Does anyone support a "Fair Tax"?

Now that Huckabee is the hot candidate on the GOP side, it's as good a time as any to talk about the "Fair Tax". It would seem to me that a tax on consumption is a non-starter in that it A.) is incredibly regressive because it disproportionately impacts the poor, working poor, and middle class, B.) discourages consumption and materialism, which is the very basis of our ecnonomy, and C.) will likely lead to significant decreases in government revenue therefore leading in significant decreases in services. Are all three of these general assumptions on my part reasonable, or am I off base?

Now, I can see how point A and point C make for a conservative wet dream, but point B would seem to run counter to anything the average conservative ideologue believes, not to mention a bit of a problem for corporate America. Obviously you can say the opposite of moderates and progressives. There is something about a "fair tax" scheme for everyone to dislike.

I'd love to here thoughts from other DUers on this. I think a "fair tax" would result in increases in poverty and suffering. Am I off base?

But that's not going to happen. Like it or not, the big box phenomenon created this side-effect. And the more they provide services, the less the rest of any of us can become entrepreneurs.

Just an observation, and there are MANY others not so cynical or crude.

but if the word 'fair' has any relevance and not abused, I'm for it.

you want a yacht - pay the fair tax.
you want food and shelter - it should be yours without contributing to the yacht owners.

Read this, from the National Retail Federation:

For Immediate Release
Contact: J. Craig Shearman (202) 626-8134
shearmanc@nrf.com

Retailers Say National Retail Sales Tax
Would Make Every Day Tax Day

WASHINGTON, D.C., April 14, 2005 - As the nation marks the annual April 15 filing deadline for federal income tax returns this week, the National Retail Federation warned that a proposed new National Retail Sales Tax would create a huge new daily tax burden for U.S. taxpayers.

"April 15 is tax day but the National Retail Sales Tax would make every day tax day," NRF Vice President and Tax Counsel Rachelle Bernstein said. "Consumers would be slammed with a 30 percent tax on every purchase from toilet paper to new cars - even new home purchases, health care and prescription drugs. The NRST is a horribly regressive tax that would hit the poor the hardest and would double tax senior citizens as they spend savings that were already taxed. We think one tax day a year is bad enough. Supporters try to call this the 'Fair Tax' but it's really the 'Unfair Tax.' "

"A national sales tax would devastate the nation's economy for years before economic gains - if any - would be seen," Bernstein said. "The psychological effect of such a huge tax on consumer spending would be profound. Consumers would simply stop spending on anything but the barest necessities for a prolonged period of time. This would have a ripple effect throughout the economy far beyond the retail industry."

The key NRST proposal before Congress is H.R. 25, the Fair Tax Act, sponsored by Representative John Linder, R-Ga. The Linder legislation would replace the current federal tax system with a 30 percent national sales tax in addition to existing state and local sales taxes. A study commissioned by NRF in 2000 found that a national sales tax would bring a three-year decline in the economy, a four-year decline in employment and an eight-year decline in consumer spending.

Bernstein addressed a number of issues surrounding the NRST proposal:

* While the proposal is referred to as a "retail" sales tax, it would go far beyond traditionally taxed retail merchandise. The legislation pending in Congress specifies "all new goods and services" including big-ticket items like new cars and new homes and traditionally untaxed items like health care and prescription drugs.
* While supporters claim a 23 percent sales tax rate, the number is calculated under the "inclusive" method rather than the "exclusive" method typically used to calculate sales tax. In other words, NRST supporters count a $30 tax on a $100 purchase as 23 percent of the total $130, rather than 30 percent of $100.
* The congressional Joint Taxation Committee has estimated that it would take a 57 percent tax at the cash register to replace all federal tax revenue rather than 30 percent. That calculation assumes that all new goods and services are taxed. If popular exemptions like home purchases and health care are maintained the rate would go higher.
* A national sales tax would be regressive because lower-income families spend most or all of their income while upper-income families can save a much larger percentage of their income and would not have to pay tax on savings and investments. Supporters say this issue is addressed because taxpayers would receive a rebate tied to the poverty level. In fact, the rebate would provide a tax cut for families with less than $18,000 in annual income. But families with income between $18,000 and $100,000 a year - who need to spend a large percentage of their income on necessities - would face a large tax increase.

NRF has urged Congress and the Bush Administration to simplify the existing income tax system rather than enacting a wholesale replacement with an NRST, value-added tax or other form of consumption tax, all of which would create a tax cut for the rich and a tax increase for low and middle-income taxpayers.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet and independent stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.4 million U.S. retail establishments, more than 23 million employees - about one in five American workers - and 2004 sales of $4.1 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.

http://www.nrf.com/content/default.asp?folder=press/release2005&file=NRST-taxday.htm

Everyone pays the same percentage of their income. It is UNfair because it hurts poor people harder than rich people. That is a simple fact. A progressive income tax, where you pay more taxes the more you make, is much more fair.

It is a tax on consumption, not on income, which the most unfair form of taxation you can have. Poor people spend a larger percentag of their income on stuff: food, cars, gasoline, etc. Sales taxes now are usually less than 10%. And a lot of the poorest do not pay income taxes as such. So upping the sales tax rate to 30% (which is usually the amount bandied about) would triple the cost.

buyers simply put off their yacht purchases until the yacht builders complained that they were going out of business. The tax got repealed. The boycott by the wealthy worked.

SC recently severely lowered property taxes and raised the sales tax (as a 'fair' tax).

As a result, our schools no longer get any tax money (school BOARD does, schools are cut out). The one tenth of 1 percent that used to go to rehabilitation programs has been cut completely...along with Head Start. While the rest of us are paying what seems like a modest sales tax...7.5% on state, an extra 1.5% for our county.

Figures though don't lie. In order to just come up to the last year's revenue before property taxes were cut, our sales tax will have to rise to between 15% and 17%. To keep up with growth, it will have to rise to a minimum of 23%. At that rate, even Wal-Mart will be priced out of the poor's budget.

Add another 30% for a federal sales tax and we'll all be living in cardboard boxes...if we can afford them.

Fair is I pay nothing. Everybody else pays my share. Oh, and I want a pension from the government. Or at least a contract. Otherwise I'll have to become a Television Evangelist, support stupid conservative candidates from my pulpit and drive a Ferrari.

Increase in poverty and suffering? For you!

"Fair Tax" the very definition of an oxymoron (or is that ox and moran?).

that is being misused.
Fair to whom?

10%, or whatever on a bag of carrots as well as a yacht.

Here's the straight dope on it:
http://www.factcheck.org/taxes/unspinning_the_fairtax.html

Why "Fair"? Orwellian language tricks; marketing, extreme subterfuge...

"The words of this wizard stand on their heads," he growled, gripping the handle of his axe. "In the language of Orthanc help means ruin, and saving means slaying, that is plain." - Gimli the Dwarf, The Two Towers: "The Voice of Saruman," p. 184.

in Orwellian fashion here. Sort of like "No Child Left Behind" and "Clean Skies" etc.

taxing fairly, in the common human sense (but yeh, not much of That around)

I'm still confused.
If I am able to buy carrots, the lowly pleeb I am, and pay, say 10% tax on that, somehow it becomes Unfair that things of much greater prestige and nothing to do with basic survival eating and stuff, should not be held to the same standard?

hahhahaa, I know it sounds totally stupid. that's what we were trained to be. those billionaires like work 2,548 hours a week and that's capitalism. they werk herd.

a tax on consumption. The poor and the middle class spend the majority of their incomes on typical cost of living items while those who have greater wealth have the majority of their income to invest, spend, save or whatever, at their discretion. So, by saving and investing the majority of their money, they can greatly reduce their tax burden while folks like you and I are being taxed on every purchase. Presently the wealthiest Americans pay a percentage of their income (just over 30%) in the form of income taxes. They'd pay significantly less than that under this "fair tax" scheme. Meanwhile, the average working stiff's tax burden would likely rise. And at the end of the day, the government would have less revenue and would therefore have to reduce services and cut budgets (of course the defense budget would be off limits).

But that isn't what is going by that name right now, and it certainly isn't what Huck is selling. It sounds like a nightmare. A complete bollocks-0-rama.

Anything that a right-wing hatemonger supports is against my beliefs.

He is?

Well I guess I should congratulate Hillary on her win.

I support a tax in which people have to pay a fair share for the resources they have. If someone is very poor their fair share would be minimal or even non-existent, if they legitimately can not afford to pay they should be exempted. The rich on the other hand have way more resources than anyone else, so it is perfectly fair to tax them at a much greater percentage of their income.

Of course my view of what a fair tax is is very different than what people like Mike Huckabee would tell you a fair tax is. In Huckabee's world a "fair tax" means getting rid of the IRS and moving to a national sales tax. Who spends a greater percentage of their income on consumer items? It is certainly the poor and middle class that would be paying a higher percentage of their income under this "fair tax", as the rich invest most of their money they don't spend a huge percentage of it on consumer goods.

I strongly oppose the "fair tax", but I would like to see a real fair tax implemented which is completely different than anything the Republicans would ever even consider proposing.

fair trade agreements
as others?
globalisation
human and equal rights.

lots of talk, no action.

Fair: Those as has, pays more. Tax the rich especially, but tax everyone on All sources of income.

A little history on the income tax:

During World War I the top income tax rate rose to 77%; following the war, the top rate was scaled down (to a low of 20%):
1918 - 77%
1921 - 50%
1924 - 40%
1926 - 20%

Anyone see a familiar pattern from 1921 to 1926? Tax cut, after tax cut, after tax cut.

1929 - beginning of the Great Depression (anyone wonder if another is around the corner?)

1932 - a slew of excise taxes were enacted that year (on lubricating oil, malt syrup, brewer's wort, tires, toilet articles, furs, jewelry, automobiles, trucks, radio and phonograph equipment, refrigerators, sporting goods, cameras, firearms, matches, candy, chewing gum, soft drinks, and electricity.) The goods were either from non-favored industries or were considered "consumption by choice" items.

During the Great Depression and World War II, the top income tax rate rose, reaching 91% during the war; this top rate remained in effect until 1964.

1964 - the top rate was decreased to 70%, and then to 50% in 1981.

1986 - the top rate was reduced to 28%.

During the 1990s the top rate rose again, standing at 39.6% by the end of the decade. (Um...the Clinton Boom years..."high" taxes didn't slow anything down, did they?)

2001 the top rate was cut to 35%.

I think we have some room here for a big increase in the highest tax rate. Of course, the rich (with the exception of wise men like Warren Buffett) would vehemently disagree.

"Fair" Tax, Consumption Tax, VAT, whatever you want to call it...it's just another regressive shell game.

but they don't want the taxes or any other policies that went with it. I think most people can agree the 50's was a prosperous time and it was because we invented new products and improved old ones and most everyone had a good job so they were able to buy those products. It had nothing to do with low taxes, I can assure you of that.

and sexism, "minorities" and women each "in their place"; i.e., their fantasy of a well-ordered, dull, hierarchical white suburbia at the peak of "America's Century", but Hell no! on anything that might negatively impact their pocketbooks.

I was just talking about economic policies. If you consider discrimination, many of them do want some of the policies that influenced the 50's like the ones you mentioned.

which is, as you say, a conservative wet dream.

From what I've heard, a sales tax of something on the order of 25% or higher would be levied on all goods and services rendered. That sounds monumentally regressive at face value, but under the current tax code, the cost of goods come with it the cost of compliance with the current tax code.

The big theme with the FairTax is that if the old income tax is abolished, then all the costs associated with complying with the old tax are also removed. The theory is a can of soup costs $1.00 now with about a quarter being there as merely the cost of compliance with the tax code, the hiring of tax lawyers, accountants, paperwork, etc. Abolish the income tax, and the theory says that the can would cost $.75 instead because all of that would be removed in a much simpler format, but when the FairTax is instituted, the cost would go back to the original $1.00 minus the large numbers of lawyers, accountants, paperwork, etc.

The argument is that the FairTax would be revenue neutral, meaning that the revenue generated after FairTax is implemented would roughly be the same as the revenue generated under the current tax proposal.

Personally, I favor abolishing the income tax as it currently stands and reimplementing a new income tax that is truly progressive. Under our current tax code, capital gains taxes are taxed lower than taxes on labor. It's up-side down.

...with the provision that my definition of "fair" translates as "one that makes those who benefited the most from the Bush tax cuts pay back their fair share...retroactively." :spank:

from taxes, too. They require the most protection of their financial assets and total assets, etc.

So no, I'm not voting for Huck.

into bankruptcy. While those living off capital gains will go merrily on, my father's fixed pension, but rising expenses, will eat him up. With medical costs rising, he'd have to reverse mortgage his middle class home, his major asset he hoped to leave to his grown children.