skip the BS sales pro sales tax propaganda
go to http://www.thomas.gov type in “fair tax” and read HR 25
Read the prebate rules,
REGISTRATION WITH THE GOVERNMENT for all people who buy or sell anything,
the draconian record keeping,
the criminal penalties for not giving or havin a reciept (ala europe)
The TAXABLE interest
the more you read of the actual proposal the more insane it becomes.
The IRS must go/change, this is not the way to do it. It only grows the government bureacracy.
Read the prebate rules, REGISTRATION WITH THE GOVERNMENT for all people who buy or sell anything,Signing up for the prebate is optional. If you don't want it, don't sign up.
the draconian record keeping,
No more so than under the present system for merchants who already collect sales tax. The taxpayer, who chooses to file for a rebate, only has to keep track of his dependents. Government record keeping will be eliminated.
the criminal penalties for not giving or havin a reciept (ala europe)
So what's new? There are usually penalties for those who don't follow the law.
The TAXABLE interest
Investment income is not taxable under the Fair Tax.
the more you read of the actual proposal the more insane it becomes.
Actually, the more I learn about it, the more I like it.
The unFair Tax will make cheating on your taxes a new national past time - not just an activity. It will drive another large segment of the economy underground and cause a LARGER paperwork burden on business owners. Not to mention the fact that the article clearly indicates why it will never pass - the number of lobbyists who work in tax issues will make sure it never passes. Why are accountants for it? If it was a easy as the unFair Taxers would suggest then many accountants would be put out of business; so the answer is they see a business opportunity. Accounts are one of stronger lobbies in DC.
The IRS must go/change, this is not the way to do it. It only grows the government bureacracy.
Bingo! You understand as few evidently do.
Employers will still have the burden of reporting wages to SSA – presumably to validate whether a worker is eligible for the “pre-bate” (those at the Department of Health and Human Services poverty guidelines and I dare anyone to live under those guidelines) not to mention the reporting burden of the individual to prove that they qualify and the additional administrative burden of states in issuing all those monthly pre-bate checks.
States and retailers and service providers will have the additional burden of collecting and remitting the Federal sales tax. Yes the bill provides for a “collection fee” to states for collecting the taxes but what about states that have no sales tax currently? Are the Feds going to pay the entire costs for those states to create and implement brand new tax collection agencies? What about those service providers who are not currently subject to collecting and remitting sales tax? What about the added burden and costs for them to comply? They will certainly pass those additional costs on to the consumers.
According to the Tax Foundation, the top 50% of wage earners pay an average of 13.84% in Federal income tax.
The top 1% pay 23.13%
Summary of Latest Federal Individual Income Tax Data
On day one of the Fair Tax, I will pay (rather optimistically) 23% more for
all purchases including my groceries including food that is not currently taxed by most states, rent or mortgage payments, car payment, utilities, gasoline, doctors visits, prescriptions, tuition, hair cuts, service calls, HOA fees….pretty much every time I exchange money with someone, there will be a 23% tax on it. That is on top of state income and sales taxes. Presuming I am in the top 50% of the income bracket at 13.84% and now pay 23% that means a tax increase to me of over 9%.
But the Fair Tax crowd will counter that without Federal corporate and employment taxes, the costs of good and services will decrease and without Federal personal income tax people will have more money in their pockets and all will even out.
They also propose that states will have a motivation to eliminate State income and corporate taxes and replace with their own version of the fair tax. So if the states follow the Fed’s lead and impose a 23% state sales tax, every time I purchase a new good or service that is not currently taxable, it could potentially cost me 46% more?
The math just doesn’t add up. The working class and working class poor, those just above the poverty level and retirees who have already paid taxes on their income and are on fixed incomes will be hit especially hard.
And since businesses will have already paid tax under the old system on their inventory and the cost of doing business, on day one of the Fair Tax, they will most likely not decrease the sales price proportionally – it will take some time for those decreased costs to trickle down to consumers.
In the short term, this could be disastrous to the economy. People who are now only paying an average of 13.84% will be paying a lot more and since the Federal sales tax will apply to every day necessities like food, rent, gas, utilities and medical care, average average people will be forced to eliminate any other goods or services not an absolute necessity. And since the Fair Tax does not tax used goods, people will have a greater incentive to buy used and not new goods and that will have an impact on domestic manufactures and retailers who are already struggling.
But my biggest problem with the Fair Tax is that it is intended to be “revenue neutral” meaning that the Feds will collect the same amount of tax they do today but will just shift the burden and the collection method.
No tax reform can really be called tax reform without a meaningful decrease of Federal spending and fiscal responsibility.
We need real tax reform but the Fair Tax is not the answer as it only shifts the burden of tax collectors and tax payers and does nothing to stem the tide of Federal spending and the elimination of the Federal deficit.