Continued...
Therefore, the national sales tax will eventually be used to track – and manipulate – what we purchase. Instead of merely being profiled by Wal-Mart or Safeway, your buying habits will be available in detail to the Department of Homeland Security, the Department of Health and Human Services, the FBI, the Bureau of Alcohol Tobacco Firearms and Explosives, university researchers – you name it.
Can't they already do this by tracking checks & credit card trails? They don't need to collect any information from you to collect the sales tax, the company you bought it from reports that they sold the item and pays the tax.
Katherine Albrecht of the consumer-privacy group CASPIAN points out one way in which the social engineering and people-tracking aspects of the national sales tax might go together: As databases come to hold more information on each individual American, the tax could be manipulated to fit the person, rather than the item: “A welfare mother puts her RFID-enabled ID card under the scanner (or waves her RFID-chip implanted hand across the scanner) and the system says, 'Oh, you're a person who's taxed at the one percent rate.'†On the other hand, a person with a $100,000 salary flashes his card or waves his chipped hand and the system recognizes someone who's “rich†enough to be taxed at the 50 percent rate.
The whole IDEA is to simplfy the tax code. It would be a bigger nightmare to try this over the income tax. Unpractical, and would be fought in the legislature.
A national sales tax will create a huge black market. A punitive sales tax on everything you buy will lead to enormous black markets. You'll soon see gang violence and vast new prisons being built to house the millions of people illegally trading DVDs, cigarettes, canned foods, TV sets, and clothing. This will be true even if the underlying prices of goods drop – as the FairTaxers assure us will happen. If people can evade a 30+ percent tax – they will. Even if the price of items is 20 or 25 percent lower than today (a claim we'll examine in a moment) people will still want – and go after – their 30 percent black-market discount.
Like black market cigarettes and booze? People like public commercial stores. Whether brick&mortar, internet, or catalog, they'll charge the tax. And this is why they only charge for new items. Once the item is sold with the tax, it's no longer "new" according to the law. So they'd have to pose as a business in order to get "pre-market" non taxed items. Minor black market.
Although the tax is initially only to apply to services and new items, here's another projection: Swap meets, farmers' markets, gun shows, and garage sales will automatically come to be considered prime places for black market activity. Either the tax will eventually be extended to used items, or all such free markets will eventually be heavily regulated and patrolled – or banned outright as havens for the new anti-sales tax criminals and resisters.
As these items were generally bought through retail channels, the tax has already been paid, the goods are considered used, and tax doesn't apply. If congress changes it to apply to the used item market, then you have a point. As is, this tax system would help the reuse market, as used items would have a price advantage over new. Also, this assumes another liberal legislature looking to tax more things. Resistance to this would be huge.
Again, that's true as far as it goes. But merely because one form of tax “avoision†goes away doesn't automatically mean no tax avoision is possible. People who are motivated to keep their own money will always invent thousands of clever ways to do so; we're astonished at the FairTaxers' naivete in assuming there will be no black marketeering.
I assume tax evasion will continue. Sure, Black Markets will "grow", but income tax fraud/evasion will dissappear. Knock the F of of the BATF and put them in charge of enforcing the sales tax. They have the most experience, already dealing with items with a national tax.
The national sales tax will give government another reason to make cash purchases illegal. Because buying with cash will make it easier to evade the sales tax, taxing authorities will quickly conclude that buying with cash is a sure indicator of criminal activity.
Cash helps all sorts of 'illegalities' anyways. Buying illegal drugs, weapons, rino horns, ivory, babies, etc... I haven't heard any serious yells about making cash illegal despite this. Besides, the moment you walk into Walmart for something, you're paying the tax. Unlike now where you work in a bar "under the table", get paid cash out of the till, and get welfare because you're "unemployed".
This tax is designed to put every single American household on welfare. The FairTax is regressive – that is, the poorer you are, the more you pay, proportional to your income.
Well, as a consumption tax, if the poor consumes more, yes, they'll pay more. You have to include the ~$500 monthly "refund". This makes the tax into a standard progressive. Somebody who spends less than poverty make money, spend exactly poverty pay 0%, spend double poverty, pay effectively 11.5%. Spend 100x poverty, it'll round to the stated 23%. As far as putting every household on welfare, that's easier(and therefore cheaper) than trying to figure out who makes "enough" money to not get the check. It'd make being a fugitive harder, as you'd have $500 less to live on per month.
But the “rebate†isn't similar to the earned income tax credit because it's intended to go, month after month, to every American household. If the intent was really to avoid taxing essential spending to place less burden on the poor, one could simply not levy the sales tax on stable items like food, medicine, school supplies, or clothing.
What about a house, or utilities? Where do you stop? What's essential? They're trying to keep it simple. And at least some rich people spend tens to hundreds of thousands of dollars on just clothing, and some do it for food. So then you say "clothing less than x dollars". You're getting complicated again.
Some religious people will be penalized. The monthly rebate check is to be paid by the Social Security Administration, based on the number of SSN holders in a household. Tens of thousands of Americans (for instance, the Amish, or those who believe the SSN is the biblical Mark of the Beast) do not have social security numbers. Therefore, they would have to pay the heavy national sales tax without being compensated in any way. When we asked AFT how their proposal addressed this inequity, their reply was one sentence long: “There is no requirement that any individual apply for the rebate.â€
Yep. Tough luck. Like how they loose out on medicare & social security. Do they even pay social security? Can I turn in my number?
A working-class religious family of four, forced to absorb $478.83 more than its neighbors for basic expenses each month simply to remain true to its faith, would have considerable incentive to make its purchases on the black market or otherwise go underground to survive.
If they're that religious, they'll make adjustments. Either lobby for a exemption for people without SS numbers, increase the price of amish goods, or something. Don't the Amish produce most of their own goods?
The economy would very likely collapse. Just before the FairTax went into effect, the economy would boom as Americans raced out to buy cars, electronic gear, or even to stock up on food. They would not believe that prices on everything would drop the very next day, or the very next week, after the sales tax was imposed. Their spending would reflect their quite rational fear that prices would simply jump 30 percent.
And prices would rise due to shortages until the tax went into effect, or stores would run out of items, and people will go home disappointed(for a couple days). Or you could put a line in where the tax increases .5% a week until it reaches the desired level. That'd be about a year for it to reach the proposed level. How much did the economy 'suffered' in florida with the hurricane?
The day the tax went into effect, the American economy would collapse. Eventually, the economy would restabilize, and some prices would drop, as AFT claim. But some industries producing high-ticket items, like the automobile industry, furniture manufacture, or construction, might never recover – even if removal of the income tax did allow prices to drop and Americans to keep more of their paychecks.
They seem to be assuming that enough 'big ticket' items are available to saturate the market for years. I say that the companies will "pre-sell" to their hearts content, to be delivered later. They'll have a windfall of cash.