What do you all think about the FairTax?

Posted by JuliBMe 4 years, 10 months ago to Economics
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I saw a new discussion on business tax proposals and thought about the FairTax. I'm not sure I've ever seen a discussion about it here. What do think?
SOURCE URL: https://fairtax.org/index


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    Posted by Zenphamy 4 years, 10 months ago
    There is no such thing as a fair tax. In all cases, it is theft.
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    • Posted by 4 years, 10 months ago
      I agree. I'm looking for anything that will stop the theft. It isn't going to be done wholesale, that's for sure.

      Anything that stops payroll deductions and the necessity of quarterly payments, however, and allows us to choose when to pay those federal taxes, not to mention eliminating those mountains of IRS CRIMINAL regulations, is a good thing.
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      • Posted by Zenphamy 4 years, 10 months ago
        The Objectivist term for what you're being a proponent of is Sanction of the Victim.

        The very concept of a fair/fairer atrocity is one of the most extreme examples of illogical irrational thinking one can imagine. Either one truly understands Individual freedom and rights or one accepts slavery to the state and those that won't or can't take care of themselves.
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        • Posted by 4 years, 10 months ago
          Reality must be acknowledged, however, and we must take a road from here to there somehow to get where freedom exists. The resistance is incredible just for this step. The FairTax has been on the table, or shoved under the table in Congress for years already.
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          • Posted by Zenphamy 4 years, 10 months ago
            Wrongness, evil, and anti-humanistic gov't must be acknowledged. Compromise with it, accepting a little bit of it, trying to make accommodation for it will only lead to more of it. There is only freedom or slavery.

            The reality is that this is no longer the most free country in the world and bears little resemblance to the one most of us believe we have and as long as it's citizenry accept individual taxation, it never will be.
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            • Posted by 4 years, 10 months ago
              But, you see, acknowledging it does not change it. I KNOW we are not free. I KNOW taxation is THEFT. I KNOW taxpayers are SLAVES just as welfare recipients are also slaves. I want to know how we get out of this mess created for us, incrementally, by people over 100 years ago. Violence is not an option until all other options have been exhausted. So, the FairTax looks like a step away from statism that can ACTUALLY be implemented.
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              • Posted by Zenphamy 4 years, 10 months ago
                Juli; I understand and sympathize with your frustration and your desire to DO something to try to achieve a change, to attempt to reverse the problems. But most people seem to miss the sub-plot and maybe main point of Atlas Shrugged, or think of it just as fiction. Attempting to work with or within the system won't work. The most accomplishment with such an effort is the destruction of oneself or help the system exist a little longer. You must let it fail--let it eat itself, and at the same time do your best to protect yourself during the chaos. We don't have and won't have a physical Gulch to escape to--we won't find a savior--nor will there be a set of magic legislation.

                But what we do have is a philosophy of reality as it is and a mind that can logically, rationally think about the world we live in and assess and determine what we should and shouldn't do in order to survive and improve our lives. Compromising with the wrong/evil/anti-human system only leaves one with no principles, and weakened morality.
                '
                If this sounds severe, that's life and that's reality. That's how we've wound up in the situation we find ourselves in today. Want to change it, stand up and say NO. Exercise your Right of Resistance. That's what the Declaration of Independence and the 2nd Amendment is all about.
                '
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                • Posted by ewv 4 years, 10 months ago
                  Ayn Rand and Atlas Shrugged did not advocate letting the system destroy itself into chaos. Ayn Rand repeatedly urged maintaining civilization and advocating the right philosophical ideas required to change the course of the country. Saying "no" and "resisting" does nothing to achieve positive change.
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  • Posted by $ CBJ 4 years, 10 months ago
    Not fair at all. It shifts the entire tax burden to consumers, who are forced to pay for everything the federal government currently does. It’s progressive – the “poor” receive government protection and services for free, everyone else pays. It maintains the same level of overall taxation to fund today’s bloated level of federal spending, so it does nothing to reduce the heavy federal tax burden, it simply reallocates all of it to “consumers”. It does nothing to reduce the deficit or unfunded liabilities, meaning that the 23% “fair tax” rate will have to be constantly increased to service the national debt. From an Objectivist point of view, the “fair tax” does nothing to fundamentally advance the goal of having a government limited to the protection of individual rights, with payment for government services tied to the value the payer receives for those services.
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    • Posted by $ AJAshinoff 4 years, 10 months ago
      The owners of businesses, any business of any size, their shareholders all pay the consumption tax like everyone else. The percentage is the same no matter who you are and the only difference is its based on what each person consumes. No one has to consume more than he/she chooses.

      Where is this progressive?
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      • Posted by $ CBJ 4 years, 10 months ago
        It is progressive. They say so right on their website. Check out the first one-minute video here:
        https://fairtax.org/about/how-fairtax...

        The progressive feature is implemented by a "prebate" which is essentially a zero tax bracket. Check out this explanation from their FAQ:
        "Is the FAIRtax progressive? Do the rich pay more and the poor pay less as a percentage of their spending?
        Absolutely. The poor actually pay less than zero-percent retail sales tax on their spending. Much like with the earned income tax credit of today, the prebate may give them more money than they actually spend on retail taxes. Especially if they are frugal and buy mostly used products. On the other hand, the wealthy approach a maximum of 23-percent retail sales tax on their spending."
        http://fairtax.org/faq
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        • Posted by $ AJAshinoff 4 years, 10 months ago
          As promised I read about the fair tax and watched a video on the "prebate"

          No. I do not favor this plan. The fact the government issues checks every month erasing peoples tax burden is entirely progressive. And a 30% tax is purely ridiculous.
          http://fairtax.org/videos/what-is-the...

          No. The Fair tax is hardly fair to the nations producers.
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          • Posted by 4 years, 10 months ago
            Yes, the prebate part troubles me, too. However, we have already become a welfare state with the government TAKING the money from production to give it to others. This eliminates the taking part and becomes more voluntary. Having the prebate, I think, would also help sell the plan to a big majority of people who would be very concerned about the fact that even the poor would have to pay the tax at checkout when the cost of food, for them, is already very high. I guess, it would be small comfort for the "concerned" to be told that everyone would not have any deductions from their paychecks anymore, nor would contractors or small business people have to send in anymore quarterly payments. I think I read that every legal household receives the prebate depending on household size. So, that part is also equal treatment.

            In the end, to me, it seems like a baby-step in the right direction at least.
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            • Posted by $ CBJ 4 years, 10 months ago
              Will you still think it's "like a baby-step in the right direction" when you're in the market for a new house?
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              • Posted by $ Temlakos 4 years, 10 months ago
                If by "new house" you mean "a house built entirely from scratch, on a vacant lot that a subdivider has only just declared," then you are correct: the Fair Tax would indeed apply to the price of such a house.

                But: if by "new house" you mean a house you mean to newly occupy, but which already has a present occupant, then you forget: the Fair Tax would not apply to such a house. The Fair Tax applies to new stuff only, never to used. That leaves out existing houses, pre-owned automobiles, second-hand store goods, or anything you would by in a yard/garage/sidewalk sale.

                Indeed, I doubt the Fair Tax would even apply to a flipped house. That's a house someone renovates. The only possible way a Fair Tax would apply to a single-family house on a lot someone occupied, might be if the builder had to tear the house down and rebuild on a new foundation. And even then the builder would pay for the new building materials, and the tax would apply to the house but not the land.
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                • Posted by $ CBJ 4 years, 10 months ago
                  By “new house” I mean a brand new, never-occupied house. You know, the kind that real estate developers build to serve a growing population. If the Fair Tax passes you can forget about any meaningful new housing construction for the next several years, and most existing developers will probably go bankrupt through no fault of their own. And it’s not just homes, it’s cars, jewelry and many other high-ticket items. For everything, the cost difference between “new” and “used” will be 30% more than it is now. This will create a huge incentive to purchase used items whenever possible, and will strangle economic growth by greatly reducing the demand for anything new. This change in consumption patterns will cause a shortfall in tax revenues and force an increase in the “fair tax” rate, making a bad situation even worse.
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                  • Posted by ewv 4 years, 10 months ago
                    Who says what kind of house it would apply to? A law based on this statist principle would be subject to all the usual pressures to tax income and "sales however derived".

                    The original income tax was simple and claimed to be "fair", too. Why would this addition of a major new national sales tax be any different? All the promises and reassurances from advocates making promises they have no authority to make or keep is the slick sales tactic used in virtually any controversial legislation as they try to avoid the essentials and their consequences in pandering to every conceivable interest group. Once the premise is entrenched they go on from there with divide and conquer.
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              • Posted by 4 years, 10 months ago
                Yes,and this it one of the things that excites me the most about this idea. You won't see a 30% or 23% increase in new houses at all. Well, maybe for a little while after implementation. If the FairTax was implemented, all compliance costs go away. That is money and LOTS of time people spend in avoiding paying the taxes we have now. This means that all the many taxes upon more taxes that are built into prices now, will become free to the original owners. This will, again, eventually, ensure that prices will massively reduce due to competition and the lack of government intervention. And, everyone who receives a paycheck will receive the entire paycheck. Wouldn't that be wonderful?
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                • Posted by ewv 4 years, 10 months ago
                  'In the market for a new house' means you have to pay 30% more for the house you have saved for for years. That is tens or hundreds of thousands of dollars more. It would not help sellers; it would depress prices.

                  It isn't "'wonderful" to receive income that you can't use without it being heavily taxed? And it isn't "wonderful" for retirees who have had their savings sacked for decades to suddenly be confronted with government-caused higher prices along with their lower retirement income.

                  This isn't "fair". It's a shell game packaged as euphoria.
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                • Posted by $ CBJ 4 years, 10 months ago
                  The day that the Fair Tax goes into effect, the price of a new house will rise 30% while the price of a used house will not. Builders who were unlucky enough to bring their housing developments to the market during this time will be bankrupted. The new house market will be destroyed for some time to come, until the interruption in supply of new houses forces the price of used houses up sufficiently to justify new construction once again. (A side effect will be a devastating fall in construction employment.) Meanwhile, renters will be faced with an immediate 30% increase in their rents, which for many of them will be enough to make existing rents unaffordable for low-income renters and their families (who pay little or no income tax now), and they will be forced to move to shabbier quarters or become homeless. Economics 101. The Fair Tax is anything but fair.
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                  • Posted by 4 years, 10 months ago
                    There is nothing in life that is fair. You are again forgetting about the amount of money people and businesses would immediately be able to keep along with the time expended to comply with the current horrible tax system we have. You really cannot say that home builders would immediately go out of business when all these positives would happen simultaneously.

                    The re-thinking of value for product and looking at outside competition alone will make prices fall precipitously. So, no, your dire predictions are not a given.
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                    • Posted by $ CBJ 4 years, 10 months ago
                      My dire predictions are a given. They are built into the Fair Tax as described on its own website. The distinction that the Fair Tax creates between "new" and "used" is absolutely clear. On the day the "fair tax" becomes law, a "new" house will be taxed at 30% and a near-identical slightly "used" house will not be taxed at all. Would you really want to be an investor in a new residential housing development on that day or for several years thereafter?
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                      • Posted by $ CBJ 4 years, 10 months ago
                        And while the Fair Tax would not promote economic growth (since the heavy tax burden would not change), it would create a field day for speculators. They could buy a new item the day before the Fair Tax goes into effect, “use” it for one or two days, then resell it as a slightly “used” item at a nice premium above what they paid a few days previously.
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        • Posted by scojohnson 4 years, 10 months ago
          Well, that's rather simple to understand, most people that earn more, spend more. You may have a few hermit crabs, but those are pretty few and far between.

          Sure, it drives prices up, but without 43% of my salary being deducted before I ever see it between state, federal, and payroll deductions, I am very happy to consider it an option. At least then my taxes are controlled by my spending, and if I need to help a family member out financially or something, I have the flexibility to do that by reducing my spending. Right now, it all goes to support 25% on MediCaid and 33% getting food stamps and Medicare and Social Security that will be long-bankrupt before I ever make a claim.
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          • Posted by $ CBJ 4 years, 10 months ago
            Re: "Right now, it all goes to support 25% on MediCaid and 33% getting food stamps and Medicare and Social Security that will be long-bankrupt before I ever make a claim." And after the "fair tax" is implemented, the money raised will all go to support exactly the same government programs.

            And if you decide to help out a family member financially, be sure to add enough to cover the "fair tax" that the family member will have to pay.
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        • Posted by $ AJAshinoff 4 years, 10 months ago
          if you had a flat tax 10% with no exemptions or deductions the rich would still pay more than the lower income people.

          The only fair way is to place the amount of tax burden on the individual in such a way that he/she can control it.

          I'll go through the link when I have a little more time. Maybe in about an hour..thanks
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          • Posted by ewv 4 years, 10 months ago
            A flat tax on "income" with "no deductions" would be devastating to businesses, most of whose gross income pays for expenses to stay in business, including other taxes like property taxes, and is not profit. And retaining business expenses with the tax on net income with do nothing to eliminate the lawyers, accountants and most of the complexity.
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            • Posted by $ CBJ 4 years, 10 months ago
              In my view it's even worse. From their FAQ, this appears to be the replacement for the IRS:

              "Also, as registered sellers, they are subject to the possibility of being audited by the state. During such an audit, they will have to produce the invoices for all the “business purchases” that they did not pay sales tax on and will have to be able to show that they were bona fide business expenses. If they cannot prove this, then they will have to pay the taxes that should have been paid when the items were purchased, plus interest and penalties. The probability of being audited will be much greater than it is under the current system with its over 140 million tax filers. Under the FairTax, there will be less than 20 million businesses that will be filing sales tax returns and thus subject to the possibility of being audited. Thus, the probability of tax cheats getting caught will be much greater than it is today, making tax evasion riskier than it is today. Additionally, while the FairTax has much stronger taxpayer rights than does the current tax system, the FairTax legislation provides for a number of fines and penalties for noncompliance. It also authorizes a mechanism for reporting tax cheats and obtaining a reward. An example would be 1-800-TAX-CHET."
              http://fairtax.org/faq

              This would be a great incentive for someone to start a new small business, don't you think?

              The more I learn about the "fair tax", the less I like it. This proposal is far from ready for prime time.
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              • Posted by ewv 4 years, 10 months ago
                The closer it is to "prime time" the more the warts are revealed as you see what the principle means in practice instead of buying into to an advanced sales pitch "this is fair".

                Still not discussed is the the nightmare maze of civil rights threats set up by giving states jurisdiction to go after people with shakedowns anywhere outside of their own borders, which this scheme shares with the internet sales tax expansion agenda. Not having to contend with a maze of different state actions interfering in trade was supposed to have been addressed by the Commerce clause in the Constitution. The kind of aggressive punishment and shakedowns this sets up is even worse.
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              • Posted by 4 years, 10 months ago
                Okay, think of it this way. Practically every household spends, I think BILLIONS of dollars for accountants and lawyers in order to navigate the current tax law with it's maze of regulations laid out so that we can AVOID paying taxes. That's what it is, TAX AVOIDANCE and the government lays traps everywhere that we have to navigate. These regulations also supposedly require the huge amount of man-power that inhabits the criminal IRS who can't audit every household but somehow have the time to harass grass roots conservative organizations!

                Now enter the FairTax, the only people who have to file anymore are the people who currently already have to file their sales tax returns to the state (I know not all states, but most). The IRS suddenly doesn't need the personnel it currently has. And, the whole department will, hopefully, be gutted (but with any government, who knows?). Yes, maybe the probability of the sales tax businesses being audited will go up. So? They collect the tax they need, file their returns like they're supposed to, and there should be no problem, right?
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                • Posted by $ CBJ 4 years, 10 months ago
                  The Fair Tax takes a major existing violation of individual rights and makes it much worse. Businesses should not be required to be tax collectors for the government. They are already being badly harassed by government paperwork, much of it related to taxation, and the Fair Tax proponents support more frequent and more intrusive audits, with “rewards” to the public for turning in “tax cheats”?? This opens the door for a higher level of abuse and shakedowns of small businesses by corrupt governments. If you don’t think governments will take advantage of this power, check out “asset forfeiture” laws and practices.
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          • Posted by ewv 4 years, 10 months ago
            Taxing people on what they control is not control over the tax they have to pay and is not "fair". You already have the means to control your income by earning less to pay less income tax. That doesn't make the income tax "fair" either. Calling these schemes a "fair tax" is a typical anti-intellectual conservative argument/sell-job.
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            • Posted by 4 years, 10 months ago
              But, the name is not the important part. It's a vehicle to try to sell the plan, that's all. Reducing your income to pay less tax is a negative. Reducing your spending to pay less tax is a positive.
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              • Posted by ewv 4 years, 10 months ago
                We earn money in order to spend it, without which it is useless. Punishing people for spending is not a "positive". The "name" "fair" is a hoax to sell a shell game that is in some ways worse than what we have now.
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                • Posted by 4 years, 10 months ago
                  People really need to stop focusing on the NAME....it's about taxation and it would smell more sweet as a consumption tax than the noxious smell of an income (or production) tax and the name of it matters NOT AT ALL.

                  Money is security, so no, we do not necessarily earn money ONLY to spend it. You need to look at what is more moral. We will always have a federal tax, as someone else said here "the only certainty is death and taxes". So, is it more moral to tax production or consumption? Yes, yes, we all understand that taxation is punishment that affects behavior. But, it isn't going away EVER. So, which behavior is better for us overall? Stopping work to avoid taxes, or not spending to avoid taxes?
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                  • Posted by ewv 4 years, 10 months ago
                    The focus on the name "fair" was pushed on us by the sales campaign telling us what to think without regard to what it is. There isn't anything fair about it, as explained several times. The sales pitch telling us it allows us to control our own taxes because you can *choose" not to buy something is also an ugly package deal and a scam.

                    There are reforms in simplification and tax rates that would help, but nothing can substitute for the fundamentals of limited government for the protection of the rights of the individual, resulting in much lower taxes so the mechanisms are not as important. Substituting a shell game campaign claiming a major reform in the name of "fairness" by adding an enormous new national sales tax is worse than a distraction.

                    Serious people interested in Ayn Rand's ideas should know better than to jump on these anti-intellectual statist band wagon scams.
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                  • Posted by $ CBJ 4 years, 10 months ago
                    Re: "So, is it more moral to tax production or consumption?" Morally and practically, it's a meaningless distinction. A heavy consumption tax will reduce demand (or shift it to "used" products) and as demand falls, so will production. It's fantasy to think that shifting a confiscatory tax burden from "production" to "consumption" will generate meaningful economic growth.
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                    • Posted by 4 years, 10 months ago
                      All activity has a reaction. Whatever you do causes a reaction somewhere. You may not see it, but it happens.

                      You get less of something if you tax it. Undeniable TRUTH. So, there IS a morality component to how money is taken "for the greater good". If by spending less, people save more, that is to their benefit and a good thing. If you tax economic activity, you also get less of it BY DESIGN by the Marxists in government. This has also been proven. It's in the Communist Manifesto, by the way. I would think ANYTHING that gets us away from adhering to Marx, everyone who frequents this site would agree with!
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                      • Posted by $ CBJ 4 years, 10 months ago
                        “You get less of something if you tax it.” I agree. If you tax consumption you will get less consumption. Less consumption means less production. If people spend less and save more, overall economic activity will fall, less taxes will be collected, and the “fair tax” rate will have to rise in order to remain “revenue neutral”.

                        And just because the “fair tax” is not Marxist does not mean that it’s an improvement over the current system.
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                        • Posted by 4 years, 10 months ago
                          We're already paying the taxes. That, obviously, won't change. So, the question becomes, "is it better to tax income or purchases?".

                          When you stop taxing income BY FORCE, people will keep more of their money. Then people will feel much more prosperous....you can't QUANTIFY that can you? No, you can't. Then people will be able to VOLUNTARILY decide where to make their purchases and pay that tax that was FORCED from them before. Believe me, people still will spend. They have to. They will still need their food and clothing and, after a period of adjustment, they will maybe be more discriminating, but they will buy other goods, too. Everybody likes stuff! We are very much a consumer society. And, if we end up being less so, and start saving more, that's all to the good.

                          Where is the problem? You keep seeing one that does NOT exist.
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                          • Posted by $ CBJ 4 years, 10 months ago
                            You propose to stop taxing income BY FORCE and begin taxing consumption BY FORCE. The same amount of money will be extracted from taxpayers either way. Why should people feel much more prosperous when, on average, they will pay the same amount of tax as before? People will be able to VOLUNTARILY decide whether to pay the “fair tax” to the government at their local Ford dealer or at their local Chevy dealer. So what? They are still being FORCED to pay the taxes to the federal government, and on average the same amount as before. And “fair tax” proponents are assuming a best possible case, that things will work out precisely in the way that they’re describing. There’s about as much chance of that happening as the chance that Obamacare will suddenly begin functioning in the way its proponents claimed it would.
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                            • Posted by 4 years, 10 months ago
                              There is NO comparison between ObamaDoesn'tCare and the MoreFairTax. You see what I did? I changed the names closer to the reality of what they are to make those of you so fixated on labels. So, obviously, you are comparing apples to oranges and really don't need to bring up ObamaDoesn'tCare again as it does not apply.

                              You don't understand the difference between choice to purchase something new as opposed to purchasing something used? For one thing you avoid the tax. SO WHERE'S THE FORCE???? Next you avoid depreciation. How about THAT in making people feeling more prosperous? I buy used ALL the time now, have for years, and save a BUNDLE and find things that are actual TREASURES, not new junk from China. It's only a matter of changing your outlook.

                              I get it. You don't want to see the benefit of it. FINE. I'm tired of this discussion with you going round and round rehashing the same concepts you can't seem to absorb. Have a lovely evening.
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                              • Posted by $ CBJ 4 years, 10 months ago
                                It’s okay for the government to FORCE (excuse me, ENCOURAGE) you to change your outlook by its preferential tax treatment of used items? We already have the choice between purchasing something new and purchasing something used, and their prices reflect the way we value new vs. used. The “fair tax” will force more people to buy used items, especially big-ticket ones, by making the equivalent new items unaffordable. But if the majority of people (or even a significant minority) adopt your preferred method of shopping, the sale of new items, and the tax revenues the government extracts from those sales, will plummet. And then, to make up that lost revenue, the “fair tax” will have to rise from 30% to 40%, or maybe even 50% and beyond, as the economy morphs into a bazaar in which everyone trades used items with each other. That will certainly change people outlook, but it’s hardly likely to make them feel more prosperous.
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    • Posted by 4 years, 10 months ago
      Actually, that's one of the things I like about it. It shifts the tax burden to EVERYBODY (even illegals) because we are all consumers at some level. It also gives us the freedom to decide when and how much we want to pay. It puts the amount of tax you pay to the federal government right there on your receipts. Making people actually see how much they pay the government. One of the biggest problems with payroll tax is that no one actually sees what they are paying. It's deducted, so people don't pay attention to what the government costs. I think the psychology of actually seeing that amount would make people change how they vote and, yes, I think the tax would end up coming down as we force the government to spend less. It would take time, but I think that is what would happen eventually.
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      • Posted by $ Dobrien 4 years, 10 months ago
        Any tinkering with taxes has had a increase built into it in my experience .Minn. had a temporary sales tax of 4% in 1967 it was a temporary increase in 1984 to 6% temporary because it was temporarily increased in 1991 to 6.5% where it is currently.
        I like the idea of taxing imports and sales to US by foreign owned co.s not protectionism but an incentive to get US manufacturing again.
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        • Posted by 4 years, 10 months ago
          I don't think the FairTax is tinkering. I think elimination of the IRS and the 16th amendment is built into it. As far as any increases go, I'm not sure how it is handled in the actual legislation but it seems to me, it shouldn't be left to Congress unless we have imposed term limits on them first. If it's left up to a vote of the people, then I would trust those votes more.
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          • Posted by $ CBJ 4 years, 10 months ago
            From the FAQ on their website:
            "Is there any provision in the FAIRtax bill to prevent both an income tax and a sales tax?
            The short answer is that there is no provision in the FairTax bill (HR 25) that would prevent having a national sales tax and the income tax."
            http://fairtax.org/faq
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            • Posted by 4 years, 10 months ago
              And, the rest of that answer is....However, the FairTax legislation does three things that effectively dismantle the income tax: (1) it abolishes the IRS, (2) it repeals all statutory language having to do with taxing income and payroll (i.e., the Internal Revenue Code), and (3) it eliminates the filing of annual income tax returns to the federal government for over 140 million Americans. The 16th Amendment does not “require” an income tax, it only “allows” one, and the FairTax will have broken that egg in a million pieces. - See more at: http://fairtax.org/faq#sthash.gRURq4l...
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              • Posted by $ CBJ 4 years, 10 months ago
                Every bit of that legislation can be reversed. It's not a Constitutional amendment. What we are likely to wind up with is the equivalent of Europe's "value added tax", or VAT. On top of all the other taxes we pay today. The federal income tax started out small as a "tax that only the rich would pay." It evolved into the monstrosity we see today. Nothing in the "fair tax" proposal will prevent it from doing the same.
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                • Posted by 4 years, 10 months ago
                  Yes, I understand that. I agree that to make these changes permanent require Constitutional amendments. However, I would hope that if this was implemented, we would insist on making it permanent after we see if it works as it seems it would.
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                  • Posted by $ CBJ 4 years, 10 months ago
                    And if it doesn't work we will have created economic havoc for nothing. And just because it doesn't work doesn't mean that it will be easy to change back. Look at Obamacare.
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                    • Posted by 4 years, 10 months ago
                      What economic havoc would be created by people keeping their own money?

                      Obamacare was WRITTEN to be unworkable. There's a huge difference between a government takeover of healthcare and a tax plan that allows people to keep their own money and decide when they will pay taxes and not have to file a return every year.
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                      • Posted by $ CBJ 4 years, 10 months ago
                        Economic havoc 101: As I posted elsewhere on this thread, the day that the Fair Tax goes into effect, the price of a new house will rise 30% while the price of a used house will not. Builders who were unlucky enough to bring their housing developments to the market during this time will be bankrupted. The new house market will be destroyed for some time to come, until the interruption in supply of new houses forces the price of used houses up sufficiently to justify new construction once again. (A side effect will be a devastating fall in construction employment.) Meanwhile, renters will be faced with an immediate 30% increase in their rents, which for many of them will be enough to make existing rents unaffordable for low-income renters and their families (who pay little or no income tax now), and they will be forced to move to shabbier quarters or become homeless. Economics 101. The Fair Tax is anything but fair.
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      • Posted by scojohnson 4 years, 10 months ago
        Correct, right now, about 50% +/- don't pay a dime of income taxes, so there isn't any skin in the game. It's always easy to vote for more free shit when you're not the one paying for the free shit.
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      • Posted by $ CBJ 4 years, 10 months ago
        Re: “It shifts the tax burden to EVERYBODY (even illegals) because we are all consumers at some level.” No it doesn’t. The “prebate” means that the “poor” pay no federal taxes at all, other people are forced to subsidize them.

        Re: “It also gives us the freedom to decide when and how much we want to pay.” Not for most necessities, such as food and gasoline. And rent. From the FAQ: “Service providers are not exempt from the income tax today, and should not be exempt from the Fair Tax. Services now account for well over one-half of the gross domestic product (GDP). Neither consumption of services nor consumption of goods should be tax preferred.”
        http://fairtax.org/faq

        Re: “It puts the amount of tax you pay to the federal government right there on your receipts. Making people actually see how much they pay the government.” State sales taxes do that now. It doesn’t appear to have much effect.
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        • Posted by ewv 4 years, 10 months ago
          Once the scheme is in place the principle is used to change the formulas to make it more progressive and grant or exclude exemptions and rate changes to favored or targeted kinds of 'purchases'. There isn't anything in principle that is better about this than the current mess, and it would only be added to that so we wind up with both.
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        • Posted by 4 years, 10 months ago
          1. The prebate is paid to every household rich and poor.

          #2. Is rent a service? I don't have a handle on everything that will and will not be taxed. Still, taxing this way will ensure prices go down as time and competition increases, so there will be much more freedom in that respect. There is also the freedom from the IRS and the compliances costs to be factored.

          #3. This is true. Here in California, people still vote against their interest and increase taxes on themselves for these criminals! Luckily most states are not the same as California and New York and will counteract the stupidity of these states when voting on "raise the tax because IT'S FOR THE CHILDREN" idiotic issues. Actually, I think more and more people will start to pay attention if they see how much money they are paying on each receipt. This will increase awareness and, maybe even in California, people will smarten up.
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  • Posted by chad 4 years, 10 months ago
    I once looked into what taxes would be if the only financial requirements of the federal government were those tasks specifically allowed by the constitution. It would be $200 per year per person, those who have large families would pay more. An easier way to discover how much we pay in taxes was to find out how much money was in circulation (much easier to do 50 years ago, there was only M1) and divide it into the federal budget for the year (also easier to do then because there were fewer black budget deals). There are so many hidden federal taxes that if you simply take what tax bracket you are in you will be short of the 67% the federal government takes. Add state income taxes, sales taxes and now ACA taxes and you are soon at 85% of everything you make pays for some kind of taxation and you are living on 15% :(. If taxation is not voluntary it is theft and extortion. As soon as the government starts an unconstitutional bureau or governing agency stop paying taxes, they will be unable to make it function. That is the only vote that counts, money. The idea that there would be not roads, schools, or hospitals & etc. is preposterous, all of those things existed prior to the federal government getting involved. We would not all be standing around stupid waiting to die because of the lack of schools, hospitals and roads. At $200 per person this also assumed there was no way to make the government more responsible when it spends money for defense; i.e. $1000 toilet seats.
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    • Posted by $ Temlakos 4 years, 10 months ago
      You describe a capitation tax. Of course that would have to fall proportionally per the population of each State, per the Census.
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      • Posted by chad 4 years, 10 months ago
        Correct, it would be applied equally to all.
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        • Posted by $ Temlakos 4 years, 10 months ago
          OK. $200 per person-year. You probably assume--and this assumption would likely be safe--that the prosperity of the people would be quite sufficient to enable every responsible party--parent, guardian, etc.--to pay the head tax for himself and any person for whom he is responsible.

          Now this next question might be a bit out-of-scope: how would you effect the voluntary collection? Where lies the incentive to pay for these services? I assume, to begin with, that at the very least, States handle road-building, and agree to connect their roads with those of their neighbors at the border. And at the most, completely private owner-operators build and maintain streets and roads. I myself have come up with three different models of street-and-road operation, one each for residential or industrial streets (the considerations being the same for each), commercial thoroughfares, and long-distance highways.

          So how would you incentivize people to pay any amount at all for the police and the military?
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          • Posted by chad 4 years, 10 months ago
            If the collection is voluntary there is nothing to handle. States would not make roads, no government no matter how large or small can own property. Once they do they then call it 'public property' and you lose all of your rights including the right to own property because the state will condemn it to build their roads. The intercontinental railroad was built with taxes and used it's ability to steal property to complete the task. The Burlington Northern ran parallel in the north and crossed the continent without condemning anyone's property, built for less and made more money until the government kept subsidizing their line with taxpayer dollars (including tax dollars from Burlington Northern) until they couldn't compete. Your assumption is probably that without coercion no one would pay taxes. There have been two times the country operated in the black without any head tax. All taxes were collected at the border (import duties). A banking system based on money and not fiat currency (debt) reduces the cost of operation of the government to where it can be handled without burdening the people. Costs for police, fire and military can be reduced and with more money to spend purchasing these services becomes easily done for anyone who chooses to do so. The idea that these services can only be provided for by governments is a lie. For every dollar that enters public coffers only one cent returns to the needed project. You have dozens of bureaus collecting, disbursing, and consuming the tax dollar that enters the system as opposed to free enterprise who is paid directly.
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            • Posted by $ Temlakos 4 years, 10 months ago
              You have me wrong. I'm just asking, and trying not to ask leading questions. It would be too easy for me to say, "I assume you believe road-building should be an entirely private affair." And mentioned police, military, and judiciary.

              We can agree as regards modes of communication, transport, and shipment. I would point out that duties and imposts still fall under the broad category of "taxes," so they are "voluntary" only in that one need not import anything if one wishes to avoid such payments.

              Residential and industrial users of streets can form associations to pay to keep them up. Storekeepers can likewise pay to keep up the roads that bring their customers to their own markets. Highway owners can charge tolls. And anyone who runs a firm that insures property can run a fire brigade to provide direct management of risk.

              Likewise, litigants, registrants, and other users of the courts can pay fees for whatever services they require. This can include "requests for judicial intervention" to certify the results of arbitrations.

              But what incentive has anyone to pay for the police or the military? How does one keep order in a society, the membership of which is not "by invitation only"?
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  • Posted by mia767ca 4 years, 10 months ago
    there is no "fair tax"....all taxation is theft...citizen contributions to govt should be voluntary...that quickly determines what govt is necessary...
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  • Posted by $ jdg 4 years, 10 months ago
    While I'd rather see all non-essential taxes just go away, the Fair Tax would be an improvement on the income tax in two major ways.

    (1) The government would no longer have an excuse to make you tell them all about your wealth, where you got it, and where it is stored.

    (2) The marginal tax rate, and with it the disincentive on producing wealth, would be substantially less than now.

    But there are even better alternatives. One would be a simple sales tax, with all food, clothing, shelter, medicine, and services exempt (thus amounting to a tax on discretionary spending). No need to annually refund everybody a "living allowance" under that scheme, the exemptions take care of that.
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  • Posted by LibertyBelle 4 years, 10 months ago
    From what I understand, the "Fair Tax" would be
    like the Income Tax, except a flat percentage, in-
    stead of being progressive like the present income
    tax. Although that would at least take away some of the penalty for success, it would still be robbery.
    I am against compulsory taxation per se.
    It could be replaced (once the government were
    cut down to its proper function) by something
    like the present sales tax; (and, since nearly
    everyone goes to the store, nearly everyone
    would have a "stake in society" that some like
    to talk about). How could it be voluntary? If a
    store were open a certain number of days, and
    the owner would not agree to pay his Law En-
    forcement Fee, he would be put on notice that
    if someone broke into the place and held a gun
    on him, it would be no use to call 911, as the
    address would be put into the computer as be-
    ing a place whose owner had refused to support
    the government and police. Also, thugs would
    be able to tell which stores were not so protected, as they would not be given the sticker
    (something like the present car-inspection stick-
    er) to put in the window. (A recalcitrant store-
    owner would still be allowed to use a gun for e-
    mergency self-defense, but in the case of 3 or
    4 thugs, this might not be practical). Also, if
    he came to work and found that the store had
    been trashed during the night, the police would
    not help. So there would be a powerful incentive
    to pay.--Also, we could still have lotteries and
    court fees.
    Still, we don't have a laissez-faire system
    now. So, maybe the "Fair Tax" would be better
    than the present income tax, for the time being.
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  • Posted by DrZarkov99 4 years, 10 months ago
    The problem with the FairTax is the necessity to eliminate the 16th amendment to avoid income tax creeping back in. The amendment process is cumbersome, even if no one fought its abolition.

    The size of government needs to be scaled back to the constitutionally authorized activities. As the Antifederalist papers authors predicted, the "general welfare" statement has been an open door to many unconstitutional elements that have created a bloated parasitic monstrosity.

    Letting agencies die off by attrition would reduce the theft, and open the door to restoring the original sources of revenue, with specific fees and tariffs. That would lift the tax burden.
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  • Posted by Herb7734 4 years, 10 months ago
    The so-called fair tax is better than what we have now. But then, almost any tax scheme would be better than we have now. Actually, in my case the F%$#@#$% tax is not good for me as we are retired with SS and income waay below the poverty level, so we wind up paying zip. Which is one of the reasons the current system smells worse than 3 day old whitefish.
    No taxation in a 350 million population nation at the current level of understanding by the citizenry is impossible. Any suggestions?
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    • Posted by bassboat 4 years, 10 months ago
      With the Fair Tax you would be an amount for a family of two ( unless there are other people living in your house) up to the poverty level for a rebate of all the money that you spend. It's much better than what we have now.
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  • Posted by CTYankee 4 years, 10 months ago
    I've been a proponent for a very long time. At first I thought it was a terrible idea, but rather than condemn it on 'opposition talking points', I decided to use my skills to analyze the proposal.

    What I learned is that the FairTax would, all other things being equal, increase the US GDP, by many billions of dollars, simply by reducing the compliance cost of taxpaying.

    But all things are not equal! The FairTax would as published, create a far stronger economy. That would allow the US GDP to increase significantly more than the simple savings from lower compliance costs.

    Additionally, the FairTax offers the one thing that the Left and the SJWs espouse, it is truly a 'fair' system that allows those who are more capable of carrying a tax burden pick up more of that load, while liberating those who for whatever reason are unable or unwilling to pay into the system avoid taxation altogether -- no implementation of the Income Tax can make that claim.

    There are a few things wrong with the proposed version as published. It taxes services, such as professional fees (e.g. Doctor, Lawyer, Musician, etc.) These services should not be taxed anymore than non-pro services like babysitting, dog-walking, parking lot attendant, etc.) I would suggest a STRICT clause that restricts the tax to NEW GOODS for CONSUMPTION and nothing else.

    Would adopting the FairTax cause some disruption to the US economy? Yes, in the short term, like ripping the band-aid off a healing wound. We've suffered the wound of the Income Tax for over a century. In less than 60 days under the FairTax, those 410+ fiscal quarters of pain would be on the way to being forgotten.

    I did the math, it was an enormous spreadsheet where I analyzed basic commodities like bread & produce, and complex ones like automobiles & housing. In every case the effect of the FairTax would allow the economy to transition with a minimal disruption. The bookkeepers & accountants would be busy for what is essentially a thorough inventory and audit, leading up to the day of the changeover. Following that the businesses would be free to decide how to transition over the next year (if they need that much time before taking advantage of the panoply of other FairTax benefits).

    Within a year the only complaint we'll hear will go something like this:

    J.Taggart: "Before the FairTax I had all these coupons for 35% off my expense for supplies."

    F.D'Anconia: "But have you noticed that the price of those same supplies has declined by 75% from last year?"

    J.Taggart: "That's not the point. My coupons aren't worth anything anymore."

    F.D'Anconia: "But, you didn't pay anything for those coupons, they cost you nothing. And now you're saving 75% instead of 35%."
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    • Posted by $ CBJ 4 years, 10 months ago
      Re: "I would suggest a STRICT clause that restricts the tax to NEW GOODS for CONSUMPTION and nothing else." Sure, if you want the "fair tax" rate to go up to 75% from the currently proposed 30%. Read the FAQ on their website. "Services now account for well over one-half of the gross domestic product (GDP). Neither consumption of services nor consumption of goods should be tax preferred."

      By the way, the current fair tax proposal apparently includes rent. A lot of poor families who are currently paying little or no income tax will become homeless because they can't afford a 30% increase in their rent.

      You might want to do the math again.
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      • Posted by scojohnson 4 years, 10 months ago
        Would certainly help the real estate market, you woulopay tax on debt repayment.
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        • Posted by $ CBJ 4 years, 10 months ago
          Paying a 30% tax on a new house would help the real estate market?
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          • Posted by scojohnson 4 years, 10 months ago
            real estate has always been exempt from sales or excise taxes because you pay annual property ownership taxes on it. Waive those, and sure, I'd pay 30% "one-time" but it certainly muddies-up the appraised value for mortgages, banks don't finance a tax bill, those are powerful lobbies, there would never be a tax on a home purchase.

            Rent.. sure, why-not? Rent is always just what the market will bear, the landlords would have to suck that up if they can't get the full rent + tax, they would have to lower rents until units fill. Supply & demand determines price. Any landlord used to getting $1200 would take $1000 + the 30% tax or something, instead of 0.

            However, I don't think its feasible on rents, there would be millions of landlords having to be setup as tax-collecting entities across 98,000 tax jurisdictions in the US. It would be absurd.
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            • Posted by $ CBJ 4 years, 10 months ago
              The "fair tax", as I understand it, applies to all purchases of new items for personal use, including homes. If rent is taxed (which I understand it would be), landlords would take a big hit the value of their investments for the reasons you cited above. And if homes and rents are excluded from the "fair tax", the rate would have to rise considerably from the projected 30% in order to make up for that lost revenue source.
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              • Posted by scojohnson 4 years, 10 months ago
                That's where plans like this dramatically break down. Its absurd to tax a house in New York or California, in my neighborhood, literally, the tax would be $250,000 on an average 4 bedroom / 2 bath home, vs maybe $25,000 in Ohio.

                I don't see it as a doable scheme on real estate, there are vast differences by locale. Someone making $100k a year doesn't have to chip in $250,000 on taxes in a single year.
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                • Posted by scojohnson 4 years, 10 months ago
                  I would see it as a value-add on the property tax as the most-reasonable approach, and the most reliable source of revenue - annual value-based tax, rather than on the purchase (which would be once every 20 years - or after this, people would never buy or sell a house and it would become generational ownership like is common in Europe).
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    • Posted by bassboat 4 years, 10 months ago
      Let's not forget the economy being helped substantially by the Fair Tax in no manufactured goods being taxed. This would cause a tremendous increase in exports and more jobs. The Fair Tax folks took a survey of the largest 400 companies outside of the US and their finding were, 240 would build their next plant here and the remaining 160 would move their corporate headquarters here. A boon for jobs and wealth.
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  • Posted by librty 4 years, 10 months ago
    The income tax accounts for a third of the moneys the fed takes in. Why not cut spending by a third and repeal the 16th amendment.
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  • Posted by unitedlc 4 years, 10 months ago
    I am huge proponent of the Fair Tax, and let me explain why. First, this has nothing to do with government spending. That is an entirely separate issue that is a much bigger problem than how they collect tax. I personally believe the only money the federal government should be allowed to collect should be for defense and a federal court system, but I digress.

    Assuming we are still going to be forced to pay tax, the Fair Tax would allow individuals to pay tax when they want to pay tax. You only pay it when you purchase a NEW item or service. A person could actually choose to not pay ANY federal tax by living off of the fruits of their land and buying only pre-owned merchandise. In this aspect it is somewhat a voluntary tax system. Businesses do not pay tax on any of the wholesale items they purchase. It is only taxed at the consumer level, so even business owners could not have to pay any federal tax if they so choose.

    Being self employed, the biggest issue with income tax is knowing I have to pay tax whether I have the money to do it or not. The Fair Tax eliminates that. It makes budgeting, saving, and planning extraordinarily easier. I am all for it.
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    • Posted by $ CBJ 4 years, 10 months ago
      Re: “A person could actually choose to not pay ANY federal tax by living off of the fruits of their land and buying only pre-owned merchandise.” A person can do that now.

      Re: “It is only taxed at the consumer level, so even business owners could not have to pay any federal tax if they so choose.” How? You can’t eat used food or buy used gasoline at the pump. And the taxation of services makes it nearly impossible to avoid paying federal tax. For business owners and consumers, residential and office rents as well as car and equipment leases would likely be subject to the 30% tax as “services”. You could easily wind up paying more than you were paying in federal income tax. Somebody has to – the “fair tax” proponents claim that their proposal is “revenue neutral”, and the money has to come from somewhere.
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      • Posted by unitedlc 4 years, 10 months ago
        I guess I wasn't clear enough in my response. What I am talking about is that, under the Fair Tax, a person could conceivably have a "legal" job, grow food on his own property, and only buy used goods, with no federal tax being paid. A person CANNOT do that now as you say. If you have any income, you are at the very least supposed to pay social security and Medicare, even if your income is very small. Unfortunately, there are individuals who do not have any income whatsoever and are subsidized to do so by our lovely government. That is another issue entirely.

        Yes, the Fair Tax is supposed to be revenue neutral. There are very few people who would even try to pull off my scenario above to avoid paying any tax, but it is doable. To make up for the hermits who might avoid the tax, the enormous pool of illegals and criminals who do not pay income tax now will be paying tax as they spend their money. Even tourists visiting our country going to Disney Land will now be paying some of our federal tax burden. It simply widens the tax base.

        Additionally, illegals will no longer be as large of a burden on our country, due to the fact that they will receive no prebate. They will be paying a much larger percentage of their income in taxes.
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  • Posted by fosterj717 4 years, 10 months ago
    I like the concept of "radical" tax reform whereas we can get away from the Socialistic "Progressive" (or should I say "Regressive" tax?). The only problem that I see is that it is much more difficult to get your brain around rather than a simple "Flat" tax with no loopholes. Net, Net, bottom line, we must enact one of those two approaches. The Tax code we have now is an abomination!
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    • Posted by bassboat 4 years, 10 months ago
      The Fair tax was born out of a business meeting in Houston. 3 wealthy guys figured out that they spent 75% of their board room time in deciding whether or not an idea meant sense tax-wise. They put $21 million dollars for economist at MIT and Harvard to come up with a way to collect taxes that was neither a tax increase or a decrease. They expected the thing that they would come up with would be a flat tax but to their surprise it was the Fair Tax method of a sales tax. In the revenue that the government had received for the previous 16 quarters the Fair Tax would actually collected more taxes due to everyone was paying taxes, i.e., drug dealers, hookers, etc. The thing that I like about it is that on each receipt that you get is a breakdown of the taxes that are being sent to the government. This alone would make more people aware of the ridiculous amount of money that each of us is sending to DC. Pressure would then come from the people to lower taxes. K Street would be out of business as there would be no more tax goodies to dole out to a senator's favorite donor i.e. graft.
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    • Posted by 4 years, 10 months ago
      There is one thing that would make it more palatable than the "flat" tax and it's pretty big. That is that the FairTax it is a voluntary tax on consumption and the flat tax is still a tax on production.
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      • Posted by ewv 4 years, 10 months ago
        It is not a "voluntary" tax. You have the choice of how much to either earn or consume. "Voluntarily" arranging your life to reduce taxes does not make taxes voluntary. Production without the ability to use it for your own consumption is meaningless. The purpose of production is for your own life, not as an end in itself.
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        • Posted by unitedlc 4 years, 10 months ago
          The "voluntary" part is really meant more as "at your discretion". You have control with the Fair Tax. If you want to survive and earn legally, you have no control over the current tax system. It is taken from you entirely involuntarily. The Fair Tax gives you the choice to pay tax only as you can/want to pay tax. If you want to buy nothing but used goods, you can avoid the vast majority of it. You can produce and hoard, or produce and live off of your own land. At least you have choices.
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      • Posted by fosterj717 4 years, 10 months ago
        I agree! that is a strong argument for the Fair Tax. The problem as I see it, our abomination of a Tax Code is job security for 100's of thousands tax lawyers, accountants and various other "Tax Preparation" support people. The lobby is extremely strong and well entrenched! I would love to see a real debate on this however. Let's see which "clowns" cling to our current Socialist (or worse) tax scheme!
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  • Posted by Esceptico 4 years, 10 months ago
    As taxes go, it is great. It is well explained at https://fairtax.org/index When one taxes production, one gets less of it. Wealth is only created by production, which, to me, means anything which encourages production is good. The argument it shifts the tax burden to consumers is ill founded as explained on the website. Then add abolish the IRS and there is a winner. Abolishing taxes will not be done, certainly not in our lifetimes, so we need to work toward a better system than an income tax and abolish the 16th amendment.
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    • Posted by $ CBJ 4 years, 10 months ago
      When one taxes consumption, one gets less of it. Reduced demand means reduced production.
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      • Posted by Esceptico 4 years, 10 months ago
        I believe you are in a tautology. On an empirical level, the Fair Tax — by reducing the costs of production — will keep price levels about the same. This is all explained on the website and need not be discussed here. To me, however, the overriding feature is to abolish the income tax and with it the IRS.
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        • Posted by $ CBJ 4 years, 10 months ago
          The costs of production will go down. The costs of consumption will go up. This will reduce consumption, which will feed back into the system to reduce production. And I doubt that the price of a new house will go down 30% with the "fair tax", especially when the value of the land is taken into account. (Or would the land be considered "used" and not taxable? The lawyers and accountants that the "fair tax" supposedly eliminates will have a field day with issues such as this one.)
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          • Posted by Esceptico 4 years, 10 months ago
            All of these same things are discussed on the website, and other websites. There is no need here.
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            • Posted by $ CBJ 4 years, 10 months ago
              I find nothing on their website regarding the taxation of the land that comes with new homes. Many of the explanations on their website need further explanation, as I pointed out elsewhere on this thread. And since this thread is a discussion of the merits and demerits of the "fair tax", there is plenty of need to discuss these issues.
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              • Posted by Esceptico 4 years, 10 months ago
                I don’t see the problem you are raising. When you sell the land, you tax it. It seems simple to me. I think you are bogged down in details rather than grasping the big picture of ridding the world of the IRS with it Inquisition-type power over every individual in the country.
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                • Posted by $ CBJ 4 years, 10 months ago
                  Obamacare was passed because voters and Congress grasped the "big picture" of making health care "affordable" for everyone. No patient left behind. Then reality emerged in the form of those pesky "details". Now nearly everyone is paying the price in the form of higher costs and reduced choices. The devil is in the details, and if you propose to replace the current system you had better make a compelling - and detailed - case. If you don't address the details, you can't possibly lay out the "big picture".
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                  • Posted by unitedlc 4 years, 10 months ago
                    I agree with you entirely that the devil is in the details! Land sold would NOT be taxed under the Fair Tax. Only new consumer level goods and services. Land is not a good or service. The value of the land would not be taxed under the Fair Tax system. So if you buy a new "spec" home, there will be a value allocated to the land that is not subject to the tax. If you buy land and have a house built on it, then the calculation is easy.
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                    • Posted by $ CBJ 4 years, 10 months ago
                      Is there a website that lays out details like this? I wasn't able to find out this or many other important details on the fair tax website.
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                      • Posted by unitedlc 4 years, 10 months ago
                        Actually there are 2 books written by Neal Boortz (who helped write the bills). "The Fair Tax Book" is a quick, easy read, and goes into excellent detail on questions like this. The follow up book "Fair Tax: The Truth" covers a bunch of questions and perceived problems as well. I would highly recommend reading these.
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      • Posted by 4 years, 10 months ago
        For a short adjustment period, that might be true. However, once people see their whole paycheck, and don't have to worry about April 15th anymore (A HUGE relief in terms of ATTITUDE, TIME, and MONEY, by the way), economic activity will skyrocket. I can almost guarantee you that!

        By the way, you and ewv are so adamantly against this, are you both accountants? :-)
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        • Posted by $ CBJ 4 years, 10 months ago
          Since you ask, I'm a writer and researcher with Masters Degrees in Economics and Environmental Science, not an accountant.

          As for not worrying about April 15, three words: state income taxes.

          "Almost guarantee" is not a sufficient reason to implement the Fair Tax, especially with its numerous flaws detailed elsewhere on this thread.
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          • Posted by 4 years, 10 months ago
            I'm not a responsible party of the FairTax. As a writer, I'm sure you understand that "almost guarantee" was a rhetorical device, no?

            The states may follow suit since they will get a portion of the FairTax. Have you thought of that? The tide just might turn towards freedom in the states as well.

            The "numerous" flaws you keep flogging also ignore the elimination of compliance costs, so I'm not taking any of your argument to heart. Your Master's Degree didn't make any difference in your very human, but suspect insistence on ignoring a key economical element. So, are you an economist for the CBO? Because this is how they quantify new laws for the government....with no proven historical dynamics.
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            • Posted by $ CBJ 4 years, 10 months ago
              I’m not an economist for the CBO, and have never held a government job. As to compliance costs, the “fair tax” website calculates them at about $265 billion per year. I expect most of this amount will remain in place, as individuals and businesses will still have to perform the exact same calculations for their state and local income taxes. They will just have a few less forms to send in. And small businesses will have to spend time, money and emotional distress to cope with the more frequent audits that the “fair tax” website promises will be imposed on them. Not a worthwhile trade-off, in my opinion.
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  • Posted by freedomforall 4 years, 10 months ago
    Its better than a tax on production, but its worse than reining in the feds to only constitutional expenditures.
    It would mean the IRS is dead and a lot of accountants and tax lawyers would have to learn to be productive. Any such law would have to include a constitutional amendment clearly stating that income tax is unconstitutional and can never be implemented again.
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    • Posted by 4 years, 10 months ago
      I agree with forbidding any other tax being implemented again! We the People are the ones who have to ensure the feds only employ themselves to what's in the Constitution and nothing else. The payroll deduction allowed them to run amuck in my opinion.
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  • Posted by bassboat 4 years, 9 months ago
    The overriding plus to it is that it gets rid of the IRS. If it did nothing else that would be tremendous but it does much more. Secondly I've read most of the posts in this forum and the biggest neglected part of the Fair Tax is that you don't pay any income tax up to the poverty level for consumption. While I will agree that I don't like the government sending people money that is what makes it "Fair". The rebate really helps the lower earners much more than anyone else since they will get about $540 a month for a family of 4 pus no income tax is taken out if their paycheck or FICA. This is a big boost for the lower income earners. If they ever understand the Fair Tax it will be passed in a landslide. The corrupt media and politicians will lie, lie, lie until their last breath about it however.
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    • Posted by ewv 4 years, 9 months ago
      Replacing the IRS with a similar bureaucracy with the same mentality is not an "overriding plus". You're rearranging deck chairs for yet another version of collectivism-statism. But it wouldn't even get rid of the IRS, only add to it and most likely become a part of it.
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  • Posted by $ Abaco 4 years, 10 months ago
    There is only one way this tax will get implemented. What is that? Well, the Feds would just levy it ON TOP of the current tax structure. Meaning - you'd pay it in addition to what you pay into the current system. Why? Because the tax code is written to allow the government to manipulate your behavior. In the insurance business they call this "social engineering". It's a very important (to the controllers) facet to the tax code that most in the public apparently don't know or don't think about. The government wants you in debt, house-poor, etc. This tax would reduce control. Therefore, don't get your skivvies in a bind over it because it's not going to happen (unless it's just in addition to what we're already doing).

    Many years ago I asked Congressman Vic Fazio about the possibilities of a flat tax that had been bantered about in DC. He said it would hurt the building industry because it would do away with the mortgage deduction. I was young and enthusiastic so I immediately responded, "If you tax me at the rate being discussed you can rest assured I'll go out and buy another house." He looked at me like I had three heads and then went on to the next question. True story...
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  • Posted by $ blarman 4 years, 10 months ago
    I think we'd do better with a flat tax, personally, and even better than that by a repeal of the 16th Amendment entirely. Can you imagine how business would take off if they didn't have 30%-45% confiscated every quarter to feed the beast of government? Can you imagine what would happen if there wasn't enough money to pay for all the government oversight and rules we have heaped upon us and which cost our economy $1.6 Trillion per year?
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    • Posted by 4 years, 10 months ago
      The FairTax does repeal the 16th amendment and eliminates the criminal IRS. Yes, I can imagine the FREEDOM we would all experience if the many thousands of pages of tax code were eliminated and once April 15th just becomes another day! It would be heaven!
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      • Posted by $ blarman 4 years, 10 months ago
        I'd much rather see us return to import tariffs than just another tax scheme which can (and will) be manipulated by the government. That's why I'd rather see a flat income tax than any kind of consumption-based tax.

        If we were going to prioritize, however, here are the taxes I'd much like to see repealed right now:
        1) FICA, SS, and Medicare: ie ALL payroll tax deductions. Make people pay the taxes themselves rather than hiding them through automatic deductions. You can bet that if people had to sign a check for these they would be up in arms demanding change. More to the point, these taxes go to support the welfare state and more government spending. They need to be cut off.
        2) Corporate "income" taxes. These are nothing more than double taxation - a point that would not have been lost on the Founding Fathers. Corporate income taxes don't get paid by the corporations, but by the higher prices of the products and services offered. Get rid of these and you'd see prices drop dramatically and everyone would be better off.
        3) Energy taxes. Repeal all of these. There should be no additional taxes just to use a specific service - especially one as critical as energy.

        Do these three and I think you can leave the personal income tax as a fourth or fifth priority.
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  • Posted by 4 years, 10 months ago
    It may be confusing to some that 23% and 30% keeps gets arguing about. Here's an explanation:

    http://pafairtax.org/resrcs/inclusive...

    It's the same amount of dollars, the difference are the words, "inclusive" and "exclusive".
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    • Posted by $ CBJ 4 years, 10 months ago
      This explanation raises some additional questions:

      1. “If you are in a withholding bracket of 20% and a 7.65% FICA tax is taken from your wages too, your total Income tax (inclusive) rate would be 27.65% as compared to the 23% inclusive rate under the FairTax.” Isn’t that your marginal income tax rate rather than your total income tax rate? Your total income tax (including FICA), after personal exemption, standard or itemized deductions and taxes paid in lower brackets, would be substantially less.

      2. “Save your money, pay your current mortgage, pay tuition bills, buy used goods such as a used car or home, and you pay no tax levy against those dollars spent.” Now I’m really confused. Is tuition not payment for a “service” that will be taxed at the full “fair tax” rate? Your “current mortgage” is exempt, but if you are a renter rather than a homeowner, won’t you be paying an additional 30% on your rent as a “service”?

      3. “In order to fund the $3.7 trillion Federal budget, a 23% inclusive consumption levy will be placed on every dollar we spend in the consumer retail market on ALL "end use" NEW goods and services with no exceptions (keeps Government out of the system).” Since “every dollar we spend in the consumer retail market” includes existing state sales taxes, will the “fair tax” include a tax of 30% on the state sales tax itself as well as on the declared retail price of the item or service? If so, I think this should be clearly disclosed. If not, I think the explanation should be more clear regarding this issue.

      4. “ . . . you will instead keep 100% of your income and then be asked to give a tax share of it to the Government just a little at a time, . . . “ What does “asked” mean in this context? The word “asked” implies that you have a choice of whether or not to give your “tax share” of the bill to the government. The Democrats often use “asked” in the same manner, as in “The rich will be asked to pay more.” Is this an appropriate use of the word “asked”?

      I think the explanation you linked to needs further clarification on these points.
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  • Posted by BradSnipes1 4 years, 10 months ago
    A fair tax will replace personal income tax. You will take home your entire paycheck. A fair tax makes it unnecessary for the government to have knowledge and control over your personal business. A fair tax will abolish the IRS.
    A fair tax will make imported goods cost more than goods manufactured here in the US. This is because the cost of income tax for the employees and the companies is simply added to the cost of the products. This cost will be eliminated resulting in a reduction of 25-30% in the cost of US manufactured goods. Meanwhile imported goods will be more expensive because a 35% tariff will be added to their cost.
    A fair tax will be great for our economy.
    Also A Galt's Gulch-like community can exist where neighbors reduce their use of money by self-sufficiency and bartering.
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    • Posted by $ CBJ 4 years, 10 months ago
      Re: ‘ . . . the cost of income tax for the employees and the companies is simply added to the cost of the products. This cost will be eliminated resulting in a reduction of 25-30% in the cost of US manufactured goods.” Not even close. The cost of income tax for the employees is paid by the employees, and elimination of the employees’ income taxes will not benefit the companies unless they reduce salaries by an equivalent amount. In which case the employees will not be any better off than before, and they will be stuck with a new 30% sales tax on any new items they purchase. And the cost of manufactured goods will not come down 25-30% due to elimination of the corporate income tax. Corporations are taxed on net profits after expenses, not on gross income or the retail prices of the goods and services they provide. Such profits are typically less than 10% of the final retail price, so the tax savings and price reductions will be more like 2%, not 22%.
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      • Posted by scojohnson 4 years, 10 months ago
        Your net taxable income is true, however a lot (A LOT) is wasted on complex schemes to avoid income tax - 401k plans, exhorbitant health plans to supplement income, etc. none of that would be necessary.
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        • Posted by $ CBJ 4 years, 10 months ago
          Employee benefits are offered to attract and keep good employees, and to match the perks that competitors offer. They would not go away under a "fair tax".
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          • Posted by scojohnson 4 years, 10 months ago
            Some yes, 401k plans themselves (which are designed to avoid or at least defer income tax), would become a moot point. The employee would be better off with a brokerage account that they can easily move around and seek the best return on investment instead of the cronied-up employer stuff (most of those do some kind of administrative kick-back to large employers).
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            • Posted by $ CBJ 4 years, 10 months ago
              The matching and automatic savings features of 401-K plans are an important part of their attractiveness to employees, and I would expect that something similar would be offered by employers even if the tax deferral features were eliminated.
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              • Posted by scojohnson 4 years, 10 months ago
                I would expect it as well. I'm saying that the sophisticated (and high cost) of hiring Fidelity or whoever to do it, and only selling those employees their "preferred" investment products (in other words the ones with enough commission to choke a horse and abysmal returns compared to the market) would go away - you could see simply managed accounts where the employee could pick anything from bonds, to index funds, to simply picking the ones on the entire market with the best returns. Not the -5% on the low end, to 9% at the absolute best that you see offered to employees.
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      • Posted by 4 years, 10 months ago
        LOL, you completely skip over the costs companies pay in time, money, personnel (accountants) to deduct and administer the employee's tax payments, not to mention their own costs in time, money, and personnel (accountants) to pay their own taxes! All up and down this discussion, you completely ignore that and it's a HUGE part of the equation a lot of which CANNOT be quantified until we try it. Your numbers are bogus.
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        • Posted by $ CBJ 4 years, 10 months ago
          If you can't quantify it, how do you know my numbers are bogus? And if you can't quantify it, how can you claim that the "fair tax" will do all the wonderful things that it promises?
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      • Posted by scojohnson 4 years, 10 months ago
        No, that is not true entirely, social security and Medicare are only paid 50% by the employee, the other half is paid by the employer. Adding workers comp and UI, and depending on the state, is close to the income tax burden. On our professional staff (we don't have wage stuff), with 401k matching, health, etc, we are at a 44% burden on the salary with a base of $100k in California.
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        • Posted by $ CBJ 4 years, 10 months ago
          Workers comp, unemployment insurance, 401k matching and health insurance paid by the employer will not go away under the "fair tax". Businesses today can deduct most or all of these items as a cost of doing business, so they pay a lower tax under the existing system than they otherwise would. I'm not sure about the employer portion of Social Security and Medicare, as I don't see it on their website.
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          • Posted by scojohnson 4 years, 10 months ago
            Trust me, I "know" what the employer share is, its 50%. It used to cap at $x a year, which meant that anyone making over $70,000 or so would max out on their SS contribution around October or sooner, but that went away in the earliest days of the Obama administration.

            The part that is deducted from the employee is only half of the SS & Medicare contribution. Unemployment Insurance is also really a tax, since its paid to the government, and would presumably get scooped up into a reform. It's also extremely expensive these days because people tend to be unemployed for much longer between jobs than the 5 or 6 hours it would take me to find a new job in my youth.

            There is also the hidden costs... taxes in various cities and counties on everything from employment to commuter taxes to a tax on parking lot spaces. I doubt much or any of that would go away, but Paychex and ADP make a killing on being the ones responsible to take care of all of that for businesses, to the tune of about $50 / paycheck / pay period.
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            • Posted by $ CBJ 4 years, 10 months ago
              I know the employer share is 50%. What I don't know is whether that would go away under the "fair tax", as I don't see it addressed on their website. Sorry if I was unclear.

              Unemployment insurance, as I understand it, is a state-level tax that would not go away under the "fair tax". At least I don't see it addressed on their website.
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              • Posted by scojohnson 4 years, 10 months ago
                Actually, UI is probably on the table in reality, the states manage the program, but the money is from the feds (or at least 90% is). The premium itself might not go away, but it would be dramatically reduced.

                Tariffs as well, presumably, and on the production side, it doesn't cost $50,000 in parts to build a $50,000 car, it's probably $10,000 in parts and some labor, plant, robots, etc. Sure the cost of sale is there and taxed, but its not dramatically so.

                i see it like this I suppose, some people are savers, some are spenders. If you have zero in cash and a big credit card bill, its obvious. I tend to save a lot of what I earn and don't really have many bills, and I tend to lease the vehicles - so in my case, I would have a 30% tax on the car lease monthly or whatever ($90 on $300 or whatever), money I save is never taxed, and earnings on savings & investment I would also assume are never taxed since it is a consumption-based thing. If someone wants to buy a yacht, so be it, pay the tax. It would definitely encourage the right activities for long term economic growth - saving and investing, versus spending. Spending might be a short-term boost, but when 65% of Americans can't come up with $400 to fix a power window motor on their car (probably a Mercedes knowing people around here), then what is their retirement going to look like? That $1089 social security check isn't going to cover their lifestyle. At some point, they can't work, do we as a society inherit that stuff?

                Right now, I pay 43% (state & federal) on EVERYTHING I make after the standard deductions / mortgage interest, etc., but I've been in my house for 20 years, so that MI deduction is dwindling. I also pay an enormous property tax bill, etc. This is California, they never met a tax they didn't really like. But on a Fair Tax, I'm a bit more in control, if I choose to spend money, it is tacked on and it will ultimately influence the price of the product because other competitors might be able to do something cheaper. It will certainly chase production efficiency, but without business income taxes & such, that might make our businesses more profitable (to be here instead of somewhere else).

                I'm not a lover of the idea, I'm open to seeing the details. It's scary to young people I'm sure, but they are always broke anyway. At some point, you have to be an owner of your assets and start transitioning to lowering your income, but spending less. Right now, I (and all others like me) can never get under that taxing our retirement income thing. When you have everything, don't need a new car every 5 years or whatever, you can control what this costs.
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  • Posted by bassboat 4 years, 10 months ago
    If anyone thinks that we can go from our current system of taxation to zero they are not thinking rationally. I agree with the premiss that we should have no taxes but that and pat on the back will get you nowhere. The Fair Tax can work to our advantage if we promote the hidden tax which is now hidden and bring it out into the open. On each retail receipt there will be an accounting of the taxes. When people see the tax and we yell loud enough seeing this tax maybe just maybe we can start whittling away at the tax monster. The good thing would be that K Street's influence would be lessened and power would be taken from our civil servants. No longer would a congressman be able to become rich by doing a few favors here and there. It is not a bad start.
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    • Posted by ewv 4 years, 10 months ago
      This scheme is not a means to "zero taxes". In the usual conservative fashion, it's a gimmick ignoring the principles required to be established for a free society while doing nothing to lower taxes and spending. There are no shortcuts. This shell game is the same anti-intellectual wishful thinking as Trump idolatry.
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