Replace federal tax system with Fair tax system

[Thunder22]

A friend of mine is a huge proponent of this, thought you guys might like to read up on it and see what you think of it.

FairTax - Wikipedia, the free encyclopedia

Cliff Notes: The FairTax is a proposed change to the federal tax laws of the United States that would replace all federal income taxes[1] with a single national retail sales tax. The plan has been introduced into the United States Congress as the Fair Tax Act (H.R. 25/S. 296). The tax would be levied once at the point of purchase on all new goods and services for personal consumption. The proposal also calls for a monthly payment to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level.[2][3] The sales tax rate, as defined in the legislation, is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes). This would be equivalent to a 30 percent traditional U.S. sales tax ($23 on top of every $77 spent—$100 total).[4]

[Quicksilver]

The problem with the fair tax is that it will be
administered by and taken advantage of by
the same crooks who look to cheat and steal
from all of us just as they are doing right now.

But aside from that, there are other issues that
perhaps need to be considered before the
concept could be considered.

FactCheck.org: Unspinning the FairTax

[Wagner]

Quick fact, Russia (yes Russia) used an incremental bracket tax structure like we have...it failed. They went to a flat tax, the following year tax revenue went up 25%.

So no, the same loop holes and crooks will not partake.

Quick:

We stand behind our earlier analysis of the FairTax. The proposal to which Gov. Huckabee referred is not a 23 percent tax, but rather a 30 percent tax. And it is revenue-neutral only through an accounting trick. It will collect more money from those earning between $15,000 and $200,000 per year and less from those earning more than $200,000 per year. It is possible that the FairTax would make most people better off, but much of that gain would be a direct result of making the tax code less fair.

Currently the richest 1% pay the majority of the taxes (as far as numbers go) in the USA, is that fair? Nope. But for some reason people seem happy to see that happen. According to the current admin, anyone making over 250K should be having dinner with Bill Gates anyway, so the range isn't that far off. What a fair tax does, is just that. Levels the field instead of allowing the middle class and primarily the rich flip the tax bill. People don't like to hear that the rich pay more 'value' wise than the lesser financially inclined IMO. I do not understand the quotes conclusion of "less fair" how so? Because it is based on percentage instead of value? Isn't that as fair as you can be? Seems some don't want to owe up to their share of taxes (something that is routinely levied on those of the upper-middle to upper class). A 30% flat tax is fair across the board IMO. Why should a person who busts their rear pay 36-39% in taxes while someone who has decided to just get by is being taxed at 15%-20% if at all?? Seems the current tier system is the corrupt one IMO.

FYI, in 1913 the income tax was 'only for the richest of the population' and was about 14 pages in length. Now nearly everyone pays an income tax and the documentation is over 66,000 pages. Hmmmmmmmmmm. Makes you wonder.

http://www.loc.gov/rr/business/hotto...s_history.html

In 1913, Wyoming ratified the 16th Amendment, providing the three-quarter majority of states necessary to amend the Constitution. The 16th Amendment gave Congress the authority to enact an income tax. That same year, the first Form 1040 appeared after Congress levied a 1 percent tax on net personal incomes above $3,000 with a 6 percent surtax on incomes of more than $500,000.

In 1918, during World War I, the top rate of the income tax rose to 77 percent to help finance the war effort. It dropped sharply in the post-war years, down to 24 percent in 1929, and rose again during the Depression. During World War II, Congress introduced payroll withholding and quarterly tax payments.

[X5Dawg]

A couple of points that article does not address:

1) If corporations are no longer paying taxes to operate, then you are going to see more of them return to the US.

2) EVERYONE contributes to this system (unlike now) if they are buying at the retail sales level - that includes foreign visitors, illegals, etc.

3) YOU choose how much tax you pay - if you don't buy anything new, then you don't pay any tax.

4) Everyone gets a check back from the government for the basic necessities based on your household makeup.

The biggest misconception about this plan is that people are being told that they will have to pay 23% more for things on top of what they currently pay for things. If the manufacturers are not paying taxes on raw materials or payroll taxes, then it does not cost as much to manufacture goods which in free-market theory should reduce the retail cost of goods.

[motordavid]

Some interesting ideas, and it sounds too good/easy; thus, doubtful it
would come to be. Back at the Spend It Faster Than We Can Send It Ranch,
the elected and appointed geniuses, (I think they are the crooks that QwkAg
was referring to), will still piffle it away on the pork barrel crap, spending
measures, etc., they do now.

[Quicksilver]

Originally Posted by motordavid

Some interesting ideas, and it sounds too good/easy; thus, doubtful it
would come to be. Back at the Spend It Faster Than We Can Send It Ranch,
the elected and appointedgeniuses, (I think they are the crooks that QwkAg
was referring to), will still piffle it away on the pork barrel crap, spending
measures, etc., they do now.

Exactly............

[X5Dawg]

As much as I wish it would, this will never get passed because our wonderful elected officials would lose so much power with this enacted - they could no longer go out and campaign on "vote for me and I will lower your taxes".

[Quicksilver]

Ok You're right "the same loop holes and crooks will not partake"
It will be a whole new set of loopholes and crooks.

Originally Posted by Wagner

Quick fact, Russia (yes Russia) used an incremental bracket tax structure like we have...it failed. They went to a flat tax, the following year tax revenue went up 25%.

So no, the same loop holes and crooks will not partake.

[Thunder22]

Originally Posted by X5Dawg

A couple of points that article does not address:

1) If corporations are no longer paying taxes to operate, then you are going to see more of them return to the US.

2) EVERYONE contributes to this system (unlike now) if they are buying at the retail sales level - that includes foreign visitors, illegals, etc.

3) YOU choose how much tax you pay - if you don't buy anything new, then you don't pay any tax.

4) Everyone gets a check back from the government for the basic necessities based on your household makeup.

The biggest misconception about this plan is that people are being told that they will have to pay 23% more for things on top of what they currently pay for things. If the manufacturers are not paying taxes on raw materials or payroll taxes, then it does not cost as much to manufacture goods which in free-market theory should reduce the retail cost of goods.

Bingo.

[AzNMpower32]

What's different between this and the Value Added Tax (VAT, MwSt, etc...) ?