[The Real Hawkeye]

Congressman, I urge you to vigorously support Congressman John Linder's proposed bill, "The Fair Tax Bill" (H.R. 25). This is perhaps the most important bill to come along since 1913. It will restore the right of privacy to the American people, stolen by the passage of the National Income Tax nearly a century ago, by replacing the current system of reporting to the IRS with a National Sales Tax. Additionally, it will eliminate the intrusive IRS, and tax fraud entirely. For once, the criminal class will find it impossible to avoid paying Federal taxes on the billions that they illegally generate each year. This will help solve multiple problems, not the least of which is the national debt. I will take notice whether or not you support his bill, and will keep my neighbors apprised of my observations. Thank you.

P.S. Since ALL Federal funding will be accomplished through the Fair Tax, there will no longer be any special tax on class three weapons, and thus the word Firearms would have to be removed from the BATF, not to mention Alcohol and Tobacco.

You may write your Rep via the hyperlink below.

http://www.house.gov/htbin/wrep_findrep

You may read about Congressman John Linder's Bill at http://linder.house.gov/index.cfm?Fuseaction=Resources.Home&Resource_id=1

[Keaner]

Wheres the popcorn icon when ya need it? Interesting, but I'll have to watch for a while.

[The Real Hawkeye]

What's a popcorn icon?

[Keaner]

Its a little smilie guy eating popcorn, i always found it funny, and appropriate.

[R.H. Lee]

Dream on. There is virtually no way congress will give up the power of micromanaging behaviour, rewarding friends, and punishing enemies by way of the tax code as enforced by the IRS.

[Keaner]

It is interesting, I am reading a ton about it from the site.

One problem I have is that it could discourage the economy a little by making it so that people do not buy stuff, because of the higher price. Even though they have more money, few americans can make the connection.

It does make sense from what I see, but I would love hear from some detractors, to see if the bad points are worth it.

[Fly320s]

Keaner, the prices won't increase.

The price of an item, let's use a gun for our discussions, includes some built in taxes. Those are the taxes that the manufacturer pays to but the raw goods to build a gun, and the taxes a manufacturer pays as income taxes, and any other taxes required by law.

The FairTax removes all those imbeded taxes which amounts to about 20% of a gun's price. Take those out and then add a 20% to 23% sales tax on top of the new, lower price and you get back to where you started.

Also, since there would be no imcome tax taken from your paycheck, you have more disposible income to spend as you wish.

[beerslurpy]

You cant reduce the tax burden unless you reduce the spending. All these new tax schemes just rearrange the deck chairs and dont address the water streaming in through the boiler room.

[Fly320s]

beerslurpy,

Under the FairTax plan, net revenue to the government will not change which menas government spending need not be decreased. It is revenue neutral as Boortz says.

I would love to see government spending reduced, but this plan is solely concentrating on changing the way the government gets money.

Under our current income tax one really has no choice about paying into the system. Taxes are withheld from one's paycheck. At the end of the year, if one qualifies, that money is returned without interest.

Under the FairTax, one pays taxes only when one chooses to by buying something that is taxed. There will be many items that are not taxed, or one may be exempt from paying the sales tax based on income.

[The Real Hawkeye]

Beerslurpy, have you read what the Congressman says about it? There are tremendous advantages to it over the present system. Once we get rid of the impossibly complicated system we have, we will save money due to the elimination of the cost of filling out our taxes each year, which should lower the total tax burden (Forcing organized crime to pay their fair share will also do that), but after it is simplified, we can then more successfully lobby to decrease the size of government. It's not an either or proposition.

[Flyboy]

Other benefits includs such things as getting rid of tax-exempt organizations. Think on that one for a second.

The NRA has huge amounts of money, but doesn't spend much on lobbying. Why? Because it's tax-exempt, and thus restricted on what it can say. The NRA-ILA isn't limited that way, because it's not tax-exempt, but has much smaller coffers (in no small part becauce very few people have even heard of it).

I don't think it's in the book (I've just started reading it), but the FairTax would get rid of a lot of unconstitutional restrictions on free speech.

BTW, the FairTax is getting a lot of interest from a lot of people. Boortz has related stories of everybody from Waffle House waitresses and truckers discussing the plan, to the President himself apparently reading the book:
http://isakson.senate.gov/pictures/072205bushplane.jpg

It's time to start calling your Congressmen.

[idakfan]

I agree with R.H. Lee:

There is virtually no way congress will give up the power of micromanaging behaviour, rewarding friends, and punishing enemies by way of the tax code as enforced by the IRS.

The IRS is one of the many reasons that many American's who might otherwise "raise a stink" somehow don't - because they'll be slapped down by the IRS.

It's their little Stalin-bulldog on a leash.

[stevesmith7]

The price of an item, let's use a gun for our discussions, includes some built in taxes. Those are the taxes that the manufacturer pays to but the raw goods to build a gun, and the taxes a manufacturer pays as income taxes, and any other taxes required by law.

The FairTax removes all those imbeded taxes which amounts to about 20% of a gun's price. Take those out and then add a 20% to 23% sales tax on top of the new, lower price and you get back to where you started.


Fly,
This is the part I just don't get. If the Fair Tax is revenue neutral and the Gov't already collects the 20% imbedded tax on your gun then when I pay the 20% Fair Tax they get the same money as before from the product. Manufacture's tax vs Fair Tax. Yet, they're not getting the thousands of dollars they currently collect from me in income tax. It just doesn't add up. There's no free lunch here, prices have to rise and anyone whose's saved any money after taxes all these years has the value of their savings cut by some amount. This may be offset somewhat by tax free investing. Don't get me wrong, I'd love to get rid of the IRS but can't undeerstand how this could work.

Steve

[The Real Hawkeye]

Steve, just read the material provided by the Congressman. He explains it in depth. Cost of running government will be reduced due to the elimination of the IRS and their enforcement wings. A huge burden will be lifted from commerce, do to simplified taxation. The only ones who will lose with this deal are the people profiting off the current system, such as organized crime and the Statists.

[beerslurpy]

Shifting the tax to the poor doesnt make it any less bad. I understand FairTax and I do not think it addresses the central problem. It is just like countless other tax "reforms."

I am not interested in a "federal sales tax" where the burden of proof for its payment rests with the owner of the item. Ever have an NFA tax stamp lost in a fire? Ever declare something on a tax return that you couldnt provide a receipt for? This is going to end up being a bigger pain in the ass than the current system. There will be massive dodging of this tax and massive witchhunting to find tax evaders. A lot of innocent people are going to be burned.

What if I mow some guys lawn and he welds up an intake manifold for me?
What if I buy a crate of ammo for cash off some guy at a gun show?
What if I buy a TV in 2003 and dont have the receipt for it in 2008 when the IRS audits my possessions for sales tax payment?

[Cacique500]

Wheres the popcorn icon when ya need it? Interesting, but I'll have to watch for a while.

http://www.1911pistolgrips.com/img/miscwebpics/popcorn.gif

[The Real Hawkeye]

Beerslurpy, do you think it's fair that, for example, restaurant owners (and other cash businesses) pay only a small fraction of their correct tax burden, while those who receive a pay check each week get burned?

[beerslurpy]

I dont think that this fixes the current unfairness of the system because all the same bastards will be extracting all the same money out of our pockets. Calling a wolf a dog doesnt stop it from eating your sheep.

This system is going to be even more adversarial and just as unpleasant as the previous system. They are betteing that this system will produce greater revenue than the current one. What happens when they realize how many transactions are cash-only and decide to crack down? What happens when posessing marijuana becomes a federal tax evasion offence?

There is a special rate for old age, pensioner and disability, not to mention hospital. This will lead to problems when grandmothers buy cars for their sons as gifts, but the IRS still wants the full cut.

As I read more of the bill (which is still fairly long) I will post more criticisms. You guys are fooling yourselves taht you are fixing anything.

[The Real Hawkeye]

What happens when they realize how many transactions are cash-only and decide to crack down?That's the beauty of it. Even if an occasional "cash deal" is arranged to avoid sales tax, the person who profited from it will still have to pay his fair share of tax when he goes to the grocery store, or buys his next yacht. It is MUCH harder to evade taxes this way, which will have the effect of flooding the treasury, which will result in a lower tax burden in general, so long as we keep them from growing government to match the new supplies of revenue.

[spocahp anar]

Keaner; read the book.

Do not think for one moment that the Fair tax will eliminate the 200$ TAX stamp for Class III weapons.

But that does raise a question: Will all permits fees, registration fees, etc... be gotten rid of? You can bet they won't, remember the purpose of the fair tax is to replace income generated by the Income Tax, not user fees.

Might need to write Linder or Boortz about this.

[Fly320s]

stevesmith7,

I'll try to explain it, but I'm no expert, and I don't have a copy of the book in front of me for reference.

I'll start with the prices. They won't rise and here's why: when the FairTax plan is implemented there will no longer be income tax. No income tax means that Colt, for example, does not have to collect income tax from it's employees (withhold it from the paychecks) and send it to the IRS. Since Colt is no longer collecting the taxes for it's employees, Colt can save money by reducing it's payroll/accounting staff.

Since there is no income tax, Colt can reduce it's CPA/lawyer staff that tells Colt the best way to reduce it's corporate tax burden.

Since there is no income tax, Colt's suppliers will also be able to reduce their costs, and through the competitive market, pass on those savings to Colt. That's a lot of suppliers and business partners.

All of those little savings eventually allow Colt to lower the price of their 1911s by about 20%. In case you're thinking that Colt won't lower their prices, that they will just keep the extra profit, you're wrong. Because if Colt doesn't lower their prices, Kimber will lower their prices and gain market share in the process eventually driving Colt out of business.

So now Colt's 1911 price went from $700 retail to $560 retail. But since Colt's costs are also lower, their operating profit is the same.

As it stands now, revenue to the IRS has been decreased (basically to zero) due to the income tax being canceled.

Since their is no income tax, no Social Security tax, no Welfare tax, and all the rest, your paycheck just increased by 20%. Amazingly enough, you actually get to keep what you've earned. :what:

So here we are: about 20% more money in your pocket, with goods and services costing about 20% less. (Basically a 40% gain for you) So, now you're rich. At least you have much more money in your pocket to do with as you wish.

You still gotta eat. You still gotta put gas in the car, ammo in the gun, and clothes on your back. So you gotta spend some of that money in your pocket. So, go down to Coal Creek Armory and buy that new Colt you've always wanted. The price is $560. Add in the 20% sales tax and you get the Colt for $700. Back where we started you say? Not exactly. You're still getting the gun for $700 out-the-door (without any additional sales tax), but you haven't had any taxes taken from your paycheck. That sounds better to me.

Now, if absolutely no one in the country buys anything that can be taxed, then no tax money will go to the government. That could be bad. But if no one buys anything, then all businesses go belly-up. That is bad. As we all know, we Americans will spend our money. More money in our pockets mean more LCD TVs on our walls, more SUVs in the garage, and of course more Kimbers in the safe. Yes, go get a safe, you've got the money now.

As a bonus, the IRS will no longer be necessary. At least not in it's current gargantuan form. Some form will be left to make sure the businesses that collect the tax actually forward it to the government. To cover the minimal cost of collecting and forwarding the tax money, every business will keep a very small portion of the tax, say 1/10 of 1%.

That, as best as I can remember, is how it works.

More to follow.

[beerslurpy]

Hawkeye, revenue will be greatly reduced. People will go out of their way to save 30 percent on the price of the big ticket items.

If this happens, I will cut my expenses nearly to zero and just accumulate money. I will then start a rental business and begin accumulating property for business use. If I wish to use it, I will simply pay my corporation rent.

The way out of tax in this system is just like the way out in the current system. The key words are "business" and "incorporation."

[The Real Hawkeye]

Beerslurpy, but even Sonny Corleone, when he wanted to buy a new Rolex, paid State sales tax on it. Now Sonny will be paying his Federal taxes that way too.

[Fly320s]

Shifting the tax to the poor doesnt make it any less bad. I understand FairTax and I do not think it addresses the central problem. It is just like countless other tax "reforms."
I don't know why you think the poor will be burdened, but they won't. The FairTax has a provision to give a monthly credit to people below a defined income level.

Each month, according to the plan, people below a certain income level, and other criteria, will get an actual check from the government to cover their basic costs, such as food. IIRC, it's about $600 per month for a family of four. Now, I do not like this part of the system, but I need to get more information about it.

As for the central problem, I don't understand what you mean. My central problem with the current system is that I'm taxed on my income. If I earn less money, either by choice or circumstance, then I pay fewer taxes. More income = more taxes. Why? Just because I am richer or poorer does that mean I use proportionally more or less government services?

Not to mention the fact that our esteemed legislators in DC can mold the tax system to reward or punish who they choose. There seem to be lots of tax breaks to corporations that just happen to be big contributors to politicians and PACs. Must be a coincidence. I'd be much happier if our representatives didn't have that power.

I much prefer a user fee type system. Or in this case a user tax system. If I choose to buy a new gun, then I pay into the tax sytem. If I choose to stuff all my money in my mattress and never spend a dime, that's my choice.

Also, other taxes such as the death tax and taxes on investments are removed. More bonus points.

I am not interested in a "federal sales tax" where the burden of proof for its payment rests with the owner of the item.
The burden of proof will rest with the business owner, who is the tax collector. It happens at the point of sale. When you buy a gun from Coal Creek Armory they add in the 20% sales tax, then forward 19.9% of that sales tax to the IRS. You have no responsibility to prove that you paid the tax just like you have no responsibility to prove that you paid any sales tax this year.

You won't need any receipts for tax purposes, because you won't be allowed any deductions. There won't be any forms to fill out and mail in by April 15th. No quarterly taxes to pay. NO PAPERWORK.

As for private sales... more power to you. But just as a seller is required to report income today, a seller will be required to report a sale under the new plan, if it is a business. What constitutes a business? Ask a lawyer.

There will be people working the loopholes under FairTax just as there are people avoiding income tax today. In the end, it will all be a wash.

[DeseoUnTaco]

This is a great idea. We should all write our reps. asking them to sign on to it. The IRS is the biggest enemy of freedom in the US.

As others have pointed out, this proposal is revenue-neutral, so it has no impact on the budget or spending.

As others have pointed out, it means no more tax returns. It means no more of them snooping in our lives. Only businesses that do sales would have to hassle with this, and it's not a big hassle because most businesses already have everything in place for sales tax (except in a few states that don't have sales tax). It would have a beneficial effect on the economy. It's more fair, because it's very hard to evade a sales tax, and it gets tax from everyone, including criminals, and including rich people who can afford fantastic tax lawyers and tax schemes. They won't escape from paying their fair share.

And as others have pointed out, the Federal government exists mainly to micromanage our lives. Congress loves the ability to give out tax credits, tax exemptions, that kind of thing. And a lot of private citizens who might support the idea of the Fair Tax are afraid to get involved, such is the power of the IRS over individuals.

Let's put it this way: the IRS knows more about our lives than our family members and closest friends do. A group of beaurocrats who view us as their farm animals are more intimate with us than our most trusted friends.

So we should all support the Fair Tax, and realize that it's going to be slow going. This proposal has been out there for several years now. It may take several more years for it to get some momentum.

One bright spot is that there are serious rumblings about a serious tax overhaul. This was one of the Bush priorities for the second term. Unfortunately it has been sidetracked by an Iraq war gone astray and a hurricane. But there still are a lot of people (voters like me, and politicians) who want to do something serious about the tax code. The tax code has become a cancer and some are waking up to the idea that the best thing to do is to slay the beast. A national sales tax is the best way, due to its simplicity, fairness, and the fact that only certain business owners would even have to mess with it.

[beerslurpy]

Youre either lying or youre mistaken. Either way you are spreading falsehoods.

`(d) Liability for Tax -

`(1) IN GENERAL- The person using or consuming taxable property or services in the United States is liable for the tax imposed by this section, except as provided in paragraph (2) of this subsection.

`(2) EXCEPTION WHERE TAX PAID TO SELLER- A person using or consuming a taxable property or service in the United States is not liable for the tax imposed by this section if the person pays the tax to a person selling the taxable property or service and receives from such person a purchaser's receipt within the meaning of section 510.

`SEC. 510. TAX TO BE SEPARATELY STATED AND CHARGED.

`(a) In General- For each purchase of taxable property or services for which a tax is imposed by section 101, the seller shall charge the tax imposed by section 101 separately from the purchase. For purchase of taxable property or services for which a tax is imposed by section 101, the seller shall provide to the purchaser a receipt for each transaction that includes--

`(1) the property or services price exclusive of tax ;

`(2) the amount of tax paid;

`(3) the property or service price inclusive of tax ;

`(4) the tax rate (the amount of tax paid (per paragraph (2)) divided by the property or service price inclusive of tax (per paragraph (3));

`(5) the date that the good or service was sold;

`(6) the name of the vendor; and

`(7) the vendor registration number.

`(b) Vending Machine Exception- The requirements of subsection (a) shall be inapplicable in the case of sales by vending machines. Vending machines for purposes of this subsection are machines--

`(1) that dispense taxable property in exchange for coins or currency; and

`(2) that sell no single item exceeding $10 per unit in price.

[Hawkmoon]

Personally, I think a flat rate income tax pegged at about 15% to 18% of total income, with no deductions and no ceiling, but a tax-free "floor" of perhaps $25,000 (subject to reconsideration) would be a better approach.

[Fly320s]

Hawkeye, revenue will be greatly reduced. People will go out of their way to save 30 percent on the price of the big ticket items.

If this happens, I will cut my expenses nearly to zero and just accumulate money. I will then start a rental business and begin accumulating property for business use. If I wish to use it, I will simply pay my corporation rent.
-edited to remove incorrect info.-

Yes, people will look for sales, just as they always do. Some people will pay retail, just as they always do. That's no different than today. The only difference is how and when the money is collected.

Try this:

Retail price, Income tax $30,000 + (or minus really) 20% for income tax.
Retail price, FairTax $25,000 + 20% sales tax
Disc. price (30% off), Income Tax $21,000 + (or minus really) 20% income
Disc. price(30% off), FairTax $17,000 + 20% sales tax.

With the RP,IT we pay $30K after we have the taxes taken from our paychecks. Even if we qualify for total tax exemption, the money is taken now and given back later.

With RP,FT we pay about $30K before we have money taken from our paychecks.

With DP,IT we pay $21K after income takes taken out.

With DP,FT we pay about $21K before we have money taken from our paycheck.

The 20% cost reduction with the FairTax is what the big brains figured out. Actually, I think the book says 22% imbeded tax is average.

[beerslurpy]

Or how about simply abolishing the IRS, killing entitlements and everyone lives happily ever after.

I cant beleive how many people on this board have been completely suckered by the FairTax scam.

[jeff-10]

Tax is tax, even if you call it fairtax. Why do you care if they take it from your paycheck or if the store clerk has to collect it? Ridiculous to think that by changing the way the tax is collected will change the tax burden for the average person.

[beerslurpy]

Fly320s, you are also incorrect. Read the bill.

`(1) BUSINESS AND EXPORT PURPOSES- No tax shall be imposed under section 101 on any taxable property or service purchased for--

`(A) a business purpose in a trade or business, or

`(B) export from the United States for use or consumption outside the United States, if, the purchaser provided the seller with a registration certificate, and the seller was a wholesale seller.

`(b) Business Purposes- For purposes of this section, the term `purchased for a business purpose in a trade or business' means purchased by a person engaged in a trade or business and used in that trade or business--

`(1) for resale,

`(2) to produce, provide, render, or sell taxable property or services, or

`(3) in furtherance of other bona fide business purposes.

[atek3]

What you people fail to understand is that if we eliminate the federal income tax and replace it with a sales tax... in ten years we'll have both. Mark my words, we'll have a fiscal crisis, and then "the rich will be made to pay their fair share", starting at a modest "5% for income over $200,000", and another ten years after that we'll have our old income tax system AND a 20% NST.

I'm with beerslurpy here, certainly some methods of tax extraction are more burdensome than others, but as long as the government feels the need to spend 2,400,000,000,000 dollars a year, its going to have to steal about 2,400,000,000,000 dollars a year. If the government taxed say, a tenth as much, I'd quit my yapping. And if you don't think the government can handle its constitutional duties with 240,000,000,000, I think you need to have your priorities checked.

atek3

[stevesmith7]

Fly,
Thanks for the lenghty reply. I understand how they claim it will work. Here's where my problem begins. In your example I got to buy the Colt for the same price as before but I don't pay any income tax, so I'm a lot better off. So's my neighbor, and the guy down the street, and everyone else. Where did all that extra wealth come from? After all the gov't is still getting the same income after we change systems. If I'm better off and the gov't gets the same money either someone got screwed or our assumptions are wrong. Sure there is money saved by not having an IRS and all the non-productive spending associated with tax collection but I've got to think that's a small number compared to the total personal income tax collected today.

Here's my fear. There was 20% in that Colt for taxes. You do get to keep 20% more of your income. But to get the same tax income the gov't tax rate is 40%. Now the working guy is right where he started. 20% more money, things cost 20% more. OK so what's wrong with that? At least no IRS, right? But wait. I don't work anymore, I live off my savings. The price of everything just went up 20% for me. Sure my investment income isn't taxed anymore but that doesn't offset a 20% hit in spending power.

Congress passes laws all the time that have unexpected results. Back in the 80's they took away some real estate tax advantages and a few years later all the S&L's were having to be bailed out with tax dollars. To the tune of billions. We're better off when they leave us alone.

Steve

[The Real Hawkeye]

Ridiculous to think that by changing the way the tax is collected will change the tax burden for the average person.Not ridiculous at all. A huge chunk of people in this country are avoiding Federal taxation. With the new system, they will not be able to avoid Federal taxation. Result is more revenues than before, because more people are paying into it. Billions of dollars from organized crime will now be subject to Federal taxation. Billions of cash business owners will now be subject to Federal taxation. That means less for us to pay. Over all, you will be paying less tax to the Federal Government if you are a paid employee, and more if you are a criminal or a cash business owner (one and the same in too many cases). The logic seems inescapable to me.

[The Real Hawkeye]

What you people fail to understand is that if we eliminate the federal income tax and replace it with a sales tax... in ten years we'll have both. Mark my words, we'll have a fiscal crisis, and then "the rich will be made to pay their fair share", starting at a modest "5% for income over $200,000", and another ten years after that we'll have our old income tax system AND a 20% NST.We fell for that in 1913 because we didn't have the benefit of past experience. We won't fall for it again.

[Fly320s]

Why do you care if they take it from your paycheck or if the store clerk has to collect it?
Interest, my friend. Not to mention time consumed by filling out the forms at the end of the year, hoping that I do it correctly, and that I get all of the deductions for which I qualify.

Interest... Would you like to give me $1,000 today? I promise to give it back to you on April 16, 2006. If you fill out the form correctly.

Or would you rather keep that $1,000 in your wallet/bank and spend it when you want?
-----------------

beerslurpy,

I am not intentionally lying or misleading. I could be wrong on my facts as I don't have the book with me for reference.

Reading that portion you quoted, I understand it as saying that businesses will collect the tax. I think that when it says that the user will be liable, it means that the user has to pay the tax, not the seller. Then the seller is required to give a receipt showing that that the seller has collected the tax. I think it's written like that to prevent a business from saying, "Yeah, the tax is included, don't worry about it" and keeping the extra money. But I haven't read the whole bill. My information comes from the book, which may differ from the bill

[Fly320s]

beerslurpy,
Fly320s, you are also incorrect. Read the bill.
Ah, I stand corrected. My apologies for misleading.

[beerslurpy]

I find it hilarious that people realize intuitively that the problem is unfixable unless the government spends less, but people seem to think that if they do enough bogus math that the problem magically fixes itself.

I repeatedly have seen the following unlikely assumptions:
-that people will not evade a 30 percent artificial price hike when the item exists within reach and they have money in their hand to give the store owner. Oh noes, an epidemic of shoplifting!
-that the government will get the trillions of dollars a year it needs from a voluntary scheme that involves PAYING OUT money to everyone that can possibly contribute
-that if the government fails to get enough money from this scheme, we will not get back the income tax and there will not be massive hunts for tax evaders. Yeah, government will just shrink and give up all its power and influence. Right.
-that congress will resist the urge to start giving tax breaks for certain groups and for certain types of items
-that congress will resist the urge to charge higher taxes for undesireable items like firearms and ammunition
-that enacting a Value Added Tax (which this is) will cause an explosion in economic growth
-that the economy will double in size in the next 13 years under this plan

[MN_Strelok]

This is all well and good, but the problem doesn't lie in tax collection. As long as government spending isn't under control, we're gonna get screwed one way or another.

Some of the things that are being said here fly in the face of basic economics and the laws of bureaucracy. I'm not trying to pick a fight, but I want to question a few points:

Once we get rid of the impossibly complicated system we have, we will save money due to the elimination of the cost of filling out our taxes each year, which should lower the total tax burden

You're assuming the new system won't be impossibly complicated. It may look simple on paper, but wait until the government gets its hands on it.

So they disband the IRS: Who cuts these monthly tax credit checks? Who audits the people that cut the checks? Who audits the people that the checks go to? And so on... Hence we get IRS MkII.

Since Colt is no longer collecting the taxes for it's employees, Colt can save money by reducing it's payroll/accounting staff.

But Colt still has a great amount of taxable transactions to deal with. The accountants will just switch from payroll deductions to handling the increased paperwork attached to everything else (raw materials, office furniture, etc.).

The only ones who will lose with this deal are the people profiting off the current system, such as organized crime and the Statists.

And you're certain the black market won't flourish, giving criminals another way out and the Statists a new excuse for regulation?

Congress loves the ability to give out tax credits, tax exemptions, that kind of thing.

They also like to selectively use sales taxes (alcohol, tobacco, firearms, etc.). What's the difference?

Also, I've got a bad feeling atek3 is right on this one:

What you people fail to understand is that if we eliminate the federal income tax and replace it with a sales tax... in ten years we'll have both.

Keep in mind that a total overhaul of the tax system - which I think we can all agree is necessary - is also a major opportunity to slip in new, more onerous taxes on top of the ones we already have. I'm afraid we might see something like a European-style VAT in the future.

[Atticus]

Dream on. The Government is run by attorneys and accountants. They will never let this happen to their professions.

[atek3]

A huge chunk of people in this country are avoiding Federal taxation. With the new system, they will not be able to avoid Federal taxation. Result is more revenues than before, because more people are paying into it. Billions of dollars from organized crime will now be subject to Federal taxation. Billions of cash business owners will now be subject to Federal taxation.

you say that like avoiding taxes is a bad thing and increased revenue is a good thing.

Hurray, more people will not be able to have their finances escape the grasping tentacles of the state.

The old yarn about "it forces us to pay more" is total nonsense. The government will take what ever it can get its claws on and flush them down the 10,000 dollar 24K government toilet.

We fell for that in 1913 because we didn't have the benefit of past experience. We won't fall for it again.

horse feathers. Who are "we" but two people with nothing better to do arguing on the intardweb. The VAST VAST majority of voting taxpaying citizens WILL fall for it because they DON'T have the benefit of past experience. I don't know about you, but when I was born the top income tax rate was 70%. I've never lived in a time when the top tax rate was below 20%, I doubt anyone reading this thread was either. So it doesn't strike me as strange that the public would readily accept a 5% camels nose under the tent to avert a "fiscal crisis".

atek3

[beerslurpy]

You guys should try brewing your own beer sometime. My most expensive beer costs 80 cents per bottle to make. It has 8 percent alcohol and is delicious. When was the last time you saw high end beer for 4-5 dollars a six pack? Ah right, alcoholic beverage tax. I can make a budlight quality beer for about 10-20 cents a bottle. Just need a lb of grain, 5lbs of corn syrup and an oz of hops. My beer costs about 1/4 to 1/2 as much as comparable commercial beers. This is partly because of profit but mostly because tax.

Every bought fuel for an agricultural vehicle? Ever notice how much cheaper it is? You would if you lived in Europe where they have VAT.

FairTax is going to end up as income tax plus vat. You are going to hate yourselves for being suckered into it.

[Fly320s]

1. The FairTax is not designed or intended to reduce government revenue or spending. It is designed to allow people to keep what they have earned and spend it (and get taxed on it) when and how they choose. You are taxed on what you spend, not what you earn. More fair that the current system, but not truely fair, IMO.

There is no escaping a sales tax. Unless one is totally independent and never buys anything, which is unlikely, taxes will flow into the system.

2. The price for products will decrease, not increase. No taxes will be taken from your paycheck. Therefore, you will have greater spending power.

The price on products will decrease, because the cost to manufacture the products will decrease because the imbeded taxes will disappear. According to Linden and Boortz, this will result in about a 20% drop in costs for businesses. They will pass on that savings to the consumer due to the dynamics of a competitive free market economy.

3. The government will get it's money. There are other taxes being discarded such as the death tax, and I believe, taxes on investments. Gotta check to be sure. Either way, more people will have more money in their pockets. A great many people like to buy things, like guns and TVs, so the money wil get into the tax system. Rich people will not be able to hide from taxes in shelters and investments, or with lawyers and CPAs, because even the rich people have to buy things, like helicopters and yachts. They get taxed then. Same with crooks and thieves. When they buy from a business, they get taxed.

There always has been and always will be a percentage of people who will manage to not pay taxes. That's a wash.

4. Any new business costs associated with the new tax are covered by that .1% that the seller/collector keeps.

5. FairTax is not trying to get the government to spend money more wisely. That's next to impossible. It is strictly about allowing you to keep the money you have earned and then dispose of it as you deem appropriate.

6. The only way government, congress, et al., will relinquish power is if we, the voters force them to do it. That will never change, and that is not addressed by this tax plan.

7. I don't have all the answers. Read the book: The FairTax, by John Linden and Neal Boortz. Or visit www.boortz.com for more info.

When I get my two copies of the book back, I'll be happy to pass them on. Or you may try your local library. Or go to Border's and read it there.

[Fly320s]

Please read here for a clarification of embedded taxes and the effect on payroll and take home pay:
http://boortz.com/nuze/200509/09152005.html#fairtax
I did a poor job of explaining it. I'll leave it to the experts. :p

[Sam]

The fair tax isn't fair.
If you think that any part of the entrenched federal bureaucracy is going to magically disappear your'e nuts.

A flat tax on everyone $XXX per year on every man, woman and child is a fair tax ,anything else is robbery!

The secret is cutting the size of the government, and that isn't going to happen by any peaceful means that I am aware of.

Sam

[stevesmith7]

Fly,
I read your link. It seems we're both making a mistake. The 20% tax burden includes the employer's payment to you of salary that you pay in taxes. Under the Fair Tax for the price of goods not to rise your salary had to decline by the amount you pay in taxes now. This whole process occurs through your employer deciding how much he has to cut your salary in order to keep the price of his product the same with the 20% tax addded to it. Wow! I can't imagine how that's going to play out.

Steve

[RocketMan]

It is a waste of time debating something that will never happen. The IRS and the gigantic tax code it administers is far too important to TPTB to ever give up.

[The Grand Inquisitor]

This has about as much chance of passing as the repealing of the NFA...that is 0%.

Taxes are an integral part of modern economics and they are not going anywhere anytime soon. As time rolls on every indstrialized nation has adopted increasingly larger social programs (and the US is doing the same thing except slower) and an increasingly larger military budget which requires tax dollars to grease pockets and buy influence.

[beerslurpy]

I'll address your explanation point by point.

1. The FairTax is not designed or intended to reduce government revenue or spending. It is designed to allow people to keep what they have earned and spend it (and get taxed on it) when and how they choose. You are taxed on what you spend, not what you earn. More fair that the current system, but not truely fair, IMO.

There is no escaping a sales tax. Unless one is totally independent and never buys anything, which is unlikely, taxes will flow into the system.

Yes, but you underestimate how much tax comes from people making my salary and higher. In a given month I only purchse goods and services with a small fraction of my salary, most of which is recreational spending. I would cut way back if it was suddenly 30 percent more expensive. Making a sales tax that really is fair and doesnt crush poor people will end up taxing "rich" people at a MUCH lower rate than they currently are. This will remove a huge chunk from the tax base.

2. The price for products will decrease, not increase. No taxes will be taken from your paycheck. Therefore, you will have greater spending power.

The price on products will decrease, because the cost to manufacture the products will decrease because the imbeded taxes will disappear. According to Linden and Boortz, this will result in about a 20% drop in costs for businesses. They will pass on that savings to the consumer due to the dynamics of a competitive free market economy.

This may be true, but the net effect will be to further reduce the tax base

3. The government will get it's money. There are other taxes being discarded such as the death tax, and I believe, taxes on investments. Gotta check to be sure. Either way, more people will have more money in their pockets. A great many people like to buy things, like guns and TVs, so the money wil get into the tax system. Rich people will not be able to hide from taxes in shelters and investments, or with lawyers and CPAs, because even the rich people have to buy things, like helicopters and yachts. They get taxed then. Same with crooks and thieves. When they buy from a business, they get taxed.

There always has been and always will be a percentage of people who will manage to not pay taxes. That's a wash.

Wrong. The government will get money, but much less of it. This is by design and assumes full compliance. Rich people currently pay over 30 percent of their income in federal tax. Someone in that tax bracket will have to spend their entire salary to give an equivalent amount of money to the government. Given that someone in that bracket makes more than I do, and I currently spend maybe 20 percent on goods/services in a bad month, this will amount to an ENORMOUS tax cut for the average "rich" person.

4. Any new business costs associated with the new tax are covered by that .1% that the seller/collector keeps.

5. FairTax is not trying to get the government to spend money more wisely. That's next to impossible. It is strictly about allowing you to keep the money you have earned and then dispose of it as you deem appropriate.

Then where will that money come from if the only way the government can tax my money at the rate of 23 percent is if I spend it all on goods and services. Even that would be a huge tax break.

6. The only way government, congress, et al., will relinquish power is if we, the voters force them to do it. That will never change, and that is not addressed by this tax plan.

7. I don't have all the answers. Read the book: The FairTax, by John Linden and Neal Boortz. Or visit www.boortz.com for more info.

Neil doesnt have all the answers either. We will end up with income tax AND VAT within 10 years of this being passed.

[beerslurpy]

Actually I just looked it up. Most people I've known are in either the 25 or 28 percent bracket. Good salesmen and executives sometimes get put into the 33 percent or higher brackets, but most people I know currently pay 25-28 percent + 6.2 percent social security tax.

Translation- you pay 30-35 percent of your income to the federal government today.

When FairTax is implemented, you will pay food/clothing/etc expenses * 1.030 - monthly refund. Do you currently spend 100 percent of your income on such expenses? 50 percent? 25? 10? The higher your income, the lower the amount you are forced to spend is and the lower your ultimate tax rate.

Add in no more corporate, investment, estate or gift taxes and the government is looking VERY poor.

Tell me where the government will get its money or admit the plan is stupid.

[Otherguy Overby]

I'm suspicious of something called "Fair" tax.

Life ain't fair and attempts to make sharing the burden of government expense fair won't be because of feel good socialism. Only one person so far has mentioned what might come the closest. That would be to figure what an individual's actual annual tax burden was and then they pay.

For what Federal income tax top rate has been historically:
http://www.taxpolicycenter.org/TaxFacts/TFDB/TFTemplate.cfm?Docid=213
And most all of the states tack on more for their "share" too. Please notice how the tax rate jumped to pay for WW1. Then the jump in 1932 to pay for the socialist solution to the depression (caused by banking) and how it stayed really high through the end of the cold war. There's a bit of a hint in there why the economy took off after Reagan through the Clinton years... No, BJ Clinton had little to do with it except for claiming credit.

However, what no one has mentioned as to how our economy would change if income tax is eliminated for a national sales tax. No more taxes on investment return, savings, sales of appreciated assets (capital gains), whatever. I could then turn over my property investments without consideration of income tax strategy. Sheesh, the stock market would take off, personal investing would take off and so would business reinvestment. I'd no longer have to screw around with tax deferred exchanges, converting invesment property to residences or whatever. And, if you have a good year, no more AMT (alternative minimum tax) to worry about.

AMT is especially heinous. Yeah, you've been a good boy, paid all your taxes, kept track of all the deductions and everything else. Have a good year and AMT slaps you down hard.

My financial survival depends on proper tax planning which is legal tax avoidance/minimization. For me, nearly ANY tax system other than the present would be an improvement.

[thorn726]

oh man this is hilarious.


Beerslurpy, do you think it's fair that, for example, restaurant owners (and other cash businesses) pay only a small fraction of their correct tax burden, while those who receive a pay check each week get burned?

that argument is great. cash businesses pay only a small fraction of their income. you just accused EVERY small business owner in America of being totally fraudulent on their taxes. also interesting, sure it's possible to clear a few orders from the register, but in the long run, the restaunrant that isnt keeping track is getting robbed big time by its employees.

i take in cash all the time, and i write it in my little book and pay my damn (sorry) taxes.
and i barely make anything. taking in cash is as simple as throwing away 2 receipts. but then in the long run, i can be held responsible, i want to put the cash in the bank and buy stuff, etc. so i report it. so do most people.

THINK= your argument is exactly why the antis say guns shouldnt be legal.
NO ONE can be trusted to be responsible. good job.

where is this "huge portion" avoiding taxes ? i'm mystified. drug dealers? come on/
compared to the corporate and top income individual scams going on? get real.

what no one seems to realize is two things- first, yeah where will the $$ come from instead?
all us poor folks paying 15-20% now will have it all go way up. low income families with kids will pay more.
you're kidding yourself if you think there won't be excessive "vice" taxes on things like gas, guns, ammo, tobacco, alcohol, soda, snacks, toll roads will be thru the roof.

reality, the feds will have no money, states will have to take care of themselves.
ehh, screw it , im firmly lodged here, go for it.
two more hurricanes and the southeast will crumble into ruin.

when will the people with huge incomes realize that you are getting a much larger share of the benefit of living in the US ??

realize that their employees and customers need roads and buses and schools
to keep making them rich, buying their products, needing their services?

probably not until we are back in the depression and us broke fools are laughing cuz we're used to it and y'all are leaping out of buildings......

[The Real Hawkeye]

I find it hilarious that people realize intuitively that the problem is unfixable unless the government spends less.That is only half the problem to my way of thinking. The other half is to get the Federal Government out of the business of requiring me, at the point of a gun, to regularly keep them apprised of my personal business. We can solve one half of the problem now, and the other half later.

[The Real Hawkeye]

Billions of cash business owners will now be subject to Federal taxation.Wow! It must have been pretty late at night when I wrote THAT! Of course, what I meant to say was that Billions of dollars from cash business owners will now be subject to Federal taxation, spreading the burden more fairly amongst us, thereby reducing the burden amongst non-cash business owners. I suspect that many of the people who are so vociferously opposed to this bill might just be cash business owners themselves. Ya think? Just a thought.

[pcf]

Keaner, the prices won't increase.

The price of an item, let's use a gun for our discussions, includes some built in taxes. Those are the taxes that the manufacturer pays to but the raw goods to build a gun, and the taxes a manufacturer pays as income taxes, and any other taxes required by law.

The FairTax removes all those imbeded taxes which amounts to about 20% of a gun's price. Take those out and then add a 20% to 23% sales tax on top of the new, lower price and you get back to where you started.



Wrong, a gun is usually sold three times before it ends up in someones hands. Manufacturer to wholesaler, wholesaler to dealer, dealer to customer. Three transaction runs the tax rate 72.8% (assuming 20% tax rate) "FAIR" system 72.8%, how's that better?

What about state taxes? Income taxes, property taxes, SALES tax, etc etc.
County Taxes? City Taxes? Still gotta pay those, how will they fit into the new tax code?

Back to the gun thing. What do you think happens to retailers? VAT's kill small business and hurt retailers. Look at the fuss interstate sales are causing due to missed sales tax revenue (specifically internet sales) That's over 6-8% in taxes. Cut out a middle man or two and your talking 20%, 44%, 73%, 107% savings, what do you think is going to happen to retailers.

Here's reality and taxes:
The top 3% pay 60% of all taxes
The top 5% pay 80% of all taxes
The bottom 50% pay 5% of all taxes
NO, it's not fair. But any fair system, simply stifles the top three percent and drags them down into the bottom 50%

If you shift the tax burden down, you increase dependence on welfare, the more dependence welfare, the more tax burden is shifted to the wealthy. Back at square one.

[Flyboy]

Wrong, a gun is usually sold three times before it ends up in someones hands. Manufacturer to wholesaler, wholesaler to dealer, dealer to customer. Three transaction runs the tax rate 72.8% (assuming 20% tax rate) "FAIR" system 72.8%, how's that better?
OK, I think we have a fundamental misunderstanding here.

The FairTax is not a Value Added Tax.

First of all, you've misunderstood the concept of a VAT. Value-added taxes are taxes assessed on the increase in value every time something changes hands. Put another way, it's a tax on the value added at that step. Ergo, there's no double-taxation on any portion--the value is taxed at the time it's added, but at the next step, that value existed coming in, and therefore isn't taxed because it wasn't added. VAT would only be 20%, no matter how many steps there are. The big objections to a VAT are that it would be onerous to keep track of, it would embed taxes in the cost of the product (only the final tax would be visible to the customer), and that it again gets government involved in every step of the process.

But that's all beside the point, because the FairTax is not a VAT. It's a single-point retail sales tax: everything is assessed when the object is sold at retail. No taxes prior to that point means that nothing is embedded in the cost of the object: you see the actual price (which will be lower than what we pay now, because you're reducing intermediate tax costs). The retail sales tax will be assessed at the cash register, just like it is with state and local sales taxes. This has a couple of advantages:

The government doesn't get involved in your personal finances
You see your actual tax rate (most people have no idea what they pay in taxes)

The former is nice because I don't think it's any of Uncle Sam's business just how much money I made last year, and he certainly doesn't need a breakdown of how I spent it (if, say, I'm taking certain deductions). That's nobody's business but mine. The second is nice because it lets people see the cost of government. Right now, most people have no idea what they pay in taxes--many of them think they get money back (admittedly, some do, but I'm talking about people who get a refund on April 15, without thinking about how much has been lifted from their cheques throughout the year). If people knew how much they had to pay the government--had it stamped clearly as a line-item on a receipt--there'd be more of a call for reduction. "Holy cow, they just took me for forty grand on my house! That's outrageous!" Income taxes and VAT both allow government to conceal tax assessments in the cost of items, so the taxpayers don't get too restless. Many people balk at the idea of tithing to a church--how are they likely to feel when they have to triple-tithe to Daddy Government? Retail sales taxes are at least honest about how much they're taking.

In any case, your understanding of VAT is incorrect, and it doesn't matter since this isn't one.

[Fly320s]

However, what no one has mentioned as to how our economy would change if income tax is eliminated for a national sales tax. No more taxes on investment return, savings, sales of appreciated assets (capital gains), whatever. I could then turn over my property investments without consideration of income tax strategy. Sheesh, the stock market would take off, personal investing would take off and so would business reinvestment. I'd no longer have to screw around with tax deferred exchanges, converting invesment property to residences or whatever. And, if you have a good year, no more AMT (alternative minimum tax) to worry about.
This, basically, is the same thing Linden and Boortz say will happen.

What do you all think would happen with all the extra capital floating around?

Look, guys, I don't have all the answers, as I'm still learning, too. Like Boortz says over and over, "Read the Book."

[beerslurpy]

You guys keep dodging the question of where government will get its money. It always seems to be "there will be so much capital floating around, the economy will be so much more efficient, blah blah" basically benefits that dont actually put any money in the fedgov's pocket.

Just like late 90s CA budget projections, this plan's success is based upon a very rosy version of the future.

If 30 percent of every purchase is collected as tax, everyone making over 30k a year is going to have to spend 100 percent of their income to be taxed at the same rate as before. Since this is highly unlikely, no one except certain off-the-books workers are going to be paying as much as they did before.

This plan is based off of deliberate ignorance of the fact that the top 5 percent of taxpayers currently make up about half of the tax base. This group will suddenly be taxed at nearly the same absolute rate (based on personal expenditures) as someone in the bottom 50% of income earers (who together pay only 3 percent of the the tax burden). Dont you get it? You can only spend so much money on food and clothing. This is going to significantly decrease the tax revenue of the US. We are talking 90 percent reductions in revenue.

[The Real Hawkeye]

Beerslurpy, how's business? I bet your hands get pretty dirty by the end of the day handling all that cash. :neener:

[beerslurpy]

I'm a salaried engineer. I would benefit enormously from this plan. That is, until the federal government decided that it would have to bring back income tax to pay for the multi-trillion dollar shortfall.

[gc70]

Start with a basic proposition:
INPUT - FRICTION = OUTPUT
Convert to Government Accounting 101 terms:
(COLLECTIONS + BORROWING) - (COST OF COLLECTIONS AND BORROWING) = SPENDING
Anything that dramatically changes the way government raises money (for instance, FairTax) could reduce the cost of raising money. Any reduction in the cost of raising money could be used to reduce the amount of money government needs to raise. But that's it; the action is all on the money-raising side of the equation.

If you think that eliminating (or really just reducing) the cost of the IRS, accountants, tax attorneys, and etc. will save enough money for everyone else to suddently be a lot richer, then FairTax is a great idea. In reality, schemes like FairTax just reshuffle who contributes to government money-raising and how they do so.

Show me a proposal that addresses the spending side of the equation and I will be impressed. Everything else is just a matter of whose pocket government's hand is in and how.

[Keaner]

My fear is that the US Gov doesnt like to fire people. Know all those IRS agents? Where will they go? Oh wait, we've done this before (see Prohibition).

IF it worked the way it is advertised, it would be amazing. Right now, I am spending very little (saving up for an apartment, car, and a 1911), yet between state and feds, I pay ~35% taxes, AND that doesn't include NJ, which come tax time, is gonna want a whole 'nother cut.

In this case, I would LOVE the chance to get the money back, and pay it when I actually want to buy something. I could deal with a 40% Fair tax, and still come out ahead!

[GunGoBoom]

I think it's a good idea, on balance, to replace that abomination of the Internal Revenue Code with a national sales tax. But that doesn't mean there won't be a certain level of lack of compliance, and thus the need for an IRS for enforcement. The lack of compliance will come in with an increase in the private sell/garage sell/barter system of goods & services, unreported. Which is not that bad of a thing in my book. Enforcement will still be needed, but the sales tax system will encourage savings, as you're not taxed until you spend.

[DavyR]

As mentioned above, congress will never let "control" go. Can you imagine what they would do with restricions/exemptions, etc., with the new tax? Also, living near, but not in (Calvert County), DC, I do not believe they would change tax systems. To do so, they would have to remove income tax at the same time they put in the new. No way they will; we would end up with both. Don't forget the ever-present "transition" period. And cut spending?!?! I have a bridge to sell you.....

[Refirignis]

Does anyone know what the IRS actually does with the money it collects? Probably not. If it was mentioned in this thread, I didn't see it when I looked it over. The IRS is just the face of the largest scam in U.S. history, and replacing it with a different system still leaves the problem it came from. In order to solve the problem, the IRS and its dark source, the not-so-Federal Reserve, must go.

The IRS doesn't collect one single cent for paying for government "services". The IRS and the Federal Reserve are scams; all government programs are paid for by increasing the principle (borrowing more money from the Federal Reserve), the IRS-collected taxes just pay for running the IRS itself and for paying the interest on the principle to the Federal Reserve. The Federal Reserve makes these loans to the Congress by printing more money (which only the Congress is supposed to be able to do, hence the Federal Reserve is unconstitutional), causing inflation, so they make loans with everyone else's money. By inflating the currency they steal value from the notes in the hands of the public, thus stealing that value from the public, and then collect interest on these loans from the public by way of the IRS. This is the biggest scam in history. To ensure their stranglehold over our economy, by guaranteeing an ever-increasing principle, they caused the Great Depression (Oct. 1929, $2400 per person in circulation; one year later it was down to just over $14...only the Federal Reserve could do that), leading to the election of the socialist Franklin Delano Roosevelt. The "New Deal" (more newspeak...there's nothing new about socialism) was a convenient mechanism through which the Federal Reserve's principle could be guaranteed to continually grow (because new loans are needed constantly to pay for it, and all that has followed since). Why is it illegal for loan sharks to do on the small scale what the Federal Reserve has been doing "legally" on a massive scale?
John Kennedy tried to get rid of the Federal Reserve, but didn't live long enough to do so. Poor guy.

[The Real Hawkeye]

Did Kennedy really try to get rid of the Federal Reserve Bank?

[Refirignis]

He did. [Conspiracy Theory Mode] Probably why he was killed.[/]

John F. Kennedy's Plan

President John F. Kennedy was simply following President Lincoln and President Andrew Jackson. By JFK issuing the Kennedy dollar, United States Note, the bankers could not get the cash for free and lend it back to the government and profit from the old banking system.

JFK planned on printing enough United States Notes, like President Lincoln, and pay off the national debt and thus ending the personal IRS taxes with no new taxes.

JFK's plan to print United States Notes, cash, would have ended the privately owned banking monopoly called the Federal Reserve Bank. Upon President John F. Kennedy's assassination, President Johnson immediately stopped the printing of United States Notes and went back to the banker's system of Federal Reserve Notes ensuring the continuation of the IRS tax and bankers profit.

It is easy to pay off the national debt and end IRS personal incomes by simply informing every voter about the truth about JFK's dollar. What voter would not join us in implementing JFK's plan if the voters understood the truth. Only the bankers, media, sheriffs, FBI, politicians, judges, and Homeland Security who benefit from the banking system will vote to enslave you.

SOURCE: UNKNOWN
"Kennedy Dollar" in quotes for Google comes up with 12,000 results.

[captlid]

If its implimented it will encourage savings, business investments, and on the books full time jobs assuming the plan.
Getting rid of estate, investment and income taxes.

I think this plan is being pushed because there is a power struggle between the states and the fed gov.

What I dont understand is this. We have 50 states in this country. Each one has its own unique needs. Each one is like a seperate country per say.

Most americans live under 3 govts. Federal, State and City.
It makes more sense to leave funding issues close to the people, so the people can keep tabs on things.

Besides a military and being a mediator when neighboring states have economic conflicts what else is the federal govt supposed to do?

My gut feeling is that this plan is being put through to tax sales on the internet and mail order, but the way the current power structure is the states will still lose out in the end. I hope I am wrong.

The fed already uses the highway funds to make states come into compliance with its pet peeves. Forcing the fed to come clean with its budget and putting a cap on how much it spends would lower our tax rates. (I am not sure how to force the fed to do so though ;) )

[Bruce H]

Where will the government get its money? We would be better off if they didn't have any. They have mannaged to borrow you and me very deep in debt. Any change that has the chance of ridding us of departments of government can't be all bad.

[odysseus]

I think there is a lot of sense to a tax based on consumption. It allows more freedom on the citizens to spend or save more (all be it most in the US spend), and hopefully (big sarcasm here) makes government spend and save when times are good. :rolleyes:

However I am not sure the Gov can make anything like that work, nor would whatever beast any "Fairtax" bill would eventually be expelled out of Congress after being manipulated through a thousand slices of death. Honestly there is a large amount of people and congress members in this country who believe in a socialistic sense of goverment having the power than people, with that power being financially controlled by the government. I had a conversation with my eye doctor recently whereby he felt raising property taxes by eliminating tax restrictions on assessed values, and making even old-ladies start selling off their payed off mortgages by reverse mortgaging or deferring their homes off to the government! :cuss: He actually felt that these people should pay "their fair share" and tide to the big government. I had to bite my toungue since he is my eye doctor... :scrutiny:

I am more interested in a "Fair Government" bill to mandate reductions in Government size, spending, and many useless spending enterprises the government is in. However I would no sooner be a political champion of that in government then find 10 pounds of cocaine mysteriously placed in the trunk of my car, or have my car brakes fail while driving down a mountain. :neener:

[NHBB]

of course they would just argue the massive job losses due to the inflated branch of govt called the IRS, and all the poor CPA's who didnt charge a fortune to file your taxes in the most professional manner. its a sad state when they give estimated HOURS to calculate what you owe to uncle sam. for self employed individuals like myself, it becomes a bit more complex, and common sense dictates that you use a professional to avoid mistakes and pay for them down the line. the tax code is so confusing and has so many different clauses and exemptions that most would rather just pass it off to a CPA or tax lawyer than worry about the safety of their small business in the future.

me personally, I am all for upping the taxes on luxuries and such, and eliminating the income tax... but it will never happen.

btw even though I get stuck in a higher income tax bracket, I KNOW that I use substantially less govt resources than most people. I work from home, dont drive all that much, and do not qualify for any govt aid nor do I attempt to collect any. so why should I pay more than those who make less and commute an hour back and forth to work every day and utilize government services much more than I do? doesn't seem fair, but that is just how it is. the people that dictate these laws have so much money to begin with they dont care how much they get taxed for the most part, because after its all said and done they still have a ton of money left over.

[Firethorn]

As far as 'minimum taxation level' required, if we could get a handle on expenses and force uncle sam to stop spending so much, we'd be far better off.

Believe it or not, you can get more tax money by lowering tax rates than increasing taxes. It's easy to show why as well. Economic activity increases the economy. It's like a savings account. If you have an economy of 1000 units($), and it's 'growth' is naturally 35% annual, then next year the economy would be $1350.

Now charge it 20% tax, post income: $1350 * .05 = $270
So it only grows to $1080.
Charge it 25% tax, and you get $337.50 of tax revenue.
But the economy grows to merely $1012.50

By year 5, you're getting $367.33 at the 20% level. 25% is only getting you $354.69.

By year 8, you've now collected more money at 20% than 25%: $2,871.89
vs. $2,821.12. That years income is $462.73 versus $368.16.

Yes, it's simplified, but as been born out many times.

It's been said that money, as long as it's used(spent or invested), it helps the economy. If it's spent, well people are hired, resources processed to make what you bought. If it's invested, it goes towards expanding businesses, purchasing equipment, etc to make a product better/faster/cheaper.

Trust me, we won't become a nation of savers overnight by any means. As for the rich getting off easy, well, the truly rich have avoided the most taxation, found every loophole, etc to avoid paying their income slot. People won't be able to 'work under the table' as a means of avoiding income to be taxed. Besides, It's far easier to audit a business than an individual.

[CAnnoneer]

You can't stop the politicians from spending by paying less taxes. The current administration is proof of that. They just borrow the difference from foreigners against our future, without our permission. The problem is political, not economic.

I was a supporter of FairTax, and it does sound fair intuitively. But, making a few calculations shows that the wealthiest would have to spend far more to pay the same taxes, while the poorest will be hit the worst. We already are worried about the widening gap and the disintegration of the middle class. Something like FairTax, even if implemented without politically motivated bells and whistles, will only speed up the process.

What needs to be done is cut spending and greatly simplify the tax laws. But, lawyers and bureaucrats will see their livelihood evaporate, and the wealthiest will see a dramatic increase of what they actually pay, so you can expect them to fight with claws and teeth against it.

[ozarkhillbilly]

One thing I have not seen mentioned is that if the fair tax was implemented that with in a couple of years the federal government would be taking in far more then it is today because the United States would become the biggest tax shelter the world has ever seen. Companies from around the world would be moving their headquarters here and or opening factories here because of no corporate tax no labor tax and no tax on raw materials. Products made in the U.S. would be able to compete price wise with anywhere in the world, factories would be opening up all over instead of closing. Wages would go up and we would spend more thus more taxes. Wouldn't it be good to here about companies moving to the U.S. to avoid paying taxes instead of moving away or how about factories open instead of closing.

The fair tax may not be perfect but it beats by far what we have now and I have not heard of another plan out there as good.

[Sylvilagus Aquaticus]

Geez, y'all are just now finding out about FairTax? My first degree is in economics. It made sense even back then when dinosaurs ruled the earth and Carter was president....but there wasn't much difference between the two.

Regards,
Rabbit.

[The_Antibubba]

Apparently you have no idea what it takes to dismiss a Federal employee-a unionized Federal employee at that.

They will still be there-they'll just be absorbed into other bureaucracies. there will be no savings on workers.

[thorn726]

You guys keep dodging the question of where government will get its money.

yeah good luck on that one. you've asked how many times now?

math is a mystery.
Products made in the U.S. would be able to compete price wise with anywhere in the world, factories would be opening up all over instead of closing. Wages would go up and we would spend more thus more taxes. Wouldn't it be good to here about companies moving to the U.S. to avoid paying taxes instead of moving away or how about factories open instead of closing.

2 cents per hour vs $16 per hour plus benefits.

[mons meg]

I'm crawling out of my hole just long enough to point everyone here:

http://www.cato.org/fiscal/tax-policy.html

Now I want everyone participating in this thread who hasn't already done so to go read a few actual studies that use actual, you know...numbers and stuff.
Then, once we have data, we can come back here and scream,

1) OMG YOU'RE GONNA BLEED THE POOR,
or maybe
2) WOOHOO WE CAN STARVE THE BEAST JUST LIKE UNCLE RONNIE SAID

Just as long as you can support one of these two views with, like, graphs and stuff.

:D

[ozarkhillbilly]

2 cents per hour vs $16 per hour plus benefits.

First of all most companies who have left the U.S. do so for places like China, India and Mexico and I believe you will find the pay alittle higher then 2 cents granted not anywhere like the U.S. but still higher. Now take into account what these same companies pay in taxes to those socialist governments and the fact that while we might find it hard to believe Americans are among the hardest working people on the face of the earth. Thats why Toyota, Honda and many other Japanies and European companies have factories here, now add to that, that we are one of the safest and most stable countries in the world. If you would cut the cost of doing business here by 20%, which is what our current tax system adds to the cost on average, you would find that we would be very competative on all but the most low tech, clothing ect.., factory jobs. However just as important as factory jobs are the office jobs that would show up as company headquarters moved here to avoid paying corporate taxes.

[antarti]

I am feeling like a curmudgeon this a.m. (like most others) so temper my remarks with that.

I believe it (so-called Fair Tax) will pass in some form, but not because it's a step forward for us.

It will pass because despite all the price inflation that we've been through, and corresponding dollar drop, it isn't enough to bail our collective (now there's a pun) butts out from the debt mess the country is in. There is going to have to be an FDR style massive and enforced inflation...

That's where this Fair Tax comes in. How else can you devalue the dollar so quickly and have everybody clamor for it? Just cause a 20+% wage inflation. End of Story.

Yeah, sure prices will drop... RIGHT... when you need 20+% more dollars to buy raw materials and fuel to deliver goods? Give me a break.

Besides, any real "fair" version of a sales tax would be about 2% (locked forever), assessed on everything retail, with no exceptions (even food and water taxed), and collected by States (like their own sales taxes) and forwarded to fedgov. This would be in concert with a gold/metals/some-commodity fixing of the dollar, to stop the Fed tyranny over money supply. The people would have nothing to do with fedgov in the way of collecting or ever being investigated.

Ever see how big the national gross receipts number is? Tell me again why a 20% tax is needed. Oh, because it has exemptions, hoops, and other malarkey, and is just a clean canvas for the IRS v2.0 and politicians to start painting on again.