Posted on 05/23/2011 6:33:08 AM PDT by SeekAndFind
don’t know many lobbyists?
this is just another angle to lobby for designation as a necessity. you will have liberals/left give tax favors for certain manufacturers and not others. (ie gm vs ford)
there is absolutly nothing stopping the income tax and this sales tax from being simultaneous.
you also have the fed deciding what is or is not a family based on political whim.
no people willl buy direct from overseas and avoid the fairtax-scam 100%.
it is a pooorly thought out scam which envisions and internetless, horse and buggy society.
Fair Tax is DOA. The 16th won’t be repealed.
Well they didn't want to call it "tax decreases for millionaires".
For the $10k guy, it can come down to choosing which necessities to cut back; for the $1M guy it may cause second thoughts about that extra week in Europe or Aspen.
We really shouldn’t have taxes on income or capital at all.
We only had taxes on people when the FED was created. We had to pay for the interest for using the FED money instead of our own sound money.
Today, that has grown to be a pot to buy votes by stealing from the producers and giving to the looters.
Somehow, this needs to change.
Government has made a mess of the policies they have enacted to replace the Christian duty to help those less well off. Government makes all of us poorer, while destroying the foundations that make a country strong.
Government needs to get out of the way.
Government needs to get out of EVERTHING that is NOT ENUMERATED in the Constitution.
Go AWAY, you thieves!!! Get out of our pockets!!!
Get OUT of OUR lives!!!!
Destroyers and Usurpers!!!!
Sorry that doesn’t wash. If you are making 1,000,000 or 10,000, a percentage is a percentage. Let’s leave class warfare to the Democrats, 10% of ones income is fair for everyone. Otherwise it would seem you are advocating a “from each according to his ability, to each according to his need” type of system.
Is that what you think it would do? Do you have any evidence of that?
It would seem that way if I advocated the “poor” paying less of a percentage than the “rich” based on income, but I prefer NO income tax for anyone.
A consumption tax with an allowance for basic needs for survival (the same allowance for everyone, rich or poor) gives each the choice of how to spend his own money. You want to keep your taxes down? Spend less on taxed items.
The rich typically buy more, and will end up paying more. The thrifty rich will pay less than their spendthrift counterparts; the poor who choose to spend up to their last penny will pay more than the thrifty poor.
The problems I had with the FairTax as proposed were the “prebate” feature (a monthly prepayment to cover the cost of tax on basic survival), and how to start it off, as all the hidden taxes paid on goods already in the pipeline with the sales tax added will rise in price until the hidden taxes are no more. If these items can be soundly addressed, I would give it my final OK.
Although the average federal income tax revenue is 9.9% of all income, and you’d think that means your plan would work, it won’t. Unfortunately, you would have huge deficits this way.
Those paying the lion’s share of income taxes would choose the flat tax because it would drop their effective tax rate by about 5% overall. The 70% of the populace that currently pays less than 10% would continue to file under the existing system and collect the tax credits that make their tax rate effectively zero. For many of them, these credits give them back the little money they contribute to SS/M as well.
What we need is a clean switch to your proposal for everybody, or if that is too “regressive” for people to accept, some other combination of rates like 7% on the first $10K and 11% on all income above that. The key to low rates is simply to make it apply to all income. It is the deductions, exemptions, and credits that reduce the taxable base to such a small figure that we need rates as high as 35% at all.
“This, and the ability the income tax gives to violate the privacy of citizens and intimidate enemies, is why the government loves the income tax.”
These issues are not intrinsic to an income tax. Suppose there were a 10% flat income tax, withheld by employers and financial institutions. The employer could simply report his total payroll costs and send the IRS a check for 10% of that total. The IRS wouldn’t need to even know who the employees were. Financial institutions would total the gains made by all their investors for the period, and send the IRS 10% of it. The IRS wouldn’t need to know who the investors were. Still an income tax. Still withheld at the source. No individual reporting. No IRS audits of individuals. No information available to base handing out credits, exemptions, and deductions (tax welfare) through the tax code. No political favors to be handed out to groups of taxpayers.
There is no reason why the same mistakes would have to be repeated if we reset the income tax to a flat 10% rate collected at the source so no personal information could fuel the deduction/exemption/credits political machine.
“The FairTax enjoys more support from this quarter than any other tax reform proposal, including the flat tax and the reforms outlined in Congressman Paul Ryan’s Path to Prosperity. The latter two reforms provide for large personal exemptions...”
As though there is a SINGLE “flat tax” proposal out there everyone refers to, and it NECESSARILY must include a LARGE PERSONAL EXEMPTION. What kind of strawman argument supposes the political will for a flat tax, but no will to avoid poisoning it with exemptions/deductions/credits ?
Yet another article on the FairTax that ignores its two major flaws. It attempts to put the entire burden for SS/M on the wealthy, and it ignores how human behavior will drive the wealthy to reduce their consumption within the tax zone and leave a huge hole in projected revenues.
A National Retail Sales Tax would need to be at a lower rate than the VATs in use anywhere else the wealthy might choose to spend their money. Otherwise they’ll take their new higher take-home pay and spend it outside the tax zone and produce no FairTax revenues.
People who make $10K and spend all of it do so because it is available. If they had only $9K, one of two things would happen. Either they would find some way to make more money, or prices would fall so they could still buy the same amount of stuff for $9K.
HR25 is not even a clean slate. It begins with tax favors already built in. Prebate, education exemption, $5K limit on tip income for SS benefits, etc.
In other words: “Let’s buy votes of low income people,” and “Let’s buy votes of teachers, students and parents of students while screwing everyone without education expenses,” and “Let’s penalize all those shifty people who make their money from tips rather than wages by ignoring most of their spendable income when figuring their SS benefits.”
“Why not just call it The Federal Sales Tax?”
Because that would be misleading. A Sales Tax is not “progressive”, but the FairTax is very “progressive”.
It aims to send out tax credits called “prebates” so lower income people end up paying nothing (not even SS/M contributions), middle income people pay almost nothing, and big spenders (otherwise known as successful people) get shafted with close to the full 23% rate.
A true Federal Sales Tax of 10% without all the “progressiveness” would have my support. That rate would collect enough revenue to completely replace all federal individual and corporate income tax. It would be low enough to avoid driving the wealthy to spend their money overseas. It would not attempt to bury the SS/M problem in a new tax on the wealthy.
I am not opposed to a flat tax. As a practical matter it would be an improvement. Nevertheless, you overlook the fact that millions of people are self-employed, that not income is wages, etc.
I didn’t forget the self employed, it is just not an advantage that the FairTax has over an income tax.
Under the FairTax, the self employed would still have more complicated tax compliance than employees. They’d still have to report their own income to get SS credits, and they’d likely have to collect FairTax when selling their services or products to end-users. To prosecute fraud of claiming more SS credits than their real income, they would still be subject to audits from an IRS-like agency. These are some of the reasons I think the attempt to wrap SS/M into the FairTax is misguided. Without SS/M and prebates, the FairTax would be revenue neutral at 10% rather than 23%. A 10% FairTax would also have much less cheating and avoidance than at 23%.
A flat income tax collected at the “source” means not just employers, but financial institutions. Easy to do when an investor has gains, but allowing for losses would complicate things, I admit. Probably the only way to do it would be to net all gains and losses annually, whether realized or still on paper. Instead of everyone being subject to audit, however, only employers (including the self employed) and financial institutions would be subject to audit. A much smaller IRS would be focused on 20M tax filers rather than 150M, and using a much simpler set of rules.
Yes, I like your idea.
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