What do you think of the fair tax idea?

Question

If instead of rebates to the poor, what if tax exemptoins were made for food and housing. If stocks and bonds were taxed like any other purchase. With a tax rate of 25% would this make scents? I know this is a republican idea, but even as a democrat I think this would be better than our current tax scheme. Is threre a problem with it that I'm not seeing?

The reason for exempting food and housing is because they sre esential to the servival of the poor. While the purchase of stocks and bonds is equivalent to gambling your money and must be taxed.

Answer 1

Some European countries have a similar tax - VAT (Value Added Tax). It tends to put a bigger burden on the poorer people that spend a larger part of there earnings.
I would be more in favor of a flat tax. Even though there is a lot of concern that the rich would have a smaller tax rate than the poor, the rich tend to have higher deductions and ultimately pay lower taxes. It would get rid of a lot of accountants and lawyers because there would be no fighting to get all the deductions. That in itself is worth it.

Answer 2

Fairness is not the issue. Discretionary income is the issue. If the "median" home is $60,000 should the rich be penalized for being able to afford $1,000,000 (million)homes? No, of course not, but why should someone making 20 thousand pay 25% or 5 thousand and have to live on 15 thou while someone making 20 million would pat 5 million and have to live on a meager 15 million a year? And it is indexed so the 5 million would be closer to 4 and the discretionary income is 16 million.

Focus on how much it costs a family to live. the rest is extra or discretionary. And if state income tax, sales tax, and property tax is thrown in, then the 15 thou gets another huge hit and the 15 million loses 1/2 a mil. or probably much less.

And Social security and Medicaid stops being deducted at about $70k of wages and investment income is excluded from that.

No sales tax on homes, stocks, bonds, hotels, malls, apartment buildings, etc.

Answer 3

I am all for a fairer taxing method. 25% seems a bit steep, but I would have to do the math. Taxing stocks and bonds at point of purchase would likely slow the economy. Loosing 25% before one has time to make a buck would stifle some buyers.

Answer 4

well.. the problem is... it would be a GREAT INCREASE in taxes for the poor... they pay virtually no taxes now...

and to exempt food and housing, you're getting into local and state tax codes, which would be almost impossible, since they would fight it tooth and nail, and poor people that rent, wouldn't get much of a discount over all... much less getting the supermarkets to get a system that can do it...

Answer 5

I fully support the Fair Tax. Thats one of the reasons I'm supporting former Sen. Mike Gravel (D-Alaska) for President, because he also fully supports the Fair Tax.

Our current tax code is so corrupted and riddled with exceptions (for corporations, that were put there by lawmakers working for lobbyists) that there is NOT ONE person in all of Washington DC that knows and understands the entire tax code! In Gravel's words "Its probably the most corrupt system of taxation we could devise!"


http://www.Gravel2008.us

http://www.youtube.com/watch?v=0c5ptT5j-zk (Gravel being interviewed on CNN)

Answer 6

I'm no economist, but common sense is common sense. I'm more than a little sceptical of any tax system that is most strongly advocated by the wealthiest of society and the political party that caters to them.

Answer 7

It's still a direct tax by the federal government = unconstitutional.

I say we let the states tax however they want to, then let the federal government tax the states... like it's supposed to.

Answer 8

TAX = FRAUD lately.