The Fair Tax

[CDarwin]

I agree with you that the wealthy do pay most of the tax currently - and that is how it should be. If we go to this "FAIR" tax, what will the distribution look like then? Who will pick up the slack? The government will keep on spending.

So, the arguments should be on the spending side, not the revenue side. The wealthy will be OK, don't worry so much about them.

 

The middle class, according to the President's Advisory Panel for Federal Tax Reform:

 

And what happens when people simply don't report those purchases? You think people are going to voluntarily pay tax on the couch they bought on Craigslist?

 

Used items wouldn't be taxed under the plan anyway. The original purchaser paid that tax.

[ecoli]

Incidentally, Neil Boortz, the co-author of the book that is mainly responsible for promoting this approach, is the Libertarian radio talk show host who awakened my personal interest in politics and critical thinking over 25 years ago while sitting in a Fotomat booth wondering if I should go stick with college. He still hosts his daily show on (I believe) WSB in Atlanta, and pre-dates the Rush Limbaugh CTR crowd by at least a couple of decades.

I listen to Neal Boortz on the way to school, he's too pro-War for me, but I like his small domestic government attitude.

[ParanoiA]

Keep it simple? Sounds good to me' date=' not sure about EVERYONE else though. Religious items, things "for the children", for education, media, farming, investment, etc. The arguments will be endless.

 

As for illegal activity - the black market will increase. People will always try to avoid paying taxes and the wealthy are far more innovative than illegal aliens, etc.[/quote']

 

Hey, you're making valid points, I just think it's better than the negatives associated with income tax. That level of personal information required and the mega-gigantica-department of beaurocracy to pay for - that in it's own complexity, causes a class of employment just to deal with it. It's existence and operating practices alone make it a burden to the poor and middle class especially.

 

And the black market is completely insanely huge right now with all of the illegal business going untaxed. A sales tax would at least impact many of the players in these businesses.

 

And never underestimate the power of garage sales... (now there's an untaxed market of activity that could spark up with a sales tax alternative ). The sales tax might just hit the higher income folk a little more than you think.

 

Well, at least he agrees with me. The article below was specifically about estate tax, which is a DOUBLE tax, but the point is the same.

 

Certainly an interesting attitude he has and I commend him for his nature, but I respectfully disagree with him. The rich can give all they want to the government, and privately, and should for similar reasons to Gates, but this is about externalizing a subjective expectation on others. I'd rather a more objective leaning idea, something linear, sterile. Something that doesn't allow the government to look at somebody and create ways, laws, specifically to 'go get their money'. That's what the IRS is. Those "loopholes" are people running away from the big bad wolf.

 

I agree with you that the wealthy do pay most of the tax currently - and that is how it should be. If we go to this "FAIR" tax' date=' what will the distribution look like then? Who will pick up the slack? The government will keep on spending.

So, the arguments should be on the spending side, not the revenue side. The wealthy will be OK, don't worry so much about them.[/quote']

 

Yeah, I'm with you on the spending side too. I'm far more interested in that at the moment actually.

[Realitycheck]

Yeah, it definitely favors the rich and unduly burdens the poor. 23% sales tax!

[bombus]

As said above, this is equivalent to the UK Value Added Tax (VAT). It puts the tax burden on the poorest as they spend most of their income on taxable stuff. It is favoured by the right wing as they favour (and mostly are) the rich.

 

Income tax is the fairest, but the rich can always employ clever accountants so they pay hardly any tax!

[Pangloss]

So why don't the poor become "clever accountants"?

[ParanoiA]

So why don't the poor become "clever accountants"?

 

I know I did. I made money off of you people...my apologies. Simplifying the tax code might make clever accountants out of everybody - even stupid people.

 

So, what's the conclusion on imports and exports? How does the Fair Tax potentially effect our international trade economy?

[Realitycheck]

So why don't the poor become "clever accountants"?

 

Actually, I'm pretty sure there is a very large number of poor contract laborers who simply don't pay when they find out they owe twice as much payroll tax as everybody else. I don't think the IRS wastes much time on them. This is one of those areas of IRS code that is truly unfair.

 

Fair tax is a tempting ploy to force everyone to pay their share, but you just can't employ graduated tax brackets into sales tax without making it all complicated. Sooner or later, you make the populace all conservative in order to save tax till the government raises it to 50% in order to make up the slack. The rich get even more conservative and don't buy anything, not even Christmas presents. The poor just die. And the middle class with kids get raped.

[DrDNA]

Income tax is the fairest,....

 

No....bu...

 

.....but the rich can always employ clever accountants so they pay hardly any tax!

 

Agreed. The obvious conclusion is the tax on income is not fair.

Simpler almost always equals better. Most, excluding perhaps those that directly or indirectly benefit from or profit off of unecessary complexity, would agree that better = fairer in the case of taxes.

Tax on goods seems like it should and could be the most simple.

[Sisyphus]

The rich get even more conservative and don't buy anything, not even Christmas presents. The poor just die. And the middle class with kids get raped.

 

That would be an awesome campaign ad.

[DrDNA]

Lol.

I agree.

I hope Hillary doesn't see this.....she'll get stuck in it like a hair in a biscuit.

[john5746]

Agreed. The obvious conclusion is the tax on income is not fair.

Simpler almost always equals better. Most, excluding perhaps those that directly or indirectly benefit from or profit off of unecessary complexity, would agree that better = fairer in the case of taxes.

Tax on goods seems like it should and could be the most simple.

 

Anarchy is the most simple system.

[bombus]

So why don't the poor become "clever accountants"?

 

I do hope you are joking!

 

Simpler almost always equals better.

 

That depends! A Poll Tax would be simplest, but it woudn't be fair!

 

 

Most, excluding perhaps those that directly or indirectly benefit from or profit off of unecessary complexity, would agree that better = fairer in the case of taxes. Tax on goods seems like it should and could be the most simple.

 

A tax on goods burdens the poorest. A simple progressive income tax with no loopholes for clever accountants to exploit is the fairest!

[DrDNA]

A tax on goods burdens the poorest.

 

How so?

The poor spend a much larger percentage of their income on food, medicine, and housing. Most (all?) proponents of a national sales tax agree that these should be excluded. For example, in my state, food (unless eaten in a restuarant) is excluded from the state sales tax.

 

A simple progressive income tax with no loopholes for clever accountants to exploit is the fairest!

In a perfect world, there would be no loopholes. Unfortunately we do not live in a perfect world.

The income tax is nothing more than a tax on income that can not be creatively hidden and disguised and it has proven to be MUCH easier to hide and disguise income than sales. To my knowledge, very few people are avoiding the state sales taxes. A few are able to cheat with boat or car purhcases by going out of state, but that could be fixed.

[Realitycheck]

A tax on goods burdens the poorest. A simple progressive income tax with no loopholes for clever accountants to exploit is the fairest!

Actually, the plan calls for rebate checks to be mailed each month so that the poor are spared from the effects. Where it really hits the hardest is on taxpayers with children. Normally, those with children get an exemption. With this, they would be hit harder, having to pay tax on all of the stuff they buy for their kids. Of course, this could be adjusted, but then things start getting complicated. Everybody wants their fair and square. It will never happen anyway. It's too much against the establishment. It's a fad. There's too many unknowns and drawbacks. Loopholes and deductions are how they get certain things done, rewarding some things more than others.

 

The question to ask is, "What effect will making the populace more conservative have?" It's got recession written all over it.

[iNow]

That depends! A Poll Tax would be simplest, but it woudn't be fair!

That's right! Poll taxes unfairly burden exotic dancers!! Oh... my bad... that'd be a pole tax. Stupid homonyms. Right. Carry on.

[DrDNA]

Why should any tax unduely burdon people of Polish descent?

[iNow]

Ooh... good one.

 

 

Back to the OP, would this really burden specific classes? Would it fail due to today's eBay and Craigslist dominance? What if we just starting buying everything from offshore?

 

I am not sure the fair tax is as viable as it once may have been, especially with the openness of today's international markets.

[CDarwin]

Back to the OP, would this really burden specific classes?

 

It would burden anyone without low enough income to qualify for the prebates who spends a relatively large proportion of their income on consumer goods and not in investments. In other words: the middle class.

[JohnB]

It sounds very similar to the Australian GST or the British VAT.

 

Where you will get caught up in the paperwork is in working out exactly which transaction is the "Retail" one. Is a sale from one business to another Wholesale or Retail? Or part both?

 

Personally I support the Transaction Tax idea similar to the one described here. The APT is however more complicated than I prefer.

 

To me the simplest tax system is the Debit Tax System. Put simply a .33% (1/3 of 1%) tax is automatically debited for any transaction in any type of account and forwarded to the Govt by electronic transfer.

 

You may note that this form of taxation is easy to administer, almost impossible to avoid and is frankly so low as to be not worth avoiding.

 

While an impossibility in previous eras, it is extremely easy for the computerised world of the 21st Century. Let's face it, no financial institution has any problem whatsoever moving transaction "fees" from your account to theirs every time you make a withdrawal.