ArTee63

What... Me worry?

blondie0420

Wait...who wants to abolish the IRS? Is it Ron Paul or this Neuman guy (whom I have, admittedly, never heard of before)?

The Fair Tax Act is, ugh, anything but fair. I completely HATE and DESPISE this idea. It's such a crock of shit. Basically, the idea is to abolish income taxes, car taxes, property taxes, every other kind of taxes - except for sales tax. And then the "national sales tax" would be raised to somewhere between 15-35% and it would be on EVERYTHING. Milk, eggs, houses, cars, everything.

The problem with this "fair" tax is that it taxes everyone. That's not fair, because generally, we recognize that certain people (mainly the extremely poor) simply cannot afford to pay a lot in taxes, and so we don't tax them. Now, instead of paying little to no taxes, poor families could be paying 20% tax on food and clothing and other things they desperately need. That's not right.

Remember when you were a kid and your parents gave you $5 in allowance to go spend on whatever you wanted? Well, 15-35% of that would be going away the second you try to buy anything. Kids in our country don't usually pay a lot of taxes, if they buy a game and pay 6% sales tax, that's not too bad. But when 35% of an eight-year-old's allowance goes to taxes, that's going to be a problem.

There are so many other reasons why the Fair Tax Act is complete bullshit, but I don't want to spend hours and hours going into them as Weeds is about to start and I missed last week's episode. Google "Fair Tax Act" and you'll come up with a bunch of stuff.

But I still want to know which candidate wanted to abolish the IRS in favor this Fair Tax bullshit, as I most certainly will not be voting for him.

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Jake

You ruined your entire argument right here, Blondie. Taxing everyone...how is it not fair? Believe me, Fair Tax deserves it's name. The people who buy the most have to pay the most taxes. Therefore people who have more money, and spend it, will be "hit" the hardest.

The average person who meets the criteria of "poor" in this country has a standard of living higher than most people in Europe. Most have cell phones and a lot have vehicles.

The people who evade taxes the most are the rich. They invest their money oversees. With the complexity of our IRS system now, a skilled person can figure out a lot of loopholes for you. The "poor" () do not have the resources to do that. In the Fair Tax system, it would be much, much harder to avoid the tax.

Okay, you're missing the point of the Fair Tax. Let's say that the 5 dollars allowance is the child's income and he loses 15% to taxes. I guess that sucks.

But you're forgetting that with the removal of income taxes means that little Johnnie is actually getting closer to 8 dollars than 5, more than off-setting the sales tax.


TAC CUTS FOR THE RICH
DON'T TRICKLE DOWN ON ME

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Plainsman1963

Ron Paul (known as the taxpayer's friend) is not a co-sponsor of the fair tax act.

Here is a pretty good write up for those looking to see the other side of the "fair tax" coin.

blondie0420

It's not fair, because, as I said before, there are certain people we just don't tax because they cannot afford it. Take my grandmother for instance, who is living a social security and a very moderate savings. She doesn't pay much in taxes because if she did, she'd have no money for food and other basic necessities. Tackling her with a 30% sales tax on everything she buys would be a major, major issue for her. Suppose she spends an average of $1000 a month on prescriptions (very possible, as she's on a LOT of medications with her failing health, but honestly I don't have any real idea how much she spends so this is just an estimation). Anyway, with a 30% sales tax, she'd be paying $1300 a month for prescriptions. That's $300 a month that she'd be paying in taxes on medication alone, then say she spends $300 a month on groceries, no you're adding on another $90 in taxes a month as well. So you take someone like her, who pays very very little in taxes now, and suddenly with this "fair" tax act, she's getting slammed with $390 on a month in taxes for food and medication alone. Add in anything else she buys (clothes, household items, etc) and she'll really be hit hard.

Those "prebates" they give to people aren't going to be perfect either. Suppose they give her a couple hundred dollars a month for her tax "prebate," even then she'd still be slammed with heavy taxes pretty much every time she leaves the house.

Not necessarily. The people who have the most money to spend are also the most likely to be able to buy their goods overseas, thus avoiding the tax altogether. Basically, you're putting the people who don't have any other option but to buy their shit at KMart at a disadvantage, because they're forced to pay taxes, while the people who have money and can afford to buy whatever from Switzerland and have it FedExed directly to their homes won't be paying shit. How's that fair?

That's moot. We're not talking about slamming Europeans with an outrageous national sales tax, we're talking about people living in the US.

The 2007 poverty line for a single person home is $10,210 in the 48 contiguous states (slightly different in Alaska and Hawaii). That's less than $1,000 a month, and no, people living on such a tiny income aren't exactly living the high life. Figure rent for an average apartment (around here at least) is about $600-800 a month (damn expensive). For a year, that'd mean they're spending $7200-9600 on rent alone. Doesn't really leave much for extra spending, does it?

I know that's often regarded as "fact," but I don't necessarily believe that it's always true. Poor people evade taxes too, especially when they're getting paid under the table.

Harder to avoid the tax how? People can buy stuff overseas and avoid the tax altogether. Sure, they're still going to have to pay taxes on groceries and other stuff that wouldn't be worth buying overseas, but there would still be a huge problem. And how do you think retailers in the US are going to do when people stop buying stuff in our country and begin buying overseas en masse? Not well, to say the least.

Income taxes are removed automatically from a person's paycheck. When little Johnnie gets his $5 allowance, his parents don't take out an income tax. So how's he getting $8 instead of $5?

Yes they do.


I'll add that it's not just me against the "Fair Tax" idea. A lot of politicians think it's a pretty stupid idea. Most advocates of the Fair Tax claim that by abolishing the IRS, we'll save truckloads of money because we won't have to pay IRS agents and whatnot. But, uh, I guess they're forgetting that we'll still need some sort of tax administration to ensure that the proper "prebates" are being distributed, not to mention all the extra people we'll need at US Customs and Border Patrol who are going to make sure people aren't just leaving the country to buy their stuff tax-free and then returning the US with their goods. Oh, then we'll also need people who are in charge of figuring out the national sales tax rate, as it will inevitably have to go up and down to accommodate for surpluses and deficits.

Plus, and this is a really big plus, STATE INCOME TAXES WON'T BE ABOLISHED. So while people are all giddy about the idea of no income tax, they're forgetting that they're still going to get hit with state income taxes anyway. So how about that? You're still going to be losing a portion of your wages for state income taxes, and then you're going to get slammed by the national sales tax at a rate anywhere between 15-35%. ("Estimations" that the national sales tax will be about 23% are just that - estimations. Until the system is actually put in place and regulated to a level that would generate the proper amount of revenues, there's really no exact number that anyone can throw out there for certain.)


What's so great about the Fair Tax anyway? You're going to be paying shitloads of taxes. It's not like you can just decide not to pay taxes by not buying anything, that's impossible as people have certain unavoidable basic necessities. People are so excited about the idea of this National Sales Tax coming along and saving them from having to pay so much money to the government, but it's just not going to happen. If people want any longterm tax solutions, they need to protest the government to SPEND LESS. Say the government needs $20 trillion each fiscal year. Whether they collect it through one giant sales tax or a combination of income taxes, gift taxes, sales taxes, car taxes and, property taxes, they're still going to need that $20 trillion - that's not going to change.

Oh wait, here's a quick way to save a ton on taxes: get the fuck out of Iraq. To date, the US has spent $456,299,000,000 on occupying a country that doesn't fucking want us there. That number keeps rising. Check out National Priorities Project - Cost of War to see how high that number is rising. It's gone up by some $300,000 in the time it took me to write these past five sentences.

Jake

You'll be happy to know that if all taxes are removed except for the 23% (not 30%...) sales tax on everything, many goods will have very similar prices to what they are today. Some may be more expensive, some many be a lot more expensive. Others might have a price reduction. This is because at every step of producing something has a tax that is somewhat paid for, but is mostly handed down and down the line until the consumer pays for it anyway.

Lets look at bread and what it takes to get it to you, with all of the taxes along the way. The selling of wheat seeds to the farm. The farm selling grains to a factory, the factory selling bread to the stores, and the stores selling the bread to the consumer. Most studies say that there is an "embedded tax" of anywhere from 15% to 25% of what we pay for goods and services.

Also, the FairTax act includes a Prebate for people who meet the standards of living in poverty. They get to keep 100% of their paychecks, paying the 23% sales tax on things they buy, while perhaps putting all of that additional money into interest bearing accounts. However, the sales tax on necessities such as bread, milk, baby food etc, the government will send you a prebate to pay for the sales tax on those items.

It's the middle class and the poor who should wanting the system the loudest!

Exactly. The FairTax is not a tax cut or a tax raise, it's just a much easier system that is not a huge burden on the people. The average person has to spend 27 hours on his taxes, or spend a lot of money to get someone to do it for him. Businesses have to make business decisions with taxes being the biggest denominator. People end up giving the government loads of money that belongs in their pocket because they didn't have the time to look through the giant list of deductions that they could have applied for.

Our system is failed. Businesses and individuals are sending their finances overseas. This system would make us a tax haven, with people running to us and spurring massive economic growth.

You're definitely right. That is the way to reduce the amount of taxes an individual will have to pay. But this is not related to how messed up our tax system is...and how much better the FairTax will be.

blondie0420

As I said before, the 23% figure is an estimation. Once the system is actually put into practice, that figure might need to be raised. That's why I used 30% in my examples, because it very well could go that high, or higher.

No, they don't get to keep 100% of their paychecks as they will still be subjected to state income taxes.

Why would the poor want to institue a change that would take them from paying very little in taxes to getting slammed with a huge sales tax on everything they buy? That doesn't make sense.

Huge burden? I'd sure as hell call it a huge burden. There are no guarantees that the price of things you normally buy is going to go down. So imagine the price doesn't change (or at least not signifigantly) and then tack on 15-35% sales tax. Sounds like a burden to me!

I got my tax forms from the public library and a couple of free informational pamplets. I filled out the forms, signed them, and sent them in. Took about an hour total, including travel time to and from the library.

That's a choice they make. They don't have to spend a lot of money to have someone do their taxes for them.

How is this going to make us a tax haven? I could buy my big screen HD-TV at BestBuy for $4000 and pay 23% sales tax, or I could buy it from some company outside the US for roughly the same price and pay signifigantly less sales tax. Some places even throw in free shipping, further sweetening the deal.

So why are people going to run to us again? Why are we going to be a tax haven? Shit, I could drive up to Canada and buy a ton of stuff duty-free and probably spend less in gas than I would in taxes. I'm really failing to see where this Fair Tax crap makes us a tax haven.

No, it's not. As I said before, our government needs a certain amount of money to operate. We've got bills to pay and mouths to feed. Say we need $20 trillion to run the place, we need to get that money from somewhere. So maybe it comes from property taxes and gift taxes and all the other kinds of taxes we have now, or maybe it comes from a huge national sales tax. Either way, each individual is still going to be responsible for paying into that $20 trillion pool. This magical sales tax idea isn't going to reduce the amount of money we NEED, it's just going to change the way we collect it. Individuals aren't going to be any less burdened unless we just elimintate spending, plain and simple.

Also, since we're eliminating property taxes...uh, businesses pay property taxes, do they not? And they pay other taxes as well, right? Who is going to pick up the slack from the tax money we won't be collecting from businesses? The individual, the consumer. That's who.

Jake

Honestly, Blondie you got me. I can't think of what else to say...

Come on guys, I can't be the only supporter of FairTax here...help me out

Plainsman1963

I gave ya a link that pretty much spells out the shortcomings. I'm assuming you didn't read it since you are still insisting the tax rate would be 23%.

blondie0420

Thanks Plains. I couldn't have said it any better myself.