Fair Tax vs. Flat Tax

TownHall.Com ^ | 9/29/05 | Neeal Boortz and Daniel J. Mitchell

[Sprite518]

A good quick read...

[SolarisRocks]

It will also require the tracking of every purchase made on the US portions of the internet.

Something to think about.

[Smokin' Joe]

No one seems to be considering what happens when home mortgage interest is no longer deductible. From the great wailing and gnashing of teeth over motor fuel price increases, I would guess a tremendous number of households would fold if they lost this deduction....

Not to mention the loss of deductions for sole proprietorship/(Schedule C) type business.

With the change in bankruptcy laws, we'd be on our way to a new depression.

Some careful thought needs to be done, but aside from a lot of arm waving, jingoistic terminology, and rates that shuffle around like walnut hulls in a shell game, I'm not seeing it.

The bottom line: If it seems too good to be true, it probably is.

[Getsmart64]

Under this regressive "fair tax" system, the phrase "Papers, please" will soon be replaced by an equally fascist "Federal receipt, please."

Here in Italia...they have the Finanzia Policia...they can stop you within a 100 meters of a business and demand a receipt....if no receipt...a fine on the spot...

[camle]

flat tax. it's fair.

"fair tax" favors the rich.

[Sprite518]

Right now this is what is going on in the current system at a lot higher level.

What the fair tax does is transfer the wealth of the country from the government to the people. That is the bottom line. Well besides simplifying the current tax code.

[Paul C. Jesup]

I here it is 23%.

[Paul C. Jesup]

You think the sales taxes are just going to add themselves up? You think an infrastructure on par with the IRS isn't going to be created to track those sales taxes? You're fooling yourself.

Read up on something before commenting on it. Fair Tax uses a State's own retail sales tax collection organization in place at that State to collect the taxes. Plus states in the bill itself, HR-25, that is abolishes the IRS.

[Paul C. Jesup]

And you can not be audited under the fairtax? The first thing the fairtax bill does is make the consumer liable for the sales tax. If they think you owe sales tax, the new taxing authority can most certainly audit you.

I doubt you know the difference between a personal audit and a business audit.

[Sprite518]

Because the Fair Tax replaces all other Federal Taxes.

When you currently buy a 100.99 item your tax is a lot higher than 8.25%. You have already had Withholding (Federal, Social Security, Medicare) taxes taken out of your paycheck. Thus if you are in the 25% rate then you really was taxed 33.25%.

See that is the beautiful thing about withholding. We do not see it so we do not count it. Even though it has been taken out. The government made it this way because they know if Americans had to bust out a check every month for taxes....then there would be a tax revolt. However, if we cannot see it, then we act as if it never happened.

It is called the FT because that is what most people said after they read it and understood it. It treats everyone the same. Politicians cannot use it for a political without effecting everyone. In other words politicians would have a lot harder time raising taxes under this system vs. the current system where they say "we will just tax the rich"...

[Always Right]

I doubt you know the difference between a personal audit and a business audit.

Since the fairtax bill doesn't specify any differences or state any protections of audits for personal, I have no idea what you are talking about. The fairtax bill gives authority to audit persons it thinks is liable for tax, and since the consumer is liable under the fairtax, the new tax authority could ask you for every receipt for every purchase you made personally.

[Sprite518]

Look right do you know how much money is being kept in off shore accounts for tax evasion? It has been estimated to be as high as 12 Trillion! Yeah that is right with a "T"...

Under the Fair Tax since only taxes would be paid when we consume. That money would come home. That alone will probably double our economy.

Right now we already have the intrusive and invasive federal bureaucracy to eliminate said black market once it takes hold. It is called the IRS.... So what else are you talking about?

What the fair tax does is TRANSFERS THE WEALTH OF THIS NATION FROM THE FEDS TO THE PEOPLE. It will deny politicians the power to raise taxes on one group of people, or give deductions for a vote.

Under the fair tax if politicians raise the taxes it will not effect one group, but everyone. Therefore, it will be a lot harder for a politician to do. Well at least if they want to remain in office.

Right now we have an enormous

[Sprite518]

Why do you want to keep forgetting about Withholding? Oh yes because the government wants you to forget about that tax money you just paid in your pay check. Along with all other taxes such as Capital gains, Death, gas tax, etc......

[StatenIsland]

But if we actually want to get rid of the IRS and adopt a simple and fair tax system, the flat tax is the only horse that can make it to the finish line.

"Surprised to hear Neal say that. That comment is going to PO fairtaxers."

You missed it, Sprite. The post was pro Fair Tax (Boortz) vs. pro Flat Tax (Daniel Mitchell).

That was Mitchell's quote.

[Sprite518]

I know this is why the plan is tax revenue neutral. There is no free lunch.


What the Fair Tax does is transfer the wealth of the nation from the Federal Government to the people. It would probably be the greatest shift from government to the people since the American Revolution.

[RobFromGa]

When the FairTax is implemented, and when business and personal income and payroll taxes disappear, your employer is going to have to make a decision. He will either take some or the entire amount he had been withholding for federal income and payroll taxes and add it to your weekly check, or he will readjust your pay figures so that your entire paycheck will be equal to what you used to call "take home pay" before the FairTax. The employer may also decide to do a little of both. Either way, you can see that the amount of money you actually receive as pay – the amount you can put into your bank account – will not decrease, and may actually increase.

Now, let's elaborate on the "keep 100% of your paycheck" line that appears in The FairTax Book. It is certainly true that after the FairTax becomes law there will be no more withholding from your paycheck for any federal taxes. What you earn is what you get. This is not to say that your gross pay will equal what it was before the FairTax.

[RobFromGa]

that comment was by Mitchell.

[Sprite518]

Just commenting on that 15%. What blows my mind is people think tax receipts go up only in tax increases. It does in the short run but not the long run.

If government wants more tax revenue, then they should lower taxes. This allows business to hire more people thus more tax payers. Look at the Kennedy and Reagan tax cuts. In both cases the tax revenue doubled over the next 10 years...


Going back to what you wrote.. Even the Flat tax this is being advocated will still have some exemptions as the writer has indicated above. Nevertheless, I will take a Fair or Flat tax any day over the current tax code...

[Sprite518]

Yes but you will pay taxes on it if you with drawl it now?

[Sprite518]

Uh Neal did not say that... That was Daniel J. Mitchell

Just scroll up a little bit, or click the actual link where this post was copied from...

[pjd]

The most important difference between the Fair Tax and the Flat tax is that the Flat Tax is still an income tax and the IRS will still insist on haveing all your sources of income reported. Also, the government will continue to take it's share off the top, leaveing you only what it decrees. You are still a slave under the Flat Tax.

With the Fair Tax, there are no audits or reporting of income by individuals. Your income belongs to you. Uncle Sam only gets a cut if and when you spend it. And he gets it without your name attached. You are free.