So, why are people opposed to the Fair Tax Bill (HR 25)?

Question

The FairTax Act:
-Repeals all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes.
-Imposes a revenue-neutral personal consumption tax on all new goods and services at the point of final purchase.
-Business-to-business transactions and used products (which have already been taxed) are not subject to the sales tax.
-Rebates the sales tax on all spending up to the poverty level.

Results of the FairTax:

-Dramatically reduce the costs of goods and services by 20 to 30 percent.
-Allows you to keep 100 percent of your paycheck, pension, and Social Security payments.
-Gross Domestic Product will increase by almost 10.5 percent in the first year after enactment.
-Compliance costs would decrease by 90 percent.
-Real investment would initially increase by 76 percent relative to the investment that would be made under present law. While this increase would gradually decline, it remains 15 percent higher than under the existing tax structure.
-Exports would increase by 26 percent initially and would remain more than 13 percent above the level under the current tax system.
-Real wages will increase.
-Increases incentives to work by as much as 20 percent in many households, leading to higher economic growth and efficiency.
Interest rates will fall 25 to 35 percent.

Bostonianinmo, don't be a jerk. Lay off of the epithets, and I may be willing to read your replies in the future, butthead.

Did I mention a party? I'm not a Republican. I'm Independent. Why must you assume I'm a Republican? Just because I see a method of making rich people pay their fair share, that is irrefutable? The tax on a H3 will by far outstrip the price of a Kia Sepphia. The price of a Diamond Ring, with matching pendant, necklace, earrings, and bracelet will by far outclass the tax on a pair of shoes. Shoes... Okay. Do the math: Figure the taxes on shoes in the $75.00 range, vs. shoes in the $15.00 range. The rich will bear the burden, not the poor.

If they were such horrible bills, why have the numbers of supporters grown, rather than shrank? Interresting question, no?

http://linder.house.gov/index.cfm?Fuseaction=Resources.Home&Resource_id=1

If there is any fiction, take it up with the sponsor of this bill, I have seen sworn affidavits from CEO's who said this would work to increase the sales of their products, as well as give the consumer the funds with which to do it. Though I am not certain if the website he mentions still has those affidavits on file, or not.

Also, ever think of this? Illegal immigrants and visitors would no longer be exempt. with an estimated 25+ million illegal immigrants in this country, the boost in revenues from these guys alone would blow the doors off of many arguments against the tax revision.

I, the questioner, happen to be at less than 50k a year, annual salary. I don't see how me keeping my FICA monies is going to hurt me any more than not. You want to champion me, the poverty level American? Then support this bill.

What do I do? Security Officer, making $11.00 an hour, 40 hours a week. This used to be a great paying job, until inflation outstripped my earnings. I get 4k a year in taxes back, but, having been married to an immigrant, who had a sibling that was illegal, I know how people can cheat the system. He bought a brand new Ford F-250, and I was left driving a used '78 Chevy Chevette, in the 1990's... Brand new truck in the hands of someone with no legal papers, and no responsibility to pay taxes vs a legal citizen who has never been able to own a new car in his life. Tax the buggers, I say!

Answer 1

As indicated in a number of the answers to this question, the vast majority of people have not heard of the FAIRTAX and many of those responding do not understand the FAIRTAX. One respondant repeatedly referred to a FLAT tax. This is not the FAIRTAX. (some of the confusion) Some people have heard objections of others and are merely repeating the misinformation. Now to answer the actual question.

The vast majority of the American people have not heard of the FairTax much less studied the bill. The bill IS A BIG POLITICAL ISSUE. It is not a Democratic vs Republican issue. It is not a conservative vs liberal issue. It is an AMERICAN PEOPLE vs POLITICIAN issue. The politicians will lose the control they currently have over the income tax system. Currently, they can pass changes that will tax one group over another and thereby gain more votes. This would not be possible under the FairTax. It will greatly reduce the efforts of lobbists trying to change the tax code and therefore the politicians will lose re-election campaign funding and other perks they receive from lobbists. It returns the power to the American People.

You will observe that "tax reform" is the only issue that will directly effect on a day to day basis every American this election cycle. The war on terrorism, homeland security, health insurance coverage are examples of issues that will indirectly effect many Americans on a day to day basis and a smaller group have a direct effect. They are important issues, but tax reform should be on top of the list. All the politicians are avoiding the FairTax like a plague. The media is cooperating with them. It is not mentioned in any interviews.

Once the American public hears the actual facts of the FairTax, they are in favor of it. I know because I mention it "one on one" every day to the people I meet.

I have not heard of any other tax reform proposal that comes close to all the benefits of the FairTax.

Answer 2

The main reason I oppose a tax like this are exemplified in your question:

1) Those who support it are putting out false information about it.

Further reasons are these:

2) Whenever the government wants to tamper with taxes you can bet on two things: democrats will raise taxes regardless of what they promise, and republicans will lower taxes regardless of what they promise. Democrats are in charge of the Congress right now, so I oppose anything they propose.

3) A flat tax will severely impact those below the poverty line before they can ever get the promised rebates. It's not worth it.

HERE'S THE INFORMATION YOU GOT WRONG:

-Dramatically reduce the costs of goods and services by 20 to 30 percent.

A FLAT TAX WILL DO THE OPPOSITE. IT WILL DRAMATICALLY (AND DIRECTLY) INCREASE THE COSTS OF GOODS AND SERVICES BY ADDING A TAX TO THEM AT THE CHECKOUT.

-Allows you to keep 100 percent of your paycheck, pension, and Social Security payments.

EVERYONE ALREADY KEEPS 100% OF THEIR PENSIONS AND SOCIAL SECURITY PAYMENTS. WITH A FLAT TAX, THOSE ON FIXED INCOMES WILL BEGIN PAYING TAXES.

-Gross Domestic Product will increase by almost 10.5 percent in the first year after enactment.

THE ONLY WAY FOR GDP TO INCREASE WILL BE TO LOWER TAXES. CHANGING THEM DOESN'T DO IT. WE CAN LOWER TAXES WITH OR WITHOUT A FLAT TAX.

-Compliance costs would decrease by 90 percent.

COMPLIANCE COSTS INCLUDE ERADICATING TAX ACCOUNTANTS. HOW DOES THAT FIGURE INTO THE EQUATION?

-Real investment would initially increase by 76 percent relative to the investment that would be made under present law. While this increase would gradually decline, it remains 15 percent higher than under the existing tax structure.

THESE NUMBERS ARE GUESSES. SINCE WE HAVE NEVER HAD A FLAT TAX IN THE US, YOU HAVE NO DATA TO OFFER. WHY ARE YOU WILLING TO MAKE UP FICTIONAL DATA TO SUPPORT YOUR CLAIMS?

-Exports would increase by 26 percent initially and would remain more than 13 percent above the level under the current tax system.

MORE FICTIONAL NUMBERS.

-Real wages will increase.

REAL WAGES WILL DECREASE FOR THE LOWER AND MIDDLE CLASS.

-Increases incentives to work by as much as 20 percent in many households, leading to higher economic growth and efficiency. Interest rates will fall 25 to 35 percent.

INCENTIVES TO WORK ARE NEVER FOUND IN TAXATION. THE WAY YOU GET PEOPLE TO WORK IS BY OVERHAULING OUR CURRENT WELFARE PROGRAMS (ALL OF THEM).

Answer 3

Actually, the fee is 30%, now not 23%. They roll it backwards to arise with 23% however earnings taxes are consistently further on. Something that sells now for $one hundred might price $one hundred thirty. The $30 tax is 23% of $one hundred thirty however earnings taxes are in no way labored that approach. A new $20,000 vehicle might price you $6,000 in taxes (on most sensible of what you already pay your state) simply to get your tags. A new $two hundred,000 dwelling might price you $60,000 in tax! It might kill each the production and car industries over night time. This absurd giveaway to the rich has been proposed by way of a few dim-witted participants of Congress each and every consultation for approximately 12 years, commonly at the first day of the consultation. It's stated Ways & Means (as all costs are) after which rots till the top of the consultation. Even its sponsors do not wish to look it published to the ground for debate, because it might be defeated by way of a margin of eighty% in opposition to to twenty% for, leaving them seem like idiots.

Answer 4

A number of your stated benefits are not likely to be real.

And as for the rich paying their fair share, right now they pay way MORE than a proportional share of the taxes - under fairtax, on the whole the "rich" will pay a lot less. That's my main objection to the proposals.

The proposals appeal to class envy, which in reality is far from the real effect it would have.

Answer 5

If HR 25 and S.1493 are such great ideas, how come they're both sitting in committee as far back as 2001, when both houses were dominated by Republicans?

Don't blame the other party for sitting on their hands when the members of the ruling party had a chance to ram it through and didn't.

Answer 6

It won't reduce the costs of goods & services -- it will INCREASE the costs by 25% - 30%. It's a back-end consumption tax, McFly! (I call him "McFly" rebuking an obviously outrageous claim and he calls me "butthead" in return. Hmmm... Guess it goes with the rest of his argument.)

It's a regressive tax that fails to take into conisderation the ability of the taxpayer to pay the tax. There are many working poor near the poverty level who would be DEVESTATED by this careless attempt at dumping the tax burden on the poor and middle class.

The cost of tracking incomes in real time (for the rebate for the poor) would be immense. The IRS can't match up W-2s and 1099s in a year right now; how much computing power will be needed to do that in REAL time?

There will be extreme reporting requirements imposed on all levels to ensure that the tax is collected and properly rendered.

The tax rate will be high enough to make black marketing activity worthwhile. There are already black marketing problems with alcohol and tobacco in high-tax areas. This will become the norm for nearly all goods and services. These activities usually attract organized crime and gang elements -- not the guys I want in my neighborhood flogging Froot Loops or plasma TVs, thank you very much!

The load on law enforcement to keep black marketing and tax fraud at bay will be tremendous.

Think "2:00 AM Tax Stamp Raids" as the IRS (who wil continue to exist, by the way, just collecting a different set of taxes) tries to make sure that everything in your home is tax-paid. No Effing Thanks!

The current system needs some cleaning up, to be sure, but replacing it with this absurd little lie -- Fair Tax, my Butt! -- is not the answer.