http://www.mises.org/story/1975 That's a good piece on the Fair Tax being proposed. Here's what I don't get.. if you take away taxes on income and then only put it on goods, but you're still paying the same amount.. how does that help? think about it, you may have more money on hand or in the bank but if you plan on using it, you're gonna have to pay those taxes one way or another, it's inevitable. What's even the point of it? if the same amount of taxes are being collected and the outrageous spending is the same, how are we benefiting if we all still pay the same sh!t? that's like God telling someone they can either die now and go to hell or wait a couple more years to die and go to hell.. the fact is, you're still going to hell!
Some people spend more than others I guess, so those that spend more pay more maybe? Which this in itself could cause problems, as 2/3 of our economy is driven by consumer spending...which in turn has its own problems.
I think the main goal is to redistribute the way the taxes affect the different economics classes of poor, middle, and rich, and the intention is to use credits to help them the poor. The problem, as you point out, is that it is only one side of the equation, the payment end, and it does not address the other half of the problem, which is the government spending that necessitates the need for taxes in the first place. The only candidate seriously looking at both sides of the problem is Paul; he realizes that changing the tax structure is futile at fixing our economy and government if we don't also radically change the way we spend money in the first place. His plan to cut spending and inefficient departments needs to be refined, more exact, and I'm not quite sure the numbers fully balance out, but it's much more of a step in the right direction than just changing the way exorbinant amounts of cash leave our wallets and get to Washington.
There are some big issues with the Fair Tax. One, it requires a repeal of the 16th Amendment, which is a major undertaking. Two, it requires a constitutional Amendment to bring in the Fair Tax, which is another major undertaking. Three, it doesn't have bi-partisan support in any meaningful way. Four, its still a progressive tax, hitting the upper middle and upper class harder than the low-middle and lower class. Unapportioned taxes are not constitutional. We're basically supposed to have a system of user fees, not relative productivity taxes. I think the only good tax, is no tax. User fees are acceptable, but they shouldn't be mandatory.
Well the point behind it is that everyone doesn't buy the same amount of stuff as guru-seo mentioned. This would mean the rich pay more in taxes and the poor pay less, since the rich buy more things.
obviously.. i'm looking past that.. so say you have a bunch of money saved up, any time that you use that money, it will be taxed 33% so you might as well just divide 1/3 of what you have because it won't be spent untaxed..
Not necessarily. There will be alot of rich not spending money only getting richer, while the poor who can barely get by will be spending every dime they have. I see so many problems with this 'tax system' Not to forget yes consumer spending does drive the economy, look at how smokers will even quit smoking when tax goes up a bit. You don't think people aren't going to buy less stuff because now it costs more? Even if on a dollar basis it costs them less than the income tax is now, they still see it directly effecting them when they buy something at that moment. IMHO the more I look at this tax system, the more I find it simply destructive and insane that anyone with any common sense would support it.
Exactly. All existing savings that are already tax paid, will be taxed once again upon consumption. The FairTax is a brutal attack on retirees and people who have not participated in the debt culture to finance their lifestyle. The sad thing is, anyone in the debt culture under a FairTax system would be paying interest on their 33% tax expenditure. I give the scheme full credit for being creative, but the transitional issues are massive. For example, do you repeal the 16th Amendment first, and if you do (removing income tax), how the hell are you going to sell the people on adding the FairTax? And if you put the FairTax in first (which many people fear), then what guarantee do you have that Congress will remove the 16th Amendment? Changing the Constitution isn't a 3 or 6 month process. I'm not even sure a President could get both changes made in a 4 year term, prompting my last scenario of only half a change.
Oh I know what you mean now, I misunderstood the question at first. Well the difference is in just that, for those who won't be spending a lot of money it will be better because there wont be a mandatory tax whereas with things like income tax you have to pay it. If you don't spend the money you don't have to pay. So it is good for things like saving up money, maybe for something like a college education, which wouldn't be taxed (as far as what I have heard from the fair tax proposals). I am not supporting it (I am actually borderline on the issue at the moment), I was just saying what it is supposed to do.
yea i was thinking it may benefit things that won't be taxed but from what i see, food and all the necessities would be taxed as well. if food and all that weren't taxed then it would make a tiny bit of sense i suppose.
The FairTax has a provision that it would become active upon a dismantling of the 16th amendment. So the process would be to vote the FairTax in, and then work to remove the 16th amendment, at which point the FairTax would become active, making the changeover as seamless as possible.
Yea, but if food and necessities weren't taxed then the gov't wouldn't generate enough money and the poor would virtually pay no taxes.
I know I simply added more to my post, only the first part was about what you posted. The rest was simply my thoughts on it.
Right, so it's a non-starter. There is almost no partisan support for this. Huck picked it up as a fringe issue to gain a voter block in Iowa where it is pretty popular. Actually, tax schemes where they collect and reimburse are a cashflow management trick. Like social security. A ponzi scheme. You collect the money now, keep it for a month, then you return it. You get the money interest free for 30 days. When you return it, you've already collected another lot of money, which you again get to keep for 30 days, interest free. Scheme like this work AWESOME, until there is an economic downturn. Then there are more people earning less, and the government has to return more than it planned. Which leads to either a tax rate increase, or inflation/juggling the numbers. Does anyone know if the return rate levels are indexed, and if so, is it against CORE CPI?
The fair tax will hurt the middle class more than anything, it will encourage saving and hurt the economy as well. They also say it is a 23% tax, which is bad math because it is in the range of 30%.
I suggest you all visit fairtax.org . It provides all the information you want to see, plus a list of congressman (both R and D) that support co-sponsor, or are against the fairtax. It has support from people in both parties, and is co-sponsored by people in both parties. http://www.fairtax.org/site/PageServer Incorrect. Your bad math of 30% is that an item that cost 100$ will (after the FT) cost 123$. 123 is 130% of 100. But in reality (and the way the FT is read), a 100$ item will still cost 100$, only 23$ of that 100 will be paid by the seller in taxes.
Here is a better explanation of my previous edit, in case people did not see it: http://www.fairtax.org/site/News2?news_iv_ctrl=1541&page=NewsArticle&id=8248
Which the seller will in turn raise the price to $123, you don't seriously think the seller is going to sell the item at the same price do you?