Does America have the "will" to replace the income/medicare/ss tax with a sales tax? (The fair tax)?

Question

Read the Fair Tax book. Neil Boortz has really figured this out.

The consumption tax is the only "fair" tax. The poor pay less, because they spend less. The rich pay more, because they spend more. Currently only "earned" income is taxed by SS and Medicare. Most of the "rich" do not have "earned" income. This way, even visitors pay into the "system".

Answer 1

This an excellent plan.

AndiGravity you need to actually read what the plan composes of. The fair tax gives a rebate equal to the adverage sales tax that a person at the poverty line pays out. Therefore eliminating and lowering the amount of tax the poor and middle class pays. If the adverage amount people at the poverty line pays out in 4,000 then all people from billionaires to people who make no income recieve a rebate of 4000 dollars.

That reduces the net tax poor people pay to zero or less and lessens the amount the middle class pays. The tax paid by a rich person will never be more than 23%. The adverage for a person around 40,000 income per year would likely be closer to 11% net sales tax eventhough they originally paid 23%.

The other point that AndiGravity is wrong about is if you remove corporate sales tax then corporations will lower the price of the food and consumables as income tax is no longer part of the cost of production. Competition will force the subject.

It is a good plan. I hope to see it happen some day.

Answer 2

I like the Fair Tax, I think Neal Boortz and John Linder have an great idea and I am all for it.

Read the book. Visit the website www.fairtax.org.

For all who think this will burden the poor-How so? It would mean that every one gets to bring home their entire pay check. The whole thing. Every penny of it. It doesn't tax savings, so it encourages people to save! It will also tax visitors to this country-including all those illegals that are living here right now without paying any taxes at all. Any thing they buy will be taxed. So it is a MUCH more "fair" tax. Tourists will be taxed as well.

I'm ready-let's do it.

Answer 3

Not a bad idea but tax greedy politicians would destroy it.
Bill Clinton put a tax on yachts, tax the rich.
The rich took their money to Europe ,bought yachts and American yacht companys went out of business.

I favor a flat tax. Everybody pays xx% on all earnings . This would be paid to the federal gov which then wrote checks to the states,who would disperse the money to the counties and cities.

WE would do away with property tax ,sales tax , taxes on gasoline,alcohol , tobacco, sporting goods ( 11% !!! ) ect.

Just one, one page tax form , sent to one place.
All income would be taxable including welfare. Dependents would be automatically exempted .
This would force an end to state and local gov. tax increases to pay for nice to have but not nesessary projects and programs.
It would also reduce the size and expence of the whole tax system and government.

Answer 4

i wish ,but the rich would have to pay there fair share

Answer 5

You're joking, right?

Neil Boortz's plan would destroy the poor, cripple the middle class, and ultimately give much more of a free pass to the rich than they have now.

He doesn't have jack $#!+ worked out except how to precipitate the American version of the French Revolution through the amount of pain and suffering his myopic vision of economics would bring.

Again, for the follow up on people saying "I just don't see how this would burden the poor", you're joking, right?

The poor and middle class have to consume a much higher percentage of their income to secure the basic necessities of life than the wealthy do.

Even though the tax is "fair" in that all goods are taxed the same, the burden would disproportionately cripple the poor and middle class because they have to expend a much higher percentage of their resources just on the basics of survival than wealthier members of society do.

At a certain point, food is not going to get cheaper. The staple foods are still going to cost the same amount if you're broke or rich, medicine is going to cost the same, and every bit of power you use is going to cost a rich person and a poor person the same per kilowatt hour... but, let's just take an example of two people on very opposite ends of the spectrum and think about a family living on 15,000 a year and one living on 1,500,000 (since it's exactly a hundred times more).

Let's say our 15K family is paying 300 a month to buy groceries, another 400 for rent, and 200 for utilities, and 100 for miscellaneous expenses such as gas (assume they own a car and aren't paying for that, too). Those are all pretty low-balled figures. I defy you to find any place, even a studio apartment, in many parts of this country, for 400 a month. In any case, that family is consuming eighty percent of their income just on the necessities of life, and they have no choice about saving or spending that money. They have to spend it to survive.

A family living on 1,500,000 a year which pays 1,000 a month for groceries, 4,000 for their mortgage, 1,000 for utilities, and another 400 for gas, on the other hand, is only spending a bit over five percent (5.12) on the necessities of life.

Those are pretty reasonable figures. A thousand a month gets you some pretty high-end groceries and nights out at restaurants. I've got a 350,000 dollar house, and my mortgage is about 1,200 a month... so 4,000 is coming close to the eight hundred thousand dollar mark for a house... and even in California, that's a pretty darned nice house. I know quite a few people who just don't buy larger houses even if they can afford them because that size and quality of house is more than adequate for their lives.

Even though the wealthy family is spending a much greater raw amount than the poor family to the tune of 640%, they consume a much smaller percentage of their resources in surviving on a much grander scale than the poor family does.

That is, I believe, why we graduate tax rates now and at least give minimal consideration to the poor on whether or not the tax burden we levy on them impacts them unreasonably.

Levying a 23% tax on the two families evenly for the goods they consume means you have raised the 15,000 a year family to having to pay 98.4% of their income just for the very basics of survival and its tax burden, where under the system we have now, at least the government recognizes that tax burden would be absolutely draconian and refunds much of it to afford them with more income to consume should they need a bit extra.

The 1,500,000 a year family? It now has to sacrifice 6.3% of its income to the necessities of life and its tax burden, far down from the burden it can now more than adequately shoulder without having its quality of life impacted.

Yeah, I can see where you'd naturally think that alleviated the burden on the poor and increased it on the rich.

Like I said, Neil Boortz doesn't have a damn thing figured out.

Addendum:

Okay, might as well do this. First off, the "pre-fund" idea wouldn't wash because the government would, essentially, be refunding money it doesn't have yet. Sure, it writes all sorts of checks it can't cash these days, but giving everyone their tax refund would lead to a spiraling cycle of debt in the same way Social Security is locked into one, except you aren't talking about decades or even years before the cycle eats itself, but one that starts out in the red and just consumes more and more resources as time goes by, so ultimately the government would have to switch to collecting the taxes and then refunding what they owe back in taxes at the end of the year, banking on what interest they can make from that money in the meantime for the bit of extra revenue it gives them (that's what they do now), which makes my original point valid.

Also, providing an "estimated refund" is simplistic at best, and worthless in the reality of most situations. You're suggesting everyone needs to pay a tax based on what they actually consume, but only figuring on giving them back what you guess they bought, which puts a broke family that had to cough up money for extra expenses S.O.L. because you aren't taking into account that they might have had to borrow a bunch of money they didn't have to pay for a new car, that round of medicine for their kid that had pneumonia, etc.

Where does that leave poor families which spend more than that? Carrying a disproportionately larger percentage of the burden, once again, because they had greater need. The government currently reduces the burden on the taxpayers based on greater need, not increase it, which is what this plan would do, so the "pre-bate" doesn't do much for me.

The plan also doesn't take into account that poor and middle class workers' dollars carry less spending parity on average than the money the wealthy has, since the poor and middle class are more dependent on turning to credit and loans to get money they need.

While you're being fair about the matter and making them pay the sales tax on how they spend money, you're ignoring the fact they also have to spend other money to pay for the money they borrowed to spend, and you're ignoring the fact that quite frequently people at the poverty line have to spend more money than average.

Again, currently, the government takes all that into account and actually looks at your taxes (at least your income taxes) as a matter of what you had to spend in relation to what you had available to you. Interest is deductible.

Well, no tax returns, no rebates, no deductions. No explaining why this year you need to pay a little less to the government because you had to pay a little more to survive because now, no agency to even listen to you.

Second, you're either completely deluded or naive if you think getting rid of corporate taxes means a damn thing to corporations except a larger profit margin. People are used to paying what they're being charged for goods now. You could pass on a third of what you're saving and have the public think they were getting a good deal.

Trust me, we're seeing that right now with the oil prices. Oil's at sixty dollars a barrel? Gas goes up to about 2.50 a gallon. Prices go up to seventy a barrel? Gas prices soar to 3.25. Gas drops back down to sixty dollars? Gas goes back down to 3.00, and record profits are posted every quarter while the oil corporations whine about just how much they're not gouging prices or overcharging for their products.

People complain, there are quite a few companies, and competition should naturally force the prices right back down. That's the way it works, of course. Competition will keep industries from gouging prices... until, of course, you discover that industries can very well choose to charge a lot more several steps down the line from you so your retail outlet has no choice but to charge the higher prices anyway, and can rely on the fact they're doing so along a consolidated bargaining link in the chain to assure that their products are still purchased regardless of whether or not their buyer likes the cost since not buying the items in question could very well damage the buyer long before it damages the seller.

At that point, the buyers for the items (which are not you, I'm sorry to say) have to simply cough up the money anyway and have no choice but to pass the increased cost along.

In any case, check how well that's worked now that it isn't all mom and pop stores in the United States. Ever threatened not to shop at Best Buy or Wal-Mart any more because their prices are too high?

Did they gasp, say they'd offer you a better deal, and work to keep your business, or go "well, I'm sure we'll survive the hit"?

I don't know about the rest of you, but the biggest complaint I hear out of people when it comes to businesses is that they just don't seem to care about the little guy any more.

There are going to be more than enough people who will accept the higher prices or who have no choice but to pay them that will allow the prices to remain inflated above and beyond what cost says they should prudently be, so unless you're also going to majorly overhaul corporate law and bring every single last industry in America under strict regulation-- which would create a series of regulatory agencies and beaurocracies so complex the IRS would be a kid's club in a tree fort by comparison, and vastly increase the amount of money necessary to run the government, leading to increased tax costs-- you've created incentive to corporations to do nothing but silently cheer at how much more of their money they get to keep while you're ponying up the dough for what they used to have to pay. Oh, sure, they'll pass on a bit of a break to you in order to make it look like they're caring, but I assure you it won't be anywhere near the burden you're picking up for them.