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To: ancient_geezer
Perhaps you would express the current income/payroll tax system rates in the same manner that leads the non-legalistic cistizen to believe he is paying up less than what he really does in your manner of measurement.

You must have me confused with someone who supports retaining the IRS and the current income tax, I don't. I just don't think this alleged fairtax is the proper way to go about bringing control to taxes or lowering them.

But, since you brought it up, isn't this taxation supposed to be a lower tax on us all? If so, how is it "revenue neutral?" That means the same exact amount of taxes will be paid into the government coffers, giving relief to the taxpaying minority, which obviously is the top one percent of wage earners today. Selling this alleged fairtax as a 23% sales tax and mentioning 'inclusive' in the same breath is legalese, designed to mislead the population that they will be paying less money than before. Obviously, that isn't so, else wise the fairtax.org site would prominently mention it is actually 30 cents on the dollar, not hide the truth that it is actually 30 cents on the dollar near the bottom of their FAQs.

I thought this was supposed to be a "simple" method of taxation? Why not just simply mention to potential supporters it is actually 30 cents on the dollar?

785 posted on 08/07/2005 4:22:29 PM PDT by DakotaRed
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To: DakotaRed

But, since you brought it up, isn't this taxation supposed to be a lower tax on us all?

No, , for it taxes those who now escape the income tax obviously, (e.g. underground cash economy, foreign "visitors" to the U.S., even hi wealth/low income types such as those living off taxfree interest that otherwise escape the income tax net.

The FairTax does however, provide lower effective rates to those who now pay income & payroll taxes certainly.

A lower rate of taxation for those now paying taxes is accomplished by broadening the the tax base.

The broader the tax base, more persons directly participate in the tax system assuring that all segments of the electorate are knowledgible of the burdens that excessive government impose upon all.

If so, how is it "revenue neutral?"

A broader tax base, coupled with a more efficient and growing economy assures the same revenue amounts to government at lower rates overall as the current very economically inefficient income/payroll tax system does with much higher impositions on a much smaller base.

Selling this alleged fairtax as a 23% sales tax and mentioning 'inclusive' in the same breath is legalese, designed to mislead the population that they will be paying less money than before.

Sorry, but most who now actually participate in the current tax system will indeed benefit from the FairTax system with its overall lower effective tax rate with regard to gross incomes as a result of the use of the FCA sales tax rebate mechanism:

To illustrate, compare the tax burden that a family of four with two wage earners, paying Fair Tax & receiving the FCA sales tax rebate would experience at various annual expenditure levels (assuming no savings or investment) compared to that same family paying income and SS/Medicare taxes under 2004 federal tax law & recieving standard deduction, personal exemptions,child credits, and EITC). Where gross expenditure is presumed to equal gross income under the Fair Tax system. When gross expenditure for consumption is actually less than gross incomes due to savings and investment out of income, the FairTax rate will actually be lower than that shown:

 

If you do not see the graph, click here

H.R.25 "The FairTax Act

 

I thought this was supposed to be a "simple" method of taxation? Why not just simply mention to potential supporters it is actually 30 cents on the dollar?

Because it "actually" is NOT as is demonstrated above. 23% of gross expenditure is actually the maximum marginal rate that anyone will pay. Their effective and real tax rate taking FCA sales tax rebate into account is "actually" much much lower for over 90% of todays taxpayers.

793 posted on 08/07/2005 5:38:46 PM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: DakotaRed

"I thought this was supposed to be a "simple" method of taxation?"
In its curent form, the FairTax bill is less than 200 pages and it replaces a system which, according to CCH, has now grown to more than 60,000 pps. In relative terms, there is no doubt that the FairTax qualifies as "simple".

"Why not just simply mention to potential supporters it is actually 30 cents on the dollar?"
I always explain the tax inclusive/exclusive issue to people when I explain the proposal now. As far as your suggestion, the 30 cents on the dollar depends on which dollar you are comparing it to - the pretax price of the item, or the total aftertax price. The reason that we don't just call it a 30% sales tax (as the SQLs would love) is that it leads to the misunderstanding that the same taxes paid under the FairTax would be at a higher rate due to the historical differences in rate calculation. It would introduce a subtle bias in favor of income taxes into any analysis, which is, of course, exactly what the SQLs want.


824 posted on 08/08/2005 8:14:43 AM PDT by phil_will1 (My posts are in no way limited or restricted by previously expressed SQL opinions)
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