Who has heard of the fair tax?

Question

If not here it is:
There will be No yearly taxes to file. No tax audits. No more taxing based solely on income.

We would have a set sales tax instead. How much taxes you pay will be based on how much you spend. Middle and lower class who spend primarily on needs with occasional splurges would not pay as much as the upper class that spend outrageous amounts on luxury items.

If you don't spend alot, you don't pay alot. You'll never have to file taxes and you'll get all of your paycheck without all the withholdings you have now.

What do you think of this? I see only good so I would like someone to point out what would be the bad side. Please don't say you won't get that big check each year, all that check is a percentage what they took from you during the rest of the year.

Thanks for pointing out there would be no more tax breaks.
That means rich couldn't pay accountants to find and abuse all these breaks and lowlife's would not be encouraged to pull stunts like having kids just for the tax break.
(I know these type of people exist cause I've met them. One forced her 4 and 2 yr old to sleep in a baby bed together so she could drive a new mustang on their tax break. Another fed her 3 kids hot dogs for a week cause she had no money but got a manicure the same week.)
As for the poor spending more than they have, here's a novel idea, don't spend more than you have. I'm speaking from experience. Especially don't buy cars, computers, and houses when you don't have the money.

Answer 1

look at it this way
NO ss tax
no medicare tax
oops still state taxes
these would be based on your gross income. as it is now.

products embedded taxes would also be removed which would reduce the price.
In a true sense you should not pay much more. it is designed to be a wash.
But every person who visits our country would pay into our system and receive no benefit. Has anybody visited the State of Florida? They pay no state tax, it is based on a fair tax of sorts. sales taxes pay the states bill.

It would also open the door for company's to reinvest in our country and not seek off shore investments to avoid abusive taxes.

Answer 2

I like the idea because it makes everyone pay their fair share.........I am a conservative, and I think that this would help quash the "targeted taxes" on gas, cigarettes, the rich.....etc, etc. No more IRS would mean quite a bit of money saved right off the bat

I think that it would encourage people to save more. If I had to think about 23% tax on that new car.......I might wait another year or two before I made it happen.

I think that it would help the economy where the illegals and tourists are concerned. The illegals even if they are paid under the table could not dodge taxes like they can now. It would basically mean 12 million more taxpayers in the tax system the very next day!!! I would feel better about the illegals being here and more likely to support some kind of amnesty if they "already" pay their share of the taxes.

It could work, its a good Idea

Answer 3

1. Discourages spending...when people can reduce their tax burden by spending less money, there would be a tremendous reduction in national spending...that results in an economic depression...not recession...depression. Jobs would be lost on a massive scale...which would encourage people to spend even less...and result in even less tax revenue...spiraling out of control.

2. Eliminates using taxes to encourage and discourage other behaviors. Tax breaks, deductions, etc are used to encourage certain behaviors while discouraging others. The home mortgage deduction encourages home ownership which helps drive the economy as well. The IRA deduction encourages savings for retirement. Behavior driving tax policies would be eliminated...resulting in a total change in social behavior.

Personally, I just think that the tax code needs to be simplified. The fair tax is a dramatic change that would come with many unconsidered effects.

Answer 4

Rich people are rich because they make more than they spend. Giving them a massive tax cut from the income end won't balance out with a smaller tax on their spendings. The same goes for poor people, who spend more than they make. Raising the price of everything, when they haven't been paying income tax already, isn't going to make them less poor.

So in short, the rich get even richer, and the poor get even poorer, and everything in the country costs more. How exactly is any of that fair?

Edit: Obviously bad decisions have consequences, but at the same time, hardly anyone can spin straw into gold. Even people who have nothing need shelter, food, and clothing; and missing any one of those things will prevent them from earning more. You can blame people for being poor if you want to, but it's short sighted. On the other hand, you can't possibly believe that this fair tax is foolproof, or accountant proof. As soon as anyone makes a rule, someones accountant has already found away around it. So Rich people import their goods, and the cost of everything we buy goes up (which consequently devalues the dollar further, when the market has to adjust to the new burden). Tell me, do you have a mortgage, credit cards, or a loan? Then you spend more than you make as well, like most Americans. Would you like a tax increase on everything you buy, so rich people can live tax free by importing their goods from out of country?

The fair tax is badly named, and a terrible idea. The system we have in place now is much better.

Answer 5

I have said it here many times, and here I go again.

It doesn't really matter how you collect the tax. What matters is how much the government spends. If the government is going to continue to spend trillions, then it has to collect trillions from us.

If on the other hand, the government learns to spend less, our taxes will go down regardless of how you calculate them. I like a simple tax formula, but it doesn't help us until we reduce the size of our government.

Answer 6

I don't think this is fair because poor people have to spend nearly all of their income just to get by, whereas wealthy people can save most of theirs. Even if wealthy people are buying some "luxury items," they still have income left that won't be taxed. Poor people don't.

Answer 7

I like it, because I would be able to keep everything in my check.

I'm changing what I originally wrote(which sounds a lot like the guy below me), because I went to the webiste listed above. I'm still bothered by it, but it's sounds good...in theory.

But we all know, if it sounds too good to be true...it probably is.

Answer 8

I have read several books about - I would love to have my entire paycheck and no have my government take part from me.

Answer 9

It is even better than you think. This is the best tax plan out there. Check out www.fairtax.org