We can be rid of the IRS

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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.
 
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?
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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......
 
I find it hilarious that people realize intuitively that the problem is unfixable unless the government spends less.
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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.
 
Billions of cash business owners will now be subject to Federal taxation.
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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.
 
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.
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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.
 
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?
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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.
 
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.
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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."
 
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.
 
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.
 
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.
 
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!
 
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.
 
What would change?

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.....
 
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?
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John Kennedy tried to get rid of the Federal Reserve, but didn't live long enough to do so. Poor guy.
 
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
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"Kennedy Dollar" in quotes for Google comes up with 12,000 results.
 
This is really interesting...

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 ;) )
 
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.
 
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:
 
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.
 
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.
 
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.
 
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.
 
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.
 
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