We sorely need a Fair Tax

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Most taxpayers spend hours just trying to weed through all the forms and making sure their tax returns are right, or at least hoping it is. There are about 77,000 pages of tax code – all written to benefit someone else and keep you confused.

There is a better way; it’s call the Fair Tax. Now, before you jump to conclusions about how it’ll add 23 percent to everything you buy – according to some political ads, intended to scare you to vote against anyone who supports it – have an open mind to the truth. If you have a computer, go to www.fairtax.org.

What do April 17 (this year’s tax filing deadline) and the Fair Tax have in common? Nothing. Under the Fair Tax, April 17 is just another spring day. No one will be burdened with filling out all those forms, hoping to get them right and not get audited.

Do you really know how much money you make? Most workers think they make what they take home, not relating all the withholding dollars taken by the employer and forwarded to the government to redistribute as they want. How would you like to take home all that you make? Under the Fair Tax, you would. Even your employers’ matched amount would stop, and the workers just might make more than before.

But – according to U.S. Rep. John Barrow – the Fair Tax will drive up the cost of everything I buy by 30 percent. He did say that, along with many other politicians who do not understand the plan. The Fair Tax would replace, not add to, the embedded taxes you are now paying that are included in all products and some services. This is estimated to be about 23 percent, not the 30 percent in Barrow’s campaign ad with fuzzy math.

Many don’t pay taxes now, but they would under the Fair Tax. Everyone is paying some tax when they make a purchase at retail. The last time you filled up your car with gas, do you know how much tax you paid? What about a gallon of milk? There are embedded taxes in everything you buy, then sales tax is added. The Fair Tax would replace those, and the final cost would be about the same. Everyone would pay something, even those who deal in cash, under the table or just don’t report it.

Many American businesses have left our country because of the complicated tax code. When questioned, most said they would return to America if the Fair Tax is implemented. Even foreign companies have expressed higher interest in locating here. Think about the employment opportunities that would open up and bring manufacturing dollars.

We need tax reform. A flat tax still will have a tax code, laws, loopholes and forms to fill out and file. The Fair Tax is really the only fair way.

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Insider Information
4009
Points
Insider Information 05/13/12 - 11:56 pm
4
3

He just doesn't know it yet

President Obama supports the Fair Tax. He just doesn't know it yet.

He talks ad nauseam about everyone paying their "fair share." The only way to ensure that happens is through a "fair tax" - no loopholes, no tax breaks, no tax incentives. Just common sense.

Retired Army
17512
Points
Retired Army 05/14/12 - 12:44 am
7
7

Code for privatizing taxes.

Code for privatizing taxes. Call me cynic but don't expect me to believe that employers will pass their "savings" from tax contributions to their customers. That's not for profit capitalism.

The so called "Fair" tax is in truth a means for the wealthy to transfer more of the tax burden to the middle class and the working poor. Those who can least afford it.

For all their yammering about "Wealth Redistribution' corporate America doesn't seem to mind it, when the redistribution is to them. It's a scam America. And it has been in play since Saint Ronald Regan began the dismantling of the American system of fairness, hard won by organized working men and women, during his time in office.

The true decline in American prosperity can be traced directly back to Regan's firing of union labor for striking. Take heed corporate America. There are folks who are wise to you and the greed that has so decimated the American middle class and kept the poor in check. History is replete with examples of what happens to those who would see their fellows starve for their own personal gain.

The Right in American politics today are nothing more than the lackey's of greedy Wall Street profiteers and speculators.

They no more have fairness in mind than the lead dog in a pack upon the death of their latest prey.

Techfan
6461
Points
Techfan 05/14/12 - 03:07 am
5
6

That time of year when we

That time of year when we start hearing from the cult of the unFair Tax. Let's start with the most often repeated lies by the cult.
1. You get to take home all that you make. You have to couple this with:
2. Due to removal of imbedded taxes, prices would drop around 22%-23%.
They use info from a research paper by Dr. Dale Jorgenson for this lie (and even after being exposed years ago, it's still used on their website). Dr Jorgenson said that prices COULD drop that amount ONLY IF CURRENT TAKE HOME PAY REMAINED THE SAME. That's right, you don't get both. The following link has Dr Jorgenson explaining this:
http://www.freerepublic.com/focus/f-news/1470200/posts
3. It's a 23% sales tax. Here they use some tricky math. They use tax inclusive figures to arrive at 23%, but people don't think of sales tax in that manner. Under the unFair Tax, if you spend $1.00, you pay $1.30. You can call that 23% all day long, but it's still 30%.
4. Related to above but, you pay less at the store. Mr Garner even stated, "The last time you filled up your car with gas, do you know how much tax you paid?" The unFair Tax only eliminates federal income taxes including personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes. It doesn't eliminate excise taxes (you know, the kind of taxes on gasoline) or state sales or add on (like we have here in ga) taxes. So, as Mr Garner says "do you know how much you paid?" Well, under the unFair Tax, take that figure and add 30%. $50 to fill up? You get to pay $65.
5. They mention this, but don't push it because it means you get to pay more taxes: The unFair Tax is added to all services as well as goods. That $10 haircut (I'm guessing since I don't get them) is now a $13.00 haircut. And guess what? With goods and services taxed it will apply to medicines, Dr. visits, hospitalization. Just add another 30% to all of them.
6. They like this one: It doesn't apply to used goods. Great for a car or house, but who wants used food or medicine. Of course it'll kill the real estate and construction markets. That new $200,000 house is now a $260,000 house. Plus, a real agent agent provides a service. Add 30% to the commission. Oh, don't forget, that mortgage provider is also providing a service. You'll get to pay 30% on a chunk of the interest. You could just rent but, yes, a landlord is providing a service. Rents just went up 30%.
7. There is still a little thing called the 16th Amendment. To get rid of it would take another Amendment (ie. the 21st repealed the 18th, YAY we can drink although it'll cost 30% more under the unFair Tax). Of course this'll tale a 2/3 vote in both the House and Senate or a vote for a convention by 2/3 of the state legislatures. Then, if approved, would require 3/4 of the states to ratify it. Easy.
8. It's "revenue neutral". In other words, they're guessing that it's going to be a 30% tax. And what is "revenue neutral"? Is it the revenue total before the recession or after? Some folks want a balanced budget amendment. How high would it have to go then?

This is just a starter lesson on the downfalls of the unFair Tax scheme. It's designed to make the little guys and the folks in the middle pay more, while the folks who do nothing get free money (that 30% of comes back in as taxes) and the top can acccumulate wealth totally untaxed. Of course you do get a small monthly stipend (called a prebate) of $214, if you're single. $800 a month rent? Extra "unFair Tax" on your rent? $240 a month. Hmmmm. Sounds like you're behind the 8 ball to start with. These are just a few of the problems with the unFair Tax scheme. There are more, but this should serve as a good primer.

desertcat6
1140
Points
desertcat6 05/14/12 - 05:10 am
8
0

I would support a flat tax on

I would support a flat tax on all personsal income/compensation before a so called fair national sales tax. I suppose it sounds good on paper, but I know I would cut back on spending to reduce my tax burden. I would expand the garden, buy in bulk, go to flea markets and garage sales to find tax free usable items as long as its legal, barter, repair what I now throw away, and purchase DIY kits instead of finished products. As an American I have the right not to purchase items and live as frugally as I want.

A flat rate income tax with no tax free investments, no minimum income levels so all pay something, and only a few deductions for primary home mortgage, medical expences and charity would be far better than a fair national sales tax. Of course, businesses and corporations would have to have a similarly streamlined tax structure, limits on deductions, and the elimination of tax exempt investments and off shore tax shelters.

Techfan
6461
Points
Techfan 05/14/12 - 05:46 am
3
4

Just surfing for info I found

Just surfing for info I found a Hoover Inst. study for a flat tax. It was done in 1995 and would require a 19% rate to equal 1993 revenues. (I know it's old, but it's the most detailed study I cann find). While it's an old study we can still speculate on increases for that figure. Military spending has more than doubled since just 2001. Also, the debt is almost 400% higher since 1993. I would say that the propsed rate of 19% would be laughable to bring in the amount of revenue required today. While a tax rate oof 19%-30% might not hinder those with enough income, it would decimate the middle and lower classes.

desertcat6
1140
Points
desertcat6 05/14/12 - 06:51 am
3
1

The problem with spectulating

The problem with spectulating on old data and studies is just that. Unless you account for all variables, you just muddy the waters. I could say that if you eliminate matching employee contributions and assume that corresponds to higher pay then it wouldn't decimate anyone. Sure, some would have to pay taxes that currently get a free ride, but that's the price of equality. Why isn't it fair and equitable if someone makes 100,000 and pays 25,000, and another makes 1,000,000 and pays 250,000?

Techfan
6461
Points
Techfan 05/14/12 - 08:37 am
4
4

You get to the point where

You get to the point where you're dealing with people who need enough to live vs people who want enough to live lavish lifestyles and use their money to make more money. For someone earning say $30,000, you may be taxing away their ability to own a home or afford a car to get them to work. When you have someone earning $22 million per year, they may not like it, but your not endangering their ability to live. Between 1979 and 2005, the income of the top 1% grew by 275%. The next 19% only saw an increase of 65%, and much of that is from going from a one income family to a two earner family. Income inequality in this country has grown to the point that we can't tax everyone equally and still have enough funds to run the government. With the bottom 80% of wage earners only making 12.75% of the entire annual income of the country, it's just not possible.

fiveobike1
65
Points
fiveobike1 05/14/12 - 09:32 am
2
4

It's a tit for tat deal, You

It's a tit for tat deal, You are not only eliminating one of the largest government agencies in the government you are also, finally, getting BILLIONS of dollars from those who previously never paid a penny in taxes. Heck just the money raised from Prostitutes, Drug Dealers and Illegal immigrants whould get us half way out of debt.. Not to mention the "redistribution of wealth" now those who hide their money in off shore accounts will pay at least a portion more than before through everyday purchases here in the states. The increase in the tax on goods would be seen in the price tag of items bought, however the increase in my pay check due to no taxes being taken from it more than covers the cost of living.. As it is now the average American works for about four month's out of the year to pay their share of taxes to the government.. FOUR MONTHS!!!!!!!!!!! Time for those who dont pay taxes to pay up!!!

justthefacts
18073
Points
justthefacts 05/14/12 - 09:42 am
2
4

Won't happen

Fair Tax would be great. But, the gov't will never give up that kind of power over the masses.

itsanotherday1
34929
Points
itsanotherday1 05/14/12 - 10:10 am
3
5

I am soon to be living partly

I am soon to be living partly off savings and investments, and as was pointed out, a fair tax would hit me harder than income tax.
I wouldn't mind a small National Retail Sales Tax that hit all first sales of goods (not services), as that would get some revenue from the ones flying under the radar. However, I would expect concurrent reductions in income tax rates to offset it, making it somewhat neutral for the bulk of folks paying FIT.

Tech, I appreciate your concern for those eking out a living; but at the end of the day, they have no claim to the wages others have earned. If paying a share of the freight deprives them of buying that new car or house, so be it. Get a better job, go back to school, dump some of the bling, whatever....

itsanotherday1
34929
Points
itsanotherday1 05/14/12 - 10:18 am
4
3

Soapy, the only FAIR tax

Soapy, the only FAIR tax would be to divvy the cost of government up between every man, woman, and child living here. It has always irked me that I get taxed for schools based on the value of my property. WHAT???? What am I getting out of the schools that the guy in the next neighborhood over isn't or vice versa? What did the West Laker kids get that mine didn't? Fire protection? Are they going to respond quicker to West Lake because they paid more in tax than I did?
What about other municipal services? Does one get more or less police protection because they pay more or less tax than the next citizen?
True fairness is for everyone to pay the same for the same government services.

Gary Ross
3346
Points
Gary Ross 05/14/12 - 10:38 am
6
0

Businesses started having

Businesses started having their products made in other countries because it cost less. Was that savings passed on to the consumer? No! It only increased the profit margins for those businesses. Now, it's very difficult to find anything made in America. We cannot support our own country any more even if we wanted to. FairTax looks great on paper, but will it really work? We still have the same problems; greedy business, corrupt politicians, special interest lobbyists, etc. Until we do something about those real problems, there is no good answer.

justthefacts
18073
Points
justthefacts 05/14/12 - 10:48 am
0
4

Question for Gary

"Businesses started having their products made in other countries because it cost less. Was that savings passed on to the consumer? No! It only increased the profit margins for those businesses." How do you know that?

desertcat6
1140
Points
desertcat6 05/14/12 - 11:08 am
5
3

Tech, I asked about fairness

Tech, I asked about fairness and equality between individuals and you respond with the ability to buy a car/home, or spend it to live in the lap of luxury? It is not the governments job to equalize this through taxation. The government has a responsibility to create an environment where we can all have an equal shot at success, if not, great success in any endeavor we choose. And no, that doesn't just mean making money, but that does follow in a few fields. We are supposed to receive equal treatment under the law - no matter what laws they may be. Okay, some rich families appear to have a leg up on the rest of us historically. Bring out the pitch forks, that's not fair! Tax them at an unfair and unrealistic rate while creating loopholes that make their effective tax rate lower than 20 percent. Come on man, as they say on ESPN, stop spouting the party line, and start talking SENSE and solutions.

TParty
6003
Points
TParty 05/14/12 - 12:09 pm
4
0

Techfan mentioned the fair

Techfan mentioned the fair tax needs to be at 30%. That's only if you want to remain revenue neutral, and it probably needs to be higher to be honest (If you want to remain revenue neutral). Does anyone here want to pay 30 cents on the dollar when you buy food, which does not include state taxes?

Cdr4500
20
Points
Cdr4500 05/14/12 - 12:17 pm
0
0

Lately I've seen a lot Tea

Unpublished

Lately I've seen a lot Tea Partiers/Republicans/Libertarians push for a flat tax, a notion embraced in its essence by the misbegotten Deficit Commission's recommendation of a greatly flattened tax. Sounds fair and sounds tantalizing doesn't it? Everyone regardless of income pays a the same rate -- the typical proposal is 15%, although one-time presidential candidate Steve Forbes pushed for 10%. Just about everyone's bracket drops, and we all live happily ever after. What could possibly be wrong with this picture?

Lots, as it turns out. For one thing, the flat taxers never take the deficit into account. We'll see why that's important in a minute. For another, just because your top rate is, say, 25%, doesn't mean that you pay 25% of your income in taxes. Remember that the current tax system still has vestiges of progressivity, so if you file singly and earn 50K -- which puts you in the 25% bracket -- your actual income tax paid is less than 10% before deductions. That's because only the income that exceeds 34K is taxed at 25%.

Consider these five taxpayers, all filing singly:

A: Earns 20K, pays $2,581 or 12.9% (.1% of all taxes paid)
B: Earns 50K, pays $4,681 or 9.4% (.2% of taxes)
C: Earns 100K, pays $13,609 or 13.6% (.7% of taxes)
D: Earns 500K, pays $139,616 or 27.9% (7.4% of taxes)
E: Earns 5M, pays $1,714,616 or 34.3% (91.4% of taxes)

The total tax revenue is 1.875M. Let's posit that by some miracle we have a balanced budget and that expenses equal revenue. And let's remember that in the real world, there are a lot more B's and C's than anyone else (millions more than E's), meaning that their share of the total tax burden is much higher.

Now, consider the effect of a flat tax of 15%

A: pays $3,000 (.4%)
B: pays $7,500 (.9%)
C: pays $15,000 (1.8%)
D: pays $75,000 (8.8%)
E: pays $750,000 (88.2%)

Notice what has happened here. Taxpayers A, B, and C are paying more, not less, taxes. Moreover, the tax burden lowers for only one of these taxpayers (if you think it's the one most like Steve Forbes, you get a gold star); it increases for everyone else. And don't forget: The actual distribution of taxpayers means that B and C -- the middle class, in other words -- will wind up absorbing the brunt of the shift in burden.

And, it gets worse. Under a progressive system, these taxpayers raised and spent 1.875M. Under a flat tax, they raised 850K, meaning that they have to cut expenditures by 1M or create deficit. And the deficit is apportioned equally. Thus, the low income taxpayer who makes 20K must shoulder 200K of the deficit, putting himself 183K in debt (including his 3K tax liability). But taxpayer E can absorb his share of the deficit easily: In fact, his share plus his 15% tax liability comes out to less than his tax bill under progressive taxation and a balanced budget. In this scenario, a balanced budget works against him.

Which is why Republicans talk big about a balanced budget and do little. The malefactors of great wealth that bankroll Republicans from the leadership to the teabaggers not only care little about a balanced budget, they don't want one. Balancing the budget inevitably means raising taxes progressively, and the Koch brothers, Jamie Dimon et. al. would rather have the middle class crash and burn than face the prospect of actually contributing to society. So they oppose government with one hand while seeking to master it with the other.

desertcat6
1140
Points
desertcat6 05/14/12 - 12:46 pm
0
3

What study/document states a

What study/document states a fair tax must be 30 percent to work? That was speculation on Tech's part based on a 1990's study where Tech failed to account for all variables in the enconomy. There are plenty of reasons to oppose the Fair Sales Tax, but suggesting we have to set the sales tax at 30 percent isn't a realistic one based on what Tech presented. It would be accurate to state that the concept is flawed, and the rate would increase over time unless spending is reduced.

justthefacts
18073
Points
justthefacts 05/14/12 - 01:00 pm
0
5

Not to mention the fact that

Not to mention the fact that food would cost less due to the embedded taxes removed and, of course, you paid no income tax.
I just saw Rod Stewart in the ATL airport. Looked good for his age!

TParty
6003
Points
TParty 05/14/12 - 01:58 pm
1
0

"What study/document states a

"What study/document states a fair tax must be 30 percent to work?"

That's the number (Low by the way- other economists say 34% at least) to stay revenue neutral.

The easy argument to make is to cut spending, and you can lower the rate. Whatever the rate one makes it to be- you have to add in sales tax (If your state has it.).

desertcat6
1140
Points
desertcat6 05/14/12 - 02:19 pm
1
0

23-24 not including state

23-24 not including state sales tax, and 30 when its included is what most pro-fair tax studies are showing. Those oppossing show higher numbers up to 38 including state sales tax. I don't like the fair national sales tax in any form, but, honestly, none of us really knows what the actual rate/cost would have to be if passed. Kind of like Obamacare in that regard.

southernguy08
415
Points
southernguy08 05/14/12 - 02:40 pm
0
0

FAIR TAX

Unpublished

The only "fair" tax IS a national sales tax, PROVIDED they do away with an income tax. We don't need to increase taxes on anyone. We need more people paying taxes. There's something very wrong when more than half the people, who also enjoy the services taxes provide, are not paying into the system. When too many people are riding in the wagon, too few are pushing the wagon, the wagon will break! Take a good look folks...THE WAGON IS BREAKING!

Conservative Man
4639
Points
Conservative Man 05/14/12 - 02:58 pm
3
0

Not 100% sold on the FairTax,

Not 100% sold on the FairTax, but I DO know tax reform is paramount if we are to get our fiscal house in order....It would achieve one result that I like. Whenever a dope dealer or a member of the "moocher" class spends money they'll pay the same tax I'd pay, as opposed to paying zero like they do right now....I know, I know, they DO pay sales tax like I do, but I talking specifically about income taxes...for them to have to pay "their fair share" as they eat up most of the resources this government offers and my income tax to disappear at the same time...to me that's kinda cool!!

itsanotherday1
34929
Points
itsanotherday1 05/14/12 - 03:04 pm
1
1

What some are failing to

What some are failing to consider is that somebody is paying that tax, whether it is 30% or 23% as it is. We say "revenue neutral", which means the Fed is already taking in that much money. Except for taxes paid by foreign entities for whatever reasons, every dime of it is already coming from we "the people" in one form or another. Whether it is a tax passed through from corps and businesses in the form of higher prices, or FIT, at the end of the day it is the American citizen and visitors spending money here who pay it.
The whole idea of the Fair Tax (by the way, I don't support it in its present form) is that since we are already paying it one way or the other, lets get rid of all the costs associated with administering the current tax code, which in theory means a tax reduction for everyone.

desertcat6
1140
Points
desertcat6 05/14/12 - 03:08 pm
2
0

That's one of the aurguments

That's one of the aurguments I don't understand. Criminals have been finding ways around tax laws for years. They'll create a black market to by pass taxes, or barter system to get what they want from drug abusers.

Conservative Man
4639
Points
Conservative Man 05/14/12 - 03:22 pm
3
0

Desertcat,Maybe but, with the

Desertcat,Maybe but, with the current system of income tax, it only takes one person to break the law to avoid taxes, With a system such as the FairTax, it takes two. Theoretically reducing the probability of tax evasion. But your point isn't lost on me. I guess my main argument is if we don't enact the FairTax, I think we can say that we need a "fairer" tax. One that doesn't put undue burdens on the poor or lower middle class, who currently pay zero, and in (most cases get free money in the form of the EITC), nor overburdens small business owners who create the lion's share of jobs in this country. A solution? I don't have one. I just know the current system isn't it....

itsanotherday1
34929
Points
itsanotherday1 05/14/12 - 03:28 pm
2
0

On that note desert, does

On that note desert, does anyone have any reliable figures on how much tax revenue is being missed in the "underground" economy? How about from tax "cheats". At least with some form of sales tax everyone pays something, even if it is a low, broad based tax that doesn't totally replace the FIT; a hybrid of the two if you want to think about it that way. Build a simple flat tax formula, coupled with a NRST that is revenue neutral. That eliminates loopholes, reduces tax complexity, and captures some revenue from those who fly under the radar.

Techfan
6461
Points
Techfan 05/14/12 - 05:28 pm
0
0

Desert, per your 12::46 post.

Desert, per your 12::46 post. The unFair Tax people (you know, Boortz, Linder, etc.)are the ones who came up with the 30% figure. They like to call it 23% inclusive, but when you spend $1.00, you pay $1.30. That's a 30% tax. The trick is, they say that it's revenue neutral. In 2011, federal revenue was around $2.3 trillion. $731 went to Social Security, $486 billion to medicare, and it's estimated between $1.0 and $1.4 trillion for defense/security (defense budget plus homeland security plus other related funds imbedded in other departments, ie. the Savannah River Plant is under the DOE). You've just hit your current revenue. That leaves no money for any other government function. Do we increase taxes on the group that's had their taxes cut at least 60% over the past 1/2 century, the same group whose income increased 275% just between 1979-2007, or increase taxes on the group whose income has stagnated or decreased?

Techfan
6461
Points
Techfan 05/14/12 - 05:32 pm
0
0

Of course no one will cheat

Of course no one will cheat under a sales tax system, especially since it covers services. "I can fix that for $1,200 cash. Of course if we put on paper, it'll cost you $1,300, but hey. that's up to you."

justthefacts
18073
Points
justthefacts 05/14/12 - 05:50 pm
2
1

Smarter than us

The people that Libs so badly want to tax the bejesus out of are so much smarter than the Feds that they can out flank just about any tax increase President Obama could get through Congress. Look at GE. The fair tax eliminates all the loop holes that those dirty rich people use to get out of paying their fair share. Buy a Corp Jet? Pony up the tax, dude. You would think that the libs who go to bed every night and wake up every money fixated on "getting the rich guys" would love it.

desertcat6
1140
Points
desertcat6 05/14/12 - 06:15 pm
3
0

Techfan, Thanks for making my

Techfan, Thanks for making my point. The Fair Tax will never work. It's not the numbers, its the concept and construct. A simplified tax code based on a flat tax rate is fair and equatable. The high earners pay more simply because they have more income. Everybody pays something for the services they receive.

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