The Fair Tax

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schuerm26

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Why have we not begun this method of taxation yet? Is the ONLY reason because of all the tax shelters the higher ups have with our current system (these get reps votes by constantly changing our current system)?

From everything I have read about this it is fair to everyone, and will GREATLY reduce the amount of tax cheats we have. This sums it up for people that don't know what it is.

www.fairtax.org

http://www.johnlinder.com/IssueDetails.asp?IssueID=9

"What is the FairTax plan?

The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.
The FairTax Act (HR 25, S 1025) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.
The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.
The FairTax:
  • Abolishes the IRS
  • Closes all loopholes and brings fairness to taxation
  • Ensures Social Security and Medicare funding
  • Brings transparency and accountability to tax policy
  • Allows American products to compete fairly
  • Reimburses the tax on purchases of basic necessities
  • Enables retirees to keep their entire pension
  • Enables workers to keep their entire paycheck"
Any thoughts on this?

Some other things are that you get a pre-bate from the Government up to the poverty line. This means a check every month from the government to buy necessities. EVERYONE gets this, not just low income.

Studies have shown that prices would be pretty much comparable to what they are now as all the hidden tax fees in the price would vanish.

Used items are NOT taxed. This system only taxes items 1 time. Unlike our current system which taxes the same good over and over again.

There is also a book called The Fair Tax Book by Neal Boortz and Congressman John Linder that goes in to depth about this.
 
I know Neal Boortz has been backing this for a long time now. I want to dig deeper into it before I decide what I think, but the general idea is good IMO.
 
The only real 'negative' I can think of to it is that people who are, say, 60 or older when it went into effect, would have any tax-advantaged savings negated. But they could easily create a one-time exception for people over X or some other workaround.
Other than that, the only negatives I've heard of are not negatives (the IRS would be out of a job! Accountants would have to find other work!) or class warfare (the poor would pay more than those evil rich!), and lots of positives.
Everything else I can think of is a positive.
* Save millions of dollars and manhours in tax compliance.
* Abolish or drastically shrink the size of one of the largest most powerful most inaccurate government organizations.
* Drastically reduce the power of federal politicians to kiss up to lobbyists/special interest groups by throwing them tax bones.
* Make people's "contributions" to the overfed government painfully obvious, thus (hopefully) making it harder to raise taxes.
* Putting people in control of their own tax bill (I know, the politicians are afraid of this one).
* Remove tax incentives/workarounds which primarily benefit those with lots of money or the ability to hire accountants to find those workarounds (not that I'm inherently against playing the rules to maximize your savings, but "the poor" usually don't get to take advantage of those.)

The main reasons we don't have this is because a large portion of politicians power is related to taxation--taxing certain industries/businesses/demographics, and reducing taxes to reward those who support them. It's a shell game...they make us feel lucky and thankful when we get 200 bucks back in April, without telling us that we could have invested that money for a year and earned interest. Politicians love power, and taxation is a very large part of their power.
The Fairtax Book is a very eye opening, easy to read book, I highly recommend it.
 
[quote name='dtcarson']The only real 'negative' I can think of to it is that people who are, say, 60 or older when it went into effect, would have any tax-advantaged savings negated. But they could easily create a one-time exception for people over X or some other workaround.
Other than that, the only negatives I've heard of are not negatives (the IRS would be out of a job! Accountants would have to find other work!) or class warfare (the poor would pay more than those evil rich!), and lots of positives.
Everything else I can think of is a positive.
* Save millions of dollars and manhours in tax compliance.
* Abolish or drastically shrink the size of one of the largest most powerful most inaccurate government organizations.
* Drastically reduce the power of federal politicians to kiss up to lobbyists/special interest groups by throwing them tax bones.
* Make people's "contributions" to the overfed government painfully obvious, thus (hopefully) making it harder to raise taxes.
* Putting people in control of their own tax bill (I know, the politicians are afraid of this one).
* Remove tax incentives/workarounds which primarily benefit those with lots of money or the ability to hire accountants to find those workarounds (not that I'm inherently against playing the rules to maximize your savings, but "the poor" usually don't get to take advantage of those.)

The main reasons we don't have this is because a large portion of politicians power is related to taxation--taxing certain industries/businesses/demographics, and reducing taxes to reward those who support them. It's a shell game...they make us feel lucky and thankful when we get 200 bucks back in April, without telling us that we could have invested that money for a year and earned interest. Politicians love power, and taxation is a very large part of their power.
The Fairtax Book is a very eye opening, easy to read book, I highly recommend it.[/quote]

The over 60 "negative" is really the only truthful negative have heard also. Being perfectly honest though, nothing is going to be perfect, and that really is a small price to pay for the tremendous benefits the fairtax would give our country.

For more info go to John Linder's webpage, I linked it in the first post. Also read the last paragraph of the post above as to why this truly hasn't been inacted yet. There are truly no negatives to this system for us the American people or the countries economy, only positives.
 
OK, I have a question. How can everyone pay less money and still have the same amount of funds?

EDIT:

If I'm not mistaken, the current federal income tax for people making over around $350,000 is 35% and that's before sales tax, capital gains, etc. on anything they buy.

So if they spent their entire paycheck on luxury goods and paid the 23% fairtax, they'd have a 12% drop in taxes. Am I reading something wrong here?

I admit I'm no tax expert.
 
[quote name='SpazX']OK, I have a question. How can everyone pay less money and still have the same amount of funds?

EDIT:

If I'm not mistaken, the current federal income tax for people making over around $350,000 is 35% and that's before sales tax, capital gains, etc. on anything they buy.

So if they spent their entire paycheck on luxury goods and paid the 23% fairtax, they'd have a 12% drop in taxes. Am I reading something wrong here?

I admit I'm no tax expert.[/QUOTE]

I'd like to know more about the math as well. They claim on their site that it raises the same amount of revenue as the current tax system, yet the rates are lower...does simply eliminating the IRS bureaucracy result in 1.8% less taxation? That seems incredible to me. I definitely like many of the goals outlined, especially the elimination of payroll taxes and the "pre-bate" which, when combined, as I see it could eliminate taxes for those making under $30,000, something I've long advocated.
 
1 way it makes up a HUGE amount of income is by EVERYONE having to pay taxes. Illegal Immigrants? Check. Tax cheats? Check. Why? EVERYONE HAS to buy stuff. There is no way around it.



Go check out the book from the library. It explains everything FAR better than any of us on here could. It will be the best 180 pages or so you have ever read. I will warn you though that you probably will get EXTREMELY frustrated at how easy it would be to implement and how great it would be for the people, yet our Government won't do anything for us.

It breaks down how they came up with the idea of "withholding" so most people don't actually know how much they are paying or think they don't pay taxes at all since the government is "giving" them money.

It basically breaks the cost of goods down to a level where they have found out there is about a 22% embedded tax cost already in the goods we buy. With the fair tax, those costs are no longer in the product hence price dropping competitions will ensue. So you are basically going to be paying the exact same cost on goods with the 23% tax on the goods after implemented, BUT you are getting a 100% paycheck. There are NO other taxes.

As for the above post, in the book it does state approximately how much the IRS costs us. I'll try to find the number but I can assure you it really is an incredible number. It's a complete waste the way our system is now.

Found some numbers:

In 2002 Individuals and Businesses spent 5.8 billion hours complying with the tax code, an effort that cost an estimated $194 Billion

100,000 people work for the IRS chewing up a budget of $10 Billion a year

It also talks about the lost investments (opportunity costs of withholdings) for the people and it comes out to nearly $24 Billion in interest payments that Americans lost out on.

It's a whole bunch more stuff in there but to sum it up, the book says it is safe to assume that $500 billion a year is spent JUST TO COMPLY with the tax code.

As stated above, it's easiest just to check out the book from the library as Im just pulling bits and pieces. It is an easy read but really gets the point across of just how wasteful and ridiculous our current system is.
 
[quote name='schuerm26']1 way it makes up a HUGE amount of income is by EVERYONE having to pay taxes. Illegal Immigrants? Check. Tax cheats? Check. Why? EVERYONE HAS to buy stuff. There is no way around it.
[/quote]

That is the awesome part.
 
I stay away from most tax issue discussions because, as an economics student, I'm taught to distance myself from issues of equity. I will say, however, that consumption taxes are the most efficient (no deadweight loss), extremely difficult to avoid(but there are ways for big entities to get around it, in addition to issues with collection), and have a positve effect on savings and investment(but at the cost of dramatically reduced consumer and producer surplus). I haven't taken the time to read the outline of this plan, but I'm assuming it addresses the major equity concern with a consumption tax being the "unfairness" to low income households purchasing necessities (ie it's progressive on consumption, but regressive on income)?
I firmly believe that the tax code in the United States has become too hopelessly obfuscated and difficult, but I don't see it changing anytime soon. The most likely evolution will be an eventual flat tax with a standardized deduction built in (so that you could fill out your tax on a postcard, and believe it or not a flat-tax is inherently progressive) before a system based entirely around consumption.

The real problem here is that people will be EXTREMELY adverse to changing the tax system, especially to something as readily apparent as a sales tax (even if it means the abolishment of the income/property tax). Additionally, most consumption taxes are added in ADDITION to income taxes instead of being substitued in lieu of (see any country with a VAT. A VAT has the EXACT same end effect of a national sales tax). At anyrate, don't expect this to happen anytime soon, and when/if it does, expect a shock to the the LRAS and AD due to the job loss of many accountants and bureaucrats.
 
Reality's Fringe;2877158 said:
I stay away from most tax issue discussions because, as an economics student, I'm taught to distance myself from issues of equity. I will say, however, that consumption taxes are the most efficient (no deadweight loss), extremely difficult to avoid(but there are ways for big entities to get around it, in addition to issues with collection), and have a positve effect on savings and investment(but at the cost of dramatically reduced consumer and producer surplus). I haven't taken the time to read the outline of this plan, but I'm assuming it addresses the major equity concern with a consumption tax being the "unfairness" to low income households purchasing necessities (ie it's progressive on consumption, but regressive on income)?
I firmly believe that the tax code in the United States has become too hopelessly obfuscated and difficult, but I don't see it changing anytime soon. The most likely evolution will be an eventual flat tax with a standardized deduction built in (so that you could fill out your tax on a postcard, and believe it or not a flat-tax is inherently progressive) before a system based entirely around consumption.

The real problem here is that people will be EXTREMELY adverse to changing the tax system, especially to something as readily apparent as a sales tax (even if it means the abolishment of the income/property tax). Additionally, most consumption taxes are added in ADDITION to income taxes instead of being substitued in lieu of (see any country with a VAT. A VAT has the EXACT same end effect of a national sales tax). At anyrate, don't expect this to happen anytime soon, and when/if it does, expect a shock to the the LRAS and AD due to the job loss of many accountants and bureaucrats.
Click to expand...

It's not the people that are adverse to changing the tax system (go ask anyone what they think of our tax system and the IRS). It is the higher ups in Washington and of companies and interest groups that are adverse to change. WHy? They are protected from taxes under our current system. They wouldn't be under the fair tax.

As for it being "unfair" to low income households. That is completely not true. EVERY head of household (no matter of income) is sent a Government pre-bate check up to the poverty line. Example in the book is that a family of four (2 adults and 2 kids) would receive a check every month for about $490 or so. This is to cover your necessities.

What is great about this system is it treats everyone equal. You aren't punished for being succesful.

Yes there are still going to be some tax cheats. Are there going to be less than the current system. Without a doubt.

As for it being apparent as to what you are paying. That is a huge plus in my mind, as I would guess it would be in others. It's unfortunate but a LOT of people have no clue what the government is actually taking from their paychecks.
 
As long as it ensure that the lower and middle class don't see their tax rates go up (which I doubt they will, but still), I'm all for it. That, in all honestly, is my only real concern with the whole idea. Oh, and certain things, like groceries, medical care, and mortgages, at least those under a certain amount, shouldn't be taxed.

I LOVE how this would basically force everyone to pay taxes, and would provide a lot more transperancy in the system. I mean, it makes illegals pay the maximum possible tax rate. How can you not love that?
 
i mean it sounds good in theory, i just dont know how one goes about changing the whole tax system. It seems like an almost impossible task to get everyone to agree on one thing
 
[quote name='evanft']As long as it ensure that the lower and middle class don't see their tax rates go up (which I doubt they will, but still), I'm all for it. That, in all honestly, is my only real concern with the whole idea. Oh, and certain things, like groceries, medical care, and mortgages, at least those under a certain amount, shouldn't be taxed.

I LOVE how this would basically force everyone to pay taxes, and would provide a lot more transperancy in the system. I mean, it makes illegals pay the maximum possible tax rate. How can you not love that?[/QUOTE]

Actually the only way for this to work is if there are *NO* exceptions. Buying beer or buying milk, buying caviar or buying bread, you pay the same tax rate. Otherwise we're in the same boat as we are now--milk should be exempted because it's 'essential', hmm, snack foods should have a higher tax rate, etc.
However, the prebate attempts to counter that argument on the front end--that is, each taxpayer is given X$ a month in advance of any taxes paid, to cover the taxes they would pay on 'essentials' and basic living expenses. Another benefit to doing it this way, instead of exemptions, in addition to just being easier: now the 'poor' save tax dollars by buying stuff with wic or food stamps, or in the future by having it exempted--which is fine, if they're buying that stuff. With the FairTax Prebate, if they (or anyone) are very wise with their spending, they can actually *make* money, since the prebate is cash in hand. This actually gives the ultrapoor the opportunity to build some savings and assets, so they can stop being so dependent on the government (if they want). Of course, certain people in the government don't *want* the ultrapoor to be self-sufficient, which is another obstacle.
 
[quote name='dtcarson']Actually the only way for this to work is if there are *NO* exceptions. Buying beer or buying milk, buying caviar or buying bread, you pay the same tax rate. Otherwise we're in the same boat as we are now--milk should be exempted because it's 'essential', hmm, snack foods should have a higher tax rate, etc.
However, the prebate attempts to counter that argument on the front end--that is, each taxpayer is given X$ a month in advance of any taxes paid, to cover the taxes they would pay on 'essentials' and basic living expenses. Another benefit to doing it this way, instead of exemptions, in addition to just being easier: now the 'poor' save tax dollars by buying stuff with wic or food stamps, or in the future by having it exempted--which is fine, if they're buying that stuff. With the FairTax Prebate, if they (or anyone) are very wise with their spending, they can actually *make* money, since the prebate is cash in hand. This actually gives the ultrapoor the opportunity to build some savings and assets, so they can stop being so dependent on the government (if they want). Of course, certain people in the government don't *want* the ultrapoor to be self-sufficient, which is another obstacle.[/quote]

There aren't ANY exceptions (except for used items, everything is only taxed 1 time). Even services are taxed.

As has been said before, everything about this makes sense for Americans. This DOESN'T make sense for politicians who manipulate the tax code for votes and those with power that within our current system are sheltered from our tax code. We'll see who wins out. This thing has been gaining a ton of steam though. Before tax day, fairtax.org had set a goal of 100,000 faxes to representatives letting them know that people want change. They smashed that goal and got 137,000. It really is up to the people.

I got a response from my representative and he said that he thought the idea was great but wouldn't support it until the 16th Amendment was repealed. For the life of me I can't remember his name right now.
 
So what happens when people start deciding to barter with each other and avoid the tax?

What happens in an economic downturn when people stop spending? You still think you're going to get that $490 check every month ?
 
There are ways around any tax system you set up. This system has the barter system, gift loopholes, and merely those incredibly wealthy who just don't spend their money as much or find loopholes such as spending their money in...Canada or a country that's a bit more of a distance away.

My biggest problem with this system is the prebate -- I can already see this turning into a system whereby you vote for the people who will give you the highest prebate. People can use their vote to give themselves money. It's the same problem I have with the negative income tax, which I still think is a better system than the Fair Tax...but, that's just me.
 
[quote name='t0llenz']There are ways around any tax system you set up. This system has the barter system, gift loopholes, and merely those incredibly wealthy who just don't spend their money as much or find loopholes such as spending their money in...Canada or a country that's a bit more of a distance away.

My biggest problem with this system is the prebate -- I can already see this turning into a system whereby you vote for the people who will give you the highest prebate. People can use their vote to give themselves money. It's the same problem I have with the negative income tax, which I still think is a better system than the Fair Tax...but, that's just me.[/quote]

Correct me if Im wrong but the pre-bates are based on the established poverty levels (which change over time but that isn't because of individual candidates). It isn't individual candidates who are saying how much people get in prebates
 
I have to be somewhat skeptical given Neal Boortz's support since he is not the most enthusiastic supporter of lower income workers. I've listened to him talk about it for a few years now and it does sound good in theory. But this is a man who loathes government spending so I don't think he would lose any sleep if the government took in less money.

I also don't care for the "Fair Tax" name. Much like the "Patriot Act", it's a little too Orwellian for my tastes. I'll leave it up to smarter economists than me to debate, but don't tell me I have to support it because it has "fair" right in the name.
 
[quote name='dtcarson'] This actually gives the ultrapoor the opportunity to build some savings and assets, so they can stop being so dependent on the government (if they want). Of course, certain people in the government don't *want* the ultrapoor to be self-sufficient, which is another obstacle.[/QUOTE]

The ultrapoor already have the opportunity to save in the current tax system. Most of them do not take advantage of it. Spreading their government subsidy payments throughout the year would not change that.
 
It is based on poverty levels -- but that doesn't mean that an entire platform for a party or a clump of candidates could be to say, "I'm going to increase your pre-bate." Whether it's supposed to be that way in theory or not -- that's what my biggest fear is that people will figure out a way to boost up the pre-bate until it's basically just cutting a high level check to all people in the US.
 
This sounds like a good way to nip that whole pesky "tourism" thing in the bud.

Unless there's some rebate for people upon leaving the country (we offer a rebate on our lowly 7% GST here in Canada), I see a fairly swift drop from the #3 worldwide destination.

I didn't see anything about a tourist rebate on the fairtax.org site linked above.
 
It cleverly circumvents earnings-based taxation by placing the focus on a consumption-based taxation. While part of me likes the fundamental idea (I firmly believe that anyone driving up the price of oil vis-a-vis their desire to purchase and drive a gas-guzzling fucking Humvee ought to pay twice what I do per gallon of gas, even if that isn't what's being debated here), I feel that there's something sinister at play here.

It involves means of earnings; this allows the wealthy and those with actual savings to earn even more money via investments and capital gains, 100% tax free, while those at the bottom have a greater tax burden shifted to them. After all, since we're going to be taxing based upon what people consume, rather than what they earn, the top-5% family that spends as much as the bottom-5% family pays the same in taxes. As far as "equity" is concerned, that's a disgustingly oversimplified version of how your tax dollars work.

It's "fair" if you think of it very simply. It's not "fair" if you think of it in terms of how "valuable" money is at various levels. Any post-consumption-and-tax monies are usable for tax-free earnings in non-employment settings; this is something that, while currently available to the wealthy and not the poor, is at the very least, taxed as earnings.

I also feel that this is a sinister way to avoid the "death tax." All those poor, poor, poor, emaciated, National Geographic cover-looking American horror stories. All of their dead families' assets over $4 million is taxed at 50%. GASP! What are they going to do with $4 million + 50% of the remainder?

Hold a bake sale to pay rent, that's what! :roll:

Though, be my guest and go for it. I can't wait until your middle-class white suburban neighborhood schools turn to shit because of the poor funding it receives now that there are no sizable property taxes used to fund them. You guys can find out what the inner city has known for decades!

I can't wait until those $490 checks start rolling in. Somehow they've taken the much-maligned concept of "government handouts" and turned it into something that those outside the poverty level feel entitled to. Feel the burn? It's cognitive dissonance, baby!
 
There's no such thing as "government handouts". There's government redistribution of citizens' money.
I have no problem with circumventing earnings-based taxation. The 'rich' are more likely to be able to play legal games with their taxes then the 'poor' (I myself save 1500/year or so using FSAs and feel absolutely no guilt about it, after all, when the government takes 45% of my yearly bonus for my contributions toward helping my company generate millions of dollars in income, profit, investment, and share payouts, they feel no guilt about that).

Property taxes are primarily state or local; the FairTax plan abolishes federal income taxes (though states are free to do what they want with their taxes; some states already have no property taxes or no income taxes).

The top 5% would pay the same 'rate' as the bottom 5%; however, their effective rate would be much greater, because it's highly likely that in actual dollars that top 5% is spending much more than the bottom 5%; though the 'rich' like to make their money turn into more money (as I think all of us do), they are also more likely to spend more of it. And even if there are a few Uncle Scrooge types who won't spend a single gold coin, those are probably also the same people now who end up paying 1500$ on income and assets of millions due to wise accountancy. Though we both buy a new car, I'm more likely to buy a sub-25k car that suits my needs, the 'rich' are more likely to buy the 85k Jaguar or the 150k Ferrari.
Ranking money's 'value' should not be the government's job. And if it is, that's all the more reason to support the FairTax. It allows people to have more control over their own money; it gives everyone the prebate which, in the case of the 'poor' is really their own money, and allows them to do with it what they will. People put more importance and value on their own money and the money they earn or handle than that which is "given" to them.
Speaking about 'fairness', I won't be sneaky about it--I have no problem with saying I'd like the death tax abolished. I'm highly unlikely to have it affect me, but it strikes me as morally wrong as you apparently feel driving a Humvee is (although recent research shows driving a Hummer is actually more efficient and less costly than driving a hybrid Prius).
It's fair because it is applied to everyone equally, and gives everyone control over how much taxation they are subjected to.
 
[quote name='dtcarson']Speaking about 'fairness', I won't be sneaky about it--I have no problem with saying I'd like the death tax abolished. I'm highly unlikely to have it affect me, but it strikes me as morally wrong as you apparently feel driving a Humvee is (although recent research shows driving a Hummer is actually more efficient and less costly than driving a hybrid Prius). It's fair because it is applied to everyone equally, and gives everyone control over how much taxation they are subjected to.[/QUOTE]

The top 8,800 households are subject to the death tax. The rest of the United States is not.

I think this "fairtax" notion is conflating two issues: it makes a massive logical leap from "the current system is unnecessarily complex and flawed" to "we should tax on consumption instead!" There's a huge chunk of logic missing in that equation.

The "fair" talk is merely semantic. I could argue that it is "fair" to tax people at a graduated rate based upon their annual earnings and assets. That's pretty damned fair to me. I'm sure it isn't to you, but that's precisely the point. The only "fairness" involved is a semantic sleight of hand that creates a strawman argument that somehow a flat consumption based rate of taxation is naturally more "fair" than something based on earnings.

Now, a logical step would be to move from "our federal income taxation system is unnecessarily complex and flawed" to "let's simplify it without stepping away from income-and-asset based taxation."

The "fairtax" proof is in the pudding. Common goods will become absurdly expensive as a consequence of reallocating *everyone's* federal taxes due equally among purchased goods and services. That's something else I think is overlooked. Many of us live with 6-7-8% sales taxes, and a few with 9%, I believe. If Neal Boortz thinks that a "fairtax" consumption-based system will lead to anything below 17-20% sales tax, he's absurd. And that's "taking money out of people's hands," to use the old GOP "I spend my money better than the government" parlance.

Most importantly, if all you anti-federalist types out there support this system, you'll have to keep in mind the amount of government oversight necessary to ensure that businesses are taking taxes fairly. The biggest hurdle to overcome would include the aforementioned bartering that would inevitably result (and I'm a handy gardener, so I'd be all 'bout some bartering!), but also monitoring and surveillance of online purchases, eBay sales, Craigslist sales, and things like that. Those can't be omitted from the "fairtax."

I'd be thrilled to see the study that claims Hummers are more environmentally friendly than a Prius. If you find that link, please PM it to me, as I don't want to (no pun intended) cloud up the discussion here.
 
Let me get this straight:

It has been said that the richer people pay more than the poorer people because of their larger amount of money spent. At the same time it has been said that people shouldn't worry about the 23% tax because of the "embedded" tax that taken out will essentially keep prices about the same.

Extrapolating from that the goods that the rich are buying will also be priced about the same, no? So the 3 million they spend now on goods will essentially be the same 3 million with the tax applied. So nothing changes for the rich or the poor besides the fact that the rich are now tax-free on investments, etc. that they usually already make, while the poor get an extra couple grand a year so that they can afford food (is that not the point of welfare?).

The middle class is then basically unaffected besides being able to buy some more superfluous shit since they're usually fine anyway and just like to bitch about taxes.

I'm not trying to say that this is a complete money-grab by the rich (I'm sure there are plenty of genuninely good-meaning people behind it), but it seems more and more like something rich people are trying to convince poorer people to do so that they get more money by playing off the poorer's disdain for taxes.

I'd also like to reiterate Myke's point that even though the percentage is equal it's not "fair". 23% from someone making 30,000 a year is much much much (I can't emphasize that enough) more significant to that person than 23% of 5 million would be. Even assuming that prices are the same and it's essentially an invisible tax the gain for someone making 30k is hardly anything compared to that of the person making 5 million.

A better solution to me would just be to have more tax brackets with higher percentages for more wealthy people and lowering the percentage on poorer people. That would probably also end up with more tax money available also so that it would not only give the poorer more money, but the government more money for public works (provided they're held accountable for their spending...)


I'm being cynical, I know, so if I'm in error please explain it to me.
 
The "fair" refers to the fact that it's the same rate, applied equally, to everyone participating in one activity (buying new goods/services.) One idea behind the Fairtax is that it's set to be revenue neutral. Personally, I don't want the government getting any more money. They need to use the money they take from us more efficiently/constitutionally. And if they "needed" more taxes, increasing the FT percentage is highly visible to everyone, so unless people feel it's really 'needed', the idea is there would be resistance.
Spazx: I see what you're saying, but your word choice shows your thinking: If I get a tax refund, or a tax prebate, or tax advantaged savings, I'm not "getting" money. I'm *keeping* my own money. Who knows better how to spend/use your money, you or the government?
The middle class would see a benefit, because if they wanted to be frugal, they could save money and perhaps move to the upper class, since they'd be taxed on their consumption. Same with the lower class. If they decide not to consume very much, they could actually build up wealth. Right now we have, what, negative 2% savings rate? That's a bad thing. Not everyone would save, in fact, most people probably wouldn't save much, since they're used to spending, so the government would still get its revenue.
Ebay, etc, would be (mostly) filtered, because the majority of those goods are used. As of now, much of that is not being taxed. If you want to barter, that's fine, that's not taxed now either, so it's no different. Bartering is not the 'sale of new goods'. And while many people will barter, many others won't or can't (compare game tradelists to things like Goozex).
The FairTax rate, last I saw, was estimated to be 23%.
Regarding 23% of 30k versus 23% 5 million--they are being taxed on their *consumption*. The millionaire is virtually certainly going to spend more on new goods than the 30k-aire; the taxes on one vacation home in the tropics is more than the 30k-aire would pay in taxes in years, and that's if s/he didn't try to stretch the dollars by buying used.
The level of government oversight required to implement a Fairtax would be orders of magnitude less than the current IRS monstrosity.
The price of goods should go down because right now that price contains overhead for levels and levels of taxation, which would no longer exist. For most products, "new price + FT" should roughly equal "current price plus sales tax (if any)".
 
I think the main problem is it's called the "Fair Tax" and not the "More Efficient Tax." That being said:

[quote name='SpazX']Let me get this straight:

It has been said that the richer people pay more than the poorer people because of their larger amount of money spent. At the same time it has been said that people shouldn't worry about the 23% tax because of the "embedded" tax that taken out will essentially keep prices about the same.[/quote]


I highly doubt this would happen. It seems to just be wishful thinking on the part of those in favor. The Tax incidence will more than likely be shared with the producer, but expect prices to rise depending on demand elasticity.

[quote name='SpazX']
Extrapolating from that the goods that the rich are buying will also be priced about the same, no? So the 3 million they spend now on goods will essentially be the same 3 million with the tax applied. So nothing changes for the rich or the poor besides the fact that the rich are now tax-free on investments, etc. that they usually already make, while the poor get an extra couple grand a year so that they can afford food (is that not the point of welfare?).[/Quote]

Ehh, not exactly. The $3,000,000 is taxed prior to receipt. Let's say (for the sake of arguement) that they pay 35% on that specific income.
That leaves them $1.95 Million to spend on goods when they were going to spend, say, the entire $3,000,000. That means that there's $1.95 million they can spend on consumables withou(Federal) tax. With each dollar being spent on a consumable at 23%, that's actually only $690,000 in federal revenues. The reality is that the rich also benefit from this tax. Whether or not that's "fair" is up to you, all I can tell you is that increased domestic consumption does wonders for the per capita K stock and % growth of real GDP.

[quote name='SpazX']
The middle class is then basically unaffected besides being able to buy some more superfluous shit since they're usually fine anyway and just like to bitch about taxes. [/quote]
Eh, my family is considered "Middle Class" and our combined income is roughly $50,000. We live paycheck to paycheck. You can thank the unchanging classification of "middle class" for that one.

[quote name='SpazX']

I'm not trying to say that this is a complete money-grab by the rich (I'm sure there are plenty of genuninely good-meaning people behind it), but it seems more and more like something rich people are trying to convince poorer people to do so that they get more money by playing off the poorer's disdain for taxes. [/Quote]
Probably, but it's not like there's no benefit for the poor, ESPECIALLY if handled correctly, and that's a BIG "if", but it can be done if you have a team of people working on it who AREN'T politicians.

[quote name='SpazX']

I'd also like to reiterate Myke's point that even though the percentage is equal it's not "fair". 23% from someone making 30,000 a year is much much much (I can't emphasize that enough) more significant to that person than 23% of 5 million would be. Even assuming that prices are the same and it's essentially an invisible tax the gain for someone making 30k is hardly anything compared to that of the person making 5 million. [/quote]

I could say something about average tax rates and returns to national investment, but that's neither here nor there. In purely normative terms, I agree (somewhat).
[quote name='SpazX']

A better solution to me would just be to have more tax brackets with higher percentages for more wealthy people and lowering the percentage on poorer people. That would probably also end up with more tax money available also so that it would not only give the poorer more money, but the government more money for public works (provided they're held accountable for their spending...)[/quote]


Higher percentages don't count for shit with the ability to exploit. Also, I could again say a bunch of boring crap about investment and national savings, but no one really cares. Also, you'd REALLY have to have faith in your politicians to spend that extra money wisely, and that would ONLY work if they lowered rates for "poor" families by less than those raised for "rich" families.


[quote name='SpazX']
I'm being cynical, I know, so if I'm in error please explain it to me.[/QUOTE]

It's really another issue of equity Vs. efficiency, with broad definitions of "equitable". It's a hard situation.
 
[quote name='mykevermin']The top 8,800 households are subject to the death tax. The rest of the United States is not.

I think this "fairtax" notion is conflating two issues: it makes a massive logical leap from "the current system is unnecessarily complex and flawed" to "we should tax on consumption instead!" There's a huge chunk of logic missing in that equation.

The "fair" talk is merely semantic. I could argue that it is "fair" to tax people at a graduated rate based upon their annual earnings and assets. That's pretty damned fair to me. I'm sure it isn't to you, but that's precisely the point. The only "fairness" involved is a semantic sleight of hand that creates a strawman argument that somehow a flat consumption based rate of taxation is naturally more "fair" than something based on earnings.

Now, a logical step would be to move from "our federal income taxation system is unnecessarily complex and flawed" to "let's simplify it without stepping away from income-and-asset based taxation."

The "fairtax" proof is in the pudding. Common goods will become absurdly expensive as a consequence of reallocating *everyone's* federal taxes due equally among purchased goods and services. That's something else I think is overlooked. Many of us live with 6-7-8% sales taxes, and a few with 9%, I believe. If Neal Boortz thinks that a "fairtax" consumption-based system will lead to anything below 17-20% sales tax, he's absurd. And that's "taking money out of people's hands," to use the old GOP "I spend my money better than the government" parlance.

Most importantly, if all you anti-federalist types out there support this system, you'll have to keep in mind the amount of government oversight necessary to ensure that businesses are taking taxes fairly. The biggest hurdle to overcome would include the aforementioned bartering that would inevitably result (and I'm a handy gardener, so I'd be all 'bout some bartering!), but also monitoring and surveillance of online purchases, eBay sales, Craigslist sales, and things like that. Those can't be omitted from the "fairtax."

I'd be thrilled to see the study that claims Hummers are more environmentally friendly than a Prius. If you find that link, please PM it to me, as I don't want to (no pun intended) cloud up the discussion here.[/QUOTE]

I think the general response to that is that removing the income tax will greatly reduce costs for businesses, and will thus have an immediate effect on prices. This will make the consumption tax hit less severe, especially since it would (at least, this is how I read it), only be applied at the final stage, and not on the intermediate stages of production and supplier-seller relations.
 
[quote name='MrBadExample']But this is a man who loathes government spending so I don't think he would lose any sleep if the government took in less money.[/QUOTE]

What's wrong with the government taking in less money? They spend way too much as it is.
 
Reality's Fringe;2881574] I highly doubt this would happen. It seems to just be wishful thinking on the part of those in favor. The Tax incidence will more than likely be shared with the producer said:
Ehh, not exactly. The $3,000,000 is taxed prior to receipt. Let's say (for the sake of arguement) that they pay 35% on that specific income.
That leaves them $1.95 Million to spend on goods when they were going to spend, say, the entire $3,000,000. That means that there's $1.95 million they can spend on consumables withou(Federal) tax. With each dollar being spent on a consumable at 23%, that's actually only $690,000 in federal revenues. The reality is that the rich also benefit from this tax. Whether or not that's "fair" is up to you, all I can tell you is that increased domestic consumption does wonders for the per capita K stock and % growth of real GDP.
Click to expand...

I was assuming the income tax was removed and going with the "fair tax" numbers. Even though state taxes would still in effect, etc. I was just assuming a person spending 3 million as an example (regardless of how much they actually made) to compare the fact that they say the rich bear the burden moreso than the poor (I recall something about caviar and expensive cars in their FAQ), but also say that prices would not change significantly, which basically nullifies any difference.

Reality's Fringe;2881574] Eh said:
Probably, but it's not like there's no benefit for the poor, ESPECIALLY if handled correctly, and that's a BIG "if", but it can be done if you have a team of people working on it who AREN'T politicians.
Click to expand...

Yeah, I see the benefit, but I can't accept giving the poor something to satisfy while giving the rich huge amounts of extra money. I share your distrust of politicians, but yeah....

Reality's Fringe;2881574] Higher percentages don't count for shit with the ability to exploit. Also said:
supposed[/I] to do. I can't bring myself to really trust somebody that runs a business though whose only motivation is based upon and indeed encouraged to be pure greed.

For that reason I give them slightly less of my cynicism.

I'm no econometician (or economist) so as far as actual numbers I have absolutely no idea what the hell I'm talking about. I'm just going purely on their logic.
Click to expand...
 
[quote name='elprincipe']What's wrong with the government taking in less money? They spend way too much as it is.[/QUOTE]
My point is I can't take Boortz at face value when he says the Fair Tax is revenue neutral. He would love it if there wasn't enough money for government schools and social programs.

I would love to see the government take in less money and spend it more wisely. I just have a feeling you and I would disagree on the "wisely" part. :)
 
[quote name='MrBadExample']My point is I can't take Boortz at face value when he says the Fair Tax is revenue neutral. He would love it if there wasn't enough money for government schools and social programs.

I would love to see the government take in less money and spend it more wisely. I just have a feeling you and I would disagree on the "wisely" part. :)[/QUOTE]

I don't know enough about him to say, so I can't comment. But I would probably disagree with most here on the "wisely" part, so nothing unexpected there :D
 
[quote name='MrBadExample']My point is I can't take Boortz at face value when he says the Fair Tax is revenue neutral. He would love it if there wasn't enough money for government schools and social programs.[/quote]

So would I. I went through government school. ;)
 
But a business guy has incentive to run his business well. (Theoretically) if he succeeds, his business is more profitable, he, his employees, his shareholders, and his customers all profit/benefit. I will say that there was a period where the sole goal of running a business was (artificially and falsely) jacking up their stock price/value and not thinking of long term growth (ironically enough this occurred during a Democratic presidential term, and was taken as a "good" thing), and there are certainly some scumbag CEOs who get in, ride the company to the ground, then bail out with their fifteen million dollar golden parachute, but I think those are the (very visible) minority.
But ultimately, except for a few business/industries (subsidized farming, etc) most private industry either succeeds at some level or dies, or at least catches itself in its death throes and makes changes (I saw that Delta is now out of bankruptcy). Government programs do not do that, their income to a great extent is virtually guaranteed.
Theoretically, yes, the politicians is supposed to "help" people. Of course, the definition of "help" varies (which is helping a junkie: getting him off the drug, or giving it to him?), and which people? However, for the vast majority of congresspeople, after no more than one term in office, "help" usually means "try to financially benefit, or hinder the opponents of", and "people" means "those people or lobby groups who give me millions of dollars in lobbying or campaign donations". It's the rare politician who does not succumb to the power and benefits of being able to write the rules, and the few who do are usually punished or ostracized (like that one fellow a couple years back who wanted a symbolic vote on the automatic congressional pay raises--in retribution a policy was floated that if if you vote against it, even if you're outvoted, you don't get it.)
Even if government revenues did decrease, I think most people would agree that the government does take too much of our money and spend it on things they shouldn't. We can certainly disagree on what they 'should' spend it on, but just like the concept that "the current tax system is, if not broken, severely damaged", most people probably agree on the base statement.
 
[quote name='dtcarson']But a business guy has incentive to run his business well. (Theoretically) if he succeeds, his business is more profitable, he, his employees, his shareholders, and his customers all profit/benefit. I will say that there was a period where the sole goal of running a business was (artificially and falsely) jacking up their stock price/value and not thinking of long term growth (ironically enough this occurred during a Democratic presidential term, and was taken as a "good" thing), and there are certainly some scumbag CEOs who get in, ride the company to the ground, then bail out with their fifteen million dollar golden parachute, but I think those are the (very visible) minority.
But ultimately, except for a few business/industries (subsidized farming, etc) most private industry either succeeds at some level or dies, or at least catches itself in its death throes and makes changes (I saw that Delta is now out of bankruptcy). Government programs do not do that, their income to a great extent is virtually guaranteed.
Theoretically, yes, the politicians is supposed to "help" people. Of course, the definition of "help" varies (which is helping a junkie: getting him off the drug, or giving it to him?), and which people? However, for the vast majority of congresspeople, after no more than one term in office, "help" usually means "try to financially benefit, or hinder the opponents of", and "people" means "those people or lobby groups who give me millions of dollars in lobbying or campaign donations". It's the rare politician who does not succumb to the power and benefits of being able to write the rules, and the few who do are usually punished or ostracized (like that one fellow a couple years back who wanted a symbolic vote on the automatic congressional pay raises--in retribution a policy was floated that if if you vote against it, even if you're outvoted, you don't get it.)
Even if government revenues did decrease, I think most people would agree that the government does take too much of our money and spend it on things they shouldn't. We can certainly disagree on what they 'should' spend it on, but just like the concept that "the current tax system is, if not broken, severely damaged", most people probably agree on the base statement.[/quote]

I assume that was directed towards me, right? I agree with you about politicians and their corruption due to lobbying, etc., but that is exactly why I wouldn't trust the business guy more than the politician. You say that politicians are corrupted by lobbying groups, and I agree, but lobbying groups are fronts for businesses that are looking out for business interests.

So, therefore, the politicians are corrupted because they are looking out for business interests (becuase they pay them to), but if we take away the politician's money and power and transfer it to the business, that makes it better? That doesn't seem logical to me: it seems like you're saying that politicians are corrupted by businesses, therefore we should take their money and give it to businesses, the very people who are corrupting the politicians!

And this is my point - a politician is corrupt when they look out for business interests over the interests of the people, but a business that looks out for business interests above all else is doing its job.

I'm ending the discussion here though, so that it doesn't go into a discussion about competition, etc. and mess up the thread.

So back to the fair tax...
 
Businesses/industry aren't the only lobbyists politicians are beholden to. There's definitely industry-related PACS such as the legal industry/lawyers; there's single-issue PACs such as NRA or Planned Parenthood; there's other groups such as Moveon or Swift Boat, all of whom give money and have power. Separating into "business" versus "government" is limiting.
"So, therefore, the politicians are corrupted because they are looking out for business interests (becuase they pay them to), but if we take away the politician's money and power and transfer it to the business,"
The politicians have money from three sources: their own (from their prepolitical career, or marriage, or investments), taxation (power of money), and contributions. There's no such thing as "taking money from politicians" as you speak of it--it's people/businesses keeping their own money/declining to contribute.
Not all politicians are corrupted by business--some are corrupted by power, or votes, or the various other lobbying organizations. And some aren't truly "corrupt", they just act so as to provide a return on the investment of their contributors.
"politician is corrupt when they look out for business interests over the interests of the people, but a business that looks out for business interests above all else is doing its job."
Exactly. Politicians are supposed to be 'for the people'. Businesses should run their business with the goal of long-term growth and profit. Now, usually that helps people as well (my company does well, so I get a raise/bonus, we invest in R&D and improve our products, helping our customers, etc.) We are luckily mostly moving away from relying solely on the stock-price driven measurements, since that can be too easily manipulated for short term gain for few and long term harm for many.

Anyway, yeah, like someone said early, one major 'fair' thing about the FairTax is that it removes all exemptions and loopholes, which most people (especially the poor) either do not qualify for, or are not aware of how to take advantage of them. Every other negative I've heard (apart from the60-year-old one I mentioned in my first post) is either false or also a negative of the current system.

I do feel sympathy for the people in the private tax industry who would most likely be out of a job. However, I think that's being overestimated--first, many states still have various taxes. Second, is tax accountancy similar to investment planning? I would think there would be room in that industry. Third, harsh as it sounds, industry changes and advances and evolves--we don't really have a buggywhip industry anymore, but that should not have stopped the car from being produced.
 
The basics sound like a good idea, but I think I'll have to dig a little further until I really make a decision...
 
I see a lot of people who seem to want to make "the rich" pay more taxes than everyone else.

I'm left wondering why "the rich" should have to?
 
[quote name='UncleBob']I see a lot of people who seem to want to make "the rich" pay more taxes than everyone else.

I'm left wondering why "the rich" should have to?[/quote]

That is why the fair tax is great. You aren't penalized for being productive.
 
[quote name='UncleBob']I see a lot of people who seem to want to make "the rich" pay more taxes than everyone else.

I'm left wondering why "the rich" should have to?[/QUOTE]

Very simply put,

1) They are better equipped to - if you consider the cost of goods and living standards today, along with the fact that the median income in the US hasn't budged more than $1,000 in 16 years (around $46K/year), you'll realize that shifting the burden from the wealthy onto the middle and lower class is inconceivable. If you thought American's negative savings in 2005 and 2006 were something, wait until you do this.

2) It is their moral obligation to repay the society that helped make them wealthy in the first place. They generated wealth on the backs of their laborers, on the support of government subsidies, and on the purchases made by the consumers. Anyone foolish enough to believe that wealth is generated by an individual no their own, and not by the efforts of hundreds or thousands of members of the social structure, is a simpleton. Now, there are those wealthy who think that they're great philanthropists, because they create jobs - the other end of that coin is this: the jobs leaving the country right now to outsourcing include skilled labor and phone support jobs - stable, skilled work, right? What's replacing it is (nothing in the inner city, anyway) unskilled retail and service work. In this case, you have two things operating: first, the wealth are increasing their wealth by means of moving jobs from the country and taking those jobs away from their fellow citizens and placing them into the hands of nations who will do it cheaper. That wealth is artificially generated, because it is due to backdoor managing, not "growing the company." Second, it flies in the face of the notion that the wealthy are great benevolent beings to this nation.

As far as I'm concerned, the answer to those who don't like to pay taxes is rather simple. If you don't like to pay taxes, or prefer to only pay taxes on your consumables, there is NOTHING standing in your way.

I'm not kidding.

Go get a job that pays you $15,000 a year. You'll get every bit of taxable income back at the beginning of the year. Surely a low-income subsidy as well.

Don't want to earn that little? Then shut up and pay your taxes. Be aware of what I'm saying, and don't put words in my mouth. I'm not saying "taxes are spent widely," I'm not saying "taxes are spent efficiently and gathered fairly." I'm pointing to one group of people, those pricks who think that being a top 1% income earner somehow makes them a targeted and oppressed group, and saying "shut the fuck up because you're privileged and you know it." If you feel so goddamned oppressed, quit your job, get up at 5AM and stand in line at a "Manpower." Then you'll find out what the fuck oppression looks like in the US.
 
[quote name='UncleBob']I see a lot of people who seem to want to make "the rich" pay more taxes than everyone else.

I'm left wondering why "the rich" should have to?[/QUOTE]

Agreed. People keep saying that the "rich" need to pay more but the top 25% tax bracket already pays for 83% of the total tax revenue so I'm not sure how much more people expect the "rich" to pay.

The consumption tax is intriguing and I think the whole fear that this lets the wealthy shelter more of their money tax free is an unfounded one since if they are able to save more money, obviously they going to spend more and therefore be subject to the tax. I would gladly trade the current payroll tax (which is basically extortion) for a 20% sales tax.
 
[quote name='mykevermin']Very simply put,

1) They are better equipped to - if you consider the cost of goods and living standards today, along with the fact that the median income in the US hasn't budged more than $1,000 in 16 years (around $46K/year), you'll realize that shifting the burden from the wealthy onto the middle and lower class is inconceivable. If you thought American's negative savings in 2005 and 2006 were something, wait until you do this.

2) It is their moral obligation to repay the society that helped make them wealthy in the first place. They generated wealth on the backs of their laborers, on the support of government subsidies, and on the purchases made by the consumers. Anyone foolish enough to believe that wealth is generated by an individual no their own, and not by the efforts of hundreds or thousands of members of the social structure, is a simpleton. Now, there are those wealthy who think that they're great philanthropists, because they create jobs - the other end of that coin is this: the jobs leaving the country right now to outsourcing include skilled labor and phone support jobs - stable, skilled work, right? What's replacing it is (nothing in the inner city, anyway) unskilled retail and service work. In this case, you have two things operating: first, the wealth are increasing their wealth by means of moving jobs from the country and taking those jobs away from their fellow citizens and placing them into the hands of nations who will do it cheaper. That wealth is artificially generated, because it is due to backdoor managing, not "growing the company." Second, it flies in the face of the notion that the wealthy are great benevolent beings to this nation.

As far as I'm concerned, the answer to those who don't like to pay taxes is rather simple. If you don't like to pay taxes, or prefer to only pay taxes on your consumables, there is NOTHING standing in your way.

I'm not kidding.

Go get a job that pays you $15,000 a year. You'll get every bit of taxable income back at the beginning of the year. Surely a low-income subsidy as well.

Don't want to earn that little? Then shut up and pay your taxes. Be aware of what I'm saying, and don't put words in my mouth. I'm not saying "taxes are spent widely," I'm not saying "taxes are spent efficiently and gathered fairly." I'm pointing to one group of people, those pricks who think that being a top 1% income earner somehow makes them a targeted and oppressed group, and saying "shut the fuck up because you're privileged and you know it." If you feel so goddamned oppressed, quit your job, get up at 5AM and stand in line at a "Manpower." Then you'll find out what the fuck oppression looks like in the US.[/quote]

Spoken like a true liberal.
 
[quote name='mykevermin']1) They are better equipped to[...]

2) It is their moral obligation to repay the society [...][/QUOTE]

Soo.... because they can and because they should, eh?

While it's all well and good to believe that those who have should give to those who need, is it right for a government to *force* that? I mean, should we, as a people, give our government the power to legislate morality (not that they don't try to any chance they get as it is...)?
 
You're falsely turning this into an issue of morality; if you insist upon doing so, that's fine. Just don't expect me to debate on the grounds of morality, because any sort of "fairness" concept has morality built into it. Even the notion of having people pay based on their consumption has "morality" built into it. We could go in circles all day long on "fairness" and "morality," and never come any closer no matter how many words we use.

Instead, I'd like to see how you would resolve the notion that the entire economy would be fucked to hell if a greater tax burden were shifted to the lower and middle classes without a substantial increase in the wages they earned. For a refresher, go back to my first post on this page (the one you thankfully edited down when quoting me).
 
Umm... you're the one who turned it into an issue of morality.

"2) It is their moral obligation to repay the society"

You talk about shifting the tax burden. I'm more interested in making the tax burden less on everyone. Let's cut government spending. A lot.

Additionally, and I know there's no way in heck this would ever pass, but let's tax people in one fair, simple way. Let's put together a budget for the government for next year. Now, take the sum of all that, divide it by the number of people in the US and each person (Man, woman, child of any age) pays $X. If you can't afford to pay your share, then you get to work it off doing a government job (cleaning a park or something) at a standard rate of pay - which will be garnished until you've paid your taxes for the year.

If the $X per person is too much, then the government needs to cut back spending. If the government can't cut back spending, then we need to elect politicians who know how to run a business within a reasonable budget.
 
It's incorrect to act as if your "everyone pays X" notion is without morality. I hope you can see that much.

As for cutting spending, that's a separate issue entirely from a debate on what segment of income earners ought to pay in taxes. If government spending is low (not in our lifetime) or high (indeed ours), it ought to be unrelated to what any income quintile pays as a portion of overall tax revenue.
 
[quote name='UncleBob']You talk about shifting the tax burden. I'm more interested in making the tax burden less on everyone. Let's cut government spending. A lot.

Additionally, and I know there's no way in heck this would ever pass, but let's tax people in one fair, simple way. Let's put together a budget for the government for next year. Now, take the sum of all that, divide it by the number of people in the US and each person (Man, woman, child of any age) pays $X. If you can't afford to pay your share, then you get to work it off doing a government job (cleaning a park or something) at a standard rate of pay - which will be garnished until you've paid your taxes for the year.

If the $X per person is too much, then the government needs to cut back spending. If the government can't cut back spending, then we need to elect politicians who know how to run a business within a reasonable budget.[/QUOTE]

I'm all for cutting government spending (believe me, I agree with the "a lot" part...like maybe 70-80 percent cut for the federal government, over time of course as to not cause a huge shock), but this plan is crazy. You would have poor mothers take their four kids under 8 years old and force them to sweep streets or pick up trash from the park, all while Bill Gates doesn't even spend 1 second (his accountants do it) on his pittance of tax. Does that really sound fair to you? It certainly doesn't sound fair to me.

The fact is that some people have it better than others. Most of the time these people have it better than others due to their good choices, hard work and intelligence (although too many through other means, sadly). I am not saying go back to the days of 90% upper brackets, but since government needs money for necessary operations, I find it much more acceptable for someone making $500,000 to pay $25,000 per year than someone making $50,000 to pay $25,000 per year.
 
[quote name='elprincipe']I'm all for cutting government spending (believe me, I agree with the "a lot" part...like maybe 70-80 percent cut for the federal government, over time of course as to not cause a huge shock), but this plan is crazy. You would have poor mothers take their four kids under 8 years old and force them to sweep streets or pick up trash from the park, all while Bill Gates doesn't even spend 1 second (his accountants do it) on his pittance of tax. Does that really sound fair to you? It certainly doesn't sound fair to me.

The fact is that some people have it better than others. Most of the time these people have it better than others due to their good choices, hard work and intelligence (although too many through other means, sadly). I am not saying go back to the days of 90% upper brackets, but since government needs money for necessary operations, I find it much more acceptable for someone making $500,000 to pay $25,000 per year than someone making $50,000 to pay $25,000 per year.[/quote]

That last sentence is pretty absurd.

It is a tax on CONSUMPTION! That "poor" mother with 4 kids? She gets a check based on the poverty level from the Govt. to buy her necessities. Anything other than necessities she has a CHOICE to buy, and if she chooses to, she must pay a tax. If she doesn't choose to buy new products (she can buy used all she wants and pay no tax), then she doesn't pay tax.

It is simple, fair and encourages saving. EXACTLY what that poor mother of 4 from your scenario needs. A FULL paycheck every 2 weeks (or whatever) and her CHOICE on how much tax she will end up paying.

In the book they refer to SEVERAL studies that say with the fair tax, a person faces lower lifetime tax rates than the current system. Look into it, it is extremely fair to everyone (hence the name). It's about time we start treating everyone EQUAL and not penalizing success.

What is exactly "fair" about our current income tax system?
 
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