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To: taxcontrol

With the Fair Tax, everything is not taxed. Your utility bills are not taxed. I don’t believe that college tuition is taxed. Used items are not taxed.

And my point was that $20,000 was my estimated *investments*, not money I plan to spend. The Fair Tax rewards savers.

So I get to earn money in my IRA or 401K off that $2000 before I spend a dime of it. When I do spend it, a large portion of what I spend will go to non-taxable things.

This increases the motivation to invest. More money goes into business development. The stock market goes up. Boomers can afford to retire. This *quickly* paves the way for the next two generations to catch fire in the workforce.

****************

Now what to you say about the point that the Fair tax captures tax-dodgers (illegal immigrants, drug dealers, prostitutes, etc) where the Flat tax does not?

I’m for anything that makes *everyone* pay. Cheaters don’t get to dodge out.


37 posted on 09/30/2011 10:04:57 AM PDT by Marie (Cain 9s Have Teeth)
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To: Marie
Well if we are going to get into the Fair tax then we need to look at the actual proposal.

The proposed 23% inclusive tax is really a 30% sales tax. Not the 10% that we used in our example.

The FairTax proposal assumes a 100 percent tax base on consumption. By way of contrast, most states that have sales taxes have roughly a 50 percent tax base. With the FairTax’s 100 percent base, consumers would pay taxes on a great many things that may not intuitively seem like consumption. The list would include:

•Purchases of new homes
•Rent
•Interest on credit cards, mortgages and car loans
•Doctor bills
•Utilities
•Gasoline (30 percent in addition to current taxes, which would not be repealed)
•Legal fees

Further, it will have very little impact on tax cheaters. These so called cheaters are already paying sales tax when they purchase goods. Since the consumption is on new items, many will avoid the new tax by simply buying used products.

Further, it does not address the REAL problem of SPENDING. Congress can still and would continue to borrow more money to pay for more spending. There is no “starve the beast” with the fair tax.

Lastly, the rebate under the fair tax is under the control of Congress ... so you could very well end up in the exact same situation that we are in now with 45% of Americans paying no taxes at all. The only difference being that instead of tax deductions and credits, the taxes paid at time of sale are returned via the rebate.

The fair tax is not some great fix. It is just another means of collecting taxes that sounds good but in the final analysis it will end up being the same taxes collected, on the same people, for higher amounts, different name.

44 posted on 09/30/2011 12:30:39 PM PDT by taxcontrol
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