And you thought the IRS is bad news?

[Firethorn]

Now, on to the "fair" tax...   So the tax doesn't apply to mortgage payments?

Interest payments period.  If you carry a balance on a credit card and have to pay interest, it won't be taxed.  neither will that car loan.

What about FICA, it's currently 15.4%, I think.  Does that go away?

It's gone.

Next what are the states going to do?  Will they just keep their own income tax system that's mostly base on IRS stuff, or just increase their own sales tax by 10 percent, or so?

Up to the individual states.  The simplist that comes to mind is that they simply copy the forms from 20XX year.  Yes, they could simply adjust, some states don't have an income tax even now.

The thirty percent figure seems high to me.  Regardless, if it gets enacted at 30% and the states tack on their sales tax, say 8%, and add another 10% for their own "fair tax" system, we are now up to a 48% sales tax...  

Welcome to government on a diet 101 .  If it comes out in one noticible chunck everytime you buy stuff, I can see people putting government on a diet right quick.

My dad expressed concerns about a black market.  But honestly, how much could they get away with, in a national system?  The only way to avoid it would be to register as a business, then attempt to not collect the tax, which will show up the lion's share of the time when you get audited.  Same with trying to be a business and deduct personal expenses/items.  Heck, that happens now.

[LAK]

[Firethorn]"Social Security&medicare adds up to 15% of most peoples income, up until they hit the wage cap on it.  Most people also pay income tax, upping the percentage even more.
Then add in the savings businesses experience from not having to spend so much on figuring out taxes, it adds up.  Is it guaranteed?  Yep, pretty much is, though I'd imagine it'd take some campaigning to get the businesses to pay their workers the hidden match.  As for income tax, well, it's already coming out of what they agreed to pay you."

..... The average corporation probably spends far more time on regulatory and other BS than payroll taxes. Having worked for a number of big corporations, including two at present, I can say with relative certainty that were they to save a given number of man hours this way - they would not be lowering any prices to our clients, and no one that actually works for the corporation on hourly pay would be getting a raise any time soon.

[Firethorn]"I always figured they'd stick it into the sticker price.  I spent time in europe, it's how they figure the VAT taxes there."

..... Yep; I was there too when VAT was introduced in the UK. It was peddled as something "beneficial" to everyone of course. The net result there; is that taxes overall are very high indeed, goods (and services) are very expensive, gov still keeps getting bigger, while the poor keep getting poorer - and the middle are falling down to join them. Etc.

"Firethorn]"The equation is very simple:
Cost to consumer = Corporate expenses in producing product/service + profit.  Corporate income tax is a expense, it gets added into the markup with all the other expenses.  The idea of taxing corporations is a scam to hide from the people, the VOTERS, just how much they're paying in taxes."

.... Of course it is an overhead. But the difference is that the gov only collects information from the corporations - not it's citizens. "Fair Tax" is a scam to allow gov to monitor individually how much every private citizen spends and on what they spend it.

[Firethorn]"Like I said, with the INCOME TAX, insurance premiums ARE CURRENTLY TAXED.  The only one getting a pass is possibly medical insurance, and I feel that that exemption is part of the reason for the mess our medical benefits are currently in, because people don't get the insurance best suited for them, they get the plan best suited for the company."

.... Insurance companies are some of the biggest scams going these days, in various forms. To suugest that insurance rates across the board are going to come down with this program is laughable. Laughing hardest are problem the CEO, boards and major shareholders. Yes, I'll wager they would find this idea extremely funny.

[Firethorn]"And this is the wrong board to try to find sympathy for 'poor people'.  In addition, as I've already stated:  The 'poor' end up being subsidized, making a profit off of fairtax(under poverty level income), neutral(poverty level), or only paying a small percentage(slightly above poverty level).
It's NOT MY JOB to subsidize people who make stupid choices.  I've seen it way too often."

.... I am a conservative, and likely far more so than most on this board and many others. I find myself constantly having to remind some people what my views are on welfare and subsidizing people for bad choices. That includes foreign nations.

But there is a pattern of economic oppression in this country that comes in many forms. And it is not so much the truely poor that are affected most, rather those just below the bottom of the middle class ladder trying to climb up, and those hanging on the bottom trying not to fall off.

Your "gov on a diet" is not about to lose any weight until the socialistic programs are all axed - foreign and domestic. And charity returned to the realm it belongs; private institutions and individuals.

[Firethorn]"Pretty much everything affects end interest rates.  My credit score affects the interest rates I can get.  Whether it raises or lowers them, in the end I don't feel that it's a big deal.  The feds can tune interest rates by tweaking the federal reserve rate anyways."

.... You may not care; but many first time home or business owners might.

[Firethorn]"Umm...  You do realize that fairtax is in REPLACEMENT of the income tax, not IN ADDITION TO like in Europe?  That income tax in Europe is frequently over 50% of income?  A 23/30% sales tax w/no income tax doesn't even come close."

Umm, yes. You must factor in other taxes - state income taxes and local taxes. Property taxes. And in the plethora of other forms of fees, licensing, etc. Insurance is a form of taxation - in it's mandatory form of auto insurance. Taxes come in a great many forms; you must take all these in aggregate before you can pretend that a 30% sales tax does not come close to what is looted in europa.

[Firethorn]"Would a government run tollroad even be taxed?"

.... "Government run"? You mean privately run - for profit. And they will most certainly be taxed; the corporations that have landed these cozy contracts are surely not going to be "tax exempt" are they?

[Firethorn]"They have more income to pay for it.  If a person is paying as they go, they're likely not itemizing, which translates to them already paying with post income tax money."

.... More? I should think not. The average hourly paid employee with a wife and even one child of either of the two corporations I work for can not afford medical insurance. If a trip to the dentist is called for, or the ER room, the insurance company they use is most likely called Cash Incorporated. I know people in the 60-ish age group who are struggling to pay enormous medical insurance premiums in addition to everything else. They are being strangled even when they hit retirement age, because they can not earn any more than a modest amount of money even if they keep working.

[Firethorn]"Hmm...  Let's look at my paystub.
I pay $435/month for rent.  That'd be $130.50 in taxes, at 30%
The bite the feds took from last month's paycheck:  $586.80
I still have $456.30 of sales tax to go before I've reached the amount of tax the feds took from me last month, or $1521 of additional spending.
I'd have to spend $1,956 in a month to equal the federal tax bite I pay now.

... Your rent is about rock bottom where I live. You might get such a low rent in many big cities at a run down apartment complex in a crack neighborhood - with regular vehicle and home burglary thrown in "for free". You might even get your door kicked in once or twice a year as a bonus.  

The average person or couple here will need close to double or three times that for a decent place here. Add things like an electric bill, perhaps water (this is often included), and things are not so rosey.

[Firethorn]"But, there's MORE!  Remember, fairtax refunds everybody sales tax up to the federal poverty level.
2006 federal poverty level for a single household is $9,800
So I'd get a check(or more likely an electronic deposit) for $187.83 monthly.  Welp, there went the 'tax' on my rent in one sense.  That's enough to cover another $626 worth of spending."

.... Right; at the expense of having every single purchase recorded. Every penny spent.

And that $187 wouldn't cover one trip to the average dentist. You have a very simplistic and rosey perception of what life is like for many people other than your own.

[Firethorn]"It might take a bit longer than in more liquid markets, I might have to move or have a talk with him, but it can be done."

... It is becoming clear that you seem to be of the impression that the living and economic environment is nationwide - as it appears before you for a radius of ten miles.

Most people in most big cities live in corporate owned properties. Walking into a leasing office post-"Fair Tax" and asking for a rent reduction is likely to be met with the same laughter as that echoing from the board rooms of insurance corporations earlier.

[Firethorn]"You're the one that spouted an 80% figure needed to break even with government spending.  The only way I can see people standing for that sort of a tax load is if it's hidden all over the place (a nickel here, a dime there, etc...).  The whole tax everything angle.  Thing is, that's inefficient, which is a major part of my objection to the current system."

... beggin your pardon, but I have not said anything about an "80% figure needed to break even with government spending". Thought that is probably close to what would be required to pay the national debt.

And as it happens, the nickel and diming you mention is already here as I stated earlier.

[Firethorn]"Many people, me included.  For one thing, I've researched fairtax closely, but it can be hard to prove a negative.  It's a damfool idea that looks like it was placed in the article as a scare tactic.  The writer of the piece evidently hates the idea of the fairtax, and wants to scare as many people as she can into fearing it as she can.

Please provide a different source showing that this would occur than this fear-mongering article."

... You may have researched this yourself, but how many Congressmen will read and research a FINAL Bill in presentation before signing?

And while you have researched this idea within a specific draft proposal, you clearly have very little idea as to how even in it's proposed present form it will affect a great number of people in circumstances different from your own. A great many of them not actually poor (yet).

[Firethorn]"They assumed that SPENDING would remain the same, while the price of goods/services drops by 22%.  Having seen the hidden expenses for employing people and selling stuff, I agree with them.

.... Assuming that spending would remain the same is a rash assumption. It might rise to the same level after a period of adjustment, but I doubt it, as the overall impact togther with other forces I have mentioned would throw a great number of people against the ropes.

[Firethorn]"Fairtax has some provisions to prevent that.  I'd suggest visiting www.fairtax.org to find out how they'd do it.  Hint:  We wouldn't fire ALL the auditors."

... Perhaps it does in it's current form, but one has to have a certain level of political naivity to believe it will remain so when the signatures hit the paper in Congress.

[Firethorn]"The best thing you've said yet, though I'm not sure about the plantation idea.  I view it as a simple fact that by doing this congress will deny themselves on of their favorite tools for social engineering.  Want to encourage something?  Give a deduction/credit for it!  The end result is a morass of loopholes that end up costing more money through inefficiency."

... But as long as gov departments EXIST dispensing foreign aid, foreign grants, domestic social programs, etc the money will be redirected so - regardless of whether it be "efficiently" or "inefficiently".

This or any other form of taxation is not going to change that. That can only result from the direct action of the Executive and Legislature. Ain't gonna happen.

So? Those programs and bureaucracies along with other "federal agencies" will continue to grow, another front will open in the Mid East .... and hey presto; "We MUST raise the sales tax!! "We just HAVE to". You know the rest.

NOTE here:[LAK said]"To free the very corporations involved in the plantation agenda of taxation and throw the entire burden on the private citizens of this country is a crime on top of the ones already piled up thus far in this insanity. I would encourage evryone to oppose this monster accordingly and KILL IT dead while we can."

[Firethorn replies]"Here we have a telling remark, though there were similar ones earlier.  Why do you hate corporations?  I happen to own bits and pieces of quite a few of them.  A corporation isn't a person, it's a thing.  It's purpose is to make money by providing goods and services.  Having it attempt to do that, as long as it stays within the rules set for a corporation, is not a bad thing.  Meanwhile we set a few 'play fair' rules, and make up the taxes when the investors go and buy stuff with their dividends."

... Here we have an odd extrapolation, and a seemingly popular notion - or suggestion in response to some expounded and unpleasant truths.

Of course corporations, while not "people" or actual "persons"as entities, are owned and controlled by people. Of course their purpose is to generate profits, and this is a good thing. There is nothing wrong with making alot of money. However, our system of the three Federal branches, and a "Navy" (which can now be said to include an Air Force as appropriate to defend our borders) was to be supported by corporate taxation and tariffs - and the PERSONAL income and spending of individual citizens to remain private. That is why we have a 4th Amendment.

Now is proposed a reversal, where the citizenry will be subject to the complete exposure and recording of all spending and purchases. Who needs a 4th Amendment when everything that one purchases, every service solicited, every dime spent, is recorded at the time of transaction?  

[Firethorn]"Who ever said that it'd be the individuals having to keep track of that stuff?  You pay the tax when you buy the item.  Do you have to keep track of your purchases for state sales tax?  It's the retail corporations who'll have to collect and keep track of the monies.  They're already set up to keep track of those records, so it's not that big of a deal for them.   They don't charge you the tax?  It's on their head."

.... I see. And how will the gov ensure that only those whose certified income level is tax exempt and qualifies actually get's the saving at the cash register? How will the gov ensure that someone who qualifies as tax exempt does not go to a store and buy goods for someone who is not?

The individual of course will not. The gov will. And you will have to produce and swipe/scan some means of certified INDIVIDUAL identification with every purchase to do so.

Hey presto! A big data base.

You need to go back and "research" this some more.

-------------------------------------------------------------------

http://ussliberty.org
http://ssunitedstates.org

[Firethorn]

..... The average corporation probably spends far more time on regulatory and other BS than payroll taxes. Having worked for a number of big corporations, including two at present, I can say with relative certainty that were they to save a given number of man hours this way - they would not be lowering any prices to our clients, and no one that actually works for the corporation on hourly pay would be getting a raise any time soon.

Like I said, it'd take a little campaigning, a little competition.The elimination of income/FICA taxes would be the biggest initial increase in people's take home pay.  Frankly, given the USA's average wage advantage over the rest of the world I'm supprised our wages aren't dropping on average.

..... Yep; I was there too when VAT was introduced in the UK. It was peddled as something "beneficial" to everyone of course. The net result there; is that taxes overall are very high indeed, goods (and services) are very expensive, gov still keeps getting bigger, while the poor keep getting poorer - and the middle are falling down to join them. Etc.

But they didn't get rid of the income tax at the same time, and it's a paperwork mess.  Corporate to Corporate sales are taxed.  Fairtax is NOT the VAT.  I simply was giving an example where the tax is already included in the price of an item.  Concession stands would be another example.  

.... Of course it is an overhead. But the difference is that the gov only collects information from the corporations - not it's citizens. "Fair Tax" is a scam to allow gov to monitor individually how much every private citizen spends and on what they spend it.

Say WHAT?  Sheesh...  This is a Sales Tax.  Collected by the business, who then forwards it on to the government.   Do the states get detailed spending reports on individuals based on their sales taxes?

.... Insurance companies are some of the biggest scams going these days, in various forms. To suugest that insurance rates across the board are going to come down with this program is laughable. Laughing hardest are problem the CEO, boards and major shareholders. Yes, I'll wager they would find this idea extremely funny.

I happen to agree with you, at least for health care.  Heck, I usually call 'em 'Health care programs' rather than 'Health care insurance'.  Insurance is something you take for unexpected loss, not something you use every year.  Then again, I get my insurance through a Coop.

But I believe that having insurance is a part of being fiscally responsable.  You can't guarentee that you won't get cancer, need a heart transplant, whatever.  But you should be able to cover the first few thousand dollars of healthcare a year.  You know, the routine stuff.  Figure out your median healthcare expense, multiply by 1.2 or so, and there you go.

.... I am a conservative, and likely far more so than most on this board and many others. I find myself constantly having to remind some people what my views are on welfare and subsidizing people for bad choices. That includes foreign nations.

You are?

But there is a pattern of economic oppression in this country that comes in many forms. And it is not so much the truely poor that are affected most, rather those just below the bottom of the middle class ladder trying to climb up, and those hanging on the bottom trying not to fall off.

And there's another big barrier at the upper end of 'middle class'.  A zone where taxes become substantially higher, yet the person doesn't yet have enough to be able to massage their income to avoid much of the tax burden.  Still, how does the fairtax program take another step towards forcing/keeping the non-rich down?

Your "gov on a diet" is not about to lose any weight until the socialistic programs are all axed - foreign and domestic. And charity returned to the realm it belongs; private institutions and individuals.

Note what I've said, please.  I believe that by making the sales tax show up in people's faces, every time they purchase something, we'd be far more likely to get the pressure needed to force the politicians to stop spending our money.

Still, it's a seperate issue from fairtax.

.... You may not care; but many first time home or business owners might.

Like I said, the feds tune the interest rate through other manipulations enough that it probably won't change much.

[Firethorn]"Umm...  You do realize that fairtax is in REPLACEMENT of the income tax, not IN ADDITION TO like in Europe?  That income tax in Europe is frequently over 50% of income?  A 23/30% sales tax w/no income tax doesn't even come close."

Umm, yes. You must factor in other taxes - state income taxes and local taxes. Property taxes. And in the plethora of other forms of fees, licensing, etc. Insurance is a form of taxation - in it's mandatory form of auto insurance. Taxes come in a great many forms; you must take all these in aggregate before you can pretend that a 30% sales tax does not come close to what is looted in europa.

First, fairtax is intended to be revenue neutral.  We're replacing income taxes with a sales tax, intended to bring in an equal amount of money, thus our average tax burden before and after fairtax would be the same.
Second,Taxes in europe, which can be over 80% of a person's income, they charge both much higher rates than in most places in the USA, and on more things.  They're more 'all of the above', having income tax, VAT, property taxes, TV tax in England, etc...

.... "Government run"? You mean privately run - for profit. And they will most certainly be taxed; the corporations that have landed these cozy contracts are surely not going to be "tax exempt" are they?

Then big deal.  Factor the tax into the toll like they do for concession stands.

.... More? I should think not. The average hourly paid employee with a wife and even one child of either of the two corporations I work for can not afford medical insurance. If a trip to the dentist is called for, or the ER room, the insurance company they use is most likely called Cash Incorporated. I know people in the 60-ish age group who are struggling to pay enormous medical insurance premiums in addition to everything else. They are being strangled even when they hit retirement age, because they can not earn any more than a modest amount of money even if they keep working.

Seperate issue.  If we have to subsidize struggling families, I'd prefer that we be honest about how we do it, and do it ala WICA.  Oh, and don't forget that said familiy will be getting a rebate payment each month, and not be charged income tax or FICA.  That's where the extra income comes from.

As for the elderly having issues, that's a problem usually caused by them not saving properly.  A rebalancing of Social Security benefits would be more helpful.

Medical benefits are the only spot where I don't entirely agree with the fairtax organizer's decision to make/keep it taxable.

... Your rent is about rock bottom where I live. You might get such a low rent in many big cities at a run down apartment complex in a crack neighborhood - with regular vehicle and home burglary thrown in "for free". You might even get your door kicked in once or twice a year as a bonus.

I live in a cheap region.  North Dakota tends to be like that.  On the other hand, I don't make that much money either.

The average person or couple here will need close to double or three times that for a decent place here. Add things like an electric bill, perhaps water (this is often included), and things are not so rosey.

But then, I bet they're making more than $24k/year.

.... Right; at the expense of having every single purchase recorded. Every penny spent.

They aren't tracking it.  All I need to get my refund check is a valid SS#.  This meme keeps showing up, and it just isn't true.  Tell me, where did you get the idea that every purchase will be recorded?  Only the businesses will need to keep track of their purchases, in order to justify not paying the sales tax on them.

And that $187 wouldn't cover one trip to the average dentist. You have a very simplistic and rosey perception of what life is like for many people other than your own.

Do you visit the dentist every month?  WTF does going to the dentist have to do with the poverty level monthy repayment?  

... It is becoming clear that you seem to be of the impression that the living and economic environment is nationwide - as it appears before you for a radius of ten miles.

As it also becomes clear to me that you've taken your entire view of the idea from it's detractors.  I've read the site, and they list the reasons for how things will go down, and they make sense for me.

Most people in most big cities live in corporate owned properties. Walking into a leasing office post-"Fair Tax" and asking for a rent reduction is likely to be met with the same laughter as that echoing from the board rooms of insurance corporations earlier.

Then you move out and they stop laughing because empty apartments produce no money.

... beggin your pardon, but I have not said anything about an "80% figure needed to break even with government spending". Thought that is probably close to what would be required to pay the national debt.

Right here, your first post:

" The 30 percent is exclusive of the state income, state sales tax and property taxes you now pay. It would be in addition to those taxes. The federal sales tax would be collected by the states with the feds "generously" giving them a ½ of 1 per cent payment for the collection service. Since the states income tax systems were designed to parallel the federal income tax system, the Fair Tax, if implemented, would virtually force states to go to an all-sales-tax system paralleling the federal sales tax system which would raise the effective sales tax rate to anywhere between 50 percent and 80 percent depending on where you live and whose numbers you use.

And as it happens, the nickel and diming you mention is already here as I stated earlier.

And while you have researched this idea within a specific draft proposal, you clearly have very little idea as to how even in it's proposed present form it will affect a great number of people in circumstances different from your own. A great many of them not actually poor (yet).

Ok, please propose scenarios where people will be significantly worse off under fairtax than they are now.

.... Assuming that spending would remain the same is a rash assumption. It might rise to the same level after a period of adjustment, but I doubt it, as the overall impact togther with other forces I have mentioned would throw a great number of people against the ropes.

Throwing people against the ropes?  Who?  Those who make more than poverty level income, who have managed to mostly shield themselves from income/capital gains taxes?

... But as long as gov departments EXIST dispensing foreign aid, foreign grants, domestic social programs, etc the money will be redirected so - regardless of whether it be "efficiently" or "inefficiently".

As I've stated before, I'd like to get rid of those departments as well, but they're ultimately a seperate issue.  If we got rid of them, we'd be able to lower the sales tax just as readily as we could lower the income tax.  Assuming we could prevent the politicians from just spending on something else, of course.

This or any other form of taxation is not going to change that. That can only result from the direct action of the Executive and Legislature. Ain't gonna happen.

So? Those programs and bureaucracies along with other "federal agencies" will continue to grow, another front will open in the Mid East .... and hey presto; "We MUST raise the sales tax!! "We just HAVE to". You know the rest.

No different from the income tax, though the mechanical nature of the fairtax helps make sure that congress has a more difficult time turning around and telling people 'But it'll only affect the rich...'.

Now is proposed a reversal, where the citizenry will be subject to the complete exposure and recording of all spending and purchases. Who needs a 4th Amendment when everything that one purchases, every service solicited, every dime spent, is recorded at the time of transaction?

And they'd get this information how?  As seperate from simply subpoening the already existing sales records?  It's not like the store has to identify that the $1.30 of tax came from 'Joe Brown, SSN# 555-55-5555'

All they'd get from the corporate tax return is 'gross sales of X', 'governent's share: 23% of it'.

.... I see. And how will the gov ensure that only those whose certified income level is tax exempt and qualifies actually get's the saving at the cash register? How will the gov ensure that someone who qualifies as tax exempt does not go to a store and buy goods for someone who is not?

Ahh...  You truly haven't read and understood fairtax.

NOBODY IS EXEMPT.  Everybody who makes a personal purchase, from Bill Gates to Sally Trailer Trash is taxed.  Where the tax becomes progressive is that EVERYBODY gets the refund check, as long as they're a US Citizen, or have the valid documentation for being a working resident.  Yes, that means that Bill gets the same $187/month as Sally.  The difference is that $187 isn't even pocket change to Bill, but it's a fair chunk of money for Sally.  Now multiply by 4 for a family of four.  Now we're getting into decent amounts of money, aren't we?

The individual of course will not. The gov will. And you will have to produce and swipe/scan some means of certified INDIVIDUAL identification with every purchase to do so.

Hey presto! A big data base.

Totally wrong.  The collection of the sales tax, as I've stated before, works identically to how most states do it.

You need to go back and "research" this some more.

Same back at you.

edit:  Oh yeah, With the elimination of welfare through tax return, I'd anticipate that one of the first things they'd end up doing is increase the poverty line a bit.

[Otherguy Overby]

Firethorn:

Ok, please propose scenarios where people will be significantly worse off under fairtax than they are now.

How about ritirees on a fixed income.  Under our current situation they pay little or no tax.  Under "fair tax" their expenses immediately jump at least 30%.  Same goes for the poor.  Sure, they'll get a refund check, but it will be nowhere near making up for the new tax burden.

About the real estate market:  I'm sure the "fair tax" will affect it negatively.  As a small time real estate investor, I'd see my tax burden going up substantially with "fair tax."  Also, if I developed the property, the improvements would have an immediate tax burden which I would try to pass on to a buyer.   The big problem with this is I'd then have to compete in price with already developed property.

I'm beginning to think that "fair tax" is an attempt to get rid of the mortgage interest deductions, property tax deductions and cash based off books small business transactions.  I've lived in So. California for years and our government really wants more taxes from small business.  The small business owner is caught between tax expenses and regulatory expenses and often has to do off book transactions to manage.  If government gets into this through "fair tax" they'll create a bigger incentive for an expanding black market.  

I really think this is just another pig with lipstick poorly applied.

[Firethorn]

How about ritirees on a fixed income.  Under our current situation they pay little or no tax.  Under "fair tax" their expenses immediately jump at least 30%.

Good point, though not entirely true.  If they're living on a low-level fixed income, the refund should make up much of the difference, with drops in the price of consumer goods making up much of the difference.

Same goes for the poor.  Sure, they'll get a refund check, but it will be nowhere near making up for the new tax burden.

First, the poor tend to be that no matter what they make.  Second, What increased tax burden?  They're getting a check refunding the tax on poverty level income/spending, plus are no longer being hit for FICA.

About the real estate market:  I'm sure the "fair tax" will affect it negatively.  As a small time real estate investor, I'd see my tax burden going up substantially with "fair tax."  Also, if I developed the property, the improvements would have an immediate tax burden which I would try to pass on to a buyer.   The big problem with this is I'd then have to compete in price with already developed property.

You have a choice.  Do it as an individual, and pay the 30% tax on your supplies, or do it as a business and simply charge the 30% tax when you sell.  On the other hand you have no income tax or property gains to worry about.

I'm beginning to think that "fair tax" is an attempt to get rid of the mortgage interest deductions, property tax deductions and cash based off books small business transactions.  I've lived in So. California for years and our government really wants more taxes from small business.  The small business owner is caught between tax expenses and regulatory expenses and often has to do off book transactions to manage.  If government gets into this through "fair tax" they'll create a bigger incentive for an expanding black market.  

I really think this is just another pig with lipstick poorly applied.

Hmm....  

What would you say to a flat income tax?  23% with no deductions other than the 'standard'?  (Basically I'd be:  Subtract 9k from my income, multiply by .23 = What I owe for the year).

[Guest]

Okay, as a Fairtax supporter, and someone who has done a bit of research, there are a few points Id like to make.  In no particular order:

1 - The bill as currently written will be changed before it is implemented, and the FINAL BILL will not do what it was originally intended to do/be as effective/it will enslave us all!
   Sorry, but that is a pretty weak argument for opposing this reform.  You would be equally justified in objecting to any bill or proposal whatsoever, on the grounds that the evil Congressmen will morph it into something totally unrecognizable before it is passed.  There IS a danger in this, and it is up to supporters of a plan to keep on top of our representatives to avoid such a pitfall.  But simply refusing the concept that reform is possible leads us all to stick our heads in the sand, praying that all the bad people will go away on their own.  

2  This does nothing to reduce the size of the federal government/waste spending/pork/welfare, etc.  
   You are right, it does not.  It also doesnt change the speed limit, get US forces out of Asia, or propose that we build a 20 meter concrete wall along the Mexican and Canadian borders.  If you are interested in such proposals (or any others) contact your congresscritters to lobby for them.  This bill simply puts into place a FAIR TAX (I think they might have used it in the name as a hint.)  Id love to eliminate 60% to 90% of what the federal government currently spends, and I suspect most people on this board would agree with me that most of what the Uncle Sam spends is blatantly unconstitutional.  But that is a separate fight.  The Fairtax is only about eliminating the current oppressively complex tax code.  Most American taxpayers can take their records to five tax preparers, and five IRS employees, and get 10 different answers on what they should be paying.  The Fairtax is trying to eliminate some 60,000 pages of tax code and regulations.  

3  The actual rate would be something like 40%/50%/80% (or insert your number here.)
   The Fairtax is designed to be revenue neutral at 23% inclusive  or 30% if you prefer.  Total replacement of personal and corporate income taxes (and corporate and personal welfare in the form of tax breaks), no FICA, Social Security taxes, etc.  All Federal revenue replaced with the Fairtax on new retail goods and services.  The current number for the Fairtax rate would be about 23%.  If the actual rate should be 50%, or 48.183%, or whatever, that is not an argument against the Fairtax, but rather FOR it.  How else can people be convinced of just how much money the federal government is sucking from each of us every day, in the form of hidden taxes paid by corporations and passed on to consumers?  And yes, maybe that will convince people to fight harder against government pork.  Not the central goal of the plan, but perhaps it would be a benefit.  

4  Its a scam to allow government to monitor individually how much every private citizen spends and on what they spend it.  (related:)  The government will have to do this to ensure that those who are below the minimum income level are tax exempt.
   Preposterous.  Retail outlets currently track what they sell  obviously for their own purposes as well as the fact that most states/locals have sales tax.  The retailer is responsible for reporting and paying the taxes collected  there is nothing in the plan about reporting purchases by individual citizens.  
The income level just doesnt come into play  ALL citizens, based on social security numbers, get the pre-bate, offsetting tax on spending up to the poverty level regardless of what is actually spent.
   The grain of sand of truth in this objection seems to be Business to Business sales.  If Im a contractor who sells new houses, I dont pay the tax on lumber (for example) because Im going to charge the Fairtax in the final sale price of a home, and I (my business would) pay it to Uncle Sam.  So if I go to the local lumber yard to get some wood, Id let them know the deal, give them my business taxpayer number, and they dont charge the Fairtax because it isnt a retail sale.  How this equates to the government tracking every stick of chewing gum I buy, I dont know.  

5  Prices will not go down.  Evil corporations wont pass on savings.
   This is pretty basic economics.  On Jan 1 of the year this goes into effect, will all prices drop 23% (or 30%) exactly?  Of course not.  But competition in the marketplace does drive down prices.  If Im running a business that just reduced its overhead by 30%, in the form of reduced federal taxes, I might be tempted to pocket the difference.  But when my competitors started to lower prices to take away my customers, you better believe Id start slashing too.  To believe that prices wouldnt go down, you have to believe that everyone who sells everything will refuse to try to undercut their competition.

[LAK]

[Firethorn]But they didn't get rid of the income tax at the same time, and it's a paperwork mess.  Corporate to Corporate sales are taxed.  Fairtax is NOT the VAT.  I simply was giving an example where the tax is already included in the price of an item.  Concession stands would be another example.  

.... Of course they didn't - nor the "poll tax" renamed the "community charge". And NEITHER are the STATE, other local taxes, plethora of licensing fees etc going to go either.

[LAK]Of course it is an overhead. But the difference is that the gov only collects information from the corporations - not it's citizens. "Fair Tax" is a scam to allow gov to monitor individually how much every private citizen spends and on what they spend it ......

[Firethorn]Say WHAT?  Sheesh...  This is a Sales Tax.  Collected by the business, who then forwards it on to the government.   Do the states get detailed spending reports on individuals based on their sales taxes?

.... You are ducking or missing the point here: The ONLY way those that qualify through low income for exemption AT THE CASH REGISTER for their goods, and billing for services - is going to be with a SECURE FORM OF ID. That means, EVERYONE will have to have one, and ALL goods sales and services billing will be recorded with a record of exactly what everyone buys etc. Convicted felon Poindexter's "Total Awareness Program" is alive and well.

[Firethorn]But I believe that having insurance is a part of being fiscally responsable.  You can't guarentee that you won't get cancer, need a heart transplant, whatever.  But you should be able to cover the first few thousand dollars of healthcare a year.  You know, the routine stuff.  Figure out your median healthcare expense, multiply by 1.2 or so, and there you go.

..... "Fiscal responsibility" is a contrived term for what is corporate-gov socialism. If you want responsibility, hold people finacially and criminally (where applicable) responsible for damages (like auto collisions). If people are allowed to keep all the fruits of their labor, they can usually pay for most medical expenses. In the past, private charities, and individuals took care of the poor who could not afford the higher expense problems. Really, the country in 1910 was not such a bad place contrary to popular belief.


[LAK].... I am a conservative, and likely far more so than most on this board and many others. I find myself constantly having to remind some people what my views are on welfare and subsidizing people for bad choices. That includes foreign nations.

[Firethorn]You are?

... Yes, see the directly above.

[Firethorn]And there's another big barrier at the upper end of 'middle class'.  A zone where taxes become substantially higher, yet the person doesn't yet have enough to be able to massage their income to avoid much of the tax burden.  Still, how does the fairtax program take another step towards forcing/keeping the non-rich down?

.... The upper end of the middle class do not have to put "auto insurance premium", "electric bill", etc in a hat and pull out which one they "are not going to be able to pay this month" because they have an abcessed tooth and need to see a dentist right away. For that matter, anyone in the upper middle class can afford to have a dental hygiene technician deep clean their teeth every six months, and probably never see an abcesed tooth the rest of their lives. For that matter, those in the upper middle class couldn't care less if gas costs "50 cents more a gallon", or their electric bill goes up 30%.

[LAK]Your "gov on a diet"[etc] ...

[Firethorn]Note what I've said, please.  I believe that by making the sales tax show up in people's faces, every time they purchase something, we'd be far more likely to get the pressure needed to force the politicians to stop spending our money.

..... I doubt it. The driving force for the amount of sales tax (yes, it ain't going to stay at 30%) will be how much the gov needs to spend. And the amount the gov needs to spend in the current geo-political climate is going to head upwards, not downwards.

[Firethorn]Still, it's a seperate issue from fairtax.

..... You brought this up as some benefit to having the sales tax. How "separate" is that?

[Firethorn]First, fairtax is intended to be revenue neutral.  We're replacing income taxes with a sales tax, intended to bring in an equal amount of money, thus our average tax burden before and after fairtax would be the same.
Second,Taxes in europe, which can be over 80% of a person's income, they charge both much higher rates than in most places in the USA, and on more things.  They're more 'all of the above', having income tax, VAT, property taxes, TV tax in England, etc...

... I already covered this. I am intimately familiar with the levels of taxation in various forms in the UK and Germany for example. But things are not really that far removed here with the STATE income taxes, sales taxes, property taxes, vehicle taxes (tags etc), other licensing requirements, fees etc. In aggregate they are right on the heels of our european counterparts.

[LAK]"Government run"? You mean privately run - for profit. And they will most certainly be taxed; the corporations that have landed these cozy contracts are surely not going to be "tax exempt" are they? ....

[Firethorn]Then big deal.  Factor the tax into the toll like they do for concession stands.

.... It will be a big deal when on top of climbing gasoline prices road travel becomes so expensive that most people will simply not be able to afford it outside commuting to the work. Visiting a State or National park once or twice a year is already out of reach for a great many people.

[LAK]More? I should think not. The average hourly paid employee with a wife and even one child of either of the two corporations I work for can not afford medical insurance. If a trip to the dentist is called for, or the ER room, the insurance company they use is most likely called Cash Incorporated. I know people in the 60-ish age group who are struggling to pay enormous medical insurance premiums in addition to everything else. They are being strangled even when they hit retirement age, because they can not earn any more than a modest amount of money even if they keep working.....

[Firethorn]Seperate issue.  If we have to subsidize struggling families, I'd prefer that we be honest about how we do it, and do it ala WICA.  Oh, and don't forget that said familiy will be getting a rebate payment each month, and not be charged income tax or FICA.  That's where the extra income comes from.
As for the elderly having issues, that's a problem usually caused by them not saving properly.  A rebalancing of Social Security benefits would be more helpful.

... It certainly is not a separate issue. One must have money UP FRONT for major expenses. A "rebate" is great for financial institutions like banks, and corporate-gov private investment accounts. It does not do anything for those who have empty wallets and purses will bills amd payment demands sitting on the table.

Saving is an individual responsibility. "Social Security" is socialist gov-mandated theft.

[LAK]Your rent is about rock bottom where I live. You might get such a low rent in many big cities at a run down apartment complex in a crack neighborhood - with regular vehicle and home burglary thrown in "for free". You might even get your door kicked in once or twice a year as a bonus....

[Firethorn]I live in a cheap region.  North Dakota tends to be like that.  On the other hand, I don't make that much money either.

..... Right. "Fair Tax" might sound good where you are, but not for many of the millions that live in the major cities.

[Firethorn]But then, I bet they're making more than $24k/year.

... Some, more that hold two jobs perhaps; but a great many are on far less than that - and still well above the exemption threshold.

[LAK]Right; at the expense of having every single purchase recorded. Every penny spent....

Firethorn]They aren't tracking it.  All I need to get my refund check is a valid SS#.  This meme keeps showing up, and it just isn't true.  Tell me, where did you get the idea that every purchase will be recorded?  Only the businesses will need to keep track of their purchases, in order to justify not paying the sales tax on them.

... You call it a meme, but you have not provided an answer as to how the gov is going to make sure that the exempt do not buy for the non-exempt. If you think that one is going to slip by, you are not paying attention.

[LAK]And that $187 wouldn't cover one trip to the average dentist. You have a very simplistic and rosey perception of what life is like for many people other than your own....

[Firethorn]Do you visit the dentist every month?  WTF does going to the dentist have to do with the poverty level monthy repayment?

.... I have had to make use of dentists about a half a dozen times in the last 10 years for my wife and I. Fortunately without anything over $300 each time. But just pay one a visit and ask how much a thorough cleaning of the entire set costs - or some bridge work etc. You are either young, or you have just been very fortunate with your teeth. I can not count how many people I know from the age of about 30 on up who have needed thousands of dollars in dental work - or the prospect of eating soup for the rest of their lives.  

[LAK]It is becoming clear that you seem to be of the impression that the living and economic environment is nationwide - as it appears before you for a radius of ten miles.....

[Firethorn]As it also becomes clear to me that you've taken your entire view of the idea from it's detractors.  I've read the site, and they list the reasons for how things will go down, and they make sense for me.

.... Maybe in North Dakota - but not many big cities elsewhere, and probably not many other medium size cities and rural areas.

[LAK]Most people in most big cities live in corporate owned properties. Walking into a leasing office post-"Fair Tax" and asking for a rent reduction is likely to be met with the same laughter as that echoing from the board rooms of insurance corporations earlier....

[Firethorn]Then you move out and they stop laughing because empty apartments produce no money.

..... And move where? To another corporate owned residence? Or Walmart parking lots? I can just see a few million people with their kids in tow, loading up the family car playing musical apartments in Chicago, Detroit, L.A., Houston, etc. You are not being realistic here at all.

[LAK]beggin your pardon, but I have not said anything about an "80% figure needed to break even with government spending". Thought that is probably close to what would be required to pay the national debt....

[Firethorn]Right here, your first post:
" The 30 percent is exclusive of the state income, state sales tax and property taxes you now pay. It would be in addition to those taxes. The federal sales tax would be collected by the states with the feds "generously" giving them a ½ of 1 per cent payment for the collection service. Since the states income tax systems were designed to parallel the federal income tax system, the Fair Tax, if implemented, would virtually force states to go to an all-sales-tax system paralleling the federal sales tax system which would raise the effective sales tax rate to anywhere between 50 percent and 80 percent depending on where you live and whose numbers you use.

..... Nope; that is what the website says. I posted their entire article. If you go there you will see your cut and paste attributed by you to "me".

[Firethorn]Ok, please propose scenarios where people will be significantly worse off under fairtax than they are now.

..... I have already mentioned several reasons. And the idea that the sales tax percentage is going to remain at 30% is naive.

[Firethorn]Throwing people against the ropes?  Who?  Those who make more than poverty level income, who have managed to mostly shield themselves from income/capital gains taxes?

.... The only people I know of in this category are the cash street vendors, etc. The people it is going to hit are the hourly paid and salaried at more than poverty level but less than the middle to upper middle class. Their income is taken at source, and they are not shielded at all.

[LAK]But as long as gov departments EXIST dispensing foreign aid, foreign grants, domestic social programs, etc the money will be redirected so - regardless of whether it be "efficiently" or "inefficiently".....

[Firethorn]As I've stated before, I'd like to get rid of those departments as well, but they're ultimately a seperate issue.  If we got rid of them, we'd be able to lower the sales tax just as readily as we could lower the income tax.  Assuming we could prevent the politicians from just spending on something else, of course.

..... You can not analyse something like the "Fair Tax" objectively in isolation of the greatest avenues of GROWING revenue spending. It is like two people discussing losing weight while eating several plates of fried food each, and personal menu planners in front of them for even more each day for the foreseeable future.  


[Firethorn]No different from the income tax, though the mechanical nature of the fairtax helps make sure that congress has a more difficult time turning around and telling people 'But it'll only affect the rich...'.

..... Wishful thinking. The current Congress has not shied away from passing whatever is required - or simply using the national credit card. The latter of which is going to demand that ever increasing interest payments are added to the costs of the current geo-political agenda. Take a calculator, divide the figure for the national debt by the number of people in this country.

[Firethorn]And they'd get this information how?  As seperate from simply subpoening the already existing sales records?  It's not like the store has to identify that the $1.30 of tax came from 'Joe Brown, SSN# 555-55-5555'

... I already addressed this above.

[Firethorn]Ahh...  You truly haven't read and understood fairtax.

NOBODY IS EXEMPT.  Everybody who makes a personal purchase, from Bill Gates to Sally Trailer Trash is taxed.  Where the tax becomes progressive is that EVERYBODY gets the refund check, as long as they're a US Citizen, or have the valid documentation for being a working resident.  Yes, that means that Bill gets the same $187/month as Sally.  The difference is that $187 isn't even pocket change to Bill, but it's a fair chunk of money for Sally.  Now multiply by 4 for a family of four.  Now we're getting into decent amounts of money, aren't we?

..... So what is to stop those at poverty level buying for those who are not and skimming a small percent - far less than the sales tax - and saving others alot of money?

How are those at the bottom end going to come up with the front money for all their radically increased goods and billing costs?

Last and by no means least, who are the "lucky" financial institutions sitting on all this liquid investment capital in any given week while all the serfs sit around waiting for their "refund checks" for the original amounts?

-----------------------------------------------------

http://ussliberty.org
http://ssunitedstates.org

[Fly320s]

.... You are ducking or missing the point here: The ONLY way those that qualify through low income for exemption AT THE CASH REGISTER for their goods, and billing for services - is going to be with a SECURE FORM OF ID. That means, EVERYONE will have to have one, and ALL goods sales and services billing will be recorded with a record of exactly what everyone buys etc. Convicted felon Poindexter's "Total Awareness Program" is alive and well.

No one gets a deduction/exemption at the register.  The prebate is mailed out monthly based on what a individual/family will spend on basic necessities for that month.  If the prebate for a family of four is $400 that is all the exemption they will get.  If that family decides to buy $500 worth of milk then they are stuck with paying the extra.

A person will still be able to go to a store, buy a product with cash, and never have to show ID.  Just like now.

[Firethorn]

I apologize if I miss a point, I'm trying to consolodate a bit, our posts are getting into unwieldy territory.

.... You are ducking or missing the point here: The ONLY way those that qualify through low income for exemption AT THE CASH REGISTER for their goods, and billing for services - is going to be with a SECURE FORM OF ID. That means, EVERYONE will have to have one, and ALL goods sales and services billing will be recorded with a record of exactly what everyone buys etc. Convicted felon Poindexter's "Total Awareness Program" is alive and well.

... You call it a meme, but you have not provided an answer as to how the gov is going to make sure that the exempt do not buy for the non-exempt. If you think that one is going to slip by, you are not paying attention.

Okay, it seems that John and I have failed to properly express the way fairtax works.  The point is that NOBODY GETS EXEMPTED, everybody pays the same rate.  Bill Gates and Jenny Trailer Trash pay the same tax rate at the register.  Bill buys $100 of goods, he pays $30 in tax.  Jenny Trailer Trash buys $100 in goods, she pays $30 in tax.  There are no discounts, different rates at the register.  The business can care less how much you make.

Where it becomes progressive is the rebate check.  Joe Rich Guy who buys $100k of stuff in a year pays enough more in tax that his effective tax rate is higher than Jenny, who only spent the $9k she made that year.  Jenny paid effectivly zero, nearly 21k of what Joe paid was taxes.

.... Of course they didn't - nor the "poll tax" renamed the "community charge". And NEITHER are the STATE, other local taxes, plethora of licensing fees etc going to go either.

Seperate issues.  Fairtax is solely federal in nature at this point.  And making fantasy scarey proposals, modifications, that isn't in the proposed legislation is a scare tactic.  Part of what the proponents want if fairtax is enacted is a consititutional amendment - So the politicos can't try to diversify and tax everything ala Europe.

..... "Fiscal responsibility" is a contrived term for what is corporate-gov socialism. If you want responsibility, hold people finacially and criminally (where applicable) responsible for damages (like auto collisions). If people are allowed to keep all the fruits of their labor, they can usually pay for most medical expenses. In the past, private charities, and individuals took care of the poor who could not afford the higher expense problems. Really, the country in 1910 was not such a bad place contrary to popular belief.

I believe that a certain amount of insurance, guarding against catasrophic loss or illness is a good idea.  That does not mean that you need to get every insurance offered under the sun.  On the other hand, I can swear uphill and down that I won't get into a car accident and put other people into the hospital tomorrow/next year, but I can't really say that.  So yes, if I'm going to be driving, car insurance is a good idea.  The fact that I don't need to even pay the first $500 if I screw up is a problem.  Partially resolved by insurance increases if I(or somebody else) screws up, but still.  Anyways, I'm against being forced to purchase insurance, but view it as a good idea.  Just like wearing my seatbelt.

I happen to agree with you on the medical and charity portions.  Personally, I love the idea of the HSP/HDIP.  You need the tax benefits to make it competitive with the tax bennies granted to 'traditional' medical plans.

I am a conservative, and likely far more so than most on this board and many others. I find myself constantly having to remind some people what my views are on welfare and subsidizing people for bad choices. That includes foreign nations.

That's probably because a lot of your other comments don't back you up.  

.. The upper end of the middle class do not have to put "auto insurance premium", "electric bill", etc in a hat and pull out which one they "are not going to be able to pay this month" because they have an abcessed tooth and need to see a dentist right away. For that matter, anyone in the upper middle class can afford to have a dental hygiene technician deep clean their teeth every six months, and probably never see an abcesed tooth the rest of their lives. For that matter, those in the upper middle class couldn't care less if gas costs "50 cents more a gallon", or their electric bill goes up 30%.

... It certainly is not a separate issue. One must have money UP FRONT for major expenses. A "rebate" is great for financial institutions like banks, and corporate-gov private investment accounts. It does not do anything for those who have empty wallets and purses will bills amd payment demands sitting on the table.

.... I have had to make use of dentists about a half a dozen times in the last 10 years for my wife and I. Fortunately without anything over $300 each time. But just pay one a visit and ask how much a thorough cleaning of the entire set costs - or some bridge work etc. You are either young, or you have just been very fortunate with your teeth. I can not count how many people I know from the age of about 30 on up who have needed thousands of dollars in dental work - or the prospect of eating soup for the rest of their lives.

More? I should think not. The average hourly paid employee with a wife and even one child of either of the two corporations I work for can not afford medical insurance. If a trip to the dentist is called for, or the ER room, the insurance company they use is most likely called Cash Incorporated. I know people in the 60-ish age group who are struggling to pay enormous medical insurance premiums in addition to everything else. They are being strangled even when they hit retirement age, because they can not earn any more than a modest amount of money even if they keep working.....

You claim to be against welfare and government spending, but when we propose to get rid of some of it, you complain about 'how it's going to hurt the poor', even when we point out to you that it's not really going to harm them.  You're going to have to face it.  No matter what, the 'poor' are always going to be in a more fragile situation when it comes to finances than the 'rich'.  Unless you go to a European socialist model.  Part of the problem stems from the simple fact that the 'poor' frequently don't know how to manage their money effectively.  I'm talking about simple money management, balancing a checkbook, delayed gratification of 'wants' here.  For example, avoiding carrying a balance on credit cards, avoiding 'payday loan' places like the plague.  NOT getting that plasma/lcd television(yes, I've known low income people who've bought them, then ended up in financial trouble the next month).  Heck, one of my favorite authers, Terry Pratchett, had one of his characters say 'It's cheaper to be rich than poor'.  Which can be true in many ways.  

Saving is an individual responsibility. "Social Security" is socialist gov-mandated theft.

I agree with you here.  Part of what makes fairtax nice is that it encourages savings.  Your investments/savings account is free to grow without the taxman taking chuncks of it as you go along.  Oh, and notice when I talked about welfare such as WICA, I phrased it as 'if we must'.  I disagree with the idea of SS, but I see no way of getting rid of it within my generation.

And monthly is plenty of time to pay bills.  Heck, I have my credit cards, rent, and car payment to hit on or just after I get paid.  Creditors are usually willing to work with you if you ask them.  Most places want rent monthly.  I'm sure most of them will be willing to have the pay-by date a little after the rebate payment date.  Even when I did get paid minimum wage(or within a buck of it), I was able to survive the couple weeks between paychecks just fine.

.... It will be a big deal when on top of climbing gasoline prices road travel becomes so expensive that most people will simply not be able to afford it outside commuting to the work. Visiting a State or National park once or twice a year is already out of reach for a great many people.

Then new solutions come to the fore.  Buying a more economical car.  Living closer to work.  Commuting by mass transit, walking or biking.  Some sort of PRT system becomes economic.  Fuel is still one of the minor expenses for driving, compared with vehicle purchase, insuring, maintenance&repair.  Suddenly those profitable toll roads ain't so profitable no more because nobody drives on them.  Fairtax isn't going to make much of a difference on the oil/gasoline situation at all.

..... Right. "Fair Tax" might sound good where you are, but not for many of the millions that live in the major cities.

Because I live in a cheaper region, I already get cuts in my taxes compared to the higher expense areas.  I figure it evens out.  Everything is lower, including my income.  The 'poor' in NYC are already being taxed more than I am.  Being poor in NYC takes more money than 'moderatly well off' here, and given the progressive nature of federal income tax, they pay more.

..... Wishful thinking. The current Congress has not shied away from passing whatever is required - or simply using the national credit card. The latter of which is going to demand that ever increasing interest payments are added to the costs of the current geo-political agenda. Take a calculator, divide the figure for the national debt by the number of people in this country.

..... I doubt it. The driving force for the amount of sales tax (yes, it ain't going to stay at 30%) will be how much the gov needs to spend. And the amount the gov needs to spend in the current geo-political climate is going to head upwards, not downwards.

Seperate issue, though it might be intertwined a bit.  So isn't income tax and crop insurance, at some level.  Doesn't mean that we can't seperate them to concentrate more fully on one or the other.  I also support a balanced budget ammendment, and would like to see one that makes it take a vote by the people to raise taxes.  So congress gets a set pot of money to play with, and they have to try to do as much as they can with it.  Hell, you might as well talk about how income taxes are going up.  The method of taxation isn't going to affect congress's spending much.

..... And move where? To another corporate owned residence? Or Walmart parking lots? I can just see a few million people with their kids in tow, loading up the family car playing musical apartments in Chicago, Detroit, L.A., Houston, etc. You are not being realistic here at all.

I've done plenty of bargaining with even large companies.  And the effect doesn't have to be huge.  If company A cuts their prices a little(expenses are lower), they'll tend to rent their units more often, for longer.  Say an effective 5% vacant rate.  Company B attempts to keep their prices the same and ends up with a 20% vacancy rate, costing them money.  As John said, the adjustment can take a little while, but it'll happen.

[Werewolf]

[Firethorn]But I believe that having insurance is a part of being fiscally responsable.  You can't guarentee that you won't get cancer, need a heart transplant, whatever.  But you should be able to cover the first few thousand dollars of healthcare a year.  You know, the routine stuff.  Figure out your median healthcare expense, multiply by 1.2 or so, and there you go.

You're right having health insurance is not only responsible but in some cases absolutely necessary to stay alive.

My wife has a number of health problems and it takes $50K plus a year to keep her alive. Insurance pays all but $2k of that now. If I had to pay a 30% sales tax on that $50K then some services just wouldn't be provided because no way could I afford an additional  $1250/month in bills. So what do my wife and I do? Pick and choose those services most necessary - got news for ya - they're all necessary. And if you truly believe the insurance companies are gonna pay the sales tax and if you think health providers are going to lower their fees you aren't living in the same world as the rest of us. How many years will be knocked off my wife's life because healthcare is no longer affordable.  Here's another example. A good friend's wife had to have a liver transplant (she's 30 and has two very young children). The drugs to keep her alive I am told would cost $100k/year without health insurance. Her husband can't afford an extra $30K/year - no way - so I guess his wife just dies too. I can't imagine how many others fall into the same circumstance but then what the hell - at least the rich will be able to keep their loved ones alive - after all what's a few hundred grand a year to them?

Health insurance is the reason health costs are so high, its the reason there is little price competition among health providers and no incentive to control costs but it's here to stay and we have to live with that reality. Add to that that the demand curve for health care is almost completely inelastic and your claim that prices will go down to compensate is crap.

So Firethorn - I don't know what dog you've got in this fight but you can take your Fairtax - which isn't even close to being fair and stuff it where the sun don't shine.

[Firethorn]

Everybody, if you have any questions, I recommend going to Fairtax.org and reading the site, specifically going into the faq section, where the search box is.  No, I don't know why they put it there.

My wife has a number of health problems and it takes $50K plus a year to keep her alive. Insurance pays all but $2k of that now. If I had to pay a 30% sales tax on that $50K then some services just wouldn't be provided because no way could I afford an additional  $1250/month in bills.

Ouch.  First, you're not paying sales tax on that 50k.  You're paying sales tax on the insurance premium, which I have no idea how much is costing you or your employer, and the 2k you're paying out of pocket.  But the $2k would equal $50/month in taxes.  Premiums vary, but I usually figure $2k for that as well, so your '$1,250' tax bill just got chopped down to a $100, which I'll admit is not pleasant, is far more affordable.

Might I point out that the rebate check should easily cover the $100?  Not to mention the elimination of FICA and income taxes?

It took some careful reading, but it says that even if an employer purchases the plan, the tax has to be paid, so it's tax neutral whether the employer buys the plan, or the individual.  The article even goes into exploring how the current distorted market is probably increasing our health care costs, and how shifting to a more free market system might help.

Health insurance is the reason health costs are so high, its the reason there is little price competition among health providers and no incentive to control costs but it's here to stay and we have to live with that reality. Add to that that the demand curve for health care is almost completely inelastic and your claim that prices will go down to compensate is crap.

There's a reason I usually call them plans rather than insurance.  A certain amount of healthcare is to be expected.  Just like your car insurance doesn't get involved with 'helping' to pay for your oil changes, a true insurance plan isn't supposed to butt in for routine matters.

So Firethorn - I don't know what dog you've got in this fight but you can take your Fairtax - which isn't even close to being fair and stuff it where the sun don't shine.

I happen to like the idea.  Helps simplify the tax code, makes what the government's taking obvious.  But have I answered your questions about health care sufficiently?  Do you no longer have to fear about fairtax bending you over the barrel and reaming you?

[Werewolf]

I happen to like the idea.  Helps simplify the tax code, makes what the government's taking obvious.  But have I answered your questions about health care sufficiently?  Do you no longer have to fear about fairtax bending you over the barrel and reaming you?

Somebody is going to have to pay the sales tax on the services provided by healthcare providers? Who's going to pay it? Are not all goods and services taxable under the not so fair tax plan?

To move on if we really want a fair tax then go with a flat income tax rate. Everyone pays 15% or so (which is the revenue neutral estimate the last time I looked into this).

You still axe the IRS except for some compliance guys who do random audits of businesses.

The tax code goes away. Corporations send in a check just like they do now every three months and with hold a flat rate from employees income. Anyone with the smarts to be able to multiply x*Y can figure out their taxes. No need to file a return every year if you're a wage slave since they've already been taken out and corporations just send in a copy of their P&L at the end of each year with their final check or demand for refund if they overpaid in the 1st three quarters.

The only downside I see is that the possibility exists for a resurgence of cash as king and the incidence of non-traceable cash transactions increasing. But then I imagine that would happen with the not so fair tax plan too.

[Firethorn]

Somebody is going to have to pay the sales tax on the services provided by healthcare providers? Who's going to pay it? Are not all goods and services taxable under the not so fair tax plan?

Business purchases aren't taxed.  As a business purchase, healthcare paid for by an insurer isn't taxed.  You paid the tax when you purchased the healthcare plan, then the insurer buys the healthcare.  If you pay for it then get reimbursed, there will be a method to get the tax paid back.

Otherwise it'd be like you ordering a house from a contracter, paying the sales tax, and the contracter then having to pay sales tax on his lumber.

To move on if we really want a fair tax then go with a flat income tax rate. Everyone pays 15% or so (which is the revenue neutral estimate the last time I looked into this).

Oh boy, Lak would REALLY hate this one.  It'd really hit the poor hard.  And I'd dispute the 15% figure.  FICA alone is 15%, and that's only to cover social security and medicare.

You still axe the IRS except for some compliance guys who do random audits of businesses.

Sounds good.

The tax code goes away. Corporations send in a check just like they do now every three months and with hold a flat rate from employees income. Anyone with the smarts to be able to multiply x*Y can figure out their taxes. No need to file a return every year if you're a wage slave since they've already been taken out and corporations just send in a copy of their P&L at the end of each year with their final check or demand for refund if they overpaid in the 1st three quarters.

The only downside I see is that the possibility exists for a resurgence of cash as king and the incidence of non-traceable cash transactions increasing. But then I imagine that would happen with the not so fair tax plan too.

Well, my father worried about a black market for goods under fairtax, but with income taxes you have plenty of people 'working under the table' already.

Yeah, it'd be real simple.

[LAK]

[Firethorn]"Okay, it seems that John and I have failed to properly express the way fairtax works.  The point is that NOBODY GETS EXEMPTED, everybody pays the same rate.  Bill Gates and Jenny Trailer Trash pay the same tax rate at the register.  Bill buys $100 of goods, he pays $30 in tax.  Jenny Trailer Trash buys $100 in goods, she pays $30 in tax.  There are no discounts, different rates at the register.  The business can care less how much you make.

Where it becomes progressive is the rebate check.  Joe Rich Guy who buys $100k of stuff in a year pays enough more in tax that his effective tax rate is higher than Jenny, who only spent the $9k she made that year.  Jenny paid effectivly zero, nearly 21k of what Joe paid was taxes."

..... I see now. And if Jenny "buys an awful lot of goods" in any given period, she gets an "interview" to "explain" where she got the money. OK; and of course anyone who "once made 60K a year and now only makes 20K a year"  - but sold some family jewels and spent 30K is going to "be there all day" and beyond?

This "rebate" idea sounds all so straightforward - but does not address some very obvious questions beyond the few I have made regarding "income" versus what the gov is going to see as "questionably high spending". It is not illegal to sell personal assets - and surely this would remain so during a "Fair Tax". And it sounds very much like people are going to have bigger headaches "proving" they possessed any given personal asset which was sold - and "to whom", and for "how much" - than haggling with the IRS over an expense deduction etc.

[Firethorn]"Well, my father worried about a black market for goods under fairtax, but with income taxes you have plenty of people 'working under the table' already."

... Um, I did try and bring this subject up several times and have been repeatedly told that "I do not understand the Fair Tax system". So now that YOU have brought it up - expect at some point for the "necessity" of some form of database with individual identifiers - and identification at point of transaction. I can not see it going any other way.

[Firethorn]Seperate issues.  Fairtax is solely federal in nature at this point.  And making fantasy scarey proposals, modifications, that isn't in the proposed legislation is a scare tactic.  Part of what the proponents want if fairtax is enacted is a consititutional amendment - So the politicos can't try to diversify and tax everything ala Europe.

... Hardly separate; when speaking of the TOTAL tax burden on each individual citizen in any given State, State, local taxes ETC must be taken into acccount in aggregate. State and local taxes, fees which I have already brought up are a simple fact. I am amazed you will not or can not acknowledge this. We all know the FT is "Federal"; but saying it is "Federal" is not going to make all the other taxes and fees etc melt away.

Getting a constitutional amendment to prevent changes along the way is not going to happen. You can take that one to the bank.

[Firethorn] RE: "auto insurance"

... Yes,  "A good idea". But when it is mandated by law it becomes something else. One can take a calculated risk according to one's assets, income etc and do without it if things are tight, and buy it during more prosperous times. Unless it is mandated by law, when the financial burden can only be balanced against the criminal penalties for not having it at any one given time.

[Firethorn]"That's probably because a lot of your other comments don't back you up."

.... How so? I see alot of corporate-gov in this - and other issues connected which I have brought up. Some of them outright socialism/communism or fascism. You on the contrary seem to be fully at ease with these things. All you can say about mandatory auto insurance is that you think "auto insurance is a good idea". I think you need to brush up on the actual differences between conservative ideology and others with a historical perspective in this country. So far about the only thing consistant with conservative ideology is your possible agreement over private medical charity.

[Firethorn]"You claim to be against welfare and government spending, but when we propose to get rid of some of it, you complain about 'how it's going to hurt the poor', even when we point out to you that it's not really going to harm them"

..... This is a ridiculous statement.

I have already said as much, but let me spell it out for you:

Ax ALL foreign aid, grants etc. Not a penny; for any reason whatsoever.
Withdraw public funding and participation of ALL multinational entities and institutions.
Stop ALL immigration.
Ax ALL socialist programs - everything. Not a penny.
Ax ALL spending from the public purse EXCEPT that which is required to administer the Congress, Executive and Judiciary, and a military force (with ongoing R&D as needed) to protect out borders, including a border Patrol and Coast Guard.

Let PRIVATE institutions and PRIVATE individuals take care of charity - "the poor" - where it belongs; which is OUT of the government realm. Period.

[Firethorn]You're going to have to face it.  No matter what, the 'poor' are always going to be in a more fragile situation when it comes to finances than the 'rich'.  Unless you go to a European socialist model.

.... I am way ahead of you. There is no such thing as a "war on poverty". There is no such thing as "eliminate hunger", "eliminate poverty" etc. See my comments about charity.

But it is flat wrong - immoral - to allow a parasitic corporate-gov to sap what the poor have, the not so poor, or reduce their chances of climbing the ladder with a plethora of oppressive taxes. Or stealing from the "almost poor" to "take care of the poor". Or from the wealthy for that matter.

And that is precisely what we have; right on the heels of europa's socialist model. Further integration with socialist Canada - and POOR Mexico - is going to close that gap very quickly.

[Firethorn]"Part of the problem stems from the simple fact that the 'poor' frequently don't know how to manage their money effectively... (etc)"

... Right; but they soon learn when there is no food in the pantry, no lights, no air conditioning, no water at my government mandated expense - or anyone else's. They learn very quickly. If you have ever seen real poverty firsthand, you will see people who know how to make the best and take care of themselves as efficiently as possible.

[Firethorn] RE: "social security"

.... OK there is one more conservative trait you have exhibited. But FT is not enough - social security needs the big ax. It could be progressively dismantled for those who have paid in and want to collect in proportion to their contributions. We could be rid of it; but again one can not take any such issue in isolation of the others; the foreign and other spending needs the big ax at the same time.

[Firethron]"And monthly is plenty of time to pay bills.  Heck, I have my credit cards, rent, and car payment to hit on or just after I get paid.  Creditors are usually willing to work with you if you ask them.  Most places want rent monthly.  I'm sure most of them will be willing to have the pay-by date a little after the rebate payment date.  Even when I did get paid minimum wage(or within a buck of it), I was able to survive the couple weeks between paychecks just fine."

... Having lived on end of the day on sale supermarket donuts, coffee, and the odd hot meal at some private charitable institutions during a short period in a very cold climate - and still gotten behind on the rent - I can add that one can walk around endlessly hunting for extra work to make ends meet. I even found a $100 bill during that miserable period - the only one I have ever found I might add.

Yes, many people are fully aware that one can manoeuver around some problems with paying bills. But we are speaking of a nation; preparing fertile ground - as opposed to telling people they are in for alot of sand and what interesting things they can do with it.

[Firethorn]"Then new solutions come to the fore.  Buying a more economical car.  Living closer to work.  Commuting by mass transit, walking or biking.  Some sort of PRT system becomes economic.  Fuel is still one of the minor expenses for driving, compared with vehicle purchase, insuring, maintenance&repair.  Suddenly those profitable toll roads ain't so profitable no more because nobody drives on them.  Fairtax isn't going to make much of a difference on the oil/gasoline situation at all."

.... So gasoline and oil (including fuel oil) is not going to be subject to the FT?

You make alot of "good suggestions". I have gone periods of years in my adult life without a car. I lived in a remote enough spot for about three years that I often walked twenty miles in a day.

Fuel is a major expense for many people. I am currently spending between $300 and $400 a month on gasoline. There is not way around it, it is a prerequisite for work.

Many people have a car, it is paid for, it runs, they know how to maintain it or someone who does, and they use it every single day for work and essential trips. They do not have the money to "buy a more fuel efficient" vehicle, let alone the time to travel all over their local town or city looking at them. They earn just enough to pay the bills and eat the cheapest food available. Their continued INDEPENDENCE from debt, welfare or any other State funds depends on their mobility. Their ability to show up for work.

The difference between $1.50 a gallon and $3.00 a gallon for people like that is enormous. Hike it to $4.00 a gallon and you are going to have a modern industrialized nation starting to move like a third worlder. You simply can not separate this from the other cost of living expenses; rent, electricity, phone (yes; in my case I MUST have a phone for my job), mandatory auto insurance, etc and discuss a 30% up front cost increase across the board. Knowing the number of people in this country with significant outstanding debt it is insane.

[Firethorn]"I also support a balanced budget ammendment, and would like to see one that makes it take a vote by the people to raise taxes."

..... Allowing people to vote over tax increases amounts to allowing people to vote for more entitlements from the public purse for themselves. Because there is no shortage of politicians that will give the entitlements in return for the vote for higher taxes.

[Firethorn]"The method of taxation isn't going to affect congress's spending much"

... Ah; you DO get it. And having got it you will know that Congress's spending will require an increased level of taxation - be it FT or IT.

So there you have it in a nutshell. It is not the IRS that is the problem - it is Congress's SPENDING. The FT will not change that, will further oppress the lower and middle class - and will increase. One step at a time.

-------------------------------------------------

http://ussliberty.org
http://ssunitedstates.org

[Firethorn]

..... I see now. And if Jenny "buys an awful lot of goods" in any given period, she gets an "interview" to "explain" where she got the money. OK; and of course anyone who "once made 60K a year and now only makes 20K a year"  - but sold some family jewels and spent 30K is going to "be there all day" and beyond?

This "rebate" idea sounds all so straightforward - but does not address some very obvious questions beyond the few I have made regarding "income" versus what the gov is going to see as "questionably high spending". It is not illegal to sell personal assets - and surely this would remain so during a "Fair Tax". And it sounds very much like people are going to have bigger headaches "proving" they possessed any given personal asset which was sold - and "to whom", and for "how much" - than haggling with the IRS over an expense deduction etc.

1.  PURCHASES AREN'T TRACKED.  You can still buy a car 100% in cash if you want to, and the dealer only has to report it was you buying it if the police show up with a warrent or there's a law I haven't heard about.  Like the one for wire transfers over x amount, or large amounts of cash during international travel.
2.  Only 'New' items are taxed.  If I buy a television, then later sell it to a friend, I don't have to charge my friend sales tax.  You buy your house, then later sell it.  You don't have to pay sales tax.  Only the contractor or company that built it in the first place.

... Um, I did try and bring this subject up several times and have been repeatedly told that "I do not understand the Fair Tax system". So now that YOU have brought it up - expect at some point for the "necessity" of some form of database with individual identifiers - and identification at point of transaction. I can not see it going any other way.

And I'm still trying to figure out why you'd need that database and identification when you're paying the tax.  The only time you'd need identification/additional paperwork is if you're not paying the tax because you're buying for a business.  To put it another way - I frequently purchase items at various stores using cash.  Part of the cash I fork over is to pay the sales tax on the item.  I have never been asked to present an ID.  So, please elaborate on why you think that a national sales tax would require everybody to present ID everytime they bought something?

Besides, dad's fears are overrated.  Sure, there's some tax avoidance smuggling going on with cigarettes because of the excessive taxation of some states, but that's going to be naturally limited.  You'd have to commit fraud(fake a business, or improperly use the business ID) or go outside the states.  It's just not worth it for a legitimate business to try to mess with it.  Too easy to catch by audit.  I'll also note that small businesses try to hide income all the time, and exaggerate their expenses to avoid income tax.

... Hardly separate; when speaking of the TOTAL tax burden on each individual citizen in any given State, State, local taxes ETC must be taken into acccount in aggregate. State and local taxes, fees which I have already brought up are a simple fact. I am amazed you will not or can not acknowledge this. We all know the FT is "Federal"; but saying it is "Federal" is not going to make all the other taxes and fees etc melt away.

I guess my mind works differently.  It becomes seperate because in order to adjust state taxes, we have to go to STATE governments to make changes.  Also, fairtax won't significantly alter what most people end up paying.  Some will pay a little less, some will pay a little more, some will pay a lot more (drug dealers, undocumented under the table workers, other people with undocumented untaxed income).

None the less, people in places like NY & CA already have a far higher tax burden than in other states.  The federal government, unless it starts adjusting it's taxation method by state, won't alter this.

Fairtax is about eliminating personal income taxes.  It states right on the site which taxes are eliminated.  We might as well be moaning and complaining that this won't be replacing NAF fees.

... Yes,  "A good idea". But when it is mandated by law it becomes something else. One can take a calculated risk according to one's assets, income etc and do without it if things are tight, and buy it during more prosperous times. Unless it is mandated by law, when the financial burden can only be balanced against the criminal penalties for not having it at any one given time.

Then what do you propose when, not having it during a lean time, the driver messes himself, his family, or you and your family up?
What happens when two people having lean times smack into each other and promptly run up a 100k in medical bills each, both with nadda for insurance?

I have already said as much, but let me spell it out for you:

Ax ALL foreign aid, grants etc. Not a penny; for any reason whatsoever.
Withdraw public funding and participation of ALL multinational entities and institutions.
Stop ALL immigration.
Ax ALL socialist programs - everything. Not a penny.
Ax ALL spending from the public purse EXCEPT that which is required to administer the Congress, Executive and Judiciary, and a military force (with ongoing R&D as needed) to protect out borders, including a border Patrol and Coast Guard.

So why do you go on about the poor so much when we propose eliminating things like EIC?  As for immigration, well, I'll say that immigration is part of what has made this country so great.

Let PRIVATE institutions and PRIVATE individuals take care of charity - "the poor" - where it belongs; which is OUT of the government realm. Period.

Agreed.

... Right; but they soon learn when there is no food in the pantry, no lights, no air conditioning, no water at my government mandated expense - or anyone else's. They learn very quickly. If you have ever seen real poverty firsthand, you will see people who know how to make the best and take care of themselves as efficiently as possible.

I've said it before, but it bears repeating: "Hunger is a wonderful motivator".

.... OK there is one more conservative trait you have exhibited. But FT is not enough - social security needs the big ax. It could be progressively dismantled for those who have paid in and want to collect in proportion to their contributions. We could be rid of it; but again one can not take any such issue in isolation of the others; the foreign and other spending needs the big ax at the same time.

Unlike you, I don't recall saying that I'm a conservative.  In actuality I'm a (very)moderate libertarian.  Mix in a healthy dose of realism and idealism at the same time and you can get some wierd things out of me.  Sometimes I speak of things as an ideal, sometimes I speak of things as a correctional measure to take to get to the ideal, sometimes I argue for what I think I can get.

... Having lived on end of the day on sale supermarket donuts, coffee, and the odd hot meal at some private charitable institutions during a short period in a very cold climate - and still gotten behind on the rent - I can add that one can walk around endlessly hunting for extra work to make ends meet. I even found a $100 bill during that miserable period - the only one I have ever found I might add.

Sounds like you economized, that's good.  Most people flirt with poverty at least once in their life.

Yes, many people are fully aware that one can manoeuver around some problems with paying bills. But we are speaking of a nation; preparing fertile ground - as opposed to telling people they are in for alot of sand and what interesting things they can do with it.

I still don't see how this is supposed to cause the economy to crash & burn.

.... So gasoline and oil (including fuel oil) is not going to be subject to the FT?

Of course it is.  It's subject to the income tax right now, isn't it?

You make alot of "good suggestions". I have gone periods of years in my adult life without a car. I lived in a remote enough spot for about three years that I often walked twenty miles in a day.

Fuel is a major expense for many people. I am currently spending between $300 and $400 a month on gasoline. There is not way around it, it is a prerequisite for work.

You got some good exercise those three years.  

As for fuel, I deliberatly choose a place closer to work, I bicycle to the mall and such, drive a 30mpg car, and spend less than $100/month on gasoline.  On the other hand, I'll say that you obviously find the additional fuel expense worth it for your current employment.  It wouldn't be on a minimum wage job, however.

The difference between $1.50 a gallon and $3.00 a gallon for people like that is enormous. Hike it to $4.00 a gallon and you are going to have a modern industrialized nation starting to move like a third worlder. You simply can not separate this from the other cost of living expenses; rent, electricity, phone (yes; in my case I MUST have a phone for my job), mandatory auto insurance, etc and discuss a 30% up front cost increase across the board. Knowing the number of people in this country with significant outstanding debt it is insane.

I feel you're exaggerating some on the travel issue.  European gasoline works out to something like $6-10/gallon and they still operate.  Solutions can be found.  Some take time, some cost money, some simply require change in the way we do business.

Many people have a car, it is paid for, it runs, they know how to maintain it or someone who does, and they use it every single day for work and essential trips. They do not have the money to "buy a more fuel efficient" vehicle, let alone the time to travel all over their local town or city looking at them. They earn just enough to pay the bills and eat the cheapest food available. Their continued INDEPENDENCE from debt, welfare or any other State funds depends on their mobility. Their ability to show up for work.

Then what happens when it finally dies, gets in a wreck and is totalled, etc?  People DEAL.  I could buy a car that gets 40mpg today, but I have enough sunk in my current vehicle(that's still running great) that I figure it's not worth it to me.  In the big picture, it'd be something that happens by attrition.  As gasoline prices rise, they stop buying big showboat vehicles that they don't really need such as the huge SUVs and pickup trucks.  They look a little harder at the jobs closer to home.  They buy a home closer to work.  They go to their employer(if possible) and arrange to work from the home, etc.  They buy a hybrid(not economical now, but double gas prices...).

..... Allowing people to vote over tax increases amounts to allowing people to vote for more entitlements from the public purse for themselves. Because there is no shortage of politicians that will give the entitlements in return for the vote for higher taxes.

You'd have to convince a majority of the people they'd benefit more from the bennies than they would from the tax increase.  Worst comes to worse, require a supermajority.

So there you have it in a nutshell. It is not the IRS that is the problem - it is Congress's SPENDING. The FT will not change that, will further oppress the lower and middle class - and will increase. One step at a time.

There you go, getting into class warfare again.  The people the fairtax will tend to hit the hardest are the rich.

[LAK]

[Firethorn]1.  PURCHASES AREN'T TRACKED.  You can still buy a car 100% in cash if you want to, and the dealer only has to report it was you buying it if the police show up with a warrent or there's a law I haven't heard about.  Like the one for wire transfers over x amount, or large amounts of cash during international travel.
2.  Only 'New' items are taxed.  If I buy a television, then later sell it to a friend, I don't have to charge my friend sales tax.  You buy your house, then later sell it.  You don't have to pay sales tax.  Only the contractor or company that built it in the first place.

...... We KNOW that under the current proposal "purchases are not tracked". We KNOW "new purchases are tracked".

OK. Last try. Please re-read what I wrote and address the questions I raise.  What is going to happen when many people on say a "20K a year rebate level" receive a rebate on say 60k worth of spending in a given year? Like Mr. Hustler whose activities follow below.

[firethorn]"Besides, dad's fears are overrated.  Sure, there's some tax avoidance smuggling going on with cigarettes because of the excessive taxation of some states, but that's going to be naturally limited.  You'd have to commit fraud(fake a business, or improperly use the business ID) or go outside the states.  It's just not worth it for a legitimate business to try to mess with it.  Too easy to catch by audit.  I'll also note that small businesses try to hide income all the time, and exaggerate their expenses to avoid income tax."

.... I see. So if Mr. Joe Hustler who will qualify for a full rebate due to his "low income" buys a new Mercedes 500SEC - and before he drives it off the lot hands the keys and title over to Mr. Iearn Ninetykayayear for small percentage of what Mr. I. N. would have paid in sales tax and NOT been rebated due to his income level  ..... what is going to happen?

[Firethorn]"I guess my mind works differently.  It becomes seperate because in order to adjust state taxes, we have to go to STATE governments to make changes."

... I guess it does indeed work differently. I would venture to say that if you were living in a state and location which had significant State and local taxes you would likely be doing some quick maths - and weighing up the possibility that the day FT is started your State legislature would wake up that morning an suddenly decide to ax the State and local taxes. The phrase "not likely" springs to mind.

So I suppose in a State where it doesn't affect you, having a mental block over the question might occur. Or you could say; "Yes, of course. Well, all those people could just pack up and move to other States". All of them; right.

[Firethorn]"Then what do you propose when, not having it during a lean time, the driver messes himself, his family, or you and your family up?
What happens when two people having lean times smack into each other and promptly run up a 100k in medical bills each, both with nadda for insurance?"

... There are no guarantees in life. Just as some people pay for their mistakes, some people DO pay for the mistakes or misdeeds of others. Or simple misfortune. It remains however that: it is STEALING to TAKE from Mr. A  so as to pay for the misfortune of Mr. B at the hands of Mr. C who "messed up". That is the bottom line.

And just as "hunger is a wonderful motivator" - so are the early mistakes in life. When the view of the world is based from the getgo that the consequences of "messing up" are alittle more than "Oh well, the insurance company will take care of it" - at everyone else's expense - people are more careful.

[Firethorn]"So why do you go on about the poor so much when we propose eliminating things like EIC?"

.... Because .. I give up. No, wait. Re-read the points I raised in previous posts concerning the DIRECT impact of a 30% up front tax on the poor and lower middle class etc.  I am not going to type them out all over again.

Read them with a copy of my conservative views right in front of you at the same time - so you do not forget (while reading my points directly affecting the poor etc) .. that I am very, very, conservative.

[Firethorn]"As for immigration, well, I'll say that immigration is part of what has made this country so great."

... Yes, for a time it did. The big 'ol U.S. of A. needed people to be fruitful and multiply. To till the soil, make clothing, tools, ships, trains, planes and automobiles. Once things begain rolling smoothly though, we started CAREFULLY vetting those people stepping off the boats. If they carried certain diseases or were otherwise undesirable, or not specifically beneficial - they were stepped back ONTO the boats again and left. Not unlike what many employers do when they look for employees. Or people in general when seeking aquaintances and friends etc.

We do not need more immigrants - for the sake of having more immigrants. We certainly do not need any carrying TB and a host of other ailments. Or that can not speak our language, or assimilate into our culture.

We especially do not need any more overcrowding in our cities, on our roads etc. Ooops; I forgot - you live in ND where such things do not exist - therefore your mind "may work differently" when the issue of overcrowding that affects other States and their cities is the issue.

So moving on .....

[Firethorn]"agreed"

... Hey! success - for several points!

[Firethorn]" ... sometimes I argue for what I think I can get."

... Yes, I know; the "my mind works differently" bit.

[Firethorn]" still don't see how this is supposed to cause the economy to crash & burn."

... It won't. It will contribute along with other factors to destroy the middle class which is already being divided and the bottom chunks slipping down the ladder. And it will ensure that most all of those in the lower class are going to continue swimming around .. in the lower class.

[Firethorn]"As for fuel, I deliberatly choose a place closer to work, I bicycle to the mall and such, drive a 30mpg car, and spend less than $100/month on gasoline.  On the other hand, I'll say that you obviously find the additional fuel expense worth it for your current employment.  It wouldn't be on a minimum wage job, however."

..... In most big cities, finding work close to home - or visa versa - is a rare luxury. I can not count the number of times I have asked someone directions, a named business location etc and heard the stock reply; "sorry, I don't live in this area".

My work with two corporations involves travel to varying locations all over town; both combined I make less than 25K. People that are earning well under 20K a year - but over the poverty level - are subject to the choice of cheap rent in a HIGH crime area - or high rent in a moderate area. Not much of a "choice" - especially for the elderly, or those with children to raise.

[Firethorn]"I feel you're exaggerating some on the travel issue.  European gasoline works out to something like $6-10/gallon and they still operate.  Solutions can be found.  Some take time, some cost money, some simply require change in the way we do business."

... No exaggeration. The european market is flooded with dirt cheap used fuel-efficient cars. When I was in the UK last (around 1995) finding a very good road-legal (taxed and mechanical inspection) car for less than $200 - yes less than two hundred dollars - was a piece of cake. They were all over the place. Fiat, Vauxhall, Ford you name it in the 1.0 to 1.3 liter class that get 35, 45, even 50 MPG. I went through several of them over a space of a number of years. Ran them and fixed them til they died - 30 pounds sterling in cash at the salvage yard for the carcass - and buy another. Try finding a good road legal car in any U.S. big city that gets 45 MPG for $200.

Places like Germany have very cheap and extensive useful public transport. Anyone who has lived in Frankfurt, Germany will agree on this point. As vast and crowded as London is, one can actually get around the city for a wide radius quite quickly for a modest sum.

Things are quite different here, and for most people and families on modest incomes, a several hundred mile trip to a State or national park is a big deal even before the permit/parking fees and other expenses are entered.

[Firethorn]"Then what happens when it finally dies, gets in a wreck and is totalled, etc?  People DEAL."

.. We are speaking on average here. Not "everyone", not "just a few". On average, most people that have a good used car can expect to get a few of years out of it. I have not bought a new vehice in 25 years; I have had two used in the last ten, and the second is still going strong.

Why should I be forced to lose the money and time I have invested in it? Why should the millions - many millions - of others who are in the same position as myself be forced to toss theirs? To take on a credit note for several hundred a month (plus FT) and full coverage insurance (plus FT)? So a manipulated oil and oppressive pricing and taxation system can be implemented? I don't think so.

[Firethorn]"I could buy a car that gets 40mpg today, but I have enough sunk in my current vehicle(that's still running great) that I figure it's not worth it to me."

.... Exactly.

[Firethorn]"In the big picture, it'd be something that happens by attrition.  As gasoline prices rise, they stop buying big showboat vehicles that they don't really need such as the huge SUVs and pickup trucks.  They look a little harder at the jobs closer to home.  They buy a home closer to work.  They go to their employer(if possible) and arrange to work from the home, etc.  They buy a hybrid(not economical now, but double gas prices...).

.... Cities are expanding at such rates as to make this big picture unrealistic. There is simply too great an influx of people, and decent paying jobs are much thinner than the number of people looking for them. The average person - the AVERAGE - has little hope of buying a home close to work - if at all. And working from home is only feasible with a limited number of types of work.

[Firethorn]"You'd have to convince a majority of the people they'd benefit more from the bennies than they would from the tax increase.  Worst comes to worse, require a supermajority."

... This is easily disproven based on our history since WW1. One only needs to look at how many Federal programs were in place at that time - compared with now. They all required funding, and funded they were. One at a time.

[Firethorn]"There you go, getting into class warfare again.  The people the fairtax will tend to hit the hardest are the rich."

...... No, I said Congressional spending. The rich have never worried about taxes. A sales tax is not going to change that.

You see, the rich don't get hung up about which port in which country they moor their yacht - or whose name is on the title of the car they have. And they don't fret over a dollar or two more on a gallon of gas.

--------------------------------------------------

http://ussliberty.org
http://ssunitedstates.org

[cordex]

.... I see. So if Mr. Joe Hustler who will qualify for a full rebate due to his "low income" buys a new Mercedes 500SEC - and before he drives it off the lot hands the keys and title over to Mr. Iearn Ninetykayayear for small percentage of what Mr. I. N. would have paid in sales tax and NOT been rebated due to his income level  ..... what is going to happen?

Hmm ... I'm not entirely sure where I stand on this Fair Tax thing, but either I completely don't get it or you don't.

As I've heard it (and I've got some close friends who are big Fair Tax supporters), the pre-bate system goes like this:

A household costs a certain amount of money to run.  That's life.  To offset the taxes on the necessities of life, the government sends a "pre-bate" check for a set amount of money per person to each household.  It doesn't matter if you clear $1,000,000 a year or $1,000 a year or whether you spend $1,000,000 or $1,000 a year, you get the same sized pre-bate check per person.  You don't get rebates based on actual purchases no matter what the income.

Many of your arguments seem to be formed against a completely different concept than the Fair Tax.  I'm not saying it's the best solution, but you're not really arguing against it because I don't think you really have even bothered to learn what it is.

[Firethorn]

...... We KNOW that under the current proposal "purchases are not tracked". We KNOW "new purchases are tracked".

OK. Last try. Please re-read what I wrote and address the questions I raise.  What is going to happen when many people on say a "20K a year rebate level" receive a rebate on say 60k worth of spending in a given year? Like Mr. Hustler whose activities follow below.

.... I see. So if Mr. Joe Hustler who will qualify for a full rebate due to his "low income" buys a new Mercedes 500SEC - and before he drives it off the lot hands the keys and title over to Mr. Iearn Ninetykayayear for small percentage of what Mr. I. N. would have paid in sales tax and NOT been rebated due to his income level  ..... what is going to happen?

The government get's it's 30% sales tax on the Mercedes, and Mr. Joe Hustler and Ninetykayayear's prebates are utterly unaffected.  See Cordex's response as to why.  I've said it before.  I don't know how else to say it.

As for keeping track of the difference between new/used, well, it'd be assumed that anything owned by an individual is used, and that the tax has already been paid.  It's the (licensed)business's responsability to collect the tax on the items it produces that it produces or obtains from a wholesaler/distributer/etc, unless the purchaser is buying it for a business and can prove it (produce said license or proper documentation showing them to be a sales agent).

... I guess it does indeed work differently. I would venture to say that if you were living in a state and location which had significant State and local taxes you would likely be doing some quick maths - and weighing up the possibility that the day FT is started your State legislature would wake up that morning an suddenly decide to ax the State and local taxes. The phrase "not likely" springs to mind.

So I suppose in a State where it doesn't affect you, having a mental block over the question might occur. Or you could say; "Yes, of course. Well, all those people could just pack up and move to other States". All of them; right.

And I still don't get why you consider state taxes such a big deal, since they exist now, and will exist essentially unchanged if FT passes unless the state legislature decides it's an excuse to overhaul their system.  If somebody is getting reamed by state taxes now, they'll be getting reamed afterwards, and the true solution for them is to campaign for change within their state.

FT is a Federal tax. I didn't include my state income taxes when I figured out how much more I'd be making, etc...

... There are no guarantees in life. Just as some people pay for their mistakes, some people DO pay for the mistakes or misdeeds of others. Or simple misfortune. It remains however that: it is STEALING to TAKE from Mr. A  so as to pay for the misfortune of Mr. B at the hands of Mr. C who "messed up". That is the bottom line.

And just as "hunger is a wonderful motivator" - so are the early mistakes in life. When the view of the world is based from the getgo that the consequences of "messing up" are alittle more than "Oh well, the insurance company will take care of it" - at everyone else's expense - people are more careful.

I'll agree with you here.

... Because .. I give up. No, wait. Re-read the points I raised in previous posts concerning the DIRECT impact of a 30% up front tax on the poor and lower middle class etc.  I am not going to type them out all over again.

Read them with a copy of my conservative views right in front of you at the same time - so you do not forget (while reading my points directly affecting the poor etc) .. that I am very, very, conservative.

And, once again, I'll point out that that's what the prebate is for.  As in they'll get their first check before the tax is in place.

... Yes, for a time it did. The big 'ol U.S. of A. needed people to be fruitful and multiply. To till the soil, make clothing, tools, ships, trains, planes and automobiles. Once things begain rolling smoothly though, we started CAREFULLY vetting those people stepping off the boats. If they carried certain diseases or were otherwise undesirable, or not specifically beneficial - they were stepped back ONTO the boats again and left. Not unlike what many employers do when they look for employees. Or people in general when seeking aquaintances and friends etc.

We do not need more immigrants - for the sake of having more immigrants. We certainly do not need any carrying TB and a host of other ailments. Or that can not speak our language, or assimilate into our culture.

We especially do not need any more overcrowding in our cities, on our roads etc. Ooops; I forgot - you live in ND where such things do not exist - therefore your mind "may work differently" when the issue of overcrowding that affects other States and their cities is the issue.

We can still handle a certain amount of immigration, and as the situation with illegals show.  I'd rather have legal immigrants.  It goes against my philosophy of limited government, but some days I wish we could just purchase the northern part of mexico, impliment US policies, controls, freedoms, etc.  It'd nicen the area up(eventually), and give us more territory.

Isn't it sad that, no matter how much a country fouls up, it's borders are considered set in stone?  Sell a few acres to a more successful country/government!

... It won't. It will contribute along with other factors to destroy the middle class which is already being divided and the bottom chunks slipping down the ladder. And it will ensure that most all of those in the lower class are going to continue swimming around .. in the lower class.

How is a flat or moderatly progressive tax supposed to destroy the middle class?

..... In most big cities, finding work close to home - or visa versa - is a rare luxury. I can not count the number of times I have asked someone directions, a named business location etc and heard the stock reply; "sorry, I don't live in this area".

My work with two corporations involves travel to varying locations all over town; both combined I make less than 25K. People that are earning well under 20K a year - but over the poverty level - are subject to the choice of cheap rent in a HIGH crime area - or high rent in a moderate area. Not much of a "choice" - especially for the elderly, or those with children to raise.

Always a problem in cities.  I'm a techie, so PRT sounds good to me.  Anyways, I still don't really get your issue, as fairtax is going to be fairly neutral in the overall financial matters for 99% of people.

... No exaggeration. The european market is flooded with dirt cheap used fuel-efficient cars. When I was in the UK last (around 1995) finding a very good road-legal (taxed and mechanical inspection) car for less than $200 - yes less than two hundred dollars - was a piece of cake. They were all over the place. Fiat, Vauxhall, Ford you name it in the 1.0 to 1.3 liter class that get 35, 45, even 50 MPG. I went through several of them over a space of a number of years. Ran them and fixed them til they died - 30 pounds sterling in cash at the salvage yard for the carcass - and buy another. Try finding a good road legal car in any U.S. big city that gets 45 MPG for $200.

Blame our emission controls.  Blame the demand for 'power' & 'pick up'.

.. We are speaking on average here. Not "everyone", not "just a few". On average, most people that have a good used car can expect to get a few of years out of it. I have not bought a new vehice in 25 years; I have had two used in the last ten, and the second is still going strong.

Why should I be forced to lose the money and time I have invested in it? Why should the millions - many millions - of others who are in the same position as myself be forced to toss theirs? To take on a credit note for several hundred a month (plus FT) and full coverage insurance (plus FT)? So a manipulated oil and oppressive pricing and taxation system can be implemented? I don't think so.

That's the thing, you don't.  You don't have to replace your vehicle immediatly.  It's your choice as when to replace it.  It's just that you may choose to get a more efficient vehicle when you do.  It's called attrition.  I'm sure the auto companies are familiar with it.  The simple idea that 10% of the cars on the road are replaced each year.  Some are fresh off the lot, because it got into an accident (My dad didn't have his truck for a week before somebody ran into him at a redlight.  He was stopped, waiting for the green when he heard a crunch...), or was a lemon, or whatever.  Some people still have their 20 year old cars.  Law of averages.  

I never said it'd be a quick process.

.... Cities are expanding at such rates as to make this big picture unrealistic. There is simply too great an influx of people, and decent paying jobs are much thinner than the number of people looking for them. The average person - the AVERAGE - has little hope of buying a home close to work - if at all. And working from home is only feasible with a limited number of types of work.

But they feel that the big city job is worth it. Keep raising expenses while not increasing income, eventually they figure out 'Hey, I can move out to Fargo, ND, cut my cost of living in half and still make 2/3rds of what I make now.'

... This is easily disproven based on our history since WW1. One only needs to look at how many Federal programs were in place at that time - compared with now. They all required funding, and funded they were. One at a time.

But all these programs didn't have to go on the general ballot, neither does the taxes to support that.  All I have to do is convince 300 odd people it's a good idea.  And they are generally already rich enough to not care.  What I was talking about was setting up the tax rates so that congress is told that:
A: They're not allowed to exceed their budget(without very special circumstances)
B: It takes a vote of the people to raise taxes
C: It's a flat percentage, thus everybody would feel the pain of an increase.

Now you have to convince several million people to vote for your increase.  Not generally going to happen.

[LAK]

Well; I am not even going to bother with any more points in detail; if a prebate is issued to each and everyone regardless of income the so-called "fair Tax" isn't - period.

We need the big ax taken to all but truly Constitutional spending. If that is done, the IRS will shrink accordingly, the national debt can be paid off, and at some point a very small sales tax could replace it with no fuss.

-----------------------------------------------------------

http://ussliberty.org
http://ssunitedstates.org

[Fly320s]

LAK, do you mean the FairTax isn't fair because the rich are taxed the same as the poor, including prebates?  

Just to clarify:  The prebate only covers the tax that will be paid on essential household items on a per-person basis.  Each month every person, or household, will receive a check to reimburse the household/person for the taxes spent on the necessities of life.  It won't be much money; I think around $400/person.  Everyone receives the prebate, regardless of income.  No one will pay taxes out of pocket (without the prebate covering it) unless they choose to spend more money than is covered by the prebate.  So, if Bill Gates only spends enough to stay alive then he will have paid the same tax as a single person living below the poverty line.  Both people will receive a prebate to cover the taxes incured to stay alive.

That seems very fair to me.  Doesn't fair = equatable = same?

-----

On a different note, I think the most "fair" way to pay taxes is to make everyone pay an equal share.

We have installed this government for the benefit of the people living in the U.S.  Only people that live here receive the benefits of what our tax money provides (at least in theory).  Since each and every person living in the US has an equal opportunity and availability to enjoy the benefits of living here, then each and every person is equally responsible for maintaining the American way of life.  

So, since we are all equally enjoying and responsible for our US government benefits, then I propose we all pay an equal share of the burden.

The FY2007 Budget is $2,656,300,000,000 (2,656.3 Billion dollars).  The current US population is 296,000,000.
With a little basic math we arrive at an $8,974 tax bill per person.  Heck, I'd be happy to pay only that.

[doczinn]

I've stayed out of this for a while, but there's something that's bugged me since I first heard about this tax.

Why send checks back to the people, unless it's to get them thinking they're getting something for free from the government? Why not just exempt from taxes the things that are true necessities? Let's see, there's groceries, used cars, homes under x dollars depending on market (maybe up to the median price for the market), clothes, gasoline, and some health care. I may have missed somehting, but it seems like a far simpler way to do it, and it completely exempts the truly poor ('cause if all they pay for are necessities, they pay no tax, but most of them do have things like TV's, DVD players, etc, on which they would have to pay 30%), while eliminating the other bureaucracy necesssary for sending out those asinine checks each month.

Now, there could be a good reason they don't want to do that, but I can't see it.

[cordex]

Why send checks back to the people, unless it's to get them thinking they're getting something for free from the government?

Yeah, that always kind of bugged me too.

Why not just exempt from taxes the things that are true necessities? Let's see, there's groceries, used cars, homes under x dollars depending on market (maybe up to the median price for the market), clothes, gasoline, and some health care. I may have missed somehting, but it seems like a far simpler way to do it, and it completely exempts the truly poor ('cause if all they pay for are necessities, they pay no tax, but most of them do have things like TV's, DVD players, etc, on which they would have to pay 30%), while eliminating the other bureaucracy necesssary for sending out those asinine checks each month.

In many states they already do something like this with sales tax.  In Indiana, for example, unprepared food products and medicine are untaxed.  Under the fair tax plan, used cars and used homes would already be untaxed.  As much as I dislike the idea of people getting used to the idea of getting something for nothing from the government, many already behave that way about tax rebates (essentially the same concept, just after the fact and with a whole lot more bureaucracy).

I'm not sure why LAK thinks the prebate concept is somehow unfair.  It's definitely different and I don't know if I'm totally comfortable with the whole concept of everyone getting a check in the mail from the government every month, but it does seem to be entirely fair assuming everyone pays taxes on all their purchases anyway.

The biggest problem I see with the fair tax is that it is so simple to bypass.  Today people go to extreme lengths to avoid paying taxes.  Under the fair tax, as far as I know all they'd have to do is form a company and essentially never pay taxes.  I'm not sure how that would be addressed, but I do know that the more stuff you bought, the more sense it would make to own a company that was buying it instead and I would guess most folks with the means would do so in a heartbeat.

[roo_ster]

cordex:

Companies that buy stuff for their own use* (and not to be sold later to customers) currently pay sales tax on that stuff, in all the states I have lived.  I expect it would be no different under FT.  Stuff that is to be resold does not bear a sales tax burden until it gets to the end user.

Example: Lowes buys fertilizer wholesale from the manufacturer.  This is untaxed.  Lowes then sells the fertilizer to me for my lawn.  This is taxed.  Boeing then bought the same fertilizer from Lowes to help maintain thier begonias at their company HQ.  Boeing would also pay sales tax on the fertilizer.

The above example is generally how it works today with sales taxes and is in the gov't's interest that it does, as the sales tax is paid by the end user...who also pays the retail (highest) price.  Thus, more sales taxes are collected.



* Say, copier paper or paperclips.

[cordex]

Hmm ... that would make sense.

How is that audited?

[Werewolf]

Americans have no real concept of just how much they pay in income tax because of withholding. It just comes out. You never had it so you can't miss it. If folks had to send the government a check once a year there's no doubt in my mind that there'd be a major tax revolt.

Based on 30% the Fair Tax that isn't will be a tax increase for the majority of middle class and lower class Americans.

To create the perception that Big Brother is helping out the weenies have come up with a prebate.

The prebate check is similar to withholding only on the other side of the door. The next step up in the government's plan to make the sheeple of this country even more dependent on the govt is to send them a check every month. People will begin to depend on that check, they'll begin to see it as an entitlement.

And the government gets yet another foot thru the door of people's lives.

In 50 years if we're not all living in mud huts and praying to allah 5 times a day then we'll all be living in a USA that's a melded version of 1984 and Brave New World.

I'm just glad I'm old enough that I won't be around to see it.