The Fair Tax

bill_maloney wrote:

Heres the reality.. it lowers the tax rate of the rich, and raises the rate on the poor.

Thats the bottom line.

So brining thirty-five (the income tax rate on the rich) closer to zero (the income tax rate of the poor) would not, in your opinion, qualify as "fair"??? I'm curious, what's your definition of "fair"?

desandrews wrote:

Can you explain to me what portion of the Fair Tax plan will shift the burden to the poor and away from the rich? Specifically, considering that the poorest of the poor today are taxed for Social Security and Medicare on every dollar they make but under the Fair Tax plan will have absolutely no tax burden at all. Not one cent.

I have another question. What is the official purpose of taxation? Is it to provide services to the society or to backhandedly attempt to decrease income disparity?

Easy! Warren Buffet pays 35% now. He would pay 23%(arbitrary) with the Flat Tax.

He would get a tax cut. Theres no doubt about that, is there?
(Mind you, he can afford it)

if the total income stays the same, and the Wealthy pay less, then quite obviously the POOR pay more. How simple can that be?

Here's what Mr Buffett thinks of the Flat Tax, btw:

"I wouldn’t support it. We have, in my view, a taxation system that’s much too flat already. If you look at the payroll tax—which is over 12% now, and that applies on the first $80,000 or $90,000 of income—Bill and I pay practically none of that in relation to our income. For the people that work for us, their tax rate in many cases is the same or even higher than my own, since the rate on capital gains and dividends was cut to 15%. What has gone on in this country in recent years is a huge benefit to the very rich and not that much relief to people down below. Frankly, I think that Bill and I should have a higher tax rate on the income we get. We pay less than half the rate that I was paying 25 years ago when I was making a lot less money. They have really taken care of the rich."

Pacomc79 wrote:

The fair tax encourages savings. It enables you to actually save your money and not be penalized for it as you are now.

I'm going to plagiarize and then slightly modify a very wise question from desandrews:

What is the official purpose of taxation? Is it to provide services to the society or to backhandedly attempt to [encourage savings]?

farfromglorified wrote:

I'm going to plagiarize and then slightly modify a very wise question from desandrews:

What is the official purpose of taxation? Is it to provide services to the society or to backhandedly attempt to [encourage savings]?

The purpose of taxation is for the government to levy funds to serve the public.

Anything I have said regarding savings is a by product of a new taxation system.


I figure I'm going to pay 5500 to 6600 bucks a year regardless of the system. The fair tax simply drags it out in the open rather than hiding it in witholdings. How many Americans actually know what they pay in taxes each year? Most talk about "take home pay" and think that they "got money back" after their tax returns.

desandrews wrote:

Yes, there is doubt. He pays 35% on his INCOME, under the Fair Tax plan he would pay 23% (not arbitrary, it was set to ensure a revenue neutral change, if it turns out not to be neutral it will be adjusted) of what he CONSUMES.

Mr Buffett can only "consume" so much. Lets just say he's got expensive taste (he doesn't). He lives extravigantly, and spends tens, HUNDREDS of millions of dollars a year on Yachts, Hookers, Blow, and Pearl Jam posters.

The dude makes several Billion dollars a year.

For your arguement, he would need to CONSUME 1.52 times his income.

If you work 2 jobs and make 40K a year, I am glad you aren't in charge of Tax policy.

desandrews wrote:

That was my wording not his, I said it was something to that effect. I was just trying to generalize, point out the gist of it. You're assuming way too much I think. You can read that declaration, even with my crappy wording, and answer yes and not be considered a "crazy liberal." Is it more important to provide roads to drive on, yes, is it more important to provide spinach subsides, no. Had I changed the phrase "their families" to "themselves" would that be better? If so, do that, it's still the same point that people in government tend to think they can take our money without being accountable for providing something useful to the greater society. Democrats or Republicans, it doesn't matter. That's just one method to force public accountability on everyone in an elected office.

But we disgress... The Fair Tax is where it's at. Wouldn't it be nice to know how much you're actually paying in taxes rather than having 3 or 4 levels of taxation embedded into the price of a product? Hell, do we even realize that the government makes more money off of a gallon of gasoline than the oil companies themselves do? Is that right?

No adding anything to the end of the statement. I would have simply phrased it "I believe that it is more important to the greater good of society to tax the citizens to pay for X rather than allowing them to keep the money." For liberals, the "X" is assumed to be for the benefit of families and their future - and for conservatives, "to provide for their families and their future" is implied, as they often believe these things are being hurt whenever money is taxed.

farfromglorified wrote:

Yes, but they're also collecting Social Security at the same rate and Medicare at a much higher rate than the rich are. The so-called "Fair" Tax will not address this problem. Furthermore, the poor would pay much under this tax. They'll pay increased prices for most low-margin goods, as well as their own taxes for consumption on above poverty-level expenditures.

Once the embedded taxes are removed free market competition will drive the prices down.

you are not paying social security or medicare out of your paycheck anymore either I believe. I think that's included in the 23%

about social security

{
Like all federal spending programs, Social Security operates exactly as it does today, except that its funds come from a broad, progressive sales tax, rather than a narrow, regressive payroll tax. Employers continue to report wages for each employee, though, to the Social Security Administration for the determination of benefits. The transition to a reformed Social Security system is eased while ensuring there is sufficient funding to continue promised benefits.

Meanwhile, Social Security/Medicare funds are no longer triple-taxed as under the current system: 1) when payroll taxes are initially withheld; 2) when those withheld payroll taxes are counted as part of the taxable base for income tax purposes; and 3) when the promised benefits are finally received. }