now where does all that missing revenue come from from lowering taxable income I wonder? This "FairTax" may not be horribly fleecing the average worker but it sure becomes very lenient on the rich and overall takes in a lot less money, so are we to believe just like the bush tax cuts that the economy will just take off and it will pay for itself......
fool me once shame on you, fool me twice shame on me....... just another conservative scheme that isn't realistic.
HOW ARE THE BUDGET SHORTFALLS MADE UP...... or will we see this implemented under the guise of saving the average worker money but then say "whoa we don't have enough revenue" and the rate gets bumped up a bit making it cost vastly more for everyone (but still less then people at the top were paying)
All valid Social Security cardholders who are U.S. residents receive a monthly prebate equivalent to the FairTax paid on essential goods and services, also known as the poverty level expenditures. The prebate is paid in advance, in equal installments each month. The size of the prebate is determined by the Department of Health & Human Services? poverty level guideline multiplied by the tax rate. This is a well-accepted, long-used poverty-level calculation that includes food, clothing, shelter, transportation, medical care, etc. See chart in Figure 1 below.*
So the prebate goes to everyone to cover taxes paid on all ESSENTIAL goods! So, if all you buy are essentials then you will not pay many taxes at all. I think it sounds great. People who buy a bunch of "stuff" pay more taxes. If they can afford a bunch of "stuff" they can afford the taxes.
Best of all, it TAKES ALOT OF POWER FROM THE POLITICIANS!!! I think we can all agree that would be an enormous step towards cleaning up our government and it's corruption.
How, exactly, does it take power from politicians? Seems to me that they are the ones who create and adjust the program; their the ones who choose how to spend the money... So how are politicians cut out of the loop?
The numerous problems with FairTax have been discussed ad nauseum. The system as described is simply too easy to scam.
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How, exactly, does it take power from politicians? Seems to me that they are the ones who create and adjust the program; their the ones who choose how to spend the money... So how are politicians cut out of the loop?
The numerous problems with FairTax have been discussed ad nauseum. The system as described is simply too easy to scam.
It removes the power of the politicians to chose favorites (as grossly as now, anyway). The probate goes to everyone. Not just the guy who makes less or the guy who donated more, or the guy who grows corn...etc.... Lessens the reason for excessive lobbying of politicians. I know it sounds too simple. I likely wouldn't be as simple in practice, but our current system is ridiculously over complicated and easily corruptible. Under the fair tax voters could't as easily vote themselves money...only vote everyone a larger probate, which would result in a higher sales tax for all...Everyone would have "skin in the game"..... I like it.
Didn't Obama's choice for economic adviser essentially propose a fair tax on top of income tax?
Quote:
Economix - Explaining the Science of Everyday Life
January 12, 2009, 6:30 am
A Future Consumption Tax to Fix Today?s Economy
By ALAN B. KRUEGER
?Alan B. Krueger is an economics professor at Princeton.
?Any casual observer knows the United States faces enormous economic challenges in both the short and long run. These challenges ? and the respective solutions that are being discussed ? are somewhat in conflict, though.
?On the one hand, the economy is contracting, people are cutting back on their spending and the economy faces a possible downward spiral with fear of job loss, causing consumers to spend even less, which in turn would cause more job loss ? the so-called paradox of thrift. On the other hand, Americans save very little, critical infrastructure has been neglected, and the president-elect warned of government deficits in the trillion-dollar range for years to come.
?Efforts to spur short-run consumption can worsen the long-run problems by increasing the government budget deficit and depleting personal savings.
?Here is a suggestion to address both the short-run and long-run problems. I pose it only as a suggestion for serious discussion; I?m not sure it is the best way to go. But here goes: Why not pass a 5 percent consumption tax to take effect two years from now? There are many different ways to implement a consumption tax, but for simplicity think about a national sales tax.
?In the short run, the anticipation of a consumption tax would encourage households to spend money now, rather than after the tax is in place. Along with the rest of the economic recovery package, this would help jump-start spending in the economy and thereby increase production and employment.
?In the long run, a 5 percent consumption tax would raise approximately $500 billion a year, and fill a considerable hole in the budget outlook. In addition, a consumption tax would encourage more saving in the long run. Many economists consider a consumption tax an efficient way of raising tax revenue, especially in a global economy. The prospect of greater revenue flowing into federal coffers would probably help lower long-term interest rates because the government would need to borrow less down the road, and further bolster the economy.
?The main downside of this proposal is that taxes reduce economic activity. But the government must make critical trade-offs, and a consumption tax could be the most efficient means to raise revenue to finance essential government functions. Over time, if the budget picture improved, income taxes or corporate taxes could be reduced and the revenue replaced by the consumption tax.
?Another downside is that a consumption tax is a greater burden for the poor, who spend a relatively high share of their income. But this can be compensated by exempting essential items, like rent and nutritious, or by providing a rebate to low-income households.
?This analysis only scratches the surface. As I said, I propose the idea only for discussion at this stage, but it is worth considering. What do you think?
?The main downside of this proposal is that taxes reduce economic activity. But the government must make critical trade-offs, and a consumption tax could be the most efficient means to raise revenue to finance essential government functions. Over time, if the budget picture improved, income taxes or corporate taxes could be reduced and the revenue replaced by the consumption tax.
?Another downside is that a consumption tax is a greater burden for the poor, who spend a relatively high share of their income. But this can be compensated by exempting essential items, like rent and nutritious, or by providing a rebate to low-income households.
?This analysis only scratches the surface. As I said, I propose the idea only for discussion at this stage, but it is worth considering. What do you think?
Well worth exploring
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One fair tax plus that often doesn't make the media is that it also taxes illegal money. By illegal money I mean drug and other crime money, illegals payed under the radar and other such money that income taxes are not payed on.
One fair tax plus that often doesn't make the media is that it also taxes illegal money. By illegal money I mean drug and other crime money, illegals payed under the radar and other such money that income taxes are not payed on.
partially true, yeah, but having a ~35-40%% sales tax (including state taxes is going to encourage a LOT more under the table sales as well
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