Posted on 01/26/2023 4:41:48 AM PST by Hostage
How can I show that I paid for my TV with saved money vs. my paycheck when its all coming from the same account?
Didn’t the IRS rule that savings on price was actually unearned taxable income?
Um..... someone needs to buy a clue.
You are one of those that didn’t read NUMERO UNO in the body text.
When you have read it, come back and argue your point against a wall.
Under the FairTax, you ain’t getting taxed anymore than you do now.
Hint: when you buy that 2 X 4, the price it sells for already has taxes in it that you don’t see. All the FairTax does is bring those hidden taxes out into the open.
If you want to hate on the FairTax in an intelligent way, go read #22.
The sales tax is also on new items only.
I’m referring all questions to you now. I’m blue in the face.
That would only make sense if you were getting the discount in return for your labor or in barter.
AND ONLY WHEN THE IRS IS ABOLISHED!
and the amendment repealed.
and the tax is collected on new purchases only...
i like it.
hahahaha
flat tax is how this all started.
have the states collect for the feds and let the feds and states sort it out as to how much the states keep.
Read #43 for a general answer.
To the specific situation, say for example a farmer sells a chunk of his land to purchase a new tractor. That tractor price has a lot of embedded taxes in it that were paid to produce it and are passed on to the buyer.
So the farmer is paying a price that has hidden taxes in it.
After the FairTax is passed, a new tractor won’t have those embedded taxes. The farmer can apply for exemption from FairTax by claiming and documenting that a pre-FairTax equity sale was used for the purchase.
After a number of years in transition from Income Tax to FairTax, these type situations will disappear.
If you got an itch to hate on the FairTax, read #22 above.
FairTax does just that, precisely. It delegates federal tax collection to the States.
The VAT REQUIRES a special government bureaucracy that determines what each step in the manufacturing process increases the product ‘value’ then taxes the ‘added value’
The consumer pays an 18% VAT at the end (this is on top of all other taxes collected along the way)!
The Fair Tax, the Flat Tax ELIMINATE the need for another government bureaucracy.
The VAT is even worse than we have now!
That would be key to implementing a new tax system. If another tax system is installed with a parallel income tax system that is supposed to be phased out, you know the government will find some excuse to keep the income tax, too. So we'll wind up with two tax systems.
The sales tax amount seems shockingly high but also remember that you will now be getting close to your GROSS pay, not the NET pay that you are now getting with income taxes withheld. I assume that FICA will continue to be withheld, so you will not get the full gross pay amount but the typical taxpayer will get a substantial increase in take-home pay.
One of the reasons that the VAT is popular with government-types is that typical taxpayers don't know how much taxes they are paying.
OK, I’ll do some reading, but I have a sneaking suspicion the price of my 2x4 isn’t going down 25-28% after a “FairTax” is implemented. I don’t see 25% of the cost of production of finished wood products being affected by current taxes that might be eliminated by the “FairTax”. i.e. what production-related taxes would eliminated on a one-person owner wooden picture frame shop? The person mills their own wood and saws, nails & glues the frames together...where are the “hidden taxes”? In the glue chain, in the brad nail chain? 25-28% taxes built into glue & brads? I am skeptical...and why not just charge the same for the picture frame & pocket the extra profit? Many Q’s! Also ANY saved $$ I spend after “FairTax” implementation is still “double/triple” taxed (CA adds sales tax to the fed excise tax on gasoline for example) even if the retail price is reduced due to “FairTax”. The plan is only “fair” to workers just entering the workforce & earning their first paychecks. The “rebate/pre-bate” or whatever would have to be doubled or tripled for seniors/retirees to be “fair”.
So true. Nobody gets wealthy working for a paycheck.
Have you really thought this through? Because it's not just the farmer, it's hundreds of millions of Americans with any savings or investments as of the date the new system is implemented.
As of that date and forevermore they're going to have to keep those funds separate from all other income, including income from those investments.
And every purchase made with those funds will have to be documented to the taxing authorities along with proof that no post tax funds were used.
For people with after-tax retirement accounts this will be necessary for the rest of their lives.
What size bureaucracy do you think will be necessary to verify all these purchases and distribute the refunds?
A brilliant scheme that can't be implemented in the real world isn't brilluant.
And transitioning/detransitioning every 7 years is the opposite of brilliant.
No need for busy-body, do-gooder feds to know how much you earn!
Everybody pays it. Every voter sheltered from the pain is a voter unlikely to vote against more pain for others.
This would be the only true objectively 'fair' tax.
Whereas the so-called Fair-Tax is actually just another form of misguided progressive taxation. Which is only fair in certain folks entirely subjective opinion.
I remember this, and was all for it at the time.
So, here is the one pitfall in whole row of dominoes...
Take the paper towels above, this system relies on the paper towel manufactures and distributors remove and not pocketing the hidden taxes.
This is where it fails
I have not read through the current version of the legislation, but I expect, that like previous versions, each receipt would be required to break out the federal, state, and local taxes at the bottom so that every knows exactly how much of their purchase is going to the government.
The farmer example or the saver are today purchasing products with the taxes embedded. Your argument therefore doesn’t follow unless you advocate that taxed savings shouldn’t be taxed again, but yet they are taxed again as things stand today.
Every product on the shelf and every service rendered come with embedded taxes that we don’t see and which are passed on to us. Whether we use taxed savings or untaxed income, we as consumers are paying hidden embedded taxes passed to us.
After the FairTax is in operation for a few years, no new products will have unseen embedded taxes.
There is a transition period that is unavoidable.
If a purchaser uses pre-FairTax assets to complete a consumer transaction, that consumer can be exempted from FairTax. Such transactions will be in diminishing numbers for a temporary time before coasting to zero.
These temporary period tax exemptions might compel some in Congress to call for raising the FairTax rate and that is a good thing because it would bring it out in the open. Such members will and should feel the heat.
Today’s Congress is out of control. They just a few weeks ago passed a $1.7 Trillion omnibus with a debt service going to Wall Street banks who borrowed from the their Federal Reserve at a quarter percent and lend to Treasury at 3.75%. Congress can stiff Larry Fink and Jamie Dimon.
Eff ‘em.
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