Why Seniors Support the FairTax

Americans for Fair Taxation ^ | October 2004 | Americans for Fair Taxation

[sandviper]

Rip off the old folks they're going to die anyway. Screw you we paid and you played!!!!!

I don't care how far you have to cut back spending I want my money and benefits. If you can't be trusted meet your obligations we might as well be living in some open dictatorship. That we are even discussing this is a disgrace.

[nj26]

"Just as "Social Security" is a massive transfer of wealth from younger to older Americans???"

Don't confuse the issues. The "Fair Tax" has nothing to do with reforming Social Security.

[nj26]

"Define income."

How about payroll wages? Minus some very commonly agreed-upon deductions?

If you enact a 30% sales tax, you don't think a black market for goods will emerge? Remember Prohibition? Federal agents didn't stop liquor from flowing, and they won't stop black-market computers and tv sets from travelling from Tijuana to Los Angeles, where you could buy them on the street for a 30% discount to the price at Circuit City or Best Buy.

Enforcement would need to be massive with a "Fair Tax."

[RVN Airplane Driver]

Where is it written in stone that the tax would be 23%? I have also heard 18% bantered about... Also on a $77.00 purchase the tax @ 23% would be $17.71...at least where I went to school that's what I was taught....

[Principled]

The "Fair Tax" has nothing to do with reforming Social Security.

ehhh?

It changes the base! The SS tax base would no longer be regressive. There would be no limits. It would be more stable. It would end the SS/MC crisis we now face.

[nj26]

"It would end the SS/MC crisis we now face."

The reason why we have a SS "crisis" is because we have too little revenue, and too many obligations.

Shifting the tax burden will not solve the "crisis" unless benefits are cut. So, if the "Fair Tax" is ending the crisis, then the "Fair Tax" must be increasing government revenue (i.e. increasing taxes.)

[robertpaulsen]

"They further mislead the reader stating that seniors would ... have to pay tax on drugs, hospital, and nursing home care, as well as doctor visits."

Has something changed? I thought all of the above were going to be taxed. What's going on?

[Remember_Salamis]

The FairTax taxes consumption: the best measure of one's ability to pay.

Taxes paid as a function of some concept of annual taxable income or adjusted gross income or net income is the way in which the Democratic staff would prefer to look at the distribution of taxes. However, it is a flawed way.

Often wealth – which itself may or may not be a fairer determination of one’s ability to pay – is not even captured in the income tax. Individuals rich in personal wealth may have very little income. That is because wealth is defined in assets that they hold – their homes, properties, securities, collectibles, and other items – which may or may not have been earned by them and which may or may not generate income. These wealthy individuals can often choose whether or not to create taxable income, since they can restructure their affairs to avoid receiving current taxable income. Far more than the poor or the middle class, the wealthy have the ability to control income flows (as we legally define it) appreciation vs. consumption. It is one of the reasons why Mrs. Kerry paid at a tax rate that is less than a college student on a summer job.

How much income someone happens to make in any given period is, at best, an incomplete measure of one’s ability to pay. In individual cases it is not even roughly accurate. Proponents of a consumption tax propose that there is no greater measurement of the equity of a tax system than what one individual consumes for their own personal well-being over the course of their lifetime. When you think about it, why would we ever tax income in the first place? Why punish what we need – work, savings, production, and self-sufficiency? If, instead of consuming his income, a rich person gives his money to charity or builds a job-producing factory, why should we punish that choice by taxing it?

We should tax what people take out of the economy for their own personal use, not what people produce for society. That's exactly what the FairTax does.

If income is not consumed, then it is either saved or invested or provided to charitable causes (or government) to fund the consumption of others. The return on savings and investment will either be used to fund future consumption or reinvested to increase productivity and output. If it is saved or invested and is not profitable, it has at least been available to the economy. If we tax income and savings, we have simply taxed deferred consumption. And those that are deferring consumption are doing so because they elect not to consume it for themselves immediately, but to make the resource available for others.

[teletech]

My wife and I are retired supporting ourselves and our one son. The way I read this, I would get a rebate up to the Federal poverty level? What about state sales taxes? They aren't affected and would remain in place? Here in The Peoples Republik of Illinois, our sales tax rate in DuPage County is just under 7%. So I would pay roughly a 30% tax on all purchases!? Doesn't sound good to me.

[Remember_Salamis]

If you don't mind me asking, do you own your own home? And if so, is it paid off?

[nj26]

"So I would pay roughly a 30% tax on all purchases!?"

As I understand it, the "Fair Tax" would be a 30% federal sales tax (or 23% of your income, if you spend all of your income on consumption.)

So you're looking at a 37% sales tax in Illinois.

The "Fair Tax" benefits people who don't spend all of their income. It's a consumption tax. If you have a lot of money left over at the end of the month, it will be good for you. If you don't have a lot left over, you'll probably pay more.

[teletech]

If you don't mind me asking, do you own your own home? And if so, is it paid off?

Yes, and yes.

[teletech]

So you're looking at a 37% sales tax in Illinois.

And Seniors on a fixed income would support this plan!? WHY!

[Always Right]

Where is it written in stone that the tax would be 23%? I have also heard 18% bantered about... Also on a $77.00 purchase the tax @ 23% would be $17.71...at least where I went to school that's what I was taught....

That would be what you think, but what I said was 100%accurate.

[nj26]

"And Seniors on a fixed income would support this plan!? WHY!"

Wealthy seniors that don't spend most of their income would support it.

It all comes down to how much of your income you spend.

[socialismisinsidious]

when you buy an item now you are paying taxes on that item--imbedded payroll, SS taxes that the company has to pay.
there is no transfer of wealth but there is a better, fairer way...sorry that it was not thought of sooner

[nj26]

"when you buy an item now you are paying taxes on that item--imbedded payroll, SS taxes that the company has to pay.
there is no transfer of wealth but there is a better, fairer way"

There are imbedded taxes on items you buy today. Employers have to match employee's social security contribution at 7% of income.

But employees are paying 20-35% income tax and 7% payroll/SS tax. That part isn't embedded today.

So prices might fall a little (due to no employer match of SS contribution), but not more than a few percent.

[teletech]

Wealthy seniors that don't spend most of their income would support it.

It all comes down to how much of your income you spend.

I'm NOT wealthy and what little income I have I usually end up spending. I fail to see how this plan would help seniors like me on fixed incomes.

[lewislynn]

It is also going to decrease to 20% inclusive/25% exclusive next year.

Is a 25% sales tax rate supposed to excite us?

[socialismisinsidious]

why would you think that it isn't embedded today...how can one tell? I can't see a "producer" paying any amount of tax and not passing that onto the "consumer"