Posted on 01/23/2011 7:27:20 AM PST by jmaroneps37
When my financial advisor gave me a lot of caveats about the new Fair Tax surfacing in Congress, what I really heard him saying was, “You can’t trust government.”
The unintended consequences of the proposed Fair Tax are pause for alarm because “when they sell a Fair Tax, they don’t tell you about other taxes” that will conveniently remain on the books.
“In theory if the government says they’ll take away all other taxes, do they?”
The Fair Tax is a misnomer in Europe. The income tax was not abolished when they added a VAT value added tax or Fair Tax. The problem is, they are suffocating the average European citizen.
A United Kingdom VAT of 17.5% on top of a 50% income tax totals a 67.5% fed to the amorphous blob; in France: VAT 19.6%, income tax 40%, total 59.6%; Greece: income tax 40%, VAT 25%, total tax 65%; Spain: VAT 16%, income tax 45%. In Sweden a 25% VAT plus a 55% income tax results in an eye popping 80% tax individuals feed to the government wow! Denmark’s 83% is even worse!
”The United States is heading right down the same path,” my advisor tells me. Initially our current administration looks to propose a minuscule amount of only 1% or 2%, just like Europe started out imposing. Our 14 trillion dollar debt load is not sustainable, but he stresses VAT economies are deeply mired in gargantuan debt loads as well.
The American notion of hard work and perseverance enables anyone to get ahead here. “Do you think that can ever happen with tax rates between 60% to 80%?” he asks.
What would our lives be like with the European model of Obama’s redistribution of wealth? Consider never being able to buy a home....
(Excerpt) Read more at coachisright.com ...
He no longer needs a tax accountant. None of the the businesses he frequents needs a tax accountant. The cost of government is reduced by ALL COSTS associated with the IRS (both sides of the table).
Fair Tax will be 23% the first year. Then . . .
25% the next year
27% the year after
30% the next
an up and up, and up and up . . . .
'cause no matter what tax system is in place, government cannot be trusted.
Never used a tax accountant in my life. Please tell me where today we can get a “10% (for ease)” ROI with any kind of retirement risk level?
Pure FT cultist drivel. In the long run we are all dead.
"we will need to accept the responsibility and acknowledge that there will be some pain"
OK, how about you give me 2 year's worth of your gross income? I'm sure that will be just "some" pain.
The neat thing about the Fair Tax re: your concerns is that it offers an easy reference point for politicians:
“If elected, I think we can get by on only 22%, not 23% taxation.”
“My opponent says he will spend 22%. We can run the gov’t on 20%!”
I think it will bid the cost of government down. Add to that the fact that ending the lobbyist hold on Washington (the tax code is their tool) will break up the current system.
Also add the fact that a single percentage representing taxation will allow services not Constitutionally authorized to be sent back to the States: “HHS and education costs 5% of the 23% we tax. Beginning next year, we will reduce the tax to gov’t by 1% and the expense of HHS/Ed by 20% (1% of their total 5%) with the expectation that the States will begin to pick up both the tax and expense burden of this service. We will reduce 20% a year (1% of the 23% pool of total fed taxes) for five years. At the end of five years, gov’t taxation will be 17% at the federal level and the fedgov will provide none of these services. We expect some of that to be offset by they States as the pick up the total cost and service of HHS/Ed. Of course, the States are free to determine for themselves the costs and services they wish to provide.”
This is a mechanism to begin to shift domestic affairs back to the States. Whether used or not, it’s clearly a better deal for States than a lobbyist backed and protected tax code that shifts power to Washington.
The bottom line is that the Fair Tax shifts power away from Washington. For me, that is its biggest draw.
The FT is theft, just like the IT.
If you can’t think beyond your immediate needs nothing will change and you can just live with the increased taxes coming your way. Have fun!
Btw: you would be terribly disappointed with all of my “gross income” in the next two years. I am retired and living off the money I “grossly earned” in the past.
IMO anyone who thinks that the FT wouldn’t be compromised into existence without dropping the amendment requirement is delusional. And, once its apparatus is implemented, the way is paved for a greater aggregate tax load—which is what the Dems always want.
Prima Fasce - False .
So, how about 5% or 25,000 per year after tax - still not bad.
By the way, in the absence of tax on interest / dividends / cap gains the effective yield on all investments goes up a bunch - hence the munis (historically).
One of the dirty secrets of tax deferred retirement accounts has been that bracket creep has been increasing your eventual marginal tax rate every year.
My immediate and always present need is to minimize theft from me through taxation. I don’t see the FT lowering my taxes. As others above have stated, the populace’s energy needs to be put into lowering gov’t spending. If the highest marginal income tax marginal rate were to be 2%, who would care about the FT vs. the IT?
A Fair Tax will morph into a VAT before it ever gets enacted in the first place and such is much easier to raise and harder to decrease than the income tax system we have now. I think we should start all over with the income tax we have and statutorily make it a FLAT 10% of earned income with NO exemptions or deductions at all at the same time eliminating all business taxes. Couple that with a reform of Social Security to make it at least what Chile has and the economic boom that would be triggered would make any boom in the past look puny in scope and longevity.
Add to that the elimination of the Fed and institution of a monetary policy oriented only to stable prices, such as with a real gold standard and the US would not be considered by anyone any more to be in danger of slippage in the world. All that would not be a permanent cure because the Congress and the judges and the agencies would continue fiddling and twisting but it would give the nation a tremendous breather and a terrific boost economically upward. It would give us a lot of margin again.
Very few people actually pay the highest income tax rates. And not all of what remains after income tax reductions is used in a way that generates VAT. The author distorts to make a point.
I used to think I owned my home but property taxes ensures I don’t...
“The Fair Tax is NOT a vat tax.”
So true. There is a big difference. The proponents of the Fair Tax plan for it to replace the payroll tax and all income tax even on Corporatations. So you would pay a sales tax on any “new items” you purchase. There would be no sales tax on a used car or a pre-owned home. This is different from a VAT tax which is a progressive tax. Everyone would get a “pre-bate” check at the first of every month to re-imburse them up to the poverty line so that the poor are not unduly burdened. The VAT tax hits everyone and is in addition to all other taxes including the income tax.
Total unadulterated bullcrap!
When current after-taxed savings are spent they get taxed again by the federal taxes currently embedded into consumer pricing from the Income Tax Code.
Those embedded taxes have been estimated again and again independently to be on the average 22%. That means a saver’s spendings are taxed twice, once by the income tax and once by the federal tax burden embedded into retail pricing.
The only difference under the FairTax is that those embedded taxes are no longer hidden, they are transparent for all to see.
Just because you choose to ignore that which you do not see but which clearly exists is not a valid objection against the FairTax.
The FairTax is SUPERIOR for all savings made after its enactment because it taxes savings ONCE as opposed to taxing savings twice under the current Income tax code and by the accumulating, passing on and embedding into prices the federal tax burden to consumers.
Most people have been misinformed deliberately by the few that feel threatened by the FairTax Code, namely the more than 25,000 tax lobbyists that make their living on trading tax favors.
K Street has managed to amend the IRS Tax Code more than 17,000 times since the last major tax reform in 1986.
The number of tax lobbyists has more than quadrupled since 1986.
These tax lobbyists bribe lawmakers in the same way that certain industries and corporations bribed the Obama people to obtain exemptions in the Obamacare legislation.
K Street hates the FairTax because it is too transparent and it requires the 16th Amendment to be repealed. Without the 16th Amendment the corruption in DC will be decapitated.
The FairTax is not enacted unless the 16th is repealed; end of story.
Does the definition of politics as ‘the art of compromise’ ring any bells for you?
You have a link?
The only difference under the FairTax is that those embedded taxes are no longer hidden, they are transparent for all to see.
Prices don't change and I get to keep 100% of my paycheck? And the government raises the same revenue? Sounds great!!! Or a perpetual motion type scam.
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