Post of Critical Importance

[dogfood]

OK, this is dogfood, Tim Hibbetts, and I've always posted here in an effort to help, amuse, or both. I love this community and automatically consider the vast majority of you as friends (it's this weird thing I've talked to many of you about). This will be the most helpful thing I've ever posted.

Friends, Romans, ConceptArt.orgians, lend me your eyes. ("orgians", not "orjians")

There are few things in this world that generate fury and boredom in tandem like the issue of taxation. This post is an effort to make people aware of the most promising tax reform bill in the last several decades. In the House of Representatives it's H.R. 25 (http://www.govtrack.us/congress/billtext.xpd?bill=h109-25) and is popularly referred to as:
The FairTax (http://www.fairtax.org)
Here's a quick summary of the main points (http://www.fairtax.org/site/PageServer?pagename=about_basics_thumbnail):
-Revenue neutral; the Federal Government gets the same amount of money
-No tax on money earned; you keep 100% what you make
-No hidden tax
-Zero tax burden for those living at the poverty level
-People are only taxed on what they purchase (goods and services)
-Things cost about the same
-The U.S. becomes a tax haven and trillions of dollars flood into the country (which strengthens the declining dollar, making all imports less expensive, like oil)

OK, this sounds too good to be true, but a host of economic experts has gone over the work of other economic experts and the numbers are there and the research is sound.

This can happen and it will work.

It is only a few congressmen short of going up for a vote and the only thing that has to happen is that people need to know about it. Once people learn about it and have the misconceptions cleared away, there is over 95% support for it. It is politically neutral (like me), makes enormous sense, and will alleviate enormous resources that currently go to waste in dealing with the current system. The cost of using the current system is estimated at 2.7 trillion dollars. The FairTax will remove that entire cost and is generally estimated to grow the economy at 10.5% in the first year (some estimates say higher). That means more jobs, lower prices, and better opportunities for everyone.

OK, so if it's so great, why has it not happened?

There are some powerful people who are dependent upon the current system for their lucrative livelihoods. First, lobbyists who rely on their expert knowledge of the current system to get their clients huge tax breaks are sowing misinformation and fear. If the FairTax happens, they lose their power (they're already rich enough that loss of their multi-million dollar salaries is inconsequential). The same power is wielded by politicians who need the money to get reelected. If they can't offer tax breaks to powerful companies, they will be seeing less in their reelection funds. Those IRS agents who enjoy crushing people? Out of a job.

Basically, anyone who uses their power in or knowledge of the current system to manipulate others is against the FairTax. For everyone else... individual, company, family... this is good. There is a book, The FairTax Book (http://www.fairtax.org/site/PageServer?pagename=about_basics_thumbnail) (#1 on the New York Times Best Seller List), and a FairTax website (http://www.fairtax.org) that can answer many question. The book, in fact, is very short and pretty amusing (very odd statement about a book about tax reform).

Please post any questions, misgivings, doubts, or even support here.

The truth has to come out.

This can and must happen.




The current system is strangling us and there isn't much time.

[Ilaekae]

YES!

Let's get their damn asses, Puppy Chow. Where do I sign up?

[JL.Alfaro]

well before you get your thread deleted, as many other great threads have been in the past...let me just thank you for bringing this up and add to that, that I completely agree that something needs to be done to fix our economy.
The national retail sales tax is labeled as "progressive", how much power is that giving the government on future homeland-retail tax increases?
Im not saying that its a bad idea, hell yeah Im all for it, but thats just something I've thought about.

[Sepulverture]

Happiness and joy! I get almost a 7th of my paycheck taken out in taxes every two weeks, for my current job, at my last job almost 45% of my income was taxable. If it weren't for bullshit tax laws like that I'd have been able to go back to school in Denver like I had planned to.

We need email addresses, telephone numbers, and mailing addresses so we can rally contact our congressmen to demand support.

[Chingwa]

Wow, this is great. I get over 1/3rd of my money stolen from me as a federal slave. Thanks Dogfood. Everyone contact their representatives!

[Chingwa]

HOUSE OF REPRESENTATIVES LIST (http://www.house.gov/house/MemberWWW_by_State.shtml#ny)

[Sepulverture]

Thanks for posting that link Chingwa

[James Kei]

I don't mind paying a lot of taxes if it goes to education, health care, local services, etc....
But paying an assload of taxes to fund the war really pisses me off.

[Costau D]

Thanks chingwa

[Art_Addict]

I don't mind paying a lot of taxes if it goes to education, health care, local services, etc....
But paying an assload of taxes to fund the war really pisses me off.

Exactly, taxes should flow back to the public somehow.

[dogfood]

The national retail sales tax is labeled as "progressive", how much power is that giving the government on future homeland-retail tax increases?
That's one of the great things about this one; the current system has been modified literally over 10,000 times since its inception in the mid-80's. Congress currently has unlimited power to increase or alleviate taxes at will since so many of them are hidden. In the FairTax, you see how much you're taxed every time you are at the retail level (the only place taxation occurs). If that number goes to 23.000001%, you know, and the outrage can begin.

If knowledge is power, it is literally power to the people.

I don't mind paying a lot of taxes if it goes to education, health care, local services, etc....
But paying an assload of taxes to fund the war really pisses me off.
I'm with you, but this is only tax reform, not government reform. BUt with so much less worry about the tax code, we can get down to dealing with truly important issues.

YES!

Let's get their damn asses, Puppy Chow. Where do I sign up?
The two best ways are to contact your local representatives and let everyone you know in on this.

[Seedling]

This system seems to promise that most everyone will end up paying less in taxes, but that the total taxes paid by everyone to the government will remain the same. Where is the catch?

[dogfood]

This system seems to promise that most everyone will end up paying less in taxes, but that the total taxes paid by everyone to the government will remain the same. Where is the catch?
No catch. Right now, the amount of money that it takes to administer the code along with the tax breaks for the wealthiest folks is a big part of it. The other part is that not all of us will be paying less in taxes. Those who live with the highest consumption (who buy the most stuff) will be paying more. These traditionally are the people who have the ear of someone in government who can get them a tax break. That will end.

We also consume more in this nation than we make.

You read that right; we consume more than we make. Our savings is lower than most of the industrialized world, our import/export rate is astronomical, and taxing income squashes increased productivity.

Who else are we taxing? Drug dealers. We can also thank those who will be vacationing here from the rest of the world, because they're going to be helping out. The government isn't exempt, either (but this is already factored in).

And since we're not taxing things sold abroad, U.S. goods will once again be competitive and we can bring back all those companies that went off-shore for the tax relief. Jobs and money will come back here. Brittany and K-fed will get back together. Life will be bliss.


Here's another bit: the expected growth of the economy will produce even greater returns, and the government will be able to start paying down the deficit (as long as we keep those bastages from spending like drunken sailors in a house).

[smugbug]

I don't mind paying a lot of taxes if it goes to education, health care, local services, etc....
But paying an assload of taxes to fund the war really pisses me off.

Word.

[Juhani Jokinen]

Sounds too good to be true- too bad I don't live in the US. Maybe I should go to knock on the door of our minister of government funds and suggest this.

-Juhani

[0kelvin]

There are a few areas where I'm skeptical, but overall this sounds like a really good plan. Transparency is something sorely needed when it comes to taxation.

Of course, I'm Canadian so it doesn't really affect me. Well, except that it will likely be quite good for the Canadian economy, since there will be a lot of Americans shopping and ordering goods from Canada to avoid the tax. I'd support something similar up here; income tax is all sorts of horrible.



Eric

[smugbug]

OK, so if it's so great, why has it not happened?

There are some powerful people who are dependent upon the current system for their lucrative livelihoods. First, lobbyists who rely on their expert knowledge of the current system to get their clients huge tax breaks are sowing misinformation and fear. If the FairTax happens, they lose their power (they're already rich enough that loss of their multi-million dollar salaries is inconsequential). The same power is wielded by politicians who need the money to get reelected. If they can't offer tax breaks to powerful companies, they will be seeing less in their reelection funds. Those IRS agents who enjoy crushing people? Out of a job.


You know THIS bill was pretty much lobbied heavily by the wealthy and corporations. It's yet another batch of welfare for both of those groups.

Yup. Just add it to the already growing list of welfare having been given to these groups.

Campaign money is not garnered via taxes. Contributions, you know. And the whole issue of campaign finance reform is NOT cutting MORE taxes. It's a whole other ball of wax that needs, NEEDS to be addressed and completely reformed.


The current system is strangling us and there isn't much time.

Yes, it is. But this "fair tax"; which btw, is just another Orwellian term for welfare for the rich, this is NOT going to do the job. And well, it was introduced by a Republican. The GOP's base ideology is that "government doesn't work" and they love to privatize EVERYTHING. So, with this Fair Tax (if it were every implimented) would mean this country's infrastructure (everything from basic utilities [water, power...air...hehehe..] to public school, police, fire, etc.) would have to be controlled by private entities. Nevermind that currently nearly 60% of our federal government has been near-privatized (THANKS, Bush!) - and THAT'S the problem.

The GOP whose sole belief is "small government" and "government doesn't work", gets elected into office and what do they do? They prove it. In the meantime, they give out tax breaks for the wealthy and corporations as our infrastructure is ran into the ground and a huge disparity is created between the very wealthy and the middle class. We were once a country where our middle class was the envy of every other industrialized nation on the planet. No longer. Sigh.

Aw, gawd, I rambled. Sorry. Anyways, an "R" guy introduced this bill in January of 2005. And since Congress' sessions generally run for 2-years, and there hasn't been any activity on this bill in that time - it's probably been cleared. Other words, call your Rep to see if there's any plans of introducing another bill.

Oh, there's a whole list of bills on the agenda of the Senate Committee on Finance, currently. http://www.govtrack.us/congress/committee.xpd?id=SSFI

And here's the list of current bills in the House: http://www.govtrack.us/users/events.xpd?monitors=misc:activebills

[dogfood]

You know THIS bill was pretty much lobbied heavily by the wealthy and corporations. It's yet another batch of welfare for both of those groups.
I actually haven't seen this at all. I mostly see lobbyists trying to squash it. Since they have so much power in the current system (good tax breaks for one company mean unfair competition with other companies), they've been sowing misinformation.

It does mean zero taxes for corporations, but even now individuals bear the sole burden of taxation. No company actually pays taxes. They pass it on to the consumer or decrease dividends to share holders (individuals).

I was actually shocked that large corporations aren't singing this to high heaven, putting out commercials and whatnot, but then I learned that they like being able to manipulate the tax system to gain market advantage. The FairTax would even the playing field. Even the government would have to compete.
Campaign money is not garnered via taxes. Contributions, you know. And the whole issue of campaign finance reform is NOT cutting MORE taxes. It's a whole other ball of wax that needs, NEEDS to be addressed and completely reformed.
I agree, though contributions are generally given for favors, either pork barrel spending issues or tax breaks.
And well, it was introduced by a Republican.
It was generated by economic experts, most of whom are in academia. There is no outcry from any experts saying that a) this is some political ploy, nor b) that it is false in any way. The research is considered very valid and has been studied by a large number of non-partisan parties.

To categorize it based upon an arbitrary affiliation (there are liberal republicans and conservative democrats) seems rather trivial. I am an extreme moderate and by judging this strictly on its merits (like we judge art strictly by its merits, not by who produced it), this one is a winner.

There is the danger that this will be politicized, however, in that one side doesn't want the other to get a "win", regardless of whether it's right or not.

That would be one of the greatest shames.

The bottom line is that this is the best tax idea to hit the table in over 20 years and to poo-poo it based on political affiliation would be a shame. Once again, this is tax reform, not government reform (would that we could tackle that beast as easily).

Additionally, it was introduced in 1999 and had one sponsor. Today, it has around 56 co-sponsors from both sides of the aisle and is very close to coming for its first vote.

[Seedling]

So, with this Fair Tax (if it were every implimented) would mean this country's infrastructure (everything from basic utilities [water, power...air...hehehe..] to public school, police, fire, etc.) would have to be controlled by private entities.

How are you arriving at this conclusion?

[smugbug]

It does mean zero taxes for corporations, but even now individuals bear the sole burden of taxation. No company actually pays taxes. They pass it on to the consumer or decrease dividends to share holders (individuals).


Then...eliminate the tax cuts for the wealthy and begin taxing corporations - so that we ALL pay our fair share. I'd think that'd be a swell start rather than offers of "free lunch for all!!!"

Because, as we all know, there's no such thing as a free lunch. I wonder under this "fair tax" who would yet again, take over the burdens?


It was generated by economic experts, most of whom are in academia. There is no outcry from any experts saying that a) this is some political ploy, nor b) that it is false in any way. The research is considered very valid and has been studied by a large number of non-partisan parties.


Economic experts that need to be read are:

NYT: Joel Slemrod's review of two books touting "Fair" and "Flat" tax. (http://www.nytimes.com/2005/11/13/books/review/13slemrod.html?_r=1&oref=slogin)

Paul Krugman's 2003 article regarding the tax-cut con. (http://www.faireconomy.org/econ/taxes/KrugmanTaxCutCon.html)

Via Alternet: Paul Krugman's "How to Save the Middle-Class from Extinction. (http://www.alternet.org/workplace/48988/) <---this is one helluva article that would put into layman's terms what the hell is going on with our tax/tax structure.

Heck, why isn't anyone reading Paul Krugman? (http://en.wikipedia.org/wiki/Paul_Krugman)

Here's another person, Robert Reich. Here's his blogpost regarding the FairTax. (http://robertreich.blogspot.com/2007/10/who-pays-dollars-that-finance-bushs-war.html)

Here's yet another: Economists View: The deceptive presentation of the Fair Tax Proposal. (http://economistsview.typepad.com/economistsview/2007/08/the-deceptive-p.html)

And this article brings up a disturbing fact: to do what the Fair Tax proposes, dismantle the IRS, it repeals the 16th Amendment of the Constitution. http://www.mises.org/story/1814

Factcheck.org has a great breakdown analysis of the Fair Tax proposal:
http://www.factcheck.org/taxes/unspinning_the_fairtax.html

That you go. I ain't for this, I am for a repeal of the tax cuts for the wealthy and for taxing corporations. Period.

[smugbug]

How are you arriving at this conclusion?

Services provided by the government to the general public are:

Education
Fire
Police
and Public Works

With this fair tax, how would these services be maintained?

[Seedling]

With this fair tax, how would these services be maintained?

You seem to be confusing the issue of gathering taxes with the spending of taxes. This fair tax thingy says nothing about how taxes ought to be spent.

[dogfood]

With this fair tax, how would these services be maintained?
The FairTax generates the exact same amount of money for the government as is generated now.

I will read through your posts.

But realize, there is no way to tax companies. They will pass it on to the consumer. Profit ratios haven't budged much in the last few hundred years (on average) in a free market economy, regardless of the taxation.
And this article brings up a disturbing fact: to do what the Fair Tax proposes, dismantle the IRS, it repeals the 16th Amendment of the Constitution.
I don't see why dismantling the IRS is bad. It is an oppressive arm of government that operates directly against the 4th Amendment. And why would we need the 16th (which legalized income tax) if we get rid of income tax? That leaves the door open for even more of what we have now.

The Economist's View is quoting Bruce Bartlett, who's article is filled with inaccuracies and outright lies and is rebutted here (http://www.fairtax.org/site/News2?JServSessionIdr009=dmyp3csqz1.app2b&page=NewsArticle&id=8645&news_iv_ctrl=1541), here (http://www.fairtax.org/site/News2?JServSessionIdr009=dmyp3csqz1.app2b&page=NewsArticle&id=8282&news_iv_ctrl=1541), and here (http://www.fairtax.org/site/News2?JServSessionIdr009=dmyp3csqz1.app2b&page=NewsArticle&id=8281&news_iv_ctrl=1541). That one sparked fear in a lot of high money rollers (as it appeared in the Wall Street Journal).

This one (NYT: Joel Slemrod's review of two books touting "Fair" and "Flat" tax.) is chock full of inaccuracies, as well. The plan was generated by economic experts, the burden of collecting taxes is not as great as he makes it out, the federal government has no problem delivering social security checks, and the big one: the FairTax completely alleviates the burden on the poor. It lessens it the closer you live to the poverty line.

Paul Krugman's writings smack particularly of class envy, where the filthy rich need to pay more because... well, they're filthy. It's actually the filthy spenders that need to be paying more. The more you buy, the more taxes you pay. As to the filthy rich, most of them are small business owners and employ 70% of Americans. More money for them has been proven time and again to mean more jobs. Most millionaires wear old blue jeans, live in modest homes, drive cars over 5 years old, and employ several other people.

FactCheck.org has the most compelling points, many of which agree that it's a good idea. Here's the rebuttal (http://www.fairtax.org/site/News2?news_iv_ctrl=1541&page=NewsArticle&id=8249) for the points where FactCheck does not agree.

One of my big things is that those who consume more, pay more. In our industrial society, consumption is directly tied to energy use, and until we get some free energy source, that means large environmental effects. You screw more with the environment, you pay more taxes. That sounds a lot better than "you're more clever or work harder, you pay more".

[smugbug]

You seem to be confusing the issue of gathering taxes with the spending of taxes. This fair tax thingy says nothing about how taxes ought to be spent.

No confusion whatsoever. BTW, I'm a former state government employee as well as local (my city) government employee (in the Public Works Dept.).

It's not how the money garnered is spent but how do you collect the money needed. If it's all dependent on a national sales tax, how much do we (the people) need to buy before what is considered enough for our base infrastructure? I'm not even considering how to get the money needed to even pay for the government that will have to run it all, either; that's a whole uttah issue here.

Another thing, lately (as in the last six-seven years), it's not a government is spending a crazy lot more - because it isn't. It's a "government spending is UNEVEN". Over half of the federal fiscal budget (over $600-billion), is spent on military/defense ALONE.

Seems like that right there needs to be modified first before we go crazy on schemes like the Fair Tax.

[Seedling]

No confusion whatsoever. BTW, I'm a former state government employee as well as local (my city) government employee (in the Public Works Dept.).

I’m not convinced that being a government employee automatically makes one an expert on taxes, seeing as they employ quite a lot of folks in quite a lot of fields. But whatever; I’m no expert either. This fair tax thing is about gathering taxes, and yes, there are undoubtedly all sorts of problems with their plan. But their plan is about gathering money. Unless you can point specifically out where they have stated how taxes should be spent, I’m going to continue holding my opinion that you are mushing together unrelated topics.

[Eric Lofgren]

It's not how the money garnered is spent but how do you collect the money needed. If it's all dependent on a national sales tax, how much do we (the people) need to buy before what is considered enough for our base infrastructure?

Seems to me that this point here and really the very heart of the issue, would be the benchmark on how well this tax model works. Note that I'm not an American, but spending is really something that doesn't recognise geographical borders in the West. At least in the US and Canada. Spending is something we do very well. So on the face of it I could see a federal income tax collection based on what you spend and not on what you earn probably doing very well. And it's in this situation where the haves finally get to deal with appropriate tax hits based on their extravagent spending habits. But I think where it would get very interesting is how it adjusts your spending habits for the future once it was implemented.

if I'm understanding this tax reform correctly, that is.

[Seedling]

But I think where it would get very interesting is how it adjusts your spending habits for the future once it was implemented.


That's my big headscratch for this idea, too. Increased incomes nonwithstanding, people will bemoan the prices of goods and services going up, and spending habits may change. I wonder, for instance, how this would effect the games industry. Could my career be hurt by people suddenly buying fewer games?

[dogfood]

Over half of the federal fiscal budget (over $600-billion), is spent on military/defense ALONE.
This (http://www.washingtonpost.com/wp-srv/politics/interactives/budget06/budget06Agencies.html) is from last year (military spending is up over 3% this year), but it says DoD is 16% of the federal budget. That's about $418 or so billion out of 2.5 something trillion.
That's my big headscratch for this idea, too. Increased incomes nonwithstanding, people will bemoan the prices of goods and services going up, and spending habits may change. I wonder, for instance, how this would effect the games industry. Could my career be hurt by people suddenly buying fewer games?
Costs will be very near what they are now (due to the current hidden, embedded taxes), but income would swell. More income means more money to save and more buying power. We all, my dear, would still buy your games. :)

[smugbug]

This (http://www.washingtonpost.com/wp-srv/politics/interactives/budget06/budget06Agencies.html) is from last year (military spending is up over 3% this year), but it says DoD is 16% of the federal budget.

Here's a poster I have:

Death and Taxes 2008 Poster (http://thebudgetgraph.com/site/index.php?main_page=product_info&products_id=1&zenid=5b59930f53253519fbdc66c86d673c44)

Also, I gotta get my ass to school and well, draw. I can talk about this shit all day (and have, mind you). But in the end, I need to work and to study.

If you like this plan, so be it. Tell your congresscritters and this is still...sorta a free society and you can vote for whatever you want. I just won't go for it; but again, free society - that's the beauty.

Seedling, I am not saying that by being a public employee, I am a expert in the economy. But by working as a public employee I see how and why money is distributed - it opened my eyes for sure in the ways of how $$ is moved through in the government.

Oh boy, did it.


ETA: Oh the luck of knowing people who can put something in simple terms; especially for me.

"What part of regressive taxation don't you understand?
A sales tax is a regressive tax because poor people end up paying a higher percentage of their income than the wealthy.

So a family of 4 earning $25,000 a year pays a higher tax rate than a family earning $200,000. Does that really seem like a good idea to you?

And consider that the poor family spends almost all of their income on necessities like food, clothing and transportation whereas the wealthy family only spends a tiny fraction of their income on these necessities. So any tax on luxury items would merely reduce demand for these items, not generate revenue. The wealthy family would still buy necessities, but the tax they would pay would be a small fraction of their wealth.

What we need is much more progressivity, not less. Already, the wealthy pay far less than their share. What we need is to tax real wealth and not just income. The estate tax worked in this regard."

[arttorney]

Yeah. There's a really interesting part of this that Dogfood has addressed a bit above. If you take the cynical view of taxes as negative reinforcement, then this change would cease punishing people for productivity and would begin punishing people for profligate spending.

I'm productive and frugal so I don't have a problem with that. I can think of a couple "shop til you drop" people who would get brutalized.

[Eric Lofgren]

I can think of a couple "shop til you drop" people who would get brutalized.

And yet, if Dogfood is correct and prices wouldn't be overly affected, your friends would be doing a great service for your country with their rampant spending :)

[kev ferrara]

Am I the only one who worries that this systems dis-incentivizes people from participating in commerce? Rather than, say, just hording your money.

Not that more savings wouldn't be beneficial for this country. Might help us through the current credit crunch.

But long term, this may result in a downward pull on the market. Its all well and good to keep more of your money. But keeping your job is a good thing too. And that means commerce, which means "other people" have to spend their money on your good or service.

Somebody re-calibrate me.

[arttorney]

There would be a lot of change. Our dependency on buying a bunch of foreign goods we don't technically need might be affected in a good way, but at the same time our lives might become rather drab without a big time Christmas season thing happening.

All those CPAs and H & R Block temps would have to change jobs (probably becoming employed by stores and corporations to add up the sales tax, see that it gets sent in to the government, and decide how much to pass on to the consumer when the retail price of the goods is being decided).

Our current system makes me wonder why on earth I would want to have an income, if I am just going to be taxed for doing that. I guess: "What do you value most" starts to become an interesting problem.

[Chingwa]

Don't forget the government has a lot of income sources through taxes that are not income taxes. They tax the radio waves, they tax your phone line, they tax the gas that goes in your car... etc. etc. People tend to think that if there was no income tax that government would cease to function, and that simply isn't the case. There's also (depending on where you live) local and state taxes to contend with as well, so I have no qualms about dumping the income tax... it translates as forced labor to the government, which does not really jive with some of the ideals this country is supposedly founded on.

For a good list of additional taxes I recommend everyone watch the beginning of America: Freedom to Fascism.

[dogfood]

Here's a poster I have:
Death and Taxes 2008 Poster (http://thebudgetgraph.com/site/index.php?main_page=product_info&products_id=1&zenid=5b59930f53253519fbdc66c86d673c44)
That only covers discretionary spending. which is less than half the budget.
Also, I gotta get my ass to school and well, draw. I can talk about this shit all day (and have, mind you). But in the end, I need to work and to study.
Thanks for playing (I'm being serious). There are a lot of detractors and it's only by bringing the counter points into the discussion can we get a full accounting.

So a family of 4 earning $25,000 a year pays a higher tax rate than a family earning $200,000. Does that really seem like a good idea to you?
The family at $25k/yr would pay zero taxes. There is a pre-bate that all heads of household get in order to cover the taxes on the basic necessities of life.
And consider that the poor family spends almost all of their income on necessities like food, clothing and transportation whereas the wealthy family only spends a tiny fraction of their income on these necessities. So any tax on luxury items would merely reduce demand for these items, not generate revenue. The wealthy family would still buy necessities, but the tax they would pay would be a small fraction of their wealth.
The poor do the same thing now, but get taxed. Under the FairTax, they would not be taxed and if they could pull in a little more money, they get to keep every penny. The wealthy would be paying about the same for the luxury goods as they do now, but would have more spending power. States with sales tax do not register a lower amount of consumption against those without.

What we need is much more progressivity, not less. Already, the wealthy pay far less than their share. What we need is to tax real wealth and not just income. The estate tax worked in this regard."
The worst victims of the estate tax are the farmers. The land is worth extraordinary amounts of money, but can only be realized by selling it. In this way, the small farm gives way to the large farmer that can say he's going to plant something he knows the government will subsidize him not to grow. The small farmer is out of work and out of luck.

Am I the only one who worries that this systems dis-incentivizes people from participating in commerce? Rather than, say, just hording your money.
That was my first thought. But as the embedded tax of 22% (on average) is replaced by an inclusive tax of 23%*, the costs will stay close and the buying power will go up. But I sincerely hope that people save, as saving means investing, which means there is money in the country to improve infrastructure, develop new businesses, and fund the arts (hopefully mine).


All those CPAs and H & R Block temps would have to change jobs
The tax lawyers and specific tax preparation cottage industry (Intuit, et al), yes, but CPA's will not be out of work. They will simply be able to concentrate on making businesses grow, vice worrying over the tax implication of every business decision.

Chingwa, you're looking more and more sexy, and are absolutely correct. Is society's purpose to provide a place for us to toil, and the more lucrative the position, the harder we work, the more we owe to maintain that society? Or is the aim to provide goods and services for the population to enjoy and the more we enjoy of those, the more we should pay to help fund that society?

The current system is robbery. They go into our check before we see it and steal from us (the history on how this came to pass is fascinating). The FairTax is an open, voluntary system. You see how much tax you're paying at every purchase and if you don't feel like funding the war/Woodstock Museum/elephant dung Mona Lisa, stop buying crap.

OK, here's something else:

This can start 1 January 2009.

Cold turkey. The details are in the book and on the site. A knowledge of the facts, cold and clear, has an unusually high correlation to raving approval (for such a radical idea). This translates into the more people know about this, the more people want it.


*OK, say a toaster now costs $100 (you love toast). Once the current embedded taxes are removed (it may take a couple days/weeks for the market to adjust prices; there are several recent examples of similar stuff happening), it is replaced by an inclusive tax of $23. The price tag says $100, but the receipt says "Toaster $77, FairTax $23" (I took out the extra dollar to ease the math). You will hear it called an exclusive tax of 30%, which is $23 added onto $77 (this is true). The money is the same, but the embedded rate is much more apples-to-apples with the inclusive rate.

[kev ferrara]

The risks:

The changeover results in a plummeting stock market because investors believe the plan will dis-incentivize commerce. Investors begin investing overseas. The drop in stocks affects millions who now have less discretionary dollars to spend and are also now in fear for their financial securty. This results in less investment. Less investment capital and less spending money means less commerce means less jobs. Especially less non-essential jobs, like in the entertainment field.

Let us assume the implementation of this idea does result in some real dis-incentivization to buy commercial products. Couple that with the fear of this happening (which reduces capital value reserves in the stock market) which further reduces incentive to participate in the commerical marketplace, and we have the result that people do spend less in the marketplace, making small businesses (which have smaller profit margins) more vulnerable to failure, possibly leaving only the large corporations (that are better able to weather the changover), viable.

Furthermore, the less people buy, the less revenue goes into the system. The only way now to rectify the situation is to again raise the rate of tax on purchases in order to match budgetary requirements. This further dis-incentivizes market participation. This results in a vicious cycle of market abdication and loss of stock value and thus capital reserves. The country plunges headlong into debt in order to finance itself as the marketplace (and thus tax revenue) implodes.

And more savings lead to the banks having more money to invest, thus accruing more power to themselves. While everybody else circles the drain.

Somebody re-calibrate me.

kev

[Seedling]

and if you don't feel like funding the war/Woodstock Museum/elephant dung Mona Lisa, stop buying crap.


You might want to reign in your enthusiasm long enough to consider how your position is going to feel when you have to buy a house, or a car, or toys for your children, or your next pair of crap. . . I mean pants. This whole idea is intriguing, but unfettered enthusiasm is going to leave you feeling betrayed when you get your wish and find out that it isn’t all puppies and kisses.



*OK, say a toaster now costs $100 (you love toast). Once the current embedded taxes are removed (it may take a couple days/weeks for the market to adjust prices; there are several recent examples of similar stuff happening), it is replaced by an inclusive tax of $23. The price tag says $100, but the receipt says "Toaster $77, FairTax $23" (I took out the extra dollar to ease the math). You will hear it called an exclusive tax of 30%, which is $23 added onto $77 (this is true). The money is the same, but the embedded rate is much more apples-to-apples with the inclusive rate.

I’m afraid this sounds like wishful thinking to me. If this system were to come into use, I would fully expect that $100 toaster to cost $123.

Am I the only one who worries that this systems dis-incentivizeis - people from participating in commerce?

As opposed to our current system, which dis-incentivizes people from seeking out higher-paying jobs. (Okay, so few people choose to pass a position of higher stress and responsibility because it’ll put them into an unfair tax bracket, but in this possible alternative, it may similarly be only a few who are dis-incentivized from spending.)



I was thinking this afternoon that governments and tax systems suffer from entropy just like physical things. Maybe its time to boot the current tax system, not because there is anything inherently wrong with it, but because it has degraded into chaos. I’m sure whatever takes its place will suffer the same fate eventually, too.

The risks: . . . Especially less non-essential jobs, like in the entertainment field.

. . .Furthermore, the less people buy, the less revenue goes into the system. The only way now to rectify the situation is to again raise the rate of tax on purchases in order to match budgetary requirements. This further dis-incentivizes market participation. This results in a vicious cycle of market abdication and loss of stock value and thus capital reserves. The country plunges headlong into debt in order to finance itself as the marketplace implodes.

Ick. :(

[Grief]

interesting thread.

i'm going to sit this one out, i don't have two cents to throw into this conversation.

[dfacto]

I don't have much to say on the matter that hasn't already been said, but I do have to ask what the chances of this happening are.

No income tax really does sound too good to be true at this point, what with a war needing funding.

[Chingwa]

Well, war isn't a given. All the money wasted on war could buy a lot of $123 toasters. or fix a lot of roads that would no longer need private investors. I'm not exactly convinced on some of the details of this plan either, but I see the loss of an income tax a great boon to the health of this country, both mentally and fiscally.

There is no specific reason to think that investors will run for the hills any more than that they won't. at this point that is just speculating. I could specualte the exact opposite could happen with just as much validity. But it does seem to make sense that $100 toaster would then become a $123 toaster.

I assume food is exempt from this tax scheme?

[dogfood]

The risks:

The changeover results in a plummeting stock market because investors believe the plan will dis-incentivize commerce. Investors begin investing overseas...
That's happening right now because of the current tax system. Because the U.S. business is forced to pay taxes on goods sold here and abroad, they move off shore and sell as much as they can to other, less business-penalizing places (BMW does not pay German taxes on cars sold in the U.S., but GM pays U.S. taxes for cars sold in Germany). If there is suddenly no business tax in the U.S., it will become a veritable tax haven and all those companies that have gone off-shore will flood back to the stability of the U.S. There may also be foreign companies that will want to take advantage of the tax savings and start building factories here, as well. The dollar will get stronger, investments will return to the U.S., and there will be far more economic growth. And if people aren't exited about spending the same amount of money for the same goods, they will be saving, which means investment, which means the stock market smiles and nods, and people have more money to buy more things.

According to what I'm reading (even several honest nay-sayers).

You might want to reign in your enthusiasm long enough to consider how your position is going to feel when you have to buy a house, or a car, or toys for your children
I know... I generally don't get fired up about much, least of all what the government does or doesn't do. And when I first heard "national sales tax", I wanted no part in paying an extra 23% on what I buy.

But that's not how it works.

The toaster has a 22% embedded tax that will go away and be replaced by a 23% inclusive tax. Businesses might try to just keep the price the same and tack on the tax, keeping the overage as profit. But, the competition will lower prices, yada, yada, and the free market will once again put profit margins to their traditional level (I think it's an average of 9%, but that's beside the point). Not so much wishful thinking as a large number of very smart people and $20 million in initial research (several teams of economists have since tried to take it apart). So far, the detractors are mainly those who don't understand and those who just want to believe our current system is the best way to make the wealthy pay for as much as they can.

But the numbers are there. It just sounds too good. The truth is that the current system is that bad.

I was thinking this afternoon that governments and tax systems suffer from entropy just like physical things. Maybe its time to boot the current tax system, not because there is anything inherently wrong with it, but because it has degraded into chaos. I’m sure whatever takes its place will suffer the same fate eventually, too.
Actually, the history of the taxation in this country is kind of interesting, in a numbers/human nature way.

I don't have much to say on the matter that hasn't already been said, but I do have to ask what the chances of this happening are.
Until the book (http://www.amazon.com/FairTax-Book-Neal-Boortz/dp/0060875410) came out, not very much, but since it debuted at #1 on the NY Times Best Seller List, it has gained tremendous momentum and is only a couple congressmen away from being put to a vote. There just needs to be more voter awareness, because Congress isn't going to freely give away one of its legs of power without some folks back home breathing down its collective neck.

[dogfood]

I assume food is exempt from this tax scheme?
Nothing is exempt. No food. No service. No one. Not even on the internet. Not even the government. If you buy something at the retail level, it is taxed (read again that all the research indicates things will cost about the same as they do now). But things are only taxed once. If you sell your used car to someone else, no tax.

And if you blushed at paying the tax on services, most common services have a hidden, embedded tax of 25% right now. Most service costs will decrease.

And talk about the mental relief! They computed the hours Americans spend dealing with taxes. If you get a work force to deal with it at 8 hours a day, 5 days a week, with a couple weeks of vacation, the workforce would be more than 2.5 million people.

That's a lot.

[Seedling]

But things are only taxed once. If you sell your used car to someone else, no tax.



Ooh. I'm not sure that sits well with me. I'm thinking specifically about the fine art market. Fine artists already have it tough; and folks who specialize in reselling fine art get off well. This system seems like it could potentially penalize original creators further, while boosting the market in previously-sold goods. Artists would then find themselves in competition with their own previous works.

Yes, I'm self-centered. Everything comes down to my own art. ;)

[Dose206]

Wow, this does seems nice. I'm a little cautious, but tomorrow when I'm bored at work with nothing to do (sweet government job affords me many opportunities to eff off) I'll do some research.

[dfacto]

Well, war isn't a given. All the money wasted on war could buy a lot of $123 toasters. or fix a lot of roads that would no longer need private investors. I'm not exactly convinced on some of the details of this plan either, but I see the loss of an income tax a great boon to the health of this country, both mentally and fiscally.

I should have been a little clearer. What I meant to ask was, given the current war, the chance that it might drag on past Bush's term, the fact that our political system is notoriously money hungry, and the fact that 15-30% of our national income is no amount of money to scoff at, what are the chances that lawmakers will turn their backs on such a nice chunk of change (or that federal agencies like the DOD would let them)?

Sounds like a pipe-dream, even if the thought of keeping all your cash is very appealing.

[dogfood]

This system seems like it could potentially penalize original creators further, while boosting the market in previously-sold goods. Artists would then find themselves in competition with their own previous works.
That sounds like a very valid concern and I do not have any clarification right now. Now, I do know that fine artists will not pay any taxes on their materials and if they have a separate studio, there will be no taxes on that, so the overhead will be less, but many skill-based crafts are not priced based on material and time (the value is not intrinsic). However, it will most likely be the case that you will be a wholesale supplier to the place where you initially sell your art and they will be applying the taxes. Regardless, that seems like a potential issue.

Sounds like a pipe-dream, even if the thought of keeping all your cash is very appealing.
This is probably going to be the greatest momentum to shift, the fact that it seems unlikely to come to pass. The American Revolution was considered even more unlikely, even impossible. The majority of the population were not for independence and were convinced that the ill-trained militia had no chance against the masterful British armed forces. All that is needed to bring about change is enough people with vision.

Listen (read), I was also very skeptical about this plan for several reasons: the math isn't obvious or intuitive, anything this good that was real should have already been enacted, and there were plenty of naysayers, just to name the big ones. But, I heard a couple people I respect talk about it and I decided to give it a fair hearing, reading the book, looking at the math, reading the counter points, and the follow-up rebuttals.

I'm not given to wild claims and am very moderate in all my views, but I am convinced that this, while not a panacea, can do a great deal to reverse the damage that a punishing and worsening tax system has done to this country and the vast majority of its citizens.

The FairTax is going to be a swift kick in the shins, but the current system is an 80 pound cancerous tumor, riddled through our kidneys, liver, lungs, heart, and brain. It clouds our thinking, chokes our breath, constricts the blood, and makes it burn when we pee.

[Hyskoa]

The wealthy would be paying about the same for the luxury goods as they do now, but would have more spending power.



> So frugal rich people only get richer and richer?

Rich people that spend a lot will get accountants and a monthly budget if this starts.
So the only way to fix all this would be to raise the prices of taxes on necessities again.

In which case, the rich pay 0,001% while the poor pay 1-10% per item.


See where this is going? :)


This is a very, very bad law.

What they need to do is incorporate the same system they have now, meaning more taxations on people who earn the most, but less on people who earn the least.
Far greater contrast in fact.

But this will only drive rich people away when they get a certain amount of money.

So this solution won't work.

The one that will work is insanely high taxes for material build in other countries, better regulations and controlling wares. Also people who leave the country permanently should pay high percentages on the money they earned in america.

In fact, every country should have this.
Kill global commerce that way, but it'll be a slow process =)

Countries with very little money to begin with will die out eventually. This isn't a humane solution, but you have to make a decission here, be human or get money. Doing both at the same time is kinda awkward.

[dfacto]

No Dogfood, I think I should have been even clearer.

The problem I see with this has nothing to do with the method, the economic forecast, or anything other than the loss of the federal income tax. I just don't think it's going to get passed because a large enough body of politicians isn't going to be willing to stick their necks out and seriously endorse something that would reduce the amount of money the government can haul in.

I think the plan has about as much chance of doing good for America as it does of screwing it over, but either way I don't think this will go anywhere.

[dogfood]

The wealthy would be paying about the same for the luxury goods as they do now, but would have more spending power.
Everyone would have more spending power, but those in the middle class would realize a greater boon than the wealthy due to the reduction of the marginal tax rates. And currently, the middle class pay a greater percentage of their gross income than the wealthy. Under the FairTax, there would be greater equity.

With this argument, under the current system, since we pay taxes on our income, people would work less or give it up altogether. The fact is that two-income families are at an all-time high in order to cover the involuntary tax burden so that folks can buy what they want.

There is no indication that people are going to buy less when costs will remain close to current costs. Some costs will go up 1-2%, while others will go down 1-2%, but overall costs will remain very close to what they are now. That's just not a reasonable view of human nature.

And will the wealthy who horde their wealth get even richer? Yes. Absolutely. What good is the money doing them? If they spend it, they pay taxes. If they invest it, they are contributing to economic growth. If they just stuff it in their mattresses, then they may as well not even have earned it.

No one envies the guy who makes $5 million/year and lives at the poverty level. They envy his buying power, his economic security, what he could do with that money. These folks already have teams of lawyers and accountants that get them out of paying what the current, secertive system says they should. Those tax experts would be looking for more productive work under the FairTax, because the tax would be visible at all times and you would pay less by spending less.

[Hyskoa]

>That's just not a reasonable view of human nature.

Who ever said accountants are reasonable humans? They are machines. And worse, they are efficiënt machines.


>And will the wealthy who horde their wealth get even richer? Yes. Absolutely. What good is the money doing them? If they spend it, they pay taxes. If they invest it, they are contributing to economic growth. If they just stuff it in their mattresses, then they may as well not even have earned it.

Accounts in another country? You see, the dollar can be used in other countries too. Now if they splurge their money over there, you might get 10% back into america.

It's incredibly easy, really.

Bags of money -> private jet -> really great weekend in another country-> return with goods.

So basicly what you're doing is giving those people the means to grow RIIIHIIICH and then just spend weekends with their friends in funland.


And if the administration asks where all the money is going. Well, they met a random begger on the street and bought him his life back. How nice.

And if they ever get into trouble with explaining their sudden loss of money, well.. a house is easily bought. And since the trips to funland are weekly anyway...


So what you're trying to do with this bill is make sure the entire world gets some nice funding =)

Thank you, I live in europe, so more than welcome with all your cash over here. And not to worry, we know how to keep a secret. Wink wink, nudge nudge.

[dogfood]

I just don't think it's going to get passed because a large enough body of politicians isn't going to be willing to stick their necks out and seriously endorse something that would reduce the amount of money the government can haul in.
The plan would raise the same amount of money in the first year as we get right now. But with the expected economic growth of 10% in the first year, the revenues would rise. And this would happen each year, as economic growth would be tied closely to revenue. Right now, raising taxes usually means less revenue, unless the economic growth is very large.

I do agree that politicians are going to balk at it until enough people understand how the plan works and start to force their hands. But they aren't going to hesitate because it brings in less money (which isn't true). They're going to dislike it because it removes some of the power they enjoy in giving tax favors to their greatest contributers.

[dogfood]

Accounts in another country? You see, the dollar can be used in other countries too. Now if they splurge their money over there, you might get 10% back into america.
This is actually one of the main problems with the current system. The restrictive taxation system forces business and money overseas (to the tune of over $2.5 trillion). That's money that doesn't see American shores. That's the way things are right now.

Under the FairTax, the U.S. will become a tax haven and business will flock here to take advantage of the economic environment. Business means money. Money means spending. Spending means revenue. Why fly to Europe to pay those prices, when you can stay here and pay what you're paying now (which is less, due to the falling dollar, which will also change under a stronger economy). Trust me, stuff in Europe costs a lot more than it does here.

The rich are doing everything you say under the current system. What you're doing is partaking in a traditional class-envy argument, "I want them to hurt more, regardless of how much it also hurts me".

The FairTax is class-neutral. You consume over the poverty level, you pay taxes (there are no accountants to help cut your tax burden because it is cut and dry). The current system is not class neutral. If you have a smart enough accountant, you pay fewer taxes. If you have a good lobbyist, you pay fewer taxes. These taxes must still be raised and are handed over to those of us without good accountants and lobbyists.

[Hyskoa]

Money means spending.

Europe is more expensive, but there are others who are less expensive.

But good luck with the system thought. Although I'm damn sure it's not going to work in that form =)

[dogfood]

But good luck with the system
Thanks! :)
Although I'm damn sure it's not going to work in that form =)
And unfortunately, it's the unsupported doubts, often emotionally based, that keep this from overwhelming support. Because the idea doesn't seem like it would work, many people just give up on it, regardless of how thorough the research. "It doesn't sound like it would work, therefore, I am against it."

Understanding and a complete hearing results in over a 90% approval of the idea among those who do not have a stake in supporting the current system (I can't find the data, but was from one of the FairTax advocates, so that may be grain-of-salt stuff).

Even if this does result in me paying the exact same amount of tax, it will be worth it in order to keep from spending over 10% of my free time dealing with my taxes (the average for Americans is somewhere between 13 and 16%, I think).



OK, I'm going to be out for a couple days, but if you have doubts or questions, please post them and I will be back to address them.

[Denart]

If this bill doesn't pass, there is still Ron Paul. He wants to get rid of the IRS and the income tax. He says that if the income tax was eliminated, the federal revenue would be the same amount as it was in 2001. Definitely do'able

[Chingwa]

Ron Paul is great... he's finally given me someone to vote for that I actually believe in.

[Seedling]

Who ever said accountants are reasonable humans? They are machines. And worse, they are efficiënt machines.

And lawyers are sharks and male nurses are gay and artists are starving morons with no aptitude for logical thinking?

[Whyatt Thrash]

And lawyers are sharks and male nurses are gay and artists are starving morons with no aptitude for logical thinking?

Exactly. :D

[dogfood]

OK, well, I really want to thank those who've read all or most, or heck, even some of this thread (there were far too many words and far too few pictures). I hope that I've peeked some interest in what has the possibility of being some monumentally good changes for the American condition.

I'm not going to harp on the subject, but if there are any large changes, I may apply the paddles to this thread. And obviously, if anyone wants to continue the discussion, I'd be more than happy. My recommendation is to either research in online or buy the book, The FairTax Book.

Thank you for your attention and have a pleasant evening.

[Dirty C]

Yeah. There's a really interesting part of this that Dogfood has addressed a bit above. If you take the cynical view of taxes as negative reinforcement, then this change would cease punishing people for productivity and would begin punishing people for profligate spending.

I'm productive and frugal so I don't have a problem with that. I can think of a couple "shop til you drop" people who would get brutalized.

Yes, I believe that's referred to as "The Economy."

Major thanks for the intelligent arguments put up by PatriciaS in this thread. I don't have time to read everything put up here, but the points brought up are definitely the ones I'm most afraid of when hearing right wing taxation schemes. Gonna check this Krugman guy out.

[dogfood]

...I'm most afraid of when hearing right wing taxation schemes.
That's inaccurate and unfair. This is a very progressive plan that takes all elements of the economy into account. The economists that spent years and millions in research come from business and academia, not politics.

If it were truly "right wing", wouldn't the current administration try to enact it? Yet, the president hamstrung his own tax reform council when directing them to generate a new plan; he specifically put language into the executive order that would derail any attempt to say good things about the Fairtax.

No, this is non-partisan. It is based on research and studies and has broad-base support from those who do not have a stake in maintaining the current system.

Those who are most deeply invested in the current system are sowing fallacy by hitting folks in their emotion zone (liberals are being told that it's only for the rich and the conservatives are told that it will unfairly reset the playing field). One of the greatest weaknesses of the plan is the ease that it is demagogued. Slap a label on it (silly, regressive, right-wing), and folks react to it on a visceral level, leaving their reason at the door.

The research in developing it is far deeper than that which refutes it. It's open for inspection and comes from myriad sources. The plan will work and is independent of political whim.

[Dirty C]

I'm not going to form my opinion purely based on the opinions of people on an art discussion forum. But here's my major question I'd like answered:

If the feds are going to have just as much money, but it'll be taken though sales tax rather than income tax, then the average person will pay exactly as much tax, just in a different way. That *has* to be true mathematically, otherwise you can't arrive at the 'just as much money' part. This can't be argued, it's built into the whole idea.

So given that the average person will get exactly as much money and spend exactly as much money, and that as its revenue neutral, this implies that the basic cost of survival (which makes up a much higher proportion of low income people's salary) will be a lot more expensive. Why? Because they need exactly as much food and water and shelter to survive as before, but the extra money has to come from somewhere. Now, the lower classes happen to pay less income tax, because the first 5000 or whatever isn't taxed - which makes up a larger proportion of their initial salary. But now, everything they spend is taxed. Ergo, they are taxed more, regardless of any actual increase in the cost of items.

The upper classes, of course, have the choice to spend a great deal of their money. Why? Because it's liquid - a great deal of their expenditure is over and above survival. So they are inherently penalised only for - as arttorney puts it - a lack of frugality. So what happens? People are punished for spending. That's the economy you're talking about! An economy being stimulated less from the top end where all the money is means a slowing economy and a manufacturing base with less to do.

Look, I'm not an economist, I'm sure this basic reasoning is flawed. But can you please explain to me how on earth paying "exactly the same amount of tax, just through other means" and having the cost of survival go up fundamentally helps anybody but those with a greater amount of disposable income?

You don't have to be a professional politician to be right wing :)

[s.ketch]

I'm not going to form my opinion purely based on the opinions of people on an art discussion forum. But here's my major question I'd like answered:

If the feds are going to have just as much money, but it'll be taken though sales tax rather than income tax, then the average person will pay exactly as much tax, just in a different way. That *has* to be true mathematically, otherwise you can't arrive at the 'just as much money' part. This can't be argued, it's built into the whole idea.

So given that the average person will get exactly as much money and spend exactly as much money, and that as its revenue neutral, this implies that the basic cost of survival (which makes up a much higher proportion of low income people's salary) will be a lot more expensive. Why? Because they need exactly as much food and water and shelter to survive as before, but the extra money has to come from somewhere. Now, the lower classes happen to pay less income tax, because the first 5000 or whatever isn't taxed - which makes up a larger proportion of their initial salary. But now, everything they spend is taxed. Ergo, they are taxed more, regardless of any actual increase in the cost of items.

The upper classes, of course, have the choice to spend a great deal of their money. Why? Because it's liquid - a great deal of their expenditure is over and above survival. So they are inherently penalised only for - as arttorney puts it - a lack of frugality. So what happens? People are punished for spending. That's the economy you're talking about! An economy being stimulated less from the top end where all the money is means a slowing economy and a manufacturing base with less to do.

Look, I'm not an economist, I'm sure this basic reasoning is flawed. But can you please explain to me how on earth paying "exactly the same amount of tax, just through other means" and having the cost of survival go up fundamentally helps anybody but those with a greater amount of disposable income?

You don't have to be a professional politician to be right wing :)


From what I understand, its not taxation on every thing. The basic things needed for living would be taxed the same as now, if not less. So food, utilities, etc wont be heavily taxed. Its when you get into things that are not needed, is when those losses are made up more. Electronics, jewelry, tobacco, alcohol, etc will be taxed like crazy. Another good thing is that you keep your whole pay check, no more income tax.

What people also don't take into account is right now not everyone is paying taxes. There are many cases of "under the table" income where the participants skip out on paying taxes for large sums of income. With fair tax, they have no choice but to pay taxes. If a drug dealer wants to go buy expensive toys, then he is getting taxed. Illegal workers would also have to pay taxes now.

It ultimately allows people to choose how much they get taxed. You pay based on your lifestyle. The only thing that bothers me as someone who is wanting a career in the entertainment industry, is that video games and movies would be more expensive, possibly causing a drop in business.

[Jasonwclark]

This would be great.

Now, if we could just get a minimum wage based on the cost of housing instead of the cost of feeding ourselves, and a congress that actually accounted for the money they spent, we might be able turn things around for the little guy. (The latter point is particularly important, what with those black budget earmarks, and lack of transparency that's existed since close of the Second World War.) I'm not holding my breath though. People need to get really angry and vocal about this sort of thing, before our representatives in government start taking it seriously.

[dogfood]

First Buck, then Dirty:

Everything rendered at the retail level is taxed. It is not in the purview of the government to decide who wins and who loses in the market place. And, yes, it is a voluntary tax and will start taxing the underground economy (drug dealers, etc.). Our current system burdens goods and services with an average of a 22% inclusive, hidden tax (this is from all the taxes that are paid along the way including corporate, payroll, income, and myriad other taxes).

It is as or more progressive than the current system because of the monthly prebate that every household (legal residents only) will get that will cover the taxes on the basic human needs (about $520 for a family of four). That means that folks living at the poverty level pay zero net taxes. I say "more", because the majority of taxes that most wage earners make are from payroll taxes, not personal income taxes (the bottom 50% of earners pay about 3% of the income taxes). So, people are still seeing the time and effort they put into their jobs being sucked out of their paycheck, regardless of their income tax exclusions. Everyone who earns a paycheck pays payroll taxes (hence the common word in these terms). Those who earn their money through investments (the richest Americans) do not. They pay a flat 15% and by moving their investments off-shore, are able to shelter much of that away from the current system (also removing that from the American economy, where it can be used for loans, small business, etc.).

And actually, the taxes will turn out to be less per person because of the much wider taxable base. The taxable income base in 2005 was half of what was spent (the taxable base the Fairtax uses). And the spending base is far less volatile than the income base.

The best part of your post was not basing your opinion on a forum post. Please look into the plan and give it a fair hearing. Once the emotion is drained from the pool, we can all skate like Jedi Ninja.

[dogfood]

and a congress that actually accounted for the money they spent, we might be able turn things around for the little guy.
One of the benefits of the Fairtax is that it is far more transparent. Right now, congress can spend either through scratching a check (earmarks, a different subject), or granting a tax exclusion (there are lines in the current system that give certain companies huge tax breaks by name). These tax exclusions amount to almost $1 trillion (almost as much as the entire discretionary expending budget). So this is just another way for congress to give money to those that help its individual members. All done on the sly.

And yes, the current system, along with a well-researched, workable solution, should enrage everyone. Every person under this system should look into this, educate themselves (it's easy; I did it to a small extent, and I'm not the sharpest tool in the shed), and demand to know why their representatives are not fully behind this (many already are).

[Dirty C]

OK, well I like the sound of this a little more now. Unfortunately right now I have to get off my arse and draw something. But I will read some more when I get the chance.

Cheers
Christian

[Earendil]

I'll definitely look more into this. Thanks to all who have participated in the discussion so far. I'll have to sit in the corner and read for a bit. :^^: