"Fair Tax"

I have heard that most of you do not like Mike Huckabee. Some of the reasons I have never heard of and i will research them. Regardless of how you feel about Mike Huckabee what do you think of the fair tax? go to FairTax.org if you've never heard of it, but given the group of people on this website I'm sure nearly all have.

I agree that it has to be an immediate transition from income to consumption tax as politicians cannot be trusted to let the income tax expire .

I have no more reason to trust that they wouldn't raise the Fair Tax rate than that they would go back on a detailed plan showing the consumption rate rate going up each year while the income tax rate goes down each year.

I see the advantages of a consumption tax, but you can't change the rules of the game so drastically at one point in time without there being as many harmed by the change as those that benefit. Don't expect much public support if you're going to tell those people that they need to just suffer the consequences, that it's in the best interest of the country as a whole.

Let’s assume an individual has saved $100,000 that has already been taxed over the years under income taxes. Assume that the average tax on it was 17%. So the double taxation argument is that the saver has been penalized $17,000 if we go to a consumption tax vs the person who has not saved. Under the income tax system, the interest earned, dividends and capital gains on those savings would continue to be taxed.So if someone earns on average $5000-$8000 income or capital gains annually on his $100,000 savings, he would be paying approx $1000 to $1300 annual taxes on the savings, possible a lot more in those years where he may get a 25% return in the stock market. The Fair Tax system supplants all other taxes so that the person who saved would no longer pay any taxes on the income earned on his $100,000 savings.The question is how long it will take him to recoup the $17,000 from no longer having to pay taxes on those savings. There would come a point where he would not only recoup it but will actually have saved more in taxes on the savings than the $17,000.It will not be immediate, It will take a few years.But keep in mind that food and medicine are exempt from the Fair tax and this saver will not be spending the $100,

“…We need a new strong freshman class in 2010…”

And there in lays the rub; the same types playing the game of differentiation, is it black strips over white or white strips over black, or just a horse of a different color…

If a percentage tax system worked well, the government would have done it a long time ago! Remember the American taxation system is designed for government to maintain control over the populace as income management, while reaping the most to maintain their lifestyles. The system as designed is not about ‘service’ to the citizenry, just a process to the county. And can be framed in terms of just being Machiavellian.

The only way to remedy this is to ‘vote out’ ‘all incumbents’ ‘every cycle’, forcing them to work productively and eliminate the Slush-fund Distribution and Manipulation System if they want to keep their jobs. Then on the other hand the government education and propaganda system has been designed to dumb-down the country’s publics to the lowest common denominator perpetuating the chaos.

I think the Fair Tax is the answer to many issues and its enactment would put the economy back on track spurring massive economic growth with job growth swelling. Having said that, it is a political pipe dream. Unless we elect a Tea Party type President and 60% of each house in Congress is populated by Tea Party types it is going nowhere. The Dems will fight it tooth and nail as well as big government Republicans.Dems attack the few Tea Party candidates that advocate it as people who are opposed to deductions for charitable contributions.They do not mention that there would be no deductions for charitable contributions because there would be no income taxes to deduct them against.

With exemptions and deductions, people don't pay any taxes on $5,000 to $8,000 in income and just because somebody gets a $25k gain in the stock market doesn't mean they'll have a taxable gain that year. How many years does it take to recover the loss? What do you get when you divide $17,000 by zero?

I'd be very much in favor of going to a consumption tax and getting rid of income taxes, but only if it's transitioned in over a period of a few years. I've pointed out my reasons in previous posts on this thread.

As it stands right now, it seems like the support the Fair Tax has is probably made up of 1) a handful of people that would most benefit from the change (specifically, people with little to no savings and higher tnan midpoint incomes), and 2) people who don't think any more deeply into the issue than "We're gonna get rid of the IRS! YEEHAW!!" I'm guessing that isn't enough to make it even remotely likely to become law.

You cannot have a law changing the constitution and changing the tax code in the same law. You have to have 2 separate bills. One changing the constitution to not allow an income tax. Number two pass the fair tax bill. Most fair Tax supporters have it number one passing the fair tax and number 2 amending the constitution. I do disagree with them there. The fair Tax abolishes the IRS, but without the constitution change it can come back. Also some have pointed out that the fair tax may double tax savings being spent and that is an issue of concern of mine. All in all i still say the Fair tax is better than the current tax.

Lessee...why don’t they talk about it? The IRS is the tool of the financiers to decide where they rape the public next. Carbon tax...healthcare....home mortgages..No politician is ALLOWED to threaten the IRS.

The next scam has to do with that little 1099 that now has to be filed for every transaction over $600.00. All “they’re” doing is looking for the economic sector generating the most S600.00 forms...they’ll then figure out how to rape that in the next 24-48 months.

The IRS is not a friend to the American people.

There are some on this site that hate Huckabee so much they refuse to listen to a good idea.

I've seen a lot of Fair Tax threads over the years, and a lot of posts on those threads, and I can't remember a single time that anybody said "Huckabee's for it, so I'm against it."

I've seen logical arguments made for it and against it on it's merits, and after weighing all the arguments, I'm coming down against it, as it's currently proposed.

Your assumption is that there is zero taxes on income on the savings because the interest income is small. Interest income and dividends are only part of a taxpayers overall income. If a taxpayer who has saved $100,000 also earns W2 salary income of $70,000, ALL his income, both active and passive, will be taxed at the same rate.So if his average tax rate on all his gross income, both active and passive, after deductions is 17%, then he is paying a 17% tax on the interest and dividend income as well as salary income.
Having said that, although I do not think it ideal, politically if it takes a transition period of say 3 years where the income tax brackets are reduced by 1/3 each year while they phase in 1/3 of the consumption tax each year,I think most Fair Tax people would accept that as I reluctantly would to get it passed

Interest income and dividends are only part of a taxpayers overall income. If a taxpayer who has saved $100,000 also earns W2 salary income of $70,000,

For practical purposes of gauging political support, there are a ton of people that are retired. Those people aren't going to have that $70k of earned income you're factoring into your argument. They've got a Social Security check and whatever they've got in savings to cover the rest of their needs, including spending down the $100k savings over the rest of their lives.

I think most Fair Tax people would accept that as I reluctantly would to get it passed

I've seen precious little evidence of that. With a few exceptions of people speculating that others might be reasonable in that regard, most just say that the income tax etc have to be eliminated entirely on some date coincident with the implementation of the Fair Tax.

You make a fair point about retirees. I too am a retiree who has 6 figure savings and social security and pension check. I am still for the Fair Tax.I really like the idea of compunded tax free growth on my savings in the future.
For low income retirees with savings as well as all low income folks the Fair Tax proposal has prebate provisions that reimburse low income earners for the Fair Tax they have paid for the year. Actually low income folks with savings may be in the best position to benefit.I am not sure of all the mechanics of the prebate but it is responsive to the concerns of low income retirees with savings.

I think a consumption tax has great potential for making US production competitive in the world marketplace. My biggest issue with the current proposal is the insistence on making it an instantaneous changeover. As I pointed out in post 42, I don't see any other outcome from doing that than the destruction of our economy. A free market economy is built on the assumption of each of the people doing what they perceive as being in their own self interest. If the majority of the people see it as being in their interest to buy as much as possible before the consumption tax goes into effect, and as little as possible after, that's what you're going to get. Tell people the price of something will go up 23% next week or next month, and they'll buy before the price increase. People will be spending as much money as they can put their hands on, chasing a dwindling supply of goods. Production and inflation will be astronomic leading up to the implementation of the consumption tax, and then crash to the point of going into a coma. The economy will go down to the point that it won't be selfsustaining.

In order to avoid that, it is necessary to ease into it. People won't make radical changes in their spending decisions based on a two percent change in the tax, so implementing the consumption tax replacing the income taxes over a period of ten years gets us where we want to eventually go, while not destroying the economy in the meantime. Plus, that gives people in or approaching retirement the opportunity to rearrange their own finances to take advantage of the new tax approach without being severely punished for the offense of saving their money over the years.

I was not referring to you. I was referring to the guy who called huckabee a word I’m not sure were even aloud to post. And two others. You were one that i thought had reasonable concerns. I’m sorry if you thought i was talking about you. Actually of all the people on the post that were against it you were the only one that made sense.

I was not referring to you. I was referring to the guy who called huckabee a word I’m not sure were even aloud to post. And two others.

I don't know that anybody would have even brought up Huckabee if you hadn't done so in your initial post to create the thread. Like I said, I've seen a lot of posts discussing the subject of the Fair Tax, and I don't recall seeing any that considered Huckabee's support of it as a factor in deciding whether they were going to argue in support of or in opposition to it.

Actually of all the people on the post that were against it you were the only one that made sense.

I think most of the people I've seen making good arguments against it over the months and years have decided they've got better uses for their time. I don't come on the Fair Tax threads very often either. Too often, the Fair Tax supporters will simply ignore questions they don't choose to acknowledge. After awhile, you just get tired of trying to have a debate with somebody that essentially puts their fingers in their ears and says "Lalalalala, I can't hear you!". I've posted comments along the lines of my post 42 a few times in the past, and I can pretty much count on being able to click the "View Replies" button and seeing "No replies". Comments by people addressing the unfairness of the effect on senior citizens living off their savings are quite often answered with derision of those "greedy seniors" standing in the way of what's best for the Fair Tax supporters.

I agree.For me, the primary advantage of moving to a consumption tax from a production tax is the explosion of economic growth it will engender in the US. The US has the second highest corporate tax at 35%. IF US companies producing offshore have no corporate tax to produce in the US those jobs will return to the US, lower the cost of production, and make US manufactured products domestically and globally competitive. It will feed on itself, more job growth freeing up more consumer spending that will be purchasing goods made in the USA rather than overseas.
Although I think it is risky to have both income and consumption tax in place, it would be worth the risk to get it passed. I do not think it needs to be phased in 10 years perhaps phased in at most 5 years considering the obsolesence of consumer goods.The buying of goods before the consumption tax takes place is the bigger issue.I do think the retirement planning issue is more of a psycholgical issue than a real one because there will be no income or estate taxes to have to plan for after the law takes effect. They will not exist.

By the way, when I speak of “the Fair Tax supporters”, I’m speaking not of you, but of the dozen or so people that come on pretty much every Fair Tax related thread to tell each other how great it is. IMO, you’ve shown some willingness to consider that there may be arguments against it too, and that the spin you get on the Fair Tax site may not tell the whole story.

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