THE LIES AND UNTRUTHS IN THE ATTACKS ON THE FAIRTAX

FAIRtax Chairman's Report 02/03/23 ^ | 02/03/23 | Steve Hayes

[Dementon]

“So what is it? If it’s a flat tax rate with no adjustable rates then I’m for it. But if, as the article proposes, the flat tax would have different rates based on how much we spend, how would that be tracked and implemented so they’d know when to charge the higher rate? That’s the part that’s throwing me. I don’t want the government tracking my spending to know when to charge me a higher rate.”

The short answer is that it is a flat rate, everyone pays the same rate with each purchase. I think where you are getting hung up is the effective tax rate vs tax brackets.

Look at the prebate as just a flat refund of all taxes paid up to the poverty level that everyone is eligible to receive. Everyone pays the same tax at the register and everyone received the same annual refund amount. If your spending is at the poverty level, with the prebate, your effective tax rate is 0% due to all of the taxes having been refunded. If your spending is somewhat above the poverty level, your effective rate (23% paid at the register minus the rebate) is going to be very low, say around 7%. If you spend a lot more, your effective rate will be, say, 18%, etc. You actually have to spend quite a lot annually to get close to the full rate of 23% (inclusive, 29.87% exclusive).

[Tell It Right]

From Dementon: Look at the prebate as just a flat refund of all taxes paid up to the poverty level that everyone is eligible to receive. Everyone pays the same tax at the register and everyone received the same annual refund amount.

A "prebate" that "everyone is eligible to receive" sounds an awful lot like UBI to me. Is it a flat tax or not?

It's kind of like gay marriage. At first, the small-government person in me supported any adults calling themselves married as long as they don't force the rest of us to call it that. But the Dims didn't stop with that. They've now taken it to supporting pedo and such.

Don't do the same with the good idea of a fair tax. Don't define it in a way that can be implemented only with UBI (calling it "prebate" is lipstick on a pig). Don't make people pay different sales tax rates if they spend more and have the audacity to say there are no tax brackets.

The "flat" in flat tax means everybody pays the same rate ... period. That's what makes it beautiful. Adding varying rates and "prebates" makes it everything but flat and too much like the crap we already have in place.

[bankwalker]

How will they know who gets prebates without monitoring everyone's income? I thought that fair tax was supposed to eliminate that. Flat tax is no better because income must be monitored.

I think that any tax based on revealing income should be illegal.

[Database]

The General Rule section on qualified family reads in part, “All family members sharing a common residence shall be considered as part of one qualified family.” So in scenario 2, they would have to be one qualified family.

I calculated based on the 2023 poverty level figures on the aspe.hhs.gov web site. For the 3 guys they each get

14580 x .23 = 3353.40

For the 3 relatives

(24860 + 9440) x .23 = 7889

for the family split 3 ways is 2629.67 each.

Thanks again for your comments.

[Dementon]

With the prebate, everyone is eligible for the same amount. No need to monitor anything related to income or spending. It is a flat rate that refunds all taxes paid up to the poverty level of spending.

[Dementon]

Thank you for the clarification on your numbers. I was using a table from 2021.

[lewislynn]

You will come out ahead!

Ignorance is bliss.

Start with the phony "prebate" (GAG!.
The face value of your "prebate" is reduced 30% day one when you spend it.
The price you pay for everything is increased at least 30%. Talk about inflation, which also is increased 30%
Not including any 30% tax you pay ON other existing taxes, fees etc. Like the NEW tax on gasoline, city, county, state services, not to mention the 30% tax on their taxes, fees.
The 30% tax on state/local sales tax.
On services like auto repair/maintenance, haircuts, government services, the hidden 30% increase of government purchases and ALL government payroll. Yes even ALL government (city, county, state, federal) employees payroll is subject to the so called "fairtax")...THAT IS HUGE!!

OH yea. The little, not so insignificant question of 7.65% employer half of FICA hasn't been resolved in the 100% paycheck scam either.

You've had a lot of time to educate yourself on the realities of the Fairtax.

Instead you'd rather display your ignorance of what is written in the bill...Or just continue to make yourself look like a fool and lie about it.

[Taxman]

Lurkey, I have neither the time nor the inclination to debate you.

Your arguments are specious, without merit!

I take it that you don’t lioke the FAIRtax, and can only conclude that you make your living in some manner off of the income tax. IOW, with no income tax and no IRS, Lurkey has to go earn an honest living.

I’ll not respond to any more of your insane rants!

[Taxman]

Thank you!

Welcome aboard.

Please go to http://www.fairtax.org and find out how you can help us Gitterdone!

[Taxman]

My former boss used to challenge us to do stuff by saying that “Can’t never could!”

We GOTTA TRY!

[Dementon]

“A “prebate” that “everyone is eligible to receive” sounds an awful lot like UBI to me.”

A refund of taxes paid is no more UBI than the personal exemptions in the current tax system.

“Don’t make people pay different sales tax rates if they spend more and have the audacity to say there are no tax brackets.”

I really think you’re making way too much of this.

Look at it this way: No one pays taxes on spending up to the poverty level so no one is taxed on the necessities of life. After that everyone is taxed at the same rate. That way there are no “effective rates” and no “tax brackets” to get you upset.

[Principled]

Thanks Taxman. I hope the conversation advances!

[Principled]

What?

Nobody knows who spends what any different than now - the retailer just collects the tax and sends it in. Just like they do now with state sales taxes.

[Principled]

Sounds about like the prebate. A $35000 exemption on income tax is probably about the same as a prebate to exempt $35,000 of spending.

[Tell It Right]

Nobody knows who spends what any different than now - the retailer just collects the tax and sends it in. Just like they do now with state sales taxes

Maybe I read the article wrong. The quote that I posted from the proposal (article) says there will be a different tax rate based on how much you spend. So how will someone know when it's time to tax you at the higher rate unless that's tracked?

If you'll read the many replies to my post you'll see various ways they say it'll be implemented. Some say the sales tax rate is based on income, not actual sales. So even if the tax is applied at sales, the tax rate calculated for the sales tax is based on income. Think income tax brackets like we have today, but applied to sales tax.

Others replied that everyone will be taxed the same rate, but the government would adjust it by giving a prebate to people in lower incomes. That sounds too much like a welfare check to me. Others say that everybody will get the "prebate". That sounds too much like UBI to me.

So which is it? If it's a true fair tax with a simple sales tax rate then I'm all for it (if it replaces existing taxes). But once you get into taxing sales at different rates, then it starts sounding too much like the "progressive" taxes we're trying to get away from. Then if you get into prebates and such, I start hating it more than the existing system.

[Principled]

I would only favor the Fair Tax if it involves a constitutional amendment forbidding congress from ever passing any form of income tax ever again.
A flat tax would last one, maybe two congressional terms and then the asshats would start tinkering with it all over again.
Their power to grift lays in their power to tinker with the tax system and they know it.

I know, right?! The plan includes an amendment to repeal the 16th amendment. That's hard. But it is true that they could add a sales tax on top of our income tax right now - but they're not, Yet.

[Principled]

You’re getting all kinds of different replies it seems. I’m glad you’re looking into it.

The tax rate at sale is always the same. Always. Always a 30% add-on [or 23% inclusive] for retail sales. Non retail has zero taxes. Always.

I haven’t gotten to the replies you mentioned but I will if I can find/make time.

[Tell It Right]

I like the flat sales tax rate. Is it safe to say, then, that the original article was wrong in saying there would be a higher sales tax rate after X dollars?

That's the part I hate, which is what I quoted from the article in the original post I made (that you replied to).

[Principled]

I don't know but I bet they were trying to assert that effective tax rates on income were different. They would be.

If I make $100 per year and pay $25 in sales taxes that's a 25% effective rate on income.

But if I make $200 per year and pay $25 in sales taxes that's a 12.5 % effective rate on income.

IMO they do that to try to make something look unequal. But the sales tax rate is not related in any way to income. It is based solely on retail sales.

The idea they're trying to get at is to try to say that the sales tax is regressive and they use that as a reason to object to the sales tax. A sales tax can be regressive but the Fair Tax has the rebate thing to minimize that.

[DMD13]

The amounts when factoring percentages are probably the same.