Replies

Man50D: It will cost much less than printing, mailing and processing the multitude of tax forms and booklets with the income tax that will no longer have to be done with The Fair Tax.

Yes and no... I don’t know about you or anyone else but I’ve been completing my yearly tax returns and getting my refund (if any) electronically for years now and I haven’t been mailed any tax forms or booklets from either the Feds or my state for many years. I don’t even print out a hard copy of my yearly tax return, rather I “print” it as a PDF and save it off to my hard drive, a CD and a memory drive just in case I ever have to print a copy later on.

Even when I ran my own business and then later worked as a payroll manager employed by a fairly large company, I wasn’t mailed any tax forms or booklets as everything was done electronically and all the forms and booklets or documents or rulings on tax code I ever needed was available on-line. There is also a pretty substantial cost to businesses to convert to a totally new form of tax collection and remittance.

While a lot of people still get tax forms and booklets mailed to them and there is a huge cost for all that printing, there is also a huge cost to process all those “pre-bate” payments 12 times a year vs. once a year. And have you ever read through the entire proposed “Fair Tax” legislation? There are a lot of reporting requirements and burdens imbedded in there.

Cracker Jack: From what I have read, most FairTax tax refunds will be direct deposited, and will cost about as much to deliver as that spam that fills up our email.

These picky little objections seem pretty trivial to me after I have just prepared and submitted 27 pages of financial data to justify the income tax I paid. What if April 15 was just another day? The FairTax could be horrid and still be better than what we have. Why are you defending the status quo?

I’m not defending the status quo. I don’t like our current tax system one bit. But from what I’ve read about the Fair Tax it doesn’t seem to be a much better alternative. My main objection is that the “Fair Tax” is intended to be revenue neutral – meaning that the Feds have no obligation to reduce out of control spending or pork or social projects as they are guaranteed to collect the same amount of tax as they do today, rather the “Fair Tax” just shifts the burden of tax collection and remittance from employers and employees to sellers and consumers. Imagine the burden you and every seller of goods and services would have under the “Fair Tax” to keep every receipt for everything you’ve purchased in the last year in order to prove you paid the sales tax and justify and or prove whether or not your purchase was for a new product – taxable, vs. a used good – not taxable.

Groanup: Almost all prebate payments will be credits to an electronic account. Just think, no more mountains of paperwork disclosing all the intimate details of your earnings and no more spending hours just to figure out how much to pay the king.

Again, it’s a bit Yes and No. From what I’ve read and researched about the “Fair Tax” plan, your employer is still required reporting your earnings and number of qualified dependents to the Feds on a monthly basis in order to determine what “pre-bate” you are “qualified” to receive.

The “Fair Tax” also doesn’t eliminate the need for SSA, and you and your employer to complete I-9 forms, federal and state unemployment insurance and such. Your employer will still have to report your earnings to the Feds and in addition to that, every seller and service provider will have to report your purchases.

One of the other unintended consequences of the “Fair Tax” is that not only are your health insurance premiums no longer “pre-taxed”, but every time you go to the doctor, your out of pocket costs and co-pays for this service is now subject to the new sales tax adding yet another reporting and administrative burden to your health care provider and adding to the cost of your healthcare.