Debunking the FairTax
Chuck Norris may like the FairTax, but the recent debate about the FairTax has deified the fair but regressive tax that ignores one's ability to pay, forcing those who make little shell out as much as those who are rollin' in it. Since demonizing the IRS and lowering taxes make for appealing sound bites, the FairTax, traditionally favored by fringe conservatives, has caught on with some, but others are warning of its dangers.
Atlanta Journal Constitution [12/28/07]
Fair Tax advocates say instituting a 23 percent national sales tax would provide the same revenue to the government as income taxes do, but give back to taxpayers more of their own income.The New Republic [12/13/07]
Buckley, a tax attorney and accountant from Smyrna who self-published his own book deriding the Fair Tax, said government studies have already shown that the tax would have to be at least double what advocates propose to deliver its promised benefits.
“Our people need to know how hard a … Fair Tax would hit retirees and the middle class,” Buckley said in a statement Friday. “While the current tax system is a complex mess, the Fair Tax proposal is not the answer.
Unlike every other sales tax in the world, the FairTax actually applies to everything--every pencil, every tank--the government buys. Unfortunately, the FairTax proposal doesn't take into account this increase in government spending. Thus, it will either provoke a massive cut in federal spending or a massive increase in taxes.
And what about the poor who bare the brunt of this highly regressive tax? The FairTax would track every household's monthly income and then cut checks to minimize the pain, a logistical challenge that will ultimately resemble some welfare state nightmare. What's more, this would cost gobs of money, forcing further cuts in spending.
While the economic effect of a flat national sales tax is unclear, it's unlikely that the regressive tax would be a "magic wand releasing us from pain and unfairness" as one recent Iowa lovechild contends.
Check out "Doing Better: Progressive tax reform for the American South" (free to download) for ways your state can improve its tax code.
posted by Sam Spence @ 5:48 PM
12 comments
12 Comments:
They feel they must lie to sway opinion against this fine system, why?
The only people who can attack the Fair Tax are those who have not read the entire wording of the 'plan'.
It will not cause undue hardship on the poor or the retirees (of which I am one).
What it will do is charge a sales tax on NEW items purchased. Buying a used car will not have any 'national sales taxes' applied.
As a side effect, the folks that are out there buying new toys from illegal activities, will pay the full amount of tax due. They have never filed income tax returns to declare their illegal income. They just spend it on expensive homes, cars, boats and other luxury items that most of us can't afford.
For the poor, they will pay no taxes. Food, medications, and other necessities will not carry a tax.
This is not just a 'National Sales Tax', it is a FAIR TAX for all Americans.
I find myself absolutely stunned when people try to knock the FairTax without researching it themselves. If they are so opposed to the Fairtax, please just once, I'd like these same people to defend the current tax code. Of course I don't need the comments of those with a vested interest in the present code, or those who are hell bent on socialism for this country.
Tkrop...it is perfectly possible to realize that the Fair Tax lacks the ability to fairly generate the revenues needed to support the investments desired by the American people while also recognizing that the national tax system (and those in most states) need reform. It is not an either/or choice.
jq
Thanks for your comment.
The ability to raise enough revenue under the FairTax was the first item of priority to be incorporated into the FairTax to remain revenue neutral. Eleven years of research went into development of the plan. Congess's spending of course has to be roped in. You seemed to be concerned. Please log onto www.fairtax.org. This will help you form any educated opinion you like.
Good Luck
Strange how all the of the Fair Tax complaints seem to sound like the current system is working efficiently. 66,000 pages of regulations-that's easy to understand I suppose, except not one person in the world can explain the entire thing.
Fairtax is a crock -- its a farce. Its bullshit, and its leaders know it.
Fairtax pretends the GOVERNMENT will pay a major portion OF ITS OWN TAXES. This is insane nonsense, bullshit, too stupid for words.
Neal Boortz wrote page 148 "The federal government itself will become a MAJOR taxpayer."
No it won't Neal you idiot. The governmetn CANT FUTTING PAY ITSELF you moron. It has to WRITE the checks you idiot TO itself.
Neal -- go write yourself a check for 10,000 each day, do that for a month. If you are 300,000 dollars richer, then Fairtax works just fine.
But thats not the only bullshit about Fairtax.
This would be the HIGHEST sales tax ON THE FUTTING planet.
And it would be the ONLY tax plan on FUTTING earth that would tax cancer surgery, and nursing home patients, and the parents of a child with luekemia.
If you dare to spend 100 or 200,000 dollars staying alive -- these Fairtax morons are going to tax you 60,00- 100,000.
This same lunatic super-high tax would be on all insurance premiums --meaning your car insurance, life insurance, health insurance.
You think gasoline is high now you idiot? Wait till Fairtax puts a 40-60% sales tax on it.
ANd on food.
And on rent.
And on utilities.
And on everything/
No one can explain the Fairtax.
It makes our code look simple.
For example, how will a 200 month "prebate" be enough to "completely untax the poor" and "make sure NO american EVER has to pay a sales tax on the basic necessities of life"
Try to explain that. Try to explain how 200 a month covers a 30% sales tax on cancer surgery AND rent AND food AND utiltiies AND gasoline AND car insurance - you have to pay sales tax on your CAR insurance/
How does 200 dollars cover that.
YOu explain that one, and its easy to explain the current tax code by comparison./
I think the grammtar used by these gentlemen who so viciously advocate against the Fair Tax indicates how poor their understanding taxation truly is. tsk tsk
The funniest thing about the Fair Tax is the number of Fair Tax supporters who obviously don't understand anything about it.
Just for grins, let see how many of the Fair Taxers can correctly answer these two questions.
1) If the Fair Tax is passed and withholding on employee wages are eliminated, what will employees be paid assuming current wages before withholdings are $100 and after $80?
2) Given your answer, to question #1 what will happen to product prices those employee have to pay for products, will they go up, down, or stay constant?
No ridiculous discussion of the prebate is necessary. I have more to purchase than basics thank you.
I am a liberal...but I have long though a flat sales tax would be more fair than the current mega-tangle of tax code.
I am not saying I favor everything in this bill as is. For one thing I don't see any indication that the Federal Excise tax is repealed. Add a new sales tax to transportation fuels and tires along with the existing excise tax will increase the cost of goods shipped and the cost to commute to work.
I have downloaded the full bill (131 pages) and intend to read it before passing judgment. I want to see how it affects purchase of necessities and health care.
Contrary to what some say re. New vs Old I did not yet see any distinction.
One area I see this simplifying is the inter state sales of goods online. With a flat tax rate nationwide paid into your home state, would resolve many issues with current plans to tax sales between states.
Are the states prohibited from tacking on additional sales taxes? Do they keep a portion of the federal sales tax they collect or do they send it all to DC to be divvied up later?
Is there a mandated ceiling on the maximum total amount of the sales taxes regardless of the taxing authority?
http://www.joethevoter.org
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