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Thread: Fair Tax?

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    Fair Tax?

    Anyone else know more about this? I've read the website www.iowafairtax.com but I'd like to know some of the cons. Can anyone shed some light on it?



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    Re: Fair Tax?

    one 'Con' to this idea, is more items will sell on the blackmarket. the black market has more bark than bite.. .if you have ever paid someone in cash, it could be that service or product wasn't taxed=black market.

    -keep.

    for the record... I am all for an even tax... fair tax, flat tax... to me either one would be better than the current system (more you make the bigger % they take)


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    Re: Fair Tax?

    Quote Originally Posted by ISUonthemove View Post
    Anyone else know more about this? I've read the website www.iowafairtax.com but I'd like to know some of the cons. Can anyone shed some light on it?
    One con to any tax reform is the number of people who make their living from the current system.


    Yeah well, ya know, that's just, like uh, your opinion, man.

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    Re: Fair Tax?

    I haven't followed the link, but if this is the large sales tax thing it would be disasterous at a state level. Namely because people would make all their purchases out of state. The black market problem was also brought up.

    There is a reason many local taxes are on property, namely that people cannot circumvent them and regions need not compete with other areas.

    I think there may be some merit to the "fair tax" on a national scale with certain tweeking necessary to prevent people from easily circumventing it.



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    Re: Fair Tax?

    Quote Originally Posted by Kyle View Post
    I haven't followed the link, but if this is the large sales tax thing it would be disasterous at a state level. Namely because people would make all their purchases out of state. The black market problem was also brought up.

    There is a reason many local taxes are on property, namely that people cannot circumvent them and regions need not compete with other areas.

    I think there may be some merit to the "fair tax" on a national scale with certain tweeking necessary to prevent people from easily circumventing it.
    Its a federal movement, not a state movement.



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    Re: Fair Tax?

    Quote Originally Posted by keepngoal View Post
    one 'Con' to this idea, is more items will sell on the blackmarket. the black market has more bark than bite.. .if you have ever paid someone in cash, it could be that service or product wasn't taxed=black market.

    -keep.

    for the record... I am all for an even tax... fair tax, flat tax... to me either one would be better than the current system (more you make the bigger % they take)
    I like the idea of a 'fairtax' although I haven't looked into it in depth. Would different types of products be taxed differently?

    Not to defend the current structure, but you do know that if one person has a $50,000 income and another person has a $200,000 income, they pay the same amount of taxes on the $50,000 part of the income. The higher percentage comes from the $150,000 more that the second person makes.



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    Re: Fair Tax?

    Americans For Fair Taxation: FairTax.org should answer most of your questions.

    I've done a bunch of research on it and I don't see many drawbacks.



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    Re: Fair Tax?

    Quote Originally Posted by clone52 View Post
    I like the idea of a 'fairtax' although I haven't looked into it in depth. Would different types of products be taxed differently?

    Not to defend the current structure, but you do know that if one person has a $50,000 income and another person has a $200,000 income, they pay the same amount of taxes on the $50,000 part of the income. The higher percentage comes from the $150,000 more that the second person makes.
    It is still a higher percentage.... IMO, we are all equal and should all pay the same amount.

    - keep.


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    May you only need 39 acres to turn your rig around. - keep

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    Re: Fair Tax?

    Quote Originally Posted by cyclonekj View Post
    One con to any tax reform is the number of people who make their living from the current system.
    True, but think how much money is wasted on the IRS division. Also, there would still be a need for personnel to manage the fair tax, it just would be drastically reduced.

    The thing I like a lot is that used good aren't taxed by the fair tax. If you buy a used car, it's not taxed because it has already been taxed before.

    In the current system, if I win $10 million in the lottery...I will see about $6 million of that after taxes. If I decide to give cyclonekj $1 million of that...he is taxed an additional $400,000 (roughly) leaving him with $600,000. That $600k was about $1.67 million of my $10M winnings. And it just compounds if kj wants to give away part of his $600k.



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    Re: Fair Tax?

    Quote Originally Posted by clone52 View Post
    I like the idea of a 'fairtax' although I haven't looked into it in depth. Would different types of products be taxed differently?

    Not to defend the current structure, but you do know that if one person has a $50,000 income and another person has a $200,000 income, they pay the same amount of taxes on the $50,000 part of the income. The higher percentage comes from the $150,000 more that the second person makes.
    But why should that person pay a higher percentage? It is not fair at all to make the wealthier people pay more than the poor people. Everyone wants to be treated equally, so everyone should be taxed equally. Either that or you get 1 vote for every $1 you make, thus the rich pay more and have more say in how the gov works. I am all for that.


    They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety. - Benjamin Franklin 1775

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    Re: Fair Tax?

    Quote Originally Posted by brianhos View Post
    But why should that person pay a higher percentage? It is not fair at all to make the wealthier people pay more than the poor people.
    There are very good reasons for a progressive tax system.

    1. Many rich people have done nothing to actually earn their money. If you inherit a large sum you are often essentially set. Capital can create more capital.

    2. To prevent an overconcentration of wealth. In America the wealthiest 1% control about a third of the wealth, the top 5% control about 60% of the wealth, and the top 20% control over 80%. Fundamental principles of equality push for a more even distribution of wealth. Marx had a few things right, although I disagree with some of his conclusions. In a very liberal economic system wealth tends to accumulate in the hands of very few. Massive disparities in wealth can lead to political instability, not to mention excessive numbers of poor people.

    3. Moral Grounds. I believe that some prominant goals of the government should be to ensure equal opportunities, and to care for those who are in need due to no fault of their own (e.g. children). Examples of this in practice include public education, student loans, and various assitance to the poor. I think something similar to these programs needs to be in place no matter the tax structure. If a greater tax burden was placed on those who are not wealthy, they would have less ability to provide for some things on their own and would require greater government assistence to be in the possition they were in before. Why not just take the easier route of taxing them less in the first place?



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    Re: Fair Tax?

    Quote Originally Posted by cycloneworld View Post
    True, but think how much money is wasted on the IRS division. Also, there would still be a need for personnel to manage the fair tax, it just would be drastically reduced.

    The thing I like a lot is that used good aren't taxed by the fair tax. If you buy a used car, it's not taxed because it has already been taxed before.

    In the current system, if I win $10 million in the lottery...I will see about $6 million of that after taxes. If I decide to give cyclonekj $1 million of that...he is taxed an additional $400,000 (roughly) leaving him with $600,000. That $600k was about $1.67 million of my $10M winnings. And it just compounds if kj wants to give away part of his $600k.
    I appreciate your hypothetical generosity. (So does Uncle Sam.) But neither you nor I will receive much sympathy from the masses, who are glad to see huge amounts of tax revenue coming from those who are (now) rich.


    Yeah well, ya know, that's just, like uh, your opinion, man.

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    Re: Fair Tax?

    Quote Originally Posted by Kyle View Post
    There are very good reasons for a progressive tax system.

    1. Many rich people have done nothing to actually earn their money. If you inherit a large sum you are often essentially set. Capital can create more capital.

    2. To prevent an overconcentration of wealth. In America the wealthiest 1% control about a third of the wealth, the top 5% control about 60% of the wealth, and the top 20% control over 80%. Fundamental principles of equality push for a more even distribution of wealth. Marx had a few things right, although I disagree with some of his conclusions. In a very liberal economic system wealth tends to accumulate in the hands of very few. Massive disparities in wealth can lead to political instability, not to mention excessive numbers of poor people.

    3. Moral Grounds. I believe that some prominant goals of the government should be to ensure equal opportunities, and to care for those who are in need due to no fault of their own (e.g. children). Examples of this in practice include public education, student loans, and various assitance to the poor. I think something similar to these programs needs to be in place no matter the tax structure. If a greater tax burden was placed on those who are not wealthy, they would have less ability to provide for some things on their own and would require greater government assistence to be in the possition they were in before. Why not just take the easier route of taxing them less in the first place?
    1. I'm not sure why one should be penalized for having wealthy parents.

    2. The redistribution of wealth you speak of sounds very much like socialism to me. No thanks!

    3. I don't want our government dictating morals. Period.


    Yeah well, ya know, that's just, like uh, your opinion, man.

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    Re: Fair Tax?

    Quote Originally Posted by cycloneworld View Post
    If I decide to give cyclonekj $1 million of that...he is taxed an additional $400,000 (roughly) leaving him with $600,000.
    Or you and your wife could 'gift-split' and give cyclonekj a tax free combined amount of 24K per year. This way you could give him 1million dollars tax free , it would just take 42 years.



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    Re: Fair Tax?

    A sales tax with no deductions that replaces the current income tax system would result in a huge change in the distribution of who pays taxes - and therefore has no chance of ever being adopted.

    Example 1 - Single person, $75,000 income, no dependants, rents, low medical bills, doesn't donate to charity, spends all they earn.
    Example 2 - Married, $75,000 income, 4 dependants, owns home, high medical bills, donates to charity, spends all they earn.

    Under the current system, the second person will pay far fewer taxes because of the deductions - probably far less than one-half of the first.
    Under the sales tax system both would pay the same tax since they are both spending $75,000. Because of that, it has no chance of ever passing.



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