Question for fair tax proponents?

Question

Wouldn't the likelyhood of fraud be compounded in a system like this? How would the government be able to make sure all transactions were taxed? Would people increase bartering and the like to avoid paying taxes?

Let me put it into perspective here:

Say, I sell computers. I buy my computers from a distributer, who buys from a manufacturer. The distributor has to pay a tax on the goods he buys from the manufacturer, who has paid taxes on all the little parts he bought to put the units together. So now I'm paying for a unit that's already been taxed twice and I have to add 23% to my sale price to cover the tax costs when I sell it.
Why wouldn't I just sell it for cash on craigslist for a cheaper and more attractive price. Guaranteed someone will buy it.

Neo Pirate - The only thing wrong with your proposal is that it would cause dramatic revenue shortfalls and our government would shut down. Other than that, sounds good.

Answer 1

Whats wrong with EVERYONE paying 10% across the board?

Answer 2

BUSINESSES DO NOT PAY TAXES! Any tax that is placed on a business is a "cost of doing business". This cost is passed on to the consumer as a higher selling price.

The Fair Tax eliminates all income taxes on businesses. There is no tax on the manufacturer, distributor or wholesaler. The Fair Tax applies at the retail level on NEW goods and services.

Every business must file and obtain a business license. They must file sales tax reports with the state they are licensed in. If they pay a tax on incidentals the purchase from a retailer, they report that payment and get a credit for the tax. They must show their sales are to other businesses (mfg to retailer).

The retailer collects the Fair Tax from the consumer for all new goods. There are two parties (seller and buyer) that must conspire to avoid the taxes. (Under the current income tax system, it only takes one party to cheat.) When the retailer submits their sales tax report and does not report the total sales tax properly, they are setting themselves up for a tax audit by the State. Since the State receives a commission from the feds to collect the Fair Tax, the state will have a stronger interest in going after those that do not report properly. (The amount of Fair Tax will be much greater than the state sales tax amount!)

A study that was conducted to determine the impact on the Fair Tax collections by the state of California showed that the state would receive enough commissions to fully fund the department of revenue for the state including a larger number of auditors necessary to handle the additional operations. This would effectively save California their current costs! Any state will be able th catch people trying to avoid paying the proper state and federal taxes!

But as always, there will be people that will try and some will get away with it. The overall amount will be substantially less than those cheating under the current income tax system.

Answer 3

What you describe would almost certainly happen between private individuals. It already happens. Many states have a sales tax but how many private individuals dutifully collect and report sales tax when they sell their lawn mower to a neighbor or a basket of vegetables to a friend?
The Fair tax idea is about business sales. sales from retailer or manufacturer to consumer. These are already taxed in many cases. The idea is to end income tax and nationally charge sales tax. Half the system is already in place and if it were implemented then you would have a undeniably fair system. The rich would not be taxed for success they would be taxed for consumerism at exactly the same rate as the poor. There would be no tax shelters to dispute. The more lavish your lifestyle the greater your contribution to the system that protects it.

Answer 4

In fact u are already paying huge taxes at each level of the existing system.

In the 'fair tax' setup...all pay taxes.. including criminals & illegals and business's.

In the existing various groups (illegals,crooks, business via passing on the cost) DONT.

Answer 5

The only true Fair Tax system we could have would be to return to the one we had in the 1950s, during America's biggest economic success.

Answer 6

Flat Tax

No exceptions no deductions

Take the 10.000 tax laws and turn them into 1, 10% of your anual gross. Business, Corporate and Personal.

Answer 7

No-there would be an allover consumption tax.
Visit this website for more info if you havent' already.
http://www.fairtax.org

Answer 8

Drug dealers would be forced to pay taxes.

How cool is that?

Answer 9

every transaction i have made has been taxed on the register. if states can and HAVE been doing it for years then why not take acut or add a 3% or whatver to the existing sales tax?

seems like the eaiest methid in the world.

why file year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearyear after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after yearafter year after year after year