The Fair Tax...

This is a discussion on The Fair Tax... within the Off Topic & Humor Discussion forums, part of the The Back Porch category; i initially heard Neal Boortz talking about this a coupla years back and have become increasingly intrigued by the subject matter.... Especially since writing a ...

Page 1 of 2 12 LastLast
Results 1 to 15 of 16

Thread: The Fair Tax...

  1. #1
    Distinguished Member Array dimmak's Avatar
    Join Date
    Feb 2006
    Location
    TN
    Posts
    1,752

    The Fair Tax...

    i initially heard Neal Boortz talking about this a coupla years back and have become increasingly intrigued by the subject matter....
    Especially since writing a healthy check to the IRS this year....
    I personally know people that draw Gov checks and they dont have to pay any Income tax, while I bust my hump and the more I make, the more I pay... (Sound familiar?)

    Anyways, here is a link with more info ('course you can always Google it as well)

    http://www.fairtax.org/
    "Ray Nagin is a colossal disappointment" - NRA/ILA Executive Director Chris W. Cox.


    "...be water, my friend."

  2. Remove Ads

  3. #2
    Member Array Lumberjack98's Avatar
    Join Date
    Jun 2006
    Location
    Houston, TX
    Posts
    146
    I am a huge supporter of the Fair Tax. I even have a link in my signature to them.

    The more and more that I work corporate and personal income taxes, I realize that the current system is completely out of control.

    I am a practicing CPA in Texas and work for a firm that derives approximately $100 million in revenues based on the current tax code. I am therefore restricted in publicly voicing my opinion on this other than on forums.

    The Fair Tax is simple, transparent and flat out just makes sense. It is not regressive like a flat tax is. The system is already in place to implement it. It's a win-win for everyone.

    The book is less than 200 pages and an easy read. I highly recommend The Fair Tax book to everyone.
    XD9 Service
    Bersa 380 Thunder
    Taurus 605
    ...a few others

    Texas XD Practical Shooters Association

  4. #3
    Moderator
    Array Rock and Glock's Avatar
    Join Date
    Nov 2005
    Location
    Colorado at 25,650'
    Posts
    12,149
    I think the simplicity of a consumption tax is good. It is very manageable, facilitates collection in a transparent manner, and is good from an economic perspective.

    There are several administrative and economic considerations with the proposal, however, that should not be overlooked. While these may be manageable, it is not a tax law passed and signed, and as we all know, "making sausage ain't pretty".

    The transition from an income and earning based tax structure to a consumption tax structure is very problematic, however. For example:

    Retirees: Retirees , now and in the near term, have been paying income tax all of the lives. Retirees, cease "earning income" from ACTIVE work, and begin CONSUMING their savings. They would potentially pay tax burdens TWICE - once when earned AND again when consumed. Many have accumulated, in some cases, both pre-tax retirement accounts (e.g. money not YET taxed) as well as amounts accumulated with AFTER tax dollars. A consumption tax would NOT distinguish between these two "types" of accumulated money - regardless of where the dollars came from, AND regardless of whether income tax had ALREADY been paid on the dollars. Without such a distinction, there is a inherent and unfair imposition of taxation twice.

    They refund the tax attributable to poverty level income? Big deal <forgive my cynicism>......How many of you live at the poverty level? For a family of four it's about $25,000. DHHS computes the level - is this geographically determined? The bill does not specify (but it may be inherent in the DHHS computation - I truly don't know) So is NYC the same as Paris, Texas? I'd guess NYC is a bit (LOL) more expensive...The SSA will refund it monthly? Right - let's make everyone a bit more dependent on Washington.

    Not to argue with their economists, statisticians, actuaries and econometric forecasting techniques, the percentages I've heard for a tax "neutral" to our current system, although several years ago, was more like 35%. Nobody really knows.

    Just consider this - a $30,000 car now would cost $36,900. Your grocery bill would be $123 rather than $100. Do you know how much state sales tax you pay now? Federal tax on gasoline? State tax on gasoline? Although the consumption tax is structurally transparent, I personally believe it is a "hidden" tax that everyone would sooner or later just ignore, because it is always there, ergo, more "hidden" in my book is bad.

    While the idea is very laudable, and would arguably be a positive change from an economic standpoint (tax consumption), and potentially make the US goods and services more competitive world wide (let the dollar fall - same result), the inherent difficulties in transition makes in very problematic.

    IMHO, the current tax code could be simplified and produce a similar result. Difficult, yes, impossible, no.

    IMHO, if Washington quite spending money like drunks painting the town red, we'd see a better result. If they spent NOTHING - we'd have no income taxes. Just funding a strong military would be a inconsequential tax at best. But...I am not a policy guy...so I leave those decisions to other folks.........

    BTW, I'm a corporate tax geek of the worst kind - a consultant. I was a partner with "Brand X". Brand X's US tax revenues were anywhere from $600 million to $1 billion plus. I thought the system was broken then - and I still do.

    I just don't want us to rush in and pass a tax law like this, without spirited, thoughtful debate at all levels.

    Edited out repeated sentences....
    Last edited by Rock and Glock; July 11th, 2006 at 08:33 PM.

  5. #4
    Member Array Lumberjack98's Avatar
    Join Date
    Jun 2006
    Location
    Houston, TX
    Posts
    146
    Great post Rock and Glock!

    I do believe that some of your assertions on costs are not in line with what the Fair Tax proposes. Your $100 grocery bill will still be $100. Why? The elimination of corporate income taxes and the competitive market will lower the price of all goods. Then the 23% tax will raise the price to the previous price. The truly hidden taxes that the grocery store pays will not be passed on to you in the initial price.

    There certainly are hurdles to overcome in the implementation. However they are not impossible.

    At least with the Fair Tax, you can choose how to spend your money, rather than it being taken from you.

    To simplify, it seems to me that everybody will be paying about the same amount of tax as they are now. It's just that there will be a lot of compliance costs saved (Billions of $) and you control when and how you pay your taxes.
    XD9 Service
    Bersa 380 Thunder
    Taurus 605
    ...a few others

    Texas XD Practical Shooters Association

  6. #5
    Moderator
    Array Rock and Glock's Avatar
    Join Date
    Nov 2005
    Location
    Colorado at 25,650'
    Posts
    12,149
    Quote Originally Posted by Lumberjack98
    I do believe that some of your assertions on costs are not in line with what the Fair Tax proposes. Your $100 grocery bill will still be $100. Why? The elimination of corporate income taxes and the competitive market will lower the price of all goods. Then the 23% tax will raise the price to the previous price. The truly hidden taxes that the grocery store pays will not be passed on to you in the initial price.
    Yep - I agree - I missed that, but I don't know what the effects are - econometrics are a pretty arcane (read "black") art.

    Quote Originally Posted by Lumberjack98
    At least with the Fair Tax, you can choose how to spend your money, rather than it being taken from you.
    Some could choose, others will not have a choice (no discretionary income).

    Quote Originally Posted by Lumberjack98
    To simplify, it seems to me that everybody will be paying about the same amount of tax as they are now. It's just that there will be a lot of compliance costs saved (Billions of $) and you control when and how you pay your taxes.
    The compliance costs are huge, and disgusting , and could be avoided, but the neutrality is yet to be seen.

  7. #6
    VIP Member Array Sheldon J's Avatar
    Join Date
    Dec 2004
    Location
    Battle Creek, Mi.
    Posts
    2,285
    Just paid $3.00 a gallon for gas I wonder how much of that is tax and if we could loose it too. Oh I know how a Foreigner tax if you are not a citizen then we get to charge you double.
    "The sword dose not cause the murder, and the maker of the sword dose not bear sin" Rabbi Solomon ben Isaac 11th century

  8. #7
    Distinguished Member Array dimmak's Avatar
    Join Date
    Feb 2006
    Location
    TN
    Posts
    1,752
    Quote Originally Posted by Sheldon J
    Just paid $3.00 a gallon for gas I wonder how much of that is tax and if we could loose it too. Oh I know how a Foreigner tax if you are not a citizen then we get to charge you double.
    You Sir, are a genious!
    "Ray Nagin is a colossal disappointment" - NRA/ILA Executive Director Chris W. Cox.


    "...be water, my friend."

  9. #8
    Moderator
    Array Rock and Glock's Avatar
    Join Date
    Nov 2005
    Location
    Colorado at 25,650'
    Posts
    12,149
    The consumption tax is also more difficult to evade (illegal) and difficult to avoid (legal). Having said that, the federal tax folks (IRS) would need to tie their tax collection & remittance in with the local DMV's and state vehicle licensing bureaus so that motor vehicles, boats and planes all have the correct tax paid on their purchase, so as to prevent "off-shore" transactions (e.g. yacht builder "delivers" yacht in international waters without tax & new owner puts it in a US slip.....)

  10. #9
    Member Array Lumberjack98's Avatar
    Join Date
    Jun 2006
    Location
    Houston, TX
    Posts
    146
    There will always be ways around a system. This one just has less holes.
    XD9 Service
    Bersa 380 Thunder
    Taurus 605
    ...a few others

    Texas XD Practical Shooters Association

  11. #10
    Member Array 500Mag's Avatar
    Join Date
    May 2005
    Location
    West Chester, PA
    Posts
    418
    I'm all for a national sales tax. A couple major pointers...1) tourism, foreigners come here and buy stuff, eat and sleep here, tax them, 2) illegal money (drugs, etc), you want new 20's for your escalade, tax them, 3) even if the tax is 35%, that's roughly the highest tax bracket...i will spend less than I make (therefore pay less tax), therefore pocketing more coin for myself, and 4) no more IRS, less money the gov't has to spend plus a smaller gov't albeit probably negligable but it's a start.
    Last edited by 500Mag; July 12th, 2006 at 07:44 AM.
    "A well regulated Militia, being necessary to the security of a free State, the right of the PEOPLE to keep and bear Arms, shall not be infringed."

  12. #11
    Moderator
    Array Rock and Glock's Avatar
    Join Date
    Nov 2005
    Location
    Colorado at 25,650'
    Posts
    12,149
    Quote Originally Posted by 500Mag

    .....even if the tax is 35%, that's roughly the highest tax bracket...i will spend less than I make (therefore pay less tax), therefore pocketing more coin for myself
    35% for income tax, but it would replace SS too - another 6.7% or so you pay, plus the 6.7% your employeer pays.... (but only on the subject amount of 75,000 or so?)!!

    Your savings ina nutshell ( ) 40+% if you're in the 35% bracket on your paycheck.....

  13. #12
    Member Array MSGTTBAR's Avatar
    Join Date
    Apr 2006
    Location
    PENSACOLA, FL
    Posts
    206
    The only way this "Fair Tax" will work is to repeal the 16th Amendment at the same time it is started. IMHO, Congress will NEVER allow this to happen. My working life is over and I am now on fixed income so my reaction is different to many of you. With no 'earned' income, I pay no taxes anyway, and living in Florida, I have no State tax liability either. That presents another bag of worms to the income tax states. There are no easy answers.
    Life is too short to be serious!

  14. #13
    Moderator
    Array Rock and Glock's Avatar
    Join Date
    Nov 2005
    Location
    Colorado at 25,650'
    Posts
    12,149
    Quote Originally Posted by MSGTTBAR
    My working life is over and I am now on fixed income so my reaction is different to many of you. With no 'earned' income, I pay no taxes anyway, and living in Florida, I have no State tax liability either.
    It is very difficult to balance the "burden" between generations with a major tax base shift (income versus consumption) such as this. You've nailed one of the major roadblocks on the button: AARP!

  15. #14
    Senior Member Array Zundfolge's Avatar
    Join Date
    Oct 2005
    Location
    Colorado Springs
    Posts
    516
    I'm a big fan of the Fair Tax too, but I want to add a constitutional amendment that limits all federal taxation to no more than 10% of GDP.

  16. #15
    Member Array Lumberjack98's Avatar
    Join Date
    Jun 2006
    Location
    Houston, TX
    Posts
    146
    Quote Originally Posted by MSGTTBAR
    My working life is over and I am now on fixed income so my reaction is different to many of you. With no 'earned' income, I pay no taxes anyway, and living in Florida, I have no State tax liability either. That presents another bag of worms to the income tax states. There are no easy answers.
    You pay tax on your social security earnings, sales tax every time you buy something (which has all corporate income taxes in the price already), and property taxes.

    The Fair Tax is only for federal income taxes and not state and local. So it would effect you're social security. You would get all of it and pay the taxes as you spent the money.

    **Below copied from the Fair Tax Website FAQ's **

    How is the Social Security system affected? Like all federal spending programs, Social Security operates exactly as it does today, except that its funds come from a broad, progressive sales tax, rather than a narrow, regressive payroll tax. Employers continue to report wages for each employee, though, to the Social Security Administration for the determination of benefits. The transition to a reformed Social Security system is eased while ensuring there is sufficient funding to continue promised benefits.

    Meanwhile, Social Security/Medicare funds are no longer triple-taxed as under the current system: 1) when payroll taxes are initially withheld; 2) when those withheld payroll taxes are counted as part of the taxable base for income tax purposes; and 3) when the promised benefits are finally received.
    XD9 Service
    Bersa 380 Thunder
    Taurus 605
    ...a few others

    Texas XD Practical Shooters Association

Page 1 of 2 12 LastLast

Links

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

Similar Threads

  1. Fair Price
    By BigJerm80 in forum Defensive Carry Guns
    Replies: 12
    Last Post: July 23rd, 2008, 06:24 PM
  2. I Do Not Feel This Is Fair!
    By Ben Hennessy in forum Concealed Carry Issues & Discussions
    Replies: 36
    Last Post: March 23rd, 2008, 01:22 AM
  3. Warning - Texas State Fair Concealed Carry - If you are going to the Fair, pls read!
    By USPnTX in forum Concealed Carry Issues & Discussions
    Replies: 10
    Last Post: September 29th, 2007, 10:15 AM
  4. Fair price...
    By Euclidean in forum General Firearm Discussion
    Replies: 25
    Last Post: February 16th, 2006, 08:19 PM

Search tags for this page

lumberjack98

,

porch fair tax

Click on a term to search for related topics.