Why not the Fair Tax?

[HeyNorm]

You have no idea that you just paid, through the purchase $23 in federal taxes.

Most likely because it doesn't.

I’m all ears.

 

[Toddsterpatriot]

I’m all ears.

Me too.
I'd like to see that math that shows a $100 product "includes" $23 in taxes.

 

[Foxfyre]

Again, you’re just making things up.

If they are all in the same boat before the fair tax implementation, after, they are in the same boat. Nothing changed.

Look, currently you want to buy the toaster. You go to the store and it’s $100.00. You grab it off the shelf, go to the checkout counter and pay for it. You walk out with a toaster that costs $100 plus state and local taxes. You have no idea that you just paid, through the purchase $23 in federal taxes. All you know is that it cost you $100.

After the fair tax would be implemented, the scenario changes to:

You want to buy the same toaster. You go to the store and see it only costs $77.00 plus tax. At the checkout counter you pay $100, the cost of the toaster plus $23 in fair tax. The consumer is paying the same amount, it’s just more transparent in the amount of taxes this consumer paid in this transaction.

It’s a zero difference.

You can pitch a fit about how much more the poor is paying in taxes, but the reality is, they pay no more in taxes, they just went from thinking they weren’t paying any taxes, to realizing they were all along.

Like I said, I have my qualms about this scheme, and posters like WinterBorn added to those for me.

One of my favorite lines from a song is “the women are lovely, the wine is superb, but there’s something about the song that disturbs you”.

In theory, the fair tax is a good idea, but if it’s that good at collecting what was previously collected through the income tax, and in theory it wouldn’t inflate prices from their current levels, then why the prebate? Sounds like a marketing ploy and something easily manipulated to buy votes.

My point is that right now the state and local gross receipts tax (sales tax) in Albuquerque is 7.625% putting us in the median range in the country. The four states with the highest sales taxes charged just a fraction over 9%. The retailers and service people add on that tax to their products and services and submit those to the local and state governments. And if they make a profit provides goods and services, they pay additional income tax which is considerably less than 7 or 8% of everything they sell.

If they are required to charge a 17% sales tax that will be added to the cost of the product just as the existing sales taxes are added to the cost of the product.

All Americans now see the price listed on the product or service they are buying and those in all but four or five states that have no sales tax know that a sales tax will be added to that product.

The roughly 50% of Americans who are paying no federal taxes do pay that average sales tax of 7% on what they buy and they see it clearly on their receipts so they know what they are paying. And if that sales tax increases they will see that it has increased. That is transparency.

You make the federal sales tax 17% on top of that average 7% and now you're looking at 24% add on taxes above the cost of the product/service. But with a 'built in' federal sales tax, the customer doesn't know exactly how much he/she is paying in taxes when he/she buys that product or whether the store/service has increased prices or the federal government has raised the taxes. All transparency is gone.

And I can't imagine the accounting nightmare involved in the government figuring out how much prebate to assign to every household. or how that would cut down on the paperwork for citizens. And I cannot see how a prebate could be designed to be fair to those who produce most of what they use, i.e. those who sew their own clothes, grow their own vegetables, raise their own protein and thus spend considerably less than those who do not have the luxury to do that. In short I think the system would be far less equitable than it is now.

The only truly equitable system is a flat tax that EVERYONE pays above a reasonable threshold of income. But even that has its pitfalls in discouraging home ownership, investment, charitable contributions, and other positive aspects in society plus government must be absolutely constrained in how much it can raise the amount of the flat tax. And those same considerations apply with a 'fair tax' as well.

No easy answers here. But I have looked at the fair tax every which way and the reason it has not been seriously proposed is because it would not make things simpler and could make things significantly worse.

 

[Billiejeens]

My point is that right now the state and local gross receipts tax (sales tax) in Albuquerque is 7.625% putting us in the median range in the country. The four states with the highest sales taxes charged just a fraction over 9%. The retailers and service people add on that tax to their products and services and submit those to the local and state governments. And if they make a profit provides goods and services, they pay additional income tax which is considerably less than 7 or 8% of everything they sell.

All Americans see the price listed on the product or service they are buying and those in all but four or five states know that a sales tax will be added to that product.

The roughly 50% of Americans who are paying no federal taxes do pay that average sales tax of 7% on what they buy and they see it clearly on their receipts so they know what they are paying. And if that sales tax increases they will see that it has increased. That is transparency.

You make the federal sales tax 17% on top of that average 7% and now you're looking at 24% add on taxes above the cost of the product/service. But the customer doesn't know exactly how much he/she is paying in taxes when he/she buys that product or whether the store/service has increased prices or the federal government has raised the taxes. All transparency is gone.

And I can't imagine the accounting nightmare involved in the government figuring out how much prebate to assign to every household. or how that would cut down on the paperwork for citizens. And I cannot see how it could be fair to those who produce most of what they use, i.e. those who sew their own clothes, grow their own vegetables, raise their own protein and thus spend considerably less than those who do not have the luxury to do that. In short I think the system would be far less equitable than it is now.

The only truly equitable system is a flat tax that EVERYONE pays above a reasonable threshold of income. But even that has its pitfalls in discouraging home ownership, investment, charitable contributions, and other positive aspects in society plus government must be absolutely constrained in how much it can raise the amount of the flat tax. And those same considerations apply with a 'fair tax' as well.

No easy answers here. But I have looked at the fair tax every which way and they reason it has not been seriously proposed is because it would not make things simpler and could make things significantly worse.

Not true,

It will never be proposed because deciding taxation - who benefits and who doesn't, is the greatest power that Congress has.

Congress will never consider any idea that would take away that power from themselves.

 

[Toddsterpatriot]

. But with a 'built in' federal sales tax, the customer doesn't know exactly how much he/she is paying in taxes when he/she buys that product or whether the store/service has increased prices or the federal government has raised the taxes. All transparency is gone.

From what I've seen of this proposal, it will clearly list a 30% "Fair Tax" on your receipt.

 

[Foxfyre]

Not true,

It will never be proposed because deciding taxation - who benefits and who doesn't, is the greatest power that Congress has.

Congress will never consider any idea that would take away that power from themselves.

The fair tax would in no way takes power away from a Congress who could raise that fair tax at will and still spend it on any damn thing they want to spend it on. It's just another way for them to blame corporate greed for higher prices since the people won't be seeing how much of a cut government is getting anymore.

 

[Billiejeens]

The fair tax would in no way takes power away from a Congress who could raise that fair tax at will and still spend it on any damn thing they want to spend it on. It's just another way for them to blame corporate greed for higher prices since the people won't be seeing how much of a cut government is getting anymore.

oh my

 

[Foxfyre]

From what I've seen of this proposal, it will clearly list a 30% "Fair Tax" on your receipt.

Not according to how others are arguing it. The illustration was a $100 toaster will still cost $100 but 17% of it will go to the government. The customer won't know the difference. Of course the person naively thinks the business will just eat that 17% off their profits. They won't any more than they do the current local and state sales taxes now.

 

[HeyNorm]

Not according to how others are arguing it. The illustration was a $100 toaster will still cost $100 but 17% of it will go to the government. The customer won't know the difference. Of course the person naively thinks the business will just eat that 17% off their profits. They won't any more than they do the current local and state sales taxes now.

The 17% weren’t profits to begin with. The 17% was the taxes paid by the manufacture of the product, that would not be collected all along the manufacturing line.

Example, the toaster requires copper wiring, since the copper is no longer taxed, then there is savings to the manufacturer, that then gets passed onto the consumer.

I like it in concept, basically, taxing at the retail level, instead of all the taxes during manufacturing and distribution (which the consumer is not aware of), then, at checkout, the consumer sees just what an economic burden the government is to their wallets.

I actually think a consumption tax, instead of an income tax should be instituted for the very reason that the consumer had no real clue how much the government really costs them! I also think that is the very reason so many people oppose it, they don’t WANT the people to understand this.

 

[Foxfyre]

The 17% weren’t profits to begin with. The 17% was the taxes paid by the manufacture of the product, that would not be collected all along the manufacturing line.

Example, the toaster requires copper wiring, since the copper is no longer taxed, then there is savings to the manufacturer, that then gets passed onto the consumer.

I like it in concept, basically, taxing at the retail level, instead of all the taxes during manufacturing and distribution (which the consumer is not aware of), then, at checkout, the consumer sees just what an economic burden the government is to their wallets.

I actually think a consumption tax, instead of an income tax should be instituted for the very reason that the consumer had no real clue how much the government really costs them! I also think that is the very reason so many people oppose it, they don’t WANT the people to understand this.

All I am saying is you aren't taking into account that everybody is different, everybody doesn't consume in the same way. A consumption tax drives the wealthy off shore to buy what they need and destroys many local industries while the people who don't have the option to do that are left holding the bag. The only truly fair tax is for people to pay for whatever services they get from the government but in a nation of 330 million people as diverse and different as we are, that could also become a nightmare to administrate.

So again I say a flat tax that everybody pays above a reasonable threshhold is the way to go so long as it's adoption was hand and hand with strict limits on Congress's ability to raise it. It would be implemented with by a strong conservative President and Congress who would limit government spending to what it absolutely had to be, require the government to stay within a budget, and the people could do their taxes pretty much on a post card.

He who taxes without taking into account human nature will almost always tax unjustly.

 

[Toddsterpatriot]

The 17% weren’t profits to begin with. The 17% was the taxes paid by the manufacture of the product, that would not be collected all along the manufacturing line.

Example, the toaster requires copper wiring, since the copper is no longer taxed, then there is savings to the manufacturer, that then gets passed onto the consumer.

I like it in concept, basically, taxing at the retail level, instead of all the taxes during manufacturing and distribution (which the consumer is not aware of), then, at checkout, the consumer sees just what an economic burden the government is to their wallets.

I actually think a consumption tax, instead of an income tax should be instituted for the very reason that the consumer had no real clue how much the government really costs them! I also think that is the very reason so many people oppose it, they don’t WANT the people to understand this.

The 17% weren’t profits to begin with. The 17% was the taxes paid by the manufacture of the product, that would not be collected all along the manufacturing line.

The claim was there was $23 worth of taxes in the $100 toaster.
That means a $77 toaster had 30% taxes added to get to $100.

Are manufacturers and their suppliers taxed at 30%?

 

[HeyNorm]

The 17% weren’t profits to begin with. The 17% was the taxes paid by the manufacture of the product, that would not be collected all along the manufacturing line.

The claim was there was $23 worth of taxes in the $100 toaster.
That means a $77 toaster had 30% taxes added to get to $100.

Are manufacturers and their suppliers taxed at 30%?

I was replying to another who used the 17%.

Are they taxed at 30%. Don’t know, but when you add all taxes paid together along the supply chain? Perhaps

 

[Toddsterpatriot]

I was replying to another who used the 17%.

Are they taxed at 30%. Don’t know, but when you add all taxes paid together along the supply chain? Perhaps

Does the government collect 30% of GDP in taxes? Nope.

 

[HeyNorm]

Does the government collect 30% of GDP in taxes? Nope.

Are ya going ta keep us in suspense?

 

[Toddsterpatriot]

Are ya going ta keep us in suspense?

What suspense?

The magical Fair Tax cannot do what it claims.
Prices can't remain the same, government revenues remain the same and our paychecks are
suddenly tax free. As some smart guy said, why do they need prebates if prices don't increase?

 

[HeyNorm]

What suspense?

The magical Fair Tax cannot do what it claims.
Prices can't remain the same, government revenues remain the same and our paychecks are
suddenly tax free. As some smart guy said, why do they need prebates if prices don't increase?

I think I actually mentioned that, and I had qualms about the fair tax alone actually working.

I think I even actually said that the prebates made it seem a marketing scheme, not a serious proposal.

Did ya miss that part?

 

[Toddsterpatriot]

I think I actually mentioned that, and I had qualms about the fair tax alone actually working.

I think I even actually said that the prebates made it seem a marketing scheme, not a serious proposal.

Did ya miss that part?

Nope. I saw that it was you.

 

[BluesLegend]

All mooching loser Democrats keep your hands off my wallet, get a job pay your own bills. This has been a public service announcement.

 

[HeyNorm]

Nope. I saw that it was you.

Trying to be clever? Is that what’s making me yawn?

 

[BluesLegend]

Whenever you hear a Dem use the word 'fair' secure your wallet and purse.