The Fair Tax Plan?

Question

What are pros and cons of the tax plan?

Answer 1

Pros:
-No federal income tax!!
-You take home your whole paycheck.
-The prices of everything you buy will not be much higher, even with the sales tax, b/c not having income tax will lower the cost of the items by about 22%, and then the 23% tax will raise it back up to normal - but you have your whole paycheck to buy it with!
-Everybody gets a check every month from the government that will pay for the taxes on essential goods and services.
-If you buy something used, you don't pay tax.
-Prostitutes, drug dealers, and illegal immigrants will all have to pay their fair share now since they have to buy stuff, even if they aren't reporting income.
-Visitors to the country will be contributing to our tax system as well.
-It's fair b/c if you are very poor you don't pay taxes b/c you get that check every month, and if you are very rich you buy expensive things and so you pay much more taxes.
-you can choose how much you spend on taxes by what you buy.
-The economy will improve.

Cons:
-people who paid taxes and then retire (no more income) will still have to pay taxes.
-there might be a black market of sales that people will use to avoid paying taxes.
-no more tax deductions like mortgage interest.

The Fair Tax is the best idea ever!!
Vote Mike Huckabee for President, he'll make it happen!

Answer 2

Pro - After implementation the general revenue stream is simplified to one item.

Cons - The cost of implementation. Billions. Seriously. Lost money, lost revenues and fraud.

The assumption that the cost of goods will go down. Unless dictated by government, no sane business person would be changing their selling prices. It ISN'T going to happen. The income stream to shareholders or owners still needs to be the same.

BIG con - The end of the housing market. Again, there is an assumption that interest rates will fall 25%. Big BAD assumption, in my opinion. People will be FINANCING THEIR TAXES ON REAL ESTATE. The rates would HAVE to fall more than 25% in order to even out with the current.

Prebate fraud. Social security numbers would still be necessary, or some other form, in order to monitor who has what.

Wealth disparity. Even with prebate, it is still not equitable. Lower-middle class earners will be paying a higher percentage of their disposable income toward this tax than some of our wealthier taxpayers. This is the opposite of current. Average American REALLY needs to read up on the two systems. They are NOT the same and the Fair Tax only shifts the burden toward the middle and lower class, not up.

Administration.

States. Most all states that have income taxes START WITH FEDERAL TAXABLE INCOME UNDER CURRENT LAWS! (Sorry for the caps, just highlighting my points.) Each state will have to decide if they want a plan similar to Fair Tax. Historically, states do NOT always accept federal changes.

Need more? Feel free to contact.

While the idea of tax simplification is wonderful, a complete tax overhaul on this size would probably send us screaming toward a recession..........or worse.

Answer 3

The biggest pro I see is that it taxes the people who are currently working under the table.

The two big cons I see are that (1) it hits the poor and middle class hardest, especially families with kids and givesa nice tax break to the wealthy, and (2) it would be complex to administer, as is the current system.

The fair tax proponents will deny the two items I list as cons. For number one, tell the parents that there's no more EIC or child tax credit or additional child tax credit or child care credit and see how much they still feel this is a good idea - oh, and by the way, their child care will now cost 30% more. For (2), there are a number of issues where the details are not defined. Just one example - the prebate which sounds so simple - how will they define household? If mom and the three kids move out on January 2, will dad still get the prebate for the year for all of them, while mom pays an extra 30% for food and milk?

If perplexed thinks it will be good for the average guy, he’s going to be very disappointed if he’s one of those “average guys”.

And it sounds like Shana has been reading N Boortz’s fair tax book without thinking about what she’s reading, just accepting the broad statements without examining them and thinking about how things would really work.

Answer 4

the pro is that it is good for the average guy.

the con is that for that reason and the significant reduction in size of the IRS that it will cause, the federal government isn't too anxious to implement it.

cheers.