Free Republic
Browse · Search
News/Activism
Topics · Post Article

This thread has been locked, it will not receive new replies.
Locked on 02/18/2008 10:17:33 AM PST by Religion Moderator, reason:

Childish behavior



Skip to comments.

WHY THE FAIRTAX WON'T WORK
NCPA ^ | 2/15/2008 | NCAP staff

Posted on 02/16/2008 3:30:21 PM PST by xcamel

One solution to the nation's long-term fiscal problems that has gained support in recent years is the idea of replacing all federal taxes with a 23 percent national retail sales tax called the FairTax. Unfortunately, the administrative problems inherent in this proposal make it impossible to take seriously, says Bruce Bartlett, former deputy assistant secretary for economic policy at the U.S. Treasury Department.

For example, under a FairTax scheme: A worker now netting $800 per week would immediately get a $200 raise and start taking home the full $1,000 gross wage that he is paid; instead of paying income and payroll taxes, workers would pay their taxes when they buy things.
The FairTax would impose a 23 percent tax on all goods and services (this is not really correct, but for now we'll accept it at face value for analytical purposes).

Whether he is better off or not depends on what his effective tax rate is: Assuming he spends all his income and no more than that, he will be no worse off if he now pays 23 percent of his income in taxes. That is, his effective tax rate is 23 percent; in this case, the FairTax is a wash, the worker is no better off or worse off in terms of taxes than he is now.

But what if the worker is now paying less than 23 percent of his income in federal taxes? In this case, he is clearly worse off, says Bartlett: The prices of the things he buys will rise by more than his income rises from the elimination of income and payroll taxes. Conversely, if one is wealthy and in a tax bracket above 23 percent, that person would be much better off. His income and payroll taxes would fall by much more than the prices of goods and services he consumes would rise.

Source: Bruce Bartlett, "Why the FairTax Won't Work," Tax Notes, December 24, 2007.

For text:

Full PDF report

For more on Taxes


TOPICS: Editorial; Government
KEYWORDS: fairtax; tax; taxreform
Navigation: use the links below to view more comments.
first 1-5051-100101-150151-200 ... 601-613 next last

1 posted on 02/16/2008 3:30:22 PM PST by xcamel
[ Post Reply | Private Reply | View Replies]

To: Your Nightmare; Always Right; lewislynn; lucysmom; robertpaulsen; Filo; longtermmemmory; ...
[ping]

A) The FT is a completely altruistic quest
B) The Govenrnment will magically loose it propensity to tinker
C) All the people you never trusted before will be completely trustworthy now
D) 30,000 Treasury Dept employees will magically disappear
E) You will “Git Yer Hole Paychex”
F) Tax rates never go up
G) Pay rates never go down
H) People just love double digit sales tax rates
I) Used food and personal items are good things
J) Social engineering will magically disappear
K) Believe the rich don’t enough pay taxes
L) Prebates and Prefunds aren’t really welfare
M) Retirees should take a hosing for no good reason
N) Getting $77 worth of goods for $100 is OK with you
O) Paying 30% tax on medical care is a great idea
P) You believe the Government should tell you what a “necessity” is
Q) Bureaucrats will always know what the "right" poverty rate is
R) The rest of the modern world is clueless about tax policy
S) Good tax policy can be pro-re-gressive depending on the argument at the time
T) Revenue neutrality is more important than spending control
U) Talk Show Hosts are the best brain trust for tax policy
V) There is no "wizard behind the curtain" but those three Texans..
W) $20 million plus only buys "the truth"
X) Asking tough questions makes you a "Marxist"
Y) Asking tough questions makes you guilty of "spreading lies and disinformation"
Z) Debate only requires insulting and attacking people who ask tough questions

2 posted on 02/16/2008 3:34:30 PM PST by xcamel (Two-hand-voting now in play - One on lever, other holding nose.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: xcamel

Didn’t read the full report but this summary doesn’t include Social Security and Medicare withholding and that alone is over 15%.


3 posted on 02/16/2008 3:35:06 PM PST by Menehune56 (Oderint Dum Metuant (Let them hate, so long as they fear - Lucius Accius (170 BC - 86 BC)))
[ Post Reply | Private Reply | To 1 | View Replies]

To: xcamel

It won’t happen for one simple reason. People will not accept a 30% sales tax (which is what it really is) instead of the mostly single digit sales tax we have today.

“Fair Tax” proponents use 23% arguing that’s how income tax is calculated today, but when people realize that 30 cents will be tacked on to every dollar they spend (i.e. it’s really 30%), the research shows that they will balk at the idea.

It’s a non-starter.


4 posted on 02/16/2008 3:35:13 PM PST by tyke
[ Post Reply | Private Reply | To 1 | View Replies]

To: tyke

Extra points added for being a rational, thinking person. Bravo.


5 posted on 02/16/2008 3:38:09 PM PST by xcamel (Two-hand-voting now in play - One on lever, other holding nose.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: xcamel

The IRS will disappear...sounds good to me.


6 posted on 02/16/2008 3:38:36 PM PST by eleni121 (+ En Touto Nika! By this sign conquer! + Constantine the Great)
[ Post Reply | Private Reply | To 1 | View Replies]

To: eleni121

Post 2, item “D”


7 posted on 02/16/2008 3:40:22 PM PST by xcamel (Two-hand-voting now in play - One on lever, other holding nose.)
[ Post Reply | Private Reply | To 6 | View Replies]

To: xcamel

AA) There’s no such thing as a black market.


8 posted on 02/16/2008 3:40:23 PM PST by evad (.I.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: tyke; xcamel

My friends in Canukistan absolutely loate their single digit GST (National Sales Tax) because it applies to such things as funeral services, new home construction, legal services...you name it. Much farther reaching than just day to day consumer goods.


9 posted on 02/16/2008 3:40:28 PM PST by lightman (Waiting for Godot and searching for Avignon.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: xcamel

What happens to existing IRS liens?


10 posted on 02/16/2008 3:40:49 PM PST by Mojave
[ Post Reply | Private Reply | To 1 | View Replies]

To: xcamel

Will you still be against the Fair Tax when Obama raises your taxes to 70%?


11 posted on 02/16/2008 3:42:15 PM PST by Normal4me
[ Post Reply | Private Reply | To 1 | View Replies]

To: tyke

Read the books, do the math (not fuzzy) and then figure out an honest reason to whine. Until then your complaints go beyond nothing but deaf ears. I suppose if Boortz were to write a tutorial workbook you might be able to follow the numbers.


12 posted on 02/16/2008 3:42:31 PM PST by mazda77
[ Post Reply | Private Reply | To 4 | View Replies]

To: mazda77

Post #2, item “U”


13 posted on 02/16/2008 3:44:12 PM PST by xcamel (Two-hand-voting now in play - One on lever, other holding nose.)
[ Post Reply | Private Reply | To 12 | View Replies]

To: tyke

my understanding is the tax will be INCLUDED in every dollar, not tacked on..where did you learn this?? (I wanna know so I can do some research on it)..


14 posted on 02/16/2008 3:44:13 PM PST by GeorgiaDawg32 (I'm a Patriot Guard Rider..www.patriotguard.org for info on joining.You DON'T have to ride to belong)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Normal4me
Will you still be against the Fair Tax when Obama raises your taxes to 70%?

The FT is supposed to be "revenue neutral". It would reflect those higher rates by law.

15 posted on 02/16/2008 3:44:29 PM PST by Mojave
[ Post Reply | Private Reply | To 11 | View Replies]

To: xcamel

Another reason it won’t work is because it will never, ever be implemented.


16 posted on 02/16/2008 3:45:46 PM PST by elizabetty (Mike Huckabee for President of the Confederate States of America -- Bad for the UNION)
[ Post Reply | Private Reply | To 1 | View Replies]

To: xcamel
Here we go again. First you post a lame article about the Fair Tax. Then you ping your support group. Then, when some unwary person comes along with a legitimate question or comment, you and your cronies blast him/her with nonsense.

Let me make a prediction: By start of business on Monday, you and your cronies will be patting yourselves on the back and posting congratulatory comments for another FairTax thread successfully hijacked.

17 posted on 02/16/2008 3:46:05 PM PST by foxfield
[ Post Reply | Private Reply | To 2 | View Replies]

To: Man50D

Ping!


18 posted on 02/16/2008 3:46:41 PM PST by foxfield
[ Post Reply | Private Reply | To 17 | View Replies]

To: Mojave

AB) Living like a hermit is the best way to beat the taxman.


19 posted on 02/16/2008 3:47:00 PM PST by xcamel (Two-hand-voting now in play - One on lever, other holding nose.)
[ Post Reply | Private Reply | To 15 | View Replies]

To: GeorgiaDawg32

They tack on 30% in FT on to each dollar spent on the item itself. Then they claim that 30 cents is only 23% of $1.30.

Total scam.


20 posted on 02/16/2008 3:47:27 PM PST by Mojave
[ Post Reply | Private Reply | To 14 | View Replies]

To: xcamel

With a pure fair or consumption tax the government loses the one thing it just can’t stand to lose...

Power...

Its that plain and simple...

Thats why we’ll never see it implemented...


21 posted on 02/16/2008 3:48:20 PM PST by stevie_d_64 (Houston Area Texans (I've always been hated))
[ Post Reply | Private Reply | To 1 | View Replies]

To: foxfield

That’s right.. You folks don’t believe in free speech, or dissenting opinions. What on earth was I thingking...

/hurl.


22 posted on 02/16/2008 3:48:48 PM PST by xcamel (Two-hand-voting now in play - One on lever, other holding nose.)
[ Post Reply | Private Reply | To 17 | View Replies]

To: Mojave

don’t believe so..you’d have to show me where you learned this..the tax is inclusive within the $, not added on..


23 posted on 02/16/2008 3:49:11 PM PST by GeorgiaDawg32 (I'm a Patriot Guard Rider..www.patriotguard.org for info on joining.You DON'T have to ride to belong)
[ Post Reply | Private Reply | To 20 | View Replies]

To: xcamel
Oh don’t worry. Some do gooder will come along and up the tax and give exemptions to the “poor” Our government will see to that. I like the fair tax idea though. I think we ought to do away with property taxes and all the fees we pay for everything. America needs to know that they pay at least 50% in taxes. If we had a 50% sales tax Congress would be run out of town.
24 posted on 02/16/2008 3:49:19 PM PST by CindyDawg
[ Post Reply | Private Reply | To 1 | View Replies]

To: xcamel

What about my tax-paid life savings?


25 posted on 02/16/2008 3:49:53 PM PST by 386wt (Be free and don't die!)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Mojave

And you are fine with this? I thought Conservatives were for LESS government and LESS spending. Let me pay my share by ME deciding how I spend MY money!


26 posted on 02/16/2008 3:49:59 PM PST by Normal4me
[ Post Reply | Private Reply | To 15 | View Replies]

To: xcamel

I had to read your list very carefully... I think some of the ‘fair tax’ people actually believe those things


27 posted on 02/16/2008 3:50:08 PM PST by Mr. K (Some days even my lucky rocketship underpants don't help)
[ Post Reply | Private Reply | To 2 | View Replies]

To: xcamel

LOL. Well played.


28 posted on 02/16/2008 3:50:24 PM PST by savedbygrace (SECURE THE BORDERS FIRST (I'M YELLING ON PURPOSE))
[ Post Reply | Private Reply | To 2 | View Replies]

To: xcamel

Well, for one thing its not fair to the illegal aliens who have to pay taxes on everything they buy. So, the Democrats and Republicans who rule over us would never vote for it.


29 posted on 02/16/2008 3:52:08 PM PST by e-male
[ Post Reply | Private Reply | To 2 | View Replies]

To: Normal4me
Will you still be against the Fair Tax when Obama raises your taxes to 70%?

Nice strawman. Even if McCain is elected, he's not going to implement the FairTax or even reform the tax system. Hell he only came out with the same lame-old "keep Bush's tax cuts permanent" after getting heat from Romney.

The FairTax is a joke. Just implement a single 10% strict flat tax with no deductions or credits.

30 posted on 02/16/2008 3:52:12 PM PST by Extremely Extreme Extremist (The Constitution does not give me the authority to run your life - Ron Paul)
[ Post Reply | Private Reply | To 11 | View Replies]

To: xcamel

The Fair Tax will never work because the establishment will never allow it to be considered seriously.


31 posted on 02/16/2008 3:52:31 PM PST by TommyDale (Never forget the Republicans who voted for illegal immigrant amnesty in 2007!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Normal4me

Well I like it. If it’s too much I’ll cut back on spending.


32 posted on 02/16/2008 3:53:08 PM PST by CindyDawg
[ Post Reply | Private Reply | To 26 | View Replies]

To: GeorgiaDawg32
"my understanding is the tax will be INCLUDED in every dollar, not tacked on..where did you learn this??"

Take something that now costs $1 - a quart of milk, for instance. With the "Fair Tax," it would then cost $1.30.

Almost any high school graduate would be able to tell you that the 30-cent tax constitutes 30% of the original price...

That the "Fair Tax" advocates express it otherwise is prima facie evidence they are liars and frauds, or fools.

33 posted on 02/16/2008 3:53:34 PM PST by Redbob (WWJBD: "What Would Jack Bauer Do?")
[ Post Reply | Private Reply | To 14 | View Replies]

To: TommyDale

No kidding. If people relly knew how much taxes they pay...


34 posted on 02/16/2008 3:54:39 PM PST by CindyDawg
[ Post Reply | Private Reply | To 31 | View Replies]

To: GeorgiaDawg32

When you compare the Fair Tax proposal with today’s sales tax, it’s still 30% no matter how you present it. Fair Tax people will say that of every dollar you spend, $0.23 goes to taxes. True, but then $0.23 is 30% of $0.77 which would have been the cost of the item without the tax.

The bottom line is, today in Austin, Texas I pay 8.5% sales tax which is 8 1/2 cents for an item that costs $1. With the Fair Tax, I would be paying $0.30 instead. To people who have been dealing with sales tax all their lives, that’s called 30%, not 23%.

The Fair Tax people know that a 30%+ sales tax cannot be sold to the American public even if it means the abolition of the IRS, that’s why they call it a 23% rate.


35 posted on 02/16/2008 3:55:09 PM PST by tyke
[ Post Reply | Private Reply | To 14 | View Replies]

To: 386wt

Vote Obama.....he will take care of you.


36 posted on 02/16/2008 3:55:18 PM PST by Normal4me
[ Post Reply | Private Reply | To 25 | View Replies]

To: Redbob

Been awhile since you bought milk? :’)


37 posted on 02/16/2008 3:55:39 PM PST by CindyDawg
[ Post Reply | Private Reply | To 33 | View Replies]

To: Redbob

That’s a tad backwards...

It’s:
“Take any item you’d be willing to pay $10 for, and under the FT, you’re only going to get $7.70 worth of that item”


38 posted on 02/16/2008 3:55:56 PM PST by xcamel (Two-hand-voting now in play - One on lever, other holding nose.)
[ Post Reply | Private Reply | To 33 | View Replies]

To: ancient_geezer; Taxman; Principled; EternalVigilance; phil_will1; kevkrom; n-tres-ted; Jaysun; ...

Fair Tax ping!


39 posted on 02/16/2008 3:55:57 PM PST by Man50D (Fair Tax, you earn it, you keep it!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Redbob

wrong..if milk costs $1 now, it will cost $1 under the fair tax, only the tax is included in the $1..

that’s how I understand it..and I’ve read the book..can you show me where you learned it’s added on and from what source?

I’m not tryin to be a bugger here, just want to debate this and see where you are gettin ur facts..


40 posted on 02/16/2008 3:57:02 PM PST by GeorgiaDawg32 (I'm a Patriot Guard Rider..www.patriotguard.org for info on joining.You DON'T have to ride to belong)
[ Post Reply | Private Reply | To 33 | View Replies]

To: Man50D

3...2...1...

“Time for the nasty poster hour....”


41 posted on 02/16/2008 3:57:32 PM PST by xcamel (Two-hand-voting now in play - One on lever, other holding nose.)
[ Post Reply | Private Reply | To 39 | View Replies]

To: mazda77

I’ve read the books. Both sides. The math doesn’t work. But that’s not what I was arguing. Even *if* the math worked, the proposal would never gain enough support from the public. Once they know the sales tax would be 30%, then they will reject it out of hand. That’s why it’s a non-starter.


42 posted on 02/16/2008 3:57:48 PM PST by tyke
[ Post Reply | Private Reply | To 12 | View Replies]

To: Normal4me

ROFL...he’ll fix health care, solve all wars, learn the secret to keeping women from fainting, cure worldwide poverty and have us all holding hands singing kumbaya..

and on the 7th day, he’ll rest..


43 posted on 02/16/2008 3:59:16 PM PST by GeorgiaDawg32 (I'm a Patriot Guard Rider..www.patriotguard.org for info on joining.You DON'T have to ride to belong)
[ Post Reply | Private Reply | To 36 | View Replies]

To: GeorgiaDawg32

I was jut thinking about that it would be nice if the tax was included in the price but then on second though...let’s see what happens when a person buys 100 dollars of groceries and the receipt shows 30% tax. Burying the tax in the product makes it not so unacceptable:’(


44 posted on 02/16/2008 4:00:48 PM PST by CindyDawg
[ Post Reply | Private Reply | To 40 | View Replies]

To: xcamel

This article misses the major point of the Fair Tax. Prices would not go up right now the tax the company pays is embedded in the cost of the goods, that embedded cost would go away.


45 posted on 02/16/2008 4:01:32 PM PST by NavVet ( If you don't defend Conservatism in the Primaries, you won't have it to defend in November)
[ Post Reply | Private Reply | To 1 | View Replies]

To: tyke

well, you believe 30%, I believe 23%..but what we believe is irrelevant in any case..it’s a non-starter because, until attitudes in congress change, the DC establishment will be absolutely unwilling to give up the power of the IRS..


46 posted on 02/16/2008 4:01:36 PM PST by GeorgiaDawg32 (I'm a Patriot Guard Rider..www.patriotguard.org for info on joining.You DON'T have to ride to belong)
[ Post Reply | Private Reply | To 42 | View Replies]

To: Menehune56

Good point.

I like the fair tax idea for a couple of reasons that really don’t have anything to do with the tax rate.

I do like the end of the IRS.

I do like the taxation of the underground/criminal economy.

I do like the taxation of foreigners.

I do like the ability of an individual to determine the tax he pays by determining what he buys. (For example, I’m sure this will bring back “victory gardens.)

There are other things.

Also some things I don’t like.

I don’t like the idea at all if the 16th amendment is not gone BEFORE this is implemented.

I don’t believe the notion that companies will lower the price of goods due to the cost of taxes built into prices. They won’t.

Given the above, I don’t believe that companies should be exempt from paying sales tax on their purchases.

I don’t believe that mortgages should be exempt.

I don’t like that states will still have their host of taxes: income, property, etc., etc.,

I do think states and fed will increase fees AND charge sales taxes on them.


47 posted on 02/16/2008 4:02:50 PM PST by xzins (Retired Army Chaplain -- Those denying the War was Necessary Do NOT Support the Troops!)
[ Post Reply | Private Reply | To 3 | View Replies]

To: xcamel

30,000 IRS employees will suddenly find themselves having to look for productive work at real jobs.


48 posted on 02/16/2008 4:04:11 PM PST by coloradan (The US is becoming a banana republic, except without the bananas - or the republic.)
[ Post Reply | Private Reply | To 7 | View Replies]

To: xcamel

I don’t see how anybody could oppose the Fair Tax

Since every group, low medium and high income will pay less taxes and yet the total revenue to the government will not go down its free money. How could anyone object?


49 posted on 02/16/2008 4:04:52 PM PST by gondramB (Preach the Gospel at all times, and when necessary, use words.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Extremely Extreme Extremist

This is such a stupid argument anymore. Just be a sheep and let the governmant dictate how much of YOUR money they seize every week and keep voting Republican...


50 posted on 02/16/2008 4:04:58 PM PST by Normal4me
[ Post Reply | Private Reply | To 30 | View Replies]


Navigation: use the links below to view more comments.
first 1-5051-100101-150151-200 ... 601-613 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson