Posted on 04/04/2006 2:17:28 PM PDT by Eaglewatcher
The FairTax (HR 25 in the US House and S 25 in the US Senate) is a federal retail sales tax that replaces the entire federal income and Social Security tax systems, including personal, gift, estate, capital gains, alternative minimum, Social Security/Medicare, self-employment, and corporate taxes. The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes), ends corporate taxes and compliance costs hidden in the retail cost of goods and services, and fully funds the federal government while fulfilling the promise of Social Security and Medicare.
More FairTax benefits:
No tax on used goods. No tax on business inputs. With the FairTax, if you choose to buy any new good or service, the sales tax is charged just as state sales taxes are computed today. If you choose to buy used goods - used car, used home, used appliances - you do not pay the FairTax. If, as a business owner or farmer, you buy something for strictly business purposes (not for personal consumption), you pay no FairTax. So, in deciding what to buy, you get to choose whether or not you pay the FairTax.
No federal sales tax up to the poverty level means progressivity like today's tax system. Furthermore, to ensure that no American pays tax on necessities, the FairTax plan provides a prepaid, monthly rebate for every registered household to cover the consumption tax spent on necessities up to the federal poverty level. This, along with several other features, is how the FairTax completely untaxes the poor, lowers the tax burden on most, while making the overall rate progressive. However, the FairTax is progressive based on lifestyle/spending choices, rather than simply punishing those taxpayers who are successful. Do you see how much freer life is with the FairTax instead of the income tax?
All Americans take home their whole paychecks. Not only do more Americans have jobs, but they also take home 100 percent of their paychecks (except where state income taxes apply). No federal income taxes or payroll taxes are withheld from paychecks, pensions, or Social Security checks. Retail prices no longer hide corporate taxes or their compliance costs, which drive up costs for those who can least afford to pay. Did you know that hidden income taxes and the cost of complying with them currently make up 20 to 30 percent of all retail prices? It's true. According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices - from 20 to 30 percent higher than they would otherwise be - for everything you buy.
Tax criminals - don't make criminals out of honest taxpayers. Today, the IRS admits to 25 percent non-compliance with the code. However, this does not take into account the criminal/drug/porn economy, which conservative estimates put at one trillion dollars of untaxed activity. The FairTax taxes those engaged in the underground economy capturing their income at the cash register. The substantial decrease in points of compliance - from every wage earner, investor, and retiree, down to only retailers - also allows enforcement to concentrate on following the money to criminal activity, rather than making potential criminals out of every taxpayer struggling to decipher the code.
The income tax exports our jobs, rather than our products. The FairTax brings jobs home. Most importantly, U.S. exports are not burdened by the FairTax, as they are with the current income tax. So the FairTax allows U.S. exports to sell overseas for prices 22 percent lower, on average, than they do now, with similar profit margins. Lower prices sharply increase demand for U.S. exports, thereby increasing job creation in U.S. manufacturing sectors. At home, foreign imports are subject to the same FairTax rate as domestically produced goods. Not only does the FairTax put U.S. products sold here on the same tax footing as foreign imports, but the dramatic lowering of compliance costs in comparison to other countries' value-added taxes also gives U.S. products a definitive pricing advantage which foreign tax systems cannot match.
YOU are in charge! The FairTax moves us from a system that taxes what we earn to a system that taxes what we spend. Under the FairTax, you control your tax liability, not the government. The FairTax puts "we the people" in charge of our money, and puts us all on the path to economic freedom!
To enact the FairTax and unleash the full economic potential of the U.S., we must apply Vocal and Persistent pressure on Congress each week.
Email, call or fax your members of Congress today. Send them this simple message: "Please support replacing the federal income tax code and become a co-sponsor of HR 25 or S 25, the FairTax."
The hell with rates, equal citizens should get equal bills. Say two guys get the same pay rate. one sacrifices and works Saturdays and the other does not. I say they should get the same tax bill and any extra the Saturday worker earns the government has no claim to. You by supporting a rate, keep the government punishing the extra effort. I say an equal tax amount is fair, because it doesn't punish someone for being more productive, it frees people from taxes once they have paid their bill.
Nonsense. If someone wants to sell real estate or stock investments purchased and paid for with money that was already taxed, so they can spend the money, who is going to tell them they can not?
There will be some unpleasant consequences for some, but there will be benefits for all and for our posterity and for the country.
Not just some; damned near everyone over 50 who has saved anything and don't forget their children who realize they may have to support them in the coming years if they run out of money. This is going to look like a "double tax" scam to a hell of a lot of people.
But now won't lower prices cause less taxes to be collected? Causing a need for the tax rate to increase?
Yes, I agree. We definitely need decreased spending first. THEN, a FairTax; maybe it can be set up to gradually decrease confiscation of our money over time; 20% the first year, 19% the next, and so on.
Good, then there's no need to make any special exemptions for businesses. Why make the tax code more complicated than it needs to be, other than to provide a legalistic loophole for people to create fictitious "businesses" as a way of sheltering themselves from taxes?
Whether you use a purchased item for "commercial" or "personal" use, or both, is none of the government's business.
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Yeah, I mean look how well the Fair Tax works in Europe!!
You care to tell us where in Europe a retail sales tax only system exists? I know of none myself.
I do know that sales taxes collected via business purchases(i.e. VATs) coupled with income/wage taxes are the primary focus of the EU. A retail sales tax only system is not even on their radar screen (though Russia appears to be working towards that by considering dumping their VAT and going to a retail sales tax system in its place.
Because if a business pays FairTax on an item and then sells it and FairTax is charged again, it is double-taxation.
The only way to remove embedded taxes from prices is to remove taxes from businesses. That takes all taxes out of hiding and puts them out where the consumer can see them, object to them, and demand less spending so we get lower taxes.
People can't just create a fictitious business under the FairTax and buy things tax-free. Everything they purchase is linked to the tax-certificate# that deferred the tax to retail sale. If they do not report sales under that same tax certificate# to a consumer -- and remit the tax -- or sales to another business and push the deferred tax amount onto a new certificate#, they'll be audited.
If the same amount of money is spent on tax enforcement of 20 million businesses as is currelty spent on 130 million individual tax returns, there will be scary resources devoted to auditing these businesses. This auditing will be done by the States, rather than the IRS, but it will still be scary. Remember, the FairTax removes the bookkeeping and auditing burden from individuals, but businesses are still on the hook. It is just a simpler set of rules for business: Gross sales ? How much to retail ? How much B2B ?
[Tax-deferred money like 401k does not make difference in how it is taxed - as income or as consumption]
Only if you ignore the price reduction from removing all embedded taxes from products.
Business paid taxes and embedded those taxes into the prices of products. Remove those taxes and competition will drive prices down a minimum of 10%. Add on the FairTax, and people would be paying 17% more than the old price.
So 401k money suddenly pays a maximum 17% tax (less after the FCA) compared to a max 32% that would have been owed under the income tax.
That is not an "irrelevant" difference. The 401k moeny gets a significant tax break compared to what would have happened under the income tax system.
There is no 'punishment' for extra effort. The tax is on consumption, not on production. You can produce all you want and you are not taxed until you take something from the economy.
If a millionaire and a janitor are both to be taxed at the same amount, the tax would be so low that the government couldn't even do their legitimate role (about 10% of what they do).
The income tax isn't fair because it does punish success. The flat tax does the same. Only the FairTax taxes everyone at the same visible rate.
Only when the cost of government is exposed will we have a chance of starting to eliminate the other 90% of what the government is doing.
Forgive me, I wasn't clear.
To avoid taxation now, most people put their money in one government approved plan or another and in those plans, you don't have real control of your money if you want to do something out of the ordinary.
Not everyone over 50 has money in those types of plans that you refer to and for those that do, their money is at risk every day that the current system runs.
You are looking at this and seeing a very static economy where the only thing that changes is the tax system. With this change, the economy will boom. Investments will be worth more, not less. People won't have to sell the family farm or business to pay estate taxes.
Put aside your fears and look at it closely. There will be more good to come of this than bad.
I'll bet it is a lot more that you think.
Put aside your fears and look at it closely. There will be more good to come of this than bad.
Sorry, perhaps I know too many old people, but I don't know anyone who really believes that. I would imagin they believe that one would have to incredibly stupid to believe that any good can come from getting double taxed.
Sorry, perhaps I know too many old people, but I don't know anyone who really believes that. I would imagin they believe that one would have to incredibly stupid to believe that any good can come from getting double taxed.
Sorry, perhaps I don't know enough people that believe a much more free-market orientated consumption tax is preferred over a socialist/Marxist income tax.. I would imagine that they think that one would have to be incredibly stupid to think that any good could come from the socialist/Marxist income tax.
Under the Marxist income tax products and services have about 22% embedded tax in the selling price. That means savings, when spent, are double taxed. With the FairTax it's a wash because the 22% embedded tax is removed and then the 23% FairTax is applied.
If you believe in the price reductions - I question your intellectual honesty and/or your IQ. Look at gas stations - prices go up much more readily than down.
I'm telling you that they can say anything they want to fool the little people: if they actually implement it, it will be both.
Wrong, embedded taxes includes taxes paid by the employee. Unless employee takes a pay cut (not going to happen), prices can not fall anywhere near 23%. Prices will go up, people on fixed incomes and savings will be hurt as prices rise by around 17% after the fairtax is applied. Eskimo is quite right to be concern with the fairtax, as a major part of their analysis is grossly and intentionally misrepresented.
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