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Locked on 02/18/2008 10:17:33 AM PST by Religion Moderator, reason:
Childish behavior |
Posted on 02/16/2008 3:30:21 PM PST by xcamel
One solution to the nation's long-term fiscal problems that has gained support in recent years is the idea of replacing all federal taxes with a 23 percent national retail sales tax called the FairTax. Unfortunately, the administrative problems inherent in this proposal make it impossible to take seriously, says Bruce Bartlett, former deputy assistant secretary for economic policy at the U.S. Treasury Department.
For example, under a FairTax scheme: A worker now netting $800 per week would immediately get a $200 raise and start taking home the full $1,000 gross wage that he is paid; instead of paying income and payroll taxes, workers would pay their taxes when they buy things.
The FairTax would impose a 23 percent tax on all goods and services (this is not really correct, but for now we'll accept it at face value for analytical purposes).
Whether he is better off or not depends on what his effective tax rate is: Assuming he spends all his income and no more than that, he will be no worse off if he now pays 23 percent of his income in taxes. That is, his effective tax rate is 23 percent; in this case, the FairTax is a wash, the worker is no better off or worse off in terms of taxes than he is now.
But what if the worker is now paying less than 23 percent of his income in federal taxes? In this case, he is clearly worse off, says Bartlett: The prices of the things he buys will rise by more than his income rises from the elimination of income and payroll taxes. Conversely, if one is wealthy and in a tax bracket above 23 percent, that person would be much better off. His income and payroll taxes would fall by much more than the prices of goods and services he consumes would rise.
Source: Bruce Bartlett, "Why the FairTax Won't Work," Tax Notes, December 24, 2007.
For text:
There's no "prebate" now. If the FT is revenue neutral, where will the extra money come from?
Its just a math question. Can you answer it? What are you afraid of?
The 30% rate (as you insist) is adequate to cover the cost of the prebate.
I thought my previous post covered this well enough.
The funny thing is, I wasn’t trying to argue the math at all, just pointing out that the public will not accept a tax that applies 30% to every item and services they purchase.
I read somewhere that surveys have been done which show that the public are not opposed to the idea of a sales tax up to around the 20% to 25% mark, but when you get much higher - i.e. 30% then it’s met with a high disapproval rate. Hence the FT advocates using the inclusive 23% number instead of the more easily comparable 30% rate.
To argue that the FT is not a sales tax is ridiculous. As others have pointed out, companies will still advertise their wares at the tax-exclusive price and then tack on 30% to the bill at the register. How on earth is that “not like a sales tax”?
In the U.K. most retail sales are advertised and transacted using the VAT-inclusive rate. Guess what? That rate is still recognized as 17.5% on top of the price of the goods (i.e. value-added-tax) and not 14.8% of the inclusive price.
So when people are informed that the Fair Tax is a 23% tax on everything you buy they will naturally assume that means for every $1.00 they spend they will have to pay an extra $0.23. That’s how 200+ million Americans have been doing it for the whole of their lives. That’s how a sales tax is calculated, and that’s how they would expect the Fair Tax rate to be described, and they won’t be happy when they find that the real equivalent rate is 30%.
Fair tax advocates may argue that they use 23% as the better equivalent to the current income tax system, but it is mighty convenient for them that people won’t understand that the 23% tax on things they buy is not calculated the same way as the 6% or 8% or whatever sales tax they pay on everything today.
Not yet...
1. …believe that taxing the creation of wealth is better for the economy than taxing the wealth when it is spent.
2. …believe that returning people’s tax payments to them is welfare.
3. …have no problem with a tax code that is wordier than the Bible.
4. …believe the IRS is a good department and does a good job.
5. …believe that the worst thing you could do is tax the wealth of old geezers who are living off of the sweat of the younger workforce.
6. …love to tell everyone you see that the FairTax was created by Scientologists.
7. …believe that what Bruce Bartlett says is the gospel and that scores of other credentialed economists are only paid shills.
8. …have a habit of going to online chat rooms and posting insults about the “Fairy Taxers.”
9. …think that calculating a tax the same way as the tax it is replacing is dishonest.
10. …think the economy has always been fine under the income tax.
11. …call the FairTax a “cult” because you can’t think of anything else to say.
12. …believe that cutting one tax by 25% and raising another by the same amount is inflationary.
13. …think inflation is caused by high taxes.
14. …think Milton Friedman is an idiot.
15. …have a soft spot in your heart for European style VAT’s.
16. …wrote the ten planks to the Communist Manifesto. 17. …think the prebate is Marxist but not the Communist Manifesto.
18. …sell some sort of tax advantaged product.
19. …claim you clamor for tax reform but have no earthly idea how to do that.
20. ...howl in outrage when the BATF violates the 2nd Amendment but have no concerns when the IRS violates the 1st, 4th and 5th Amendments.
Built on false premises.
Again, where does the money come from? Do other expenditures get cut? Does borrowing increase?
There ain't no such thing as a free lunch.
Ah, yes, the argument that if you think the Fair Tax is a bad idea then you must love the current tax system. I would welcome sensible tax reform that cleans up the mess we have today but the obvious truth is that reforming the current income tax system would be much easier and much more feasible than creating a whole new tax system that many have doubts would even get off the ground.
Yes, it may come as a surprise to the Fair Tax fans, but there are other options available.
Its a simple question based on the Fair Tax plan. Why are you having such a hard time? Just take a guess.
BECAUSE.. Senate and House socialists will morph the fair tax INTO a VAT.. thats why..
I wouldn't trust this Congress with my dirty laundry..
It comes from the FairTax paid by the taxpayers. Where does any government money come from other than the taxpayers? Three answers to the same question should be enough for anyone.
Have you n/ever seen imported products?
So are..property taxes, fees on your utilities, gas, car tags, marriage licences, inspection stickers, tolls, tire disposal, cigarettes, alcohol, park feesAll of which would be taxed once again by the Fairtax.
False premises.
This lead in article has been posted on FR multiple times in the past and refuted EVERY time. The poster of this thread KNOWS this but continues to abuse the system here at FR and get away with it. All of which is a mystery to me.
If the Fair Tax brings in the same amount of money as the income tax, where will the funding for the new entitlement program come from?
And your reference for this allegation is:
You’re arguments are being thrashed so you cry to the mods for help?
Sad.
Its not a based on a false premise. All of your posts have been based on false premises which is why you don’t want to answer the question.
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