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Been reading more and more into this plan, and the more I read, the more I like it and the more I don't understand why more people don't support it...
As I have learned, it is understood that at present, the current tax code forces an average of a 22% "cost" to any consumer item or service per a Harvard University Study. Today, businesses spend a collective 6billion hours each year, just to comply with the tax code, at a conservatively estimated cost of $225billion. Who do you think eventually pays for that expense? As the late and grate Dr. Milton Friedman once said - "All taxes are ultimately paid by the consumer. Corporations don't pay taxes. They collect them, but they don't pay them." The Fair Tax would completely wipe that out. There would be:
- No federal income taxes
- No payroll taxes
- No self-employment taxes
- No capital gains taxes
- no gift or estate taxes
- no AMT
- no corporate taxes
- no payroll withholding
- no taxes on SS benefits or pension benefits
- no more federal tax forms
- no business income or personal income tax filing
- NO IRS!
Today, we know that we are facing epic shortages in the SS plan, and major funding shortages for both Medicare and Medicaid. Additionally, we face a national debt figure that stands to do in our country all on its own.
Today, do you know who and how many people contribute to SS, Medicare and Medicaid?? Well, we have a total population of 300million people at present. Less than half our contributing to social systems via payroll taxes... Under the Fair Tax, 300million would contribute, as well as the 50million or so that come to America to vacation and work... And let's not even discuss the millions of criminals out there who "earn" or otherwise get access to "income" while never paying a penny's worth of taxes. They too would be contributers each and every time they purchase an item or service...
Think about the huge cost burden to corporations and what this means to their ability (or inability) to compete globally... Today, more than 130 nations use a form of The Fair Tax, called VAT. The Organization for Economic Co-operation and Development (OECD) has 30 member countries. 29 have adopted the VAT. The lone exception - yup, America...
An informal study conducted by the House, Ways and Means Committee surveyed 500 international companies located in Japan and Europe. They were asked, "What would you do in your long-term planning if the U.S. eliminated all taxes on capital and labor, and taxed only personal consumption?" 80% (400 out of 500), said they would build their next plant in America! The remaining 20%? They said they would relocated their business to America altogether!
Just think of the potential impact on jobs! On our economy and our ability to deal with our national debt... It's staggering...
Today, Americans and American businesses stash close to $12 trillion offshore. Why? To avoid U.S. taxation... Just think about the impact of that money, or even a % of that money flowing back into the U.S.
Fair Tax: The Truth, Answering the Critics. Great book. Pick it up!
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I don't have time to get in to a discussion right now, but (and thanks for bringing the discussion here 82) a few things stand out to me..
- No payroll taxes
That's not true as this plan is for Federal as I understand it. Therefore, states with no sales tax will still take income tax. Also, states with sales tax rather than income (or those who have both) will lump their sales tax with the Federal sales tax.
- NO IRS!
Who's collecting the sales taxes? If not the IRS, than some other group performing the same function under a different name.
- Today, businesses spend a collective 6billion hours each year, just to comply with the tax code, at a conservatively estimated cost of $225billion. Who do you think eventually pays for that expense? As the late and grate Dr. Milton Friedman once said - "All taxes are ultimately paid by the consumer. Corporations don't pay taxes. They collect them, but they don't pay them." The Fair Tax would completely wipe that out. There would be:
How does this plan change anything for corporations? Thier still tax collectors, they still have to have people taking care of this, and they still have paperwork and redtape to comply with.
If business are themselves paying sales taxes on stock and other services, I imagine they still will pass that onto the consumer. Now instead of say (a low estimate) a 23% Federal sales tax, it's a +/-46% to you and me? If a $100 item cost a business $23, so they in turn mark it up, that $23 and then the customer pays another 23%, that $100 item is now $151.29 before the business marks it up for their profit. I can't see how that wouldn't lower sales, productivity, and jobs.
If businesses are stashing the money, what's too suggest they will suddenly spend it (they would be paying taxes on it in that case too)?
Yeah there's 300 mil., but some of them are kids who don't have income or spend. As with all new tax ideas, I want to support them if they are an improvement over the crappy current system. I'm not seeing that here.
Could you imagine buying a $30,000 car (average car price nowadays) only to tack on $7,500 plus plates and doc fee? That's about $180 per month on taxes and fees alone!!!!
So let me get this straight - many of you have been trumpeting the demise of our nation as a result of the debt tsunami that is just around the corner... Hmmm...
The Fair Tax is by far the best plan I've seen to contend with so many issues that like cancer to this country.
DEI - rerad the damm book dude... Your comments couldn't be more wrong.
KloD - you raise some valid questions and candidly, I certainly don't have all the answers. To learn more, you can go to www.fairtax.org. I do know that in terms of funding social programs like SS, Medicare and Medicaid; making America much more competitive on the global scene, stemming the flow of jobs outsourced and/or shipped outside our borders, etc, etc, etc - this is by far one of the best ideas I have seen. Is it perfect - what is? Is it worth SERIOUS exploration? Damm straight...
Today, more than 130 nations use a form of The Fair Tax, called VAT. The Organization for Economic Co-operation and Development (OECD) has 30 member countries. 29 have adopted the VAT. The lone exception - yup, America...
This is highly misleading.
What are not saying is that these countries still have a regular tax system, the VAT is extra.
What are not saying is that these countries still have a regular tax system, the VAT is extra.
True - I suppose nidan. However, there is no one, singular approach to the whole notion of VAT. It's application varies dramatically from one country to the next.
What is common amongst these countries however, is that virtually all countries that have adopted VAT have realized greater tax revenues as compared to legacy personal and corporate taxation methods...
So let me get this straight - many of you have been trumpeting the demise of our nation as a result of the debt tsunami that is just around the corner... Hmmm...
The Fair Tax is by far the best plan I've seen to contend with so many issues that like cancer to this country.
DEI - rerad the damm book dude... Your comments couldn't be more wrong.
KloD - you raise some valid questions and candidly, I certainly don't have all the answers. To learn more, you can go to www.fairtax.org. I do know that in terms of funding social programs like SS, Medicare and Medicaid; making America much more competitive on the global scene, stemming the flow of jobs outsourced and/or shipped outside our borders, etc, etc, etc - this is by far one of the best ideas I have seen. Is it perfect - what is? Is it worth SERIOUS exploration? Damm straight...
If this tax was instituted it would have a huge impact on the economy.
The amount of extra money you get in your pocket from not paying an income tax will not equal the amount you will have to pay in "fair" tax. This is why it will supposedly erase national debt.
If I was going to buy a $30,000 car as someone stated i would pay over $37,000. Therefore I would no longer buy that car instead I would buy a $22,000 car. What would that do to GM's profits? How many people would be laid off due to lower profits. This would effect every industry in the same way.
Our fake economy is kept alive by people spending/charging. Any measure that makes spending unusually difficult will implode our economy.
Years back Forbes proposed a flat tax of 13%, no deductions. You'd think that the poor would balk at this idea but it was killed by the richy rich because most rich people never pay anything close to 13% after they squirrel away their money in tax shelters........
That's not true as this plan is for Federal as I understand it. Therefore, states with no sales tax will still take income tax. Also, states with sales tax rather than income (or those who have both) will lump their sales tax with the Federal sales tax.
Correct - Federal income taxes would be replaced by a flat tax. State / County / Local taxes on the same would not. The fair tax is only for Federal taxes, as a "revenue neutral" solution for the Federal Government only.
Quote:
- NO IRS!
Who's collecting the sales taxes? If not the IRS, than some other group performing the same function under a different name.
Yes, the IRS will still exist, but in a much reduced form - someone still has to audit corporations. The theory is because there is only one point of tax, from the manufacturer to the end consumer, that the large army of accountants, lawyers, etc... would no longer be required.
Quote:
- Today, businesses spend a collective 6billion hours each year, just to comply with the tax code, at a conservatively estimated cost of $225billion. Who do you think eventually pays for that expense? As the late and grate Dr. Milton Friedman once said - "All taxes are ultimately paid by the consumer. Corporations don't pay taxes. They collect them, but they don't pay them." The Fair Tax would completely wipe that out.
How does this plan change anything for corporations? They're still tax collectors, they still have to have people taking care of this, and they still have paperwork and redtape to comply with.
If business are themselves paying sales taxes on stock and other services, I imagine they still will pass that onto the consumer. Now instead of say (a low estimate) a 23% Federal sales tax, it's a +/-46% to you and me? If a $100 item cost a business $23, so they in turn mark it up, that $23 and then the customer pays another 23%, that $100 item is now $151.29 before the business marks it up for their profit. I can't see how that wouldn't lower sales, productivity, and jobs.
Right now, taxes affect all companies down the supply and manufacturing chain. So, taking a car for example, the manufacturer's of the tires, stamped metal parts, engine, brakes, interior, etc., all of them pay taxes. Those taxes are then passed up the line - in this case, the auto manufacturer (say Ford). Ford then has to pay taxes on the assembled product as a whole, which you pay when you purchase the vehicle.
It is my understanding that all of those taxes would be eliminated, and a single tax would be assessed from when you bought the car from Ford. No taxes would be assessed, for example, when the tire manufacturer provides the tires to Ford.
The proponents of Fair Tax say that the savings due to the elimination of the multi-layered tax system means that products would be roughly the same if not a bit cheaper than they are now - as the tax system is "revenue neutral", it is designed to bring in the same amount of money under the new system as was brought in under the old.
Yes, the IRS will still exist, but in a much reduced form - someone still has to audit corporations. The theory is because there is only one point of tax, from the manufacturer to the end consumer, that the large army of accountants, lawyers, etc... would no longer be required.
This is the Federal Government.. I don't buy the theory.
Quote:
Right now, taxes affect all companies down the supply and manufacturing chain. So, taking a car for example, the manufacturer's of the tires, stamped metal parts, engine, brakes, interior, etc., all of them pay taxes. Those taxes are then passed up the line - in this case, the auto manufacturer (say Ford). Ford then has to pay taxes on the assembled product as a whole, which you pay when you purchase the vehicle.
It is my understanding that all of those taxes would be eliminated, and a single tax would be assessed from when you bought the car from Ford. No taxes would be assessed, for example, when the tire manufacturer provides the tires to Ford.
The proponents of Fair Tax say that the savings due to the elimination of the multi-layered tax system means that products would be roughly the same if not a bit cheaper than they are now - as the tax system is "revenue neutral", it is designed to bring in the same amount of money under the new system as was brought in under the old.
Are they seriously suggesting a citizen only tax system? If that's true, 23% is far too low an estimate. Corporations not paying? No, I don't like that one bit. No wonder this is supported by some on the right. I'm not a fan of sales taxs and while I agree the system needs an overhaul, This one means I'd pay way more taxes than I do now. I have 2 houses and we're looking at buying a third in the next year, I would be up **** creek without deductions.
I'm being cynical, but the idea that Walmart increases their profits (I don't believe for a second that prices would drop to represent their savings) while my portion potentially doubles... no way. I don't see how this benefits everyone, it benefits businesses, it benefits government, but not the people.
This is the Federal Government.. I don't buy the theory.
Are they seriously suggesting a citizen only tax system? If that's true, 23% is far too low an estimate. Corporations not paying? No, I don't like that one bit. No wonder this is supported by some on the right. I'm not a fan of sales taxs and while I agree the system needs an overhaul, This one means I'd pay way more taxes than I do now. I have 2 houses and we're looking at buying a third in the next year, I would be up **** creek without deductions.
I'm being cynical, but the idea that Walmart increases their profits (I don't believe for a second that prices would drop to represent their savings) while my portion potentially doubles... no way. I don't see how this benefits everyone, it benefits businesses, it benefits government, but not the people.
No, that's not what they're suggesting. They are suggesting that there is a one time tax that is assessed when the product is bought by the end consumer. Essentially, the corporations (such as Wal Mart) would have to collect. If you bought your house 3 years ago, for instance, and then sold it 2 years after the fair tax was enacted, then neither you nor your buyer would pay taxes on the house - it's already been taxed.
Similar if you bought a house new from the builder after FT was enacted - you would have to pay 23% on the new house - but you wouldn't have to pay (or your buyer wouldn't have to pay) when you sold it, as the tax has already been paid on it. One time thing.
I've studied the program a bit, and they make very valid points regarding "hidden taxes" and so forth, it may be worth your time to read a bit further up on this on their website - they also have an FAQ and a place to submit questions for answers, along with numerous published studies.
No, that's not what they're suggesting. They are suggesting that there is a one time tax that is assessed when the product is bought by the end consumer. Essentially, the corporations (such as Wal Mart) would have to collect. If you bought your house 3 years ago, for instance, and then sold it 2 years after the fair tax was enacted, then neither you nor your buyer would pay taxes on the house - it's already been taxed.
Similar if you bought a house new from the builder after FT was enacted - you would have to pay 23% on the new house - but you wouldn't have to pay (or your buyer wouldn't have to pay) when you sold it, as the tax has already been paid on it. One time thing.
I've studied the program a bit, and they make very valid points regarding "hidden taxes" and so forth, it may be worth your time to read a bit further up on this on their website - they also have an FAQ and a place to submit questions for answers, along with numerous published studies.
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