The Fair Tax plan was created by and is supported by American citizens, not by the lobbyists who run Congress. So, inherently, it garners trust because it was created outside Washington DC.
It repeals the income tax, corporate tax, payroll taxes (FICA and MEDI), gift tax, and estate tax and repl... more
The Fair Tax plan was created by and is supported by American citizens, not by the lobbyists who run Congress. So, inherently, it garners trust because it was created outside Washington DC.
It repeals the income tax, corporate tax, payroll taxes (FICA and MEDI), gift tax, and estate tax and replaces the current revenue stream with a national retail sales tax.
It lessens or solves so many problems that Congress has created by currying favor with special interests over so many years, including many of the problems that have led to the current economic crisis.
For example, eliminating the corporate tax and income tax will flood this country with investment from overseas. And with investment, jobs that we have been off-shoring for years will come back. Everyone wins except the lobbyists.
By taxing consumption and rebating life's necessities, it's effective rate (tax paid minus rebate) starts at zero and approaches the maximum rate the more you spend. So, the wealthy, who spend more, pay more.
It encourages savings and investment because investment gains not taxed. (What an idea!)
There are no loopholes.
Federal taxes are no longer withheld from wage earners and Joe-The-Taxpayer doesn't have to file anything with the Federal Government.
In fact, only businesses that sell at retail have to file and its a simple percentage of their sales AND the business is compensated with a small percentage of the tax remitted to offset its own compliance costs.
By eliminating the ability of Congress to manipulate the Byzantine Internal Revenue Code, the power of lobbyists over the Federal government is greatly diminished. And Congress won't be spending time on its interminable tweaking of the I.R.C.
If the GOP can't get behind an idea that benefits every single American then it deserves to disappear as a political party.
brian tunheim
Can anyone name when and where Socialism worked?
Herb
The article at http://www.mises.org/story/3389 was very interesting but failed to mention five key components and surmise why we are debating it in the first place.
1) The first being the billions of dollars spent annually in compliance costs of taxation. This is reported to be 65 billion to 200 billion depending on which authority you read. Any tax other than the FairTax still has compliance costs and does nothing to eliminate the IRS which in turn can still be used by congress to reward or punish.
... more
The article at http://www.mises.org/story/3389 was very interesting but failed to mention five key components and surmise why we are debating it in the first place.
1) The first being the billions of dollars spent annually in compliance costs of taxation. This is reported to be 65 billion to 200 billion depending on which authority you read. Any tax other than the FairTax still has compliance costs and does nothing to eliminate the IRS which in turn can still be used by congress to reward or punish.
2) The second is addressing the corporate tax which at 35% is the highest in the world. The reported 13 trillion dollars (who knows the real figures) that would come back to America and create jobs is not relevant under any other plan than the FairTax.
3) The third is under the Flat Tax you have no personal control of your taxes as you pay a set amount per individual. Under the FairTax you control your taxes. If you have been frugal all your life and by "used" versus "new" you pay no taxes. Anything that you spend over the poverty level is totally in your control.
4) You don't even come close in reporting how the "empty lockbox" of social security will be covered. The Flat Tax does not address this issue but The FairTax does.
5) The Flat Tax does not cover illegal immigrants, the underground economy, or foreign visitors. The FairTax does in that they all are consumers and will pay their share.
Sorry, "we the people" let the Federal government into the hen house! A government, who has the most employees, owns the most land, has the most buildings, the largest bills in the world, and yet produces no commodity other than the ability to tax its people. If I "must" pay, I choose the FairTax way!
skmoguls
Pete, I reviewed your link from the Mises conference. The gentleman who wrote this article provides misinformation regarding the Fairtax. There are several inaccuracies, all which are well covered in the books. I doubt he read the books. Also, to discredit the fairtax because it does not address the govt spending side of the equation is unfair. Fairtax addresses a better way to collect taxes. Addressing govt spending is important too, but that needs to be dealt with seperately. Once you address go... more
Pete, I reviewed your link from the Mises conference. The gentleman who wrote this article provides misinformation regarding the Fairtax. There are several inaccuracies, all which are well covered in the books. I doubt he read the books. Also, to discredit the fairtax because it does not address the govt spending side of the equation is unfair. Fairtax addresses a better way to collect taxes. Addressing govt spending is important too, but that needs to be dealt with seperately. Once you address govt spending, then we can reduce the consumption tax accordingly. But realistically, how will we pay for the roads you drive on without some kind of tax? Lets be serious!
PegasusRPG
While you have some interesting points, how should the government be funded? Some capitalistic method (where the money they get to spend is in direct proportion to how much good work they do) would be ideal. The biggest problem with this idea is that you have to get the majority of the status quo thinkers on board. A revenue-neutral transparent progressive system is a way to do that. Once that's in place, and the sales tax rate is on everyone's receipts to see, people can then demand the government lower... more
While you have some interesting points, how should the government be funded? Some capitalistic method (where the money they get to spend is in direct proportion to how much good work they do) would be ideal. The biggest problem with this idea is that you have to get the majority of the status quo thinkers on board. A revenue-neutral transparent progressive system is a way to do that. Once that's in place, and the sales tax rate is on everyone's receipts to see, people can then demand the government lower the federal sales tax rate by truely cutting pork. There's nowhere to hide behind a percentage value on every receipt you get.
gaol oriented
let me summarize: taxes are not fair, ergo the Fair Tax and Flat Tax are not fair (they're also not flat). The author actually suggests everyone pay the same amount, independent of income. "the wealthy don't use the streets any more than the poor" Haha, the chairman of Macy's Inc. is only rich because everyone else can use the streets to go and make him so.
Pete
The fair tax is not fair: http://www.mises.org/story/3389
gaol oriented
I think I agree with you. The workers should seize control of the means of production and no longer allow the capitalist class and their government hirelings to steal the value that their labor adds to goods. Finally, I meet a fellow traveler on the glorious path to anarchic socialism.
worl
There is no such thing as a fair tax. We should not have an income tax at all. So instead of replacing it, why not put your effort into abolishing it. Most of you need to realize that taxes are nothing but a form of theift by our gov. & we are now far more oppressed than our founder's were by england.
gaol oriented
oops, typo. I am just kidding, buddy. Seriously though, you're barking up the wrong tree with this fair tax business...I hate to say it because you seem pretty emotionally invested. If you'll actually listen MAYBE I'll explain myself. What we need is something that starts with S and ends in OCIALISM (SOCIALISM)
gaol oriented
hey pete, if you love the free tax so much why don't you marry it? I know why. It's because you're a bigot.
pete60174
The Fair Tax SOLVES the "financial crisis," the problems with collecting the Income Tax (less than 49% collection rate is NOT "collection"), the pending Social Security "train wreck," the $3 trillion untaxed "underground economy," the $1.5 trillion trade deficit, illegal aliens, the shrinking tax base, etc., AND TRIPLE the growth rate of the economy, FOR FREE. The country NEEDS the Fair Tax.
supercop13x
To get politicians to accept the Fair Tax, vote for it instead of them. If your representative has not taken action to support the Fair Tax then write "Fair Tax HR-25" on the voting ballot (assuming all states allow this). Politicians go after the people who are on the fence because they already have the "solid" Rep or Dems. So if enough do this we will be ones they try to gain.
gaol oriented
I think the GOP needs to embrace the following principle: NO WAR BUT CLASS WAR. I think the youth could really get behind the idea of NO WAR BUT CLASS WAR. All true patriots know that there can be NO WAR BUT CLASS WAR. The fair tax will be smashed by the righteous fist of socialism once we realize there is NO WAR BUT CLASS WAR.
pete60174
The average 26% federal tax we pay in retail prices today is IN ADDITION to the Income Tax, Alternative Minimum Taxes, Capital Gains Taxes, Estate (Inheritance) Taxes, Medicare Taxes, Self-Employment Taxes, Social Security Taxes, etc. Federal taxes absorb 40% or more of most people's wages. The Fair Tax replaces ALL that. That is possible because CHEATING on sales taxes is in the single digits.
pete60174
PegasusRPG - that lack of willingness to embrace the Fair Tax (in my view) comes from the TREASURED power to dole out tax breaks, in the form of Amendments to the Tax Code, to friends and campaign contributors. They average FOUR Amendments per day, for every DAY they are in session. Many Congressmen won't embrace the Fair Tax until they are CONVINCED they will only be reelected by doing that.
pete60174
StereoPete - today's federal tax component (plus associated costs) in retail prices ranges from a little over 20% (for mega-corporations) to over 45% (for small businesses, which employ more people). The AVERAGE federal tax component, though, is 25.9%. As an EXclusive tax, that is 35%. With the 23% Fair Tax, net prices paid will usually be a tad LOWER than we pay now. Take home pay will be UP 30%.
PegasusRPG
The fact that this is the hottest issue on the site by far, and has been for months, and is still not accepted reveals something about the willingness to change for the better, doesn't it?
pete60174
Deerichards should know that under the Fair Tax, illegal aliens working as "day laborers" and receiving their full pay in cash, will no longer have a leg up on their compatriots working for legitimate competitors, but those compatriots will start receiving the Fair Tax "prebate," the means by which the Fair Tax UNTAXES "the necessities of life" AND makes the Fair Tax "progressive."
pete60174
The Fair Tax will replace the current "system" with a better tax collection system - less tax evasion & lower costs. Your first dollar of tax paid will be paid when your SPENDING passes Poverty Level spending for a household the size of yours. ABOVE that spending level, 23% will be Fair Tax. Because EVERYONE will pay, most will pay LESS. In 2007, the IRS collected only 48.8% of Income Taxes owed.
sms75
Most taxpayers are in the 15% income tax bracket. That 15% that you are paying now plus the 7.65% payroll tax (Social Security and Medicare) that you are paying now already adds up to a tax payment of 22.65%. Therefore the FairTax 23%, without even the effect of the embedded income taxes, is just replacing what you already pay - and replaces it with a better system!