I have read the summarized version of the fair tax. It seems pretty logical to me. What are the flaws?
Scroll to the bottom of the bottom of the page (I found this off of your link) to see the big ones. Looks like they are trying to take a stab at fixing some of the problems associated with the flat tax plan... I'll try to look 'er over later today if I find time between work and football.
Here is an older criticism of the flat tax:
interesting idea not sure if people would spend more of less, and really we need more tax revenue if free health care passes which i hope it does. As a society without to many civil problems(war, and of that nature in our own country) we have the ability to pay for those who can not pay for themselves and healthcare should be one of those items.
Any ideas on where this bill stands right now?
To me the only or at least principal flaw is that it is oversold.
It does not make sense -- yes, I know about the arguments of embedded tax and there is truth to this -- that a tax can exist which:
1) Collects just as much for the government as the personal and corporate income taxes do,
2) Due to abolishment of those taxes, allows everyone who pays taxes much higher takehome pay, and
3) Results in no increase in retail price, even when including the Fair Tax, that consumers pay.
Reaganomics was not voodoo-nomics, but THAT is.
Did any of the Fair Tax proponents stop and think that if the price consumers pay for items does not rise, yet they have much more money, that would mean that they could and would buy more? 30% or so more, due to having that much more money?
What, production magically increases by 30%?
It would likely increase somewhat but imagining an immediate (if at all) 30% increase in GDP, or 15% for that matter, is delusional.
OF COURSE the after tax price of goods would be higher upon implementation of the Fair Tax. Much higher.
And incidentally, obviously the proponents actually know this. Not because they necessarily figured out the above -- perhaps they could be dim, though in fact I know they are not -- but they themselves argue that a monthly check needs to be sent out to everyone to cover the cost of the Fair Tax for the necessities of life, so that the poor have no net greater cost for the minimum needed to live
What????? If the Fair Tax adds nothing to price actually paid for goods as they claim, then how would the poor be paying any more than they are now for goods? Why would they have calculated the amount they did as the amount necessary to make up for increased cost?
Except, of course, for their actually knowing that price paid for goods, when including the Fair Tax, WILL increase. Dramatically.
But that wouldn't sell well, would it. So let's say that prices paid will magically stay the same, but you'll have all this more money due to no income tax, so you'll be so much better off.
Secondly, the proponents are deceptive on the amount of the tax.
If your state has an 8% sales tax, what does that mean? That means that if a sale, without tax, would be for $1, eight percent of that is added for tax. Causing the consumer to pay $1.08.
This is the method that is universally used to describe and calculate sales tax, and is what everybody knows. Anyone wishing to communicate honestly would use this method.
But what is the Fair Tax method of selling people on that sales tax?
Well, if the item would sell for $1 without the tax, and 33 cents is added to pay the tax, they call this a 25% tax.
I guess they realized that people would be shocked by the idea of a 33% sales tax and decided it would play so much better to play a deceptive arithmetic game and call it 25%.
General principle: If you have a good idea that you want to advocate, don't add in claims that are untrue, because the whole idea winds up being attacked and possibly dismissed because of your decision to add in the bullshit claims.
The Fair Tax advocates failed to follow that principle, and continue to fail.
I am for no taxes. But I would prefer a "fair tax" to a progressive income tax. And I would prefer small consumption taxes to an income tax.
The problem with all taxes is that they tend to entice the piggies to line up and feed at the public trough.
No taxes, no bottom feeders. All governmental problems solved.
We'd just end up with this and a re-instituted income tax on top of it. Don't fall for it.
Aren't you your brothers' keeper? If you are intelligent and ambitious, it is YOUR JOB to produce and feed those who aren't. We have to spread the wealth.
It is selfish and shameful to want to keep what you produce, when others are in need. Their needs come first. Remember, the group always comes first.
If we abolish the IRS who will enforce cap n trade and mandatory health insurance? Preposterous!!!
But on the other hand, Obama, Reid, and Pelosi love decreasing power of government.
So they'll be all over this, don'cha know.
A consumption tax (not necessarily The Fair Tax) is a great idea for anyone who actually pays income tax. That's about 50% of the population sans illegals. It would allow for much more economic freedom for the producers also. But don't go getting all excited, first the 16th amendment would have to be repealed, otherwise it would just be a VAT tax on top of the income tax we already pay. It would also take an enormous amount of power out of the federal governments hands, which is why it will absolutely never happen.
One of the biggest upsides to a consumption tax that no one ever mentions is the fact that it would, almost immediately, bring 10-15 trillion dollars into our economy from offshore. Many CEO's and wealthy investors have stated that if the corporate tax was abolished they would move their assets back to the U.S. in a minute. Imagine our economy with an immediate infusion of 10 trillion dollars into the marketplace (not govt).
And just imagine every illegal crossing the border, and the 20-30 million already her, having to pay their fair share....I'm getting tingley just thinking about it.
Well, there we go! Obama, Pelosi, and Reid love for illegal aliens to have to pay their share of taxes, so you know they'll be all over the Fair Tax now.
Yes, but in their version of the "Fair" tax, they will implement it in addition to the progressive structure we have now.
It's like the ultimate "Tax Stack".
Actually, quite seriously, there is Democrat talk of adding a VAT tax to the income tax being a good and "needed" idea.
With VAT in the UK the main problem is that it places the tax collectors job upon businesses. And small businesses especially sometimes struggle to get the VAT correct. For a variety of innocent and in a minority of cases not so innocent reasons.
So, if you are for no taxes, how would you fund even a very limited government? Police and fire departments? Seriously.
Well, the obvious answer is I wouldn't fund it at all. All of the services provided by government can be provided by the private sector through voluntary exchange -- police, defense, courts, roads, etc.
No one who works in government should get paid anyway. If they love their country so much they should volunteer and work for free.
Oh, I wasn't joking......
This causes it to occur, one could have an extremely short IQ test. One question only:
"Did you believe that Obama would cut taxes for 95% of Americans?"
If the answer is yes, then the conclusion of the test is, "You are a f***ing moron."
I believe this test would be 100% reliable, with regard to true positives.
LOL!! Well, thanks for answering....
You wouldn't believe, well maybe you would, how many people I had this conversation with one month into Bill Clinton's first term.
Bill Clinton, I believe second debate with Bush 1:
An obvious sarcastic jab at Bush's broken "read my lips, no new taxes" campaign promise. Though at least GHW Bush had to be strong armed into raising taxes.
Bill Clinton on day 30 of his term:
One month in. I literally laughed my ass off at people who thought liberals could hold all 3 non judicial branches and not sprint into action raising taxes. You have to be kidding me.