The Fair Tax Primer

[Some Guy]

If I understand 'Fair Tax' - i.e switching to sales tax only correctly, the problem is that people with higher incomes receive considerably more money than they need for consumption. They would have the option of simply not spending their money...they could squirrel it away in savings accounts or just invest it in stocks or bonds.

I guess that if there sales tax were applied equally to all equity purchases it may be O.K., but it just seems that anyone at the low end of the income scale...who lives pay check to pay check...would be paying a tax on their full income, where as the wealthy would have the option of just not spending money.

What's the point of being wealthy if you're not going to spend your money, ever? Of course it would apply to equity: if you're spending your money on something, then you'd pay a tax on it because you're receiving something back in return.

The beauty of it would be that is gives everyone the same footing to start on, so everyone would have an equal stake in the game (without drowning the poor via that prebate). If you're against paying taxes for the things you demand that the government provides you, then i can definitely see why you wouldn't like this proposal.

 

[NightFox]

it's not leeching. Stop saying that.

And I noticed you tried to dodge by not quoting me, you fucking cowardly hack.

It is leeching. I am stating a fact. I am not going to stop preaching the truth, leech.

The only leeching going on is whatever is sucking out the ability to think from your brain, you TDS suffering splooge.

You can't even make a coherent argument. The sum total of your intellect is to shout, "Nuh uh!"


Let's see if you are dumb enought to call Devin Nunes a libtard liar blah blah blah...

Here is Nunes explaining that every credit, deduction, and exemption is paid for by raising tax rates on everyone: No tax reform without border adjustment tax, Rep. Nunes says

"If people wanted to drop the corporate rate from 35 to say 33, 32, maybe 30, we could probably do it. But if you go back to several years that we looked at doing just that, the goal was to get to 25 percent, and by the time every lobbyist, every special interest group in town, representing every major corporation in this country, the tax rate was automatically all the way back above 30 by the time you put everybody's special loophole in."


Read that a hundred times if that is how much it takes for you to comprehend it.

I know you won't.

Nunes sits on the House Ways and Means Committee. That's the committee responsible for taxation.

Nunes clearly states that every deduction, exemption, and credit is paid for by raising tax rates on everyone. That's why I call them government gifts, because they are. They are theft from someone else's pocket.

Leeching.

The problem you have is that you insist on using that idiotic phrase "tax expenditure" which is a complete oxymoron instead of just calling it what it is, tax FAVORITISM.

IMHO if you stop parroting politicians and their apparatchiks I suspect you'll be more effective in getting your points across.

I use the correct technical term for them. It's not a political term, it is an economics term.

Er… it's a term specifically designed to shift the blame for the sorry state of government finances away from out of control spending and an inability to prioritize and unto people that pay taxes.

As in "The governments financial problems aren't caused by the fact that we waste money like its going out of style, it's that you cheapskate tax payers aren't giving us enough money to waste because we're spending too much on tax breaks."

"Favoritism" is a political term.

It's not... the concept of favoritism isn't confined to the political arena but in this case it definitely applies, you could also call it cronyism or in many cases social engineering via the tax code.

Facts are facts. Sometimes facts have to shoved down the throats of the leeches who defend this mad scheme.

...and yet whatever "facts" you have to present will be lost on many people that might otherwise listen and consider because of your stubborn insistence on using terminology that is frankly offensive to anybody that understands the problem with federal finances isn't that they don't fleece tax payers enough already.

Forcibly confiscating less of the money somebody else earns isn't in any way, shape or form an "expenditure", regardless of how it affects the amount of money you forcibly confiscate from somebody else.

It's like a mugger claiming that passing on the opportunity to mug Joe is an "expenditure" that he must make up for by mugging two other people.

 

[Skull Pilot]

The first and foremost basis for taxation should be determining how much money the government needs to fulfill it's obligations (what those obligations should be is open to debate)

Second they need to have a tax policy that ensures that the government has enough money to fulfill those obligations AND to pay down it's debt at a reasonable rate.

Unfortunately for the wealthy, you can't squeeze blood from a rock. You can't get money from people who don't have money. That means that it's the wealthiest that will have to pay the lion's share.

I believe that anyone that makes more than a doctor or even as much is getting way more money than they deserve. So I don't have any qualms about taxing the daylights out of the wealthiest.

I disagree.

No one should be denied the fruits of their own labor.
Why should the guy who never aspires to be more than a bag boy be treated any differently than a guy who paid risked everything he owns to start a business?

If we are going to have an income tax it should be a flat tax.
The consumption tax is OK if it's done right.

I agree no one should be denied the fruits of their own labor. They should be denied the fruit of other people's labor.

If they were denied the fruits of other people's labor, no one would be wealthier than doctors.

Why should someone that risks his wealth be entitled? If he's truly 'risking' then he hasn't done his due diligence and he deserves to lose his wealth. If he has done due diligence, then he's not really risking.

If I own a business and pay you the wage you agreed upon for your labor than I am not denying you the fruits of your labor am I?

And if no one ever took a risk then there would be no small business, no entrepreneurs, and no economy.

So If I take the risk to start a business then I should also reap the reward of a higher than average income. What right do you have to any of that if you didn't take the risk?

 

[Skull Pilot]

If I understand 'Fair Tax' - i.e switching to sales tax only correctly, the problem is that people with higher incomes receive considerably more money than they need for consumption. They would have the option of simply not spending their money...they could squirrel it away in savings accounts or just invest it in stocks or bonds.

I guess that if there sales tax were applied equally to all equity purchases it may be O.K., but it just seems that anyone at the low end of the income scale...who lives pay check to pay check...would be paying a tax on their full income, where as the wealthy would have the option of just not spending money.

If it was done correctly there would be no tax on groceries, clothes, shoes, and prescriptions.

Rich people will always spend more than poor people and they will always buy more expensive things.

One also has to remember that services can be consumption, not just products.

What would probably be required is re-structuring how investment advice and implementation is paid for so the cost of the broker or trading house's services could be taxed, while not taxing the "fruit" of said investment, which is a form of income.

Exactly right.

I know in my state financial adviser services are subject to the state sales tax as are many other services. It shouldn't be too tough to figure out which services should be taxed.

 

[Some Guy]

Exactly right.

I know in my state financial adviser services are subject to the state sales tax as are many other services. It shouldn't be too tough to figure out which services should be taxed.

It'd basically be everything that you spend money on.

The pre-bate idea is in lieu of not taxing certain items. After kicking the idea around in my head, while i hate the idea of the government sending me a check every month (or quarterly or whatever), it's a more effective means keeping people out of abject poverty. If you just don't tax certain basic items like food(s), toiletries, housing or whatever, then you still need money to buy it. So the poor would still be getting checks anyway as long as some welfare program is in place.

The idea of the pre-bate plus taxes on everything starts everyone off on an equal playing field. The prebate covers everyone's basic necessities (which is something that the communists here should love) while everything else is inherently defined as a luxury and thus gets taxed. From tangible items to services to capital, etc. As i said earlier, if only verified citizens are getting that coverage for basics, then illegal immigrants have far less incentive to live here illegally.

If i have to have government in my life, it's hard to think of a better way to tax that ensures that people have a really hard time voting themselves into more government services that they're not helping to pay for in part themselves.

 

[buckeye45_73]

I believe we should repeal income taxes and enact a Fair Tax.

I believe consumption taxes are superior to taxes on production.

At the same time, I acknowledge a sales tax is regressive.

There are at least two big advantages to a sales tax, however. First, everyone has to pay it. Second, it is a lot harder to hide a tax hike.

You want to give free puppies to hookers? Fine, we'll raise the sales tax to pay for that.

Say what!?!

Suddenly, people won't be so quick to give away taxpayer dollars any more. The days of "gimme gimme gimme, and make that guy over there pay for it" will end. A hike in the Fair Tax will affect everyone!


The Fair Tax is a kind of sales tax, however it attempts to mitigate the regressive nature of a sales tax with a "prebate".

Each month, every adult American would receive a stipend which would offset the tax on things we all have to buy to survive. The prebate would be the same for everyone. A person in abject poverty gets the same prebate as Bill Gates.

That, in a nutshell, is the Fair Tax.

In subsequent posts, I will discuss some of the difficulties in implementing the Fair Tax. But let's get the ball rolling with your thoughts first.

We disagree a lot, but I have to agree with you and the logic and reasoning behind it. It wont happen because it would unite us......and some folks like to pit groups against each other.......BUT I am onboard with a fair tax

 

[buckeye45_73]

And second, how would much higher sales tax impact consumer spending? Would it slow the economy down?

I'm sure initially it would as people would have to have an adjustment period. People who pay income taxes wont be effected as they would get that money to offset....the poor and ederly would need an adjustment...but after that period....it should work well for everyone. We all pitch in and if it needs to be raised, we all have to agree.

 

[Some Guy]

And second, how would much higher sales tax impact consumer spending? Would it slow the economy down?

I'm sure initially it would as people would have to have an adjustment period. People who pay income taxes wont be effected as they would get that money to offset....the poor and ederly would need an adjustment...but after that period....it should work well for everyone. We all pitch in and if it needs to be raised, we all have to agree.

g5000 mentioned early in the thread that that's the big difficulty in starting it up. So if i'm 60 years old, you're now telling me i paid income taxes for 40 years and now i'm paying those taxes again when i go to spend my money as well? That would suuuuuuck. But, perhaps that could be adjusted on the prebate. Give the oldsters some more cash.

When everyone is paying $50 for a meal at McDonald's, they'll finally go "WTF? Why are taxes soo high?" Oh, that's cause the government spent almost $400k last year to study if quails are more sexually active when high on cocaine.

 

[buckeye45_73]

It's a noble enterprise but to accomplish any reform, it needs buy in from both sides. And McConnell isn't going anywhere and the Freedom Cactus isn't either. There are well meaning dems and goper in both Houses, although the House is losing those gopers. It takes leadership from the White House.

Yes, it takes leadership. And we had a couple of Republican presidential candidates who would have provided the leadership for the Fair Tax.

Leadership is sorely lacking in Congress and the White House.

I agree, but I think people don't take it seriously...yet
The leftwing propaganda machine would be attacking it 24/7.

 

[martybegan]

If I understand 'Fair Tax' - i.e switching to sales tax only correctly, the problem is that people with higher incomes receive considerably more money than they need for consumption. They would have the option of simply not spending their money...they could squirrel it away in savings accounts or just invest it in stocks or bonds.

I guess that if there sales tax were applied equally to all equity purchases it may be O.K., but it just seems that anyone at the low end of the income scale...who lives pay check to pay check...would be paying a tax on their full income, where as the wealthy would have the option of just not spending money.

If it was done correctly there would be no tax on groceries, clothes, shoes, and prescriptions.

Rich people will always spend more than poor people and they will always buy more expensive things.

One also has to remember that services can be consumption, not just products.

What would probably be required is re-structuring how investment advice and implementation is paid for so the cost of the broker or trading house's services could be taxed, while not taxing the "fruit" of said investment, which is a form of income.

Exactly right.

I know in my state financial adviser services are subject to the state sales tax as are many other services. It shouldn't be too tough to figure out which services should be taxed.

The biggest fight in any consumption tax is always drawing the line between what is considered "consumption" and what is considered to be part of making something else for consumption.

 

[buckeye45_73]

I believe we should repeal income taxes and enact a Fair Tax.

I believe consumption taxes are superior to taxes on production.

At the same time, I acknowledge a sales tax is regressive.

There are at least two big advantages to a sales tax, however. First, everyone has to pay it. Second, it is a lot harder to hide a tax hike.

You want to give free puppies to hookers? Fine, we'll raise the sales tax to pay for that.

Say what!?!

Suddenly, people won't be so quick to give away taxpayer dollars any more. The days of "gimme gimme gimme, and make that guy over there pay for it" will end. A hike in the Fair Tax will affect everyone!


The Fair Tax is a kind of sales tax, however it attempts to mitigate the regressive nature of a sales tax with a "prebate".

Each month, every adult American would receive a stipend which would offset the tax on things we all have to buy to survive. The prebate would be the same for everyone. A person in abject poverty gets the same prebate as Bill Gates.

That, in a nutshell, is the Fair Tax.

In subsequent posts, I will discuss some of the difficulties in implementing the Fair Tax. But let's get the ball rolling with your thoughts first.

Federal income tax was originally meant to tax the wealthy when implemented in 1913. Back then it was a tax on anyone making over $100,000. Today that would equate to $2.5 million.

I think the first $75,000 for every citizen should be exempt. You make $50,600 you pay no income tax. Then 4 brackets. 15%, 25%, 35%, 60%. Yes it shifts the tax burden to people with money that can afford it and yes 60% on anyone making over say $3 million. Over the last 100 years the wealthy have shifted the tax burden as much as they can to the poor and middle class.

Time for a correction. You gain wealth from a society you should pay more back to that society to keep it functioning properly.

The complexity is the problem.....the point of the fair tax is to unite people and stop the blame game.....we all pay it and his prebate idea will help the lower incomes deal with it.

 

[buckeye45_73]

If I understand 'Fair Tax' - i.e switching to sales tax only correctly, the problem is that people with higher incomes receive considerably more money than they need for consumption. They would have the option of simply not spending their money...they could squirrel it away in savings accounts or just invest it in stocks or bonds.

I guess that if there sales tax were applied equally to all equity purchases it may be O.K., but it just seems that anyone at the low end of the income scale...who lives pay check to pay check...would be paying a tax on their full income, where as the wealthy would have the option of just not spending money.

If it was done correctly there would be no tax on groceries, clothes, shoes, and prescriptions.

Rich people will always spend more than poor people and they will always buy more expensive things.

One also has to remember that services can be consumption, not just products.

What would probably be required is re-structuring how investment advice and implementation is paid for so the cost of the broker or trading house's services could be taxed, while not taxing the "fruit" of said investment, which is a form of income.

Exactly right.

I know in my state financial adviser services are subject to the state sales tax as are many other services. It shouldn't be too tough to figure out which services should be taxed.

The biggest fight in any consumption tax is always drawing the line between what is considered "consumption" and what is considered to be part of making something else for consumption.

True, but I think it should be a retail tax....it solves the problem.

 

[Skull Pilot]

Exactly right.

I know in my state financial adviser services are subject to the state sales tax as are many other services. It shouldn't be too tough to figure out which services should be taxed.

It'd basically be everything that you spend money on.

The pre-bate idea is in lieu of not taxing certain items. After kicking the idea around in my head, while i hate the idea of the government sending me a check every month (or quarterly or whatever), it's a more effective means keeping people out of abject poverty. If you just don't tax certain basic items like food(s), toiletries, housing or whatever, then you still need money to buy it. So the poor would still be getting checks anyway as long as some welfare program is in place.

The idea of the pre-bate plus taxes on everything starts everyone off on an equal playing field. The prebate covers everyone's basic necessities (which is something that the communists here should love) while everything else is inherently defined as a luxury and thus gets taxed. From tangible items to services to capital, etc. As i said earlier, if only verified citizens are getting that coverage for basics, then illegal immigrants have far less incentive to live here illegally.

If i have to have government in my life, it's hard to think of a better way to tax that ensures that people have a really hard time voting themselves into more government services that they're not helping to pay for in part themselves.

I think the whole prebate thing can be done away with. it makes no sense to charge people more only to give some of it back

If we implemented a consumption tax tomorrow there would be no income tax or FICA deductions taken out of a person's pay so they would have more money than they used to have to buy what they need. We can exempt groceries, medicines, clothing and other necessities from the consumption tax so that the people who spend most of their money on these necessities will avoid the consumption tax.

 

[martybegan]

If I understand 'Fair Tax' - i.e switching to sales tax only correctly, the problem is that people with higher incomes receive considerably more money than they need for consumption. They would have the option of simply not spending their money...they could squirrel it away in savings accounts or just invest it in stocks or bonds.

I guess that if there sales tax were applied equally to all equity purchases it may be O.K., but it just seems that anyone at the low end of the income scale...who lives pay check to pay check...would be paying a tax on their full income, where as the wealthy would have the option of just not spending money.

If it was done correctly there would be no tax on groceries, clothes, shoes, and prescriptions.

Rich people will always spend more than poor people and they will always buy more expensive things.

One also has to remember that services can be consumption, not just products.

What would probably be required is re-structuring how investment advice and implementation is paid for so the cost of the broker or trading house's services could be taxed, while not taxing the "fruit" of said investment, which is a form of income.

Exactly right.

I know in my state financial adviser services are subject to the state sales tax as are many other services. It shouldn't be too tough to figure out which services should be taxed.

The biggest fight in any consumption tax is always drawing the line between what is considered "consumption" and what is considered to be part of making something else for consumption.

True, but I think it should be a retail tax....it solves the problem.

Still you have to define retail

 

[buckeye45_73]

And second, how would much higher sales tax impact consumer spending? Would it slow the economy down?

I'm sure initially it would as people would have to have an adjustment period. People who pay income taxes wont be effected as they would get that money to offset....the poor and ederly would need an adjustment...but after that period....it should work well for everyone. We all pitch in and if it needs to be raised, we all have to agree.

g5000 mentioned early in the thread that that's the big difficulty in starting it up. So if i'm 60 years old, you're now telling me i paid income taxes for 40 years and now i'm paying those taxes again when i go to spend my money as well? That would suuuuuuck. But, perhaps that could be adjusted on the prebate. Give the oldsters some more cash.

When everyone is paying $50 for a meal at McDonald's, they'll finally go "WTF? Why are taxes soo high?" Oh, that's cause the government spent almost $400k last year to study if quails are more sexually active when high on cocaine.

yeah, the transition would be rough, but it's like social security.....I'll give up my current paid in for a private option.....it would suck, but for a better option, well worth it.

 

[Skull Pilot]

I believe we should repeal income taxes and enact a Fair Tax.

I believe consumption taxes are superior to taxes on production.

At the same time, I acknowledge a sales tax is regressive.

There are at least two big advantages to a sales tax, however. First, everyone has to pay it. Second, it is a lot harder to hide a tax hike.

You want to give free puppies to hookers? Fine, we'll raise the sales tax to pay for that.

Say what!?!

Suddenly, people won't be so quick to give away taxpayer dollars any more. The days of "gimme gimme gimme, and make that guy over there pay for it" will end. A hike in the Fair Tax will affect everyone!


The Fair Tax is a kind of sales tax, however it attempts to mitigate the regressive nature of a sales tax with a "prebate".

Each month, every adult American would receive a stipend which would offset the tax on things we all have to buy to survive. The prebate would be the same for everyone. A person in abject poverty gets the same prebate as Bill Gates.

That, in a nutshell, is the Fair Tax.

In subsequent posts, I will discuss some of the difficulties in implementing the Fair Tax. But let's get the ball rolling with your thoughts first.

Federal income tax was originally meant to tax the wealthy when implemented in 1913. Back then it was a tax on anyone making over $100,000. Today that would equate to $2.5 million.

I think the first $75,000 for every citizen should be exempt. You make $50,600 you pay no income tax. Then 4 brackets. 15%, 25%, 35%, 60%. Yes it shifts the tax burden to people with money that can afford it and yes 60% on anyone making over say $3 million. Over the last 100 years the wealthy have shifted the tax burden as much as they can to the poor and middle class.

Time for a correction. You gain wealth from a society you should pay more back to that society to keep it functioning properly.

The complexity is the problem.....the point of the fair tax is to unite people and stop the blame game.....we all pay it and his prebate idea will help the lower incomes deal with it.

That's where you enter the murky area of the value added tax.

We could only tax a product at the end user not throughout the manufacturing process.

 

[Bootney Lee Farnsworth]

We don't have nearly enough tax expenditures. I think we need at least 10x more.

 

[buckeye45_73]

If it was done correctly there would be no tax on groceries, clothes, shoes, and prescriptions.

Rich people will always spend more than poor people and they will always buy more expensive things.

One also has to remember that services can be consumption, not just products.

What would probably be required is re-structuring how investment advice and implementation is paid for so the cost of the broker or trading house's services could be taxed, while not taxing the "fruit" of said investment, which is a form of income.

Exactly right.

I know in my state financial adviser services are subject to the state sales tax as are many other services. It shouldn't be too tough to figure out which services should be taxed.

The biggest fight in any consumption tax is always drawing the line between what is considered "consumption" and what is considered to be part of making something else for consumption.

True, but I think it should be a retail tax....it solves the problem.

Still you have to define retail

True, the main thing would be to setup a system where people cant cheat the system. So on a website you could have a retail and a non retail section. retail pays the tax, non retail would have to file out paperwork as to why they shouldn't and if they cheat they get hit with tax fraud. something akin to that, same for brick and mortar.

 

[Some Guy]

I think the whole prebate thing can be done away with. it makes no sense to charge people more only to give some of it back

If we implemented a consumption tax tomorrow there would be no income tax or FICA deductions taken out of a person's pay so they would have more money than they used to have to buy what they need. We can exempt groceries, medicines, clothing and other necessities from the consumption tax so that the people who spend most of their money on these necessities will avoid the consumption tax.

The idea isn't to eliminate taxes, just to shift how the taxes are collected. While i agree that government needs to be a LOT smaller and thus our taxes should go down, this thread is really dealing about tax collection, not amount of them.

Without a prebate, you're cutting welfare checks, unless you eliminate welfare. Either way, you're cutting checks, and the government already has to do much of that anyway with tax collection in April. This would just be much simpler and get those taxes in front of people's faces.

 

[buckeye45_73]

I believe we should repeal income taxes and enact a Fair Tax.

I believe consumption taxes are superior to taxes on production.

At the same time, I acknowledge a sales tax is regressive.

There are at least two big advantages to a sales tax, however. First, everyone has to pay it. Second, it is a lot harder to hide a tax hike.

You want to give free puppies to hookers? Fine, we'll raise the sales tax to pay for that.

Say what!?!

Suddenly, people won't be so quick to give away taxpayer dollars any more. The days of "gimme gimme gimme, and make that guy over there pay for it" will end. A hike in the Fair Tax will affect everyone!


The Fair Tax is a kind of sales tax, however it attempts to mitigate the regressive nature of a sales tax with a "prebate".

Each month, every adult American would receive a stipend which would offset the tax on things we all have to buy to survive. The prebate would be the same for everyone. A person in abject poverty gets the same prebate as Bill Gates.

That, in a nutshell, is the Fair Tax.

In subsequent posts, I will discuss some of the difficulties in implementing the Fair Tax. But let's get the ball rolling with your thoughts first.

Federal income tax was originally meant to tax the wealthy when implemented in 1913. Back then it was a tax on anyone making over $100,000. Today that would equate to $2.5 million.

I think the first $75,000 for every citizen should be exempt. You make $50,600 you pay no income tax. Then 4 brackets. 15%, 25%, 35%, 60%. Yes it shifts the tax burden to people with money that can afford it and yes 60% on anyone making over say $3 million. Over the last 100 years the wealthy have shifted the tax burden as much as they can to the poor and middle class.

Time for a correction. You gain wealth from a society you should pay more back to that society to keep it functioning properly.

The complexity is the problem.....the point of the fair tax is to unite people and stop the blame game.....we all pay it and his prebate idea will help the lower incomes deal with it.

That's where you enter the murky area of the value added tax.

We could only tax a product at the end user not throughout the manufacturing process.

yeah that's why I think the tax should apply to screws you get from home depot, not if you need them to build a car.....it would be two different processes