View Poll Results: Fair tax

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  • Fair

    7 87.50%
  • Unfair

    0 0%
  • Just crazy

    1 12.50%
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Thread: Fair Tax

  1. #19

    Default Re: Fair Tax

    Quote Originally Posted by UGLY View Post
    Presidential nominee Mike Huckabee has proposed eliminating the IRS and enacting a fair tax.

    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 neutrality, and, through companion legislation, the repeal of the 16th Amendment. www.fairtax.org

    Considering what the IRS costs to operate and the fact that this fair tax would virtually ensure that all citizens pay taxes including illegal immigrants I don't really see a downside. Unless the Government starts heavily taxing necessities like meat, milk, and medication unfairly then that would be a problem. And how would this affect the State governments ability to tax.

    But just imagine not having to dread April 15 and never wondering about an audit from the feds.
    I have a question. Given that we would be paying taxes on the items we buy , wouldn't it have the consequence of pushing people to buy their expensive items from other countries that don't have that tax. How would the fair tax deal with this issue (i.e. neglecting it would punish our economy)? I presume the answer is that the tax will be applied to imported items. But then government would be forced to inspect all incoming mail items, and border inspection (Canada/Mexico) would have to be increased to inspect incoming traffic. For instance, if one were to buy a car from say Canada, one would presumable save several thousand dollars from the price in the USA which would have a fair tax added to it. Thus it would seem that border control agents would need to inspect every car going by to make sure the fair tax is imposed on imports. Maybe now I should stop imagining possibilities and let somebody who knows answer the question on how Fair Tax is going to prevent people from avoiding it by shopping overseas.

  2. #20
    National Finalist leglace's Avatar
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    Default Re: Fair Tax

    Quote Originally Posted by contini View Post
    I have a question. Given that we would be paying taxes on the items we buy , wouldn't it have the consequence of pushing people to buy their expensive items from other countries that don't have that tax. How would the fair tax deal with this issue (i.e. neglecting it would punish our economy)? I presume the answer is that the tax will be applied to imported items. But then government would be forced to inspect all incoming mail items, and border inspection (Canada/Mexico) would have to be increased to inspect incoming traffic. For instance, if one were to buy a car from say Canada, one would presumable save several thousand dollars from the price in the USA which would have a fair tax added to it. Thus it would seem that border control agents would need to inspect every car going by to make sure the fair tax is imposed on imports. Maybe now I should stop imagining possibilities and let somebody who knows answer the question on how Fair Tax is going to prevent people from avoiding it by shopping overseas.
    Not quite. Right now we are being double taxed. The manufacturers are taxed on the pieces they use, and they pass on that cost on us the consumer. The manufacturers are also paying a tax as a business. Then we are taxed on the assembled product.

    Fair tax would apply the tax 1x.

  3. #21
    Olympic Champ RYou's Avatar
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    Default Re: Fair Tax

    "For instance, if one were to buy a car from say Canada, one would presumable save several thousand dollars from the price in the USA which would have a fair tax added to it."

    Here in NJ, you would have to pay the sales tax. I would presume that is where they would hit you with the fair tax too.

    I'm not so sure you will save anything buying in Canada since the exhange rate is near 1:1 today.

  4. #22

    Default Re: Fair Tax

    Quote Originally Posted by leglace View Post
    Not quite. Right now we are being double taxed. The manufacturers are taxed on the pieces they use, and they pass on that cost on us the consumer. The manufacturers are also paying a tax as a business. Then we are taxed on the assembled product.

    Fair tax would apply the tax 1x.
    The problem I have with this is people are making sound like everybody benefits, when this cannot possibly happen. The government needs money to operate, and right now we are over-spending as it is. If everybody is paying less taxes, then the government is receiving less, meaning we are going in more debt. Sure, you can say that the government will save money from getting rid of the IRS, but that is a small percentage of the budget (the dominant costs are the military and interests on the federal debt). So the government needs to make up these funds in another way. That suggests that this fair tax is going to be a lot larger than people expect, and you may find that you can actually buy less than you expected.

    As I said before, I am skeptical of the fair tax and think it is a big risk to try it, but other than that, I like Huckabee.

  5. #23
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    Default Re: Fair Tax

    Quote Originally Posted by hardcore View Post
    Matclone, what is in that you do not like about the Fair Tax proposal ? Do you believe that the current system is more equatible to all Americans? The plan as laid out appears to treat the poor, the working poor and senior citizens much better then the existing system. Are there pitfalls and downsides with this new plan that are being hidden or not addressed? I honestly want your input on this. It took a long time for me to get on board with this and only after after reading all the pros and cons that I could find and if I missed something I would like to know what it is.

    First, if not already obvious, I'm not the least persuaded by single-minded polemics (i.e., the "fairtax" website). I'm skeptical of what's essentially an infomercial and you should be too--the same way you would be skeptical of, say, answergenesis.

    Just a brief glance at some of their claims should put you on guard. For example, they say that taxes would be based on what a person spends, not what they earn (as if the logical value were self-evident. It's not.). And they argue that the wealthy spend more than the poor, so this is fair. Well, I wasn't born yesterday. The other part of that reality, which they conveniently ignore is the fact that the poor spend a greater proportion of what they have. So they're purposely showing only part of the picture. I say: bs. At another point, they pose the question: what was the income tax started? Then they don't really answer their question except in the most cursory manner. Why should I believe anything at their site?

    Unlike the website, I don't pretend to be a tax policy expert, so I don't have all the answers, but I have two basic questions (the first which has been mentioned by Contini):

    1. What is fundamentally wrong with the current tax system that it should be overhauled?

    Inconvenient?--It may be a burden to business people or those who own multiple properties, but frankly they represent a small portion of the public. No that their interests aren't important--they are, but the tax system is meant to serve the entire public not a small minority. As an individual, I've done them on my own, gone to H&R or their equivalent, or, now, do them on-line with Turbo Tax.

    Costly?--It seems we collect most of the taxes due.

    Unfair?--The current scheme for individuals is basically progressive. I'm all for that.

    If it isn't broke (unlike our health care system for example) I say, why institute wholesale change?

    I'm all for simplicity. However, there's a reason our taxes are complex, which leads to my second question.

    2. The U.S. system has long been used as a tool to implement public policy, basically using the carrot or the stick. If we toss the whole system, how will we support said policies?

    For example, if I'm not mistaken, employers get tax breaks for providing employer benefits (a carrot). If that incentive is taken away, what happens?

    I believe industry, even individuals, are given tax breaks for environmentally sound practices. Arguably this is a better (at least more politically palatable) approach, than, say, legislating punishment of polluters.

    Mortgage holders get a huge tax break. I would guess the majority of Americans think this is a good idea. What do we do when it goes away with a "fair" tax?

  6. #24
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    Default Re: Fair Tax

    The manufacturers are taxed on the pieces they use, and they pass on that cost on us the consumer.

    Simplistic and misleading argument. There is no direct correlation between what an entity is taxed and what they charge. Moreover, manufacturers (or let's say corporations) benefit, as a corporation (not as a collection of individuals), from public services. Their presence imposes certain costs on a community. Why shouldn't they be taxed?

  7. #25
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    Default Re: Fair Tax

    Quote Originally Posted by contini View Post
    The problem I have with this is people are making sound like everybody benefits, when this cannot possibly happen. The government needs money to operate, and right now we are over-spending as it is. If everybody is paying less taxes, then the government is receiving less, meaning we are going in more debt. Sure, you can say that the government will save money from getting rid of the IRS, but that is a small percentage of the budget (the dominant costs are the military and interests on the federal debt). So the government needs to make up these funds in another way. That suggests that this fair tax is going to be a lot larger than people expect, and you may find that you can actually buy less than you expected.
    Yes. Underlying the scheme it seems is the ideology that taxes are a bad thing (and correspondingly that public services are bad). Repeal the 16th amendment? Sure. That might be a good way to ensure that tax increases (fair tax style) are never implemented.

  8. #26
    National Finalist leglace's Avatar
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    Default Re: Fair Tax

    Quote Originally Posted by matclone View Post
    The manufacturers are taxed on the pieces they use, and they pass on that cost on us the consumer.

    Simplistic and misleading argument. There is no direct correlation between what an entity is taxed and what they charge. Moreover, manufacturers (or let's say corporations) benefit, as a corporation (not as a collection of individuals), from public services. Their presence imposes certain costs on a community. Why shouldn't they be taxed?


    huh?

    They create jobs, and you consider them as imposing?

  9. #27

    Default Re: Fair Tax

    Quote Originally Posted by RYou View Post
    "For instance, if one were to buy a car from say Canada, one would presumable save several thousand dollars from the price in the USA which would have a fair tax added to it."

    Here in NJ, you would have to pay the sales tax. I would presume that is where they would hit you with the fair tax too.

    I'm not so sure you will save anything buying in Canada since the exhange rate is near 1:1 today.
    You pay the sales tax when you register the car, but what about other goods which you don't have to register? what about people going to Canada to buy TVs or other appliances and paying the sales tax in Canada (which would be much lower)?
    There's no such thing as a pretty good aligator wrestler.

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