Posted on 01/20/2008 6:29:07 AM PST by Man50D
During an election season, one of the first losers is the truth. The current misinformation campaign against the FairTax has been particularly virulent. Last month the FairTax was being panned by some columnists as a "crackpot scheme," even though it could be collected exactly the same way as its close cousin, the value-added tax, which is the most successful tax in the world. This month the FairTax is being vilified by various columnists as a tax increase for the middle class, even though it would provide a substantial tax cut for two-parent middle class families. Specifically, in a recent column, George Will asked, "Do you want a president (Mike Huckabee, proponent of a national sales tax of at least 30 percent) pledged to radically increase the proportion of federal taxes paid by the middle class?" Similarly, Time magazine's business and economics columnist Justin Fox wrote a blog piece entitled, "The FairTax and its big break for the $200,000-plus crowd."
The FairTax is a national sales tax that would replace the income taxes, the payroll taxes, and the gift and inheritance taxes. It would be a 30 percent sales tax on retail purchases. Since 30 cents is 23 percent of $1.30 (the amount you would pay on a $1 item), a 30 percent FairTax would cost you about 23 percent of your consumption. To help you pay the tax, you would get a prebate check or a debit card credit at the beginning of each month equivalent to the amount you would pay when buying necessities. In 2007, that amount would have been based upon $10,210 spending per adult and $3,480 spending per child.
(Excerpt) Read more at worldnetdaily.com ...
Cite the items lacking in the transition plan.You mean besides actually having no transition plan?
But this thread isn’t about SS or INS.
I haven’t figured out whether or not the FT actually benefits me financially, therefore I’m not for it (or against it) for those reasons.
My support is simply because it is actually a more voluntary system to pay for taxes, those who consume more at retail will pay more (lol...their fair share!) and (generally) money won’t be taxed two, three, four times.
`(a) General Rule- The Social Security Administration shall provide a monthly sales tax rebate to duly registered qualified families in an amount determined in accordance with section 301."
I'd say the SS admin IS germane to the discussion.
I'd guess that the Federal road tax on fuel will be itself taxed. Sweet deal for the gov't.
I don't see anything on how revenue will be affected by the huge buying binge towards the end of the year before the switchover. I know I'll be buying a year's worth of Diesel w/o the tax.
SEC. 902. TRANSITION MATTERS. `(a) Inventory- `(1) QUALIFIED INVENTORY- Inventory held by a trade or business on the close of business on December 31, 2008, shall be qualified inventory if it is sold-- `(A) before December 31, 2009; `(B) by a registered person; and `(C) subject to the tax imposed by section 101. `(2) COSTS- For purposes of this section, qualified inventory shall have the cost that it had for Federal income tax purposes for the trade or business as of December 31, 2008 (including any amounts capitalized by reason of section 263A of the Internal Revenue Code of 1986 as in effect on December 31, 2008). `(3) TRANSITIONAL INVENTORY CREDIT- The trade or business which held the qualified inventory on the close of business on December 31, 2008, shall be entitled to a transitional inventory credit equal to the cost of the qualified inventory (determined in accordance with paragraph (2)) times the rate of tax imposed by section 101. `(4) TIMING OF CREDIT- The credit provided under paragraph (3) shall be allowed with respect to the month when the inventory is sold subject to the tax imposed by this subtitle. Said credit shall be reported as an intermediate and export sales credit and the person claiming said credit shall attach supporting schedules in the form that the Secretary may prescribe. `(b) Work-in-Process- For purposes of this section, inventory shall include work-in-process. `(c) Qualified Inventory Held by Businesses Not Selling Said Qualified Inventory at Retail- `(1) IN GENERAL- Qualified inventory held by businesses that sells said qualified inventory not subject to tax pursuant to section 102(a) shall be eligible for the transitional inventory credit only if that business (or a business that has successor rights pursuant to paragraph (2)) receives certification in a form satisfactory to the Secretary that the qualified inventory was subsequently sold subject to the tax imposed by this subtitle. `(2) TRANSITIONAL INVENTORY CREDIT RIGHT MAY BE SOLD- The business entitled to the transitional inventory credit may sell the right to receive said transitional inventory credit to the purchaser of the qualified inventory that gave rise to the credit entitlement. Any purchaser of such qualified inventory (or property or services into which the qualified inventory has been incorporated) may sell the right to said transitional inventory credit to a subsequent purchaser of said qualified inventory (or property or services into which the qualified inventory has been incorporated).
Who's to say (as has been pointed out many times above) that Congress won't be dinking around with the FT year after year? The FT is guaranteed to be in force for 50 years? Who's bonding that guarantee?
LOL, I've suspected that FTers are not the type to have a long planning horizon. Isn't a week less than the time between paychecks for most people though?
The FT is just a scheme by HDTV mfgrs to spike sales in a year or so.
Breaking laws when it comes to taxes could be a little more painfull than ignoring the speed limit.
I think when folks out here talk about all these Tax plans they need to take into account the end result because it may not look anything like the current plans.
Fair enough since the FT will use an existing system to handle the prebates, IMO tying the bloated SS benefit program to the Fair Tax is not productive if tax reform in dependent on benefit reductions.
Again, IMO a separate topic.
It sounds to me that you will defend the status quo regarding the IRS and income taxes unless you get your changes in everything else at the same time.
And since that won’t happen, you’re still defending the status quo.
Neal is a pain in their butts, isn’t he?
He is one of the few commentators with whom I can disagree but still appreciate his viewpoint.
Bzzzt. The EITC isn't universal like the prebate welfare scheme.
How is a prebate welfare in your book?
Would you still consider it welfare if it came at the end of the period instead of the beginning?
Do you consider income tax refunds welfare?
It's not a rebate and it is not dependent on how much the taxpayer paid in taxes. It's a welfare payment, pure and simple.
By the way, the President’s Advisory Panel on Federal Tax Reform found that the national sales tax rate would have to be at least 34 percent to bring in the same revenue as the programs the “fair tax” would replace.
It also found that the “fair tax” plan would create the largest entitlement program in American history.
Welfare implies something for nothing.
Anyone buying retail will pay taxes. Rebate or prebate is a return of a portion of those taxes.
Do you have an objection to people getting their tax money back?
Or is there fear that since *maybe* some might ‘get over’ on the system, then the whole system is bad?
No. I understand that I will pay under the Fair Tax as I now pay under the income tax. What I also understand is that the cost of my services are now borne first by the client; borne secondarily by the consumer to the extent that the client can pass the buck. Under the Fair Tax, the cost of my services will be borne by the consumer. The cost of administering the tax is built into the rate. Apparently you are unable to comprehend the difference.
Then they've adapted well to your preferred method of taxation.
I guess you MISSED the portions of the Bill labeled “TRANSITION MATTERS” and “phase out of existing taxes.”
SEC. 902. TRANSITION MATTERS.
`(a) Inventory-
`(1) QUALIFIED INVENTORY- Inventory held by a trade or business on the close of business on December 31, 2008, shall be qualified inventory if it is sold—
`(A) before December 31, 2009;
`(B) by a registered person; and
`(C) subject to the tax imposed by section 101.
`(2) COSTS- For purposes of this section, qualified inventory shall have the cost that it had for Federal income tax purposes for the trade or business as of December 31, 2008 (including any amounts capitalized by reason of section 263A of the Internal Revenue Code of 1986 as in effect on December 31, 2008).
`(3) TRANSITIONAL INVENTORY CREDIT- The trade or business which held the qualified inventory on the close of business on December 31, 2008, shall be entitled to a transitional inventory credit equal to the cost of the qualified inventory (determined in accordance with paragraph (2)) times the rate of tax imposed by section 101.
`(4) TIMING OF CREDIT- The credit provided under paragraph (3) shall be allowed with respect to the month when the inventory is sold subject to the tax imposed by this subtitle. Said credit shall be reported as an intermediate and export sales credit and the person claiming said credit shall attach supporting schedules in the form that the Secretary may prescribe.
`(b) Work-in-Process- For purposes of this section, inventory shall include work-in-process.
`(c) Qualified Inventory Held by Businesses Not Selling Said Qualified Inventory at Retail-
`(1) IN GENERAL- Qualified inventory held by businesses that sells said qualified inventory not subject to tax pursuant to section 102(a) shall be eligible for the transitional inventory credit only if that business (or a business that has successor rights pursuant to paragraph (2)) receives certification in a form satisfactory to the Secretary that the qualified inventory was subsequently sold subject to the tax imposed by this subtitle.
`(2) TRANSITIONAL INVENTORY CREDIT RIGHT MAY BE SOLD- The business entitled to the transitional inventory credit may sell the right to receive said transitional inventory credit to the purchaser of the qualified inventory that gave rise to the credit entitlement. Any purchaser of such qualified inventory (or property or services into which the qualified inventory has been incorporated) may sell the right to said transitional inventory credit to a subsequent purchaser of said qualified inventory (or property or services into which the qualified inventory has been incorporated).
AND
SEC. 301. PHASE-OUT OF ADMINISTRATION OF REPEALED FEDERAL TAXES.
(a) Appropriations- Appropriations for any expenses of the Internal Revenue Service including processing tax returns for years prior to the repeal of the taxes repealed by title I of this Act, revenue accounting, management, transfer of payroll and wage data to the Social Security Administration for years after fiscal year 2011 shall not be authorized.
(b) Records- Federal records related to the administration of taxes repealed by title I of this Act shall be destroyed by the end of fiscal year 2011, except that any records necessary to calculate Social Security benefits shall be retained by the Social Security Administration and any records necessary to support ongoing litigation with respect to taxes owed or refunds due shall be retained until final disposition of such litigation.
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