FairTax Discussed on Floor of U.S. House of Representatives

Americans For Fair Taxation ^

[Man50D]

Iowa Congressman Steve King hosted a "Special Order" on the House floor on March 17 to discuss the FairTax. For an hour, Members of Congress discussed how our legislation can save the U.S. economy. Several H.R. 25 co-sponsors spoke about the FairTax during this historic session.

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[Man50D]

Fair Tax ping!

[Principled]

bump-tation

[napscoordinator]

I am seriously glad that they are doing this, but what percentage would they use? I mean three years ago when I really was a huge supporter of this it was thought 15 percent for all would do the trick, but after the last three years of so, I think it will have to be significantly higher...like 25 or 27 percent. Also don’t forget they will add a VAT to all things soon...I know it is coming. They will charge 3 percent to everything like they do in Europe and Asia.

[napscoordinator]

By the way, I did a prelimiary tax for 2008 and I paid 9300 dollars in federal and those creeps want another 1,093 dollars...I am pissed! I want a zero bottom line!!! lol.

[JustSurrounded]

Sadly, as this AIG bill so eloquently illustrated, income tax is not about raising money. It’s punitive and all about masters and slaves. I would love a flat tax, would compromise with a fair tax, but either presumes men of good will working toward an equitable system of raising money.

[Man50D]

I am seriously glad that they are doing this, but what percentage would they use? I mean three years ago when I really was a huge supporter of this it was thought 15 percent for all would do the trick, but after the last three years of so, I think it will have to be significantly higher...like 25 or 27 percent. Also don’t forget they will add a VAT to all things soon...I know it is coming. They will charge 3 percent to everything like they do in Europe and Asia.

The first question that should be asked is what percentage do we pay now? The deceptive secret about the income tax is there are embedded taxes in the price of every item people purchase. Corporate income taxes are a cost to businesses. They past the cost of the levied tax onto the consumer in the form of higher prices. This occurs at each stage of production. The total tax imposed is just shy of 23% for every purchase. The remaining 77% is the actual price of the item. We have been essentially paying sales taxes multiple times for decades on everything we purchase. The VAT you fear will be imposed in the future has existed for a long time without you realizing what is happening.

I'm not sure how you concluded the consumption rate under The Fair Tax will be 15%. The rate has always been stated as 23%, equal to the amount VATs factored into products with the income tax. Most people fall into a 15% tax bracket. Also all wage earners pay 7.65 percent in payroll taxes. That’s 23 percent right there, without taking into account the 7.65 percent employer matching. Additionally, you have to add in the business taxes and associated compliance costs passed on to consumers in higher prices. That total far exceeds the 23% that will be levied under The Fair Tax.

[Man50D]

I would love a flat tax,

The Fair Tax is a flat tax but on consumption instead of income. A flat tax on income will still maintain the same government agency who will be going after AIG to collect the 90% punitive tax, the IRS.

[Principled]

They will charge 3 percent to everything like they do in Europe and Asia.

Right now we pay more than that - in addition to our income and payroll taxes - but this excess is hidden in business tax costs.

Just a cursory review of numbers indicates that all goods and services have prices that include, on average, a 10% increase due solely to hard tax costs [payroll taxes, income taxes, compliance costs.] That is, business taxes are a hidden sales tax.

[autumnraine]

Too late!!

Why wasn’t this idea pushed when Bush was President? Does anyone think that the Fair Tax will get anywhere with an administration that punishes people by the IRS???

[Principled]

It’s been goin’ on since 1997. 12 years later, it’s starting to make news.

It used to be only “anti-IRS kooks” we were called. Now, there are millions and millions on board and right now [5 months into this Congress] there are 50+ cosponsors and folks are asking good questions about the whole national retail sales tax idea.

A flat tax on spending w/ an exemption for necessities [like our existing “standard deduction”...

[JustSurrounded]

I guess I don't quite understand exactly what it is. I've gone back and read through web page after web page of glowing pr about it, but not sure if I've grasped what it truly is. Do I have this right:

It is a national sales tax on both goods and services. So, for example, doctors who did not previously collect tax on office visits would now do so. Additionally, everyone gets a monthly check from the government to offset taxes on basics, the presumption being, that, for the poor, this would render them tax-neutral. Everyone needs to file something with social security numbers and household/dependent info in order to get that monthly check.

Is that basically it? I have to admit I think income tax is an abomination, and except for the fact that is actually IN the Constitution, I find it highly unconstitutional (if that makes any sense).

[Man50D]

“It is a national sales tax on both goods and services. So, for example, doctors who did not previously collect tax on office visits would now do so.”

There will be a tax imposed on medical services however you need to keep in mine we are already taxed on everything we purchase thanks to embedded taxes(see post #7). No one complains because they aren't seen. Out of sight, out of mind is the Congress critters favorite saying. Raise the corporate tax rate, pass that business cost onto the consumer and no one is the wiser. The Fair Tax will end this deceptive practice by imposing a one time tax at the point of sale as a separate entry on the receipt.Also keep in mind a person's purchasing power will increase making purchases more affordable.

Additionally, everyone gets a monthly check from the government to offset taxes on basics, the presumption being, that, for the poor, this would render them tax-neutral.

The monthly prebate check will cover taxes on necessities up to the poverty level for the purpose of lowering the overall tax burden, more so as household income decreases. Only a very small number will have no effective tax rate(after the prebate). Most people will have an effective rate somewhere between zero and 23%.

I suggest you click on the Fairtax.org logo above and research the website at your leisure, particularly the FAQ section. It will answer many of your questions. People at the Fair Tax Nation website will also provide information. You will have to register to participate. Registration is free.

[Principled]

So, for example, doctors who did not previously collect tax on office visits would now do so.

Not quite - doctors already collect taxes when they charge you - they recover any income taxes, payroll taxes, and any other costs. If they didn't, they'd go broke. They collect their tax costs just as they collect amounts with which they pay the utilities bill, copier lease, payroll and every other cost - again - they'd go broke if they didn't collect their costs.

The difference is that under the income tax, those amounts are invisible. It's even tricked you, if momentarily. Under the nrst, those amounts are visible - and are seen and felt daily.

Everyone who chooses my receive the offset on necessity spending - just like now - anyone who chooses may take the standard deduction to offset necessity income.

BTW the income of today had to be added by amendment to the constitution. Excises have always been in the constitution.

[Principled]

You may also wish to consider researching outside the pro-fairtax sites. Heritage Foundation, CATS, etc.

[JustSurrounded]

Thanks. I understand that all businesses must recoup their taxes in their fee structures. (By that reasoning, you could make the argument that we already have a shadow national sales tax.) And don’t get me wrong, I like the idea of ditching that horrid income tax. I just wanted to understand how implementation of the fair tax would appear in my daily life.

[Principled]

By that reasoning, you could make the argument that we already have a shadow national sales tax.

Indeed!

That's right. It's just invisible. Making it visible would put some downward pressure on taxes. So would eliminating withholding!

[Principled]

I just wanted to understand how implementation of the fair tax would appear in my daily life.

Nominal prices would rise, but real prices fall... ie your purchasing power increases.

The nrst collects from a larger base with more payers. Hence more people all pay a little less.

Example - a baseball glove my grandson wants has a $100 price tag on it. But it costs me more than that. I paid 21% effective fed tax last year - so i'd have to earn $126.56 to have enough left to buy it. So it really costs me $126.56.

Under the nrst, the tax costs are stripped away [competitive industries only]and prices fall by 10% [conservatively]... so it becomes $90. Then add the nrst and the price goes to $117. That's less than $126 obviously.

Note that I did not include the effect of the necessities offset in the example. Doing so would decrease the nrst rate below the marginal rate.

I've calculate my effective rate and it's about 17% - depending on a few things. At 17%, the glove would cost me $108.43.

I think examples help one see what questions to ask.

[gkarlin]

To help gain on the momentum of the Tea Party spirit and the Fair Tax, or just to check it out if you are curious, please check out my friend Marilyn Rickert’s website - http://www.fairtaxnation.com.