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Huckabee's fair tax and plan to abolish IRS?

Discussion in 'Politics & Religion' started by smatts9, Nov 30, 2007.

  1. #1
    What do you all think of Huckabee's plan to abolish the IRS, but in turn replace it with a fair tax? I'm not a big fan of the fair tax which is keeping me from supporting Huckabee and maybe you all have some thoughts on it?

    I know this isn't Huckabee's bill, but he supports it, along with some other candidates but I'm not sure hwo he is only one who brings it up consistently.

    Link to actual fair tax bill: http://www.fairtax.org/PDF/HR25_2007.pdf
    Info: http://en.wikipedia.org/wiki/FairTax

    I'm skeptical about this. Seems like giving up one evil for another.
     
    smatts9, Nov 30, 2007 IP
    GTech likes this.
  2. GTech

    GTech Rob Jones for President!

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    #2
    Huckabee on Fair Tax, straight from the debate.

    It is a huge leap, for many Americans. The burden of tax the IRS has created on Americans is enormous. Not just the actual monetary value of the tax, as a burden, but burden of proof, burden of understanding the laws, burden of guilty until proven innocent.

    What I like about it is, it doesn't penalize you for earning. I see a lot of people here talking about how Americans should be saving, working hard to eliminate debt. The Fair Tax would certainly afford, but also encourage this. Tax on consumer purchases. It would encourage more Americans to save. You are not taxed on your income or earnings, you are taxed when you go to spend.

    Wish Will Spencer was around. He's talked in depth about the Fair Tax before.
     
    GTech, Nov 30, 2007 IP
  3. smatts9

    smatts9 Active Member

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    #3
    Would this not just hurt our economy. The economy runs off it's people spending. This fair tax promotes saving.
     
    smatts9, Nov 30, 2007 IP
  4. GTech

    GTech Rob Jones for President!

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    #4
    That's a valid question. I'm not going to pretend I know the answer. Kind of why I wish Will was here. He seems to know it very well and could discuss it without a partisan twist.
     
    GTech, Nov 30, 2007 IP
  5. guerilla

    guerilla Notable Member

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    #5
    A lot of people advocate the Fair Tax as a change to the tax system, but I doubt they have actually read through it, and understand the criticisms of H.R. 25.

    For example, passing the Fair Tax would require a Constitutional Amendment to repeal the 16th. A Constitutional Amendment is a lot harder to engineer than a House super majority.

    There is a very real possibility that we could end up with both a Fair Tax, and an Income Tax simultaneously. This should give any small government fiscal conservative pause.
     
    guerilla, Nov 30, 2007 IP
  6. smatts9

    smatts9 Active Member

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    #6
    I think they would repeal the 16th before voting on the Fair Tax bill or a lot of the country would go ape shit knowing what was going on.
     
    smatts9, Nov 30, 2007 IP
  7. smatts9

    smatts9 Active Member

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    #7
    Yeah, I always look at everything from an objective stand point and make my opinions based off such stances.
     
    smatts9, Nov 30, 2007 IP
  8. guerilla

    guerilla Notable Member

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    #8
    Most of our spending is credit driven, so this would assist in that regard.

    However, you have to understand how the FairTax works to understand who it affects.

    1. It doesn't tax the investment earnings or savings of the super wealthy.

    2. It doesn't tax the poor, in fact serving as a form of super welfare, with refund checks possibly exceeding what is paid out. A form of entitlement.

    3. That leaves the middle class as the group least likely to get refunded, and least likely to profit from a heavy savings vs. consumption level.

    Also the Fair Tax allows for the government to drive the annual tax rate up on demand. It is not a fixed 23%, only an introductory 23%.

    The best way to reduce taxes is to reduce government spending. Tax reform can come after the cuts have been made.
     
    guerilla, Nov 30, 2007 IP
  9. guerilla

    guerilla Notable Member

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    #9
    That's not how it is set up. It's Fair Tax first, then the Amendment. They aren't going to abolish the IRS without another mechanism in place.

    And you know it will take time to establish the massive infrastructure required to collect sales tax on every single transaction, so even once enacted, it's not going to happen in 2 or 3 months.
     
    guerilla, Nov 30, 2007 IP
  10. smatts9

    smatts9 Active Member

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    #10
    Assuming this is all correct, it seems like the middle class is going to get the burden of the crap from this or am I wrong here?
     
    smatts9, Nov 30, 2007 IP
  11. smatts9

    smatts9 Active Member

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    #11
    Is there a way to pause the effects of the fair tax until the 16th is repealed and in that meantime the infrastructure can be built?
     
    smatts9, Nov 30, 2007 IP
  12. guerilla

    guerilla Notable Member

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    #12
    Like GTech, I am not an expert on this topic. I have an elementary understanding of the FairTax.

    I would advise that you research the answers and report back to us your findings. It's all out there.
     
    guerilla, Nov 30, 2007 IP
  13. d16man

    d16man Well-Known Member

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    #13
    I would be happy to fill in for will about the fair tax...I have done extensive study on it myself. The book that Congressman Lindler and Neal Boortz wrote is wonderful, and very simply explains the fair tax. I love the idea and am all for it.

    To try and answer some questions:

    The fairtax would have to be in place by the time the IRS was demolished. The fairtax actually hurts the rich more than the middle class. Everyone pays a 23% tax on EVERYTHING, meaning that you can't hide your millions from the govt. It means that anytime you buy something, the tax is already included in the price (no, the price of consumer goods will not go up). We already have embedded taxes in everything we buy anyway. Furthermore, refund checks are given by the govt based on your income level. The less you make, the greater the check. Also, because now everyone would be paying taxes, those that are in this country illegally will be paying more tax, which means sending less out of the country and boosting the economy.


    I encourage everyone to check out fairtax.org if you want to know more, I will be happy to answer questions to the best of my ability.
     
    d16man, Dec 1, 2007 IP
  14. guerilla

    guerilla Notable Member

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    #14
    I do not understand how the FairTax hits the rich the hardest?

    They have a larger capital and asset base to borrow against or use to fund consumer spending. All of their investment income, or capital gains on those large asset pools would not be taxed. Just their consumption, which would be higher, but there is no evidence that the rich are consuming more than they are making.

    Ok, but this is a form of welfare. In the end, it's no different than a progressive sales tax. The poor pay less than the rich, which means it is not truly flat. It's true that illegals would pay for consumption, but it also means that illegals would become a legitimized part of the economy.

    That's very cool of you. Please don't take my questions as confrontational, because they are not meant to be. I merely find debate a better way to learn than only reading.

    So my question to you is, what do you not like about the Fair Tax and what do you think could be done better in the legislation?
     
    guerilla, Dec 1, 2007 IP
  15. soniqhost.com

    soniqhost.com Notable Member

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    #15
    People will still spend to buy their necessary goods, you'll also have additional tax coming in from people who make their money in the underground economy (drugs, gambling, etc) but don't pay taxes.

    Also it worthless to shelter your earnings from taxes if their not taxed, until you spend it.

    I think its an interesting idea but a little more complicated then it sounds.

    For example do you taxes businesses (the same consumption tax rate) who buy goods from other businesses which are later sold to consumers who pay the consumption tax?
     
    soniqhost.com, Dec 1, 2007 IP
  16. soniqhost.com

    soniqhost.com Notable Member

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    #16
    The more money the rich have, the more they’ll spend, which means you’ll collect more tax revenue from them.
     
    soniqhost.com, Dec 1, 2007 IP
  17. d16man

    d16man Well-Known Member

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    #17
    because those that are in the poverty level and other low-income levels will receive a prebate whereas those that are not do not...does that not make sense?
    most of that investment income is not taxed now...thanks to the democrats. Furthermore, hiding money over-seas and on other non-taxed accounts will not be necessary, therefore bringing more money back into the US economy.

    incorrect. see this link for more info.

    http://www.fairtax.org/site/PageServer?pagename=about_faq_answers#3

    furthermore, illegals would not get the prebate check back...so therefore they would not become a legitimized part of the economy, instead, they would help keep more US money in the US economy, and pay their fair share of the tax. If they don't want to do that, then they can leave. The fairtax allows everyone to take home their whole entire paycheck....which most illegals do now in the form of cash. imagine if these people all of a sudden started paying the same tax as the rest of us. Imagine what that would do to the US deficit.

    what do I not like about the fairtax? that it is not already in place...our legislation is way out of control already in terms of the tax code. Why not abolish it and replace it with something that doesn't need millions of pages of constant updates?
     
    d16man, Dec 1, 2007 IP
  18. guerilla

    guerilla Notable Member

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    #18
    Oh, I understand that, it just that the rich are not the biggest consumers in the economy and they trend to make more, that would be untaxed, than the middle class.

    For example. I make $1 million per year. I might spend $300,000. That's 30%. If I make $50,000 per year, I'm likely to spend $45,000 (or even more than I make in our current credit economy). Although I am not in the poverty class, I still consume nearly all of my income and would have to pay full pop on that.

    I'm seeing this as a squeeze tax on the middle class. The rich can make more than they can consume, the poor get prebates on their taxes paid, but the middle class will likely pay tax on everything they earn above the prebate amount, because Americans do not save, they can't afford to.

    Unless you slow down consumption. But how many middle class 4 person households with an annual combined income of $50,000 can afford to save money?

    Actually, it is welfare. If you do the math, poverty level Americans don't pay the Fair Tax. They get government services at no cost, the cost being borne by the bigger consumers.

    The deficit will never be reduced without spending cuts. People who think that fiddling with the tax code, will restrain government largesses are kidding themselves. There is little evidence on this in history.

    The problem with illegals is, they would be paying tax, but in that regard, they would not be equal contributors to the state with citizens when it came to government income. I worry that this will lead to some sort of Amnesty, because the government will be less willing to deport it's tax base.

    So there is nothing about the Fair Tax that you feel could be done better?

    There will be an entirely new bureaucracy set up for the Fair Tax, to collect it from every single vendor. Again, in my eyes, it's just fiddling. It may be an improvement, but I don't see it as a solution. Simply trading one system for another.
     
    guerilla, Dec 1, 2007 IP
  19. d16man

    d16man Well-Known Member

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    #19
    you would still get a prebate check, if you made 50,000....but the millionaire would not...why does this not make sense??
    you obviously didn't look at the link. go do some reading and come back with some legitimate questions.
    lots of them...it depends on how you manage that money...don't substitute wasteful spending with being poor.

    no its not...again, you obviously didn't look at the link...the biggest problem with the fairtax is people like you that think it is one thing when it is not.

    that may be true, but more money in the system will help.
    not true, again, this is mere opinion on your part, because you have not read the information about the fairtax.

    I'm not the one that needs to be an expert on the fairtax. As I see it, I like it. thats my opinion plain and simple. its so much more than trading one system for another. Like I said previously, the largest problem the fairtax has is people that "think" they know how it will work, without ever finding anything out about it. Go spend several days at fairtax.org and then come back with some legitimate questions. You wanted debate in another thread, here is your chance.
     
    d16man, Dec 1, 2007 IP
  20. usasportstraining

    usasportstraining Notable Member

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    #20
    As a small business owner, I'd love to see an easier to manage taxing system.

    Flat Tax, Fair Tax, no tax - I don't know what would be the best answer, but I'd love to see a change.
     
    usasportstraining, Dec 1, 2007 IP