Posted on 02/14/2006 4:55:43 PM PST by Eaglewatcher
There are very few who look forward to income tax filing and the Internal Revenue Service, especially around this time of year. Yet many probably consider it un-patriotic to complain about the tax system, even if they quietly wish we could come up with something better.
Now, after years of grass-roots effort, there is broadly supported legislation before both houses of Congress that would eliminate both the IRS and the income tax system. The legislation, House Bill 25 and Senate Bill 25, is called the Fair Tax Plan. It replaces the income tax system with a national retail sales tax on new goods and services. It would generate enough tax revenue to completely replace all federal personal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment and corporate taxes.
The Fair Tax eliminates all payroll tax withholding as well as the 7.65 percent employer matching of Federal Insurance Contributions Act, or FICA, taxes.
The Fair Tax is imposed on new goods only. No sales tax is collected on the transfer of used property. It is also a progressive tax, with a monthly rebate paid to each household in the amount equal to the sales tax on that household's poverty-level income. Those at the poverty level essentially would pay zero effective sales tax.
Imagine the Fair Tax benefits of taking home your whole paycheck with no taxes withheld; never filing another income tax return; not thinking in terms of tax write-offs and deductions; American goods competing against imports without the embedded cost of corporate income taxes.
This is a tax system of which all Americans can be proud. The Fair Tax Plan would be real tax reform. Questions can be answered by visiting www.fairtax.org. Also, "The FairTax Book" is available at local bookstores.
I urge taxpayers to write their congressman and senators requesting their support for the Fair Tax Bill
mmmm fairtax
We'll all be dead before we see this day.
Unfortunately, it's also time to imagine pigs flying.
(I'm all for it - just don't see it happening anytime soon)
The best that can be done is to remove low-income people from any U.S. income tax bracket and very gradually move that income level up.
Imagine paying a 40% sales tax.
*cough* 23%, and the embedded taxes in products are dropped. Prices shouldn't be more than +1-2%
And paying no income/payroll taxes.
And paying to tax on investment income.
Sounds good to me.
It's revenue neutral, FC. So the only way for it to be 40% is if we're paying about that now. ...
WHAT? People don't know the tax burden is so high? How could that be?
Do ya think withholding and hidden taxes in prices help the gov't increase taxes and spending without the populace being too upset?
C'mon FC.
My grandmother remembers when the income tax began. She's still alive.
I dunno about that - what I will say is that after cost are eliminated from prices and your net pay increases by what is now withheld (income and payroll), your purchasing power will be about the same.
And in future years, the "robuster" economy will lift everyone's standard of living. JMHO
If we're going to reform taxes,cut them,make them universal (everyone with more than $100 of income pays at least *some* tax) and establish a single rate...and eliminate that damn AMT!
It's human to fear change. Even change like eliminating one of the most odious components of America.
I just want the to see the Feds spend like the did prior to 1913. Income taxation and general taxation on this scale are not needed for the government that I envision. Though that's very idealistic, and unrealistic.
I don't see the 16th amendment disappearing anytime soon. If anything, they'll use both and really scare us.
What happened in 1913 that made spending increase without bound?
"A national sales tax would be a disaster simply because once one was instituted it wouldn't take long for the income tax to reappear."
If you think that enforcing income taxes is intrusive, just wait until you see Canadian-level-plus sales taxes. People will flock to tax havens that are evil enough to sell stuff w/o a sales tax (witness the cigarette smuggling from New York into Canada).
If you think that the income tax is sensitive to economic downturns, wait until you see what sales taxes will do. Most states now are heavily dependent on sales taxes, and most are hurting to make up lost sales tax revenue during a very minor slowdown in growth!!
No, the reason that this idea isn't adopted is that it's a bad idea.
You look at all the world economies that have a VAT, and they're all in the toilet. One darling is Denmark - with a "fair flat tax" of Seventy Five Percent
Taxation is not now nor has ever been the problem. Unlimited government spending on all levels is.
When wholesale theft is legal, you damn well better learn how to steal.
If your net pay increases to your gross pay amount, how is it that costs are removed from products? The only amount "saved" by an employer at that point would simply be the taxes paid on profit. There would be no cost reduction.
My understanding is that your net stays the same, the employer simply pays your current Net instead of the same wage minus taxes.
Course, don't argue with me, I'm just barfing up what I read here a while back on the fair tax.
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