Skip to comments.Fair Tax Personal Calculator
Posted on 08/17/2005 4:28:06 PM PDT by witchypooy
Like the Boortz book? Intrigued with the FairTax HR25?
Try the Fair Tax Personal Calculator at www.pafairtax.org/calc.php
It will calculate what you will pay in FairTax if your spending choices remain about the same, using all the "tax free" spending deductions that FairTax allows under HR 25. Put in a few figures describing your current spending/savings habits. Only dollar figures are asked for and your family size for the rebate calculation. No private info, no info on where you work etc, it's totally anonymous.
Then take this figure and compare it to your current income tax paid in 2004 PLUS your FICA paid in 2004. Remember FairTax eliminates both income withholding and payroll (FICA) taxes and replaces both with the 23% inclusive sales tax. To make an honest comparison therefore, any income tax plan including any Flat Tax proposed, must have the 7.65% FICA added to it to be compared to the 23% FairTax rate. This means the most popular 19% Flat Tax must have 7.65% FICA which will remain in place, added to its rate to be charged to the taxpayers, for a grand total of 26.65% inclusive for the first year of HR 1040 The Flat Tax. Compare this to the 23% inclusive FairTax rate. Get the picture?
Of course the Flat tax has a standard deduction for tax free spending similar to the FairTax rebate system. The Flat Tax proposed also gives a deduction for gifts to charities, but limited to only those charities approved by the Government. Finally, the Flat Tax does give a deduction on taxes paid on the interest portion of your mortgage.
But since FairTax gives you tax free giving to any and all charities or persons, regardless of who or what they are, and gives you mortgage and other loan payments tax free for both principal and interest, and gives you totally tax free savings and investments at any amount level YOU choose, and gives you tax free education payments cradle to grave, and gives you totally tax free state tax payments of any and all kinds, and gives you tax free "used" purchases, most of you will see a tax savings under FairTax. The tax savings you see will be made up in the sales taxes paid by the 24 million illegal aliens, 48 million tourists, and $1 trillion underground economy, all of which exist today totally tax free.
Check it out. I think you will see that about 90% of all Americans will benefit economically under FairTax. However, 100% of all Americans will benefit by FairTax reestablishing the freedom and liberty to control your own life and your own destiny.
pa state director - fairtax
Hey, witchy, how's this deal looking up on the hill????
As long as there are Democrats lurking in the halls of Washington, D.C. the "Fair Tax" will always be nothing more than a VAT.
The VAT is a stoooopid idea. We already have a similar concept with corporate income taxes. Corporations should NOT have to pay income taxes. The consumers of goods and services should UNDERSTAND what their costs of goods and services are. Again, Economics, Accounting, Finance 101 are in order to anyone who does not understand simple logic.
I agree - the VAT is a terrible idea. However, one need look no further than the socialist systems of Europe to see how the liberals over there LOVE the VAT.
Impose the Fair Tax here and the liberals will turn it into a European style VAT.
pin g for later review
this method would save me substantially in my present situation where i am retired but not yet drawing social security. next year when the wife and i begin to draw our social security, it will cost me much more than i am paying now. this plan taxes social security and that should not happen since it has already been taxed. not only does it tax social security that i am drawing but it requires people drawing social security to pay into the plan while they are drawing from it if they have any other income of significance. something needs to be done about this or it will never fly.
If you would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer for additional information:
Impose the Fair Tax here and the liberals will turn it into a European style VAT.
The current corporate income tax/ payroll tax combination is much closer to a Euopean style VAT than a retail sales tax ever will be. In fact, with a retail sales tax only system there is no infra-structure in place on which to build a VAT. That is why even though 45 of 50 states in the US have retail sales taxes not one has yet successufully implemented a VAT from their retail sales taxes.
You want to avoid a VAT better look at corporate/business income taxes which are virtually indistinguishable from a subtraction method VAT the close kissing cousin of full Credit/Voucher system VAT of the EU.
"Under the WTO definition of the term, a sales tax is an indirect tax, as is an European-style VAT. The economic equivalence of an European-style VAT and a subtraction-method VAT is well-established. A subtraction-method VAT is essentially identical to a business income tax except that all purchases of plant and equipment may be expensed, rather than depreciated as under current U.S. law."
And every man woman and child in the nation, pays federal taxes through that VAT.
DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation
Definition [ http://www.encyclopedia.com/articles/13330.html ]:
levy imposed on businesses at all levels of production of a good or service, and based on the increase in price, or value, added to the good or service by each level. Because all stages of a value-added tax are ultimately passed on to the consumer in the form of higher prices, it has been described as a hidden sales tax. Originally introduced in France (1954), it is now used by most W European countries.
The current income/payroll tax structure now in place is a subtraction method VAT, in that it is a levy imposed on businesses at all levels of production, it is passed on to the consumer hidden in the price of goods and services
Issue: What Is the Best Way to Collect a Value Added Tax?
A value-added tax (VAT) generally is a tax imposed and collected on the value added at every stage in the production and distribution process of a good or service. Although a VAT may be computed in any of several ways, the amount of value added generally can be thought of as the difference between the value of sales and purchases of a business.
Several administrative systems could be used for a VAT: the credit-invoice method, the subtraction method, and the addition method. The credit-invoice method has been the system of choice in nearly all countries that have adopted a VAT. A subtraction-method VAT is also known as a business-transfer tax. The addition method is a mirror image of the subtraction method and will not be discussed here.
Credit-Invoice Method VAT. Under the credit-invoice method, a tax is imposed on the seller for all of its sales. The tax is calculated by applying the tax rate to the sales price of the good or service, and the amount of tax generally is disclosed on the sales invoice. A business credit is provided for all VAT taxpayers on all purchases of taxable goods and services (that is, on inputs) used in the seller's business. The ultimate nonbusiness consumer does not receive a credit for his or her purchases. The VAT credit for inputs prevents the imposition of multiple layers of tax on the total final purchase price. As a result, the net tax paid at a particular stage of production or distribution is based on the value added by that taxpayer at that stage of production or distribution. In theory, the total amount of tax paid with respect to a good or service from all levels of production and distribution should equal the sales price of the good or service to the ultimate consumer multiplied by the VAT rate.
To receive an input credit, a business purchaser generally is required to have an invoice from a seller containing the name of the purchaser and the amount of tax collected. At the end of a reporting period, a taxpayer may calculate its tax liability by subtracting the cumulative amount of tax stated on its purchase invoices from the cumulative amount of tax stated on its sales invoices.
Subtraction-Method VAT. Under the subtraction method, value added is measured as the difference between a business's taxable sales and its purchases of taxable goods and services from other businesses. At the end of the reporting period, a rate of tax is applied to this difference in order to determine the tax liability. The subtraction method is similar to the credit-invoice method in that both methods measure value added by comparing sales to purchases that have borne the tax.
The subtraction method differs from the credit-invoice method principally in that the tax rate is applied to a net amount of value added (sales less purchases) rather than to gross sales with credits for tax on gross purchases. A business's tax liability under the credit-invoice method relies on the business's sales records and purchase invoices, while the tax liability under the subtraction method may rely on records that the taxpayer maintains for income tax or financial accounting purposes.
Further the Flat Tax is a VAT in the manner in which it transfers tax onto the consumer from business which is taxed at all stages of production and passed on to the consumer hidden in price of retail goods an services.
"Robert Hall, one of the originators of the proposal(Flat Tax), who describes his Flat Tax as, effectively, a Value Added Tax. A value added tax taxes output less investment (because firms get to deduct their investment.)"
"The Flat Tax differs from a VAT in only two respects. First, it asks workers, rather than firm managers, to mail in the check for the tax payment on that portion of output paid to them as wages. Second, it provides a subsidy to workers with low wages."
The Flat Income Tax (FIT) proposal, H.R. 1040, has two elements: a Flat Income Tax on an individual's earned income, and a VAT on businesses. The Flat Income Tax on businesses, is, by admission of Professors Robert E. Hall and Alvin Rabushka, who "wrote the book" on the FIT, a subtraction method Value Added Tax.
Quoting Hall and Rabushka ("The Flat Tax," Hoover Institution Press, 1995, pp55,56):
"To measure the total amount of income generated at a business, the best approach is to take the total receipts of the firm over the year and subtract the payments the firm has made to its workers and suppliers. This approach guarantees a comprehensive tax base. The successful value-added taxes in Europe work this way. The base for the business tax is the following:
Total revenue from sales of goods and services
purchases of inputs from other firms
wages, salaries, and pensions paid to workers
purchases of plant and equipment."
this plan taxes social security and that should not happen since it has already been taxed.
Actually it doesn't as the Social Security is indexed for CPI which includes sales and excise taxes, not to mention the fact that the FairTax legislation expressly mandates in law that the Social Security index must include the effects of the retail sales tax implemented under the FairTax as well.
This is above and beyond the FCA sales tax rebate that all legal residents receive regardless of income or actual expenditure.
Tax aint fair.
One should avoid wine and strong drink. It can cause you to shoot at tax collectors..... and miss......
Not a chance.
This is at least the fourth time you've posted this. How many times do you plan on posting the same thing?
Corporations do not pay taxes. They pass the cost of the tax onto the consumer. These are essentially hidden taxes.You need to read up on tax incidence. There are three ways a corporate tax can be passed on. As higher prices, as lower wages, or as a lower return for the investors/owners. Higher prices are probably the least likely way they are passed on.
Thanks to Clinton, your Social Security is taxed under the present system. This is basically a sales tax so you can control your tax rate by controlling your discretionary spending.
Hopefully, as many times as necessary until the FairTax becomes the tax law of the land.
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