Americans for Fair Taxation - FairTax.org

[tooAlive]

It's time we had a Fair Taxation system in this country.

Americans For Fair Taxation

[ame=http://youtu.be/QRpWir4eDrs]FairTax: Fire Up Our Economic Engine (Official HD) - YouTube[/ame]

And for those thinking that this system is regressive as it would affect poor people the most:

Under the FairTax, all Americans consume what they see as their necessities of life free of tax. While permitting no exemptions, the FairTax (HR25/S122) provides a monthly universal prebate to ensure that each family unit can consume tax free at or beyond the poverty level, with the overall effect of making the FairTax progressive in application. There is no marriage penalty as the couple gets twice the amount that a single adult receives.

While everyone pays the same tax rate at the cash register, the prebate results in effective tax rates (annual taxes paid divided by annual spending) that increase as the level of spending increases a progressive tax rate structure. For example, a person spending at the poverty level has a 0% effective tax rate, whereas someone spending at twice the poverty level has an effective tax rate of 11.5%, and so on.

 

[Daktoria]

People don't want a sales tax because we're a consumer economy.

You can't have fiscal responsibility without social responsibility. The right needs to get on the ball with social policy if it expects fiscal policy to change.

 

[tooAlive]

People don't want a sales tax because we're a consumer economy.

You can't have fiscal responsibility without social responsibility. The right needs to get on the ball with social policy if it expects fiscal policy to change.

I think people would get used to having the sales tax a bit higher; especially if their income wasn't being taxed at all. I mean, we're already paying both income and sales taxes right now.

 

[Daktoria]

People don't want a sales tax because we're a consumer economy.

You can't have fiscal responsibility without social responsibility. The right needs to get on the ball with social policy if it expects fiscal policy to change.

I think people would get used to having the sales tax a bit higher; especially if their income wasn't being taxed at all. I mean, we're already paying both income and sales taxes right now.

Income tax is incognito, sales tax is obvious. Rich people also pay more income tax than poor people.

You need social reform first so people stop indulging like hedonists.

 

[theDoctorisIn]

Why is a consumption tax "fairer" than an income tax?

 

[g5000]

Why is a consumption tax "fairer" than an income tax?

The more you tax something, the less of it you get, which is why economists of all stripes believe taxes on consumption (like a sales tax) are preferable to taxes on production (like income and corporate taxes).

 

[tooAlive]

People don't want a sales tax because we're a consumer economy.

You can't have fiscal responsibility without social responsibility. The right needs to get on the ball with social policy if it expects fiscal policy to change.

I think people would get used to having the sales tax a bit higher; especially if their income wasn't being taxed at all. I mean, we're already paying both income and sales taxes right now.

Income tax is incognito, sales tax is obvious. Rich people also pay more income tax than poor people.

You need social reform first so people stop indulging like hedonists.

I agree in regards to the social reform; that needs to happen one way or another.

But even still, I'd think people would learn to get used to a higher sales tax. We already don't even think about the current sales tax rate, so it'd just be a tad higher than what it is now.

Why is a consumption tax "fairer" than an income tax?

Well for starters it'd be the same rate for everybody. That's much "fairer" than the progressive system we have today.

And like G said, not taxing production/income gives a higher incentive for people to earn and produce. That's what we need. Not the current joke of a taxation system that favors some over others.

 

[g5000]

You can't hide a hike in sales tax, and everyone feels the effect of a hike immediately. Therefore, the connection between demanding more government services and the consequences are more closely linked in the public mind.

You want free puppies from the government? Fine, and here's the one percent hike in sales tax to go with it.

 

[Daktoria]

I think people would get used to having the sales tax a bit higher; especially if their income wasn't being taxed at all. I mean, we're already paying both income and sales taxes right now.

Income tax is incognito, sales tax is obvious. Rich people also pay more income tax than poor people.

You need social reform first so people stop indulging like hedonists.

I agree in regards to the social reform; that needs to happen one way or another.

But even still, I'd think people would learn to get used to a higher sales tax. We already don't even think about the current sales tax rate, so it'd just be a tad higher than what it is now.

Why is a consumption tax "fairer" than an income tax?

Well for starters it'd be the same rate for everybody. That's much "fairer" than the progressive system we have today.

And like G said, not taxing production/income gives a higher incentive for people to earn and produce. That's what we need. Not the current joke of a taxation system that favors some over others.

The incentive to produce only works in a society of inspired people. People today aren't inspired by society. They're depressed and spoiled.

The quantitative effect of the fair tax on behavioral economics is something you would have to measure as well.

 

[Obamanation]

The thing with the "fair tax" that I could never wrap my brain around is that the vast majority of middle and lower income people spend ALL of their money --- this basically, in my mind, means that unless you are upper middle to upper class --- virtually all of your disposable income is taxed.

I'd much prefer a flat tax - that still allows us to do away with the IRS, but isn't UNfairly taxing all who spend all of their disposable income.

But there may be parts of the "fair tax" that I am not understanding completely.

 

[tooAlive]

You can't hide a hike in sales tax, and everyone feels the effect of a hike immediately. Therefore, the connection between demanding more government services and the consequences are more closely linked in the public mind.

You want free puppies from the government? Fine, and here's the one percent hike in sales tax to go with it.

This is a great point.

People would think twice before asking the government to do stuff if they'd immediately see (and feel) the consequences.

I think that's exactly what America needs. A sense of ownership and responsibility, and that each and every one of us is equally responsible for our country's well being.

 

[tooAlive]

The thing with the "fair tax" that I could never wrap my brain around is that the vast majority of middle and lower income people spend ALL of their money --- this basically, in my mind, means that unless you are upper middle to upper class --- virtually all of your disposable income is taxed.

I'd much prefer a flat tax - that still allows us to do away with the IRS, but isn't UNfairly taxing all who spend all of their disposable income.

But there may be parts of the "fair tax" that I am not understanding completely.

There's a prebate system that's given out to everyone that ensures nobody will pay taxes at or beyond the poverty level. So the people that can't afford to pay taxes won't have to.

 

[tooAlive]

Income tax is incognito, sales tax is obvious. Rich people also pay more income tax than poor people.

You need social reform first so people stop indulging like hedonists.

I agree in regards to the social reform; that needs to happen one way or another.

But even still, I'd think people would learn to get used to a higher sales tax. We already don't even think about the current sales tax rate, so it'd just be a tad higher than what it is now.

Why is a consumption tax "fairer" than an income tax?

Well for starters it'd be the same rate for everybody. That's much "fairer" than the progressive system we have today.

And like G said, not taxing production/income gives a higher incentive for people to earn and produce. That's what we need. Not the current joke of a taxation system that favors some over others.

The incentive to produce only works in a society of inspired people. People today aren't inspired by society. They're depressed and spoiled.

The quantitative effect of the fair tax on behavioral economics is something you would have to measure as well.

I suppose that's also true. But the road we've been heading down doesn't seem to be creating much inspiration in too many people. Which is why I'm looking at other (perhaps more drastic) approaches.

Such as this one.

 

[martybegan]

The thing with the "fair tax" that I could never wrap my brain around is that the vast majority of middle and lower income people spend ALL of their money --- this basically, in my mind, means that unless you are upper middle to upper class --- virtually all of your disposable income is taxed.

I'd much prefer a flat tax - that still allows us to do away with the IRS, but isn't UNfairly taxing all who spend all of their disposable income.

But there may be parts of the "fair tax" that I am not understanding completely.

There's a prebate system that's given out to everyone that ensures nobody will pay taxes at or beyond the poverty level. So the people that can't afford to pay taxes won't have to.

The problem with that is it makes EVERYONE get a government check, so basically everyone is on the "dole." Then when the government wants to put on the squeeze, it just has to threaten the "prebate" and everyone who depends on it will fall in line.

Better to not tax basic things like food medicine, and lodging.

 

[Obamanation]

The thing with the "fair tax" that I could never wrap my brain around is that the vast majority of middle and lower income people spend ALL of their money --- this basically, in my mind, means that unless you are upper middle to upper class --- virtually all of your disposable income is taxed.

I'd much prefer a flat tax - that still allows us to do away with the IRS, but isn't UNfairly taxing all who spend all of their disposable income.

But there may be parts of the "fair tax" that I am not understanding completely.

There's a prebate system that's given out to everyone that ensures nobody will pay taxes at or beyond the poverty level. So the people that can't afford to pay taxes won't have to.

Then the middle class is, once again, taking it on the head. We spend more of our disposable income than anyone else. It's still better than what we currently have though. At least you can what the left hand is trying to do while the right hand is asking for your money.

The real problem is going to be the percentage. I think the gov't should be able to exist just fine and pay back debt at 15% --- and they are likely to want 25% or more!

 

[Obamanation]

The thing with the "fair tax" that I could never wrap my brain around is that the vast majority of middle and lower income people spend ALL of their money --- this basically, in my mind, means that unless you are upper middle to upper class --- virtually all of your disposable income is taxed.

I'd much prefer a flat tax - that still allows us to do away with the IRS, but isn't UNfairly taxing all who spend all of their disposable income.

But there may be parts of the "fair tax" that I am not understanding completely.

There's a prebate system that's given out to everyone that ensures nobody will pay taxes at or beyond the poverty level. So the people that can't afford to pay taxes won't have to.

The problem with that is it makes EVERYONE get a government check, so basically everyone is on the "dole." Then when the government wants to put on the squeeze, it just has to threaten the "prebate" and everyone who depends on it will fall in line.

Better to not tax basic things like food medicine, and lodging.

--- I think it doesn't apply to necessities...

 

[g5000]

The thing with the "fair tax" that I could never wrap my brain around is that the vast majority of middle and lower income people spend ALL of their money --- this basically, in my mind, means that unless you are upper middle to upper class --- virtually all of your disposable income is taxed.

I'd much prefer a flat tax - that still allows us to do away with the IRS, but isn't UNfairly taxing all who spend all of their disposable income.

But there may be parts of the "fair tax" that I am not understanding completely.

There's a prebate system that's given out to everyone that ensures nobody will pay taxes at or beyond the poverty level. So the people that can't afford to pay taxes won't have to.

The problem with that is it makes EVERYONE get a government check, so basically everyone is on the "dole." Then when the government wants to put on the squeeze, it just has to threaten the "prebate" and everyone who depends on it will fall in line.

Better to not tax basic things like food medicine, and lodging.

No! No, no, no, no, no, NO!

We already have a tax structure that has been completely corrupted by special interest groups all grabbing for tax expenditures.

Once you open the door to exempting one thing, you open the door to large campaign donations to politicians to put back all the same goddamed loopholes that are in the tax code now.

You think the prebate would be hostage but exemptions would not? That's pretty naive.

The prebate eliminates the need for exemptions. The sales taxes you pay on food, medicine, etc. is recouped when you get your prebate. That is the whole point of a prebate.


And history tells us that, if anything, the prebate will GROW over time, not shrink. Every populist demagogue will promise a prebate hike, guarantee it.

 

[Obamanation]

Yeah, I don't think I like the fair tax...

Give me a flat tax!!

Get rid of the IRS!!!

 

[g5000]

Yeah, I don't think I like the fair tax...

Give me a flat tax!!

Get rid of the IRS!!!

A flat tax is highly regressive.

And if there is no IRS, who collects the flat tax?

 

[Obamanation]

Yeah, I don't think I like the fair tax...

Give me a flat tax!!

Get rid of the IRS!!!

A flat tax is highly regressive.

And if there is no IRS, who collects the flat tax?

a computer...

you would still need a few people --- but the IRS as we know it would be history...

...and I could care less about the regressive nature of a flat tax. I have much more of an issue with the concept of punishing success....