FAIRTAX anyone? Want to eliminate the IRS? Its truly possible. WWW.FAIRTAX.ORG?

Question

It would be a direct shot to your pocketbook and the American free market economy.

Answer 1

The Fair Tax will work.
It will fund the federal government at the same level as the current income tax system.
It treats everyone fairly by using the same percentage of tax on "spending" rather than "earnings".
The more the person spends, the more taxes they pay.
The prebate totally untaxes every household up to the poverty level.
The Fair Tax contains provisions to define "household" and "poverty level"
The IRS will be eliminated. There will be a much smaller (1/10 the size or less) federal administration set up to work with the states,who will be handling the collections of the taxes.
There has been private industry companies that have offered to handle the distribution of the prebates to all the households. They are willing to pay the federal government for the privilege to do this. It will not cost the federal government anything to distribute the prebates.
It will make USA the tax haven of the world for all businesses.
The Fair Tax will allow people to keep the money they earn and does not penalize people for doing a good job.

The Fair Tax will benefit the vast majority of Americans.

Answer 2

You think the IRS is a bureaucratic mess now? How about when they have to send out 75 million prebate checks every month? Also, it is not going to reduce business paperwork anyway. Businesses will have to file sales tax paperwork with the state AND the federal government. Also, they'll probably insist on detailed reporting forms to ensure businesses aren't cheating on the collected sales taxes. Also, the rich DON'T spend everything they earn. Therefore, the rich won't be paying as much tax as they are now. That's just some of the reasons it won't work.

There is a simpler solution. Keep the existing income tax but get rid of 75% of deductible items. Increase the standard deductions for a family of four from about $24,000 to $40,000. Simplify the income tax filing to where 75% of the people could fill out a form similar to 1040EZ and be done.
It would take a lot more thought than that, but you get the idea.

Answer 3

No, it will be a kick in the groin to the middle class and will destroy the working poor. I'm sick and tired of debunking this mythological "solution" so I won't waste my time any more.

Suffice it to say, there's a REASON that the wealthy LOVE this (and the so-called "Flat Tax") so much. They'll SAVE a TON of $$$. But if one group saves, another has to step up and pay. Guess who THAT will be?

It won't eliminate the IRS, by the way. Who do you think will administer it and collect the 30% sales tax? (Hint: It won't be Billy Bob's Backyard Barbeque Joint!) And with rates that high, there will be a LOT of $$$ to be made on black market goods -- and we all know who deals with those things, don't we? And if you think EITC fraud is rampant, wait until you see what "Prebate" fraud looks like! It won't even fix the "underground economy" as some have speculated -- it will just switch it from the supply (income) side to the distribution (spending) side.

There's a damn good reason that this still-born idea never moves. Congress realizes that it's a TERRIBLE idea. But they let it sit there so they can "brag" to their constituents that they're "trying to fix things" while carrying on with business as usual. OK, that last sentence might not be quite fair -- but it IS a terrible idea.

Answer 4

No.

It doesn't eliminate the IRS. It just renames it.

The Fairtax has no chance of making it out of committee. It never has and it has been introduced in the House every year since 1998.

The Fairtax discussion has done exactly what it was supposed to do; sell lots of books for Mr Boortz and Mr Linder but, as an actual tax policy, there is no evidence that it could work.

Answer 5

Sure. Give the rich a break, and increase taxes on the middle class, and maybe on the poor also even with the "prebate". Sounds real "fair".

Its big positive, though, would be that it would tax the underground economy.

No more IRS? OK, who is going to send out the "prebates", and define household, and settle disputes on what a household is?

Answer 6

Eliminating the IRS requires an amendment to the Constitution. Also, I have yet to see a tax system that treats fairly both the individual AND corporation (including our present one)