Forum Post: Fair Tax
Posted 12 years ago on Oct. 13, 2011, 4:26 p.m. EST by asdf46554
(26)
This content is user submitted and not an official statement
If we want to be fair, then why not a fair tax. Seems like an easy solution.
its a double think con scam. its not fair, its just a way for elites to dupe the republican sheeple into fighting against income tax. its exactly not what it claims and opposite to the claim- its patently unfair.
Go further with this.....How is it not fair. If everyone pays 10%, then it is fair.
nope, its not fair because its just a way to shift the tax burden to the poor and middle class and escape income taxes. a mere 10 percent (UN)fair tax wouldn't raise enough taxes, in fact models and math of (UN)fairtax show it would have to be about 60 or 70 percent to even begin to raise the same kind of money- which would cause black markets and the rich would just sit it out.
its not fair because it does not tax earnings, a rich man can get by spending as much as a poor man, so a sales tax pretty much obviously is not fair.
So you are saying that if we taxed everyone at 60-70 percent, we would bring in as much as we do now?
But even the highest tax rate is only 35 percent. Sounds like someones math is wrong.
NEXT
Top income tax is 35% , he is talking about raising capital gains and capital income (dividend) tax that's currently 15% since beginning of Bush era.
That's where the rich get richer. And raising 35% income tax or sales tax doesn't increase tax revenues much.
income taxes bring in more money with a lower percentile. sales taxes obvious are a different animal, bringing in much less money. sounds like you have not thought this through, and have not done your math. NEXT.
OK. 60 percent is always less than 20 percent.
60 percent of 100 dollars is 60 dollars. 20 percent of 1000 dollars is 200 dollars. not hard to figure that out. Its not just the percentile, its the percentile of what. how much does a sales tax raise versus income tax is about how much sales there are versus how much money gets made. turns out most money is not about sales. so the net result this is that you are comparing apples to oranges and getting confused over percentile numbers which you have detached from understanding what the percentiles OF relate TO.
If everyone pays 10%, no it is not fair. And it doesn't benefit the economy either. But 10% across the board for all is a flat tax which isn't the same thing exactly as the "Fair Tax."
ows from start has been democratic and all republicans do nothing but demonize the movement read the signs listen to the people and see tax rich get money out of politics end wars have never been backed by republicans tax cuts for middle class modernize roads and bridges invest in middle class not banking class by raising minimum wage thats the occupy wall street message
You need to keep in mind the reason we have income tax today is due to democrats back in 1913. And then they tricked us into the withholding scheme in 1943. Withholding sucks because previously Congress was having a hard time getting more taxes out of people. At the end of the year citizens would write their biggest check of the year to the government, and say to themselves where in the heck is my money going??? Now withholding eliminates that transparency and visibility. People now say o wow I got a check from the government, yay. Total wrong thinking.
http://occupywallst.org/forum/flat-tax-fair-tax-and-9-9-9-oh-my/
http://occupywallst.org/forum/why-a-flat-tax-costs-the-poor-more/
Not to mention that it could eliminate capital gains and dividends taxes, which would absolutely drain from the coffers like a Super Mosquito.
http://www.npr.org/2011/09/19/140599307/does-buffett-rule-add-up-for-obama-deficit-plan
Also - The NPR article is a bit misleading. 50% is still very regressive compared to the post-War era. (where it was 90%)
http://occupywallst.org/forum/the-flat-tax-is-unfair/#comment-70544
http://ntu.org/tax-basics/history-of-federal-individual-1.html
http://www.fhwa.dot.gov/publications/publicroads/96summer/p96su10.cfm
http://en.wikipedia.org/wiki/Moon_landing
http://www.time.com/time/magazine/article/0,9171,155487,00.html
So let's see...back when taxes were "high" on the rich we had a moon landing, the creation of the highway system and the microprocessor for three things. Therefore it did -not- kill investment.
Also - you'll see the most regressive tax area to be somewhere around the late Coolidge and the early Hoover era. (Even more regressive than we are right now by around 10%)
I think you know where I am going here.
Meet The Great Depression
http://www.english.illinois.edu/maps/depression/depression.htm
There is just no excuse. The 1% have no excuse at all.
Dammit I am tired of repeating this! I got chewed out by two people already! x.x
EDIT - Rico correctly pointed out the flaw in my assertion...
Back then we were king. And now we have bloodsucking multinationals pitting country against country against country. Another notch on the "Crimes Against America" Belt of the multinationals. And here some people call protectionism "barbaric" and such lawl...
+1 on most you said. But I disagree with that protectionism is good. Isnt that one or the protractors of great depression? It kills trade, it kills your market size, it leads to GDP drop and more unemployment. I'll read your links tonight. Thanks for posting them.
Glenn1894...you are RIGHT...protectionism is BAD. We can't put the Genie back in the bottle.
We DO need to make sure trade is fair. But if China can make some safe toys cheaper, then those toys should be made in China.
We should re-train workers so they can add more value, and we should make more of what we can make better/cheaper.
Right now free trade is killing JOBS. Right now the market size is US and THEY aren't buying crap. (At least...not as much as us anyway)
Free trade -DID- lead to massive unemployment. As for GDP...we are borrowing from China while giving them our consumer base.
Protractors of the Great Depression? Links please.
The Great Depression was preceded by the most regressive tax rates in the course of US History (Beginning in the late Coolidge Era), NOT counting the years when the colonies were first formed. (Correct me if I am wrong but uber-low taxation on the rich did not work out for them so well either now did it?) Our tax rates now are the third most regressive starting all the way from 1987 - which was the late Regan Era.
Low taxes on the rich = broke government = no investment = cutting of basic services that we all take for granted = income inequality = depressions = well you get where I am going with this. All the low taxes possible thanks to borrowing from Social Security.
Rico pointed out that it was thanks to globalization that companies can not only just "dump" any country that "demands to be treated good". I will add that it has also made the Double Irish and Dutch Sandwich possible for Google (tax scheme to save billions through Ireland and Bermuda) AND to add insult to injury - they sell all that shit back to us and take our money after taking our jobs.
I played with the Fairtax Calculator on the FairTax.org website. It's supposed to "compare the FairTax to your current tax burden." But it gives erroneous results that make the FairTax look advantageous when it really isn't. How can any of it be trusted?
Even if I put that aside, there's a dealbreaker in the plan for me. It offers a huge advantage to those with the highest incomes. That break means the burden has to be placed on lower income people, if the plan is really revenue neutral as its promoters claim.
The 23% surcharge rate will automatically raise the cost of everything that we buy. And it will raise the cost of everything that the US Government buys too. Wouldn't that automatically cause the budget amount to be inflated, and make the deficit bigger?
I'll study it some more but it already looks like a trojan horse to me.
Yes cost of goods will have to go up. Some FairTaxers think the cost of goods will go down as much as 22%. I don't believe that. But I do believe that 10 - 12% is reasonable. If you drop prices 10% across the board, then add the 23% inclusive tax, the cost increase now becomes around 17% inclusive compared to today.
I say 10% because of the embedded taxes in our goods. Corporations do not pay taxes, individuals pay taxes. Corps only increase the cost of their goods to cover their taxes that they pay to the government. By removing the corporate tax, income tax, payroll taxes, capital gain taxes, and no taxes for business to business transactions, the prices of goods will drop.
For example, take the payroll tax of 15.3%. Employees pay 7.65%, and the employer pays 7.65% for each employee. This covers Medicare and Social security. If you give that back to us, and to the corps. They will have 7.65% to lower their cost of goods. (SS and Medicare are covered in the FairTax 23%)
Some inexact math. Average Labor costs are around 25% today. so 25% * 7.65% = ~2% price drop right there. As the embedded taxes disappear from business transaction to transaction, I would not be surprised to see the price drop at least 10%. I haven't done any math on the 35% corp tax going to 0% because I'm sure I'd get it wrong, but I expect that to be a factor in the 10% price drop.
I can't comment on the budget inflation, etc... but I'll look into it some more.
Good point that retail prices SHOULD drop. Assuming a competitive marketplace, that's true.
To ensure this happens, I'd add an amendment to the Fair Tax that ensures competition and, if retail prices do not fall sufficiently, Gov't would be able to regulate prices. I'm not talking anything big...just strengthening anti-monopoly efforts.
That watchdog threat would ensure vanishing embedded taxes result in lower retail prices.
come on - you dont need to do the math - use your eyes
who is pushing mr. 999 ?
thinkaboutit - dont be a lemming
It seems to me that a truly fair tax would make everybody file a straight form (no deductions) and pay the same percentage of their income.
When big business starts paying taxes on its gross income the %99 percent will pay less. Of course we will hear that it will cause inflation.
In reality it will increase the cost of products. That cost will go to the consumer that buys it.
The days of subsidizing Business need to end
"Fair Tax" and "Flat Tax" are nothing but huge tax cuts to the rich and tax hikes to the middle class. With income disparity as high as it was since 1929, there is no reason to make it even higher. Plus why are people who hate taxes so willing to give themselves a tax hike? It's VERY simple common sense, if the top 20% pay 35% rate and pay something like 70% of the overall taxes to lower their rate is automatically raising your rate. Also I'm sick of the stupid argument of "The 1% pay 40% of all taxes" It's not true, they don't include payroll taxes, but that's because they make so much more money than everyone else. I would much prefer 1,000,000 at 90% tax rate than 50,000 at 0% tax rate. Who cares how much they pay in taxes, what matters is the after tax earnings. Is being a CEO really 400 times more valuable than teachers, soldiers, firemen, and even something like 100 times more valuable than scientists?
You miss the point of our outrage.
Many of the rich don't pay 35% tax...they pay almost NO tax (due to tax shelters they've bribed Gov't to give them).
Under the "Fair Tax" almost all the rich WILL pay their fair share.
If a flat tax was implemented most people would pay that dont, and that would be the lower end of the totem pole, not the top
The only fair tax is one that's paid by someone other than myself. That's the ows way.
Contradiction in terms. There is nothing fair about tax.
Oh ye of little knowledge and understanding. Read the FairTax, it's in Congress, HR25. Study the FairTax
ALLof the FairTax - fairtax.org. Don't just nitpick the snipets that you like or dislike. Check out the whole damn thing!FLAT TAXES ARE NOT FAIR
Flat taxes seem to be so fair. After all, if you earn twice as much, you should keep twice as much, shouldn't you? You should have twice as much to spend, afford a car that costs twice as much, afford two homes instead of one.
But turn the observation around and it becomes less clearly fair. If you earn half as much as I do, you should buy only half as many clothes, use only half the gas, travel only half the distance to work (but work more hours), brush your teeth only half as often (or use only half the toothpaste when you brush, and use your toothbrush twice as long), and most importantly eat only half as much or only one meal and a snack a day (and weigh half as much, and be half the height.)
There are, of course, many people who do do these things to survive, because they do earn less than half the average wage. But ask yourselves this: does your daily nutritional needs depend on your income level? When you look on the back of your vitamin supplement bottle, does it say that if you live below the poverty rate, you only need a quarter of a pill a day, or does it say you are superhuman and don't need nutrition and don't need to eat?
The 9-9-9 plan? Sounds like a typo: it's the 6-6-6 plan.
I half agree. The 9-9-9 plan is nothing compared to the FairTax bill sitting in Congress right now.
To be factual with math here, and please correct me if I am wrong....
I crunched the current income tax with turbotaxes taxcaster.
Assume single 23 year old making $29000 no kids and rents: First, let's do today's tax system...
$29k - standard deduction - exemption = taxable income $29k - $5.7k - $3.65k = $19.65k
$19.65k * 15% (low income bracket) - $400 credit = ~$2133 due in taxes
The math is not exact but taxcaster gives a final number of $2133
total payroll tax paid in most years is 7.65% (Medicare and SS) $29k * 7.65% = $2218.5
Total taxes paid to govt: $2133 + $2218.5 = $4351.5
Now let's look at FairTax assuming same above, plus no price changes (There will be lower prices estimated around 10%), plus only buy new goods with every dime, no savings. (Used goods aren't taxed): $29k 23% (Inclusive FairTax) - prebate for 1 = taxes paid to govt $29k 23% - $2505 = $4165 total taxes possible
That is $186.5 bucks in the pocket under FairTax. And she can save more by buying used goods. And this assumes prices don't change today, which they could due to no more corporate tax, payroll taxes for business.
I'll run the numbers under other scenarios the best I can if you would like, maybe there are others that aren't as advantageous for the FairTax.
I ran my on numbers using today's method of taxation and the FairTax method. I'm a single person making $47k. The FairTax would save me about $400. Not much but still less. I then ran some numbers for someone making $500k. Guess what? Their savings would approach $75k to100k. It's quite obvious who benefits more; the rich. Those who are making millions are bound to see extremely substantial reductions in what they pay in federal taxes. What I can't figure out is it looks like almost everyone as individuals will pay less and without corporate taxes, how can this be revenue neutral. When one group pays less that means another group has to pay more. In most tax schemes the rich typically pay more in dollars than the lower income families; however; the lower income families pay a much higher percentage. I pay 15% on $47k while multi-millionaires will pay less than 10%. There is no need to change our whole system of taxation. The use of tax brackets as is done today is fine; just eliminate all deductions including pre-tax deductions. We only need one tax; no separate income and social security tax. The only other thing remaining would be the standard exemption; which would similar to the FairTax poverty line. For example: a family making $40k would get a $15k exemption and then pay tax on the $25k. A family making $5million would get a $15k exemption and pay tax on the remaining $4,985,000. Unlike a flat tax there would be steps, how much of a percent and where to draw the steps are beyond me. It could go something like this. Above the standard exemption: the next $10k would be taxed at 5%, then the next $25k at 10%, the next $50k at 15%, and 20% for anything above that. A family making $25k – $15k exemption would pay 5% on $10k which is $500. That $500 would be the total taxes; which is less than what they currently pay for just social security. A family making $50k would pay the same $500 plus 10% of the next $25k for a total of $3000. A family making $100k would pay the $3000 plus 15% of the next $50k for a total of $10,500. All 3 of the mentioned groups would see their taxes go down. A family making $250k would pay $10,500 plus 20% of $150k for a total of $40,500; that still only works out to be an average of 16% tax. Ninety percent of family’s would see lower taxes. So who is going to pay more? The greedy rich making more than $250k. Someone making $5 million a year will essentially be at the 20% mark. At that income level they certainly have enough money to pay a higher percentage. Even though the top percentage would drop from 35% to 20%, the rich would oppose because closing all the loopholes, aka deductions, would require them to dish out their fair share.
mandm1200, are you implying that if people earn more they shouldn't be able to save us much? With the FairTax families below the poverty line will pay a 0% effective tax rate because of the prebate. See: http://www.fairtax.org/PDF/PrebateExplained2011.pdf The more you spend from there the more you pay in taxes, yes I agree a rich person will never pay all of their income like we could, so effectively they will never hit 23%. But they will definitely be paying more money to the government than us. No tax system is perfect. Taxes suck. Our goals should be lets make what we pay in taxes transparent so we can see what the government is costing! Then let's force them lower drop that rate and cut spending by voting for the representative who have that philosophy.
First, I agree that a simpler flat income tax, or simpler income tax is better than we have today. But I still like the FairTax better.
I don't like taxation at all nor the IRS. The FairTax eliminates the IRS while still being fair to the poor (They pay no taxes). Eliminating $430 billion in compliance cost, auditing, filing taxes, etc...
The FairTax will also make it transparent to how much our government is really taxing us, which today it doesn't. We then can take that and hold Congress' feet to the fire to cut spending and reduce taxation further.
No body should be taxed as much as we are today. You can't argue that the more money you make, the more you will consume, and the more you will pay in taxes; a consumption tax provides this while being efficient and eliminating a lot of the compliance cost.
Keep in mind today, with an income tax, we are taxed on our savings! When I realized this and think about it, it pisses me off. Most Americans pay 23 cents or more of their earned dollar to the government without choice. With this plan we at least have a choice on how we are taxed by what we purchase, new goods or services. Buy a used good, tax was already paid on that item, no double taxation.
YES! Fair Tax is an excellent and indeed fair solution
This needs to be examined more closely. Different scenarios yield different results. And there's more to the picture than the net gain or loss to individuals when the new system is compared to the old. What about the amount of revenue that will be collected?
There has been $20 million + in research on the current FairTax plan. HR 23 and S 13 in Congress. It is revenue neutral, meaning it will generate a little over $2 Trillion in tax money for our federal government. As the GDP increases due to the economic boom provided by freeing up our tax burden, consumption will rise and more taxes will be generated.
Not to mention anyone who consumes in our country on new goods and services will pay tax. Illegals, tourists, Americans, etc... Beauty is only Citizens can get the progressive prebate.
Wow, a dude with actual numbers showing the advantages of the fair tax? How can you argue with that? Thanks for the info.
Here are some of the benefits I see under the fair tax:
1) Everyone who registers gets the prebate. Even the people who are unemployed will get a monthly check from the government.
2) Illegal aliens in this country currently not paying taxes will be and I do not see very many of them registering for prebates.
3) Illegal businesses currently not paying taxes will be. Their profits will be taxed when they go to spend the money they made.
4) US exports will no longer be double taxed so they will be cheaper when purchased at the imported country. Under our current tax system, companies get taxed when the item is built no matter if it is sold here or exported. Then it gets taxed by the receiving country.
5) No more IRS is needed and that $450billion currently being spent could be used for something more productive to the country.
6) Congress choosing who wins and loses by manipulating the current tax system will be ended. I think it will bring a big reduction in lobbying on the part of business who try to manipulate congress to write tax laws in their favor.
There are probably more, but that is what I see for now.
Finally, a concrete idea associated with the Occupy movement. The best part of the Fair Tax is the elimination of paperwork and keeping records so that we can be taxed. Ever hear of a rich person living on a poverty budget? No way! That is made up. People with money spend money -- and therefore, they would pay tax. What about the $430 billion spent by the IRS on enforcement? That part of the budget could go for something positive. Part of fairness is about getting my time back. Talk about who pays a few more dollars or a few less. It's irrelevant compared to the amount of time we spend keeping records. If many small business owners, who employe between 2 and 20 people each (average of 10) quit because they are tired or the paper work, what does that do to the unemployment rate? Why burden those of us providing work opportunities with so much paper work that we give up our weekends just to provide jobs? The Fair Tax would give me back my weekends -- and I would keep my business going and continue to provide jobs.
Fundamental socioeconomic reforms need to take place before we move on to the next most important issue of reforming taxes, which is why what we most immediately need is a comprehensive strategy that implements all our demands at the same time, and although I'm all in favor of taking down today's ineffective and inefficient Top 10% Management System of Business & Government, there's only one way to do it – by fighting bankers as bankers ourselves. Consequently, I have posted a 1-page Summary of the Strategic Legal Policies, Organizational Operating Structures, and Tactical Investment Procedures necessary to do this at:
http://getsatisfaction.com/americanselect/topics/on_strategic_legal_policy_organizational_operational_structures_tactical_investment_procedures
Join
http://finance.groups.yahoo.com/group/StrategicInternationalSystems/
if you want to be 1 of 100,000 “support clicks” needed to support a Presidential Candidate – such as anyone you'd like to draft – at AmericansElect.org in support of the above bank-focused platform.
Remember that any candidate, regardless of party, is a straw man, a puppet; it's the STRATEGY that the people organize themselves behind, in military internet formation, that's important. Read and think critically about the 1st link and join the 2nd link and you'll see exactly what I mean.
Fairtax is a middle weighted tax. Its supporters don't understand that. The thing is the trickle up effects of tax cuts are huge.
To its credit, fairtax is a tax cut for folks on the bottom 20% of the income scale. That is why it has a lot of support in rural areas where cost of living is low.
The problem is fairtax is a big tax cut for a lot of folks on the upper end of wealth/income. If fair tax is tried, watch the rich get MUCH richer-and the middle class will loose more ground.
You could pair fairtax with a bigger exemption and a tax on concentrations of assets(say a 2% tax on assets over $5 Million), and you'd wind up with a better system-and reduce the marginal tax rate from 28% to 17%.
Yes the rich will get richer. Everyone will get richer, we will have more money in our pockets because our income (earned money) isn't taxed. Savings aren't taxed, etc... A few years down the road the poor have a chance to pull themselves above the poverty line if they choose to do so. How would they do this?
Save their money (no taxes paid). Get a prebate to offset the cost of living. Buy more used goods than new (no taxes on used goods). Before you know it the poor are better off than they are today if they choose to be. Today they have no chance.
The main problem I see with a Fair Tax is that businesses and corporations have to collect it. Personally I don't trust a whole lot of them and if their business is poor they will be tempted to dip into that money. Moreover, the government will never trust the collection of such a tax to a third party.
asdf is correct. Texas and Florida have the biggest economies around, and they both have sales taxes only, no income tax. They are collecting their money fine.
Also, the amount of filers that the government has to watch is 90% less than today. Because only business that do retail transactions will have to be watched and audited under the FairTax. Do you think a business who is successful is going to risk their neck by getting caught under-cutting the government? There will be huge penalties associated with avoidance like there are today.
Today small business is about 8% of our tax revenue. If every small business decides to evade the retail sales tax, we will lose about $150 billion dollars in tax revenue. Today we are losing way more than that in compliance alone.
Also all collectors of the sales tax will be paid points to collect. There will be incentive to collect it.
Texas and Florida have basketcase economies in my view. Oh yeah, there may be plenty of jobs, but the pay scale is atrocious both for blue and white collar workers. Both are slave wage paradises. I know Florida is a "right to work" state and I believe Texas may be one as well. That basically translates into the poor and working classes being there to support the wealthy.
Several states currently have sales taxes in place and the state government gets the money without issue. I'm not sure this is valid.
Also, why couldn't it be a fair tax based off income. Everyone's income taxed at the same rate would be fair and then you take the third party out.
You are getting into a flat tax idea now.... not a fair tax and the flat tax is regressive without some exemptions. Plus it keeps the IRS alive, keeps compliance costs higher as well.
The fair tax includes a prebate that is paid monthly to everyone registered. That will cover the necessities of life this makes it progressive. Without the prebate the fair tax is regressive.