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Old 05-04-2005, 03:48 AM   #1 (permalink)
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Fair Taxing....?

I seldom post in here.....for obvious reasons, but. On occasion there is something I would very much like to get opinions on....from both sides of this divided nation.

In the link below is an example of a taxation system....granted it is very simplified. Personally I find little to be critical of in this system....but would like to hear opinions from the community.


http://myfairtax.org/RebatePie.html


Thank you for taking the time to post
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Old 05-04-2005, 05:17 AM   #2 (permalink)
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Sounds much better than the current system. I've heard the IRS doesn't even know all the laws regarding taxes. I like how it doesn't tax income and basic living needs, so it doesn't directly contribute to poverty. I wish Bush would make the fair tax "the issue" instead of social security. This sounds like something that many people would be in favor of.

Would anyone at all even be hurt by this plan? It almost sounds too good to be true.
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Old 05-04-2005, 05:25 AM   #3 (permalink)
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I love this idea - but I have a feeling it would cause widespread panic to be instituted, because it's such a major change.
I love it.
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Old 05-04-2005, 05:37 AM   #4 (permalink)
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Looking at it briefly I'd say that it's only a good idea if you've opted to pop out a few tax deductions or are married to a tax deduction... Single people get shafted and seem to carry more of the tax burden.

The tax free burdon for a family is only 760 at 25,000 - then it goes up to 24,200 and stays there, the tax free burden for a single person is 8,980 and stays that amount no matter what their salary level is. It seems to be an unfair burden on those at the poverty level that hasn't popped out some tax deductions.
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Last edited by maleficent; 05-04-2005 at 05:40 AM..
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Old 05-04-2005, 05:56 AM   #5 (permalink)
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The current status is nuts. Nobody understands it, not even the IRS. Congress passes huge tax bills they don't read. Basically the feds use smoke and mirrors to keep us from understanding that they are robbing all of us.

Any system that is simple to understand would be a huge improvement.

Thanks for listening.
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Old 05-04-2005, 05:57 AM   #6 (permalink)
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I agree with you Mal....again, this is very simplistic. Likely some level of change would need to be made to it, but I do rather like the general Plan.
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Old 05-04-2005, 06:32 AM   #7 (permalink)
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Hm, I hadn't seen that part. Well, it would be too much to ask for it to be so simple. Maybe a better break/rebate for the singles?
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Old 05-04-2005, 06:43 AM   #8 (permalink)
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Quote:
Originally Posted by maleficent
Looking at it briefly I'd say that it's only a good idea if you've opted to pop out a few tax deductions or are married to a tax deduction... Single people get shafted and seem to carry more of the tax burden.

The tax free burdon for a family is only 760 at 25,000 - then it goes up to 24,200 and stays there, the tax free burden for a single person is 8,980 and stays that amount no matter what their salary level is. It seems to be an unfair burden on those at the poverty level that hasn't popped out some tax deductions.
Although the pie charts are intended to make the plan look simple, there seems to be quite a lot going on behind the scenes here. When comparing an individual with a family, you can expect the individual spending the same amount as a family of 4 as having a richer life.

A family of 4 spending 25k a year is far different from an individual spending 25k a year.

Looking at the pie charts, it appears that the higher you go in spending, the more likely the family of four assumes that the spending is equivalent to two individuals. Tax requirements for a 100k for a family of four is nearly equivalent to the tax requirements of 2 individuals spending 50k. 1000k for a family of four, 2 individuals spending 500k.

I believe the tax requirements for an individual spending 12.5k is a negative amount. From that perspective, the family of four spending 25k is being over burdened.
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Old 05-04-2005, 07:53 AM   #9 (permalink)
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The first thing that I consider is, "who is for this change in the method of taxation?" The answer that I come up with is conservative "think tanks" like the heitage.org and cato.org.

Why? Probably because the change is designed to shift the burder from the wealthiest to the less wealthy, as all recent tax "reform" seems to result in.

Here is one example of the result of this proposal:
The "rebate pie" for a single annual spender of $1,000,000 at http://myfairtax.org/RebatePie.html displays a net tax paid of $227,935.
Single taxpayer, under the plan, pays the highest rate. Presumably a couple would pay less.

On the non-paritsan, "Citizens for Tax Justice" website (conservatives may see them as partisan because the theme is exposure of the injustice of the current tax "reform"), the following is displayed:
http://www.ctj.org/pdf/bushcheneytax2004.pdf In 2004, "President and Mrs. Bush reported $784,219 in total income on their tax return.They paid $207,307 in income tax,"

This amounts to just $20,628 less paid in taxes on nearly $800,000 in income, for a married couple, under the current tax structure, than a higher tax single would pay on $1,000,000 in annual spending activity under the "fair tax" plan.

The Bushes are currently paying about 26.5 percent income tax on all of their annual earnings. It can be presumed that they, or any other couple making their annual income do not spend all that they earn.

A single taxpayer (taxed presumably at a higher rate than the Bush's current rate, because they are a family of two), would only be taxed $227,935 on $1,000,000 in annual spending activity. This is a 22.7 tax rate, on the highest tax rate payer in this plan, and.....is only a tax on the spending of that individual, not on the income.

The above "real world" comparison, reveals to me why the Heritage and the Cato Foundations promote this "reform". It saves their contributors money, at the expense of the rest of us !

The comparison above also makes it easier to believe this:
Quote:
http://www.brookings.edu/views/artic...e/20040924.pdf
To determine the revenue- and budget-neutral tax rate in a national sales tax requires
estimating the rates of evasion, avoidance, the extent to which deductions, exemptions and credit
would be re-introduced, and the impact on economic growth. With extremely conservative
assumptions about the magnitude of evasion, avoidance, and statutory base erosion, it would
require a 60 percent tax-exclusive (38 percent tax-inclusive) tax rate to replace existing federal
taxes, and a 26 percent tax-exclusive (21 percent tax-inclusive) tax rate to replace the existing
personal income tax. These estimates do not include any allowance for economic growth, but even
if the economy grew by 5 percent, which would be an enormous effect relative to existing
estimates, the tax-exclusive tax rates would only come down to 57 percent and 19 percent to
replace all federal taxes, or the income tax, respectively.
Simply put, people, the federal government is already running a $500 billlion annual deficit. Under this "reform" plan, most of us would pay a little less in taxes, and people who earn $784,000, or more......like the Bushes, woull pay signifigantly less, especially if, unlike most of us, they did not spend almost all of their annual income, under the new tax plan, each year. Where will the money that they currently pay in taxes, put won't pay any longer, come from to keep the deficit from rising even higher?
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Old 05-04-2005, 09:58 AM   #10 (permalink)
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Taxes on spending are inherently regressive because those at the lower ends of the income spectrum spend a higher percentage of their income. If you think that people near the bottom of the income spectrum are paying too little, this plan is a wonderful idea. Lets make those poor fuckers pay their fair share!
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Old 05-04-2005, 11:08 AM   #11 (permalink)
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Quote:
Originally Posted by alansmithee
Taxes on spending are inherently regressive because those at the lower ends of the income spectrum spend a higher percentage of their income. If you think that people near the bottom of the income spectrum are paying too little, this plan is a wonderful idea. Lets make those poor fuckers pay their fair share!
That's not the response I would have expected from you and I totally agree with you.

That site is just another smoke and mirrors ploy by the fairtax people. The 'fairtax' is a load of crap and any thinking person should be able to see right through its holes. The fair tax is only fair to millionaires.

The people behind this have a lot of money at their disposal. It would be really nice if a group could form to oppose the fair tax.
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Old 05-04-2005, 11:39 AM   #12 (permalink)
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Quote:
Originally Posted by kutulu
.......The people behind this have a lot of money at their disposal. It would be really nice if a group could form to oppose the fair tax.
Hopefully, there already is a group opposed to this. It is called the majority......
Quote:
http://www.chron.com/cs/CDA/ssistory...siness/3162191
May 2, 2005, 7:09AM
TAX REFORM
Shopping for fair taxation

...............Wright is the executive director of Americans for Fair Taxation (www.fairtax.org), a group backing legislation to replace all federal income, payroll and corporate taxes with a 30 percent national sales tax on all new goods and services.

Supporters say the tax would free Americans from mountains of paperwork, eliminate loopholes and tax fraud, encourage savings and fatten paychecks. House Majority Leader Tom DeLay, R-Texas, likes the idea, and President Bush says he's open to the suggestion. It also has received a qualified endorsement from Federal Reserve Chairman Alan Greenspan, who believes the plan would increase Americans' savings.

"We're not raising taxes here," said Wright, a folksy Florida resident who previously ran a Texas advertising agency. "We're just taking all of the taxes people are currently paying and making them extremely obvious at the bottom of their retail sales receipts. And nobody's taking anything out of their paycheck anymore."

Wright said DeLay and House Speaker Dennis Hastert, R-Ill., have pledged to get the tax bill passed by the end of 2006.

"As far as we're concerned, we're in the endgame right now," he said.

But not if the nation's retailers have a say. They don't want the job of federal tax collector.

The National Retail Federation argues that a national sales tax would cause "sticker shock" that would depress retail sales.

"This is a do-or-die issue for many of our member companies," said J. Craig Shearman, vice president for governmental affairs for the National Retail Federation. "If consumers look at a 30 percent tax and don't buy a product, the retailer is the first to lose, but there are a lot of other companies and workers behind that retailer that are also going to be out of business."

A study commissioned by the National Retail Federation in 2000 concluded that a national sales tax would cause a three-year decline in the economy, a four-year decline in employment and an eight-year decline in consumer spending.

The organization also notes that a study by the congressional Joint Committee on Taxation found that a sales tax of 57 percent would be needed to replace all current federal tax revenue.

Other opponents of the sales tax proposal complain that it is part of a continuing trend to reduce the burden on the wealthy and shift it to everyone else.

After all, the rich have the luxury of saving large amounts of money, meaning it would not be taxed; the middle class and poor have to spend a much higher percentage of their income on necessities.

AARP, the national association representing senior citizens, says eliminating payroll taxes would be unfair to senior citizens "because they don't pay payroll taxes. They've already paid them," said John Rother, policy director for the AARP.

Governors oppose idea
And the National Governors Association has taken a stand against the tax, saying it would "intrude into a tax area that traditionally has been reserved for, and relied on by, state and local governments."

Sales tax proposals have been hovering around the fringes of the tax reform debates for two decades, but the idea has gained enough momentum in recent years to worry opponents.

"A year ago, this was something being promoted mostly by a rank-and-file congressman from Georgia," Shearman said. "Today, it's something where we have a presidential task force looking into it, and we have the chairman of the Federal Reserve discussing it in serious terms.

"That's a lot of progress in a short time, and reason for us to be concerned that this is more than just a hypothetical idea. This is something that's a legitimate threat to the U.S. economy."

If the bill, House Resolution 25, authored by Republican Rep. John Linder of Georgia, becomes law, Paramus, N.J., would become one of the nation's biggest federal tax collection sites. Paramus generated more than $3.2 trillion in retail sales in 2004, the most of any ZIP code in the country, according to marketing information company Claritas.

That volume of spending would generate more than $960 million in sales tax under the Linder plan.

Services such as haircuts, manicures, massages and doctor visits also would be subject to the tax, along with new homes, new cars, food, medicine, gambling chips and lottery tickets. Used cars, previously occupied homes and antiques wouldn't be taxed.

The bill has more than 50 co-sponsors, including DeLay.

Linder describes his plan as the equivalent of a 23 percent tax on income, because a $130 purchase would include $30 in federal taxes, or 23 percent of the bill. To counter the unfairness argument, his proposal includes a rebate provision that would cover the sales tax up to the federal poverty limits.

In March, Greenspan gave a partial endorsement to shifting the tax burden to consumption.

"Many economists believe that a consumption tax would be best from the perspective of promoting economic growth particularly if one were designing a system from scratch because a consumption tax is likely to favor saving and capital formation," Greenspan said.............
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Old 05-04-2005, 12:29 PM   #13 (permalink)
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"Services such as haircuts, manicures, massages and doctor visits also would be subject to the tax, along with new homes, new cars, food, medicine, gambling chips and lottery tickets. Used cars, previously occupied homes and antiques wouldn't be taxed"

Talk about instant death to the new home market. A 30% tax on a 200k home would be 60k. At a 5.5% interest rate on a 30yr loan, the payment shoots up from 1135/mo to 1476/mo.
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Old 05-04-2005, 12:39 PM   #14 (permalink)
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Quote:
Originally Posted by kutulu
The 'fairtax' is a load of crap and any thinking person should be able to see right through its holes. The fair tax is only fair to millionaires.
The fairtax wouldn't be any worse than the tax system now. Who do you think all those loopholes are for? The rich don't pay anything, and they never will. At least a fairtax would make it easier to do one's taxes and we wouldn't have a whole parasitic industry that revolves around taking money from people.
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Old 05-04-2005, 01:32 PM   #15 (permalink)
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Quote:
Originally Posted by Master_Shake
The rich don't pay anything, and they never will.
lol, if that were true they wouldn't be trying so hard to shove this 'fair tax' down out throats. The fair tax not only lowers the percentage taxed on the money they spend but also reduces their tax rate to zero on money they don't spend.

Right now, a person that makes 5M and spending 1M is paying more than 30% on the entire 5M. With the fair tax, only the 1M would be taxed. Additionally, that 1M that does get taxed is taxed at a lower rate than it is right now (about 25% vs 30%). So instead of paying 1.5M/year in taxes, this person's tax rate would be reduced to about 0.25M that is an 83% reduction in taxes.

About half of the money the govt collects comes from the top 1%. How will the govt be able to survive if they give enormous tax breaks to the people who bring the most in?
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Old 05-04-2005, 06:37 PM   #16 (permalink)
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Only on a forum like this would people actually see through the "Fair Tax" plan.

The problem with this plan is that the extremely rich can become richer so much faster. By taxing spending you encourage hording (or spending out of the country). Now, while saving your pennies isn't a bad thing, if everyone in the nation were to start saving a large portion of their money at the same time, there could be a severe economic downturn.

The only fair tax system that I could imagine would be so complex, and so overbearing that it would never be implemented. That system would be one completely based on an increase of "wealth", no income tax, no sales tax, just take what you have at the start of the year, and compare it to what you have at the end of the year. In order to make it possible, you would need a database that kept track of every single purchase that was made by every single person. Unless you have complete faith in the government, you can see why that huge database of every single purchase could be used as a tool for evil. The wealth gain is the idea behind our current tax system, but since there is no central database of all of your purchases, there is an income tax to assume most of it, and a billion little rules to try and sort the rest of it out.
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Old 05-05-2005, 07:17 PM   #17 (permalink)
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Quote:
Originally Posted by kutulu
That's not the response I would have expected from you and I totally agree with you.

That site is just another smoke and mirrors ploy by the fairtax people. The 'fairtax' is a load of crap and any thinking person should be able to see right through its holes. The fair tax is only fair to millionaires.
Yeah, why should they be treated fairly? Let's keep right on blaming them for poverty.

Nasty bastards, those millionaires. I just can't figure out why they think they should keep the money they worked for.

It makes so much more sense to keep trying to tax them into poverty with the rest of us.
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Old 05-05-2005, 08:40 PM   #18 (permalink)
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Quote:
Originally Posted by F-18_Driver
Yeah, why should they be treated fairly? Let's keep right on blaming them for poverty.

Nasty bastards, those millionaires. I just can't figure out why they think they should keep the money they worked for.

It makes so much more sense to keep trying to tax them into poverty with the rest of us.
You are new here, F-18_, how about extending us the courtesy of non-sarcastic, thought provoking, researched and documented contributions to these threads. It does take more time and effort, I can attest to that; but contributions to this forum, similar in content to your last post, do not advance the discussion.
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Old 05-05-2005, 10:29 PM   #19 (permalink)
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Quote:
Originally Posted by F-18_Driver
Yeah, why should they be treated fairly? Let's keep right on blaming them for poverty.

Nasty bastards, those millionaires. I just can't figure out why they think they should keep the money they worked for.

It makes so much more sense to keep trying to tax them into poverty with the rest of us.
Oh give me a fucking break. The fair tax idea would not work. It would not bring in close to as much revenue as the current model.
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Old 05-06-2005, 02:15 AM   #20 (permalink)
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Why Do I Bother

Golly.....I really should know better than to post in here expecting anything other than attack and name calling....

Please....continue beating each other up in another thread.....heh
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