what about the "fair tax" any thoughts??

[marketcrazy1]

http://www.fairtax.org/site/PageServer --- just looking over this, seems to make sense...........

[Captain Hilts]

1. No. nt

[Donnachaidh]

2. sure - overtax the folks who can least afford to pay them

Yeah, sure -- makes sense :eyes:

[Gormy Cuss]

3. About as fair as FOX News and just as balanced. n/t

[GOPNotForMe]

4. Joke? RIGHT? nt

[NaturalHigh]

5. The Fair Tax isn't fair.

It just continues to promote wealth disparity over time.

[ipfilter]

6. It's a regressive tax.

Those with high income spend about the same on necessities as those who earn less. This makes the effective tax rate of the higher income lower.

http://www.fairtaxblog.com/20051201/is-the-fairtax-regressive/

[Swede Atlanta]

7. The Fair Tax isn't Fair....period

[prolesunited]

8. If you think it's a good idea,

then you really don't understand it. It's like the Clean Skies Act. It sounds good, but is a very regressive tax system that would benefit the wealthy.

[Hello_Kitty]

9. It's regressive as shit

As a general rule, if Steve Forbes is for something it probably ain't good for working people.

[ProgressiveProfessor]

10. Clearly a new tax policy is called for, but FairTaxis not it

Its got some good points. Its simple and cleanly structured. However its regressive and therefore not acceptable to many people.

[wuushew]

11. Try the archives next time

Results 1 - 10 of about 938 from democraticunderground.com for "fair tax". (0.11 seconds)

Every time the subject is raised it is correctly and throughly debunked. What is new this time around? Why is it so great?

[EstimatedProphet]

12. You mean, taxing the people that have money to pay? Is that what you mean by fair tax?

If not, then it isn't very fair. Kind of like going to the desert to look for water.

[Demit]

13. That would be the old Republican flat tax idea, with a new spiffed-up name.

I bet you did the Pavlov's dog thing when the repubs rename the estate tax the 'death tax', too. They sure have a way with words.

Both attempts to change the tax code are a way of further favoring the rich. They're the only people it makes sense for.

[marketcrazy1]

14. jesus christ

I am sorry I brought it up!!! I said i was just LOOKING at it and it SEEMED ok!! excuse the fuck out of me for checking out something different! I mean why bother right!! after all what we have BEEN doing is working so fucking great!! MODS feel free to delete this thread........

[jmowreader]

38. No, it's the National Sales Tax, and it's the most destructive idea ever

The very first line in the FAQ explains why it won't work: "Used items are not taxed."

Brand-new $1000 aluminum jon boat: taxable
Five-year old, $10 million 90-foot yacht: not taxable

Brand-new Chevy Aveo: taxable
Three-year-old Rolls Royce Phantom: not taxable

Brand-new 1500sf ranch house: taxable
Ten-year-old 15,000sf mansion: not taxable

The FairTax will destroy the economy. If no one is buying new, no one will be employed making new. Do we really want America to turn into a land of used car salesmen and pawnbrokers?

[thesquanderer]

40. new vs. used

re: "The very first line in the FAQ explains why it won't work: "Used items are not taxed." "

Most states today have sales taxes where used items are not taxed (at least if sold privately). Hence no sales tax on most eBay purchases.

In New York, at least, cars are an exception, though.

I think, in part, the reason to exclude used items from sales tax is that there's usually no effective mechanism for collection or enforcement on sales between private parties. In general, I don't think the underlying idea is really to distinguish between new and used as much as it is to distinguish between sales by companies who are in the business of selling as opposed to individuals selling the one of something that they own. I mean, that's basically how state sales tax works now. But there is that middle area of businesses that sell used merchandise which is a third scenario.

You also mentioned houses. I don't know how their tax works with that. Consistent with what I said above, it makes sense that a builder (in the business of selling homes) charges sales tax, whereas a private sale of a house from one person to another would not involve sales tax. But that's problematic in that it essentially makes "new" houses much more expensive than "used" ones, and that could have some other consequences. Houses are a funny situation, in that is about the only "product" where, currently, people don't pay way more for new ones than used ones. (And currently there is no sales tax per se on either, though there are other kinds of taxes.)

I also wonder, does the plan tax interest? That is, is the interest portion of a mortgage payment, itself, something you have to pay sales tax on? If so, do you pay that tax regardless of whether the principal is for a new house (taxed) or a used one (non-taxed)?

The other thing that's different about houses is that, up until recently, they generally appreciated. In most cases, if you sell something used, it is worth less than what you paid for it (and in fact, you probably paid sales tax on the full value when you first bought it, making taxing it on resale a second sales tax on the same item). But in cases where you're selling something for more than what you bought it for, the argument about the tax on it already having been paid doesn't quite wash (even if you bought the first half of the argument, which not everyone will agree is relevant).

[jmowreader]

41. Most states, if not all, charge sales tax on cars no matter how old they are

If this UnFairTax came to fruition, and we were relying on it for our only source of federal income, not taxing used items would be a disaster.

As far as interest payments...well, probably not. You'd pay the 23-percent (or whatever number they come up with) tax on the buildings and land, but the interest wouldn't be taxed. Remember, the goal here is to bankrupt the government so they could justify eliminating social services and privatizing everything including the fire department, not to properly fund the government.

[Venceremos]

15. It raises taxes on the middle class

The consensus among various tax experts is that the "fair" sales tax rate would be 30% (and that's higher than the number Mike Huckabee often quotes). The current federal income tax range for the middle brackets is between 6% and 12%. Current state sales tax rates are from zero to 11.5% (when local municipalities that levy an additional sales tax are figured in).

So when you figure current state sales plus federal income tax rates, the middle class aren't now being taxed at a 30% rate in any state, meaning the "fair tax" would effectively raise taxes on all middle income earners.

On edit: I believe the 30% fair tax rate takes into account current individual state sales taxes. It does not take into account individual state income tax rates, so i did not make them part of the equation. In other words, whether you paid the fair tax or the current tax structure, state income tax is in addition to that number.

[Mugweed]

16. Libertarians are Republicans

The only difference is that Libertarians freely admit that hookers and drugs are OK, while the Republicans hide in the closet on both. Their ideas are not beneficial to anyone but themselves.

[RB TexLa]

17. the amount of taxes on necessities cause it to be regressive

The poorer you are the more of your income you spend on things like utilities, clothing, transportation, food, and the like.

It would be saying to people working for minimum wage that they are having a fair deal because their neighbor paid $4,000 tax on their boat and you paid $0 tax on boats this year because you didn't buy any boats.

[Mojambo]

18. It's totally regressive.

Libertarians aren't too bright.

[Taverner]

19. The "Fair" Tax is anything but

Yes, the rich need to pay more. They use more and damage more!

[Warpy]

20. Remedial math

should be necessary for anyone in the bottom 99% of wealth holders in this country who think this dog is fair.

[thesquanderer]

21. regressive?

I don't know how many people replying to your question actually went to the link you provided. I did... and they do seem to make a convincing argument that it is not regressive as people here are saying. The "prebate" element (advancing a check to people each month) is designed to essentially eliminate most of the tax for those of lower income... and since the regressive FICA tax is eliminated, it may in fact be a net gain for many such people. The elimination of income tax loopholes likewise may make it less regressive than the current system, which is often progressive more in theory than in fact.

I think it is important to consider it, not necessarily only in relation to other theoretical approaches, but also to what we actually have today. Compared to the current plan (which is regressive via FICA and regressive via the availability of all kinds of methods by which wealthy can avoid taxes), I don't see reason to dismiss the possibility that it could be a better system. I think you need to compare it to what we have, not to an idealized version of what we have... and what we have is very problematic.

Personally, I would not fare well under the "fair tax," but that's another story!

[Gothmog]

22. The prebate concept is unworkable

The pre-bate concept is a feeble attempt to try to make a very regressive tax less regressive. No matter what this tax is overall regressive and is being proposed to replace a progressive tax system. I read that the pre-bate mechanism is designed to fail in that it would require a bureaucracy larger than the IRS

[Lydia Leftcoast]

26. Now that you mention it, you're right

A "pre-bate" system would be incredibly complicated to administer.

[thesquanderer]

30. complex to administer?

re: "I read that the pre-bate mechanism is designed to fail in that it would require a bureaucracy larger than the IRS "

Why is it more complicated to send everyone a $xxx check each month than it was for them to send everyone a $300+ check last year?

[Lydia Leftcoast]

25. "marketcrazy" and "thesquanderer"--such apt names

If you knew how much even a rise in the sales tax scares poor people, you wouldn't be for this turkey.

I'd be for it only if it were applied across the board to capital gains, inheritances, executive bonuses, dividends, high-end professional services, and purchase of financial products.

Oops! Now it doesn't sound so attractive, does it, you greedy, selfish, smug Libertarians?

[marketcrazy1]

29. hey miss Lydia Leftcoast

I never said i was for this, just that I was looking at it. so........... BITE ME!!!

[thesquanderer]

33. libertarian?

I'll graciously ignore the name-calling, and just ask about the issues you raise.

What makes a national sales tax libertarian? (I'm not discussing the pros and cons of libertarianism, I'm just looking for the connection, as I don't see either sales or income tax to be more inherently libertarian than the other.)

If a poor person gets a check each month that covers their sales tax, how are they worse off?

(And, btw, I don't have any capital gains, inheritances, bonuses, or dividends to pay tax on. As I said, as I see it, I would actually come out worse under the "fair" tax. This isn't about what's good for me, it's about the merits of the plan... and most of the disparaging comments in the thread have not been terribly enlightening about the plan's actual shortcomings.)

[razors edge]

34. I'm a libertarian

I vote Democrat because they are the closest thing we have in this country with a chance to do good.

Not that they will.

How would you like being called a lazy, thieving commie dirt bag?

The description may fit in a lot of peoples minds, but I doubt it would be a true description.

[backscatter712]

23. Fuck no!

The economics math is clear - to maintain a healthy nation with a solid middle class, you have to have progressive taxation. Yes, soak the rich.

[ItNerd4life]

24. I will give you my thoughts in a respectful manner

It's much easier for people to insult and have knee jerk reactions. (That's the Republican way)

The Fairtax has some interesting ideas:
The lower to middle income people get a tax rebate so in essence they wouldn't pay any taxes on any basic needs or commodities.
It encourages people to save instead of spend (which is a double edged sword)

IT'S EXACTLY WHY MOST STATES AND CITIES HAVE 'SALES TAXES'. It's the same thing, just on a Federal Level.

The biggest problem with it is Wealth:
Executives used to make 50 times the average worker, now they make 500 times. This is why people are so upset with greedy executives and big business.
If a 'control' factor were put in where executives could only make 100 times the average (the number isn't important, it's the idea) this would eliminate the wealth/greed issues
people have with executives. The key is this: Imagine executive incomes limited based upon the incomes of the workers. If they want to make more money they have to pay their workers better.

Currently, the progressive income taxe rates are used to redistribute this wealth. That's why people like it.

If you tie both ideas together, you start coming up with a very different income, spending, and taxing structure. This would cause a massive change and shift to the American psychie.

That is change that people are afraid of.

[marketcrazy1]

32. thank you

I posted this looking for honest feedback. I did not expect to be ridiculed, derided and insulted!! ( should have known better! )

[Lost4words]

27. Its just like clean coal. nt

[Belial]

28. there is no "fair tax" ..

[dkofos]

31. The only fair tax is one that redistributes wealth downward.

[TreasonousBastard]

35. Everyone here hates the "fair tax," but...

even though I don't think much of the idea, Europe has been using the VAT for years and our "progressive" income tax isn't all that progressive in real life.

Years ago Warren Buffet decried that he pays the same effective income tax rate as his secretary. His secretary is undoubtedly very well paid, but not in the billionaire league of her boss and Buffet hisself said that situation is unfair and untenable. I say it ultimately leads to economic instability. However, one problem with soaking the rich with luxury taxes is that the rich have as many ways of getting out of them as they do income or wealth taxes. I remember when there was a $10,000 tax on yachts and yacht sales just dried up, putting a lot of builders out of business-- the guys who would happily spend half a million on a boat, and 10 grand of it on a great rod and reel and the chair to fight marlin simply refused to spend that 10 grand on a tax.

Ain't easy to come up with any kind of fair tax scheme, and even though I like the idea of using median income as a zero point for taxation, the median family income in Detroit doesn't work out the same as in midtown Manahattan. And, a millionaire in Vermont doesn't often live like a millionaire in Houston or Miami.

But, maybe it is time to look a little more closely at some alternative tax systems.

[muriel_volestrangler]

36. VAT tends to be regressive

in the UK, at least. Although food (ingredients, that is - restaurant food attracts VAT) and children's clothes are free from VAT, and utilities (phone, natural gas, electricity) pay a lower rate of 5%, compared with the 15% (17.5% when the following figures were taken) that most items attract, the percentages of incomes of households, grouped into quintiles by gross income, paid in VAT and income tax in 2001-2002 in the UK were:

quintile  bottom 2nd  3rd  4th  top
     VAT    11.5 7.5  7.0  6.3  4.7
income tax   3.2 6.9 10.3 13.5 18.4

source: http://www.statistics.gov.uk/articles/economic_trends/effects_taxes_benefits_household_income_01-02/revised/Lakin_revised_final.pdf

One problem is that the rich spend a lot more on buying houses; and they don't attract VAT (and that's not just the 'very rich' either; it's true for anyone who buys a house). Perhaps they should. The rich also spend more abroad, where they do not pay their nation's sales taxes or VAT.

[TreasonousBastard]

37. Interesting-- the totals do go up...

as income goes up, but not by much, and the bottom quartile here might pay less income tax and certainly less sales tax. We have high property taxes here, though, and I don't know how that works in the UK. We also have those Social Security and Medicare taxes that are often higher than income taxes. Our lowest quartile averages a total of around 10-15% in payroll and sales taxes, just as in the UK.

I thought EU member citizens had to pay local VAT when travelling, so if that's the case you have to find a non-EU country with a favorable exchange rate to save money buying stuff. (That would be the US at the moment)

Anyway, while the VAT is probably as regressive as our sales tax, there seem to be few, if any, ways to come up with a completely nonregressive tax system so the point would be to minimize its effects on the lower earners. That could be possible with a well thought out tax plan.

(the primary problem here is that we'll never see a well thought out tax plan from any politicians of any party or ideology)

[jmowreader]

39. There's a difference between Europeans' VAT and FairTax

The Europeans have VAT in addition to income tax. FairTax aims to replace the income tax system with an unfunded mandate--they expect the state departments of revenue (even in states that don't have sales tax) to collect and forward the FairTax payments, probably without reimbursement.

The only way this FairTax shit works is through massive, unpopular reductions in spending. You can pretty much figure the army will be funded but nothing else will.

[TreasonousBastard]

43. That's why I don't like the idea as usually presented, but...

I do think that we should look at alternative tax proposals, and consumption taxes are one possibility.

[BlooInBloo]

42. Gawd we're a stupid, stupid country. Put a pretty name on it, and Americans will believe ANYTHING.

[Juche]

44. factcheck.org says it is regressive

The poor and the wealthy do better, everyone else suffers. People who make less than 15k or more than 200k pay less in federal taxes, everyone else pays more. Throw a few crumbs at the poor, give the real rewards to the rich and put the burden on everyone else.





http://www.factcheck.org/taxes/unspinning_the_fairtax.html

[TXDemGal]

45. It's bullshit, that's my thought

Totally regressive, disproportionately slams the poor, working and middle classes. But I hear the super-wealthy like it.

[Cerridwen]

46. A whole lotta' people ain't never done taxes...

or know WTF they're talking about.

Other than that...

Nevermind.