What do you think of Fair Tax?

Question

What is the FairTax Plan?
The FairTax Plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an
integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal
taxes on spending up to the poverty level, dollar-for-dollar federal revenue replacement, and, through companion
legislation, the repeal of the 16th Amendment. This nonpartisan legislation (HR 25/S 1025) abolishes all federal
personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and
self-employment taxes and replaces them with one simple, visible, federal retail sales tax – administered primarily
by existing state sales tax authorities. The IRS is disbanded and defunded. The FairTax taxes us only on what we
choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and
intelligent solution to the frustration and inequ

Answer 1

I think it is the single best thing that could happen to this country.

This issue is SO important to me I will not support a Candidate who does not expressly support it.

If anyone has not read "The Fair Tax Book" I would highly recommend it. (I given about 20 as gifts over the last two years)

If you tax something you get less of it. Taxing savings and income is a bad Idea because this encourages people to not earn more so they can stay out of the next higher tax bracket.

Taxing new products and services only once allows people to control how much taxes they pay at the same time they balance their personal budget.

The no exemptions is the best part!
exemptions are where lobbyists make their money giving exemptions to there clients.

The pre-bate acts like an exemption and would not take the IRS to run. Everyone gets a check based on how many Citizens (with social security numbers) are in their household to cover the taxes on the basic necessity's of life.

Consumption is a much better measure of wealth than income, taxing spenders is a much better (fairer) way of funding the government.

The Fair Tax is the best tax plan PERIOD

Answer 2

I really like the idea of it, and of the spending that could be cut from government by disbanding the IRS. However I wonder if once politicians got a hold of the "fair tax" eventually wouldn't they have it just as complicated as the current tax code? One way they "buy" votes is by offering tax cuts to this interest group, or no taxes to this product. Also what would stop it from being at 25% or 30%.
Still in theroy I think it's a very good thing.

Answer 3

Flat tax. I've worked 30+ years, paid taxes on that income, and saved for my retirement and I don't want to be taxed again when I spend the money I have saved up. Besides, the fair tax would discourage spending and be bad for the economy. With the flat tax, people who earn more will still pay more, but the disincentives to earn more will be removed as higher earners will no longer be punished by higher rates and loss of deductions (since there won't be any deductions). It wouldn't exactly eliminate the IRS but the 20,000 pages of tax code could be replaced by one line. Your income x tax rate= your tax.

Answer 4

I'm aware of it and don't totally dislike it, but it has terrible weaknesses. Enough that I'm not in favor of it.

The poor who are just above the poverty level don't need this tax unless food is taxed less than other items. The elderly on fixed incomes ALREADY have to choose between food and medicine. This won't make that choice easier. That's not all. Once you get past the poverty items, that tax quickly becomes regressive. I see massive economic turmoil, job turmoil, business turmoil, and pain for lots of people.

Think about it this way. The really poor people of the USA pay almost no taxes compared to even the middle class. They get ADC and Earned Income Credits and a bunch of other credits to the effect that their tax bill might be less than $1000 in a year. Maybe even less than that, but let's say less than 1 grand.

If they have a 23% tax on everything, they have to spend only $4350 dollars to suddenly owe MORE in the "fair" tax than they did on the other system. But $4350 isn't even the amount of the single-person tax exemption that is supposed to somehow correspond to the "poverty" line. (Last year it was $5600? Something like that, anyway.)

Another probem is that this cannot in reality be a "money gets taxed once" scheme. Business gets taxed when it buys raw materials or office supplies, right? They are going to pass along that cost to the consumer. (Did you think they wouldn't?)

This also opens up a HUGE black market to avoid paying such a huge tax. Remember prohibition? Do you want to encourage people to become criminals? When you talk about luxury items, that tax can be incredibly expensive.

This also puts a HUGE damper on big-ticket item spending. You just KILLED the new car market. You just KILLED the appliance market. You just KILLED the housing industry. Because before, the goods purchased for making cars, appliances, and houses were deductible as business expenses. Which offset taxes completely if the business was making more than it was selling in a given year.

Now you cannot take expense deductions. So that means your cost of business takes TWO hits. First, the big tax on each load of lumber, so your prices go up, so demand falls. This ripples back to the suppliers. (Ever hear of supply and demand...?)

Second hit on business is the absense of the big expense deduction. This will put small businesses under the ground in a heartbeat. It will stifle jobs growth and lead to massive unemployment because... it is SMALL businesses that employ the majority of all employed USA residents.

Then, let's not forget that states and municipalities ALSO get their revenues from sales taxes in many cases. This trend to reduce spending because of the exorbitant tax would hit government in the pocketbook, reducing funding for city services and forcing the states or municipalities to impose income taxes to make up the losses. You would have cities unable to pay police, states unable to pay teachers, reduced fire services. That doesn't help does it?

Then... there are the LENDING institutions. They make money on their ability to lend. But if everything goes from 4% federal tax to 23% tax, the amounts they have to lend go up and their criteria for qualifying lenders have to go up as well. Which makes credit tighter, which would lead to or at least push hard towards recession.

So while it is a noble idea, I think we would do better with a flat tax, one size fits all, get rid of the loopholes, and let the IRS aggressively pursue the deadbeats. Perhaps we could start by killing the lobbyists?

Answer 5

Anything would be better than giving tax breaks to the rich and forcing the middle class and working poor to carry the tax burden.

Answer 6

As a libertarian, I really like it. It's non-punitive except with regards to consumption, and encourages investment and saving. Income tax is a drain on the economy.

Answer 7

The more I read about the Fair Tax the more I like it.

Answer 8

a fair tax would bea tax that nobody has to pay so we can keep the money that we work for and not give it away to people who did not work for it.

Answer 9

Will lobbyists be able to corrupt the system like they have the current system?

Answer 10

Love it. Wish they'd actually do it, but the IRS is powerful.