Posted on 12/31/2007 7:13:27 AM PST by shrinkermd
...Mr. Huckabee, along with Republican presidential rival Rep. Duncan Hunter (Calif.), has endorsed what proponents call the "FairTax," which they say will allow the government to dispense with the Internal Revenue Service.
...First, the 23 percent figure is disingenuous. If the current price of a widget is $1, a 30-cent sales tax would be added at the register under the FairTax. Because 30 cents is 23 percent of $1.30, backers of the tax claim that the tax rate is 23 percent. In addition, to make the claim that the tax would bring the same amount of money into the Treasury, FairTax proponents assume that the government is paying tax to itself on its purchases.
...The Presidents' Advisory Panel on Tax Reform -- that's President Bush's tax panel -- calculated that the rate would have to be at least 34 percent, not 30 percent, "and likely higher over time if the base erodes, creating incentives for significant tax evasion." Brookings Institution economist William Gale puts the rate at 44 percent -- and his calculation doesn't take into account cheating, for which there would be ample incentive.
...Finally, the FairTax would hit the middle class the hardest. Consumers would receive a monthly "prebate" on expenditures up to the federal poverty level, providing a cushion and probably even a modest benefit for those with the lowest incomes. The top earners, those with incomes greater than $200,000, would see significant tax cuts. So who makes up the difference? It's likely that taxpayers with incomes in the middle range -- about $40,000 to $100,000 -- would pay more. And they call that a FairTax?
(Excerpt) Read more at washingtonpost.com ...
The Fair Tax abolishes the income tax.
Who says that the tax on the $1 widget is going to be 30 cents? If the rate is 23%, the tax will be 23 cents, bringing the total to $1.23. I seriously doubt the Fair Tax bill advocates taxing the tax as well.
The really neat thing about a consumption tax is that you can save when you don’t need to consume. It puts your level of taxation in your control. Want to live large — pay the tax. Want to save — live small.
If it's not abolished by constitutional amendment, it will be back in ten years.
I would never vote for Huckabee, but this is a gross distortion of the Fair Tax. First of all, the income tax is now embedded in the cost of everything you buy. If that tax went away, the base price of the good in question would be lower. The final total at the register would theoretically be the same as it is now. Maybe lower, since businesses would no longer have to recoup the cost of compliance.
And as far as cheating goes. It is hard to imagine that there would be more cheating than there is now. The current system is so complicated even those trying to comply usually don’t get it right.
Ditto. The amendment must go fist.
Nope, it's $1.30. The tax is 23% of the gross. So for a retailer to get $1.00, he has to collect $1.30 under the fairtax.
The only way to get those embedded taxes out of the cost of goods is for all employees to take a pay cut in the amount of tax they pay. The embedded taxes includes all income taxes paid including those taxes paid by employees. Without wage reductions, the fairtax analysis falls apart.
So, you'd pay less for goods, less (zero) in income tax and get a prebate? And the government would get the same revenue? Are you sure about that?
The tax is 23% of the gross. So for a retailer to get $1.00, he has to collect $1.30 under the fairtax.What a stupid way to write a sales tax.
Checking out the sponsors and co-sponsors, there are only two Democrats that support it. All the rest are Republicans. Also, there are many Republicans that don’t support it, unfortunately. Shows how deep in the hole this country is getting.
Something that certain folks simply cannot allow!!!
So, you'd pay less for goods, less (zero) in income tax and get a prebate? And the government would get the same revenue? Are you sure about that?
The “Fair Tax” is most Un-Fair to retirees and those near retirement. They paid have already paid the income tax on the money they have saved and now will have to pay the Un-Fair tax again on those savings when they spend it.
Only if employees agree to reduce their wages. Otherwise those hidden taxes remain in the cost of goods. The embedded tax analysis done for the fairtax included ALL income and payroll taxes too, not just corporate and business taxes.
And what would keep black markets from appearing to avoid 30 cents on the dollar tax. Not including State and local sales taxes. I would go to Canada to buy my products to avoid the tax.
Ummmm, there would be NO INCOME TAXES with the Fair Tax/Consumption Tax plan. There goes your wage reduction theory.
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