Skip to comments.Current system stifles U.S. competition, productivity (Time For The Fair Tax!)
Posted on 04/15/2008 11:54:07 AM PDT by Man50D
"Great idea too bad it's never going to happen." Pretty discouraging words, I would say. In fact, it makes you wonder, "Why even put big ideas out there; what is the point?" Unfortunately, these are the words that I often hear when it comes to talking about my FairTax bill.
Ironically, I most often hear them from the folks who follow that comment up with a barrage of questions about the bill and suggestions on how to move the bill along more effectively. It is this phenomenon that strikes me if it is a great idea, if it is much needed, why then will it never happen? Have we in this society become so jaded that we cannot believe that much-needed change is possible?
Perhaps Ben Franklin said it best in his famous quote, "In this world nothing can be said to be certain, except death and taxes." These words seem to have become America's credo when it comes to taxes, though I would wager that Franklin had not intended that to be the case. We have come to accept our current tax code as a part of our lives.
The FairTax legislation would repeal all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, death taxes and gift taxes and replace them with a revenue-neutral, 23 percent personal consumption tax. Americans would keep their entire paycheck and have the power to choose exactly when and how much to pay in taxes. It has always been a belief of mine that all taxes should be voluntary; we achieve this with the FairTax by offering to every household in America (provided that household can prove it is inhabited by citizens or legal U.S. residents) a tax prebate.
(Excerpt) Read more at ajc.com ...
Fair Tax ping!
American, Land of the (Highly Regulated and Taxed) Free.
The Fair Tax is BIG gov't republican bait to very large Congressional SHARKS.. Pass the Fair Tax and one thing is certain..
WE BETTER GET A BIGGER BOAT..
If I have read the Bill correctly, does not H.R. 25 repeal the 16th Amendment as part of its language. I believe that it also states that the provisions of the Fair Tax would not be implemented before that repeal.
I stole your picture...:P
This is a little tricky. A Constitutional Amendment cannot be repealed by a mere law. It must be repealed by a subsequent Constitutional Amendment. This has only occured once before, when the 18th Amendment (Prohibition) was repealed by the 21st.
However, a law can be written such that it only goes into effect upon repeal of a particular Constitional Amendment.
It would also be possible for the new Amendment (which repeals the 16th), to include language that restricts the Fair Tax to its original form.
The tax that hammers the retired. Starting with double taxation.
This retired would welcome the FairTax. When all things settled out, there probably wouldn't be much difference in the amount of my tax. But I would be relieved of the obligation of keeping detailed records for years and years and compiling, summarizing and filing a tax return every April 15 that includes intimate details of my financial situation and the charities I help support.
Retirees that have all their assets in cash accounts are in the same situation as an estate. After the assets of the estate have been taxed and accumulated, they are taxed again when the estate is settled. For those with all cash retirement assets, the main benefit of the FairTax would be a general downward drift of prices and no income tax paid on accrued interest (or anything else). Retirees that have their assets in IRA's, 401(k)'s, appreciated stock, etc should have no problem with the FairTax. These assets are mostly untaxed.
I just mentioned several gimmicks that Congress has given us to tweak the income tax. FairTax would make new IRA's, 410(k)'s, long and short term capital gains obsolete, as well as depreciation calculations, tax exempt bonds and dozens of other complicated little gimmicks. To me, much of the advantage of the FairTax is the relative simplicity.
Double taxation is not unheard of with the present system. Estates, as I mentioned, are taxed twice. Taxing dividends is a second taxing of a corporation's profits.
I filed my ‘08 taxes and quickly realized that the only taxes I have to pay from now on are real estate and state sales tax. And I could care less as regards taxing my estate when I pass. So it completely eludes me have a national sales tax will help me. It won’t. It will greatly increase my tax burden besides double taxing money I spend from my savings (not 401k). All round bad deal.
I'm not sure what income is required to pay no tax, but my 90-year old MIL paid no tax for the first time in '07. She lives on SS and one small pension and paid tax on $21,000 gross income in 2005. For 2007, her medical bill deduction finally eliminated her income tax obligation.
Are you aware that the FairTax is refunded to everyone for the poverty level of spending? You and everyone else (legal resident) receives a full refund on your first $X of spending each month. (X is determined by the feds, the same people that define the poverty level now.) With embedded taxes removed from the price of what you buy, the price of the product goes down, so the only federal tax you pay is the FairTax when purchasing a new item or a service. You would pay FairTax on cheaper goods and services for your spending above the poverty level.
This might not help you any, but it is not an "all around bad deal", either. And it will be great for your grandkids, or your friend's grandkids. (It is usually liberals that say "do it for the chi-i-i-ildren". /s)
If the FairTax promises to be revenue neutral, which it does, then how do you suppose the tax scheme will permit you to keep your own money?
According to Boortz, the money withheld from your paycheck to pay taxes is not really your money, but your tax burden incurred as a result of your employment, and passed on to your employer. In other words, your employer pays your taxes, not you. Its his money.
Every employee of any company involved in American commerce is also a provider of a service, and, as such, the employee incurs a tax liability as a result of his or her work. This tax liability is incorporated into what the employee charges the employer for their services, and is eventually incorporated into the final retail cost of the employers product or service. Each employee is essentially a separate business entity providing a product, be it physical or mental labor, to the employer.
...With the passage of The FairTax Bill, those embedded taxes disappear. These embedded taxes include the combined tax burdens of all entities involved in bringing those goods or services to market, and that includes you, the employee, and the taxes you incur as a result of your employment.
...He will either take some or the entire amount he had been withholding for federal income and payroll taxes and add it to your weekly check, or he will readjust your pay figures so that your entire paycheck will be equal to what you used to call take home pay before the FairTax. Boortz Clarifies Keep 100% of Your Paycheck
In a sense, what the FairTax scheme does is to remove your tax burden paid by your employer, and transfer it to government in the form of the prebate, but only up to the poverty level; so the prebate isn't your money either, only a portion of your tax burden passed on to government.
As for removing embedded taxes from the price of a product or service - those taxes are are withholding and payroll taxes paid by your employer, so if prices fall, then so must your gross pay. However, if removal of embedded taxes from retail prices means that the portion of your pay that was called taxes is now simply called wages, then prices remain the same with 30% sales tax added when the purchase is made.
Of course "X" excludes food and energy price increases.
With embedded taxes removed from the price of what you buy, the price of the product goes down, so the only federal tax you pay is the FairTax when purchasing a new item or a service. You would pay FairTax on cheaper goods and services for your spending above the poverty level.
If embedded taxes are removed from prices, that means employees have received a cut in gross pay, but still have an unmet tax burden.
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