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Flat Tax vs. Fair Tax
freedomworks ^ | Today | Julie Borowski

Posted on 07/07/2011 12:42:35 PM PDT by jessduntno

The current U.S. tax system is huge convoluted mess. The Internal Revenue Service (IRS) has six federal income tax brackets ranging from 10 to 35 percent. Our so-called progressive tax system punishes the most productive members of society with a higher tax rate. The current tax system is riddled with loopholes and biases that hurt individuals who save money for the future. Not only does our tax code treat citizens differently but it is hopelessly complicated. According to the IRS, the average taxpayer spends 26.5 hours preparing and sending in their taxes. The ever-growing Internal Revenue Code is now over 3 million words. It’s far too complex, intrusive and long.

We can all agree that we clearly need to fix the tax code. The two most common tax reform proposals are the flat tax and the fair tax. Which one is best? First, both the flat tax and the fair tax (if implemented correctly) would likely be better than the current tax system. As Cato Institute scholar Dan Mitchell says, “from an economic perspective, the flat tax and the national sales tax (or fair tax) are virtually identical. Both would junk the current system. Both would restore fairness by taxing at one low rate. Both would eliminate all forms of double taxation.”

FreedomWorks has long concentrated our efforts on implementing a flat tax. The flat tax is simple and would generate more economic growth than the status quo. Instead of our current multi-rate tax system, a flat tax would tax all individuals at the same rate. Under a 10 percent flat tax, someone making $100,000 annually would pay a $10,000 federal income tax. It’s a simple equation. It would not punish productive members of society with a higher tax rate.

I personally advocate the flat tax being as low as possible. Of course, any tax reform should be accompanied by significant spending cuts. The flat tax would remove special interest loopholes from the tax code and allow individuals to file their taxes within five minutes on a form the size of a postcard.


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If we don’t repeal the 16th Amendment first, we could end up with both an income tax and a national sales tax. The politicians in Washington would love to have both sources of money. Several European governments have added a national sales tax on top of their federal income tax. The same trick could happen in America if we aren’t careful.

Fair tax advocates claim that it would get rid of the IRS but it would likely be replaced with another agency by a different name. The proposal promises that individuals under a certain income threshold would get some money back at the end of the year. Who would administer this? Unlike the flat tax, the fair tax as a replacement for the income tax has never been implemented in any country. We have no real world examples of what a fair tax would look like in action. Perhaps the fair tax isn’t as politically feasible as the flat tax. It’s important to remember that repealing a constitutional amendment requires the approval of 290 House members, 67 Senators and a majority of the legislatures in three-fourths of the states.

1 posted on 07/07/2011 12:42:36 PM PDT by jessduntno
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To: jessduntno

I prefer a flat tax, but I would take the fair tax. I’ll vote for a candidate that supports either.


2 posted on 07/07/2011 12:46:45 PM PDT by Durus (You can avoid reality, but you cannot avoid the consequences of avoiding reality. Ayn Rand)
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To: Durus

I would take the flat tax. Anything with the work “fair” in it seems to be rooted in communism and socialism, and we know how that work.


3 posted on 07/07/2011 12:48:31 PM PDT by BuffaloJack (2012 is the opportunity to get rid of Obama and his Empire of Lies.)
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To: jessduntno
We have no real world examples of what a fair tax would look like in action.

We had no idea what a constitutional republic where the government had strictly limited powers and was subordinate to the people would like either. Not the best argument that can be considered. "The world" isn't the best place to derive ideas on government, taxation, or pretty much anything important.

4 posted on 07/07/2011 12:51:05 PM PDT by Durus (You can avoid reality, but you cannot avoid the consequences of avoiding reality. Ayn Rand)
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To: Durus

I have heard that a 10% flat tax would give the government more money than they would know what to do with...if you can believe that. But.....I have also heard politicians also say that 20% or greater would be required. As for the IRS, it is complicated because the politicians want it that way.


5 posted on 07/07/2011 12:53:01 PM PDT by RC2
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To: jessduntno

Anyone that wants a flat or fair tax.. is just begging for a VAT... in the current environment..
In case one does not not know what a VAT is.. is begging for out of control taxation..

A VAT is taxation on everything that moves or doesn’t move..
AND after all taxation is done.. there will be a tax on completion..

The next stage is paying the goverment rent for everything making taxes obsolete..
LIKE: you know.. property taxes.. as an example..


6 posted on 07/07/2011 12:54:19 PM PDT by hosepipe (This propaganda has been edited to include some fully orbed hyperbole...)
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To: jessduntno

Congress not IRS has the various tax brackets, loopholes, etc. IRS could be called XYZ and we would have the same brackets, loopholes and Congressional corruption as we have now. We need Congressional Reform more than a new tax system. There will be no new tax system because CONGRESS LINES THEIR POCKTH THIS SYTEM!


7 posted on 07/07/2011 12:54:31 PM PDT by Tuketu (Socialize the Legal System. Then we are all equal before the law.)
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To: jessduntno

Tax COLLECTION is not the bigger problem. Revenue is already 19% of GDP and according to the Laffer curve, is about as much as can be gained by taxation.

The bigger problem is SPENDING. We are currently about 24% of GDP for spending and that needs to cut back to 18%. Anything else is rearrainging deck chairs.


8 posted on 07/07/2011 1:03:27 PM PDT by taxcontrol
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To: jessduntno

Assume a flat tax with a percentage set where you are comfortable --- and roll the hands of time forward.

Watch as exceptions are legislated for classes of individuals based upon their race, gender, income, needs, etc. Watch as the "rich" are encouraged to pay their share by kicking in a little extra. Watch as government overspends making it necessary to raise the rate on everyone. Watch as you end up exactly where we are today.

I've done the research. I've read the book. I've been to the meetings. A number of our Founders favored a consumption tax. That's what the Fair Tax is. It's the best way to fix a broken system.


9 posted on 07/07/2011 1:11:19 PM PDT by so_real ( "The Congress of the United States recommends and approves the Holy Bible for use in all schools.")
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To: hosepipe

Anyone that wants a flat or fair tax.. is just begging for a VAT... in the current environment..

You didn’t read the article...it covers that point. Quite well, I though.


10 posted on 07/07/2011 1:15:17 PM PDT by jessduntno (Liberalism is socialism in a party dress. And just as masculine.)
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To: RC2

US GDP for 2012 is projected to be a tad over $15T. So for simplicity, I will just go with a round $15T.

Flat tax chart

10% = 1.5 T
14% = 2.1 T
18% = 2.7 T
20% = 3.0 T
22% = 3.3 T

Total spending for 2011 = 6.2 T (estimated)
18% in Healthcare
16% in Pensions
16% in Defense
14% in Education
11% in Welfare
25% in Other

Without any spending cuts, the FEDERAL flat tax rate would need to be at or near 42%


11 posted on 07/07/2011 1:15:56 PM PDT by taxcontrol
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To: jessduntno

This is a false choice. There should no Federal taxes period. Money equals power and FEDGOV has to much of it. They should be limited to the funds they raise from excises and duties. If they need more money they should hold a Jerry Lewis telethon or a bake sale. If the people think its worth it they’ll give their money voluntarily.


12 posted on 07/07/2011 1:16:00 PM PDT by Roninf5-1
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To: Roninf5-1
You have made the best comment so far.

The Flat Tax would only smooth out the current tax system. The FairTax would replace all federal personal and corporate income taxes and do away with the IRS.

The current bill before congress would only allow implementation of the FairTax if the 16th Amendment is repealed. Both FairTax and income taxes cannot co-exist.

Because of the other features of the FairTax not listed here, it is far and away (IMHO) better than any flat tax. I don't think any posters here really understand the FairTax in its entirety. Read The FairTax Book by Neal Boortz to get a good understanding of the FairTax.

13 posted on 07/07/2011 1:26:42 PM PDT by Tucson Jim
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To: Durus

We had no idea what a constitutional republic where the government had strictly limited powers and was subordinate to the people would like either.”

And look how well that turned out?


14 posted on 07/07/2011 1:27:17 PM PDT by jessduntno (Liberalism is socialism in a party dress. And just as masculine.)
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To: taxcontrol

I thought current federal spending was about $3.7T.


15 posted on 07/07/2011 1:46:06 PM PDT by riverdawg
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To: so_real; All

I prefer the Fair Tax or rather a consumption tax. A tax that is based on what you spend not what you earn.

Plus if everyone realized where all these taxes on the Corporations and all kinds of other places, if everyone could see that corporations DON’T PAY TAXES, they just pass on the cost to the consumer. So, everyone in everything we buy or services we purchase is paying a hell of a lot of taxes again.

So, strip all these taxes and put them on the side of consumption and you will see how much taxes you are really paying. And when everyone sees how much the taxes they really are paying, you will see more participation in the political arena.

Till now this congress has been able to hide tax increases by taxing the corporations and businesses and appealing to our class envy. All the while laughing at how stupid we all are.


16 posted on 07/07/2011 1:50:04 PM PDT by el_texicano (Palin 2012 - Viva la Palainista's)
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To: jessduntno
Of the two I like the Fair Tax because it puts US and foreign production on the same footing. Foreign and multinational companies can currently set up their pricing structure and US subsidiaries so that very few profits are made in the US on imports putting US companies at a disadvantage. The Fair Tax sets the same taxes for foreign and domestic products.

The Fair Tax's biggest weakness is that it hits people a second time who have already earned money and paid taxes on it but saved rather than consumed at the time. Those who borrowed and spent will be essentially untaxed when they earn and pay off their debts. Also I think that untaxed black markets will pop up all over the place unless the IRS's replacement is stalking everywhere looking for untaxed sales.

17 posted on 07/07/2011 1:55:08 PM PDT by KarlInOhio (Extremism in the defense of liberty is no vice! Tea Party extremism is a badge of honor.)
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To: so_real; All

Not to mention removing all the taxes off of the job creating side of the private sector. Think of all the savings businesses will be blessed with. No more lawyers to hire for tax savings from the IRS. No more having to worry about collecting the taxes from workers. How many people work for just these type of positions?

You talk about businesses freed to pursue what they are there for? Think of all the savings that will be passed on to the consumer?

Just take an item that you purchase then think of all the taxes that went into producing that product.

Oh baby, talk about a rip roaring economy. People will be stunned to see it happen.


18 posted on 07/07/2011 1:57:43 PM PDT by el_texicano (Palin 2012 - Viva la Palainista's)
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To: riverdawg

My numbers came from this site: http://www.usgovernmentspending.com/


19 posted on 07/07/2011 1:58:54 PM PDT by taxcontrol
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To: jessduntno

Re-value our dollar 1 for 10, go back to gold backing, close IRS. A loave of bread that costs 2.xx dollars now would cost 20 cents in new money. Wash. would get 23 pecent of the sale. The elimation of various costs would bring the price of a 1 dollar item DOWN to 77 cents or so. So figuring in the 23 cents for the govt. you still would pay 1 dollar for the item. But, with all our debt, this may be hopeless.


20 posted on 07/07/2011 2:01:50 PM PDT by Waco (Nominate Palin or forget 2012 you lost)
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To: riverdawg

You are correct with regards to FEDERAL spending. I was referencing TOTAL (Fed + state + local) spending. The 42% represents the total tax load on US citizens.

If we look at it from just the Federal level. The break even point is between 24% and 25%. Again, that is without any spending cuts.


21 posted on 07/07/2011 2:02:01 PM PDT by taxcontrol
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To: jessduntno
I wish to eliminate the IRS and do not support starting "some agency similar to it that concerns its self with how much I make.

There are far, far too many temptations for elected leaders to promise "exemptions" or "exclusions" in return for their vote.

Nope, totally eliminate the 16th Amendment, then move to the flat tax, as it is now, almost (some would say more) people pay NO income tax, no matter how much they earn, others are taxed on monies that they've already paid taxes on!!!

Time to shut this door once and for all IMHO!

22 posted on 07/07/2011 2:02:59 PM PDT by zerosix (native sunflower)
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To: jessduntno

[ You didn’t read the article...it covers that point. Quite well, I though. ]

I have read many fair and flat tax proposals on FR..
They are the same basically.. same concepts..

Congress mainly and the american people have become socialists...
SSA is already pure socialism.. only thing remaining is to make the rest of the system purely socialist..

UNTIL the federal government has been reduced to manageable size..
ANY attempt to recover proper taxation will NOT happen..
Any that trusts it will has a Utopian bent.. and resides in OZ..


23 posted on 07/07/2011 2:11:02 PM PDT by hosepipe (This propaganda has been edited to include some fully orbed hyperbole...)
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To: jessduntno
I'm pro-Fair Tax and I vote.

The reason for the massive pages of current tax code is defining various “incomes” (capital gains, wages, deferred, etc ...) and how to “report” and calculate with numerous exemptions and on, and on, and on to the point that the IRS and millions of private tax accountants come up with different scenarios and solutions.

Plus, Uncle Sam still has his giant bureaucracy into your so-called “private” affairs. The proposed Flat Tax does not solve these issues rather is simply flattens them which arguable is better than what we have today.

With the Fair Tax, defining a “sale” is nowhere as difficult. But the big bonus is Uncle Sam won't be all up in your personal affairs.

Most states already have sales tax collection systems in place. Without going into great detail about the Fair Tax, I encourage one to read the Fair Tax Book for the particulars. Granted, there is a lot to argue about, but for me, the restoration of some personal financial privacy moves in the direction of liberty.

There is no secure way to “trust” politicians from legally enacting more government “greed,” but reading the Fair Tax Book answers many of these type of honest objections. We are only mere citizens ruled by the governing class. (If you don't believe that, just ask them). Our only strength is in numbers.

I believe many US citizens are witnessing an American revolution of rejecting the statist status-quo. Me, I am participating. Here is how: I am a Tea Party of One! I work to help other Tea Party individuals to politically restore our Constitutional Liberty. I fight against statist tyranny. I financially support FreeRepublic and I support the Fair Tax.

24 posted on 07/07/2011 2:18:59 PM PDT by taxcutisapayraise (Making Statism Unpopular)
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To: taxcontrol

[ US GDP for 2012 is projected to be a tad over $15T. So for simplicity, I will just go with a round $15T.

Flat tax chart

10% = 1.5 T
14% = 2.1 T
18% = 2.7 T
20% = 3.0 T
22% = 3.3 T

Total spending for 2011 = 6.2 T (estimated)
18% in Healthcare
16% in Pensions
16% in Defense
14% in Education
11% in Welfare
25% in Other

Without any spending cuts, the FEDERAL flat tax rate would need to be at or near 42% ]

I see no problem with this, if everyone was having to pay 42% of their income to the government, Tea party Ranks would swell and we would see some real spending cuts.


25 posted on 07/07/2011 2:21:24 PM PDT by GraceG
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To: jessduntno

Other than Herman Cain, who is backing the Fair Tax, has a single one of the Republican candidates made fundamental tax reform a key part of his platform? If not, why not? Either the Flat Tax or the Fair Tax would kill the present corrupt system and deprive hack career politicians of their power over the economy.


26 posted on 07/07/2011 2:29:27 PM PDT by hellbender
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To: taxcutisapayraise

A flat tax is a fair tax. The use tax you admire is confiscatory at best and is not necessary, especially as it wil GROW the government, not reduce it. Black markets would flourish and crime would escalate.

Why not a flat tax? Ten percent of my income has the same value to me as ten percent of yours ... ten percent ... and if we have the same amount of skin in the game we have at least some interest in government, unlike the use tax, where there would be a tremendous body (still) of people who don’t pay and, therefore, don’t care.

The one who pays no taxes has no interest...and we are about to perish from freeloader ennui...if presented with a budget that is designed to provide that which the State requires to function at the level at which we all agree, through representative republic votes, we will fare better and be more able to correct course.


27 posted on 07/07/2011 2:36:31 PM PDT by jessduntno (Liberalism is socialism in a party dress. And just as masculine.)
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To: jessduntno

Ten percent of my income has the same value to me as ten percent of yours ... ten percent ...

Same value, but not the same buying power, which is why a "flat" tax is doomed not to stay flat for very long.

For easy math, let's say you and I each have a family of four, a hamburger costs $3, and the "flat tax" rate is 50%. You are a doctor ... you earned $24 today. I'm a ditch digger ... I earned $12. After the government takes half of your income, and half of mine, you have $12 to spend and I have $6. Everyone in your family gets hamburger tonight, but only my kids eat today.

A kind-hearted legislator will take my case in no time and introduce legislation to reduce my tax burden so we can all eat too. That's only fair. So now we have a two tiered "flat" tax.

But wait, that means the government is collecting less revenue, having reduced my tax obligation. That means it'll have to raise your taxes to make up for it, because the government is not good at tightening its belt. But you don't have a dollar to spare. You can barely cover a burger for each family member now.

Another noble legislator will come to save the day. The "rich" will have to kick in a little extra, pay their fair share you know, to make up for the lost revenue from ditch diggers like me. ANd so a third tier is introduced.

Amazing, you now have a graduated tax system just like we have today. And soon history will repeat itself to bring us to the exact same mess we are in today.

A consumption based tax with a prebate for the poverty stricken is the only fair solution ... the Fair Tax.


28 posted on 07/07/2011 3:04:55 PM PDT by so_real ( "The Congress of the United States recommends and approves the Holy Bible for use in all schools.")
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To: jessduntno

The FairTax replaces the Income Tax and...

* Ends - Filing income tax returns!
* Ends - IRS audits and fines!
* Ends - IRS costs of $500 billion/year!
* Ends - Tax code abuse by politicians!
* Ends - Tax free underground economy!
* Ends - Tax on businesses (more jobs)!

——— www.FAIRTAX.org ———


29 posted on 07/07/2011 3:29:22 PM PDT by StraightDave (.)
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To: jessduntno
It's a good discussion to have to determine once and for all what is the most fair and moral taxation method or system. The source of all fairness and morality is God himself, so why not look to the ultimate source of truth. God required the individuals of the nation Israel to tithe. The word "tithe" comes from "tenth", meaning the Hebrews were commanded to give 10% of their income to the church/government which was one and the same at that time. So if a FLAT TAX is good enough for God and His chosen people, it ought to be good enough for everyone else.

Now if God wants 10%, any government wanting more than that is implying that it is more important than God. Of course liberals certainly want us to believe that government IS God (and it's certainly theirs) but in a perfect system, government flat tax should not equal or exceed 10%.

This assumes that people are tithing as well, to a church. Of course not everyone does this, but if they did, the churches could provide the "safety net" of esssentials (food, clothing, shelter, basic health care, education, job training) for those in need. I'm sure they would do a superior job as well compared to the government.

So how to get people to "tithe" to churches (or non-profit organizations providing these essentials) in addition to paying a low flat tax to the government? Easy. Make the flat tax rate 25% for those who do not "tithe". For those that do "tithe", they reduce their flat tax rate by $2 for every $1 they tithe to a church (or priviate charity that is providing for the poor) up to a maximum of 20% of their income. In other words, if someone gave 10% of their income to church/charity, then their flat tax rate would fall by double that amount (20%), making their flat tax rate 5%. Ultimately, this would mean they are out of pocket 15% of their income (as opposed to 25% if they didn't want to bother with "tithing").

A couple of other notes. God didn't have "deductions". It was a true FLAT rate of 10%. So, there would no deductions in this system, either. No mortgage deductions and no deductions for dependants. If you want 10 kids, great, but you still get to pay the same rate as everyone else. Secondly, NOBODY gets off "scott free". There is no "minimum". EVERYONE pays the tax/tithe. This would have a number of beneficial aspects. First, you don't get rewarded for hovering just below the "poverty line", because there will be no such thing. If you have to pay no matter how little you make, you might as well try to make as much as you can, which is beneficial to society instead of a drain. It's also good for the soul to give and contribute, so why rob anyone of that? Jesus said the widow making a meager donation at the temple was more blessed than the wealthy giving huge amounts. If she had been told "hey, you are poor and helpless, so don't give us anything, someone else will pick up your slack", she would have been robbed of her blessing.

Also, if you are contributing financially to something you are more likely to be watchful of how that money is being spent. How many Americans pay NO tax today? And how many of those Americans have no concern or interest in their government, other than getting their next check? Now, if all those people had to contribute instead of being on the dole, a lot of them would be much more interested in how their government operated and how their money was spent.
30 posted on 07/07/2011 4:27:09 PM PDT by GLDNGUN
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To: jessduntno

Are you suggesting that it didn’t turn out well? Perhaps you would have preferred that we stay a colony?


31 posted on 07/07/2011 5:06:13 PM PDT by Durus (You can avoid reality, but you cannot avoid the consequences of avoiding reality. Ayn Rand)
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To: Durus; Taxman

Imagine how much money we could save getting rid of the IRS?


32 posted on 07/07/2011 5:10:49 PM PDT by AGreatPer (Support the troops. Every Friday night at Walter Reed.)
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To: so_real; jessduntno; BuffaloJack
"A consumption based tax with a prebate for the poverty stricken is the only fair solution ... the Fair Tax."

Only "fair" solution? Nonsense!

BuffaloJack's instincts were keen to observe that:
"Anything with the word 'fair' in it seems to be rooted in communism and socialism..."

The so-called 'fair' tax can only be judged fair by use of very subjective (progressive) thinking. Which, by definition, is objectively UNFAIR.

Certainly there are fabulous components to the total FairTax boondoggle. We definitely should switch to consumption based taxation. We should streamline the system, get rid of the IRS as we know it and tax everybody at ONE RATE.

But I would implore anyone who considers themselves conservative/ libertarian/ RightWing/ originalist/ etc. to seriously consider the ramifications of the FairTax's poison pill: the God awful 'prebate' concept.

Prebates are NOT something simply for the "poverty striken" (as if that would make it ok). NO. They are a check sent to EVERY American household EVERY month from good old Uncle Sam! In theory, to cover the expense of the tax rate for purchases up to whatever level that DC bureaucrats decide (and continually re-decide) is what 'poor' people might spend.

The fairness of which these people speak is the very liberal concept of progressive taxation. The effective tax rate under the FairTax will range from 0% to just under 23%. It is not even close to a flat tax. And it is only fair by the most subjective of definitions - in other words, the liberal definition.

The FairTaxers bad-mouth a flat income tax stating that exceptions and exemptions will creep back into the effective rate. And they are correct. However, the asinine prebate idea does the same dang thing, FROM THE START, under the FairTax.

Once the wildly subjective 'poverty rate' determines how many digits appear on each household's monthly federal sugar payment, then I fully expect that poverty will strike a majority of voters by the next election. Meaning that vote-buying politicians (which are with us always) will see to it that both the poverty rate and the tax rate will skyrocket leaving fewer folks paying anything close to the stated tax rate and millions more who pay nothing.

Prebates ARE the built-in, streamlined facilitation of the exemption process which FairTaxers say would eventually foul a real flat tax. Apparently the answer is to build such corruption into the plan from the start so it would seem as much like corruption.

Sales tax, YES!

Progressive rates, NO!

Listen to the wise Buffalo. Subjective fairness itself IS the enemy of responsible budgeting. Don't fall for the prebate trap.

33 posted on 07/07/2011 5:35:32 PM PDT by BuddhaBrown (Path to enlightenment: Four right turns, then go straight until you see the Light!)
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To: BuddhaBrown; jessduntno; BuffaloJack

Prebates are NOT something simply for the "poverty striken" (as if that would make it ok). NO. They are a check sent to EVERY American household EVERY month from good old Uncle Sam!

Correct! As I re-read my prior post, I see I could have chosen my words better and clarified. Yes, the prebate is designed to take care of the poverty stricken. And, yes, every American citizen gets the same prebate amount. That is the beauty, really. Finally taxation that treats all citizens equally (fair-ly).

The effective tax rate under the FairTax will range from 0% to just under 23%.

Add up your taxes now. Include the payroll tax. Now include the 7% your employer pays for the other half of your payroll tax. Now include the business taxes that are built into the product cost we all pay at the cashier. You are already over 23%. The estimates I've seen for a flat tax that will fund government exceed 40%. I'll take the Fair Tax.

Meaning that vote-buying politicians (which are with us always) will see to it that both the poverty rate and the tax rate will skyrocket leaving fewer folks paying anything close to the stated tax rate and millions more who pay nothing.

The same tax rate applies to every single voting citizen. The vote buying politicians that allow the Fair Tax to skyrocket won't be in office long. This is a transparent tax. It's not hidden like the income tax is. They can't disguise it or run from it. Nor can they disguise the poverty line. And every citizen gets issued the same prebate check. Just how will a vote buying congressmen leverage it to his benefit when he has to answer to the constituency of all?

The Flat Tax is still and "income tax". It's the same old game being played today. The Fair Tax is a "consumption tax". Switching to a consumption tax is the best way to bring government spending back under control. They can no longer spend when We the People aren't spending.

Compare


34 posted on 07/07/2011 6:52:01 PM PDT by so_real ( "The Congress of the United States recommends and approves the Holy Bible for use in all schools.")
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To: so_real; All
"The same tax rate applies to every single voting citizen."

That simply is NOT true.

I've read all the FairTax propaganda too. The "rate" they talk about is really a range. People will pay from 0% to 23% (or whatever) as a personal effective tax rate based on how much they consume and on the current size of the Uncle Sam sugar checks sent to EVERYONE monthly.

Raising the "poverty" rate (which will quickly be renamed the "subsistence" or "living" rate) in sync with raises in the tax rate will be just as politically easy or more so than adding similarly evil progressivity today. The actual taxation is built-in and hidden to those not looking. But the sugar checks... ooohh, baby... the sugar checks will be not only VERY visible, they will become intravenous dependencies.

To ALL conservatives tempted by bad ideas like the FairTax prebates, I'd ask that you consider one possibility:

If having the federal government sending a check, the amount of which is decided politically, to EVERY home in America EVERY month does not set off a huge red flashing light in your conservative spider senses, then it's maybe time to get the bulb checked!

35 posted on 07/07/2011 7:22:17 PM PDT by BuddhaBrown (Path to enlightenment: Four right turns, then go straight until you see the Light!)
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To: Tucson Jim
There is something better that the FAIR tax: No Direct Federal Tax!

The Cato Institute calls this system of taxation Reverse Revenue Sharing: The federal gov't should collect only an agreed-upon flat percentage of what each state collects. Each state would be a laboratory to determine the best state tax system. The states would compete to have the best tax system in order to attract people and business; and the state leaders would similarly compete to get re-elected. The voters of each state would get the level of taxes and government services that they want. Voters in Vermont will not determine how taxes are collected in Oklahoma, and vice versa.

36 posted on 07/07/2011 7:51:20 PM PDT by UnwashedPeasant (Don't nuke me, bro)
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To: jessduntno

The flat tax is the only fair tax.

All sales taxes are regressive and subject to manipulation is myriad ways.


37 posted on 07/07/2011 8:05:38 PM PDT by editor-surveyor (Going 'EGYPT' - 2012!)
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To: Principled; EternalVigilance; phil_will1; kevkrom; Bigun; PeteB570; FBD; Voter#537; Dick Bachert; ..

Jump in, FairTaxers!

Let the debate begin anew!


38 posted on 07/07/2011 8:08:05 PM PDT by Taxman (So that the beautiful pressure does not diminish!)
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To: BuffaloJack

>> “Anything with the work “fair” in it seems to be rooted in communism and socialism, and we know how that work” <<

.
Absolutely true.

Fair is in the eye of the beholder; a very squishey word.


39 posted on 07/07/2011 8:08:14 PM PDT by editor-surveyor (Going 'EGYPT' - 2012!)
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To: Principled; EternalVigilance; phil_will1; kevkrom; Bigun; PeteB570; FBD; Voter#537; Dick Bachert; ..

Jump in, FairTaxers!

Let the debate begin anew!


40 posted on 07/07/2011 8:10:09 PM PDT by Taxman (So that the beautiful pressure does not diminish!)
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To: Tucson Jim

>> “The FairTax would replace all federal personal and corporate income taxes and do away with the IRS.” <<

.
Nonsense!

The “fair tax” is nothing but a foot in the door for a massive VAT tax, and the IRS will be happy to enforce it.


41 posted on 07/07/2011 8:12:57 PM PDT by editor-surveyor (Going 'EGYPT' - 2012!)
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To: Tucson Jim

>> “The FairTax would replace all federal personal and corporate income taxes and do away with the IRS.” <<

.
Nonsense!

The “fair tax” is nothing but a foot in the door for a massive VAT tax, and the IRS will be happy to enforce it.


42 posted on 07/07/2011 8:13:56 PM PDT by editor-surveyor (Going 'EGYPT' - 2012!)
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To: jessduntno

If you study the 16th passage, it was a total fraud anyway. Why do we need to repeal a fraud?


43 posted on 07/07/2011 8:50:03 PM PDT by Goreknowshowtocheat
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To: Tucson Jim

The FairTax proposal actually is a comprehensive plan to replace federal income and payroll taxes, including personal, gift, estate, capital gains, alternative minimum, Social Security/Medicare, self-employment, and corporate taxes.

Plus abolishes the IRS.

Also, lets us never forget that the current income tax started in 1913 as a ‘Flat Tax’. See where that got us.

Also I prefer the Fair Tax because it is a consumption tax. That means I get to sent in tax dollars when I choose to buy something. I don’t know about everyone but I would like 100% of my payroll check that I earned.

With the gov’t taking up front and always taking about raising taxes ... they believe that yours and my wages are THEIRS and we should be happy with whatever they allow us to have.

Repeal if the 16th Amendment is also necessary and required.

A VAT (Value Added Tax) is a hidden tax at each stage of production prior to the final sale at retail. The Fair Tax is levied only at the retail level (the final sale), thus with the Fair Tax there is no hidden tax. The Fair Tax is not and can never lead to a VAT as it is a sales tax (on original sales of items not resales of items). However and income Tax can lead to a VAT, just look around the world.

Now to be truthful both the Fair Tax and the VAT are types of consumption taxes although aimed at different levels of sales.

Today’s income tax is from 10%-35% with steps of increasing tax rates with increasing amounts of income. Then add in the Social Security tax (OASI at 5.3% and DI at 0.9%. Then add in for Medicare 1.45%. But lets not forget that it is paid by the employee and the employer so Social Security is actually 12.4% and Medicare is 2.9%.

So what is your ‘REAL’ tax rate. Income tax plus Social Security tax plus Medicare tax. Is it high yet.

Lets also not forget that with the Fair Tax there are no loopholes for certain entities (read Special Interests), everyone is the same. With a Flat Tax, well Congress will take care of their friends on K Street (lobbyists) and make exceptions big enough to drive barges through. Thus need a higher rate, yet again. So the Fair Tax does away with K Street too.

Maybe the current Tax Code if laid end to end (page wise) would circle the globe 28-30 times. Imaging that!

Now, don’t forget that Tax Reform is not Spending Reform, which includes PORK. They are two different and totally separate things. One does not accomplish the other. BOTH must be perused on separate tracks, hopefully at the same time.

My vote for real tax reform is the Fair Tax, it is not perfect but better than any Flat Tax ... cause as I said and history shows - the Flat Tax will not stay flat.


44 posted on 07/07/2011 9:02:18 PM PDT by K-oneTexas (I'm not a judge and there ain't enough of me to be a jury. (Zell Miller, A National Party No More))
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To: Taxman

We already won this debate more than a decade ago.

The flat income tax is nothing more than the Republican excuse to do absolutely NOTHING.

And the leadership of “FreedomWorks” are the ones who led in that massive historic deception.

They took the almost total control of the U.S. government that conservatives worked so hard to give them, and SQUANDERED it.


45 posted on 07/07/2011 9:08:45 PM PDT by EternalVigilance ('The difficult, we do right away. The impossible takes a little longer.' -- the U.S. Marines)
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To: jessduntno

fair tax...only way to go. Scrap the IRS and the code and eliminate reporting of income or any other personal information.


46 posted on 07/07/2011 9:13:15 PM PDT by paul51 (11 September 2001 - Never forget)
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To: K-oneTexas; Taxman
Federalist #21

*excerpt*

The wealth of nations depends upon an infinite variety of causes. Situation, soil, climate, the nature of the productions, the nature of the government, the genius of the citizens, the degree of information they possess, the state of commerce, of arts, of industry, these circumstances and many more, too complex, minute, or adventitious to admit of a particular specification, occasion differences hardly conceivable in the relative opulence and riches of different countries. The consequence clearly is that there can be no common measure of national wealth, and, of course, no general or stationary rule by which the ability of a state to pay taxes can be determined. The attempt, therefore, to regulate the contributions of the members of a confederacy by any such rule, cannot fail to be productive of glaring inequality and extreme oppression.

This inequality would of itself be sufficient in America to work the eventual destruction of the Union, if any mode of enforcing a compliance with its requisitions could be devised. The suffering States would not long consent to remain associated upon a principle which distributes the public burdens with so unequal a hand, and which was calculated to impoverish and oppress the citizens of some States, while those of others would scarcely be conscious of the small proportion of the weight they were required to sustain. This, however, is an evil inseparable from the principle of quotas and requisitions.

There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.

Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country. Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment. Either the value of land, or the number of the people, may serve as a standard. The state of agriculture and the populousness of a country have been considered as nearly connected with each other. And, as a rule, for the purpose intended, numbers, in the view of simplicity and certainty, are entitled to a preference. In every country it is a herculean task to obtain a valuation of the land; in a country imperfectly settled and progressive in improvement, the difficulties are increased almost to impracticability. The expense of an accurate valuation is, in all situations, a formidable objection. In a branch of taxation where no limits to the discretion of the government are to be found in the nature of things, the establishment of a fixed rule, not incompatible with the end, may be attended with fewer inconveniences than to leave that discretion altogether at large.

PUBLIUS

47 posted on 07/07/2011 9:13:50 PM PDT by EternalVigilance ('The difficult, we do right away. The impossible takes a little longer.' -- the U.S. Marines)
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To: jessduntno; Taxman

If you walk out in the pasture, find a big fat cowpie, and flatten it, it’s still cow manure, and it still stinks.

The income tax itself is fundamentally flawed from its inception. You can’t fix it. It must be done away with if our posterity is to live in freedom and prosperity.


48 posted on 07/07/2011 9:17:59 PM PDT by EternalVigilance ('The difficult, we do right away. The impossible takes a little longer.' -- the U.S. Marines)
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To: BuddhaBrown

I don't follow your logic. The Fair Tax is a single rate collected by businesses as goods and services are purchased by consumers. It's comparable to a sales tax in how it is implemented. The tax is not a range. It is 22.5 or 23 percent depending upon who you talk to. The only way you come up with a range is if you try to adjust the tax rate by the prebate effect. Which, in my opinion, is pointless. The prebate value is calculated by the Department of Health and Human Services as a measure of poverty. It is an estimate of how little an individual or couple, with or without children, can spend in a year and still survive. The point is, and always has been, to calculate the minimums. These monetary levels are multiplied by the same Fair Tax rate everyone pays on every purchase to determine the prebate amount. It simply offsets the taxation of goods and services that are considered necessity. It's like not subjecting food stuffs to sales tax today, only more equitably applied. Are you suggesting that suddenly the DoHHS will claim single men with no children must spend a million dollars a year in order to survive, just so the Congress can jack up the Fair Tax rate and give big prebates to single millionaires? I think that is hooey.


49 posted on 07/07/2011 9:26:13 PM PDT by so_real ( "The Congress of the United States recommends and approves the Holy Bible for use in all schools.")
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To: Durus

Are you suggesting that it didn’t turn out well?

No. I am stating it. We have not had a Representative Republic.


50 posted on 07/07/2011 10:33:09 PM PDT by jessduntno (Liberalism is socialism in a party dress. And just as masculine.)
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