The FairTax Is Fair!

Pajamas Media ^ | March 18, 2008 | Adakin Valorem

[Man50D]

Max: The FairTax is a radical tax reform with a strong contingent of devotees …. In this campaign season, the tax is being promoted by presidential hopefuls Governor Mike Huckabee of Arkansas, Rep. Ron Paul of Texas, and Senator Mike Gravel of Alaska.

Adakin: Sir, only Huckabee and Gravel have expressed outright support for the FairTax. Congressman Paul (as well as Senator John McCain) said he would, as president, sign HR-25 if it made it through congress, but Paul advocates the outright abolition of the income tax and replaces it with nothing. Also part of that “strong contingent of devotees” are the 74 bipartisan congressional cosponsors of the bill in both the U.S. House and Senate that support HR-25/S1025, also known as the FairTax.

Max: As things stand the poor pay no federal income tax. Most families with children under median income levels owe little or no income tax. The vast bulk of individual income tax is paid by those well above the median.

Adakin: Yes and no. Even though “the vast bulk” pays no federal income tax, they all pay employment taxes, which when combined with what the employer contributes totals over 15% of a worker’s compensation. While a low-income worker sees only $92.35 from every $100 earned, an employer hiring someone at $100 per unit of work pays $107.65, with the overage being the employer’s side of FICA, for a total of $15.30 going to the Fed.

With the FairTax, a worker would get the promised $100 plus that additional $7.65. So passage of the FairTax would result in a 16.6% increase in take-home pay for those that “pay no federal income taxes.”

[Man50D]

Fair Tax ping!

[avacado]

"The FairTax Is Fair!"

How can a regressive tax (Fair Tax) or a progressive tax (current tax system) be fair?

[cake_crumb]

I like the IDEA of the fair tax, but whenever I ask about state and local sales tax on top of the fair tax people stop answering me.

[Always Right]

This ‘news’ is about 6 months out of date. It talks about presidential candiates Huckabee, Paul, and Gravel. NEWSFLASH, McCain has the nomination. Great spam as usual.

[MiltonFriedmanFan]

The fair tax is an intriguing idea but is many decades down the road to understand the intricacies of it and acceptance by the population. The best idea right now is a flat tax of 20% with a $10,000 exemption.

[svcw]

Should be $50,000 exemption.

[Man50D]

I like the IDEA of the fair tax, but whenever I ask about state and local sales tax on top of the fair tax people stop answering me.

States won't be required to repeal or piggyback their sales taxes on the federal tax but for those that choose to conform to the Fair Tax will raise the same amount of state sales tax with a lower tax rate Fair Tax FAQ #25 because the Fair Tax will collect taxes from a much broader base. States may also consider the reduction or elimination of property taxes by keeping their sales tax rate at or near where it is currently.

[avacado]

"The fair tax is an intriguing idea but is many decades down the road to understand the intricacies of it and acceptance by the population. The best idea right now is a flat tax of 20% with a $10,000 exemption."

20%? Errrr... Not many people pay 20% in income taxes. The federal tax rates are on a graduated scale. If someone's bracket is say, 33%, they do not pay 33% on the total of their income. They only pay 33% on the upper $10K or $15K (depending on the scale) of their income.

For instance I pay 19% in federal income tax but my upper tax rate scale is higher than 19%. We should have a flat tax of about 10%-15% max.

TAX BRACKETS

[Man50D]

The fair tax is an intriguing idea but is many decades down the road to understand the intricacies of it and acceptance by the population.

The Fair Tax and its 133 pages is far less intricate than the income tax and its 67,000 plus page tax code that no one understands and never will understand.

The best idea right now is a flat tax of 20% with a $10,000 exemption.

A flat tax will still maintain the IRS and deny people the freedom to choose when and how much they will be taxed. A flat tax will take longer to pass in Congress considering the four flat tax related bills combined have far less acceptance in Congress and far fewer cosponsors than The Fair Tax.

[svcw]

Choose how much I will be taxed...can I choose to eat or not eat? Choose to buy heat or lights for my home? Gas for my car? etc
You act as though all consumption is a luxury. Its not.
And how do you handle people who are retired and already paid taxes on everything they own, who are now living off of savings or what ever - will they have to pay again?
Whats to say states will eliminate any tax, come on.....

[Bigun]

What is your rate when you add in ALL of the taxes you currently pay and the FairTax would replace?

The social security and medicare payroll taxes are the most regressive taxes there are the largest taxes most pay.

[pfony1]

Excuse me....

Just WHAT is “fair” about having my savings, which I have accumulated from my after-tax earnings over many years, be taxed AGAIN, when I need to “spend” those savings to pay for my living expenses after I retire?

I know....

I know....

The “genius” of the “fair tax” will “protect” me, once the “details” are all worked out....

Just as the “genius” of the Children’s Crusade protected all those poor innocent children on their fool-proof mission to bring “Peace” to the Holy Land...

In a way, the “Fair Tax” bandwagon is another iteration of that Children’s Crusade: simple, wide-eyed innocents convinced that their moral purity will miraculously “overcome” all the fatal flaws in their simple “plan”: flaws which are quite obvious to the less gullible.

[Always Right]

With the FairTax, a worker would get the promised $100 plus that additional $7.65.

Wow, this idiot takes the lie even further. He is saying the workers even will get the employers half of the employment tax and then he even latter has nerve to talk about embedded taxes. When will fairtaxers ever stop lying about embedded taxes? If the workers pocket all these taxes, there are no savings from embedded taxes to pass on to the consumer. Prices will go up at least 30%.

[avacado]

"What is your rate when you add in ALL of the taxes you currently pay and the FairTax would replace?"

I just did an exact calculation for you:

The total taken from my income is 24.4% which includes federal income tax, SS and Medicare and not including 401K. 16.8% is for federal income taxes, 1.45% is for Medicare and 6.2% id for SS (and my company pays another 6.2% for SS).

[lewislynn]

With the FairTax, a worker would get the promised $100 plus that additional $7.65. So passage of the FairTax would result in a 16.6% increase in take-home pay for those that “pay no federal income taxes.”

So much for those promised price reductions.

[lewislynn]

What is your rate when you add in ALL of the taxes you currently pay and the FairTax would replace?

The total taken from my income is 24.4% which includes federal income tax, SS and Medicare and not including 401K. 16.8% is for federal income taxes, 1.45% is for Medicare and 6.2% id for SS (and my company pays another 6.2% for SS).

Since you pay 24.4% before making purchases of products with 23% embedded taxes that the Fairtax also replaces it would be interesting to see how Bigun and other Fairtaxers calculate how the 23% rate replaces all that.

Someone is lying somewhere.

[Man50D]

Choose how much I will be taxed...can I choose to eat or not eat? Choose to buy heat or lights for my home? Gas for my car? etc You act as though all consumption is a luxury.

Regardless of the fact the prebate will cover the tax on necessities(Food,shelter, transportation etc...) up to the poverty level, You can choose how much food, gas, electricity and gas you consume. You reply as though you haven't read The Fair Tax Act. I suggest you do so before making anymore incorrect assumptions.

And how do you handle people who are retired and already paid taxes on everything they own, who are now living off of savings or what ever - will they have to pay again?

Few people, obviously including yourself, are unaware they pay taxes multiple times with the income tax due to embedded taxes! The Fair Tax will end multiple taxation by eliminating embedded taxes, including taxes on savings.

[Man50D]

Just WHAT is “fair” about having my savings, which I have accumulated from my after-tax earnings over many years, be taxed AGAIN, when I need to “spend” those savings to pay for my living expenses after I retire?

What's fair about the federal government creating an income tax system that doesn't allow people to be aware they are taxed multiple times due to embedded taxes? The Fair Tax will make taxation end this deception by eliminating hidden taxes and the multiple taxation they create.

[K-oneTexas]

Flat Tax - 3% on all income, no deductions no exclusions. Income would have to be redefines to include any income.

Repeal cap gains ... investment income is income. Stocks, bonds dividends are income. That's the Buffet comparison now, he pays less on cap gains that his secretary does on income tax.