Posted on 05/11/2007 5:30:56 AM PDT by Dick Bachert
I have a little scenario I would like to paint for those of you out there who just insist on finding something wrong with the FairTax. Admittedly, the FairTax isn't perfect. No tax plan is. How, after all, can you come up with a perfect way for a government to take its operating funds from its subjects? If you know an easier and more equitable way to do it, by all means, let me know!
I'm going to ask you to crank up your imagination for a moment here ... and by "you," I mean those of you who think that this FairTax thing is a bad idea and you're not prepared to come on board.
I want you to imagine a scenario. Don't worry about whether or not this scenario is possible .. Just accept it as I present it, and then consider the alternative picture I'm going to also present. Simple as that.
Let's imagine that the FairTax is the law. We've been operating under the FairTax since the day you drew your first paycheck. It's all you know. Here is your imaginarily "reality."
On every payday you get your complete paycheck. There are no deductions. If you earn $2,000 per week, you get a check for $4,000 every two weeks. You never have to save receipts or create any records pertaining to federal taxes. You can invest money without paying any taxes on it. You don't have to pay taxes on the money you earn through your investment portfolio. You pay no taxes on any money you put in your savings account. When you die you get to leave your entire estate, everything you own, to whomever you wish. The federal government will take no taxes from your estate. Your death is not a taxable event. When you go to the store to buy an item, and the price tag says $19.99, you will had a $20 bill to the cashier and get one penny back. The price tag is the price. There are four people in your household. You, your spouse and two rug rats. At the beginning of every month you get a check or a credit to your checking or charge card account in the amount of $506.00 to compensate you for the federal sales taxes that are included in the price of everything you buy; right up to the poverty level.
All in all .. not such a bad deal. You keep all of the money you earn and you get five hundred bucks a month from the feds. Plus .. you only pay taxes when you spend money.
Now .. .here comes some politician who has a grand scheme for a new tax system. He wants to explain it to you. Here's his great idea ..... give him a listen and tell us what you think.
The plan is simple. First the federal sales tax is going to be removed from the price of everything you buy. This will mean that everything will cost 23% less than it does now. But ... he's going to levy an income tax on every single individual and business who plays any role at all in bringing those products to the marketplace. These people and companies are all going to pass the cost of these taxes down the economic line to the final consumer of the products they manufacture. These taxes will end up embedded into the prices of products in our retail marketplace, bringing those prices right up to the current level. So .. no loss, no gain.
Next your political benefactor is going to take away your $500 per month prebate from the government. In its place he's going to tax every penny you earn. It doesn't matter where the money comes from. Your salary, your investment income, winnings at the track ... whatever you earn and however you earn it, it's going to be taxed.
Wait! He's not through. He's also going to tax your wages for Social Security and Medicare. He's going to try to soften the blow by telling you that your employer is going to match the taxes he takes out of your paycheck, but you're employer has made it clear that this money is all going to come out of the money he has budgeted to hire you. You'll probably lose out on your next raise while the boss his accounting in order.
There are some more nifty ideas in your congressman's tax reform plan. When you die your family is going to have to file a complicated estate tax return. A huge amount of the wealth you have managed to build during your life is going to be sent to the government. Your survivors may well have to sell the family business in order to come up with the money to pay for these death taxes.
One more thing .. you're going to have to keep records of all of your financial transactions. Every year you're going to have to spend no less than about 30 hours or spend hundreds of dollars to hire someone to fill out tax forms for you. If mistakes are made you will be hit with a huge penalty and interest. Oh .. and the government is going to have access to all of your financial records to make sure that you are paying everything you "owe."
The question, of course, is why does this politician want to change the tax system in this way? Power, that's why. They want to be able to enact little changes to the tax code that will benefit certain constituents ... which constituents will then benefit the politicians -- with money or with votes. Under the FairTax system these politicians have no power to favor one group of voters over another for the benefit of votes. The new system would give them that power.
Your choice, my friends. If we had the FairTax now ... would you be willing to make the switch?
Awww...trying to prop each other up? If you’re not presently cubicle mates you should be. Anyone that has the time you two have to babble nonsense as you do can only do so from the desk of a government job.
You two ‘Income’ tax lovers have been discredited through your own words. Keep on trying. You make great advertising for the FairTax.
Sinking further into desperation?
Link to the post where I said that.
I have been debating on if I should go or not. I went to the last one in Atlanta, and was turned away. Too many people showed up. Also my work schedule is kind of an issue. Nevertheless, I hope this pays off.
This line of attack has already been debunked.
Any time you take your ‘savings’ (if indeed you really have any) out to purchase something, there are already embedded taxes in the product you are buying. All the FairTax does is bring it out into the open.
You’re not going to convince anyone that your savings have already ‘paid its tax’. The interest on your savings is presently taxed. And every purchase you presently make has a federal tax in it. The only person you’re fooling with this angle is yourself.
OK, smarty pants, let's see your calculations and analysis.
However, it would be a lot harder for politicians to raise taxes under the Fair Tax then with the current tax structure. Right now all they have to say is that we are going to “roll back”(aka increase the taxes) the tax cut since the “Rich” do not need a tax break. If the Fair Tax was in play, then it would effect everyone, and not just certain classes. Therefore, it would be a lot harder to do.
You right, but its a lot better then the current system. I will take a fair tax, flat tax over the current system.
I charge $375 an hour. Freepmail me and describe your questions of interest. After we agree on the terms of the project and how you will pay for it I will give you billing information.
Thank you, that answers one of my questions, finally!
The sales tax will be stated at the 23% inclusive rate, to mislead Joe Average into believing that he is paying a 23% sales tax when he is really paying a 30% tax. So much for transparency!
Its 23% and not 30%. It is an inclusive tax, not exclusive like the current tax. If you want to quote both with an exclusive tax rate, then anyone in the 25% tax rate and up is paying 33% currently.
If the FairTax were to be enacted, then the apples to apples argument would be moot.
What a condescending remark!
‘Joe Average’ is heads and shoulders above you.
Joe understands his tax burden and the KGB IRS that has grown up around him today.
Joe knows there are federal taxes in every product he pays for.
Joe is angry that people such as you think he can’t understand that $23 out of $100 is 23% and that $23 out of $77 is 29.9%.
After the FairTax causes you to be laid off from your government job, don’t go askin’ Joe for a job. He doesn’t like you much.
No. It is not quoted as an inclusive 23% to mislead people. It is quoted inclusively because the Income tax and FICA taxes that it will be replacing are INCLUSIVE rates.
The upper 10 % pay the majority of the taxes in this country. For instance, the top 1% pays 36.89% of the taxes. Here is the rest for you
Top.....Pays.....Percent
5.......Pays.....54.36%
10......Pays.....65.84%
25......Pays.....84.6%
50......Pays.....96.70%
This is from the IRS stats.
Man you are still fighting this thing. That is fine, and your position. However, you have to admit this the Fair Tax is a BIG improvement from the current tax code.
3000 retailers? YOU HAVE GOT TO BE KIDDING! In 1997 there were 89,153 non-federal doctors, and 23,000 dentists in California alone. Under the FairTax scheme, each one of those doctors and dentists becomes a sales tax collector for the government. Add to that every provider of a newly taxable service, and the number of tax collection sites becomes astronomical.
You nailed it on the head..
It's a sales tax, it is 30%. I am not trying to compare it to the income tax, I am honestly stating what the sales tax rate is as everyone normal person in the universe would calculate it. Heck, most fairtax supporters don't comprehend that it is a 30% sales tax. Many wrongly believe a pre-taxed $100 item will cost $123 after the tax is added.
Really?
There shall be in the Department of the Treasury a Sales Tax Bureau to administer the national sales tax in those States where it is required pursuant to section 404, and to discharge other Federal duties and powers relating to the national sales tax (including those required by sections 402, 403, and 405). The Office of Revenue Allocation shall be within the Sales Tax Bureau.
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