I would like to get everyone's opinions of the FairTax. Since I'm in support of it, I'm most interested in criticisms, but supports are welcomed too.
If I understand correctly, the "FairTax" is basically just a sales tax. I oppose the FairTax because I am against the taxation of productive activities (of labour/business/industry). A FairTax would discourage consumption, add to prices, distort markets & create deadweight losses. It would add to the cost of doing business & decrease national competitiveness. The most efficient form of taxation is an Economic Rent Tax. Unlike all other taxes, it does NOT add to prices, does NOT deter production, distort markets or create deadweight losses. Instead of impeding production as other taxes do (on labour/industry), an Economic Rent Tax encourages production. It is also the most moral form of taxation. Economic Rent is derived not from labour or effort but from privilege.
I am in support of FairTax. Even thought you would be taxing productive activities, there would be no, or little, income tax. A person would have extra funds and would be able to spend his money how they wanted, weighing the options. When the government directly takes your income, it is fundamentally telling you how to spend the amount taken, whether it be on social programs,protection (military), public roadways etc. If a person requires or wants a good, they will get it. A person who spends more, typically a person who makes more money, would be paying more money in taxes and visa versa with lower income people. FairTax also solves the Constitutional problem of placing an unequal burden on those who pay a higher percentage of their income to the government. If FairTax actually passed, the government would have to save the money from a year of taxes in order to be able to use it for the next year.Then they can create a budget from the previous years taxes. the tax income would be incalculable because the gross tax revenue would come from the success or failure of the economy. Which is another problem I foresee. What if the economy tanks? then the government would not have the funds necessary. This is why you would have to save the money and make the budget from the previous year. haha but it really doesnt matter does it because the government takes in much less then it is spending now, even with being able to project the next years tax intake. I guess my point is that if FairTax passes, our government could from a philosophy of credit spending, to spending from savings. Which, in my opinion is a very smart thing to do, yet never before done. Or they can always spend on credit, like they do now. It could potentially generate more tax revenue. It would also make the tax system more equal
As a "FairTax" is not an income tax, there would be no direct income taxation. A "FairTax" doesn't mean a lower tax burden. It depends upon how it is implemented. The "FairTax" is by nature highly regressive. It will most certainly result in lower taxes for the rich & higher taxes for the poor Nonsense. The "FairTax" makes no difference in regards to Federal spending. Federal Taxes don't "fund" Federal spending. There is no such "Constitutional problem". The original intent of the US Income Tax was to tax "Unearned Income" or "Economic Rent". Less than 1% of Americans even had to file returns. Nonsense. There is a reason why Federal deficits are the norm This is a common misconception. A Currency Issuer MUST spend before it taxes/borrows.
My understanding of the FairTax (which I mostly support) is that it only applies to the purchase of 'new' items. You buy a new car, YOU pay the tax. When you want to sell that car, the tax has already been paid by you, so the purchaser does not pay any tax on it. My concern about it revolves around the above phenomenon. If it works the way I understand it, the Fairtax would give rise to a huge swing towards second-hand goods to avoid taxation, which would negatively impact manufacturing to the extent that people are making stuff last longer and so do not purchase new items as often. I do believe the fairtax would reduce the tax burden on the poor while bringing new taxpayers into the system that traditionally avoided the income tax completely.
Couldn't have said it better myself, that's exactly what I like about it. It creates a massive incentive to create voluntary communities.
I would be in support of FairTax. Originally the US had no other tax than import tax or sales tax. Then they brought in property tax, individual income tax, windfall tax, and now carbon tax. The way things are going, soon you will pay a 100 % tax on all your earnings, then you will try to apply for an allowance, to get some personal cash. HEHE
I oppose it. a 23% federal sales tax on top of state and local sales taxes could drive the tax on something like a hamburger up to the 35% range depending on whether there is also a meals tax in place. I could support a more modest federal sales tax if and only if the earned income tax credit is eliminated, a reasonable cap is placed on home mortgage interest deductions, and agriculture product subsidies that drive up prices are ended, or some similar combination of spending cuts and revenue enhancers.
I'm fundamentally opposed to taxation, but if I'm gonna be taxed, I'd prefer in a way that I can avoid.
One BIG problem is that they aren't going to tax "necessities" and that sounds to me like special exemptions to those with political pull (how do you define "necessities"? Is a car a necessity? What about a computer?). I think it is a step in the right direction, but there are still issues. I think that before we fix the tax problem, we need to fix the government spending problem.
Never heard of economic rent before, but after reading about it, it will never work - its far too subjective and open for abuse. It all depends upon the definition of "privilege".
The push the "fair"tax with a lot of gimmick and tricks (for example, its name, for another, the 23% tax rate which they call the "internal" tax rate because it is really a 30% sales tax). The try to mask the inherent regressive nature of a sales tax with the "rebate". But overall, it shifts the tax burden from the uber rich (because savings aren't taxed) to the middle/upper middle classes. Which is why guys like Steve Forbes push it so hard.
I don't care about buzz words like 'Fair Tax'. The only 'Fair Tax' labels worth considering are the actual bills themselves, and they are invariably not fair at all, not even a little bit.
the idea is to get tax burden off of poor and good hard working people and put it on lazy and big baller spenders gosh you are such a party line democrat, think outside the box a little please
That is the selling point. But since investments and savings aren't taxed like spending is, and a billionaire typically only spends a fraction of his income, IMO the true idea is to lower the tax burden on the very rich and shift it more to the middle classes. Which is the effect it would have. Which is why guys like Steve Forbes push it. Think a little outside the box please.
I need to go back and read the books again, and the arguments against, but as I recall the fraction of ones income that is spent is not relevant, what is relevant is the absolute amount that is spent. The rich spend more absolutely. Removing the IRS and all kinds of tax avoidance strategies, loop-holes, deductions, etc. would be a positive.
I'm sure that was the spin. One guy makes $100 million and spends $10 million. He only pays the 23% (or whatever it is) tax on 10% of his income, resulting in an effected 2.3% effective tax rate. A guy making $100,000 spends 95% of his income, and pays the tax on 23% of his income. He pays $21,850 in tax. Even with a $6k "rebate" he's paying $15,850. An effective rate of 15.8%. about 6x higher than the millionaire. As I said, it's a great idea if you want to shift the tax burden from the richest to the middle class, which is why guys like Forbes and Boortz support it. Who is going to tally, calculate, keep track of, and enforce the law and rules to all those sales taxes with the myriad of exceptions and loopholes?
Tally would be kept at the point of purchase. No exceptions, no loopholes. sorry I didn't do this correctly, hope you can read it.
Who ensures that the point of purchase is collecting the taxes? No exception? What if it is a "used" item? A "component" item? And "educational" item? Apparently not since I have no idea what you are talking about.
fairtax should be implemented immediatly it will help the poor, esp the poor who save and tax the big baller spenders in addition it will make everyone richer by ending need for IRS and 500Billion a year dealing with its unfair rules where crony communists get to pay nothing while poor pay a lot
I support the Fairtax, but I think the prebates should be higher for lower incomes. I believe everyone should take home their entire paychecks. The state governments need to follow suit, to make it consistent. With the prebates higher I cannot see too many people objecting to it. Jmo
