New Fair Tax Book

[Aggravated Assault]

Don't want to start a big political discussion for/against or at all, I'm just fired up and want to plug the new book about the FAIR TAXFairTax, The Truth, Answering the criticshttp://www.amazon.com/FairTax-Answer...540463?ie=UTF8


If you don't know much about it, or haven't heard about the fair tax, check it out at www.fairtax.org and the house bill is HR 25

I think the idea of tax reform is gaining momentum, and spreading information is the key.

Soooo... If anybody wants to discuss, awsome.

[93civiccpe]

I have done some research on the fair tax and from what I've read, I really am in favor of it. It is one reason why I really like Mike Huckabee and hope that by some miracle he gets the GOP nomination. The fair tax would get rid of the IRS, and basically the more money you have (and more you spend), the more taxes you would acrue. That way it is more of a level playing field. It is tax per dollar spent.

Not only that, the fact that illegal immigrants would now be getting taxed because it would be included on any product they purchase. So yes, the cost of food & etc will go up a little, but that will be in place of the IRS taking a random amount away from us. I like the plan, and if any of you aren't informed on it, I'd definitely advise you to read up as well.

[pmstc]

Honestly, when the federal government is trusted with sending out monthly 'prebate' checks, I see that as being wasteful (how much do you think it would cost to mail everyone in the US a check once a month???), and prone to many problems...
How about we cut spending, and eliminate the income tax all together? The fairtax seems slightly better than our current system, but it is still very complex.

[mag79]

Honestly, when the federal government is trusted with sending out monthly 'prebate' checks, I see that as being wasteful (how much do you think it would cost to mail everyone in the US a check once a month???), and prone to many problems...
How about we cut spending, and eliminate the income tax all together? The fairtax seems slightly better than our current system, but it is still very complex.

If you think the FairTax is complex you dont really understand it

[going_home]

Mine shipped today, got it on Ebay

I waited in line for half hour to get the Neil Boortz to sign the first
one then ended up giving it away

[pmstc]

If you think the FairTax is complex you dont really understand it

Thanks for the insightful rebuttal.

[mag79]

Thanks for the insightful rebuttal.

[Aggravated Assault]

You know, just the idea of people our age talking about (tax) reform is full of big WIN no matter if you are for, against, or on the fence.

Just to add, The Authors of the book (Boortz/Linder) get nothing...they are donating the all proceeds to charity.

We (all the twenty, thirty, and forty somethings) are the future. A ship as big as the U.S. dosent turn fast, but in time we can make a difference. Go buy a copy this weekend and help knock an Oprah book off the no 1 spot.

pmstc - I am with you here...this is an area I have reservations with too. But the coolest part is not that you have a good opinion, it's that you have taken the time to look into the fair tax. Seriously, I've posted on a few other forums and some tear it down without even looking at it.

[Thordic]

Fair Tax doesn't work for one simple reason.

The less money you make, the larger percentage of your salary you are forced to spend.

Someone making $30k a year probably spends everything and doesn't save much.

Someone making $30 million a year probably spends a few million and the rest gets tucked away somewhere. Lets say, for arguements sake, he spends HALF his income somehow (buys a new house, whatever, and spends $15 milion)

The proposed fair tax rate is 23%, so the poor person would get taxed at 23%. Sounds fair, right?

The rich person would get taxed at 11.5%. How is this "Fair Tax" fair when the rich get taxed at much less a percentage than the poor?

Also, some businesses would make out like BANDITS. My old company was a professional services company. They didn't buy and sell goods. They sold services. They wouldn't be paying tax on the services they sold, because that would be the responsibility of the group requiring services (Which in my old company's case was usually the government). The majority of their expenses was simply salary for their employees.

So basically a company that provides professional services would avoid taxation. They don't "buy" anything so there would be very little to tax compared to a something like, for example, a manufacturing company, which has to purchase large amounts of raw materials.

[Aggravated Assault]

Fair Tax doesn't work for one simple reason.

The less money you make, the larger percentage of your salary you are forced to spend.

Someone making $30k a year probably spends everything and doesn't save much.

Someone making $30 million a year probably spends a few million and the rest gets tucked away somewhere. Lets say, for arguements sake, he spends HALF his income somehow (buys a new house, whatever, and spends $15 milion)

The proposed fair tax rate is 23%, so the poor person would get taxed at 23%. Sounds fair, right?

The rich person would get taxed at 11.5%. How is this "Fair Tax" fair when the rich get taxed at much less a percentage than the poor?

I'm not sure I understand your logic. Why woud the "rich" guy (in your example) only be taxed at 11.5%? I in no way claim to be a scholar of the ins and outs of HR 25 (that's the fair tax bill)...But I believe the proposal is a consumption tax of 23% across the board, no matter your income level.

If you look at the proposal, I think you actually are talking about effective tax rates...and have your figures reversed. "Lower" income households, tho they would be paying the 23% on goods/services, would actually have an effective tax rate closer to 11.5%, because spending up to the poverty level (using Dept. of Health and Human services long established guidelines) is not taxed.

Also, some businesses would make out like BANDITS. My old company was a professional services company. They didn't buy and sell goods. They sold services. They wouldn't be paying tax on the services they sold, because that would be the responsibility of the group requiring services (Which in my old company's case was usually the government). The majority of their expenses was simply salary for their employees.

So basically a company that provides professional services would avoid taxation. They don't "buy" anything so there would be very little to tax compared to a something like, for example, a manufacturing company, which has to purchase large amounts of raw materials.

I just want to mention, I believe your above example is wrong. Services will be taxed. A company that provides professional services will not be able to avoid taxation. Tho, As I understand, goods purchased for buisness purposes would be tax free.

As I said above, I an not an expert. It seems you have done some looking into the proposal...If you could point me to some of the information you have posted, I'd love to check it out.

[Army]

Whenever a tax is called "fair"........it isn't.

12% flat tax for all, make earmarks illegal, and jail for politicians that fail to hold to the budget.


(BTW, let's be very careful on this thread, it is on "fairly" thin ice as topics go)

[Thordic]

The rich person would get taxed at 11.5% because they would only be spending half of their income, so the other half that they put into savings would be tax-free. Basically you encourage saving, not spending, by having a consumption tax. That doesn't help the economy much.

And as for the other part, of course the services would be taxed. But the company providing the services wouldn't be the one paying the tax.

Company A generates $100 million in revenue for professional services. In 2008, under the current tax law, they pay $35 million in income taxes.

Company B is the sole client of Company A, requiring $100 million in professional services from Company A.

In 2009, the Fair Tax goes into effect.

Company A still generates $100 million in revenue for professional services. In 2009, they pay no tax on this revenue because there is no more income tax.

Company B must pay $123 million for these services, $100 million for the services and $23 million in income tax.

All you've done is passed the tax burdon along to another company and made the CEO of Company A get a larger bonus. I haven't seen how the Fair Tax law would apply to professional services but given the nature of that business it doesn't seem like it would work well at all. Professional services firms don't spend any money on goods. Their only real expenses are payroll (aside from rent and office supplies).

[teufelhunden]

The rich person would get taxed at 11.5% because they would only be spending half of their income, so the other half that they put into savings would be tax-free. Basically you encourage saving, not spending, by having a consumption tax. That doesn't help the economy much.

And as for the other part, of course the services would be taxed. But the company providing the services wouldn't be the one paying the tax.

Company A generates $100 million in revenue for professional services. In 2008, under the current tax law, they pay $35 million in income taxes.

Company B is the sole client of Company A, requiring $100 million in professional services from Company A.

In 2009, the Fair Tax goes into effect.

Company A still generates $100 million in revenue for professional services. In 2009, they pay no tax on this revenue because there is no more income tax.

Company B must pay $123 million for these services, $100 million for the services and $23 million in income tax.

All you've done is passed the tax burdon along to another company and made the CEO of Company A get a larger bonus. I haven't seen how the Fair Tax law would apply to professional services but given the nature of that business it doesn't seem like it would work well at all. Professional services firms don't spend any money on goods. Their only real expenses are payroll (aside from rent and office supplies).

To be fair, your last point holds true today. Everything you buy has the income tax effect factored into it. People forget that corporations are simply entities -- but people are the ones paying for the services, holding ownership, receiving dividends, and paying taxes. Every level is affected by that -- paying for goods/services: the amount of estimated tax paid will be included in the cost of the pdt/service; owing the corporation: capital gains tax penalizes the owner for that; dividends, as everybody knows, are subject to "double taxation" meaning that the corporations income is taxed before it is paid out in a dividend and the recipient of the dividend then has to pay tax on it.

[Aggravated Assault]

Army...If I there is some rule I am breaking by posting this topic, i'm sure didn't mean to....so far I thought this was a pretty cool thread

Anyway,

The rich person would get taxed at 11.5% because they would only be spending half of their income, so the other half that they put into savings would be tax-free. Basically you encourage saving, not spending, by having a consumption tax. That doesn't help the economy much.

And as for the other part, of course the services would be taxed. But the company providing the services wouldn't be the one paying the tax.

Company A generates $100 million in revenue for professional services. In 2008, under the current tax law, they pay $35 million in income taxes.

Company B is the sole client of Company A, requiring $100 million in professional services from Company A.

In 2009, the Fair Tax goes into effect.

Company A still generates $100 million in revenue for professional services. In 2009, they pay no tax on this revenue because there is no more income tax.

Company B must pay $123 million for these services, $100 million for the services and $23 million in income tax.

All you've done is passed the tax burdon along to another company and made the CEO of Company A get a larger bonus. I haven't seen how the Fair Tax law would apply to professional services but given the nature of that business it doesn't seem like it would work well at all. Professional services firms don't spend any money on goods. Their only real expenses are payroll (aside from rent and office supplies).

Just to counter a tad, (and piggyback on what was said in the previous post), tax burden is passed along already in our current system. HR25 isn't trying to lower the tax burden, It is supposed to be revenue neutral. The whole idea is to simplify the tax code, encourage economic growth, and make compliance enforcement easer.

also, in your example, the cost company B would pay would still be about 100 million...taking the embeded taxes out of the equation would cause the price to drop about 22%, making the 23% tax nearly a wash.

As for the investing side, investments/retirement/saving money...would that be such a bad thing to encougage capital investment and or saving money, inderectly increasing the lenging power of institutions? I'm no banker but, as just a regular guy, on the surface it dosen't sound all bad. I would think it would also encourage others to invest here in the US than sheltering their money offshore.

[maxama10]

Well, I don't know a terrible lot about this. However, it seems to me, that it would harm people like myself, who don't have any income, being a student. So, I don't get any kind of income tax break, due to the fact I don't have an income, yet things I purchase, food etc... are more expensive. In the future, once I am out of HS/College, it sounds nice though.


Any thoughts on this?
-Max