Fair Tax wealth distribution plan

[Elwar]

Ok, on the surface the "Fair Tax" (HR 25) sounds like a good idea with getting rid of the income tax and replacing it with a flat sales tax. (In the absence of no taxes at all).

But I can't believe that nobody's noticed the huge loophole that's created by the monthly check to all US citizens to pay them back for all taxes up to the poverty level spending.

Basically stating that if the poverty level is $10,000 you will get back money to pay for the percent you spent on sales tax for that $10,000 in basic necessities. In the form of a monthly check.

So, to get rid of the income tax and enact this tax you have to have a Constitutional Amendment.

Sure, the percentage can be set and no words of the fair tax law can be changed but then comes the loophole: the poverty level is determined by Department of Health and Human Services.

That department then becomes the most powerful department in the country. They could set the poverty level to the point that for every dollar going into the tax it is then redistributed equally to all US citizens.

Wealth distribution for everyone.

Summed up well at the obama forum:
http://www.theobamaforum.com/showthread.php?t=434

[mediahasyou]

There is no such thing as a "Fair Tax".

[Matt Collins]

The monthly "prebate" will be used as a tool to control people. "Do this and that or you won't get your prebate".

[fr33domfightr]

The monthly "prebate" will be used as a tool to control people. "Do this and that or you won't get your prebate".

The FairTax isn't perfect.

Which would you prefer, what we have now, or the FairTax? Of course, it would be the lesser of 2 evils. If you guys think we can get rid of the Income Tax and replace it with nothing, I'm all for it. The FairTax is just a stepping stone, NO INCOME TAX.


FF

[Matt Collins]

The FairTax isn't perfect.

Which would you prefer, what we have now, or the FairTax? Of course, it would be the lesser of 2 evils. If you guys think we can get rid of the Income Tax and replace it with nothing, I'm all for it. The FairTax is just a stepping stone, NO INCOME TAX.The fairtax would be ok if

1- there were no "prebate"
2- it lowered revenue into the government

But you're right, it is indeed better than what we have now if those two things were put into place.

[liberteebell]

The FairTax isn't perfect.

Which would you prefer, what we have now, or the FairTax? Of course, it would be the lesser of 2 evils. If you guys think we can get rid of the Income Tax and replace it with nothing, I'm all for it. The FairTax is just a stepping stone, NO INCOME TAX.


FF

Agree. I like the fact that income is not directly taxed. It's not perfect but it beats the hell out of what we have now.

[nate895]

I think a Fair Tax with exemptions for food and prescription drugs (I am pretty sure it already includes that) is a good middle ground between the current system and eventual abolition of all direct taxes.

[nobody's_hero]

Something that doesn't come directly out of a paycheck could be a plus if we ever engaged in a tax-revolt.

Short of quitting our jobs, the income tax has us by the balls.

[fr33domfightr]

The fairtax would be ok if

1- there were no "prebate"
2- it lowered revenue into the government

But you're right, it is indeed better than what we have now if those two things were put into place.



The problem is, the FairTax taxes food and living expenses. The "prebate" is supposed to help those at the lowest income levels, since the Fair Tax would burden them most. If a way can be found to reduce the burden on those people without a "prebate" that would be good.

What I don't like about the Fair Tax is, the prebate doesn't take into account how many people are living in a dwelling. If I'm living alone, my tax burden will be higher than 2 people living in the same dwelling size, because they'll each receive a prebate, yet their housing costs will be split in 2.

The only way to sell this is to make it revenue neutral to start. Complaints will also come in from every interest group to save their deductions.


FF

[Knightskye]

No corporate tax, no payroll taxes, no need to prepare your taxes!


The monthly "prebate" will be used as a tool to control people. "Do this and that or you won't get your prebate".

How about "Pay your taxes or go to jail."

Which one do you want?

[fr33domfightr]

I was thinking some more about this Fair Tax. I'm thinking the "prebate" needs to be split into a housing prebate and food prebate.

What if only the people actually paying a mortgage or rent got the housing portion of a prebate? That way, if I paid all my rent, I'd get full payment, whereas someone who is paying half, would only get half a payment. Everyone would get a food prebate.

So how would payments be made? At the workplace, property manager, mortgage company, City, County, State, Fed?



FF

[BenjFranklin]

I'd be for the FairTax if they simply dumped the prebate and lowered the tax rate.

[Elwar]

I was thinking some more about this Fair Tax. I'm thinking the "prebate" needs to be split into a housing prebate and food prebate.


Why create different names for the prebate? Why not just cut everyone a $6,000 check every month.

That's the key, the government gets to set the "poverty level" however high they want which in essence sets the monthly check everyone gets.

Elections will turn into auctions of who can raise your monthly check higher.

Why work if you're bringing in $6k a month from the government.

And yes, it is worse than what we have now. It's welfare and a tax all rolled into one. At least with the income tax they're kept seperate.

[fr33domfightr]

Why create different names for the prebate? Why not just cut everyone a $6,000 check every month.

That's the key, the government gets to set the "poverty level" however high they want which in essence sets the monthly check everyone gets.

Elections will turn into auctions of who can raise your monthly check higher.

Why work if you're bringing in $6k a month from the government.

And yes, it is worse than what we have now. It's welfare and a tax all rolled into one. At least with the income tax they're kept seperate.


Six thousand dollars per month is unrealistic, as you probably don't even make that much right now, depending on your job. And to pay everyone that prebate makes no sense, since all people aren't paying all the bills in a family. I was just trying to find an equitable way to reimburse people for the taxes they actually spent at the poverty level.

The prebate is to cover the taxes that someone at the poverty level would already be paying every month (when they make purchases) to survive, and yes its somewhat arbitrary, because it can cost more depending on where you live.

I say, NO, the FairTax is not worse than what we have now. Have you ever dealt with the IRS?!?!?! Its their way or the highway!! You must pay first, then argue your case!!

The FairTax was just a way to eliminate the Income Tax. At least with that, you have a choice in the amount of taxes based on how much you purchase. Rich people will purchase more things and get taxed more, that's the idea.

The whole "prebate" idea isn't to sell the system, it was suppose to make it equitable for the poor. With NO prebate, the poor will still be paying taxes on everything they buy, and the thinking is, that's not fair to them, so the prebate was to help them, not the rich guy.

I'm saying the prebate needs to be equitable to all people, not just paid out to everyone who didn't pay anything in taxes.



FF

[klamath]

I do not believe in the prebate, Necessities of life items should be exempt period.

And for the OP's statement that it is welfare and taxas all rolled into one what do you think the ecconomic stimulus tax rebates were?

[fr33domfightr]

I do not believe in the prebate, Necessities of life items should be exempt period.


I agree with this. Those folks over at the FairTax website say that rich people spend a lot of money on food, so they need to capture the taxes on it.

As you said though, necessities of life should be exempted. Can you offer some examples of the necessities?

If possible, I'd like to see the people here on RPF come up with modifications to the FairTax, such that it could be changed to make it more acceptable. Finding a way to eliminate the prebate should be priority number one.

I really hate the IRS, so I want anything to get rid of those guys.


FF

[AutoDas]

Necessities of life should be taxed. Then maybe these fools can see how "great" big government is really helping them.