I just posted this in another fair tax thread, but it bears repeating.
23% is way, way too high. Add that to the 8%+ that some states steal in sales tax plus the state level income taxes, property taxes and other nonsense fees and you'll pull the typical American into a 35% overall tax bracket.
If the 23% were it then I'd be okay, but it's just the Federal portion!
15% tops to start and then lower it as government gets cut up and parted out.
Then you can count me as a supporter.
EXACTLY!! I have been saying this for awhile!
It sounds great until you stop to think that its not the "only" tax we will be paying!
When you also consider that the state and federal government can raise these percentages at any time to whatever they want I think that we are in great danger.
For instance, After reading the fair tax book I came away believing that there was alot to it that would work but I kept thinking..."why would anyone buy something new when you could buy used and not pay sales tax?"
A new car would have this huge sales tax attached to it but a used one none. Same with everything! Even with more in my paycheck i'm still going to be budgeting because all in all its not a decrease, they are just shifting the burden. Therefore I will most likely never get to have nice new things because i won't be able to afford the taxes and settle for someones hand me downs.
They actually add 30% sales tax. 23% is what they call an 'inclusive tax rate'. On a $100 item, they add $30 of tax. They come up with 23% by dividing the $30 tax by final cost $130. It's FairTax Deception 101.
So a item priced at $100.00 would cost you $129.87 plus applicable state and local sales taxes.
And that tax applies to items that weren't previously taxed, like food, prescription medicine, and rent.
What are you going to do when your rent goes up 30% on day one of the Federal FraudTax?
23% is way, way too high...
Do you spend every penny of your income on goods? Since I spend much less than 10% of my income on goods, then that 23% would be equivalent to less than a 2.3% income tax, not 23%. That means instead of the > 50% total tax burden I shoulder now, it would be about 35% (or less if state income taxes go away) which would be a lot better!! Think about it...
I agree - 23% is too high.
The reason that the FairTax is set up that way is to make it "revenue neutral." I don't want "revenue neutral" I want less government spending and lower taxes.
I support the FairTax in principle but would not want to see it go into effect until the income tax amendment is eliminated first, spending is cut and the tax rate is reduced.
I pay WAY, WAY, WAY, more than that RIGHT NOW!!!!!!!!!!!!!
In fact, Filo, if the FairTax were passed today, the revenue neutral rate sould be something like 19% due to the Bush tax cuts that are in effect.
As for state sales taxes, the most likely thing there is for most states to choose to conform to the FairTax which would lower the state sales tax rate to about 1/3 the rate presently in most states. There's a good discussion of this on the FairTax website. For example if your state had a 6.5% typical sales tax now and chose to conform to the FairTax, the tax base would be broader and the rate drop to perhaps 2 or 2.5 percent.
As the FairTax progreses from year to year, the rate would probably drop as the rate is very visible which allows political pressure o be brought to bear and with the improving ecomony from the FairTax effects the rate could be lower for a given amount of tax revenue.
Unless you don't have much an income, you're already paying this - its just being extracted by income tax withholding. The tax is supposed to be revenue neutral.
You're already paying 23%. The Fairtax just collects it all out in the open instead fo through withholding and hidden costs of the goods you buy.
These mechanisms are the novicaine that keeps you from being outraged about your 23% rate. Precisely why the Fairtax is good for forcing spending cuts on the politicians.
Anything is better than the system we have now and I think this plan is better than most other proposed alternatives.
The 23% is instead of Federal income and SS taxes. You still would have to pay all other local taxes.
I have been FOR the Fair Tax since I first read about it here on FR.
What is your tax bracket now? Don't forget to count all of the taxes being repealed. Those include all federal income taxes, all federal payroll taxes and all federal estate and gift taxes. Those will be replaced by the Fair Tax at 23%.
And you may wish to consider what is good for others as well as yourself. Say your children and grandchildren, who will be active workers at a time when their payroll taxes will be exorbitant and yet they will get no social security benefits from the taxes paid. The Fair Tax would solve those problems, plus give them stronger economic growth to raise standards of living.