Do we need to overhaul our tax system ?

Question

It really seems to me to be a no brainer - we should scrap our current tax system and adopt the fair tax, which, if you don't know about it, is simply a consumption tax. Imagine being paid your ENTIRE paycheck every week, or however often you are paid, and only paying taxes when you consume ? If you want to hold onto more of your money, then you simply cut back on your consumption. The fair tax will accomplish what the dems want.....taking more money from the wealthy - they buy bigger, more expensive toys. What do you think ?

Answer 1

Yes....and imagine everything you buy costing 30% more!

Under the Fairtax:
If you are poor, your taxes will stay the same ($0.00 theorettically)
If you make more than $200,000, your taxes will go down.
If you make less than $200,000, your taxes will go up.

The Fairtax is great if you make more than $200k per year!

Just naming something "Fair" does not make it so.

Answer 2

YES!
FairTax is NOT the answer for so many reasons.

First, the idea that Americans should be addicted to getting a monthly check from the government is abhorrent. (That's their "prebate.")

Second, the GOVERNMENT determines WHAT you SHOULD spend on the NECESSITIES: medical care and food. This is just WRONG. It AUTOMATICALLY severely taxes the most vulnerable people in society: the ill. Medical EVERYTHING is now taxed. You can NOT get reimbursed for actual expenditures on tax, but ONLY what the government SAYS you SHOULD spend.

The IRS is NOT abolished--SOME agency, name is IRRELEVANT, has to collect the taxes AND issue the "prebates." Cutting a check, esp. a government check, is VERY EXPENSIVE.

This does NOTHING about things like the tax on gas. The tax on gas is GREATER THAN the PROFIT on gas and yet the government screams oil folks are ripping us off. Want to see a rip-off? Look at where the money goes for real.

The tax can NOT prevent what WILL come to pass, whether the rate goes up from the 23% or not: the feds will put more of THEIR mandated programs on the backs of the state--esp. health care. Hello communism via bankruptcy.

State and local taxes are untouched--can shoot up as high as people allow. Look what happened with property taxes--people are paying NOW for the BUBBLE MARKET PRICES. NOTHING stops that with FairTax.

Also, by definition, as the poorer people spend more on necessities (food, shelter, medical care) they will pay a higher percentage of their income in taxes than the rich. And trust me, the rich will figure out ways to circumvent the "FairTax"--if nothing else, buying a lot of their luxury goods from other countries. See the infamous (though now forgotten "Luxury Tax." This was the 1990 idiocy that Congress passed to increase tax revenues by placing an EXTRA tax on "luxury items" like yachts and private jets. Revenues dropped and expenses shot up. Why? Yacht retailers reported a 77% drop in sales resulting in around 25,000 thousand boat builders being laid off. Obviously that meant they were on unemployment while seeking other work in an industry the kooks in Congress were trying to kill off with excessive taxation. Some may also have ended up needing other government services to tide them over while seeking work--something they would NOT have had to do if a Congress that can't control spending would have not attacked their industry.

This is a nasty plan, ill-conceived, and full of dangerous pitfalls.

Far better is Steve Forbes' flat tax, though it could use work (like a rate less than 17%).

What we really need is a Constitutional government--enough of this spending where it's not even authorized (and "general welfare" does NOT mean what moderns want it to mean. There is a reason the Founders ENUMERATED the powers.) It would also be great if we were the first country to return to the gold standard. "Fiat currency" is INHERENTLY flawed.

Answer 3

do a google on Carter commission. Its a Canadian study from the 1960s answering the question of how we'd create a fair and just tax system.

Advocating a consumption tax was one of the reccomendations. In economics savings = investment so the belief would be that I could forego consumption in order to invest and spur the economy.

Canada and a lot of the EU have a VAT (value added tax) on top of their income tax system, which kinda allows consumption taxes to come into play.

The problem with that kind of system is there are a lot of people / ethnicities who will continue to pay cash under the table and avoid these taxes.