So Long, IRS? Debate Swirls Around “Fair Tax”

RTTNews ^ | September 16, 2007

[mysterio]

I understand the reasoning behind your claim, but that isn't proof. The fact is, it just doesn't happen.

The fact is is happens every time the government raises the price or tries to prohibit the sale of anything. And you're talking about raising the price of all new goods 30% while leaving prices of used goods the same.

For example, there's a great profit to be had by stealing cars and selling them, but few people steal cars. Profitability isn't enough of an incentive to cause most people to violate the law.

Are you kidding me? 30% is quite a bit of money. I think people will avoid paying it whenever possible.

[groanup]

It is so obviously flawed that it will collapse on itself like communism.

Well don't keep us guessing, what are the flaws?

[kitchen]

You always seem to post these threads, so I'll address my questions to you.

1. What compensation does a retailer receive for collecting, holding, and transferring the tax?

2. Will any compensation for tax collection exceed the discount rate of electronic transactions?

3. How frequently will a retailer be required to transfer the collected taxes to the government?

4. Do you anticipate split transactions requiring level 3 or greater data collection during a credit card transaction? If so, who pays for the hardware? Who can access the data stream?

5. What government agency will review and administer the process?

6. Who will certify inventories to ensure that sales are properly recorded?

7. What documentation is required to prove breakage or spoilage as opposed to tax avoidance?

8. How frequently will government auditors visit retailers to review documentation of inventory, sales, and tax payments?

You don't really think the fed is going to terminate the thousands of IRS employees, do you?

[GeorgefromGeorgia]

The FairTax proposes to repeal the Income Tax through a Constitutional Amendment.

[groanup]

I am a big fan of the FairTax but I believe you have a point. It could be that some allowance can be made for investors in the category you refer to. That allowance could come from those who stand to make a huge windfall from tax-deferred investments.

[MattinNJ]

Well don't keep us guessing, what are the flaws?

To the Internal Revenue Code?

[r9etb]

LOL! I always chuckle when folks claim that the IRS would disappear as a result of something like The Fair Tax.

Of course it wouldn't. Tax evasion would still exist, and still need to be ferreted out and prosecuted. Adherence to tax regulations would still need to be audited and verified.

And of course, there would inevitably be Congressionally-mandated tax rebates for folks who qualify ... who do you suppose manages that?

I'm not particularly opposed to the idea of "the Fair Tax," but it won't simplify things nearly as much as its adherents claim.

[groanup]

No. Aren’t you talking about the FairTax?

[ncpatriot]

So with the Fair Tax only new items are taxed? Purchases at auctions, eBay, garage sales, used cars are not taxed? Am I right about this?

[TChris]

The fact is is happens every time the government raises the price or tries to prohibit the sale of anything. And you're talking about raising the price of all new goods 30% while leaving prices of used goods the same.

1. The government doesn't "raise the price" of anything. They raise tax rates.
2. If they prohibit the sale of anything, it's entirely irrelevant to a discussion of tax rates.
3. The proposed rate for Fair Tax is only 23%, not 30%. If you're trying to deal in nice, round multiples of 10, then 23% rounds down to 20%, not up to 30%.

Are you kidding me? 30% is quite a bit of money. I think people will avoid paying it whenever possible.

No, I'm not kidding you. And repeating your assertion isn't making it any more correct.

Combined taxation is already quite high, and there are ways for people to cheat the system to avoid paying taxes, for a while. But very few people even try. Why should I believe that a change to "pay when you purchase" would instantly cause a significant increase in tax avoidance?

To prove such a claim, you'll have to show that it has happened in the past, with other "pay when you purchase" tax collection methods, or you'll have to show some inherent feature of the Fair Tax that will somehow cause a unique, illegal behavior to arise among average people.

[Anitius Severinus Boethius]

I agree, a flat-tax. A flat 10%, no exemptions, no poverty level, nada. Everyone pays their 10% period.

Well, that would be nice, but...

If the U.S. GDP is $13,210,000,000,000 and the Federal Government's revenue is $2,409,000,000,000, then mathematically it would appear that the Federal Government takes in 18.24% of every dollar earned in the nation.

Soooo... A flat tax of 18.24% is needed to continue with government revenues.

The "10%" is just fantasy.

[groanup]

You are correct.

[sheana]

I don’t really give a rat’s patooty. 10% is way more than this government deserves, in my opinion. The other 8.24 is probably just waste anyway.

[Anitius Severinus Boethius]

Probably very true, but reality is different than idealism. Where would you specifically cut $1,088,000,000,000 out of the budget?

Answering questions like those puts you from internet complainer and armchair quarterback into the realm of, well, Presidential material.

[Man50D]

I don’t trust the guvmint. They’ll add this tax ON TOP OF the income tax.

The Americans For Fair Taxation and Congressman Linder also considered this possibility when drafting the bill. The Fair Tax legislation does three things that effectively dismantle the income tax: (1) it abolishes the IRS, (2) it repeals all statutory language having to do with taxing income and payroll (i.e., the Internal Revenue Code), and (3) it eliminates the filing of annual income tax returns to the federal government for over 140 million Americans. Fair Tax FAQ #50. AFFT is also working to concurrently to repeal the 16th amendment. House Joint Resolution 16 is already on the books to repeal the Income tax. Keep in mind The 16th Amendment does not “require” an income tax, it only “allows” one, and the FairTax will have broken that egg in a million pieces.

[ncpatriot]

The other 8.24 is probably just waste anyway.

It is waste. I worked for gov't x35 yrs and saw a lot of waste. We must hold our gov't accountable.

[Man50D]

But the income tax will never go away.

Read post #55.

The idea of repealing any tax is impossible for them even to contemplate, other than as a ruse.

You're absolutely correct! Politicians don't, lead they follow. That is why the Americans For Fair Taxation has created a strong and growing grassroots campaign to pressure politicians to either support The Fair Tax or lose their jobs. Anyone who doubts it can be done need only look to this summer's overwhelming grassroots effort that stopped amnesty for illegal immigrants in its tracks. Politicians changed their minds after experiencing the wrath of the American people. The same can happen with The Fair Tax.

[mo]

One additional BIG benefit is that it force the government to become more responsive to business..especially at the small business level....thus making it “The American Tax”

[Man50D]

No, I have not read your website. I did my own research and discovered so many faults that I cannot support ANY consumption tax.

Then you are not getting all the information to make a well informed decision.

Look at Europe about haow this scheme has impacted their economies.

That's a poor comparison. You are comparing apples to oranges. Any consumptions taxes in Europe are VAT based by taxing each stage of production. The Fair Tax will eliminate embedded/value added taxes and only tax the final stage when the purchase is made.

Your statements are ludicrous at best because everyone of them are refuted at the Fair Tax website. You will continue to make erroneous assumptions about The Fair Tax until you read the bill or visit the website.

[3niner]

I don’t know the details. There are others here who pay a lot more attention, to exactly how it is supposed to work.