Replies

All the consumer perceives is how much money must be forked out to acquire item X.

The Fair Tax will itemize the tax rate as a separate entry on the receipt so people will know exactly how much they are taxed.That transparency is a big improvement over the federal income tax since the price of all goods and services include the cost of corporate income taxes and the associate compliance . These embedded taxes are never seen by the consumer. The Fair Tax will end that deception.

If labor+"fair tax" is too much, the price will have to be reduced until it becomes "affordable". If the labor compensation is too low, nobody will bother. The tax rate will make the availability of labor and the cost of doing business a fairly volatile issue.

If the tax rate becomes too high with a consumption tax people will respond with less purchases. Less purchases will result in Congress collecting less tax. This forces Congress to keep the tax rate within reasonable if it wants to maximize the tax collection. People will have more freedom to determine how much and how often they are taxed and thereby return power to the people and away from Congress as our founding fathers intended when they wrote the Constitution. This tax concept was recognized by one founding father and first Secretary Of The Treasury, Alexander Hamilton in Federalist Paper #21, To quote:

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.

When the tax is applied to labor (service), it is a flat income tax.

The individual will earn his or her wages free and clear of any tax with The Fair Tax as they will not have to report it as income. That will in turn eliminate the embedded taxes imposed at each stage of production. That reason alone makes the Fair Tax profoundly different from any income tax.

That's not a prediction. You're merely stating the obvious as all labor by definition is a service.

At that point, it would have been easier to simply go with a flat, non-progressive income tax.

A flat tax on income still mean people will not have the freedom to choose when and how often they are taxed. It will also maintain the increasingly oppressive IRS.

Further, things that weren't previously taxed (rental of a house or apartment) will add to the tax burden.

On the contrary. All items with the income tax are taxed multiple times. All the materials used to construct houses or apartments come from many businesses who pay taxes and past that cost on to their customers(lanlord/developer) in the price. They in turn pass those taxes plus their own tax onto the tenant and home buyer. Ultimately a person pays multiple taxes with every payment without knowing as is evident by your statements. The Fair Tax will only tax each one once at the time of payment.

I would much rather see HR 25 state that NO sales tax can be collected until repeal of the 16h amendment is ratified.

The purpose of concurrent passage of The Fair Tax Act and repeal of the 16th amendment is to put pressure on Congress. Your scenario would give Congress critters less reason to commit to passage of The Fair Tax and more reason to delay.

My guess is that the repeal will never happen. The socialists feeding at the trough can't allow it.

They will have less say as an increasing number of their constituents demand they support The Fair Tax and repeal the 16th Amendment concurrently as is occurring with more people supporting the Fair Tax as time passes.

The Fair Tax will itemize the tax rate as a separate entry on the receipt so people will know exactly how much they are taxed.

So was the sales tax on a $1500 item I just purchased. It added another $90. If I don't have the extra $90, it stays on the shelf. There would have been an extra $345 of "fair tax" applied if it were in place right now. I would have deferred and canceled the purchase had that been the case yesterday.

If the tax rate becomes too high with a consumption tax people will respond with less purchases. Less purchases will result in Congress collecting less tax. This forces Congress to keep the tax rate within reasonable if it wants to maximize the tax collection.

What are you smoking? The leftists in Congress don't really care what they are collecting. The use tax policy to punish the successful (progressive taxes) and buy votes from the bottom end of the income scale. They spend money without any care as to whether it runs a deficit. They can always print more.

The individual will earn his or her wages free and clear of any tax with The Fair Tax as they will not have to report it as income. That will in turn eliminate the embedded taxes imposed at each stage of production. That reason alone makes the Fair Tax profoundly different from any income tax.

I call BS again. In my income range ($143K) I'm paying about $38,000 FIT and maximum social security. That comes out of my gross. Only the employer's contribution to social security (7.65% of the nominal $100K cap) is an "embedded" cost that is outside of my gross. I pay the rest. Elimination of that cost isn't going to matter squat in the bottom line pricing of corporate services. Frankly, I think there will be an attempt to slash my gross compensation rather than put that $38,000 back into my paycheck. People in the minimum wage world pay nearly zero FIT. Giving a minimum wage earner that $110 of annual FIT back matters little.

A flat tax on income still mean people will not have the freedom to choose when and how often they are taxed. It will also maintain the increasingly oppressive IRS.

You really don't have a choice about the taxation either way. You have to work to earn income to eat. If your work is a service, it is taxed. No difference between that and the current income tax. It's just "itemized" for the consumer. That same money gets taxed again when it is used to purchase something, except this time it comes out of the "principal" under your control.

The current IRS might be "abolished", but it would be replaced by a bigger organization to collect taxes from every living thing...and mail monthly checks to everyone as well. It's just a different monster.

The purpose of concurrent passage of The Fair Tax Act and repeal of the 16th amendment is to put pressure on Congress. Your scenario would give Congress critters less reason to commit to passage of The Fair Tax and more reason to delay.

The repeal of the 16th amendment is an act that requires ratification by the states. Congress can not do it on their own. Why should the socialists feel any pressure to do something they don't want to do? They are geared up to tax everything in sight. They have majorities in both houses and will control the White House on Tuesday. It's all about the leftist agenda. What's good for the country has nothing to do with what is coming down the pike.

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.

Did the above consumption taxes include sales taxes on domestically produced goods and services?