Fair Tax debate ONLY

[BanginJimmy]

I hope we can get a mod in here to keep this subject on the fair tax only. I would like all rep/dem talk to be excluded from this thread as it has nothing to do with the fair tax.


that said here we go.


The fair tax is designed as a complete replacement for FEDERAL income and corporate taxes. It is not an add-on to current taxes like some would like you to believe. If you dont spend money, you dont pay taxes. This unfortunately does not include state taxes.

pros:

* eliminates income taxes for the poor and actually pays them basic necessities. Each family in posession of social security numbers will receive a prebate check from the federal govt to cover minimum basic needs for the family. Those that are in the country illegally will be not receive this prebate. For those that live below the poverty line, this will effectivly eliminate any tax liability they may have.

* Right now every product has federal taxes imbedded. Those taxes account for ~22% of the current price of the products you buy. The fairtax will completely eliminate the taxes that these businesses will pay and replace it with the 23% fair tax. This will cause all products to cost ~$0.01 per dollar more. So if you bought a product now and it cost you $100.00 after all taxes, with the fairtax it will cost you $101.00.


* Corporate taxes will be eliminated. Right now corporate payroll taxes cost a business owner about 32% of their monthly payroll amount. If you have 1 person on payroll and their pretax payroll is 1k per month. It doesnt cost an employer 1k. It costs the employer over 1500 when you add in payroll taxes and unemployment taxes. Eliminate nly these 2 taxes and that employer can hire 1 more person and add that much more money into the economy.

* Eliminating corporate taxes will make the US the world's largest tax haven. More than 90% of foreign fortune 500 corporations said they would at least move a portion of their of their business to the US, some said they would move their entire operation to the US. Can anyone begin to imagine the number of high and low paying jobs this would create?

* The fairtax is 100% revenue neutral from day 1 of full incorporation. It creates the tax haven that will bring large numbers of foreign companies to the US. With more jobs and more money being made, this plan will create a revenue POSITIVE system. This will work quickly to eliminate our foreign and domestic debt.



Cons:

* I cant think of any




I dont pretend to know this system back and forth. I still have a lot of research to do on it. If you want to know more I would suggest reading Neal Boortz and John Linder's books on the subject. I plan on reading them just as soon as I finish reading the one I am reading now. You can also find out alot more by spending an hour and listening to Boortz's seminar on it http://wsbradio.com/ads/fairtax_webinar.html


I'm open to all INTELLIGENT debate on this. "I think it sucks" statements are pointless so dont post it unless you actually have a reasoning behind it. Also dont bring up WHO is supporting it or not supporting it as it really doesnt matter to this discussion.

[Revmaynard]

I've never completely looked into Fairtax, but it seems pretty ideal for our government right now, especially with them saying we're hitting a recession. Eh, but I'm no political genius either, just my two pennies.

[Turbo04]

I've been reading up on this as well and so far I don't see a problem with it. I'll post more as I learn more

[carbon_crash]

I think its a good idea because it will make ALL people pay taxes through buying goods. So when you have all these illegal immagrants out on sundays shopping, they would be paying their debt too. As of right now, they can avoid income tax. Fair tax or deportation

[BanginJimmy]

I think its a good idea because it will make ALL people pay taxes through buying goods. So when you have all these illegal immagrants out on sundays shopping, they would be paying their debt too. As of right now, they can avoid income tax. Fair tax or deportation

this is one of my favorite parts too.

I went back and edited my original post to address this as I forgot to add it.

[JConner]

I think its a good idea because it will make ALL people pay taxes through buying goods. So when you have all these illegal immagrants out on sundays shopping, they would be paying their debt too. As of right now, they can avoid income tax. Fair tax or deportation

HELL YES! The author said no reps in this thread otherwise i'd rep you! lol

[BanginJimmy]

HELL YES! The author said no reps in this thread otherwise i'd rep you! lol

I was about to say I never said that, but I guess I did. I meant no republican/democrat talk though.

[TIGERJC]

So that will mean all items so in the us online would have to be taxed and the the gov't would have to step up montering of goods being brought over without being taxed and sold on the street. I do see the bootleg market growing once this is pass. I was against the fair tax at first, but I am gradually starting to realize that this is the only way we can save our economy from going into a recession. I just hope that a private company can also keep track of how much the govt recieves in tax, just so that money doesn't get lost in the system (politicain's pockets). I am worried that the gov't will take in way too much mopney and that money will not find its way back to the ppl

[BanginJimmy]

So that will mean all items so in the us online would have to be taxed

In alot of ways that is already happening though. I know you have seen online stores that say ?% tax will be charged to items shipped to this state or that state.

[TIGERJC]

In alot of ways that is already happening though. I know you have seen online stores that say ?% tax will be charged to items shipped to this state or that state.

yea you will have to pay sate tax if the store is in the same stat as you or you are picking it up at the store. I am talking about places like ebay and other buy and sell sites that would open up

[JConner]

for those of you that have not read neal boortz's fair tax book i will GIVE you my copy, just pm me and i'll meet up with you and it's all yours to share with your friends! I would love to see this happen in my lifetime, this whole "economic stimulis" (or as Clark Howard calls it "the politician protection plan of 2008")plan where the govt hands out money will never work.

I mean the gov't spent 42 million just to send out letters to let everyone know that their check is in the mail! What BS!

What needs to happen is the Fair Tax, or atleast corporate taxes need to be cut in half and also cut the capital gains tax. That would encourage people to do business in the US instead of go overseas!

[SLOWR/T]

Im all for Fair Tax. It seems to be alot better system then what we have right now.

[BanginJimmy]

1 thing about the fair tax is that you dont pay taxes on used goods. I'll do a little more research on it though and I'll post up what I find.

[TIGERJC]

1 thing about the fair tax is that you dont pay taxes on used goods. I'll do a little more research on it though and I'll post up what I find.

Yea I do know that, but I could see ppl smuggling new items to be sold here in the states without being taxed as becoming a big problem if the fair tax came into effect. I guess the IRS would enorce those laws

[BanginJimmy]

Yea I do know that, but I could see ppl smuggling new items to be sold here in the states without being taxed as becoming a big problem if the fair tax came into effect. I guess the IRS would enorce those laws

IRS is dismantled by the fairtax. Smuggling is illegal now and we all know that it doesnt curb anything. The thing is, prices really arent going to go up on anything and people will have more money in their pocket. That being the case I see few people taking the risk as the risk to reward ration would be extremely small. Buying something in say Canada is not going to cost much, if any, less than it will here.

[redrumracer]

I'm personally all for the fair-tax. Its a great idea. The only bad thing is that certain groups of people probably will not support this.

[BanginJimmy]

mainstream politicians and media will not support it because it hurts their agenda. I wont go anymore into that because it would violate the rules for my own thread.

[calmnothing]

The fact that the IRS will be no more is a great thing for everyone. You no longer need all those resources to count our money. Things will be a lot more simplified. There will be an abundance of very smart people who can become teachers and other professions that will benefit the nation.

[mad3nch1na]

Will fair tax be for the State of Georgia or for the entire Country?

For it to be a debate, there must be a Con, the fact that you can't think of any shows you have done little research on this subject. If there were truely no Cons, would we not have fair tax employed already?

One con that I can think of is, if fair tax is passed in Georgia, and not in neighboring states, the economy in Georgia would probably decrease due to persons purchasing high dollar items in low tax states. Another con is that Fair Tax would have to be put in to service universally and unchallenged. During this period, there would be many tax evasions and frauds.

[ksniperfox]

how would the government collect said fair tax? if it is paid through items purchased and not directly withdrawn from the income, it is up to the corporation to pay its share at the end of the month/year? gov't would have to keep a very close eye on how much every company has in sales, in order to calculate the correct taxage. i could see some fraud in businesses reporting what they sold. obviously withdrawing it on the spot from income paychecks has its advantages, but how would it work under fairtax?
discuss?

[BanginJimmy]

how would the government collect said fair tax? if it is paid through items purchased and not directly withdrawn from the income, it is up to the corporation to pay its share at the end of the month/year? gov't would have to keep a very close eye on how much every company has in sales, in order to calculate the correct taxage. i could see some fraud in businesses reporting what they sold. obviously withdrawing it on the spot from income paychecks has its advantages, but how would it work under fairtax?
discuss?

it would be collected the exact same way state and local sales taxes are collected now in the 45 states that collect it. For their troubles each business will keep 1/4 of 1% of their sales before they kick up to the states. The the states do the same while keeping their 1/4 of 1%.

[BanginJimmy]

Will fair tax be for the State of Georgia or for the entire Country?

One con that I can think of is, if fair tax is passed in Georgia, and not in neighboring states, the economy in Georgia would probably decrease due to persons purchasing high dollar items in low tax states. Another con is that Fair Tax would have to be put in to service universally and unchallenged. During this period, there would be many tax evasions and frauds.

The fair tax is for federal only. All current state taxes would remain the same.




If you have any cons to this I would love to hear them. I am presenting 1 ide of the debate, and I will happily go back and forth with someone that is against the fairtax.

[Jaimecbr900]

http://www.importatlanta.com/forums/...6#post36047606

Another thread where we discussed this subject before.

[tony]

I've yet to see a really good argument against it

[BanginJimmy]

I've yet to see a really good argument against it

I thought of a weak arguement against it.

The is an entire industry devoted only to income taxation. There ould be aprox. 15-20k people that woul lose their jobs because of it.

After about 10 seconds though I thought of a counter to that stance that makes just as much sence.

The people that would lose their jobs are generally well educated people. These new companies that will undoubtly come to the US would need the services of hundreds if not thousands more accountants to handle the daily operation of their businesses. There would be more than enough jobs opened up to cover the poss of that particular industry.

[eghonda88]

I love listening to Neal Boortz and hearing about the fairtax. It is just what our econnomy needs.

[dickdragon]

sounds like a good idea! maybe i should look into this!

[David88vert]

This discussion has already happened on here.
Fair Tax

Here is some quick points copied to start:

http://money.cnn.com/2005/09/06/pf/t...ptiontax_0510/
Important Note: Wages will have to go down to compensate.
Important Quote: "It is practically and logically impossible for the government be collecting the same amount of money as before and have everyone suddenly be better off," says Daniel Shaviro, a tax law professor at New York University.


http://www.mises.org/story/1814
Important Note: The national retail sales tax rate under the FairTax plan is 23 percent. That is on top of state sales taxes that are currently collected by forty-five states. That is on top of the sales tax that many cities and counties also collect. That is on top of the special taxes that exist on hotel rooms in most areas of the country. I suppose that a national retail sales tax would also apply to gasoline. There is no mention of the federal gas tax anywhere in the Fair Tax Act of 2005. No list of taxes that are supposed to be eliminated under the FairTax includes the federal gas tax.
Important Quote: There shall be in the Department of the Treasury a Sales Tax Bureau to administer the national sales tax in those States where it is required pursuant to section 404, and to discharge other Federal duties and powers relating to the national sales tax (including those required by sections 402, 403, and 405). The Office of Revenue Allocation shall be within the Sales Tax Bureau.
Cliff Notes: Fair Tax advocates call for the IRS to remain.

http://www.mises.org/story/1975
Important Note: The taxes currently imposed by the states would be unaffected by the FairTax Plan. Thus, states that impose a state income tax or a state sales tax would continue to collect those taxes.
Important Quote: The FairTax will basically do away with not-for-profit entities.
Important Quote: Two examples of federal taxes that will still be with us under the FairTax are the excise tax on gasoline and the various taxes that one pays when purchasing an airline ticket. There is no mention of the federal gas tax anywhere in the Fair Tax Act of 2005. No list of taxes that are supposed to be eliminated under the FairTax includes the federal gas tax, which adds 18.4 cents to the price of a gallon of gas. So under the FairTax, we would have added to each gallon of gas federal excise tax, state excise tax, and federal sales tax. This is just the minimum. The states could also begin applying their sales tax to gasoline. A recent airline ticket I purchased had added to its price a federal excise tax of $15.28, a federal segment tax of $12.80, and a September 11th security fee of $10.00. And what about federal taxes on tobacco and alcohol? The FairTax will merely replace one visible tax with another while leaving intact the invisible ones.


Again, can you really trust Congress to stop collecting other taxes? Can you expect them to curb spending? Can you expect them to not raise the sales tax every year?

Is anyone here really that gullible to believe that Congress could pull this off correctly?

Also, under the current system, a person making $6000/yr (under the poverty level) pays NO income tax, and pays $420/yr in sales taxes if they spend all of their money. Under the Fair Tax, they would spend AT LEAST $1380 in sales taxes. Basically, you are increasing taxes on the poor. How are they supposed to be able to save and improve their lives? Even with the prebate, they will pay more initially than they currently do. And for those that live on a week-to-week check, life will be more difficult when inflation rises. Remember, not every one is a good money manager, many will waste their prebate and stay in debt.

There is no proviosion in the Fair Tax proposal to repeal the current taxes levied. So you would add 23% onto the cost of fuel. Read the proposal, it leaves a lot out of its explainations, PLUS state taxes would NOT be repealed at any point under the proposal.

For that matter, neither would state income taxes. You still would be paying more for fuel, tobacco, and alcohol - any way that you try to slice it under the current proposal.

Do you guys really think that it will save you money? Think about this. In order for the government to operate, they will need the SAME amount that they needed before. So it will not be lowering taxes, just changing who and where they will collect from.

Now if you are rich, it's simple, live in the US, buy your stuff from overseas, and have it shipped over - no taxes then for the rich, unless you implement some sort of import tax.

The poor get subsidized, so "no" real tax for them (due to "prebate").

Now who is left to collect the money from? The people that have enough not to get subsidized, but aren't rich or technically savy - i.e. the middle class.

The answer is not changing of the way that taxes are collected - you have to change the amounts. In order to do that, you have to have a government that controls its spending, and we definately don't have that. Find a way to hold the government accountable for the amount that it spends - then you will lower taxes.

Read Bootz's book - all of it. Try the chapter, "Questions and Objections". Boortz even says that it will have to be about 30%, rather than 23%. That's a big difference. At under 31%, the budget will not be met in 10 years, unless there were increases. The math doesn't lie.

The federal gas tax is 18.4 cents/gallon. The Fair Tax act does not repeal that set of taxes. So now you would pay 23% more on top of the current federal tax, and then state taxes on that (another 15 cents/gallon here in GA). So if you paid $3.00 including taxes before, you would pay 3.69 afterwards. Another big difference.

Now for the real deal. Guess what, that whole promise of prices dropping (removal of embedded taxes), and you getting your full salary - it isn't going to happen. If you get paid $50K, and $10K is taken out, do you think that the company can lower it's prices if you get the whole $50K? Of course not. They are paying out the same amount. The only way it would work is if you got $40K - not $50K - a 20% drop. Boortz knows this and Harvard economist Dale Jorgenson admitted it when questioned.
Don't get me wrong - I LOVE the IDEA of a Fair Tax, but it is going to need a lot more work polishing out the problems BEFORE it could be implemented. I can't support it until then. After the big problems are worked out and solved, then I would reconsider it.

Let's look at this scenario:
A company make cabinets. They did buy material tax exempt. Now under Fair Tax, they have to pay 23% - because there are no exemptions. It now cost them more to make the cabinets, plus they are paying the same wages to their workers. Finally, shipping services are no longer $100K/yr - due to the Fair Tax collected on services - they jump to $123K/yr. Now tell me, how will the company NOT raise prices? They have no choice, so your 23% raise just got eaten up by higher prices. Even Boortz says that this is not a plan that will save people money.

Also, non-profits like churches will now be taxed, as will all companies and our own federal and state governments. Services will be taxed, like doctors and lawyers. So your simple out-patient surgery that would have run you $1,000 out-of-pocket, will now run you $1,230. That additional $230 might not hurt you if you make $1 million/yr, but for the middle class, that's a large increased cost. If you are in the middle class, not everything is covered by Medicare.

Now go get Jaimecbr900 so we can restart our discussion.

[David88vert]

Has anyone ever read Bruce Barlett's article from earlier this year? He made a few simple observations and published them. Most major financial magazines picked up on it and distributed it. He probably knows more about economic advancement than anyone on here. He was the Deputy Assistant Secretary of the Treasury for economic policy from 1988 to 1993.

-------------------------------------------------------------
Unfortunately, like all things in life that are too good to be true, so is this one. Here are a few problems with the FairTax.

True rate. When people hear about a 23 percent national sales tax, they naturally equate it to the state sales taxes they are familiar with. If a state sales tax is 5 percent, then this means that if someone buys something for $1 they will pay $1.05 at the checkout. Thus they assume that the FairTax would cause a $1 product to cost $1.23 if it were to be enacted.

In fact, the rate is not 23 percent, but 30 percent. The 23 percent rate is arrived at by treating the tax as if it were already part of the price instead of being on top. Thus if a product were to sell for $1 and the FairTax added 30 percent, the 30-cent tax comes to 23 percent of $1.30. This is how a 30 percent rate is deceptively turned into a 23 percent rate.

Governments must also pay. The FairTax would apply to all government purchases at every level. Only education spending is exempted.

States would have to pay 30 percent more on every highway and bridge they build, local governments would have to pay 30 percent more for police and fire protection, and even the federal government would have to pay the tax to itself when it buys weapons and ammunition for troops.

Taxes would have to be increased at the state and local level to pay the FairTax to the federal government. The FairTax rate would also have to be higher to pay for the additional federal spending it will require. However, FairTax supporters exclude this higher spending from their calculations. The 23 percent rate is designed only to be revenue-neutral, not spending neutral. Thus the federal deficit would either rise by more than $200 billion per year or spending would have to be cut by this much.

Rebate problems. The FairTax rebate would also add $600 billion to federal spending annually. Although its supporters say it is just like the one we get when our tax withholding exceeds the taxes we pay on our tax returns, the FairTax rebate is more like Social Security because it comes in a monthly check.

Although FairTax supporters tout the generosity of the rebate, it is extremely modest because it is based on the poverty level income - a figure that bears no relationship to the actual cost of living. As a consequence of the way the poverty rate is calculated, childless couples would get a monthly rebate of $391 per month, but a single mother with two children would only get $329 per month.

Prices will rise. Finally, FairTax supporters assume away many of the problems with their plan by asserting that prices will fall by 22 percent once all income taxes are abolished. Prices at the checkout would be about the same with the FairTax as they are now, they say, but everyone would come out ahead because their net wage will now equal their gross wage.

If this were so, it's hard to see why the rebate is needed, since there seems to be only winners and no losers under the FairTax. In reality, for prices to fall by 22 percent, business costs would also have to fall by 22 percent, which means that all workers would have to take a 22 percent pay cut.

It's unlikely that workers would agree to this. It is far more likely that the FairTax will raise the price of everything by 30 percent. This has been the case in every country and every state with a sales tax. The idea that prices will fall is just a pipe dream.

[BanginJimmy]

Important Quote: "It is practically and logically impossible for the government be collecting the same amount of money as before and have everyone suddenly be better off," says Daniel Shaviro, a tax law professor at New York University.

Actually it is when you consider that more than 12 million people are currently earning wages illegally in this country as it is. It will also eliminate all of the loopholes that exist. Remember also that people get returns of some of all of the federal income tax.

Important Note: The national retail sales tax rate under the FairTax plan is 23 percent. That is on top of state sales taxes that are currently collected by forty-five states. That is on top of the sales tax that many cities and counties also collect. That is on top of the special taxes that exist on hotel rooms in most areas of the country. I suppose that a national retail sales tax would also apply to gasoline. There is no mention of the federal gas tax anywhere in the Fair Tax Act of 2005. No list of taxes that are supposed to be eliminated under the FairTax includes the federal gas tax

it still doesnt change the price of the things you buy by more than $0.01 per dollar. The fair tax eliminates the taxes that are paid by the companies and added to the price of it before it gets to the store. Right now there is no sales tax on gas. It is all excise taxes and it would not be affected by the fair tax

The taxes currently imposed by the states would be unaffected by the FairTax Plan. Thus, states that impose a state income tax or a state sales tax would continue to collect those taxes.

This has already been covered. No the fair tax does not eliminate state taxes in the 45 states that do impose an income tax.

various taxes that one pays when purchasing an airline ticket. The states could also begin applying their sales tax to gasoline. A recent airline ticket I purchased had added to its price a federal excise tax of $15.28, a federal segment tax of $12.80, and a September 11th security fee of $10.00. And what about federal taxes on tobacco and alcohol? The FairTax will merely replace one visible tax with another while leaving intact the invisible ones.

1. no sales tax is added to airline tickets, and no tax will be added there either.

2. Nothing is stopping the states from charging a sales tox on gas now, why would a new tax code change that?

Also, under the current system, a person making $6000/yr (under the poverty level) pays NO income tax, and pays $420/yr in sales taxes if they spend all of their money. Under the Fair Tax, they would spend AT LEAST $1380 in sales taxes.

now that you are done with the copy and paste I see you really dont know much about the fairtax. One of the biggest benefits of the fairtax is that every month you will receive a prebate of the tax that would be imposed for the basic necessities. For a family of 4 it works out to be about $656 a month. Over 12 months that family that makes 6k per year will nearly double their annual salary. For a single person with no dependants they will receive $245 a month. That single person would receive 2940 in prebates. If they ONLY made minimum purchases they would make ~1600 more a year. For that same person making 6k per year they pay 420/yr in sales tax PLUS another 2k per year in income taxes.

Remember, not every one is a good money manager, many will waste their prebate and stay in debt.

and this is the govt's responsibility why?

A company make cabinets. They did buy material tax exempt. Now under Fair Tax, they have to pay 23% - because there are no exemptions. It now cost them more to make the cabinets, plus they are paying the same wages to their workers. Finally, shipping services are no longer $100K/yr - due to the Fair Tax collected on services - they jump to $123K/yr. Now tell me, how will the company NOT raise prices? They have no choice, so your 23% raise just got eaten up by higher prices. Even Boortz says that this is not a plan that will save people money.

business purchases are tax free. therefore those materials that were purchased to build the cabinatel would NOT cost 23% more, neither would the transportation costs.

[David88vert]

Actually it is when you consider that more than 12 million people are currently earning wages illegally in this country as it is. It will also eliminate all of the loopholes that exist. Remember also that people get returns of some of all of the federal income tax.
There are many illegals paying tax right now that do not collect a rebate at all. I personally know more illegals paying income tax right now, than not paying tax. And none of them get rebates. The reason is because they believe that will help them get green cards later. I'm not sure tha it does, but I know that they believe it and pay it. They use the same SS# for several people and all of the employers take out the taxes. None of them see a rebate of course. So not all of it is necessarily an increase.

it still doesnt change the price of the things you buy by more than $0.01 per dollar. The fair tax eliminates the taxes that are paid by the companies and added to the price of it before it gets to the store. Right now there is no sales tax on gas. It is all excise taxes and it would not be affected by the fair tax
Under the Fair Tax, you would pay sales taxes on the gas. Read the propsal again. It is very clear that it would go up substantially.

This has already been covered. No the fair tax does not eliminate state taxes in the 45 states that do impose an income tax.
Agreed.

1. no sales tax is added to airline tickets, and no tax will be added there either.
All services would be taxed except education. Flights are a service.
2. Nothing is stopping the states from charging a sales tox on gas now, why would a new tax code change that?
Georgia has a 15 cent tax right now on gas, and that wouldn't change, nor would anything stop the state from changing it. Remember when Purdue suspended it for a few days?




now that you are done with the copy and paste I see you really dont know much about the fairtax. One of the biggest benefits of the fairtax is that every month you will receive a prebate of the tax that would be imposed for the basic necessities. For a family of 4 it works out to be about $656 a month. Over 12 months that family that makes 6k per year will nearly double their annual salary. For a single person with no dependants they will receive $245 a month. That single person would receive 2940 in prebates. If they ONLY made minimum purchases they would make ~1600 more a year. For that same person making 6k per year they pay 420/yr in sales tax PLUS another 2k per year in income taxes.
So you agree that it is a redistribution of wealth by your own statement. Do you realize how little a single mother with 2 dependants would get? Only $337. Think that would really help? Do you have a child, and know what it costs to have one? Do you think that people only want to barely exist (minimum purchases)? Interesting...


Remember, not every one is a good money manager, many will waste their prebate and stay in debt.
and this is the govt's responsibility why?
It's not. Just realize that it won't necessarily help anyone. It's not God's gift to all.


business purchases are tax free. therefore those materials that were purchased to build the cabinatel would NOT cost 23% more, neither would the transportation costs.
In order to keep the costs down, they would have to pay the employees less. Thus, production costs would rise, as no one would work for 30% less. Shipping services would be taxed under the proposal as it is currently written (yes, I know that would probably change before passage). Additonally, gas costs would increase, raising the cost of getting gods to market.

Don't get me wrong, again, the idea is great, but there is a lot to work out ahead of implementation. Much is left out of the actual proposal. For example, the site says that it will repeal the 16th amendment and abolish the IRS. The actual document does not list that at all. It call for the creation of a new tax collection agency.

You said there were no cons to it. I have presented some. Nothing comes for free. The real solution is to rein in government spending. Collection of taxes only treats the symptoms, not the problem. If you want to improve the system, make the govenment be accountable for it expenditures. If Fair Tax could do that, I'd back it 100%.

[mad3nch1na]

Would you still have the IRS and have to pay income tax?
If the IRA was disbanded and you no longer had to file income taxes then alot of criminals or scammers would have a hay day spending spree. Is Fair Tax traceable?

[David88vert]

Problem #1:The Fair Tax hides the amount of sales tax being paid. Boortz explains how "the Fair Tax was designed as what's called an 'inclusive' tax—that is, the tax is included in the list price of the product." He reasons that "since our current income taxes are figured on an inclusive basis—that is, they are taken out of our paychecks, not added to them—it was decided to handle the sales tax in exactly the same manner." How could someone write a whole chapter on the evils of the withholding tax and then turn around and recommend a hidden tax like the Fair Tax? Boortz even has the audacity to claim that with the Fair Tax the "consumer is completely aware of what he is paying." Really? Suppose the Fair Tax is implemented next year. Go stand in front of a store and ask the typical American how much federal sales tax he paid on the item he just bought for $139? Give him a calculator and ask him again. Unless he is familiar with figuring percentages, the average American will not be able to tell you how much sales tax he just paid.

Problem #2:The Fair Tax is progressive. Boortz correctly identifies a progressive income tax with Karl Marx. Yet, because of the prebate, the Fair Tax sets up a progressive tax system like we have now. Millions of Americans will pay no taxes at all. Others will have some of their taxes offset by The prebate. "The rich" will still be paying the majority of the taxes—something Boortz says he considers "class warfare."

Problem #3: The Fair Tax is an income redistribution scheme. Boortz calls the Earned Income Tax Credit "a prime conduit for income redistribytion from high-income earners to the poor and middle class." Why, then, would he promote a Fair Tax Plan with a prebate that in essence allows the majority of citizens to not only pay no taxes, but in many cases gives them money over and above that which they paid in sales tax? What's fair about making "the rich" subsidize the poor and the middle class? Boortz calls Social Security an "income redistribytion and welfare program." but under the Fair Tax Plan, Social Security is even worse. At least now it is funded by payroll tax contributions that are independent of deductions for federal income tax. Thanks to the prebate, many people will receive a free retirement program via Social Security who never contributed a dime towards their retirement, or as Boortz says: "All benefit and no burden."

Problem #4:The Fair Tax creates new tax collectors. From doctors and lawyers to garbage collectors and tree trimmers—multitudes of individuals and businesses that never collected taxes before will be turned into tax collectors for the federal government. Will a teenage babysitter be required to collect the Fair Tax from her neighbors?

Problem #5:The Fair Tax creates new taxes. All Internet purchases will be subject to the national sales tax. So will heart surgeries, kidney transplants, and appendectomies—plus the drugs prescribed by The doctors doing the procedures. Want to attend a baseball, football, or basketball game? Better save up a little extra to take care of the Fair Tax that will be imposed on your tickets.

Problem #6: The Fair Tax creates new taxpayers. If there are no exceptions and no exemptions then churches and other non-profits will be forced to pay a national sales tax on every purchase. The Fair Tax will basically do away with not-for-profit entities. The Fair Tax would also count as taxable the purchases made by federal, state, and local governments. This means the government will be using taxpayer money to pay taxes to itself.

Problem #7: The Fair Tax makes it easier for the federal government to raise taxes. All Congress has to do is slightly increase the initial 23 percent rate. A penny here, a penny there; a quarter of a cent now, a half of a cent later. Just a little at a time, of course. It might be to compensate for inflation, to give seniors a cost of living raise, or to pay for some manufactured crisis like bird flu . Since the federal budget goes up every year, and the Fair Tax is supposed to be "revenue neutral," the Fair Tax rate will have to go up right along with the federal budget. You can count on an increase every year, for if government budgets are not under control now, why should we expect Congress to magically become fiscally responsible just because the Fair Tax is adopted?

Furthermore, since Social Security and Medicare would be funded out of general revenues the Fair Tax rate would also have to go up to fund the ever-increasing cost of these programs. Then there are the escalating costs of the new prescription drug plan. And if the amount of the prebate "is updated every year to keep up with inflation," the Fair Tax rate will have to be raised in like manner. How can Boortz recognize that "there is absolutely no limit to the government's desire for your money" and then express hope that the Fair Tax rate "will go down in the future" if "Congress can keep government spending down"?

Problem #8: The Fair Tax makes it easier for state governments to raise taxes. In the name of simplicity and efficiency, the states would be inclined to follow the lead of the federal government. States that currently have no sales tax could add one. States that have exemptions on certain items could get rid of the exemptions so as to match the federal government. States that have no sales tax on services could begin taxing services like the federal Fair Tax Plan would do.

Problem #9: The Fair Tax has unknown and potentially huge transition costs. Boortz asks a good question: "How will the switch to the Fair Tax be made?" but then he gives a very naïve answer: "Cold turkey!" He explains that "on January 1, we'll begin to get our gross pay with no deductions." Boortz gives one "transition rule": The value of any inventory on hand December 31 can be used as a credit against collecting taxes in the next year." This should get accountants to work figuring out how to value each company's inventory the highest. Will it be specific identification, average cost, FIFO, or LIFO? but what if a company's fiscal year does not end on December 31? This will cause massive accounting problems. And especially for the federal government since the government's fiscal year begins on October 1.

Problem #10:The Fair Tax makes certain exceptions while supposedly having none. After saying that there are "no exclusions or exemptions" under the Fair Tax, Boortz specifically mentions exemptions for Internet access services and tuition. Therefore, his complaint that "exempting certain items—such as food and prescription drugs—would again open the door to an entire battalion of lobbyists to argue that the portion of the industry that they represent is clearly an essential product" is unjustified for he has already opened the door to that very thing.

Problem #11: The Fair Tax has great potential for fraud. Boortz envisions the prebate amount being issued to a card "like your bank debit card." Since every head of household would have one of these cards, there would be a great chance of criminals preying on people for their cards. There is also the possibility of counterfeiting, resulting in massive theft from the taxpayers. And since the Fair Tax only applies to new items, there will also be a tremendous incentive for new items to be reclassified as used or previously owned. businesses could offer a slight increase in the price of a reclassified item in exchange for not having to charge customers the 23 percent national sales tax that would be due if the item was considered new. Enforcement of the "proper" classification of items would require an army of federal bureaucrats that would rival the IRS.

Problem #12:The Fair Tax has the potential to turn thousands of law-abiding Americans into criminals. Since the Fair Tax contains no exemption for even the smallest business, anyone who does not collect the Fair Tax on any good he produces or services he provides is breaking the law. Mow a yard—collect the tax. Baby-sit—collect the tax. Repair a car—collect the tax. If you don't collect the Fair Tax then you are a criminal. Once again, the Fair Tax would have a terrible enforcement problem.

Problem #13: The Fair Tax does not repeal the Sixteenth Amendment. When Fair Tax advocates discuss their plan, they talk as though the Fair Tax would result in the repeal of the Sixteenth Amendment that gave us the income tax. To his credit, Boortz doesn't make that mistake, but when many people read about "saying goodbye to the income tax," that is what they think. The Fair Tax bill now pending in Congress ( H.R. 25 in the House and the identical S. 1025 in the Senate), repeals Subtitle A of the Internal Revenue Code of 1986 that relates to income taxes and self-employment taxes and Subtitle C that relates to payroll taxes and the withholding of income taxes.

The only mention of the Sixteenth Amendment in H.R. 25/S1025 is when it reports: "Congress further finds that the 16th amendment to the United States Constitution should be repealed." but to repeal Sixteenth Amendment would require a constitutional amendment. Are we to believe that Congress would vote to repeal the Sixteenth Amendment after the passage of the Fair Tax? And even if Congress did so it would still have to be sent to the states for approval by Three-fourths of them.

So, barring the repeal of the Sixteenth Amendment, what is there to prevent an income tax from being imposed again after a national sales tax has been enacted? And what is to prevent any of the other taxes replaced by The Fair Tax being re-imposed due to some unanticipated budget shortfall or "crisis"?

Is Boortz that naïve to think that Congress will be satisfied with just the Fair Tax? And even if the Sixteenth Amendment was repealed after the imposition of the Fair Tax, any previous tax not on income could be brought back. Can Congress be trusted to do anything else? I can easily envision Congress proposing to lower the rate of the national sales tax in exchange for the addition of a supplemental Social Security tax because we need more money to fund Social Security. Then, a few years later, the national sales tax rate would be right back up to where it was before the "exchange."

Problem #14: The Fair Tax does not eliminate all federal taxes. Although it is implied throughout the book that the Fair Tax will be a replacement for the various federal taxes, there are some federal taxes that will still be with us under the Fair Tax. Even Boortz slips up one time and says that the Fair Tax would "replace virtually all personal and corporate taxes." Two examples of federal taxes that will still be with us under the Fair Tax are the excise tax on gasoline and the various taxes that one pays when purchasing an airline ticket. There is no mention of the federal gas tax anywhere in the Fair Tax Act of 2005. No list of taxes that are supposed to be eliminated under the Fair Tax includes the federal gas tax, which adds 18.4 cents to the price of a gallon of gas. So under the Fair Tax, we would have added to each gallon of gas federal excise tax, state excise tax, and federal sales tax. This is just the minimum. The states could also begin applying their sales tax to gasoline. A recent airline ticket I purchased had added to its price a federal excise tax of $15.28, a federal segment tax of $12.80, and a September 11th security fee of $10.00. And what about federal taxes on tobacco and alcohol? The Fair Tax will merely replace one visible tax with another while leaving intact the invisible ones.

Problem #15: The Fair Tax is not at all about lowering the amount of taxes the government collects. Boortz terms the Fair Tax a "tax reform measure, not a government reform measure." It "changes the way revenues are raised for the legitimate operations of the federal government." but if the Fair Tax raises the same amount of revenue to fund the same federal programs, then what does Boortz think the federal government does that is illegitimate? Is there anything he considers to be illegitimate? If so, then why would he expend so much energy on changing the way the federal government collects taxes instead of changing the amount that the federal government collects in taxes? The fundamental problem is clearly taxation, not the tax code. What is wrong with the federal government's tax code is not that it is too complex, but that it makes possible the almost $3 trillion a year that the federal government spends. As the French laissez-faire economist Jean-Baptiste Say (1767–1832) once said: "The best tax is always the lightest." Or, as our modern-day Say in Congress, Ron Paul (R-TX), says: "The real issue is total spending by government, not tax reform."

Problem #16: The Fair Tax doesn't even begin to address the root of the problem. Boortz does refer to Frank Chodorov (1887–1966), reminding us that he "once observed that, by enacting the income tax, the American government was proclaiming that all wealth belonged to the government, and whatever wealth the government did not seize from the person who created it should be looked on as a concession—a gift from the government." but Boortz doesn't quote Chodorov, and he gives no source that he is referencing. He subtly seems to imply that Chodorov was opposed to the income tax because it was an income tax and that, therefore, he might be inclined to support the Fair Tax if he were alive. but this couldn't possibly be true because Chodorov considered taxation itself to be robbery . How is justifying the federal government spending almost $3 trillion a year of the taxpayers money, as long as it is collected "fairly," any different from the viewpoint that Chodorov condemns? While making the case for not allowing exemptions from the Fair Tax for food, Boortz, in using the example of a wedding reception, inadvertently shows his true colors: "Would it be fair to allow a multimillionaire to spend $20,000 on food for a large wedding reception at his estate, and not pay any sales tax on that purchase?" Why, of course it would. It would be fairer than forcing the American people to pay a 23 percent national sales tax on every good and service they purchase.

Problem #17: The Fair Tax makes welfare universal. Millions of people who never took a dime from other taxpayers in the form of food stamps, SSI, AFDC, Medicaid, WIC, or housing assistance will now be on the federal dole via the prebate. The Fair Tax is welfare for the masses. It makes us all wards of the state. Perhaps it would be best, in the interest of equity and efficiency, if all the money Americans earned was just paid to the state and then distributed to every American in a "fair" manner. The government could just keep what it needed, redistribute what's left, and do it all without the Fair Tax.

----------------------------------------------------------
Laurence M. Vance is a freelance writer and an adjunct instructor in accounting and economics at Pensacola Junior College in Pensacola, FL.

[Jaimecbr900]

Thanks for mentioning me David, although I disagree with the majority of the points you are quoting.

The "economists", "money experts", and "gov't analysts" that are so whole heartedly against the Fair Tax are more scared of losing their current cushy jobs than they are about being "FAIR". I promise you that. In ANY circumstance, always consider the source before you buy into it.

Boortz is very rich and very pompous, but he's far from the first person to suggest a form of a single tax. He and Senator Linder are in the spotlight right now due to their book and the fact that finally a State Representative, i.e. someone in a "gov't" position, is stepping up to the task.

That being said, I totally support the Fair Tax in any form. Even at it's worst possible light it stands heads and shoulders above the IRS, the Federal gov't, and any other idea of tax collection anyone has come up with so far.

Here's why I support this idea:

1. As an employer, I see DIRECTLY just how much I (as an employer) have to pay to the Federal gov't to fund programs that I get zero benefit from. In other words, I pay for something that I'm not even allowed to use. Fair? Not hardly. It would infinitely simplify my life as an employer if I did not have to file the mounds of paperwork, taxes, quarterly payments, and especially the matching of even more taxes of money that I don't have a snow ball's chance of ever reclaiming.

I would much rather pay my employees the amount they have EARNED and call it a day. Much like "independent contractors" get paid now. Why should I have to pay "unemployment", "FICA", matching taxes, etc, etc, etc? Just WHO is GETTING TO USE those taxes that me and my employees PAY???? Think about it for a sec and you'll figure it out.

2. The current tax collection scheme has no real rules. Has anyone here ever tried to read the actual tax "laws"? Even accountants not only differ in the interpretation of those rules, but the majority have no clue what most actually say. Why is that? Because the IRS has purposely made them so difficult and ambigious to interpret in order to always have a trap door to use for their own benefit. If someone with reasonable intelligence can't read and interpret something that CAN cause them to be JAILED, it should be unconstitutional. Do we forget about "Miranda Rights"? Law enforcement are FORCED to be sure that ANY ACCUSED understands CLEARLY what their BASIC rights are...be they blind, dumb, and/or stupid. Why is it that something that we spend BILLIONS of hard earned dollars on doesn't have that same basic right? So, you have to be explained UP FRONT and BY LAW what your rights are even if the worst that you can get is a slap on the wrist, but for something that you can lose your business, house, money, AND freedom you are not afforded the same????? You kidding me???? When was the last time an IRS audit was preceeded by anything? They confiscate YOUR money and YOU have to go fight to get it back. How is that "fair"?

99.99999% of all tax payers depend on someone else to figure out what their "portion" of the tax burden they should pay every year by April 15th, and then the IRS decides if you're right or wrong. Complicated enough yet?

Why not make it infinitely simpler and just tax us AS WE SPEND? IF we decide to buy something, before we leave the store we KNOW what we paid for OUR SHARE of the overall TAXES. Right now, we pay taxes then....at work....and then again to the IRS if you're not careful enough. HMMMMM, how's that "FAIR" again?

3. Right now, BILLIONS of dollars are being both flown out of our economy and/or not reported at all by everyone from illegal aliens that are mere ghosts in our economy because they work with non-existent SS#'s to pure red blooded Americans that are "independent contractors" yet pay little to no tax at all either because they don't bother to file taxes or because they deduct the nails off the cross to avoid paying any. Yes, that was the longest sentence in the world, but you get the point. BILLIONS of dollars are being paid yet not being accounted for RIGHT NOW.

Under the Fair Tax, these same exact individuals that are skipping out on paying ANY taxes, let alone their "fair share", would not have the chance to skip out anymore. This fact alone will inject BILLIONS of dollars that the IRS, Federal, Local, and State gov'ts don't see NOW. What do you think this would do to our struggling economy?

4. Corporations are some of the smartest and most astute institutions on the face of this planet. They see things as dollars and cents FIRST and everything else later. That is how business runs. Like it or not, that is reality. More income than expenditure equals PROFITS. That is what work is about, PROFITS.

Now, look at it from the perspective of a Corporation. It costs me X to do business based out of the U.S. and it costs me Y to do business based out of elsewhere on the globe. If X is more, then WHY in the world would I EVER base my company out of the U.S.? Put yourself in their shoes. They have stock holders who only care about PROFITS to answer to. Why does it cost companies MORE money to do business out of here? Corporate TAXES as they are structured NOW. What would happen if you made it more attractive for BIG business to be based here instead of Japan, China, or Europe? Remember, after it's all said and done, what REALLY matters to corporations is PROFITS. One of the biggest expenditures corporations have????? TAXES. Both employee based and product based taxes eat up gazillions in profits every year. Tell a company that next year, just by moving here, that they will EARN X MORE billions......what do you think they're going to do? They are going to build big HQ here, which in turn has the domino effect of boosting our economy both locally and globally by creating jobs for everyone from local construction workers that are going to build the new 100 story global HQ building to corporate leaders they may just hire. It's a win, win situation for everyone.

5. Finally, for now, I'm really really tired of paying for people to sit on their behinds doing nothing yet spending MY money. If even those people without a job are TAXED, then atleast they are contributing to that same system that is supporting them.

The Fair Tax is a consumption tax. If you SAVE, you don't pay. How much more money will people have to spend on say......stock market?.....starting their own business?....saving for their own future retirement????. Think about it.

[Jaimecbr900]

While I agree that the real trouble is uncontrolled spending from Capitol Hill, it is never going to happen.

For the last 200+ yrs, it has not happened. It's not ever going to happen. The Fair Tax shifts power considerably back to the masses as opposed to gov't.

It's time for something new. If we keep sticking our head in the sand and HOPING that gov't finally realizes that since we put them in the positions they're in they should work for US, we are going to be TALKING about this same thing 200+ years from now.

[David88vert]

Thanks for mentioning me David, although I disagree with the majority of the points you are quoting.

You are always good at keeping up a reasonable debate, and I like that. If everyone agreed on everything, we'd all be nothing more than robots.

The "economists", "money experts", and "gov't analysts" that are so whole heartedly against the Fair Tax are more scared of losing their current cushy jobs than they are about being "FAIR". I promise you that. In ANY circumstance, always consider the source before you buy into it.

Neither Boortz nor Linder have education in economics, nor do they have experience in business. The closest Boortz has come is a law degree. The closest that Linder has come is that he sits on the Way and Means Committee. So do professional economists or amatuers has more credibility? And what does Bartlett have to gain? He left the government in 1995.

[QUOTE=Jaimecbr900]
Boortz is very rich and very pompous, but he's far from the first person to suggest a form of a single tax. He and Senator Linder are in the spotlight right now due to their book and the fact that finally a State Representative, i.e. someone in a "gov't" position, is stepping up to the task.
[/QUOTE}
Correct. The Church of Scientology suggested the Fair Tax plan before Linder and Boortz.

That being said, I totally support the Fair Tax in any form. Even at it's worst possible light it stands heads and shoulders above the IRS, the Federal gov't, and any other idea of tax collection anyone has come up with so far.

Here's why I support this idea:

1. As an employer, ...
2. The current tax collection scheme has no real rules. ...

I completely agree with above...

3. Right now, BILLIONS of dollars are being both flown out of our economy and/or not reported at all by everyone from illegal aliens that are mere ghosts in...

I mostly agree. There are many that are sharing a SSN# illegally, and constantly pay in as well. That is free money for the government.
Money being sent out of the country would not be taxed at all though, if you get rid of the income tax, and only have sales tax. Take the illegal that gets paid $600/wk, and sends $300 south of the border. That money would now have never been taxed, since you got rid of the income tax. Show me where the current proposal deals with that situation. Last year, Mexico received $18 billion in over-the-border transfers. Now you will be losing the tax on that $18 billion. That's a lot of money. Got a calculator handy?

4. Corporations are some of the smartest and most astute institutions on the face of this planet. They see things as dollars and cents FIRST and everything else later. That is how business runs. Like it or not, that is reality. More income than expenditure equals PROFITS. That is what work is about, PROFITS.

Now, look at it from the perspective of a Corporation. It costs me X to do business based out of the U.S. and it costs me Y to do business based out of elsewhere on the globe. If X is more, then WHY in the world would I EVER base my company out of the U.S.? Put yourself in their shoes. ...

On this part, you are right and wrong. Yes, companies are about profits. Taxes are a small portion though. Wage rates are what they look at. I know, I work daily with the largest outsourcer in the world, and on their biggest account. I work with India daily. Do you think they will move jobs back here, when it costs them $9K/month/per person here, and over in India, they pay $700/month per person? I see the numbers as I have to do the T/C estimates. Tax rates aren't even on the radar. In fact, they still pay US taxes, and aren't worried about it.

5. Finally, for now, I'm really really tired of paying for people to sit on their behinds doing nothing yet spending MY money. ...

Agreed. But the real solution is to lower spending, otherwise, you are just creating a new wealth distribution system - nothing more.

[Jaimecbr900]

You are always good at keeping up a reasonable debate, and I like that. If everyone agreed on everything, we'd all be nothing more than robots.

Why thank you, my good sir.

Neither Boortz nor Linder have education in economics, nor do they have experience in business. The closest Boortz has come is a law degree. The closest that Linder has come is that he sits on the Way and Means Committee. So do professional economists or amatuers has more credibility? And what does Bartlett have to gain? He left the government in 1995.

All of our Presidents, good and bad, NEVER had "experience" at being "President" before they got elected into office, right?

My point is that some of the most brilliant minds evolve out of experience rather than book smarts. Boortz may not be the most likeable person around, but he is not dumb. Neither is John Linder.

The politicians and accountants that are so against this move are doing so, not because they are economists or brilliant Harvard School of Business Magna Cum Laudes....it is because they see THEIR jobs being no longer needed and/or as important as before. See, politics revolve around power and money. Fillibustering things forever assures politicians job security. Same thing goes for the IRS. The more difficult and ambiguous they make the tax laws, the longer they get to keep their jobs because that keeps US all tangled up in junk for years to come. If you propose to totally shut down the IRS, just WHO do you think is immediately going to complain? The IRS and the GOV'T that feeds off the money collected by the IRS.

So again, as I've said before, so called economists are going to dig and dig until they find their smoking gun to rationalize this as a bad idea. Well, it's the best idea anyone has proposed since the IRS's conception.

I mostly agree. There are many that are sharing a SSN# illegally, and constantly pay in as well. That is free money for the government.

How do you figure anyone that uses a fake SS# is "paying in"? Yes, I do acknowledge that there are quite a few illegals that are W-2'd, but an overwhelming MAJORITY do not get W-2'd at all. That majority far outweighs the few that leave a meager few bucks they may take from his/her check. Comparatively speaking it's not even a contest.

Money being sent out of the country would not be taxed at all though, if you get rid of the income tax, and only have sales tax. Take the illegal that gets paid $600/wk, and sends $300 south of the border. That money would now have never been taxed, since you got rid of the income tax. Show me where the current proposal deals with that situation. Last year, Mexico received $18 billion in over-the-border transfers. Now you will be losing the tax on that $18 billion. That's a lot of money. Got a calculator handy?

Yes it most certainly would be taxed. The difference is that it would be taxed up front when that illegal buys necessities such as food, clothes, and essentials. He/she would not receive the "rebate" for those essentials, like you or I would, because they are in fact illegally here. So, when they went to the store to buy something the money they use to pay with would be turned into tax dollars that otherwise they would have NEVER BEFORE paid at all.

See, people don't realize just how many BILLIONS of dollars illegals earn every year that goes totally unreported and then shipped out, never to contribute to OUR LOCAL economy. To get an idea of just how much money goes out....take a look around next time you are driving around in just about any town U.S.A. Notice just how many Check Cashing places also have under the same roof a Western Union. Think about why that is. Think about how much business there must be for these types of businesses to be popping up in just about every street corner all the time. Why do you think that is? Because there is that much demand for them is the reason. Why is there demand? Because there really is that much money being made "under the table" each and every day. That money NEVER gets paid INTO any tax table, except for sales taxes since EVERYONE has to buy something at sometime.

On this part, you are right and wrong. Yes, companies are about profits. Taxes are a small portion though. Wage rates are what they look at. I know, I work daily with the largest outsourcer in the world, and on their biggest account. I work with India daily. Do you think they will move jobs back here, when it costs them $9K/month/per person here, and over in India, they pay $700/month per person? I see the numbers as I have to do the T/C estimates. Tax rates aren't even on the radar. In fact, they still pay US taxes, and aren't worried about it.

No, I know I'm right about this. Corporations are focused on one thing and one thing FIRST before anything else....PROFITS. Why do you think it costs your employer $9k as opposed to $700/mo? It's not just about cheap labor, it's also about cheap costs. In India, they don't have income taxes, corporate taxes, or anything resembling our antiquated tax code. So your $700/mo employees don't have to have FICA, unemployment, disability, nor are they W2'd. Add in all those costs, and then that $700/mo is no longer $700/mo to the EMPLOYER. Yes, going to other countries makes sense to big corporations due to cheap labor. But an even bigger reason for big corporations to be based overseas are TAX shelters. Companies have to PAY taxes on everything they make. Why do you think they "sponsor" this for a gazillion dollars or buy Leer Jets for themselves to go to meetings? Because they either spend that money on stupid crap like that or they PAY taxes on that same money. Which do you think they choose to do with it? Once again, money that is not always benefiting our local economy.

Companies do care about the bottom line. I know from experience that if I didn't have to pay all the employment taxes that I've had to over the years, I'd certainly have a good chunk of change in the bank.

Agreed. But the real solution is to lower spending, otherwise, you are just creating a new wealth distribution system - nothing more.

It will never happen. It hasn't happened in the history of this country, and it's never going to.

You keep using that line, "wealth distribution". How is a flat tax for EVERYONE that is exactly the same if you make 50K or 500K taking from one and giving to the other? The Fair Tax has provisions to keep low income people paying exactly what they pay now.....NOTHING. It's not going to change for those people. It's only going to make US more responsible and more importantly more in control of our own finances. Why? Because you now would have everything you've EARNED in your own hands to either A: spend and pay taxes on it, or B: save it and use it other ways. It really is that simple. The every day essentials are going to be taken care of for EVERYONE the exact same, so that means that part of the argument is taken out of the equation. EVERYONE will have the same amount of egg, milk, and cookies as proportioned by your family size. Now since that supplier of eggs, milk, and cookies no longer has to pay a gazillion dollars for stupid employee taxes....they no longer have to price eggs at $2/dozen to make the SAME money they make if they priced them at $1.50/dozen. This is where the "embedded" tax comes from. We prize our products based on the fact that we have to pay X amount of taxes in either making, distributing, or selling that product. If we no longer have to PAY those taxes, only 1 thing is going to happen: we will make MORE money selling the same product for the same price we sell it now because that 20% mark up that we had to have to cover our tax EXPENSE can go into our pocket where it belongs rather than Uncle Sam's to buy $5000 toilet seats. Get it?

[David88vert]

Would you still have the IRS and have to pay income tax?
If the IRA was disbanded and you no longer had to file income taxes then alot of criminals or scammers would have a hay day spending spree. Is Fair Tax traceable?

Under the current proposal, the Fair Tax Act of 2005 does not disband the IRS nor repeal the 16th ammendment. They claim that later supplemental legislation would do that. Care to trust the government to tell you the truth?

Bartering would not be traceable, nor would private sales (they aren't now either). Which would you do - buy a new car and pay a 30% tax on it, or buy a used car from a private seller without the tax? Who here will want to buy new goods? Don't forget, all of the materials needed to make the car will each be raised 30% as well. New items will cost more. Paying people to police and audit businesses should cost more as well. Look at countries that already have consumption taxes to see how they behave.

BTW - I see you in here, Jaime....

[David88vert]

One last scenario for the night.....since this is a car forum....
Under Fair Tax, you got to buy a $30K new car. With tax, you would pay $39K. $30K is eligible for payments, but $9K would not. No lender is going to loan you the money for payment of taxes. The car's value would not be collateral enough to cover it. So instead of paying $9K down on th principal, you are only paying taxes. Thus, you will pay more in interest - period. That does not spur the economy. It drags us deeper into debt.
Now if you bought a 1 year old car from a private seller, and we will assume a $2K depreciation over the year, you would be able to borrow the full $28K and fudge the taxes. Which is a better value?
Shortly after it's start, there will not be any 1-2 year old cars for sale except in expensive luxury vehicles. Middle-class people will not be able to stomach the depreciation. Everyone will have to drive the car until the wheels fall off.
Now if you think that is wrong, please explain how it is wrong - in detail please.

[Init2winit]

There is no debate. Fair tax is the way to go!