I originally posted this as a reply to another post but..

lonehalf

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Sun Oct-08-06 11:18 AM
Original message

I originally posted this as a reply to another post but..

...I'm posting it now because I would like it discussed here.

Maybe someone can add to what I know.

=================================================================

I'm neutral about The Fair Tax it so far because I haven't had time to study it.

But I have read some and talked to Georgians about it.

Here's the basics (read for yourself though):

1) All taxes (income, payroll, corporate, etc) go away.
2) A national sales tax of 23% on all retail sales.
3) Every household would receive a check from the Government every month that covers basic needs.
4) The IRS would be abolished.
5) It would get the tax cheaters except the ones who go "black-market".

The supporters (mostly middle class and non-aligned ideologues) say it will be good for the entire world.
The opponents (mostly Liberals and Progressives say it will hurt the poor. They usually point out number 2, and not the other provisions.

Like I say, study it for yourself. Read the arguments of both sides, please.

It does have many supporters in Congress.

The bill number is HR25.

You can study it here and make up your own mind.

http://www.fairtax.org/

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proud2BlibKansan

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Sun Oct-08-06 11:21 AM
Response to Original message

1. Yes it will hurt the poor

A national sales tax of 23% would be way beyond the means of most low income families.

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Warpy

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Sun Oct-08-06 11:30 AM
Response to Reply #1

2. Yes, especially since they'd pay that 23% all month

and be reimbursed for what the gummint thinks they needed to live on only at the beginning of the next month.

Assessing what people need to live on is also tricky. Do they assess it in Mississippi, or do they assess it in California or New York City? Are they talking about bare bones subsistence without health care and without the ability to save for retirement, or are they talking about what a living wage would be?

Remember what they've been doing with the market basket for the CPI: changing a beef roast for an equivalent amount of the cheapest hamburger and then to cold cuts adulterated with starch, changing fresh veggies out of season for cheaper canned ones, trading bread for flour--all to hide what the inflation rate has actually been.

There are a lot of problems with any flat tax, national sales tax, or any other scheme the GOP is coming up with because they know only the graduated income tax is both fair and adequate to raise the revenue our country depends on.

All this stuff was fought over, argued out and decided upon in the early yearrs of the last century. The graduated income tax was the fairest thing they could come up with. Their mistake was tying it to fixed dollar amounts instead of indexing it to the median wage.

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Syncronaut Seven

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Sun Oct-08-06 12:06 PM
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3. We're from congress, and we're here to help!

Meet my friends the easter bunny and santa claus. They like you and want you to be happy!

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Hong Kong Cavalier

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Sun Oct-08-06 12:11 PM
Response to Original message

4. Oh cripes. Not again.

Edited on Sun Oct-08-06 12:17 PM by Hong Kong Cavalier

:banghead:

50%!!!! Not that 23% bullshit Boortz is pushing. 50%!

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mcscajun

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Sun Oct-08-06 12:30 PM
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5. Peddle this somewhere else: Money Magazine examined the "Fair Tax" in 2005

Edited on Sun Oct-08-06 12:31 PM by mcscajun

The FairTax is what economists call a consumption tax, and the basic economic rationale for it is the same as for all such taxes. It is designed to make saving and investing more attractive to people and companies, which most economists think would spur economic growth as people plow more cash into starting businesses, building factories and so on. With the FairTax you'd get taxed only when you spend money on retail goods and services.

(snip)

The rebates help make the FairTax progressive -- tax jargon for "richer people pay more." For the very rich, however, that's not quite the whole story. Say you earn $2 million a year. You can live pretty well spending $1 million, and as a result pay a mere 11 percent of that year's income in taxes. If the very rich pay less, that means more of the total tax burden in any year has to fall on somebody else, most likely the middle class.

(snip)

Critics claim the FairTax has two major flaws: It wouldn't work in practice and, even if it did, it wouldn't raise enough money. The first problem has to do with the fact that people cheat on their taxes; they do it now, and they'd find ways to do it under a sales tax. With all of the taxes we'd owe being lumped into one big sales tax, lots of people might be tempted to try evading it, with black markets springing up everywhere.

(snip)

The FairTax bill pegs it at 23 percent in order to fund the government at current levels without raising the deficit. (If you think of the FairTax like a state or local sales tax, you'd say that this is a markup of 30 percent on prices at the store. See the chart above.) But economist William Gale of the Brookings Institution says that this number is way, way too low. "They're telling kind of a big lie about tax reform," he says.

http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/

Take a look at what else is on the "Americans for Fair Taxation" website: A link to a policy paper from the Cato Institute; oh yeah, I want to listen to THEM. :sarcasm:
Oh, and did I mention in my reading of the AFT site that Corporate Taxes would also be eliminated? Oh yeah, it's buried in there with the usual claptrap about how a corporation is really fictional and it's people (us) who wind up paying their taxes. Plus, anything supported by Neil Boortz must be very carefully examined.

Why don't you run up an alley and holler "fish!"?

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Greyhound

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Sun Oct-08-06 12:50 PM
Response to Original message

6. You don't give the impression of neutrality in your post, I'd say you are

Edited on Sun Oct-08-06 01:15 PM by greyhound1966

an advocate. As always, the devil is in the details and they are entirely lacking in your post.

I have noticed that it is generally only people with high incomes that advocate taxing consumption.

Edit: I would like to ask you what is wrong with a flat income-tax that taxes all income, regardless of origin, after a minimum standard (say $20,000 p/wage earner) and that's it, period. No exceptions, no credits, no deductions, no forms, no IRS, no refunds, no exemptions, just every dollar that comes in the government gets a slice off the top to finance the system that lets us make the money we make. BTW, a tax rate of 4% - 7%% is all it would take to maintain the current revenue levels with a plan like this. The down-side would be much less work for accountants and there would be little, if any, need for tax attorneys and it would make tax evasion/avoidance all but impossible

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