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View Full Version : fairtax - really bad system




steph3n
10-19-2007, 09:40 PM
I have just been reviewing the "FairTax" that huckabee is so gung ho about, this system really needs to be exposed, it will be the single largest tax hike in the history of the world!
wow it is scary, it will KILL the already struggling poor and middle class, at least now they can itemize and get a refund for most of their taxes with this 23%!!!!! Fairtax they will be destroyed!

RP4ME
10-19-2007, 09:44 PM
really did you glean thsi from their site? or someones analysis of it?

steph3n
10-19-2007, 09:46 PM
fairtax.org
it is a national sales tax, all it does it offload the papers from the person to the BUSINESS and then make an even higher tax on someone like me :(

imagine a 23% sales tax + any state sales tax( 8.25% in TX)

born2drv
10-19-2007, 10:06 PM
I actually like the idea... although I need to read up on it more.... if there needs to be personal federal taxes and cuts in spending are not enough, a tax I'd prefer would be:

1) based on consumption to help encourage savings and not punish hard work

2) not be based on income, so we can protect our privacy --- government would have no reason to know our income, who we donate money too, who we give our inheritance to, etc...

3) some type of "flat" or lumped tax that is more or less equalized for all. the less confusing it is, and the more people who are treated equally, the harder it would be to raise taxes, and to have class warfare with pandering politicians promising to tax the rich, cut taxes for this person or that person, etc... equality would ensure politics stays out and tax hikes/finances would be scrutinized much more carefully.

but i still prefer RP's goals ---- eliminate the income tax and IRS, and replace with nothing :)

steph3n
10-19-2007, 10:13 PM
this idea they have is SERIOUSLY flawed, a prebate system based on SSN and income(what! I don't want them sending me monthly PREbate checks equal to 5%!) then 23% base on all goods purchased.

It is really bad, esp with no fed reserve reform, it will send the nation down faster than the IRS.

plus people are not thinking about the major small businesses this will hurt, or even put out of business.

jkaufmann
10-19-2007, 10:20 PM
Just because an Idea is not on RPs front page, and on another candidate's, does not make it bad.

I've read the fair tax book. Twice.

It is a tax replacement system. And it would eliminate all corporate taxes, as well as others, and replace our entire tax system with a national sales tax at the retail level.

As taxes go, it would have the least amount of overhead and allow the abolishment of the IRS (at least as we know it for collecting income taxes)

Now, If we actualy removed 1/3 of the national revenue by eliminating the Income tax, we would STILL be well served by eliminating other taxes and replacing them with a Fair Tax (national sales tax).

Most business descisions are made at the business level to avoid taxes, and not neccesarily to enhance profits by increasing efficiency. This practice would be eliminated. It would also make the U.S a safe haven for outside companies to place their headquarters in the US. It would be a boom to the economy. Lots of jobs would come back to the US.

Please do not go around knocking the Fair Tax. It has alot of support, and is not actualy a bad idea. I know I always ask others to just "do some research" on Paul. Well, the reverse is also true.

steph3n
10-19-2007, 11:23 PM
Sir, I did research the Fair Tax, it is not fair at all. It will kill the working class.

F3d
10-20-2007, 12:18 AM
....

jkaufmann
10-20-2007, 12:29 AM
No it won't. The reason why is because of WAGES. Why stay here when all those 3rd world countries cost less like Vietnam and India. I thought they just "pass on" the corporate income tax and payroll cost anyways (2.4 trillion dollars worth i.e. 22% embedded cost)?

Thats not a bad argument. I'm starting to feel better about my fellow RP supporters again. :)

jkaufmann
10-20-2007, 12:31 AM
Thats not a bad argument. I'm starting to feel better about my fellow RP supporters again. :)


You might want to add the additional regualtions faced on companies in the US vs others that are not as well developed.

steph3n
10-20-2007, 12:46 AM
thinking as a former small business owner, and a director now, such sales tax would kill us.
I did tech work for a number of small businesses with either custom developed POS systems some years back, or some extremely expensive systems that they make a large 100K+ investment in one time and it has worked for years.

these systems would suddenly be obsolete, the original makers may not even exist now, and these businesses would be in a nightmare situation of installing a new system, taking tens of thousands of
items into inventory on a new system, spending tens of thousands in retraining, in other words, business would revolt on this idea.

just FYI, POS=point of sale, or computerized cash register systems.

oh wow, i wasn't even thinking of the REALLY small businesses with the royal branded registers, that have no such capability to register such a tax, so these too would need new systems.

Pete
10-20-2007, 04:57 AM
thinking as a former small business owner, and a director now, such sales tax would kill us.

The tax would be unified with state sales tax, so existing computer systems should be able to handle it. This is not to say that I am a fan of the tax.

The rates are just too friggin' high. They would have the effect of bringing consumption to a standstill, revenues would fall short, and we would have chaos. Then there is the prospect of black marketeering in order to avoid the tax. I could get behind the Fair Tax if it were much more reasonable, say under 10%.

One reason the tax is so high is that it would replace Social Security, so it becomes a case of tax A to pay B, always a terrible policy.

werdd
10-20-2007, 09:52 AM
its the most retarded idea ever, have fun paying 135 dollars for a 100 dollar item.

mtmedlin
10-20-2007, 10:06 AM
Its an absolutely horrible idea for all the reasons posted above and this. I worked for many years with independent store owners. Many high volume items are low profit margin. So what many stores do, is not ring up these items....such as phone cards. The phone card industry just in central florida, 8 county radius is over 30 million dollars a year. By not ringing up the sale they add the 7% sales tax to the profit margin. Now think what will happen when its 23%. The average profit on phone cards is 20%, if you pocket the sales tax its now 43%. I had stores that sold $2000 a week of these cards. At 43% profit they would make $860 a week for an area of roughly 4ft by 4ft section of the wall.

IF YOU WANT A GREAT TAX SYSTEM THAT ALMOST NOBODY WILL FEEL CHECK OUT

http://www.apttax.com/

F3d
10-20-2007, 11:00 AM
.......

steph3n
10-20-2007, 11:02 AM
agreed, doesn't seem to be a viable tax esp when doing away with all over excise taxes.


really to me the most viable long term if we must have a tax, is a flat tax of a very low percentage like 6% on all purchased goods. I'd prefer a 3% but 6%, plus leaving current excise taxes, could work quite well. 23%, just not viable and will not be accepted, and has an insane overhead for the prebate system, just make it lower reduce the overhead. Why do people like to make things so complex?


need to pass a bill that says no bills can be more than 10 pages long, because anything longer is filled with loopholes and earmarks!

Are you serious? That tax makes no sense at all.



That's more than what the average family in the U.S. makes and they pay only 180? You would get absolutely no revenue. This tax amounts to taxing the rest of the world which is totally asinine. Of course you wouldn't be able to do that.

tfelice
10-20-2007, 11:05 AM
I've read the Fair Tax book. It's not as bad as some of its detractors say, but its not as good as its supporters tout it as being. All in all the best position is to focus on phasing out the IRS and replacing it with nothing.

Zarxrax
10-20-2007, 11:40 AM
Wow, a lot of you guys who are talking down about the fair tax seem to have no understanding of it at all. I was a big fair tax supporter before I became a ron paul supporter, and it just sounds like most of you guys haven't even took 15 minutes to really understand how the tax works.

Of course, I like Ron Pauls ideas of NO tax way better than I like the fair tax, but the fair tax is DEFINATELY far superior to our current income tax.

Let me correct some of the most outstanding incorrect views I have seen posted here:

1. It will kill the lower and middle classes.

- This statement is false, because under the fair tax, each person is given a prebate for all sales tax up to the poverty level. This means that if you are living at poverty level, you pay ABSOLTELY NO TAX. For the middle class, this prebate will still handles quite a large chunk of your tax, so you still aren't paying all that much.

2. It will kill small businesses.
I think someone else already mentioned it, but your registers can handle a state sales tax cant they? Then they can handle a national sales tax as well, I'm sure. And even if registers had to be replaced, you can't even compare the price of those things from 20 years ago. I mean good lord people, this is technology. Equipment you bought 20 years ago for $10,000 probably wouldn't sell for $100 today.

3. Items would be more expensive.
No. All the research shows that prices would probably stay about the same. Businesses no longer have to pay any tax, so their costs immediately go down. Furthermore, since businesses in the US could operate tax free, we would see a lot of new companies coming over from around the world, creating new jobs and boosting the economy.

Under the fair tax, most people end up paying LESS tax than what they pay today. This can happen because the tax base is considerably broadened. The biggest benefit of all though, is that the fair tax is simple. The current tax system is so convoluted that we spend billions upon billions of dollars just trying to comply with it. The overhead involved is a significant percentage of the tax itself. The fair tax would have hardly any compliance costs, in comparison.

F3d
10-20-2007, 11:50 AM
....

cjhowe
10-20-2007, 12:05 PM
Wow, a lot of you guys who are talking down about the fair tax seem to have no understanding of it at all. I was a big fair tax supporter before I became a ron paul supporter, and it just sounds like most of you guys haven't even took 15 minutes to really understand how the tax works.

Of course, I like Ron Pauls ideas of NO tax way better than I like the fair tax, but the fair tax is DEFINATELY far superior to our current income tax.

Let me correct some of the most outstanding incorrect views I have seen posted here:

1. It will kill the lower and middle classes.

- This statement is false, because under the fair tax, each person is given a prebate for all sales tax up to the poverty level. This means that if you are living at poverty level, you pay ABSOLTELY NO TAX. For the middle class, this prebate will still handles quite a large chunk of your tax, so you still aren't paying all that much.

2. It will kill small businesses.
I think someone else already mentioned it, but your registers can handle a state sales tax cant they? Then they can handle a national sales tax as well, I'm sure. And even if registers had to be replaced, you can't even compare the price of those things from 20 years ago. I mean good lord people, this is technology. Equipment you bought 20 years ago for $10,000 probably wouldn't sell for $100 today.

3. Items would be more expensive.
No. All the research shows that prices would probably stay about the same. Businesses no longer have to pay any tax, so their costs immediately go down. Furthermore, since businesses in the US could operate tax free, we would see a lot of new companies coming over from around the world, creating new jobs and boosting the economy.

Under the fair tax, most people end up paying LESS tax than what they pay today. This can happen because the tax base is considerably broadened. The biggest benefit of all though, is that the fair tax is simple. The current tax system is so convoluted that we spend billions upon billions of dollars just trying to comply with it. The overhead involved is a significant percentage of the tax itself. The fair tax would have hardly any compliance costs, in comparison.

I have had much more success arguing this angle with fair tax supporters than arguing that it's a bad tax system. We can talk all day long about how the government collects taxes, however it doesn't change government. Government will still rake in trillions of dollars into the coffers to spend on programs and guiding policy that should be guided solely on the local level.

The fair tax is far superior to the current income tax. But, it doest not change the fundamental role of government of our lives. Repealing the income tax and replacing it with nothing would greatly diminish the role of government and put the onus of responsibility back on the individual, the family and the local community.