The FAIR TAX

Anyone who pays taxes (which would be everyone)should read this. If you have any questions feel free to post them. I am curious to see what the 12oz community thinks of this. There is a great book out on the fair tax bill(HR 25) right now called "The FairTax Book" at 182 pages it is a quick read.

I lifted this off of FAIRTAX.ORG

Thumbnail sketch of the FairTax

a comprehensive plan to replace income and payroll taxes

The FairTax proposal is a comprehensive plan to replace federal income and payroll taxes, including personal, gift, estate, capital gains, alternative minimum, Social Security/Medicare, self-employment, and corporate taxes. The FairTax proposal integrates such features as a progressive national retail sales tax, dollar-for-dollar revenue replacement, and a rebate to ensure that no American pays such federal taxes up to the poverty level. Included in the FairTax plan is the repeal of the 16th Amendment to the Constitution. The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes), ends corporate taxes and compliance costs hidden in the retail cost of goods and services, and fully funds the federal government while fulfilling the promise of Social Security and Medicare.

Americans take home their whole paychecks.

Not only do more Americans have jobs, but they also take home 100 percent of their paychecks (except where state income taxes apply). No federal income taxes or payroll taxes are withheld from paychecks, pensions, or Social Security checks.

No federal sales tax up to the poverty level means progressivity like today's tax system.

To ensure no American pays tax on necessities, the FairTax plan provides a prepaid, monthly rebate (prebate) for every registered household to cover the consumption tax spent on necessities up to the federal poverty level. This, along with several other features, is how the FairTax completely untaxes the poor, lowers the tax burden on most, while making the overall rate progressive. However, the FairTax is progressive based on lifestyle/spending choices, rather than simply punishing those taxpayers who are successful. Do you see how much freer life is with the FairTax instead of the income tax?

No tax on used goods. The amount you pay to fund the government is totally visible.

With the FairTax you are only taxed once on any good or service, the sales tax is charged just as state sales taxes are today. If you choose to buy used goods - used car, used home, used appliances - you do not pay the FairTax. If, as a business owner or farmer, you buy something for strictly business purposes (not for personal consumption), you pay no consumption tax. When you decide what to buy and how much to spend, you see exactly how much you are contributing to the government with each purchase.

Retail prices no longer hide corporate taxes or their compliance costs, which drive up costs for those who can least, afford to pay.

Did you know that hidden income taxes and the cost of complying with them currently make up 20 percent or more percent of all retail prices? It's true. According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices - from an average 22 percent on goods to an average 25 percent on services - for everything you buy. If competition does not allow prices to rise, corporations lower labor costs, again hurting those who can least afford to lose their jobs. Finally, if prices are as high as competition allows and labor costs are as low as practical, profits/dividends to shareholders are driven down, thereby hurting retirement savings for moms-and-pops and pension funds invested in Corporate America. With the FairTax, the sham of corporate taxation ends, competition drives prices down, more people in America have jobs, and retirement/pension funds see improved performance.

The income tax exports our jobs, rather than our products. The FairTax brings jobs home.

Most importantly, the FairTax does not burden U.S. exports as they are with the current income tax. So the FairTax allows U.S. exports to sell overseas for prices 22 percent lower, on average, than they do now, with similar profit margins. Lower prices sharply increase demand for U.S. exports, thereby increasing job creation in U.S.manufacturing sectors. At home, imports are subject to the same FairTax rate as domestically produced goods. Not only does the FairTax put U.S. products sold here on the same tax footing as foreign imports, but the dramatic lowering of compliance costs in comparison to other countries' value-added taxes also gives U.S. products a definitive pricing advantage which foreign tax systems cannot match.

The FairTax strategy is revenue neutrality:

Neither raise nor lower taxes so consumer costs remain stable.

The FairTax pays for all current government operations, including Social Security and Medicare. Government revenues are more stable and predictable than with the federal income tax because consumption is a more constant revenue base than is income.

If you were in a 23-percent income tax bracket, the federal government would take $23 out of your paycheck for every $100 you made. With the FairTax, if the federal government gets $23 out of every $100 spent in America, the same total revenue is delivered to the federal government. This is revenue neutrality. So, instead of paycheck-earning Americans paying 7.65 percent of their paychecks in Social Security/Medicare payroll taxes, plus an average of 18 percent of their paychecks in federal income tax, for a total of about 25.65 percent, consumers in America pay only $23 out of every $100. Or about 30 percent at the cash register when they elect to spend on new goods or services for their own personal consumption. And this tax is collected only on spending above the federal poverty level, providing important progressivity.

Tax criminals - don't make criminals out of honest taxpayers.

Today, the IRS will admit to 25 percent non-compliance with the code. FairTax.org will be generous and simply take the position that this is likely a conservative estimate of the underground economy. However, this does not take into account the criminal/drug/porn economy, which equally conservative estimates put at one trillion dollars of untaxed activity. The FairTax will tax this - criminals love to flash that cash at retail - while continuing to provide the federal penalties so effective in bringing such miscreants to justice. The substantial decrease in points of compliance - from every wage earner, investor, and retiree, down to only retailers - also allows enforcement to concentrate on following the money to criminal activity, rather than making potential criminals out of every taxpayer struggling to decipher the current code.

What is Americans For Fair Taxation?

Americans For Fair Taxation (FairTax.org) is a non-profit, non-partisan, grassroots organization dedicated to replacing the current tax systems. The organization has hundreds of thousands of members and volunteers nationwide. Its strategy supports sound economic research, education of citizens and community leaders, and grassroots mobilization efforts. For more information visit the web page: http://www.fairtax.org or call 1-800-FAIRTAX.

I think it is a great idea and I am currently volunteering for the AFFT to help gain support for the bill I have already spoken to my local represtentatives and urge anyone else who thinks it is a good idea to do the same.

If you have any questions or objections post away, and we will see what happens next.

Yeah, I've been reading about this plan and others like it for a long time. As I said earlier, the big hurdle to this is convincing the feds that eliminating the IRS is a good idea, since it will put a LOT of people out of work...I personally love the idea, and have written letters on its behalf...I'm waiting for the IRS to audit me any day now. :haha:

haha, just plead "THE 16th IS UNCONSTITUTIONAL!"

people are saying that their calculations are way off, wayyyyyy off, which, might be true, but people are going to be way more open to the idea of keeping all their pay, and bringing jobs to america and the economy, and only paying taxes when they want, which would be neat. I'm almost done with the book. But, like most great plans, there is a downfall, i just cant figure it out yet.

they say there is going to be a huge blackmarket, but like said in the book, who is gonig to go to jail over 23 cents? i dont know, ill finish. Thanks

edit*double post

Did you ever wish that there was "C.O. tax status"? Say, there's a war going on that you didn't support, and you could check a box and say, "I want whatever funds that would go to 'defense' to go towards rehabilitation programs for the veterans of this misguided war", or something to that effect.

Originally posted by onesecondple@Sep 19 2005, 04:40 PM

people are saying that their calculations are way off, wayyyyyy off, which, might be true, but people are going to be way more open to the idea of keeping all their pay, and bringing jobs to america and the economy, and only paying taxes when they want, which would be neat. I'm almost done with the book. But, like most great plans, there is a downfall, i just cant figure it out yet.

 

they say there is going to be a huge blackmarket, but like said in the book, who is gonig to go to jail over 23 cents? i dont know, ill finish. Thanks

Quoted post

I can relate to that, I have been listening to Boortz talk up the Fairtax on his radio show for well over a year now, and at first I was very skeptical of the idea... as any red blooded American would be of any idea pushed by todays politicians. But three years as a business major, and way too many economics courses, I realized how enormous our rate of consumption at the retail level is, the only other nation that comes close is China, and they still have to get most of their citizens out of the rice patties and into the chain stores(which is increasing steadily every year) to reach the amount of money that changes hands in America on a daily basis. I think in my somewhat educated opinion that tax revenue will actually increase for the government under the fairtax.

I think that armed thugs roaming the street beating people to collect taxes would almost be a vast imporvement from the inefficient, unwieldy beast that the IRS has become, the worst example of a bloated government agency that is commonplace in the country today.

I am curious though who are the people that are saying the calcuations are off, I would like to look into that.

Also, any black markets that will arise to avoid the tax will never reach the amount that the IRS claims to be unable to collect every year, which I think is somehwere around 25% I could be wrong though, and even the money that is made in the black markets will eventually end up back in the system one way or another. It's really hard to avoid Wal-Marts and the like these days.

It is good see that some people around here are paying attention to the issue.

I'm not really qualified to speak on this but it certainly raises questions for me despite how good it sounds.

I'm not so sure I like the idea of a 23% price increase on goods. But they are saying that we are essentially being taxed that with hidden income taxes.... Why are consumers paying the hidden income taxes of corporations anyways? If only profits can be taxed then there shouldn't be any rational reason for raising the price of goods anyways.

And wouldn't consumers be more apt to buy goods from foreign sources for the lower tax rate? Might not everyone start buying from EbayChina to avoid the higher sales taxes? Sure imported goods would be subjected to the same tax rate but if we buy our goods online and have them shipped ourselves..... (This is going to become more and more commonplace as well.)

And aren't the lower and middle class the ones who spend the most money? The vast majority of the money in this country, which is possessed by the rich, would apparently become untaxable. And if any of it does move it's to various forms of investment and tax shelters and hidden bank accounts.

Wouldn't this lay the entire tax burden upon the middle and lower classes?

Sounds too good to be true to me.

I'm Skeptical

This plan is rediculous. It is all econ think tank crap. It almost sounds like they took a page out of the book "confessions of an economic hitman". There are better ways to shift the tax burned from the working class to the investor class.

1) close corporate tax loop holes

2) stop allowing corporations that survive off of

government contracts and corporate wealfare from

incorporating off shore.

3) Just say YES to the "Paris Hilton tax" ( the inheritance tax )

4) make people who earn there living from dividen checks pay

more than the 15% tax

Originally posted by s.urkaleeno@Sep 21 2005, 06:37 AM

This plan is rediculous. It is all econ think tank crap. It almost sounds like they took a page out of the book "confessions of an economic hitman". There are better ways to shift the tax burned from the working class to the investor class.

 

1) close corporate tax loop holes

 

2) stop allowing corporations that survive off of

government contracts and corporate wealfare from

incorporating off shore.

 

3) Just say YES to the "Paris Hilton tax" ( the inheritance tax )

 

 

4) make people who earn there living from dividen checks pay

more than the 15% tax

Quoted post

The key term is "Fair"...the upper class has no reason to pay into services that they'll never need...if the shit hits the fan in their part of the US, they'll simply go to their house in the Hamptons and let the "little people" sort it out.

The only purpose busting Enron and Worldcom serves is diverting attention away from federally subsidized companies like Halliburton, KBR, and the entire DOD, which is more or less private industry nowadays. And, something tells me those guys get the retarded tax breaks....

Yeah.... corporate welfare gobbles up huge amounts of tax money. I just did a search on it and found some interesting statistics:

http://www.corporations.org/welfare/

Originally posted by s.urkaleeno@Sep 21 2005, 08:37 AM

This plan is rediculous. It is all econ think tank crap. It almost sounds like they took a page out of the book "confessions of an economic hitman". There are better ways to shift the tax burned from the working class to the investor class.

 

1) close corporate tax loop holes

 

2) stop allowing corporations that survive off of

government contracts and corporate wealfare from

incorporating off shore.

 

3) Just say YES to the "Paris Hilton tax" ( the inheritance tax )

 

 

4) make people who earn there living from dividen checks pay

more than the 15% tax

Quoted post

This man has the right idea.

Originally posted by s.urkaleeno@Sep 21 2005, 08:37 AM

This plan is rediculous. It is all econ think tank crap. It almost sounds like they took a page out of the book "confessions of an economic hitman". There are better ways to shift the tax burned from the working class to the investor class.

 

1) close corporate tax loop holes

 

2) stop allowing corporations that survive off of

government contracts and corporate wealfare from

incorporating off shore.

 

3) Just say YES to the "Paris Hilton tax" ( the inheritance tax )

 

 

4) make people who earn there living from dividen checks pay

more than the 15% tax

Quoted post

1) Never going to happen under the current tax-code. That is why Washington lobbyists are so opposed to it, while the companies they are serving actually support it. Their sole purpose it to court lawmakers into slipping little amendments into existing bills that will give the paying company a little tax break. Under the Fair tax there will be no lobbyists, because there will be no 16th amendment, or income tax, personal or corporate.

2)Under the fair tax there will be no incentive to do business offshore anymore. The US will be the most favorable place to do business because every other country will not have a tax structure that will be as competitive as the fairtax. More businesses in the states means more jobs and more money for us plebs to spend or save.

3) JUST SAY NO TO THE DEATH TAX, the worst tax in existence, why not just go all the way and become communists

4)Don't worry about the rich people they spend a lot more in a year than I will every make in my lifetime, and it will be taxed. I worked in Vail, Colorado for quite a few years, I've seen how these people throw money around.

Re: the inheritance tax: if you died today, unless you have a taxable estate of $1.5 million or more, you will not be affected.

Did you ever wish that there was "C.O. tax status"? Say, there's a war going on that you didn't support, and you could check a box and say, "I want whatever funds that would go to 'defense' to go towards rehabilitation programs for the veterans of this misguided war", or something to that effect.

Every fucking day.

^^that would be awesome..

The reason this won't happen is that most of the "cannon fodder" are poor folks who never got a fair shake even before they went to fight an oil war. That's why most kids join the army, not because of a sense of patriotism or duty, it's usually for the GI bill or training that's available. But, the sad thing is, they sure as shit won't get taken care of after the fact, either. Cue up Metallica's "One" here.

The fair tax is just an another oxymoron from the double-speak neo-cons...

Its basically just another flat-tax scheme (like that professed by Ross Perot) except its focused on consumption. And the truth of the matter is, is that poor, working class and middle class spend the biggest percentage of their incomes on consumption, so they in essence would be taxed the most. Rich people would basically be paying taxes now on only their disposable income, buying luxury items.

And the idea of rebates for people below the poverty line: the poverty line is way fucked up and way below the rate most families need to be out of poverty.

correct me if im wrong, but i thought neil boortz was a libertarian. most neocons are to pussy to back this. a neo con is a liberal with "socially conservative" values. the only ones i see fully backing this plan are the libertarians. i have seen 2 libertarian stands at 2 events all with huge displays on fair tax. i personally see no difference in this than income tax. its bullshit to say "well the middle class and poor spend more so they are paying more taxes and the rich still dont have to pay." i think this fair tax makes more sense than our current income tax. this is another example of liberal genius, "hey lets tax the incomes of us citizens, which was specifically written in the body of the constitution not to do, so we can fund some bullshit ass programs that will make us all better off!" 30 trillion dollars later, the poor are poorer and still growing. good job there guys. the complete opposite took place of what they thought. and you still have people saying that we simply arent spending enough. talk about throwing some wet wood on a smoldering fire.

personally i think the country would be 100% better off if we dropped income tax, and didnt do this fair tax thing. i think our fed government should be reduced to traditional size funded soley by tariff revenue on imports and various small duties, and if need be in times of crisis, funded by the sovereign states. this policy worked well over 100 years and with this and sound money, we went from an almost total agrarian republic to the world biggest wealthiest industrial power.

the reason i would support the fair tax, is that it seeks to abolish the 16th amendment and the IRS.