Fair Tax - Straightening Out Some Confusion

Nealz Nuze ^ | 9/15/2005 | Neal Boortz

[SolidSupplySide]

The first thing I'm doing is setting up a business. A miserable failure of a business that will allow me to buy stuff tax free.

Looks like you're a dynamic economic thinker.

[ancient_geezer]

Gotta be a better way than a prebate.

Alternatives

1) let Congress & lobbiests decide what to except from sales tax playing the same games the do today with income deductions and tax credits.

2) no rebate no exceptions in products and let liberals kill any chance of passage for taxing them poor folks.

3) require folks to track purchases and report them to the government to claim refunds or report household income to qualify for special treatment, issue tax exception cards etc. (keeping an IRS in family finances)

4) treat each citizen the same and rebate sales taxes by an an amount based on household size rather than qualifying by income or wealth.

5) Other, please specify your poison.

[SolidSupplySide]

This way the government is not sending a $300 checks every month to every bum in this country keeping him supplied with wine and crack.

Do I have an incentive under the rebate scheme to claim more kids than I have?

[goldstategop]

The point is there no TANSTAAFL under ANY tax system. The Fair Tax simply brings all the formerly hidden taxes out in public sight. You know exactly how much your tax bill's gonna be. It doesn't take an army of accountants to figure it out for you. Perhaps that's why accountants and lawyers loathe the Fair Tax. They'd have to look for more honest work.

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)

[Eagle of Liberty]

Hmmm....

I am actually guessing one of the reasons why the prebate is included is to specifically tackle #2.

I don't like any of those alternatives. Can't we just exempt all food and call it even?

[ancient_geezer]

The first thing I'm doing is setting up a business. A miserable failure of a business that will allow me to buy stuff tax free.

And let yourself be audited frequently for compliance as businesses under a retail sales tax get to do.

Then find yourself rapidly classed as a hobby under such circumstances and endup paying the tax owed as a consumer rather than a business operating for a profit.

[goldstategop]

No one can be disadvantaged under a Fair Tax. That's the point in the level that's set. You could set it a lot lower but it won't fly in the real world. Politicians will never support putting the government on a diet. Just ask Tom DeLay about his punch line.

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)

[SolidSupplySide]

And let yourself be audited frequently for compliance as businesses under a retail sales tax get to do.

Man, it's gonna take an army of IRS agents to audit every person to see if their tax information is legitimate. Sounds like what we have today.

[Dead Corpse]

Are you still trying to deny what even Boortz has admitted?

That is like the MSM trumpeting that Bush admitted he was at fault for the Katrina SNAFU.

Keep it up. You are making us look GREAT!

[goldstategop]

Excellent point. In our free market economy, employers want to attract and keep talented people. If they pay them less, its the employer who loses. So I don't believe the claims of Fair Tax opponents employers would pay their employees less than they do now. When it comes to getting paid for one's work, workers also have the power to decide for whom they will work.

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)

[Dead Corpse]

You don't have to register for the prebate. If you don't want the check, don't apply for it.

Try that with the current IRS and see how far you get.

[SolidSupplySide]

Excellent point. In our free market economy, employers want to attract and keep talented people. If they pay them less, its the employer who loses.

Doesn't that apply today?

[ancient_geezer]

I am actually guessing one of the reasons why the prebate is included is to specifically tackle #2.

Yes it is.

I don't like any of those alternatives. Can't we just exempt all food and call it even?

You mean congress gets to define food, and the more food exempted the higher the tax rate on everything else?

Is caviar food? or maybe those non-nutritional fat producing hamburgers should be classed as a health risk instead of food, or ...

Looks like a great way to create an endless opening for special interest legislation to me.

[Dead Corpse]

Let's see.... audit a couple million businesses? Or audit a couple hundred million income tax payers AND businesses? Which would be smaller?

Keep it up. You too are doing your part to make the Fair Tax look awesome.

[Always Right]

Do I have an incentive under the rebate scheme to claim more kids than I have?

Yes, the rebate goes up with family size. They did eliminate the marriage tax penalty, perhaps because of me. Each child claim must have a SS#, which will reduce the chance of two or more people claiming the same kid as their dependant.

[goldstategop]

Yes. Remember a consumption tax puts power into the hands of workers and consumers. If they're not paid well, government revenues suffer and businesses lose profits from not being able to sell their good and services. So there's an incentive to make sure people are able to buy the things they need and corporations make a profit and the government is funded. After an initial period of uncertainty, considering its advantages, we'll wonder how we ever got along without the Fair Tax in the first place.

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)

[SolidSupplySide]

Yes, the rebate goes up with family size. They did eliminate the marriage tax penalty, perhaps because of me. Each child claim must have a SS#, which will reduce the chance of two or more people claiming the same kid as their dependant.

So that sounds about the same as the income tax, too.

[rolling_stone]

....I see how you completely avoided answering how may collection points there are for each system. obviously 80% fewer collection points will be easier to police under a Fair Tax.....

You are caught up in static economic analysis. A change in the tax code will cause people to change behavior. Many people will create business out of their hobbies to acquire a sales tax exemption certificate.

No I am not caught up in a static analysis, you are caught up in resisting change. There will be adjustments and changes in behavior as with any law, but that is true now, look at how popular large SUVs were because of the depreciation deductions..look at other social engineering in the current law. Under the Fair tax there will be no social engineering and people will buy what they need and not for tax purposes. There will be some people trying to abuse any system, but it will be far easier to catch less people than more people.

Dynamic economic analysis suggest the number of collection points will increase as well and the number of sales tax exemption certificates. Both developments will increase the amount of fraud.

What makes you think the amount of fraud will increase from what we have today? Have your read the analysis of expected fraud? It seemed to me to have been well taken into consideration.

[SolidSupplySide]

There will be some people trying to abuse any system, but it will be far easier to catch less people than more people.

There will be less people under a Fair Tax?

[rolling_stone]

Less collection points...