Thread: Our Tax Dollars at Work

Originally Posted by Judy

http://www.govspot.com/know/incometax.htm

Looks like 7 states have no personal income tax except dividends and interest.

Two big states like Texas and Florida.

If they can operate successfully without it, then it sure seems like the United States of America can do so.

Well how about that! Florida is Jeb Bush's stomping grounds, and Jorge's is Texas. Hmmmmmm!

Remember when someone suggested a tax revolt? Yeah, this is a good idea. But under present law, we'd be violating the law. With the national sales tax, when Americans are upset or don't like what their government is doing...you can have a NO SPEND revolt and now you'll get their attention. We become customers instead of controlled dominions. They want our spending? They want our business? They want our "sales taxes"? Then make us happy and do as you are told.

Judy, I agree with this.
And there is no way the average worker can stage a tax revolt now because they take it right off the top from people who work for someone else and there is no immediate remedy short of quitting out jobs.

But I have to agree with PA that the business people charged with the responsibility of collecting the tax from the consumers-- the retailers-- are GOING to find ways to not pay some of it and some are going to find ways to not pay any of it. Unfortunately, the criminals, and many of them are illegal aliens, are going to be the ones who don't send that money where it belongs.

I have no qualms about the states collecting the federal money and sending it onward. I do sort of have a problem with the federal gov't making their money the state's responsibillity so that they can come back somewhere down the line and blame the states instead of themselves when they start stealing it and squandering it again. In short, I don't trust the federal government much at all anymore and as long as we have even one of the current globalist snobs in charge of anything, I won't start trusting them again.

But, as I have said, I DO like the Fair Tax Act in general. It just needs a few bugs ironed out.

I'd go along with a flat tax from EVERYBODY all the way across the board as well, if they would charge everyone the same rate and not say a guy who makes a hundred grand is going to pay fifty percent but a guy who makes ten grand is going to pay one percent. And, along with a flat tax program would have to come the hard line against funding charities of any kind and let the people who want to have those charities support them. That means churches from all denominations, girl scouts, boy scouts, the United Way, etc.

PA--no the underground economy like the criminal enterprises would still exist. FairTax doesn't have any impact of those organizations like drug dealers, black market, weapons sales, trafficking.

I don't think that PA is thinking about drugs, prostitution, boot leg booze and otehr issues as far as the non tax paying retailers. PA means what I mean. Let me try to explain.

Say a retailer takes in $5,000 per day. Say he claims he took in $4,000 per day. Then, he gets away with that so next year he says he takes in $3,000 a day, and so on. The consumers are STILL paying taxes but the government is not getting them. Then what? We get screwed from somewhere else. That is what I'm trying to point out.

How do that they do that exactly?

How do that they do that exactly?

They do it every single day in this country and have been doing it for years. I used big figures for talk purposes in my scenario.

I used to own a store in a resort area years ago. Most of my friends were small business owners, not all retail but a fair share, and we all struggled during the off season. I can't count how many times I would be asked why I didn't have a separate set of books to reflect less income. One of the biggest problems for me was employees stealing money rather than ringing it through the cash register, which was balanced twice a day.

More recently, I have participated in craft shows. People who do this are required to have a tax number and pay sales tax. Most of the people who do that in this area are of Mexican descent if they aren't outright Mexican citizens who buy local licenses, etc, in order to sell their wares in the US. (I have no problem with that, by the way, as long as they go back across that bridge at the end of the day.) But, here, again, when the subject of sales tax comes up, I have been asked why I don't report less of my income so that I don't have to pay sales tax. And, of course when people operate out of a cash box, it is even eaiser to avoid the sales tax man.

By the way, that is why many illegals have a federal tax number and why they can claim that they "pay taxes."

Now do you see it? There are literally hundreds of thousands of people in this country who are small business owners. If those hundreds of thousand of people don't report all their income, don't pay tax on all their income, then what? Say they make fifty dollars in sales and only report 25 or 40? There is a dip out of the sales tax being paid.

I hate math and I hate playing games so I couldn't tell you the ins and outs of how it is done but I am acutely aware that it is done. And I am convinced that it is a fairly common practice just based on the number of people who discuss it openly.

Or would the goal of the government by passing a fair tax act be to put all the small business people out of business and let WalMart hide their profits through cooked books?

In truth, I wish I trusted the government enough to help them to educate people on this subject because it does have good points and only that one major flaw that I see.

The Fair Tax and other proposals like it are just a back door attempt to start a VAT tax just like they have in Canada and Europe.

It all sounds good until you realize there are no guarantess they will not raise the taxes. Under The Reagen administration they calculated that a fair tax rate of 5% would more than cover the operatong costs of the Gvoernement.

It never happened because it would limit how much the Government could steal from you. Until the Government stops the witholding system Americans will not be able to see how much they steal from you.

I too agree with poster that stated the 16th amendment never passed the constitutional process.It was 2 votes short of being ratified.

Our Government survived on tariffs and import duties for over 100 years without having to tax its citizens. There is no reason for us to have pay any kind of income tax IMHO to the Federal Government.

Another excellent point ScottyDog. Last figure I heard with relationship to the Fair Tax Act was 30 %. I feel that is way too much unless the states are going to drop their tax entirely but you and I both know they aren't going to do that. I figure if it passes at a 30% rate, we will, in effect, be paying over 50% of our income for taxes in one form or another. Some of the taxes we pay aren't going to go away--property tax? gasoline tax? etc.

The proposed tax rates is 23% for the Fair Tax and includes social security. There were some other proposals in the past that were lower but didn't eliminate social security payments. This one does.

You do not pay any percentage of your income under Fair Tax. You only pay the percentage on what you spend. And then you get the rebate back every month based on the actuary formula for what you would have spent on necessities. For most people the first 10,000 to 15,000 x .23 = $2300 to $3,450 of tax is rebated back to you every month in monthly or 1/12 payments. The rebate is figured based upon the number of people in the household. A single person gets back so much; a married couple more; a person with kids more; a couple with kids more; based upon adults and children in the household.

If you earn 25,000 and spend every dime you would pay an annual national sales tax of .23 = $5,750 and if you are single with no kids, you would get a rebate back of around $2,141 for a net tax of $3,609 which is about 14.4% of your gross income and includes FICA and Social Security. Social Security is around 7% now, so your federal rate would be equivalent to about 7% less than your income tax rate.

If you earn 25,000 and save 5,000, then you would only spend 20,000 x .23 = $4,600 in sales tax get back $2,141 = $3,100. $2.459 is only 9.8%. Social Security is 7%, so your effective rate on your earnings for comparison is only 2.8%.

http://www.fairtaxvolunteer.org/smart/faq-main.html#3

The rebate starts out at $2,141 for a single person. This link shows you the chart for calculating your situation on the rebate.

A married couple would get a rebate of $4,183 a year.

A family of 4 married couple and 2 kids would get a rebate of $5,745 a year.

Lets take the family of 4 and both parents work and together they gross the average per capita household income for the US at about $41,000 a year.

Lets say they spend 90% of their income and save 10%.

$41,000 x 90% = $36,900 x .23 = $8,487 in taxes paid less rebate of $5,745 = $2,742. This is 6.7% of their income. Just enough to cover their social security.

So, the single person comes out ahead.

The married couple comes out ahead.

The family of 4 comes out ahead.

See, this is why it is FAIR for the poor and lower income Americans.

Now, lets take a middle income family of 4.

Lets say both earn $40,000 each generating $80,000 of gross income.

Lets say they spend 80% of their income.

$80,000 x .80 = $64,000 x .23 = $14,720 less rebate of $5,745 = $8,975 which is 11.2% of their gross income and after Social Security only 4.2% of their income and far less than what they would otherwise pay in FICA and Social Security.

Now lets take an upper income family of 4.

Lets say both earn $75,000 and they spend 75% of their income.

$150,000 x .75 = $112,500 x .23 = $25,875 less rebate of $5,745 = $20,130 which is 13.4% which after 7% social security is only 6.4%.

Lets take an upper upper income family of 4.

Lets say together they earn $500,000 a year eand they spend 60% of their income.

$500,000 x .75 = $375,000 x .23 = $86,250 - $5,745 = $80,505 which is 16.7% which after 7% social security is only 9.7%.

On the issue of cheaters and little small cash businesses, I'm not sure what the solution there is. They might even be exempt. If they are running two sets of books to cheat, well, then they are probably used the fraudulent books to pay their income tax so they are already cheating the system and you're already paying more as a result.