There is No Such Thing as a Fair Tax

Ludwig von Mises Institute ^ | 12/12/2005 | Laurence Vance

[nopardons]

I'm for the Flat Tax as well. What those here who want a VAT don't understand, is that a VAT would be far worse than anything they say about what we have now and those who want to go back to tariffs, have no idea how ruinous that would be for our economy and themselves.

[nopardons]

But "essentials" to whom? Who is the judge of what is and what is NOT "essential"? And no, one size doesn't fit all!

[nopardons]

Exactly and it won't be just the wealthy, who figure out how to get around this VAT garbage.

[lewislynn]

The amount of tax paid regardless of which rate is used -- 23% inclusive tax rate or the 30 exclusive tax rate -- is exactly the same.

Except you can't know the inclusive amount to pay unless you use the exclusive rate.

The inclusive rate is only useful to the person/business remitting the tax to the government....

-What was your "gross payments" received for taxable property or services?...send 23%-.

If the business didn't know to collect 30% ON the transaction, s/he'd be up sh!t creek when s/he remitted "23% of the gross payments".

The law clearly wasn't written with the consumer in mind. The tax paid/due by the business (not the consumer) is (as the law dictates) "23% of the gross payments".

[lewislynn]

Or profiting from the current system.

Well that says a lot doesn't it?

Anyone making a legitimate profit while still capable of paying income taxes on them is an evil person to you Fairtaxers?

[Paul C. Jesup]

lewislynn: Anyone making a legitimate profit while still capable of paying income taxes on them is an evil person to you Fairtaxers?

There is nothing 'legitimate' about a income tax code designed to be so complicated that it is impossible to truly comply with every single regulation in said income tax code and as thus is it used to hurt hard working american citizens for no other reason than for sadism.

One of the major reasons why Fairtax is so popular is that it is designed to be so simple that even a trained monkey can comply with it.

[Shalom Israel]

As I have repeatedly stated, NO tax reform will ever work until the excess spending of government is gotten under control.

Exactly. As long as we're being robbed for trillions, it hardly matters whether we're being robbed at gunpoint or knifepoint--whether they're stealing our wallets or our TV sets.

[Shalom Israel]

For example, the more expensive stuff that you have, the more you should pay to protect it.

Exactly why law enforcement should be privatized.

[Shalom Israel]

There is no 'used good problem'. Used goods simply aren't taxed.

Which, as the article cogently points out, becomes a massive incentive to reclassify items as "used". For example, is a rent-to-own contract a new or used purchase? I know what I'd do: rent a car for a month, return it, and then offer to buy it. Likewise for furniture, consumer electronics, etc. Video stores will clean up by stopping to sell new videos, and instead rent every video out once before selling it used.

[Shalom Israel]

SEC. 804 deals in part with not allowing a leased item being sold to circumvent paying the tax on the value of a new product.

You realize of course that there are plenty of ways around that. For example, I and my neighbor can each rent a car, and then each buy the other's car used from the agency. You'll be surprised how inventive self-interested humans can be.

[Shalom Israel]

This is so simple! Even an under-worked, over-educated idiot should be able to understand it. If I don't make any purchases on new goods or services I won't have to pay any tax.

Factor food into the equation. To avoid all taxes, you'll need to hunt or grow your own food, make your own clothes, etc. The same is already true today: if you start a self-sufficient farm, you'll pay no income taxes.

[Shalom Israel]

"The principal amount shall be determined to the extent possible by examination of the contemporaneous sales price or prices of property the same or similar as the leased property."

You realize what a massive bureaucracy you've just created? Instead of assessing the FairTax on the actual sale price, it must now be assessed on the "fair market price" as determined by the enforcers of the FairTax itself. So it isn't a sales tax at all; it's an ad valorem tax similar to property taxes, and requires an assessor's office similar to the property appraiser.

[Your Nightmare]

Your "Lie # 1" section is completely absurd. Your claim that the fair tax would not be voluntary is way off the mark. You ask "what happens if someone decides that they don't want to pay any taxes to the federal government?" Then you reply with: "The same thing that happens now: fines and imprisonment." Fines and imprisonment could occur if someone buy or sells goods without charging or paying the tax. As is pointed out in the book, that requires two parties (the buyer and seller) to consciously avoid the system.

First, I didn't write this. Second, it does not require 2 people to cheat the FairTax. The buyer or the seller could do it, easily, by themselves. As a seller I could collect the tax and not remit it. As a buyer I could provide a business-use certificate to purchase a product that is for personal use. As a buyer I could also order from out of the country and not remit the tax.

The FairTax is easily cheated.

[Gaffer]

My "crux of the problem" problem with FT is it's premise that in order to sustain viability for the low incomed among us, everyone (and I'm not sure that includes the more well-off, either) would receive a rebate equal to the "minimum existence" level, thereby effectively allowing them to pay no taxes at all. That's subsidation just as we have now in the form of EIC payments, FDIC payments, Section 8 rent payments, and on and on and on. This same sort of crap will eventually infiltrate it's way into any FT because those people can still vote.

[fooman]

my point. Again, i am sympathetic to running the gov on retail sales and excise taxes. But it is clear that if the sales tax is too great there will be large incentives to dodge it.

[fooman]

Reducing the size of government needs to be factored into the equation.

[Wolfie]

Ouch. That's gonna leave a mark.

[Allan]

bump

[lewislynn]

There is nothing 'legitimate' about a income tax code designed to be so complicated that it is impossible to truly comply with every single regulation in said income tax code and as thus is it used to hurt hard working american citizens for no other reason than for sadism.

Well that says a lot doesn't it?

Anyone making a legitimate profit while still capable of paying income taxes on them is an evil person to you Fairtaxers?

[pigdog]

Well, Nightie - you've found your ideal frothing-at-the-mouth hit piece replete with misstatements and innuendo, haven't you? Someone with a personal animus vs Boortz, it seems, which makes it all the more vituperative. If you don't think that's the case, then read it more carefully.

I'm tied up for a short time on other affairs but will certainly be responding to this sort of nonsense a bit later on in detail. It really sounds like nothing but collecting all the lies and other trivia you SQLers have been trying to spread and putting them into one hitpiece that is replete with distortions, misinformation, and some outright lies as well.

In this case, nothing like attacking the messenger to make him a bogeyman and thereby try to reflect discredit on the FairTax. This is really no different that what the naysayers have been doing all along for several years now. Vance merely seems to be another johnny-come-lately to your party. You Squirrels should certainly welcome him into your little anti-FairTax clique with open arms (but certainly not open minds).

No doubt other FairTax supporters will be refuting this hitpiece in the meantime, but more later ...