[xcamel]

3...2...1...

[A Balrog of Morgoth]

Might want to do something with the thread heading.

It’s a mess.

[CitizenUSA]

One thing the Fair Tax proponents never seem to discuss is the psychological disincentive a massive sales tax would have on the economy. Most people, intentionally, have no idea how huge the tax burden really is. The Fair Tax would certainly make the tax burden more apparent, but what impact will a 23% (most likely much greater) sales tax have on the market? I can only speak from personal experience, but I would be less inclined to spend if everything had a 23% tax on it (even if my take home pay was larger). Perceptions are important. Right now, the tax burden is hidden.

[Man50D]

The first such myth is that the rate would need to be set at 23% in order to raise enough money to run the federal government. Not so fast. Under the proposal if you buy a $100 item the tax would be $30. Most of us would describe that as a 30% tax. But proponents would have us believe that the tax rate should be calculated by dividing the tax amount by the total purchase price including the tax. So divide $30 by $130 by and you get 23%. That is truly fuzzy math at its finest.

This article loses all credibility with this statement. Fair Tax opposer's are deliberately leaving out one very important fact. The Fair Tax ill eliminate the hidden/embedded 23% Corporate income taxes and associated compliance costs known as the inclusive rate. The $100 item will then cost $77 and the $23(100*.23) will be the tax rate applied externally to the $77 as the tax exclusive rate of 30%. Consequently the price will remain at $100.

This is the same old tired, disingenuous argument that has been used for a long time but people who actually read about the Fair Tax know better. More information can be found at The Americans For Fair Taxation website. Fair Tax ping!

[camle]

thank you, for the post. More people need to wake up and smell the snake oil.

[xcamel]

truth ping

[RangerM]

the typical middle-income North Carolinian who earns about $34,000 per year would pay an additional $3,800 in federal taxes

Using the author's numbers if you take $3,800 and divide by 0.23 you get $16,522

34,000-16,522 = $17,478

Assuming this person is single and has no children (although not the "typical North Carolinian is) his/her prebate allowance is $10,210 (ie no taxes paid on this amount)

This means a difference of $7,748, including $1,720 paid in FairTax. $1,720 + $3,800 = $5,520 total Federal Tax

Assuming NO FEDERAL INCOME TAXES PAID AT ALL, and using only Payroll taxes, this person paid $2,550 (NOTE: This ignores the employer contribution, which under the fairtax doesn't exist, and is can be given to the individual)

$5,520 - $2,550 = $2,970

This is a good bit shy of $3,800.

If we INCLUDE the employer contribution (as we should) to the amount of Federal tax paid, then the total is $5,100.

[NOW LET'S LOOK AT THE CURRENT SYSTEM INCLUDING INCOME TAX]
Assume an single individual who made $34,000 last year. According to the 2007 tax tables his standard/personal deductions are: $5,350 + $3,400 = $8,750.

His taxable income is approx $34000 - 8750 = $25,250.

Therefore his Federal income tax is $3,224 (rounding down).

So in conclusion:
Current system $5,774 (total Payroll/Income Tax)
Current system $8,324 (total Payroll/Income tax incl Employer contribution)
FairTax system $5,520 (total)

Where's the $3,800?

[snippy_about_it]

FLAT TAX people. It’s the only truly FAIR tax.

[BufordP]

Bruce Bartlett on the "Fair" Tax Proposals, by Linda Beale

Why the FAIR Tax won't work, by Bruce Bartlett

There IS one thing I'll say good about the FAIR Tax. It would likely make small government conservatives out of the yellow-dog Democrat "working" poor. They would quickly tire of watching all their income being eaten by federal sales taxes. (Hardly made up for with monthly rebate checks.) "You want to lower the tax rates? Stop voting for socialists!"

[Daveinyork]

http://libertyunbound.com/archive/2003_04/welber-tax.html

[LibLieSlayer]

Like Rush says... whether you like it or not... a snowball has a better chance in hell than this pipe dream. I cannot envision any Congress doing away with the IRS... aint’ ever going to happen. Some may try... but corruption is deep in DC and America grows dumber, lazier and more socialist... ain’t going to happen in our lifetimes.

LLS

[sergeantdave]

“This brings me to the third myth – that a 30% rate would be adequate to run the federal government.”

This socialist reveals herself. What she’s really worried about is that the pig bureaucrats and thieving politicians won’t have enough money to run the criminal fascist syndicate occupying Washington.

Whenever the current Marxist applecart tax system is threatened, the socialists and others who leech off the system come out screaming.

My solution to cut taxes and business costs is simple - fire every fascist/Marxist federal bureaucrat who’s not involved in national security.

[avacado]

The so-called fair tax is a regressive tax and we do not need the federal government handing out a monthly (rebate)allowance for toothpaste, bread, and shoes. What a completely crappy idea to have "bread lines" in the greatest free enterprise country in the world!

I suppose a FLAT TAX is just too simple a concept?

[Turbopilot]

[Paladin2]

"Better yet, imagine adding $4,500 for every $10,000 paid in college tuition."

The "FT" makes tuition exempt in direct opposition to the claims that there are no exemptions.

[MrB]

1) Same old pissin’ match about “inclusive vs exclusive rate” instead of “the government should or should not tax INCOME, the measure of what you provide to the economy”.

2) Class warfare about “the rich not paying as high of a percentage of their income as the poor”.

3) Concerns about the pre-bate. Seriously, it’s NOT THAT HARD TO UNDERSTAND!

[steve-b]

The allegation that a 30% rate is sufficient relies on some strange assumptions such as requiring government to tax its own spending

The government already collects income tax on its own spending (i.e. federal employees and contractors pay income tax), so how is this assumption "strange"?

[Little Ray]

As my dad used to say “Son, who ever promised you ‘fair?’”

Besides, what is so “fair” about the current system, with a tax court where the plaintiff is guilty until proven innocent? Where the people in charge of running are not able to correctly fill out their own taxes?

I’ll take the Fair Tax.

[Bryan24]

Here’s an idea:

1. Zero out ALL Federal Taxes. Completely repeal all Federal Taxes on individuals and businesses.

2. Establish a 10% Flat Tax on all employment compensation. No deductions of any kind.

3. No taxes on investment dividends or interest from savings.

4. Force the Federal Government to cut spending and live with 10% of the wages paid by the working men and women of this country.

[The_Reader_David]

And then there are all of us with Roth IRA’s who paid taxes, invested for our retirement on the expectation that the accumulation would not be taxed, and folks poor enough that their Social Security benefits are completely untaxed.

The ‘Fair Tax’ is grossly unfair to everyone in either category.

[groanup]

Thank-you for posting yet another left wing moonbat's interpretation of the FairTax. When are you going to post someone with credibility?

The NC Budget & Tax Center is the state’s leading source for information on how fiscal and economic policies shape the opportunities available to working families. Because of its long-standing reputation for credible analysis and well-researched proposals, a wide range of service and advocacy organizations turn to the BTC for leadership in setting the progressive policy agenda in North Carolina.

The BTC’s work focuses on three primary areas:

Budget Priorities – During every state legislative session, the BTC analyzes key spending proposals to determine how they would affect low- and moderate-income families in North Carolina. The BTC’s data are routinely cited in the media and on the floor of the NC General Assembly as legislators debate spending on education, training, housing, health care, and other priorities. (Learn more on our State Budget page.)

Tax Policy – The BTC does the rigorous number-crunching necessary to determine if North Carolina’s revenue system is fair to working families and adequate to meet the needs of this growing state. Most recently, the staff has led initiatives to provide tax reductions for low-income families and to close corporate loopholes. (Learn more on our Fair and Adequate Taxes page.)

Economic Policy – BTC staff examine a variety of state policies regarding economic development, workforce development, and employment opportunities. In addition to explaining the positives and negatives of current policy, the BTC examines how potential policy changes would impact the state’s economy and working families. (Learn more on our Supports for Working Families page.)