WHY THE FAIRTAX WON'T WORK

NCPA ^ | 2/15/2008 | NCAP staff

[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.

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[xcamel]

Proof positive that the only defense of the FT is incessant blistering personal attacks.

I hope your're proud of yourself.

[xcamel]

Tell adobe... I didn’t invent it..

[lewislynn]

What is only worth $70?

Because you can only purchase $70 worth of product, the rest is tax.

[Turret Gunner A20]

"For each purchase of taxable property or services for which a tax is imposed by section 101, the seller shall charge the tax imposed by section 101 separately from the purchase."

Are you claiming that the FairTaxers are claiming any any diffeent? If you are, as you have and seem to be inferring now, you are lying.

Also, you jokers are falsely claiming that the tax will be charged IN ADDITION TO the marked price -- which is a flat out lie.

And yet FTers always demand that critics "read the bill".

What's wrong with that -- you should really try it sometime -- you MIGHT learn something. Although I seriously doubt it.

[cowboyway]

‘for the children’ - so what’s the difference?

Voluntary - of your own free will or design; not forced or compelled.

[Turret Gunner A20]

Swiss cheese should be so lucky to have as many holes..

Speaking of you head ....

[cowboyway]

of your own free will or design; not forced or compelled

You're 53 short.........

[Turret Gunner A20]

Ho Hum -—— Read the book.

[Mojave]

"There is no income or consumption test for the rebate. It would go equally to those with zero income and those who buy nothing in the course of a month, as well as to billionaires like Warren Buffett and Bill Gates. In effect, it would constitute a national welfare program with a flat payment for every American regardless of need."

Devastating analysis of the FT welfare scam.

[In veno, veritas]

"...incessant blistering personal attacks."

"Hi, pot!"
"Hi, kettle!"
"We're black!"

[xcamel]

Even people with IQ’s less then the room temperature can come up with hundreds of purchases that invalidate the “Voluntary” BS. Try again.

[Mojave]

What's wrong with that

The FTers never seem to know what's in the bill themselves. They're constantly being embarrassed when the bill is quoted to them.

[xcamel]

Trying to earn your FT troll merit badge?

[cowboyway]

BTW, on a lot of these links, you and xcamel are responsible for a lot of postings and it’s well known that you both share a vitriolic propensity.

[gitmo]

With a pure fair or consumption tax the government loses the one thing it just can’t stand to lose...

Power...

The power to decide who to enslave and who to give the fruit of the slaves' labour to.

[lucysmom]

Hasn't it occured to you that most of it is none of their damned business -- or shouldn't be? Such as, how much my income is, how many members are in my family, how much money I give away or to whom. what my address is, what my telephone number is, am I retired or for whom I work, and on and on, ad infinitum?

I suppose you think that the government will know less about you if the FairTax were enacted.

[foxfield]

You should take your 'thought-nazi' and strawman arguments back over to DU where they belong.

Are you saying xcamel posts on DU? Just wondering.

[cowboyway]

Even people with IQ’s less then the room temperature can come up with hundreds of purchases that invalidate the “Voluntary” BS. Try again.

It's not BS. It is voluntary. Are you saying that the government will enforce 'purchasing'?

By careful purchasing, a person can reduce his tax liability through a sales tax.

Can you do that with an income tax, either flat or graduated? No.

You try again.

[lucysmom]

Most of the same things the IRS asks for are the same things you need to know to run a good business or even have a solid family financial plan.

I think you're on to something there.

[Thermalseeker]

I’ve read the books. Both sides.

Get a copy of Answering the Critics by Boortz and Linder. Maybe it'll answer your questions.