The Fair Tax Primer

[g5000]

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

I believe consumption taxes are superior to taxes on production.

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

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

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

Say what!?!

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


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

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

That, in a nutshell, is the Fair Tax.

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

 

[BluesLegend]

You lost me at "fair" tax.

 

[g5000]

You lost me at "fair" tax.

The Fair Tax is a kind of sales tax. Everyone pays it. I am very surprised you have never heard of it!

I guess it is a good thing I started this topic.


Pass the FAIRtax | FAIRtax.org

H.R. 25 - Fair Tax Act of 2017 (Current House legislation)

To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.


.

 

[g5000]

The "official" Fair Tax twitter: FairTax® Official (@FairTaxOfficial) | Twitter

Only #FAIRtax #Abolishes IRS and ends tax lobbying. Added together a great start on #DrainTheSwamp. BigSolution.org #FAIRtax will #MTFA.

 

[RDD_1210]

I think the idea has real merit. My initial concerns though are around how it would impact seniors who don't have an income or prospects to really increase their income and are now faced with higher taxes on goods. The stipend would help but I would want to really think through scenarios that would ensure it wouldn't hit seniors the hardest.

 

[RDD_1210]

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

 

[martybegan]

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

I believe consumption taxes are superior to taxes on production.

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

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

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

Say what!?!

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


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

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

That, in a nutshell, is the Fair Tax.

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

Why not just scale the tax rate like income tax? To me the whole idea of everyone getting a monthly government check is a non-starter.

Exempt non-prepared food, exempt medicine, and clothes under $50 bucks.

Everything else gets taxed on a rising scale.

 

[g5000]

I think the idea has real merit. My initial concerns though are around how it would impact seniors who don't have an income or prospects to really increase their income and are now faced with higher taxes on goods. The stipend would help but I would want to really think through scenarios that would ensure it wouldn't hit seniors the hardest.

Well, now you have come to one of the difficulties of implementation I said I would address.

However, the regressive nature of a sales tax is not age-related, it is income related. So to say "seniors" are hurt the most by the Fair Tax because they don't have an income is incorrect.

Seniors do have an income. Social Security, 401k, IRA, stocks, bonds, etc.

The prebate offsets the regressive nature of a sales tax. So seniors would not be hurt in that way.

The way seniors would be most impacted by the Fair Tax is that their savings have already been taxed once via the income tax. To then tax that savings again when it is spent is definitely a problem. In fact, that is the biggest obstacle to the initial implementation of the Fair Tax.

So I would propose a solution this problem. An amendment to the Fair Tax which either exempts seniors from the Fair Tax for a defined period of years, or taxes them at a lower rate.

 

[NightFox]

I believe consumption taxes are superior to taxes on production.
.

Agreed, the problem is that there's nothing stopping the professional money wasters in Washington from doing both, even if you got a repeal of the income tax code and replaced it with a consumption tax system, what's to stop 'em from re-instituting an income tax on top of the new consumption tax system ?

Remember the federal income tax was originally sold to large swaths of the populace as a way to replace the revenue that the Federal Government would lose from alcohol taxes if prohibition was instituted, prohibition was repealed, the income tax expanded and taxes on sales of alcohol are back, not to mention the hidden tax (monetary inflation) is bigger than ever.

You'd need an airtight constitutional amendment and even then there's no guarantee.

 

[g5000]

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

I believe consumption taxes are superior to taxes on production.

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

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

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

Say what!?!

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


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

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

That, in a nutshell, is the Fair Tax.

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

Why not just scale the tax rate like income tax? To me the whole idea of everyone getting a monthly government check is a non-starter.

Exempt non-prepared food, exempt medicine, and clothes under $50 bucks.

Everything else gets taxed on a rising scale.

As soon as you open the door to exemptions, you have opened the door to wide spread corruption. Our current tax structure has been thoroughly corrupted by carve-outs for special interests. We need to slam that door and nail it shut. ZERO exemptions.

Otherwise, you will have politicians being bribed with large wads of campaign cash to exempt milk, coal, yachts, rubber duckies, popsicles with plastic sticks (but not wooden ones), Trump office supplies, and so on and so on and so on.

As soon as you allow exemptions, you have to increase the Fair Tax to offset those exemptions. Everyone suffers for it. Exemptions are theft.

 

[g5000]

Exempt non-prepared food, exempt medicine, and clothes under $50 bucks.

It is a horrible, horrible, horrible idea to give politicians the power to decide who gets a tax break. Look at the mess our tax system is in now!

Disastrous.

 

[g5000]

I believe consumption taxes are superior to taxes on production.
.

Agreed, the problem is that there's nothing stopping the professional money wasters in Washington from doing both, even if you got a repeal of the income tax code and replaced it with a consumption tax system, what's to stop 'em from re-instituting an income tax on top of the new consumption tax system ?

Remember the federal income tax was originally sold to large swaths of the populace as a way to replace the revenue that the Federal Government would lose from alcohol taxes if prohibition was instituted, prohibition was repealed, the income tax expanded and taxes on sales of alcohol are back, not to mention the hidden tax (monetary inflation) is bigger than ever.

You'd need an airtight constitutional amendment and even then there's no guarantee.

It would obviously take a constitutional amendment to repeal the 16th Amendment.

And it would take another constitutional amendment to put it back. And that would not be easy. That is what would stop an income tax from being piled on top of the Fair Tax.

Our politicians are going to find a way to pile a consumption tax on top of our existing income tax. They are going to enact a VAT sooner or later. And that won't take a constitutional amendment.

We need to get ahead of that.

 

[g5000]

A Fair Tax with zero exemptions would reduce the opportunities for corruption. All legislative debates would be reduced to what percentage to tax everything, and how much the prebate should be.

This would achieve maximum transparency, and nobody gets a carve-out at everyone else's expense.

 

[martybegan]

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

I believe consumption taxes are superior to taxes on production.

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

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

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

Say what!?!

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


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

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

That, in a nutshell, is the Fair Tax.

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

Why not just scale the tax rate like income tax? To me the whole idea of everyone getting a monthly government check is a non-starter.

Exempt non-prepared food, exempt medicine, and clothes under $50 bucks.

Everything else gets taxed on a rising scale.

As soon as you open the door to exemptions, you have opened the door to wide spread corruption. Our current tax structure has been thoroughly corrupted by carve-outs for special interests. We need to slam that door and nail it shut. ZERO exemptions.

Otherwise, you will have politicians being bribed with large wads of campaign cash to exempt milk, coal, yachts, rubber duckies, popsicles with plastic sticks (but not wooden ones), Trump office supplies, and so on and so on and so on.

As soon as you allow exemptions, you have to increase the Fair Tax to offset those exemptions. Everyone suffers for it. Exemptions are theft.

I think making everyone dependent on a government check every month is far worse, and far worse than the current situation.

 

[martybegan]

A Fair Tax with zero exemptions would reduce the opportunities for corruption. All legislative debates would be reduced to what percentage to tax everything, and how much the prebate should be.

This would achieve maximum transparency, and nobody gets a carve-out at everyone else's expense.

And give government the leverage to see those checks get delayed to certain people.....processing mistakes of course.

You close the door on one form of corruption and open another.

 

[NightFox]

I believe consumption taxes are superior to taxes on production.
.

Agreed, the problem is that there's nothing stopping the professional money wasters in Washington from doing both, even if you got a repeal of the income tax code and replaced it with a consumption tax system, what's to stop 'em from re-instituting an income tax on top of the new consumption tax system ?

Remember the federal income tax was originally sold to large swaths of the populace as a way to replace the revenue that the Federal Government would lose from alcohol taxes if prohibition was instituted, prohibition was repealed, the income tax expanded and taxes on sales of alcohol are back, not to mention the hidden tax (monetary inflation) is bigger than ever.

You'd need an airtight constitutional amendment and even then there's no guarantee.

It would obviously take a constitutional amendment to repeal the 16th Amendment.

… and what odds do you give that of happening ?

Our politicians are going to find a way to pile a consumption tax on top of our existing income tax. They are going to enact a VAT sooner or later.

Uh-huh, so the odds are very high that at some point in the not too distant future we're going to have our current income tax "system", the existing federal consumption taxes AND a VAT, the only unknown is whether or not we'll switch into Greece Mode Financing™ before or after it happens.

 

[g5000]

I believe consumption taxes are superior to taxes on production.
.

Agreed, the problem is that there's nothing stopping the professional money wasters in Washington from doing both, even if you got a repeal of the income tax code and replaced it with a consumption tax system, what's to stop 'em from re-instituting an income tax on top of the new consumption tax system ?

Remember the federal income tax was originally sold to large swaths of the populace as a way to replace the revenue that the Federal Government would lose from alcohol taxes if prohibition was instituted, prohibition was repealed, the income tax expanded and taxes on sales of alcohol are back, not to mention the hidden tax (monetary inflation) is bigger than ever.

You'd need an airtight constitutional amendment and even then there's no guarantee.

It would obviously take a constitutional amendment to repeal the 16th Amendment.

… and what odds do you give that of happening ?

Our politicians are going to find a way to pile a consumption tax on top of our existing income tax. They are going to enact a VAT sooner or later.

Uh-huh, so the odds are very high that at some point in the not too distant future we're going to have our current income tax "system", the existing federal consumption taxes AND a VAT, the only unknown is whether or not we'll switch into Greece Mode Financing™ before or after it happens.

The whole reason we will have a VAT is because our income tax system is thoroughly corrupted with $1.4 trillion of tax expenditures.

We have given our politicians the power to decide who gets a tax break, and they are paid big bucks in campaign cash to provide them to the special interests who own them.

The revenues lost to tax expenditures have to be offset. You can feed this corrupt system only two ways:

1) Increase tax rates (or add new taxes like a VAT).

2) Borrow.

If you reduce one, you have to increase the other. If you decrease tax rates, you have to borrow more. If you reduce borrowing, you have to increase tax rates.

To offset the annual $1.4 trillion in tax expenditures, our politicians raised tax rates and borrow the rest. And that is how we have gotten to a $21 trillion debt and high tax rates.

Now that Trump has cut the corporate tax rate, we have to borrow more. Simple math.

At some point, borrowing will no longer be a viable option, and then option 1 will kick back in. And that's when the push for a VAT will raise its ugly head.

 

[g5000]

… and what odds do you give that of happening ?

I can dream, can't I?

The public has to be educated. That is the only way great changes happen.

Consider this topic my contribution to that education.

 

[g5000]

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

I believe consumption taxes are superior to taxes on production.

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

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

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

Say what!?!

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


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

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

That, in a nutshell, is the Fair Tax.

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

Why not just scale the tax rate like income tax? To me the whole idea of everyone getting a monthly government check is a non-starter.

Exempt non-prepared food, exempt medicine, and clothes under $50 bucks.

Everything else gets taxed on a rising scale.

As soon as you open the door to exemptions, you have opened the door to wide spread corruption. Our current tax structure has been thoroughly corrupted by carve-outs for special interests. We need to slam that door and nail it shut. ZERO exemptions.

Otherwise, you will have politicians being bribed with large wads of campaign cash to exempt milk, coal, yachts, rubber duckies, popsicles with plastic sticks (but not wooden ones), Trump office supplies, and so on and so on and so on.

As soon as you allow exemptions, you have to increase the Fair Tax to offset those exemptions. Everyone suffers for it. Exemptions are theft.

I think making everyone dependent on a government check every month is far worse, and far worse than the current situation.

Everyone is already dependent on the government. They are dependent on the government for their child tax credit, their mortgage insurance deduction, their employer sponsored health insurance tax exemption, and so on and so on and so on.

They are dependent to the tune of $1.4 trillion of gifts every year!

 

[Flash]

Taxes are never "fair". Fuck government and fuck taxation.

No income tax, corporate tax or anything else.

Pay for the roads when you buy fuel. Be assessed for defense, courts, police etc and then screw everything else. Pay for your own kids education.

This stupid idea of taking money from those that earn it and giving away to those that didn't earn it has to stop.