A) The FT is a completely altruistic quest
B) The Govenrnment will magically loose it propensity to tinker
C) All the people you never trusted before will be completely trustworthy now
D) 30,000 Treasury Dept employees will magically disappear
E) You will “Git Yer Hole Paychex”
F) Tax rates never go up
G) Pay rates never go down
H) People just love double digit sales tax rates
I) Used food and personal items are good things
J) Social engineering will magically disappear
K) Believe the rich don’t enough pay taxes
L) Prebates and Prefunds aren’t really welfare
M) Retirees should take a hosing for no good reason
N) Getting $77 worth of goods for $100 is OK with you
O) Paying 30% tax on medical care is a great idea
P) You believe the Government should tell you what a “necessity” is
Q) Bureaucrats will always know what the "right" poverty rate is
R) The rest of the modern world is clueless about tax policy
S) Good tax policy can be pro-re-gressive depending on the argument at the time
T) Revenue neutrality is more important than spending control
U) Talk Show Hosts are the best brain trust for tax policy
V) There is no "wizard behind the curtain" but those three Texans..
W) $20 million plus only buys "the truth"
X) Asking tough questions makes you a "Marxist"
Y) Asking tough questions makes you guilty of "spreading lies and disinformation"
Z) Debate only requires insulting and attacking people who ask tough questions
Didn’t read the full report but this summary doesn’t include Social Security and Medicare withholding and that alone is over 15%.
It won’t happen for one simple reason. People will not accept a 30% sales tax (which is what it really is) instead of the mostly single digit sales tax we have today.
“Fair Tax” proponents use 23% arguing that’s how income tax is calculated today, but when people realize that 30 cents will be tacked on to every dollar they spend (i.e. it’s really 30%), the research shows that they will balk at the idea.
It’s a non-starter.
The IRS will disappear...sounds good to me.
What happens to existing IRS liens?
Will you still be against the Fair Tax when Obama raises your taxes to 70%?
Another reason it won’t work is because it will never, ever be implemented.
With a pure fair or consumption tax the government loses the one thing it just can’t stand to lose...
Power...
Its that plain and simple...
Thats why we’ll never see it implemented...
The Fair Tax will never work because the establishment will never allow it to be considered seriously.
Fair Tax ping!
This article misses the major point of the Fair Tax. Prices would not go up right now the tax the company pays is embedded in the cost of the goods, that embedded cost would go away.
I don’t see how anybody could oppose the Fair Tax
Since every group, low medium and high income will pay less taxes and yet the total revenue to the government will not go down its free money. How could anyone object?
What about when I spend the money I’ve already saved (i.e. already paid income tax on)...won’t this kind of tax benefit those who are younger or who have no savings more than those who do? Older folks would be double taxed, so to speak.
Seems to me the concept would slow down the economy because perception is everything, and when people “perceive” of an item as expensive they don’t spend as much. Add 30% to every item, service, etc...and people’s perception will be that it costs more, thus they won’t spend, and the economy will take a hit.
I’m definitely not an economist, just an ordinary person trying to think how other ordinary people would think about the FT.
And as far as eliminating the IRS, yeah maybe, but they’d have to establish some other huge bureaucracy to collect the tax from the retail/service sector. So you’d just be exchanging one bureaucracy (IRS) for another (FT collectors.)
Of course the leeches and parasites of society love the present system, which hides, supports and panders to them.
If everyone, including welfare and "disabled" types, pays the same percentage, no matter how small or how large, it is hard to argue that it is unfair, except for the extremely hard core socialist types.
If it's not voluntary, it's not charity; it's robbery or extortion.
Arguing that it's 23% or 30% is a total waste of time, since the politicians and the parasites keep on sailing along without a clue about spending less to reduce taxes no matter what the feakin' rate is!
That's what the discussion should be about.
Geeez!
A 25% federal sales tax is not good? Who would have thought that?
Income tax is avoided by working "off-the-books", by tips, by "gifts", by barter, by cash businesses, etc. Sales tax is avoided by used items, "off-the-book" sales, barter, etc. I would suspect that avoidance is driven by liklihood of being caught and the amount of the tax.
No one shops garage sales to avoid a 9% sales tax. People may buy used stuff to avoid a 30% tax. (40% if the local tax is added on top.)
That is not to say that something does not need to be done. Gas taxes are nearly impossible to avoid, VATs are difficult to avoid. Property taxes are difficult to avoid.
If it were not for the fact that government raises every tax they have, I'd like to have small taxes on everything. Alabama is taxed somewhat like this. Single-digit income tax. Single-digit sales taxes (state, county and local total.) Probably a small gas tax. Low property taxes. Somewhat low "sin taxes".
I like it because tax decisions do not control our lives.
Examples:
But what if the worker is now paying less than 23 percent of his income in federal taxes?
Less than 23% in federal taxes on income means the worker filing as single has to be paying less than 23 - 7.65 (SS/MC) = 15.35% in income taxes on ***taxable*** income of less than $37,060:
http://www.irs.gov/formspubs/article/0,,id=164272,00.html
For 2007 tax tables:
T = Taxable Income
Formula: $4386.25 + .25(T-$31,850) = .1535T ==> T =~ $37,060.
Adding in the standard deduction of $5,350 and personal exemption of $3,400 brings the gross pay to $45,810 or about $23 per hour rate. That's par for an electrician or pipefitter.
But! The FairTax rebates this worker 23% of DHHS poverty level of $10,210 or $2,348!
Assuming reasonably as brainless Bartlett does that all taxable income is spent or $37,060 is spent, the NRST paid is 23% of $37,060 or $8,523.80. Next subtract the rebate of $2,348 and the net NRST consumption tax paid is $6,175.80.
Under the FairTax our worker pays net $6,176 in federal tax whereas under the Income/Payroll tax system he pays:
SS/MC Payroll tax of 7.65% of gross $45,810 =~ $3,504 Income tax FICA 15.35% of Taxable $37,060 =~ $5,689
for a total of $9,193.
This bit of arithmetic is too much for the density of Mr. B's cranial capacity.
In this case, he is clearly worse off, says Bartlett:
Uh huh....
The prices of the things he buys will rise by more than his income rises from the elimination of income and payroll taxes.
I guess estimates by leading economists above this neaderthals' paygrade of federal embedded taxes of between 22% to 23% just wooshed past his attention span.
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.
Yes, of course Comrade Bartlett. We must preserve our Marxist Income tax to ensure all those well-heeled doctors and lawyers are kept in check even if we must hurt the electrician and pipefitter. We must all be miserable together. After all it is the way of America! (not necessarily the 'American way', which more and more are forgetting as they march to a supreme nanny state in a world of socialism).
The only point this nimrod made that prevents assigning a full 'F' on this dismal effort of his is that he used the inclusive rate of 23% in comparison with the inclusive income and payroll tax structure. But he could not help sniping that it wasn't really 23%. Of course it is 23% if one is using the full denominator and it's 29.9% if one uses the exclusive or net denominator.
Bring it on Bartlett! If you are the best that that K-Street can put up against the mighty FairTax then 2013 is going to be a cakewalk!
American manufacturers under the ingeniously innovative uniquely American FairTax are going to kick some major @ss across the globe!
btt