What are Sup Forumss thoughts on FairTax?
Yea or Nay?
FairTax
Jonathan Rogers
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factcheck.org
fastcoexist.com
youtube.com
waysandmeans.house.gov
fairtax.org
beaconhill.org
twitter.com
Joshua Powell
Advantages
1.Favoring High Income Earners. Currently, our tax system is based on tax brackets: The more you make, the more you pay in taxes. Under the Fair Tax plan, only the amount of income you spend gets taxed. Someone who makes $200,000 and spends $100,000, for example, would pay only 11.5% of their income to taxes.
2.Helping Investments. Because the capital gains tax would be eliminated, individuals who can afford to invest will enjoy tax-free compound growth. This would be similar to having an IRA in which you could invest as much as you want and withdraw funds at any time without taxes or penalties. (Under current legislation, you can only invest a certain amount per year and must be 59 1/2 to withdraw funds without penalty.)
3.Making Tax Revenues Easier to Predict. Because consumption rates have been much more stable than incomes, figuring out tax revenues will likely be simpler, and estimates will be more accurate.
4.Benefiting Businesses. Along with eliminating double-taxation, the proposed plan would get rid of payroll taxes and taxes on capital and investments. This change could substantially benefit businesses and buyers, because prices could fall due to increased spending power and lower production costs.
5.Requiring More Disciplined Spending Habits. It’s apparent from the rampant use of credit cards and the mortgage debt crisis that our country has become far too dependent on credit. The Fair Tax would put an end to this problem, since the more you spend, the more you pay. Moreover, people would likely be inclined to pay off their debt, rather than spend more, since money that goes to credit card bills won’t be taxed.
6.Eliminating Tax Administration and Filing. Simply put, you’d no longer need to file taxes, and the IRS would close up shop.
7.Providing Prebates. The monthly check would help offset some portion of every household’s sales tax payments, especially for families near and below the poverty line.
Jose Green
Why would this be better than a flat tax?
If I knew anything I was buying would be taxed, I'd go out of my way to barter with goods other than money wherever possible.
Nolan Collins
>"I'd go out of my way to barter with goods other than money wherever possible."
>implying that's a bad thing
>"If I knew anything I was buying would be taxed"
>implying you didn't already know this
Michael Cook
Sounds like a good way to saddle the middle class with even more of the tax burden. They're going to be paying taxes on almost every dime the earn because so much of it will go towards things you "need" (food, shelter, entertainment, etc) whereas the wealthy can dump their money in investments and make more money tax free. Aside from the whole prebates thing, it sounds like a very regressive tax and I'm not sure how well that would play out. Will have to read more here.
Adrian Sanders
4.Benefiting Businesses. Along with eliminating double-taxation, the proposed plan would get rid of payroll taxes and taxes on capital and investments. This change could substantially benefit businesses and buyers, because prices could fall due to increased spending power and lower production costs.
Flat Tax Would Introduce New Problems:
usnews.com
Elijah Diaz
I don't give that much of a shit about paying an extra 7% on things, but you can sure as hell bet I'll be finding ways to get around paying +30%.
Jason Moore
You say that now. I live in commiefornia and theres effectively a minimum 10% tax on everything. its a fucking joke.
Jason Hughes
It applies to everyone senpai cause everyone of every socio-economic background buys the same essential things such as food, shelter, utilities, etc.
Brandon Roberts
Right, but if a rich person and poor person go out and buy a new outfit, the poor person is going to spend a lot more of their income on that one outfit than the rich person, and so even though they might pay the same dollar amount in tax, the poor person is forced to spend a much greater proportion of their income on tax. Thus any adjustment of the tax rate will hurt (or help) the poor far more than it will the rich. This is why most nations have tax brackets, so that these rates can be tweaked somewhat independently.
Adam Scott
FairTax is not a flat tax.
Sometimes sales taxes are called regressive, meaning that the poorest pay higher rates than the wealthy. Strictly speaking, sales taxes are flat, since everyone pays the same rate. But because the poor tend to spend a high percentage of their income on basic consumer goods such as food and clothing, sales taxes do require the poor to pay a higher percentage of their income in taxes.
The FairTax plan, however, helps to alleviate this difficulty by exempting sales taxes on all income up to the poverty level. Taxpayers would receive a "prebate," which Edwards calculates to be about $5,600 annually. The Treasury Department estimates that the prebate program would cost between $600 billion and $700 billion annually, making it the largest category of federal spending. Americans for Fair Taxation disputes the Treasury Department numbers, claiming that the actual cost would be closer to $485 billion per year. The Treasury Department has so far refused to release its methodology, making it difficult to determine whose estimate is correct.
factcheck.org
Liam Watson
It just sounds like a flat tax mixed with universal income, no?
Josiah Lewis
It's meant to correct the problems with the current tax system in the US. It isn't flat cause it varies by income. Remember, those earning under a certain amount will pay little or nothing.
Who Really Pays?
With the prebate program in effect, those earning less than $15,000 per year would see their share of the federal tax burden drop from -0.7 percent to -6.3 percent. Of course, if the poorest Americans are paying less under the FairTax plan, then someone else pays more. As it turns out, according to the Treasury Department, “someone else” is everybody earning between $15,000 and $200,000 per year. The chart below compares the share of the federal tax burden for different income groups under the current system and under the FairTax. Those in the highest and the lowest brackets will see their share decrease, while everyone else will see their share of taxes increase.
factcheck.org
A flat tax is the exact same for everyone regardless of income/wealth. This is not a flat tax.
Eli Baker
Fair tax is just code for a VAT which is absolutely horrendous, as it just hides increased costs in the final sale and pushes it on the consumer.
Nolan Davis
>What are Sup Forumss thoughts on FairTax?
It's great for the 1% and shit for everyone else.
Are you getting paid to shill for FT or are you just this stupid for free?
Jordan Russell
Other than FairTax there is what's called a negative income tax which has some of the same ideas such as those earning under a certain amount don't pay but receive payments.
fastcoexist.com
Dominic Butler
See: What makes you think it only benefits the top 1%, especially the Prebate part of it? A lot of people think it would really benefits society as a whole.
Joseph Thomas
Bump
Carter Jackson
...
Kevin Barnes
Sounds like a way to flatline the government and kill the middle/lower classes to me.
Grayson Long
Tariffs>all other income taxes
Blake Stewart
Oh, OP. You are just like every other Fair Tax supporter. You fail to explain the structure correctly, only leaving the on-the-fencers with worst understanding of it than they already have.
Caleb Brooks
THE FAIR TAX
1. Eliminate all *federal* taxes (including, the income tax and pay roll taxes) and replace it with a national consumption tax at the *final point of sale* of *new* goods and services for *personal consumption* (business-to-buisness transaction, i.e., VAT, not included).
2. Households are given a monthly *prebate* based on their income and composition (number of dependents). This prebate *fixes* the regressive nature of consumption taxes. The wealthy will pay more in taxes due to spending more and on more expensive goods and services. For the very poor, their *effective tax rate* would be negligible; the poor would be given more money
3. The estimated 2015 tax percentage is 23%. Yes, 23%. It has been calculated that all taxation that goes into the *cost of a product or service* at the final point of sale (including the payroll tax and other taxes such as corporate tax and other regulatory taxation) in all industries averages out to be 23%. That means your *effective tax rate* on buying goods is 23% since businesses shift the burden of taxes on the consumer by raising their rises somewhat to maintain a profit.
4. Used goods would be exempt. Garage sales are taxed free.
Angel Torres
No one should be taxed. Taxes destroy the free market and make everyone poorer.
Christopher Clark
S.155 - Fair Tax Act of 2015
congress.gov
Fair Tax Act of 2015
This bill is a tax reform proposal that imposes a national sales tax on the use or consumption in the United States of taxable property or services in lieu of the current income and corporate income tax, employment and self-employment taxes, and estate and gift taxes. The rate of the sales tax will be 23% in 2017, with adjustments to the rate in subsequent years. There are exemptions from the tax for used and intangible property, for property or services purchased for business, export, or investment purposes, and for state government functions.
Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines.
The states have the responsibility for administering, collecting, and remitting the sales tax to the Treasury.
Tax revenues are to be allocated among: (1) the general revenue, (2) the old-age and survivors insurance trust fund, (3) the disability insurance trust fund, (4) the hospital insurance trust fund, and (5) the federal supplementary medical insurance trust fund.
No funding is allowed for the operations of the Internal Revenue Service after FY2019.
Finally, the bill terminates the national sales tax if the Sixteenth Amendment to the Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this Act.
Adam Nelson
>paying less because you have kids
Why would someone who is going to use more of the taxpayers money spend less into it?
Enough of this
I want to save more money to buy more high end 911s
tired of paying 43%of my income to taxes
Juan Wright
Progressive consumption tax.
Thomas Campbell
Becuase by having kids they are gave the government new tax payers. Meaning that they are a solid investment so long as the kids replace the parents or more and they don't move to bum fuckistan.
Xavier Richardson
>only the amount you spend gets taxed
So, that sounds like an amazing way to discourage economic growth.
Levi Hill
How do you even collect it if you close the IRS?
Point of sale? That's ludicrous.
Self reporting? Lol yeah right.
Whole thing in general seems designed to make people NOT want to spend more. The opposite of how you grow an economy.
Blake Garcia
>How do you even collect it if you close the IRS?
It's just propaganda. Pure and simple. It's another way of saying that income taxation will be abolished. Of course there will be a federal agency to collect the money. Of which is collected by the state governments, passing it on to the federal government.
>Point of sale? That's ludicrous.
How so? It's just like any other sales tax. Local and state governments have it.
>Self reporting? Lol yeah right.
How is that any different than now?
>The opposite of how you grow an economy.
People are going to buy goods and services regardless. You have to also take into account that all federal taxes will be abolished in favor the consumption tax. That means people will have more money to spend.
Wyatt Reed
We have that now with sales taxation on top of income taxes. Under a FairTax regime you have more money in your paycheck.
Ryan Nelson
>How so? It's just like any other sales tax. Local and state governments have it.
Wanna know how I know you're not involved with small business? Yeah, it's that. Sales tax in general is already a huge nightmare headache, if you added another tax on top of that I'd close up shop just to not have to deal with it. The paperwork and need to escrow funds then pay out lump sum quarterly/yearly is killer.
Or alternatively, everyone that isn't a major corporation would just fib it. A lot of which already happens. Say goodbye to your tax dollars, they're going into private pockets unreported now. And since you killed the IRS good luck figuring out who isn't reporting.
>How is that any different than now?
People are only even remotely honest on their taxes for fear of the IRS coming after them with a legal/financial hatchetman. Without that threat everyone starts to lie. You can trace how much income people have because of W2s etc (somewhat) but having people self report how much they spend? You're crazy if you think you'll get anything remotely accurate
>People are going to buy goods and services regardless. You have to also take into account that all federal taxes will be abolished in favor the consumption tax. That means people will have more money to spend.
And they will cut back/save in order to not get taxed. You'll see luxury spending dramatically fall in the middle class, and upper-mid/upper move their purchases overseas where they can evade the tax. The government isn't going to run off a bread consumption tax and you're incentivizing people to not spend anything aside from subsistence in taxable ways.
Josiah Harris
But what does this do to the federal deficit? And what does this do to all the social programs?
Ian Hughes
Nay
There should be graduated brackets that have deductions to incentivize domestic investment and charity by top earners
Tyler Edwards
Under the FairTax, business actually keeps a portion of the tax to cover collection of the sales tax. And you don't have to deal with the compliance costs associated with the income tax. See pic.
How is the FairTax collected?
youtube.com
Impact of the FairTax on Small Business
waysandmeans.house.gov
FairTax FAQ
fairtax.org
How will this plan affect compliance costs?
>It is estimated that Americans spend at least $265 billion a year to comply with the tax code — nearly $900 for every man, woman, and child in America. That is greater than the current federal deficit ($205 billion). Billions of dollars in compliance costs are wasted each year, and we have nothing of value to show for this expenditure — not one single productive service or product is added to our nation’s wealth. It is estimated that the FairTax dramatically cuts such compliance costs, perhaps as much as 95 percent.
How is the tax collected?
>Retail businesses collect the tax from the consumer, just as state sales tax systems already do in 45 states; the FairTax is simply an additional line on the current sales tax reporting form. Retailers simply collect the tax and send it to the state taxing authority. All businesses serving as collection agents receive a fee for collection, and the states also receive a collection fee. The tax revenues from the states are then sent to the U.S. Treasury.
>You'll see luxury spending dramatically fall in the middle class, and upper-mid/upper move their purchases overseas where they can evade the tax.
That sounds like fear mongering. I don't see that happening on a large enough scare to matter. Again, people won't have deal with any other federal taxes. Plus there is the prebate. See pic It's revenue-neutral. It doesn't affect money for them programs.
Camden Diaz
nay, burn the tax code traitor
America has been damned since the whiskey rebellion
Josiah Young
CHAPTER 2—CREDITS; REFUNDS
Sec. 204. Administration credit.
congress.gov
SEC. 204. ADMINISTRATION CREDIT.
(a) In General.—Every person filing a timely monthly report (with regard to extensions) in compliance with section 501 shall be entitled to a taxpayer administrative credit equal to the greater of—
(1) $200, or
(2) one-quarter of 1 percent of the tax remitted.
(b) Limitation.—The credit allowed under this section shall not exceed 20 percent of the tax due to be remitted prior to the application of any credit or credits permitted by section 201.
Tax Administration and Collection Costs: The FairTax vs. the Existing Federal Tax System (2007)
beaconhill.org
See, IV. FairTax Revenue Collection Process, page 12.
See, V. Retailers and Service Providers (Sellers), page 13.
Nolan Clark
This seems like a pretty raw deal to me. If my sales are 250k a year, at 11.5% tax we're talking 28k or so tax.
Paying me $200 to have to swallow down and then spit up $28k a year? No thanks.
The rest of it sounds good, but the collection method just sounds like a headache for small business.
Not even getting into what would happen to all the CPAs out there.
Aaron Flores
>Paying me $200 to have to swallow down and then spit up $28k a year?
The administration credit is in relation to the *federal* FairTax. It is still $200.00 since it is greater than $143.75.
250k / year x 23% (FairTax) = $57,500
$57,500 x 0.25% = $143.75.
$200 > $143.75.
What does this compliance cost compare to federal taxes now?
Brandon Lopez
Sounds like more neoliberal bullshit.
David Watson
BUMP
Wyatt Williams
That's even worse. I'd gladly pay my costs for tax preparations/compliance and even add the $200 to not have to deal with collecting and sending off 15k a quarter in addition to the 2-3k I already send off for sales tax.
This whole thing seems like a scheme to pawn off the work on businesses in order to cut costs for the government.
Easton Morris
>I'd gladly pay my costs for tax preparations/compliance and even add the $200
I find that hard to believe. What makes sales tax so hard?
Connor Walker
The father of capitalism, Adam Smith said a progressive income tax is necessary to prevent horrific income inequality.
The greater the income inequality, the more wealth concentration. Wealth concentration slows the velocity of money and deprives the economy of demand consumption.
Progressive income tax puts more tax burden on the people who benefit most from government services.
Who is behind the "fair tax" nonsense? The wealthy - they're counting on you to be stupid enough to fall for it.
Leo E. Linbeck Jr. the Founder of FairTax.org used to be apart of Duke Energy’s Board of Directors.
Robert C. McNair who is ranked 242 in the Forbes 400 Richest Americans. Robert who is the second founder of the Fair Tax Organization has a net worth of $1.5 billion discovered on Forbes.com.
So why would a bunch of rich elitist people want to propose the dramatic change in the tax laws? A "Fair Tax" on all Americans?
Because it will put more money in THEIR pockets, not ours.
Isaac Fisher
Yeah, and with both of those we already can't afford SS and Medicare, fuck off.
William Carter
When you're running a business, cashflow is everything. Carving 30% of the money in your pocket off to escrow would be a major headache, nevermind having to sell your customers on a 30% tax markup once sales tax is included. There are way too many chances for that escrow to not happen, and then whoops you're fucked.
Robert Morgan
Actual tax lawyer here.
>6.Eliminating Tax Administration and Filing. Simply put, you’d no longer need to file taxes, and the IRS would close up shop.
I'll leave all the dumb trickle down bullshit and just cut right to this one point. The tax code is long and arduous because our lives are complicated and the government wants to reward certain behaviors like providing healthcare for workers and the like.
Blow up the tax code all you want, it'll get just as long as you started. There's a huge section devoted just to lunches. I'm not kidding.
The fair tax, or any other tax simplification scheme that has been pushed by the right for a long while, at best, gets rid of two pages of the tax code. The tax code is over a thousand pages long.
If anyone EVER says that a fair tax would simplify the tax code, they're either lying to your face, or they don't know a thing about the tax code. With politicians, it's most likely the former. In either case, it's a dumb idea to listen to them.
Julian Smith
Fair enough.
As a businssess owner, what would you change about the FairTax?
Without implementing the FairTax, what kind of taxation would work for you?
Henry Campbell
>they're either lying to your face
It's literally just this piece of legislation. It gets rid of everything and has no exemptions of any kind.
S.155 - Fair Tax Act of 2015
congress.gov
Nolan Young
>1.Favoring High Income Earners. Currently, our tax system is based on tax brackets: The more you make, the more you pay in taxes. Under the Fair Tax plan, only the amount of income you spend gets taxed. Someone who makes $200,000 and spends $100,000, for example, would pay only 11.5% of their income to taxes.
>2.Helping Investments. Because the capital gains tax would be eliminated, individuals who can afford to invest will enjoy tax-free compound growth. This would be similar to having an IRA in which you could invest as much as you want and withdraw funds at any time without taxes or penalties. (Under current legislation, you can only invest a certain amount per year and must be 59 1/2 to withdraw funds without penalty.)
Yes, lets give rich people more money while still taxing middle class as much. What could go wrong?
A spending based tax and on top of that no taxes on investments sounds like a paradise if you make maybe 100-200k+ a year. I don't know why you would think it's a good idea unless you are making that much.
Carter Moore
Oh, I understand.
My point is, A) It doesn't repeal all the underlying legislation from all the different sources that require the different little exemptions, and B) Even if it did, it would take only a few years for all that to come back as everyone who was used to those exemptions knocked down the door to get them back. Those exemptions generally exist for good reason. Not only that, but a lot of the exemptions are designed to negate behavior that would encourage skipping out on taxes.
There's a lot of structure that just needs to be there.
Dominic Campbell
I would say don't try and force the business world to handle collection. Sales tax is already a giant loophole filled mess where most small businesses cheat it or false report and whatnot. Unless you want only corporations to be taxing (Which would, as a nice side effect, spur small business growth immensely but probably fuck the economy) don't go the business side route.
You'll spend 10x what the IRS costs trying to keep small business in line and honest on the subject, because you're basically trying to sell "Stop doing all this extra work, do THIS extra work instead!" and adding a frankly kind of insulting $200 cherry on top only now you're basing the country's revenue off of it.
Connor Cook
Yeah it seems like just a shittier version of UBI+flat tax