We can be rid of the IRS

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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.
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`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.
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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.
 
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.
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-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.
 
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.
 
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.
 
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.
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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
 
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
 
Ridiculous to think that by changing the way the tax is collected will change the tax burden for the average person.
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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.
 
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.
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We fell for that in 1913 because we didn't have the benefit of past experience. We won't fall for it again.
 
Why do you care if they take it from your paycheck or if the store clerk has to collect it?
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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?
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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
 
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
 
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
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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.
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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.
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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.
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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.
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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.
 
Dream on. The Government is run by attorneys and accountants. They will never let this happen to their professions.
 
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.
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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.
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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
 
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.
 
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.
 
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
 
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
 
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.
 
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.
 
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.
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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.
 
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