an item is taxed before it comes to the retail market?
Where are you getting your numbers?
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