Fine, let's have the fair tax.

Would anyone want to barter? I grow homemade oyster mushrooms. I will trade you a few pounds of them if you help with my landscaping. You know someone who raises chickens and cows? Thats great, as I have an accountant friend that will manage your portfolio for a specified amount of milk, beef, eggs, and chicken.

This would drive all business underground, and not just the drug and prostitution markets.

Next the federal government will ban barter.

Let is return to import duties. We do not need the federal government to get enough tax revenue to enrich their cronies and wage war.

Can I have the Fred tax?

http://fred08.com/NewsRoom/PressRelease.aspx?ID=83cce9c2-c521-4394-b838-efaae396 7afe

The Thompson plan would give Americans greater choice, by giving them the option of remaining under the current, complex tax code or opting for a simplified, flat tax code. The simplified tax code would contain two tax rates: 10% for joint filers on income of up to $100,000 ($50,000 for s ingles) and 25% on income above these amounts. The standard deduction would be more than doubled to $25,000 for joint filers and $12,500 for singles. The personal exemption amount would be increased to $3,500. Therefore, a family of 4 would be exempt from income tax on the first $39,000 of income. The simplified tax code would contain no other tax credits or deductions. It would also retain the 15% tax rate on capital gains and dividends. This approach would dramatically simplify taxes for tens of millions of Americans. This proposal would serve as a stepping-stone to fundamental tax reform

I might as well include a picture here:

Wow...

and LargeCanine has run away as well.

Maybe him and Crosshair had somewhere better to be.

I'd be happier if they actually let some of it sink in...

mofroe: My question about the national sales tax is this:
What, if anything, will be done to compensate people that have already paid income tax on their savings, and now would have to pay an additional tax on their new purchases?
The double taxation in these situations is inherently unfair and needs to be addressed I think

This is the same question I have. I have a lot of money in my bank account right now, and I've already paid income taxes on every cent. Can someone who knows more about the Fair Tax proposal fill us in?

cchris_39

Great post. Payroll withholding is the greatest fraud ever perpetrated on the American people.

If people actually received what they made and had to write their own check to the federal government every payday we'd have alot smaller government in a hurry.

Yeah, because everyone that makes money is on a payroll. There certainly aren't self-employed people that have to pay their taxes all at once, no way.

If I sound bitter it's because a friend of mine was working as a contractor up until this year when he started working for the same guy all the time on a payroll. Now, all I hear is "wah, wah, wah they're taking my money, it was $x this cheque and oh my god what thieves, biatch whine moan complain"

Which is absolutely farking retarded, they would be taking the same amount of money if he was contracting/self-employed.

That is, if the lazy fark would bother paying his taxes from last year.

/yes, he owns the "Don't steal, the government hates competition" t-shirt
//would be nice if these idiots would realize that the only reason they have jobs in the first place is because of the social structures paid for by........TAXES!

If the "Fair Tax" thingy was so great then its supporters wouldn't have to lie about the tax rate. It is 30% not 23%.

Oh what a great idea -- rely solely on one of the most regressive taxes in existence (besides the payroll tax, of course). That's a really crackin' idea.

I'm all for a simplification of our tax structure, it's far too complicated at the moment. But this is probably the worst possible method of doing it.

If you can't think of any ways that the extremely wealthy and extremely poor would abuse the "FairTax" system for their own personal enrichment, you aren't thinking very hard.

Baby Diego: cchris_39

Great post. Payroll withholding is the greatest fraud ever perpetrated on the American people.

If people actually received what they made and had to write their own check to the federal government every payday we'd have alot smaller government in a hurry.

Yeah, because everyone that makes money is on a payroll. There certainly aren't self-employed people that have to pay their taxes all at once, no way.

If I sound bitter it's because a friend of mine was working as a contractor up until this year when he started working for the same guy all the time on a payroll. Now, all I hear is "wah, wah, wah they're taking my money, it was $x this cheque and oh my god what thieves, biatch whine moan complain"

Which is absolutely farking retarded, they would be taking the same amount of money if he was contracting/self-employed.

That is, if the lazy fark would bother paying his taxes from last year.

/yes, he owns the "Don't steal, the government hates competition" t-shirt
//would be nice if these idiots would realize that the only reason they have jobs in the first place is because of the social structures paid for by........TAXES!

Yeah, he sure is an idiot for not liking to give the federal government his money. You must be perfectly happy paying for the war in Iraq.

I'm not quite sure where ekdikeo4 is getting his numbers. I don't even think being buried in an ass can distort them that much though.

Why would married couples get double credit under these other options? Their cost of living goes down (I'd say it goes down considerably).

Go Go Chinchilla!: Taxation is theft.

Rhetoric is diarrhea.

Why the national sales tax is a bad idea.

1) Make a ton of money, and save it
2) That money is taxed
3) National sales tax goes into effect
4) Try to spend your money
5) That money is taxed again.

I don't care for any double tax scheme

GoodyearPimp: Why would married couples get double credit under these other options?

Because they are not gay.

dittybopper
No, a true regressive tax would have the top earners paying a smaller percentage of their total income than those below them on the economic scale.

Thus, it is propaganda to call a system where everyone pays the same percentage 'regressive'.

Here is the actual proper terminology:

Progressive Tax: The more you make, the higher percentage of your income you pay.
Flat Tax: Regardless of income, you pay X percent.
Regressive Tax: The less you make, the higher percentage of your income you pay.

Certainly, a progressive tax disincentivizes people from making more money: I've known people to refuse overtime simply because that bumps them into a higher tax bracket, and it effectively lowers the amount of take-home pay per hour worked.

Good job, now change all instances of "income" to "disposable income" and recompute your calculations to see why a fair tax is actually regressive.

Charming_Man

Nah, my government wasn't so farking retarded as to start a land war in Asia on borrowed money.

But, hey, if it makes you feel any better, you can just go on believing that people shouldn't pay taxes. Lord knows we don't need any of the things they pay for.

Maybe I should update that..

"Wah, wah, my taxes go towards things I don't want/like/use/care for! If only there was some mechanism for the people to exercise control over the government and what they spend my taxes on! It's just so UNFAIR!"

dittybopper: SusanIvanova: Oh what a great idea -- rely solely on one of the most regressive taxes in existence (besides the payroll tax, of course). That's a really crackin' idea.

It is not 'regressive'.

Regressive would require that the less you make, the higher percentage of your income you would have to pay.

It's regressive in that those people who have to spend most of their money to get by would pay more of their income in taxes.

dittybopper: Regressive would require that the less you make, the higher percentage of your income you would have to pay.

And poorer people (because they have to in order to keep functioning as a productive member of society), spend a greater proportion of their income than richer people, who tend to invest a decent proportion (because they have money that they don't need for immediate consumption).

Sales taxes are extremely regressive in practice, which doesn't do good things for consumer spending patterns or economic growth.

If you spend at the poverty rate, you pay no tax. If you spend 2x the poverty rate, you pay 13% tax, and so on until you get close to 23% (Or whatever the rate is) but you never exceed it.

It's still regressive and therefore ironically named.

Ummm, no. How is a tax that is a higher percent on higher spending regressive? That is the definition of a progressive tax.

Locke3k
Good job, now change all instances of "income" to "disposable income" and recompute your calculations to see why a fair flat tax is actually regressive.

FTFM

I'm a Ron Paul supporter, so naturally no tax at all is my first choice, but I wouldn't mind paying a flat tax of 10% to pay down the deficit, once federal spending gets under control.

My objection to the Fair Tax concerns immigrants, both legal and illegal, who send a large percentage of their income to relatives in other countries. Since this money isn't spent here, there would be no taxes paid on that income under a Fair Tax plan. At least a flat tax would apply to all income, and everyone would be free to do whatever they want with the 90% or so remaining.

I don't know how much money is currently being sent out of the country, but I do know it's a staggering amount.

Code_Archeologist: Hold on, being in the retail point of sale business I have to ask, how the fark do you expect retailers to charge a customer the correct tax rate? The programming around something like that is mind boggling and might cost million of dollars in development and billions in implementation.

Most retailers already collect sales tax for the state, so it would not be much different. The rate collected does not change, the effective rate would vary according to how much a person spent over the year.

And as far as you question about the impact to the overall economy, think about this: You have your entire paycheck available to spend rather than just "take home pay". It would encourage rather than discourage saving and investment domestically, and with the embedded taxes on producing goods removed, it is likely foreign investment in the US would increase.
There may be a down turn in direct consumer spending, but much of that will be balanced out by the investment side. We would end up with a stronger economy.

Emrick: If the "Fair Tax" thingy was so great then its supporters wouldn't have to lie about the tax rate. It is 30% not 23%.

You're the only one telling lies. It's 23% inclusively, just like the IRS quotes tax rates.

We need to implement a true regressive income tax. The less you make, the more you have to give to the government. Poor people have been free riding for too long, and they need encoragment to make more money. 0-$30,000 50% tax rate, $30,001-$50,000 40% rate and etc.

To much of your money getting taken by the government???? Get another job and stop whinning. It'll be like getting 2 raises.

I find that the discussion in the thread is insightful, informative and well spoken.

The article, however, seems to say "Fair Tax is bonkers wacko and Hucabee is a poopyhead" without ever making an actual argument.

Peace.

ManRay
Most retailers already collect sales tax for the state, so it would not be much different. The rate collected does not change, the effective rate would vary according to how much a person spent over the year.

So let me get this straight...they charge a flat tax at the point of sale, similar to how they arrange sales tax currently, and then afterwards they give you a rebate or you end up having to pay more to adjust for what your yearly purchase amount was?

Presumably there would be a government agency similar to the IRS that would be required just to keep track of all the purchases made by every person in the United States?

This seems like more of a boondoggle than the current income tax system. How do we collect from foreigners who came here to purchase items? On the flip side, do we collect from Americans who buy stuff over the internet and/or from a foreign country? These are just two of my concerns that popped into my head first.

Miles D Davis Jr.: LargeCanine

First says:
EVERYONE would recieve a check equal to the tax they would pay for necessities at the poverty level.

Then has the balls to say:

Think of it, tens of thousands of tax lawyers and accountants would need new jobs

Uhm, this wouldn't kill the system, it would just merely change it. The amount of finagling and bureaucracy that would go into determining "what's at the poverty level" and the geographic variability of the poverty level line would be massive.

We already determine what the poverty line is, that process would simply be used to determine what the check would be. Everyone recieves the same check, wherever they live. The massive bureaucracy, both private and public, would in fact need new jobs.

And again, how does this do anything except force corporations to move further out of our country so their materials aren't taxed?

Retail sales tax, not wholesale. Its not a VAT. Their materials costs would go down as imbeded taxes would diminish. Further,you have this ass-backeards, the current tax system we use punishes US corporations - taxing them on their income both inside and outside the US, giving competitive advantage to foreign corporations and causing some US corporations to move overseas. This factor would be eliminated.

Let alone rich private citizens (and border people like me)...

Prices on new retail goods would go up only slightly. 21% of the cost of an item is imbeded taxes which would be eliminated. This plan is NOT a tax cut OR a tax increase, it shifts the point at which the tax is collected, and elininates a vast bureaucracy and the capricious nature of the rules.

//So many half baked ideas, so little time.

uh huh. Its clear you have not actually read the proposal.

Miles D Davis Jr.: Wow...

and LargeCanine has run away as well.

Maybe him and Crosshair had somewhere better to be.

I'd be happier if they actually let some of it sink in...

I have work to do. I am not obliged to sit around answering your posts. Accusing me of "running away" because I don't respond to your post is a childish thing to say.

Code_Archeologist: Problems with the fair tax which I have not seen answered.

* All sales taxes are regressive, and most economists will tell you that regressive taxes reduce the spending power of the consumer base, thus slowing economic growth. How is the Fair Tax supposed to overcome its regressive nature or the impact of a slowed economy?

The fair tax includes a rebate intended to cover the taxes on cost of living expenses. So, over the year, you spend Cost of Living + Discretionary. You are, effectively, only taxed on your discretionary spending.

I think we all agree that the rich have more disposable income that will be spent on yachts, jetskis, and so on. So, they also pay a higher portion of their income in taxes.

Vacaboi: The fair tax includes a rebate intended to cover the taxes on cost of living expenses. So, over the year, you spend Cost of Living + Discretionary. You are, effectively, only taxed on your discretionary spending.

Is the tax on discretionary spending HUGE then?

Baby Diego: t/like/use/care

Look into how the government collected revenue before the income tax. I am writing a term paper on 1840s monetary and tax policy, and the numbers add up beautifully and according to GAAP.

The government is contractually obligated to defend the boarders, and in return, we give them permission to collect duties on imports.

We also contract the government to provide a legal framework, and in return, they can collect corporate income.

Locke3k: So let me get this straight...they charge a flat tax at the point of sale, similar to how they arrange sales tax currently, and then afterwards they give you a rebate or you end up having to pay more to adjust for what your yearly purchase amount was?

Not quite. You submit a form (1 page) that tells the gov. what your status is (single, family, how many people, etc) and then each month you receive a "prebate" check based on the Commerce Dept. calculations of necessity-level spending for your status. Everyone gets this check, regardless of income, but the net effect is that it lowers the effective tax rate on lower-income households because they receive most or all of their expenses back with the prebate check.

In order for the FairTax to be implemented at all, the 16th amendment has to be repealed. All income tax, all corporate taxes, basically the whole shebang is gone and is replaced with a built-in retail level sales tax of 23% on NEW goods/services. The fairtax.org website explains it much better, so if anyone is truly interested in learning about it, I would read there.

As to the "double taxation" complaints, the argument in favor of the FairTax is this: Right now, if you go buy a $100 item, you're paying the retailer for the cost of the item, plus all the markups it goes through in the process between manufacturing and point-of-sale due to taxes on business transactions. That tax-increased amount is estimated to be 22%, and because the FairTax removes all of the factors that cause those increases in price, there is effectively zero change in the end retail cost of the item - it's still $100 even with the FairTax. Your purchasing power doesn't change, and you aren't being "double taxed". Obviously any state-level sales taxes that are already added to the cost of the item would remain, but you pay those regardless.

Add to that the fact that everyone takes home 100% of their gross income as net income, and your disposable income suddenly gets a lot bigger.

QU!RK1019: Vacaboi: The fair tax includes a rebate intended to cover the taxes on cost of living expenses. So, over the year, you spend Cost of Living + Discretionary. You are, effectively, only taxed on your discretionary spending.

Is the tax on discretionary spending HUGE then?

It's 23%. The same as all spending. But the taxes you pay for cost of living expenses are refunded.

I'm not sure that it would be practical to enforce something like this, but I'm amazed at how complicated people want to make something that is so simple.

Vacaboi: he fair tax includes a rebate intended to cover the taxes on cost of living expenses.

Not having read BOORTZ's book, how is cost-of-living figured out? Is it a state-by-state decision, or is it the same across the nation? Obviously, there are huge differences. Cost-of-living in New England is much higher than in the South or the Midwest.

StrikitRich: Emrick: If the "Fair Tax" thingy was so great then its supporters wouldn't have to lie about the tax rate. It is 30% not 23%.

You're the only one telling lies. It's 23% inclusively, just like the IRS quotes tax rates.

You are talking crazy talk. The IRS doesn't quote tax rates inclusively. Link (pops)

hbeck2003: In order for the FairTax to be implemented at all, the 16th amendment has to be repealed.

Not necessarily. The 16th Amendment allows an income tax, it doesn't mandate one.

Son of God: Not having read BOORTZ's book, how is cost-of-living figured out? Is it a state-by-state decision, or is it the same across the nation? Obviously, there are huge differences. Cost-of-living in New England is much higher than in the South or the Midwest.

Cost of living is already calculated each year by the US Commerce Dept. It's a simple matter to use those figures to then calculate the appropriate "prebate" check for people/families.

Vacaboi: It's 23%. The same as all spending. But the taxes you pay for cost of living expenses are refunded.

I'm not sure that it would be practical to enforce something like this, but I'm amazed at how complicated people want to make something that is so simple.

23% is pretty darn big. Is FairTax designed to help stop people from purchasing stuff? I like the Zen idea of freeing yourself from material possessions, but I don't see why an economist would like this. :)

No, I'm kidding. But seriously, I read the link that StrikitRich posted, and it kinda seems like it's designed for the rich to get richer, and so on. What is it really supposed to do?

Son of God: hbeck2003: In order for the FairTax to be implemented at all, the 16th amendment has to be repealed.

Not necessarily. The 16th Amendment allows an income tax, it doesn't mandate one.

Fair enough - however the FairTax bill calls for it, and I sure as heck wouldn't want to implement the FairTax with the gov. still being able to turn around and tax my income.

ManRay: Most retailers already collect sales tax for the state, so it would not be much different. The rate collected does not change, the effective rate would vary according to how much a person spent over the year.

Crosshair replied that the tax percentage is a sliding scale based on amount a person spends above the tax rate. How does the retailer identify what your percentage of taxation is supposed to be on the coffee or the car you are buying.

CityHall: "Fair Tax" was invented and or being pushed by Scientology as part of their vendetta against the IRS.

It's a 30% tax, which is fraudulently passed off as 23% because 30 cents tax divided by $1.30 new price = 23%.

Both the scientology part and the 30% part are patently false.

hbeck2003: In order for the FairTax to be implemented at all, the 16th amendment has to be repealed.

The 16th Amendment: The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

You're over-complicating things. Any bill establishing a "Fair Tax" would, I assume, include the repeal of all other taxes (or at least income, corporate, probably capital gains ...). So, there's no problem there. You don't need to deconstitutionalize the income tax.

It also occurred to me that the whole "census or enumeration" bit may be what's throwing you. I think that's meant to loosen the restrictions on Congress' ability to tax -- not prohibit them from giving rebates/prebates, etc. to people.

QU!RK1019: 23% is pretty darn big. Is FairTax designed to help stop people from purchasing stuff? I like the Zen idea of freeing yourself from material possessions, but I don't see why an economist would like this. :)

It is actually 30%, not 23%. If you buy a $100 widget the tax is $30. Fair Tax liars get away with saying 23% because the tax, $30, is 23% of the total cash outlay, $130.