Thread: Opinion: Sen. Cruz might face birther problem, isn’t that ironic?

Originally Posted by MW

THANK YOU! I've read a ton of information on the issue and came to that very same conclusion ages ago (that the so-called Fair Tax plan would hurt everyone but the wealthy). The so-called fair tax plan does not pass the smell test and never will.

MW: I just came across some old but interesting "Smell Test" comments.

Does this even pass the smell test, the "fair tax"?

- we're going to give everyone a gov. check
- we're going to increase the sales tax to 23 percent (which would be a tax increase for about 70 percent of people, as Mitt said, 47 percent pay none)
- and, after we send out checks to everyone and discourage spending... we're going to make more money doing it...

REALLY? REALLY?

you give the average person a $50 check and make their next TV cost $300 more and you think you will sell more and make more money?

Update: I now see the basis of selling this is to tell people who pay almost no taxes now that they will pay less when they pay 23 percent... and hoping that people are stupid enough to believe it...

this will have a HUGE incentive for people to not buy items that are much more expensive... and most will not see hardly any more real money... most that get money withheld get it back... no more of that...

Update 2: zaza... and what if they decided that the cost was a little too much and decided not to buy them as much any more? 23 percent is a pretty steep price increase

Follow
13 answers
Report Abuse

Answers

Relevance

Best Answer: I think the only fair tax is a progressive one. The basic cost of living is the same for everyone, but it eats up a larger percentage of poor people's incomes. The wealthy have an extremely small percentage of their income that needs to go to the basic cost of living. The wealthy should pay higher rates of taxes because they have much higher percentages of income that is disposable.

Chewy Ivan 2 · 2 years ago

5
Thumbs up

3
Thumbs down

Comment

Report Abuse

• 
  1. ONE person getting ONE PENNY back is an admission by the federal government it stole more than it was legally entitled to steal. NO ONE should ever get a tax refund.
  
  2. A "flat tax" simply means everyone pays the same percentage of their income for the services they receive from the federal government. What is wrong with that?
  
  3. If a person can't afford a TV set, they can't afford it. They can just buy a cheaper one or none at all.
  
  4. 23% may be a "steep price increase" but I could afford it if I wasn't losing more than that already to the federal thieves. Instituting a flat tax eliminates the current earnings theft (tax) fiasco that no one understands.
  
  out2lunch4now2 · 2 years ago
  0
  Thumbs up
  
  0
  Thumbs down
  
  Comment
  
  Report Abuse
• 
  No, it doesn't. It raises taxes on people who make the least. Some people have no problem with that and it may be their goal, but every time I hear something like that it seems that no one bothered to look at the side effects. For starters, 25% sales tax would not make up the revenue generated by income tax.
  
  Mailing out tiny checks to everyone--isn't that how Bush turned a surplus into a deficit BEFORE 9-11 happened and we had a couple wars to fund without revenue? I got my $300--I think the government now owes around $1100 for giving it to me.
  
  The tax system needs improvement, but flat sales taxes are a step in the wrong direction. If they are on final sales, they tax the percentage of a person's income that they actually spend: 100% of the poor's income, 60-90% of the middle class' income, and less than half of a rich person's income. Corporate taxes would either drop to 5% or go up, depending on whether the tax is applied to consumer sales or any sales. If it applies to any sales, it would benefit any company large enough to horizontally integrate so that it is its own supplier--giving it a huge competitive advantage over any small business that purchases products or parts.
  
  wayfaroutthere · 2 years ago
  0
  Thumbs up
  
  1
  Thumbs down
  
  Comment
  
  Report Abuse
• 
  The fair tax already reeks. Merely calling something "fair" doesn't make it true.
  
  Take that sales tax. Buy a tv, you pay tax. Buy stock? no tax. Or at least I've yet to see anyone who has ever proposed a national sales tax which would tax stock sales.
  
  The only person I've seen propose that was a man who proposed a quarter cent tax on shares, as it would stabilize the market. You wouldn't buy and sell stocks to make money off minor fluctuations. The point of that tax wasn't even to generate revenue.
  
  Would a national sales tax, tax house sales? If so, you could expect the housing market to crash and the rental market to become quite popular. Such a hit would turn the professional class into renters, as they need to move for work and the poor into owners.
  
  Smells like New Screen Names · 2 years ago
  2
  Thumbs up
  
  1
  Thumbs down
  
  Comment
  
  Report Abuse
• 
  YES.. you biased fool
  
  We are already giving 49% of households a gov check EVERY MONTH
  That "prebate" refund every DIME the poor would pay in necessary expenses.
  
  Yes.. sales tax of 23% .(7% already exists in most states). while getting rid of ALL corporate income taxes AND Payroll taxes = Net lower tax.. prices would NOT go up.
  
  Plus .. people will have MORE money because there is no tax withholding !
  
  You're totally ignorant on the Fair tax.. read up on it
  
  Source(s):Which is it ? Do you "Hate" that some people have millions or do you hate what they can do with it?
  
  It does nothing for them sitting in a bank account, this way it will be used !!
  ? · 2 years ago
  4
  Thumbs up
  
  3
  Thumbs down
  
  Comment
  
  Report Abuse
• 
  It's not about the average person. Its about the person who depends on the government to take care of them. They are the ones who will get on the bus and vote as many times as they can because their way of life is at stake,
  
  Denniejc · 2 years ago
  0
  Thumbs up
  
  0
  Thumbs down
  
  Comment
  
  Report Abuse
• 
  I hear the words fair tax, but never anything about eliminating offshore accounts and other forms of tax evasion.
  
  Heretic · 2 years ago
  0
  Thumbs up
  
  0
  Thumbs down
  
  Comment
  
  Report Abuse
• 
  Yes it does pass the smell test.
  
  Why would you reject a tax that is based on what you take from the economy and favor a tax on what you contribute to the economy? That to me doesn't make sense.
  
  Their Constitution rules them · 2 years ago
  0
  Thumbs up
  
  1
  Thumbs down
  
  Comment
  
  Report Abuse
• 
  The so-called fair tax is a right-wing pipe dream to give a massive tax cut to the wealthy. Most Americans support a progressive tax structure and this idea will never be carried out.
  
  Easter Bunny · 2 years ago
  3
  Thumbs up
  
  4
  Thumbs down
  
  Comment
  
  Report Abuse
• 
  I like the "we're going to give everyone a government check" part. It's about time that we stopped rewarding just the lazy. Liberals claimed Obama created enough shovel ready jobs for every man, woman, and child. If you don't have a job, that just means you a racist trying to make Obama look bad.
  
  ahandle101 · 2 years ago

Would a national sales tax, tax house sales? If so, you could expect the housing market to crash and the rental market to become quite popular. Such a hit would turn the professional class into renters, as they need to move for work and the poor into owners.

The FairTax would only tax new home sales, not existing. So no, the housing market would not crash. The 23% FairTax is less than what the embedded income taxes already are on brand new home sales. If you buy an existing home, there is no FairTax on the purchase. There would be some small FairTax on the fees of due diligence, broker, and closing costs.

The rental market may become more popular under the FairTax but not because it's exempt from the FairTax, because it isn't. Retail rents are subject to the FairTax, business rents like all business expenses are not.

The "professional class" will actually have a great deal more options available to them under the FairTax and renting for the convenience and stress-free lifestyle may appeal more to them under the FairTax. A lot of people who move a lot and travel a great deal find home ownership they engaged in for the mortgage interest deduction, a serious problem, not only because of commuting distances from the suburbs where they can find affordable homes to buy, but because of the maintenance and time required to care for the property. It could mean a revival of our downtown core business districts which would be another advantage of the impact of the FairTax. Another would be the attraction of older existing homes which are not subject to the FairTax for fixer-uppers which would pull more people with good jobs and money into the these areas of a city for a revitalization. Environmentalists, real ones, who are worried about the consequences of urban sprawl would find this a great advantage of the FairTax.

No, it doesn't. It raises taxes on people who make the least. Some people have no problem with that and it may be their goal, but every time I hear something like that it seems that no one bothered to look at the side effects. For starters, 25% sales tax would not make up the revenue generated by income tax.

It's not 25%, it's 23%, 8.09% earmarked for Social Security and Medicare and 14.91% dedicated to General Revenue.

Yes, it actually does make up the revenue generated by the income tax, in fact, it does so at the Clinton tax rates, before the Bush Tax cuts when the 23% was selected and the legislation first introduced into the US Congress in 1999.

Take the GDP, subtract exports, and multiply it by 23%.

$16.8 Trillion - 2.35 T in exports = $14.45 x 23% = $3.325 T (2014)

Tax revenue collections, all sources, federal government = 3.021 T (2014) (all sources)

http://www.taxpolicycenter.org/taxfa....cfm?Docid=200

Subtract non repealed non-income taxes:

Excise $93 b
Customs and duties (tariffs) $34 b
Fed Reserve Deposit Interest $99 b
Misc other receipts $37 b
Total: $253 billion

Subtract these from $3.021 Trillion - $253 T = $2.768 T in income tax receipts to be repealed by the FairTax

FairTax = $3.325 T - $489 b in Rebates (assumes 100% participation) = $2.836 T

http://en.wikipedia.org/wiki/FairTax

The FairTax generates approximately $68 billion more in revenue than the existing income-based taxes it is repealing.

Because everyone will have more expendable disposable income, the economy will have a boost and generate more revenue than this, and if that stabilizes, then it's possible that the General Revenue rate could be reduced. The Social Security and Medicare rate portion is evaluated every year and if needed, this rate is adjusted according to the statute to guarantee adequate funds are available for SS and Medicare, the same as when they would raise the payroll taxes to ensure the same.

I hear the words fair tax, but never anything about eliminating offshore accounts and other forms of tax evasion.

That's because the FairTax solves the issue of offshore accounts and other forms of tax evasion. People and companies store their money in offshore accounts to avoid the income tax. The FairTax eliminates the reason these monies are stored offshore, so they will come home as soon as the FairTax passes. I've read estimates that claim there is around $14 trillion dollars of American money stored offshore. This in whatever huge amount it is will come roaring home and be stored and invested here. Other forms of income tax avoidance and evasion will disappear because there is no income tax to evade. There will still be some who try to evade the FairTax, and some will succeed, and this is just a fact of life. There will be far fewer players since only retail businesses collect the FairTax, and because the businesses who collect it aren't the ones paying it, they are merely collecting and transmitting it for a fee, then it will be much easier to police and since the states actually do the policing and collecting from the businesses and are quite experienced in collecting these types of sales taxes, it should be a small problem. Plus, when a retailer cheats, it's actually theft of the consumers money they collected, not just an evasion of their own tax obligations, so the penalties are very stiff akin to embezzlement.

The tax system needs improvement, but flat sales taxes are a step in the wrong direction. If they are on final sales, they tax the percentage of a person's income that they actually spend: 100% of the poor's income, 60-90% of the middle class' income, and less than half of a rich person's income. Corporate taxes would either drop to 5% or go up, depending on whether the tax is applied to consumer sales or any sales. If it applies to any sales, it would benefit any company large enough to horizontally integrate so that it is its own supplier--giving it a huge competitive advantage over any small business that purchases products or parts.

Because of the Rebate, the poor pay nothing, the middle class pays on only what they spend above the allowance and only then on what they spend on new goods and services. So someone earning household income of $60,000 with a family of 2 adults and 2 kids would have their first $30,000 plus in spending covered by the Rebate of around $7,000 a year. Whatever portion of the other $30,000 they spend on new goods and services would be taxed by the FairTax at 23%. Whatever portion they spend on used goods is exempt as is whatever they save or invest or put in retirement or education funds and so forth.

All corporate income-based taxes are repealed by the FairTax, so all corporate income tax rates would be eliminated and their income-based taxes would drop 100% to zero. This includes corporate income, employer payroll, capital gains, interest and dividends taxes, all gone through the repeal of income-based taxes by the FairTax legislation.

Judy, for the answers you're seeking, you may want to broaden your research beyond the FairTax website. Just saying .......

Originally Posted by MW

Judy, for the answers you're seeking, you may want to broaden your research beyond the FairTax website. Just saying .......

Hi MW! I'm not seeking answers, I'm providing them. I'm explaining the FairTax based on the legislation, not the FairTax website. For anyone who would like to read the bills, they are HR 25 in the US House of Representatives and S 155 in the US Senate.

Originally Posted by MW

Judy, for the answers you're seeking, you may want to broaden your research beyond the FairTax website. Just saying .......

MW: If you know the answer to these questions, or come across the answers later, please share the info with us.

What would it cost to sent a check to every person in the U.S. every month?

What would the computers, software, hardware, printers, ink, etc. necessary to make that happen cost?

How many employees would that take?

Who keeps the list up to date? Newly eligible, died, etc. every month?

Who checks the legal status of people who get checks?

Who investigates fraud related to cheaters?

Do people in jail or prison get a check? Who takes them off the list and back on every month if not?

What if they are only locked up for 1 week or 2 weeks?

I can't find this info, and more, anyplace.

If you think of more unanswered questions please share them with us.

You know, MW, back when I was in college studying taxation and economic policy, we devoted a great deal of time to studying the various tax methods and how to solve the problems with the income tax in the United States, because it was a problem then and still is one. We studied, researched and wrote papers on how we would solve the problem and one of the options of several available was the national sales tax. The FairTax hadn't been developed yet of course, so in the course of these studies, the national sales tax notion was like state sales taxes. Based on everything I'd learned so far, it seemed to me that the best option for our country was the national sales tax, so I wrote my paper on the national sales tax as a replacement for the corporate and individual income taxes and other income based taxes with the exception of the payroll tax for Social Security and Medicare, I didn't repeal the payroll tax in my paper, I left that alone. At the time, a national sales tax rate charged on all private sales, new and used, goods and services, was 7%. Companies and employees would still pay their payroll taxes to fund Social Security and Medicare.

A few days later after the professor had read and graded the papers, he handed them back out to class, but I didn't get mine. And he told the class he was holding one back to read to the class. Assuming mine was awful and he was calling me out for a bad paper, I slid down in my chair to look inconspicuous hoping no one would know me or see me, and then he says, this is the paper written by and gives my name, and then says I'm holding it back to read it to you, because it's the best research paper I've ever had the pleasure to read and grade, and the only A+ grade I've ever given. I perk up and say to myself, "wow."

The professor took the whole class time to read my paper to the class. After he was finished, there was another girl in the class and she pivots around and says "well, my daddy is a salesman, and he has to deduct his expenses, so under your plan he won't get to do that." And the professor asked me if I would you like to respond to that? So I said sure, and explained to her that her daddy wouldn't need to deduct his expenses from his income tax, because he wouldn't be paying any income tax to begin with. And then she said, "well then what is he going to be able to deduct them from"?

So, I've known since then, that there will always be some people who don't get the national sales tax because they don't get taxation to begin with because they can't see the forest for the trees, or in this case, they can't see the tax for the deductions. But it's a small percentage of Americans.

The differences between the FairTax plan and my plan are:

1. FairTax only taxes new goods and services sold at the final point of sale.
2. FairTax repeals and replaces payroll taxes as well as the other income-based taxes.
3. FairTax rate has a Rebate.
4. FairTax exempts exports.
4. FairTax rate is higher because of 1-4.
5. FairTax is inclusive and part of the posted price, not added on at the register, but accounted for on receipts.
6. FairTax is collected by Retailers from consumers and are paid a fee for the service.
7. FairTax provides the option for States to collect the FairTax from Retailers for a fee and forward to the Feds.

I have no problem with those differences, and see the advantages of them. The team of economists who put the FairTax together did a great job.

Originally Posted by JohnDoe2

MW: If you know the answer to these questions, or come across the answers later, please share the info with us.

What would it cost to sent a check to every person in the U.S. every month?

What would the computers, software, hardware, printers, ink, etc. necessary to make that happen cost?

How many employees would that take?

Who keeps the list up to date? Newly eligible, died, etc. every month?

Who checks the legal status of people who get checks?

Who investigates fraud related to cheaters?

Do people in jail or prison get a check? Who takes them off the list and back on every month if not?

What if they are only locked up for 1 week or 2 weeks?

I can't find this info, and more, anyplace.

If you think of more unanswered questions please share them with us.

These are great questions, JohnDoe2.

First of all, not every person in the United States receives a Rebate check. Under the FairTax legislation, the Rebates are issued to the head of a household, not to all the individuals in the household. If an adult wants a separate Rebate for themselves, for example a relative living with family members or roommates sharing an apartment or house, then they can receive their Rebates individually. Another example are children who turn 18 and are now qualified for their own Rebate but are still living at home, they can apply for their own and the new amount paid to them, and they would be removed from the child Rebate of the parent or parents. Also, only US citizens and legal residents of a household are eligible for Rebates.

Second of all, under the FairTax, the Social Security Administration is responsible for approving the requests for Rebate, based on citizenship and legal residency, and is also responsible for calculating and delivering the monthly rebates, something Social Security Administration does every month for retirees and those on Disability. So they already have the programs and means to do this. They also don't mail out Rebate "checks" to everyone, there are 3 ways to receive your Rebate, by check, direct deposit, or on a Smart Card, and you check the preference on your application form for the Rebate. So while there will be an added cost for Social Security, it will be quite small compared and more than offset by the elimination of administrative activities currently being conducted by the IRS, so there will be substantial government savings on administrative costs over all.

Social Security Administration is responsible for the Rebate, verification of eligibility, fraud, deaths, changes in households, and so forth, which is the same as what Social Security does now for all who have a Social Security number, so there shouldn't be any additional costs for this function.

There is no exclusion to the Rebate for people of households who have a household member in jail or prison, the same as there is no exclusion to the Rebate for people on welfare.

When there is any change in your household, you notify Social Security.

With regards to FairTax cheaters, the States who collect the tax investigate these, something they would do for their own sales tax cheats, and for the 5 states who don't presently have a sales tax bureau, they would either need to form one to collect the FairTax or the feds will collect it in those states. The 5 states could also contract with the bureau in a state that collects sales tax and they could collect it for them. The States aren't required to do it, but since they make money from doing so, all probably will, but for those who don't, the legislation provides for the Federal FairTax division to collect it, and save the fee that would otherwise be paid to the states that decided not to do it for whatever reason.