Fair tax, National Sales tax, or Consumption tax

[Denny Crane]

Ran across this article today:

http://www.karlonia.com/2007/04/16/fair-tax-pros-and-cons/

What does everyone think of this?

[Denny Crane]

Come on, some of you big brains out there give me an opinion. I'm really interested in this.

[ShockerPrez]

I just posted in another topic that we should just have a 'wealth' tax. Where you pay taxes on how much money you have in your bank accounts and investments ie liquid assets.

This would bring a whole new meaning to the term 'tax deduction' as people rush to spend, spend, spend during the holidays to get their wealth as low as possible.

[double dribble]

The problem that I see with the Fair Tax is that politicians would not be able to devide people into groups by class for the purpose of creating class envy, so that they can in essence "buy" the votes of one class group by promising to tax another class group at a higher rate and rebate the lower class group with funds from said class group. Oh wait... that might be a good thing. Yes, we do need to abolish the current tax code, the IRS, and run on sentences.

[SubGod22]

The problem that I see with the Fair Tax is that politicians would not be able to devide people into groups by class for the purpose of creating class envy, so that they can in essence "buy" the votes of one class group by promising to tax another class group at a higher rate and rebate the lower class group with funds from said class group. Oh wait... that might be a good thing. Yes, we do need to abolish the current tax code, the IRS, and run on sentences.

They'd find some way to bring class warfare into it anyway. Those politicians can be crafty...

[1979Shocker]

This thread back in September had a discussion about the Fair Tax and Flat Tax.

Does Chuck Norris get it?

[ShockerPrez]

Why can't Chuck Norris just roundhouse kick the national debt in the jimmy and bring it down?

Better yet, why doesn't Chuck Norris just run for president in 4 years? How great would that be. Would he be the first president since Abe Lincoln to sport a full beard? It would be worth it just to have a painting of Chuck Norris in the White House forever. How great would that be?

[Ixiah]

I work in taxes and I know full well the complexity and difficulty in complying with the tax code so if there is a serious alternative its definitely worth looking into. However after reviewing the info on it I dont think that fairtax is the right answer. Factcheck did a nice article on the fairtax a while back:

http://www.factcheck.org/taxes/unspinning_the_fairtax.html

To me the list below is a killer. Think about the impact taxing some of the items on the list below at 34% would have....

With the FairTax’s 100 percent base, consumers would pay taxes on a great many things that may not intuitively seem like consumption. The list would include:

Purchases of new homes
Rent
Interest on credit cards, mortgages and car loans
Doctor bills
Utilities
Gasoline (30 percent in addition to current taxes, which would not be repealed)
Legal fees
At today’s prices, gasoline would cost almost $1 per gallon more. A $150,000 new home would run $195,000 – plus the 30 percent tax that the buyer would pay on the interest on the mortgage.

[shocrates]

None of those things you quoted are subject to sales tax. I can see how that could get ugly. Why not just make a federal sales tax on things normally that are sales taxed by the state and counties, such as consumer goods? We all survived a few years of the arena tax even with income tax being taken out of our checks. Seems like you could do the math and set it a percentage that would bring in plenty of revenue. I'm just asking. I heard Neil Boortz wrote a book on this. Has anyone read it?

[ShockBand]

While there are some weaknesses, I like the notion of tax based on spending. You want to pay less in taxes? Then spend less. Would promote saving and investing, which wouldn't hurt us as a country at all.

[rrshock]

While there are some weaknesses, I like the notion of tax based on spending. You want to pay less in taxes? Then spend less. Would promote saving and investing, which wouldn't hurt us as a country at all.

Actually, I would think that people not spending money would hurt the economy. They would be afraid to make major purchases, thus hurting businesses all along the way. Then those businesses layoff employees and then it is a giant downward spiral.

[btp1029]

The fair tax is a 23% tax. In all goods there is approximately a 22% imbedded tax when the good makes it to the consumer. After the income tax and corporate tax are abolished these imbedded taxes would go away. The fair tax also abolishes fica taxes, the death tax etc. All national taxes would be replaced with the fair tax. The fair tax is set up to be an imbedded tax. When a good is marked $1,that would be the price paid (this assumes no local or state sales tax). .77 would go to the retailer and .23 to the government. If you would like more information on the fair tax visit www.fairtax.org. Or check out the two fair tax books written by Neal Boortz and Congressman John Linder of Georgia. The first book is called The Fair Tax Book:Saying Goodbye to the Income Tax and the IRS. The second book is called Fairtax The Truth: Answering the Critics. These two books are excellent and provide some back ground on how the current tax code was started.

[Ixiah]

[quote="shocrates"]None of those things you quoted are subject to sales tax. I can see how that could get ugly. Why not just make a federal sales tax on things normally that are sales taxed by the state and counties, such as consumer goods? [quote]

You can do that of course, but if you start carving out things that are not taxed then you need to increase the rate even higher to make the switch revenue nuetral.