Is the "fair" tax fair?

~ The following pasted and condensed from www.clarkhoward.com~ ~stuff I typed is enclosed by~
Consuption tax headed our way

"Clark thinks there would be a great benefit to having a national sales tax." Way to go Clark, I can't wait to spend another 23% tax on my doctor visit and prescription drugs. Oh, and all that money you have told us to set aside for that cruise in retirement. Yep, add on 23% to that to cruise.

~I agree. I think Neil Bortz and Clark Howard owe someone a favor. It has been decades since a bill became law that made any significant improvement and typically, each bill does some disgusting things we didn't expect. Why would you think a consumption tax would be good for you or for The USA.
I have looked at "fair tax" in some detail. It pays a monthly stipend to nearly every man women and child regardless of income or net worth. Can you imagine the pressure your government can put on you by forgetting to send your $300 per month sales tax rebate = stipend. With combined state and federal sales tax at about 30% nearly everyone will be cheating. Big brother will note every cheat, but say nothing until, big brother wants to tell you how to testify in a trial or otherwise black mail you. Neil~

The rebate to families is NOT to every"man, woman, and child", the rebate is figured based on the amount of sales tax paid on necessities for each family. The rebate check is for the HEAD OF HOUSEHOLD only.

Cheating will be nearly non-existent, as all taxes are collected at the point of purchase by the retailer. The tax is then paid to the state which then pays it to the Government, it is not paid by the individuals.

The Fair Tax is the best thing I have seen proposed for tax reform in years. ~the best is awful unless it can be improved~
Basically, the Fair Tax purposes to
1. Outlaw ALL income taxes by constitutional amendment.
2. Levy a consumption tax on all NEW goods and services at the point of purchase. Note, used items will not be taxed under this law.
3. The Fair Tax would replace both the income tax and the social security tax deductions from every paycheck. When you received your check, there would be no deductions. if you make $500 per week, your check would be $500.
4. There would be no more reason to file with the government for tax purposes. Filing would be once yearly by head of household reporting the number of members of the family.
5.Once the income tax is outlawed, the prices of goods can be expected to drop between 20 and 30 percent, depending on the item.
Go to www.fairtax.org for the whole story.

All those people using drug money currently avoid the taxes. At least they'll PAY sales tax on their drug profits if they want to spend the money.

~Reading pro "fair" tax propaganda requires that you think! Why would anyone list their children as part of their household when the kids get a bigger check if they apply as a single person? Sure the Feds can spend billions dollars per year catching and prosecuting heads of households who encouraged their kids to apply as single. That is not the kind of America I want
We are a nation of cheaters, lead by cheating politicians, who are very unethical: Why would you think "cheating will be nearly non-existent'? Many people will start a small sole proprietor business, so they can buy tax free items for their business. Sure the Feds can spend a billions of dollars prosecuting these citizens who withdrew items for personal use, without paying the 30% tax, But that is not the kind of America I want.
1 It could take decades to pass the Consitutional Amendment to abolish the Income tax. In the meantime, when the Feds discover that 21% plus 2% to the merchant for being the tax collector. does not collect nearly enough money, they will find other taxes to impose, Perhaps even after the amendment passes the Feds may continue the income tax/ have you not noticed that many of the Supreme Court decisions are contrary to the intents of the the original signers? George Orwell called it double speak. Have you seen the wording of the proposed amendment to our Consitution? How will states with sales tax and an income tax make up this loss of revenue? Raise their sales tax from 7% to 11% making the total tax 34%? 2 People will use various strategies to sell new goods as used, so they are more competitive by not collecting the 23% "Fair Tax. 3 It will be nice to have lots less Federal Government. There won't be much left over after the Feds fund the present recipients of entitlements (including Social Security), pay the federal debt interest, Make jobs for 500,000 IRS employees, and private tax preparers,such as H&R Block and send out 200 million stipends/"Fair" tax rebates each month, plus the cost of preventing fraud. 4 Don't you think the 100 million small businesses should at least pretend to account for the goods they got tax free, but withdrew for personal use? 5 I understand why prices will fall on goods made entirely in the USA, but that is hardly any goods at present. Why will prices on imported goods and services fall by more than perhaps 10% representing typical mark up in the USA? Neil~

don't count on it . . . no matter how much you (and others) may like the idea it won't happen. too much of the economy is built on companies that specialize in tax reduction strategy. expect heavy lobby money to counter any push to do away with IRS.

taxing consumption vs income makes a lot of sense. why penalize earning potential? do something to encourage saving vs consumption. just don't expect it to happen.

All those heads of households are already on record. The filing, as in anything else will be monitored. ~at considerable cost~

I will say there will be some problems initially, but, as in everything else, problems will be worked out and things will work smoothly ~ like the liberation of Iraq~ There are too many brilliant minds behind this thing for it to be side railed so easily as you make it seem.

I used to think the same way, then I saw this thing grow from about 10,000 supporters to several million. There is currently 54 representatives signed on to the bill and about 15 senators, I never thought it would become a bill, yet here it is introduced into both houses. I say give it a chance, work to get it passed, If it does not then so be it. Actually, there are many of the larger corporations working in the wings to get this passed, think of the savings to them, no more corporate taxes, no more withholding of any kind except voluntary withholding. Accounting would become simpler, thus saving monies. I think it has a chance, and I support it totally.

By the way, there would be ~fewer~ lobiests. No tax breaks to lobby for.

It's too late for the FAIR tax. Thirty years ago, our economy was driven by manufacturing and production, but all that has changed. The health of the U.S. economy now depends largely on growth in consumer spending -- in other words, consumption.

The FAIR tax plan is a consumption tax. And as Neil Bortz likes to point out, when you tax something, you invariably get less of it. So whatever it's supposed benefits, the FAIR tax would reduce consumer spending and probably send our economy into depression. Now I don't see much future for our debt-burdened economy anyway, but the FAIR tax would definitely put a fork in it.

Congress can't even agree on a PERMANENT repeal of the estate tax (which is a relatively minor portion of the tax code and tax revenue stream). why do you think they will come to terms on this?

100% of my paycheck, I'd be spending A LOT MORE MONEY.... stuff that I'm doing without now. I'd get that hi def TV. I'd be eating OUT instead of cooking. I'd be traveling instead of visiting family on vacation.

The vig on your paycheck is still there Bubba, it's just pushed out to the points of consumption. Neil Bortz bloviates about how much prices will drop if the FAIR tax is enacted. I'll grant that some prices may drop, but not nearly enough to equal the tax. So the net effect is to raise prices at the point of purchase. Hmm lets see now, basic economics says that when consumers are faced with higher prices, they generally purchase less.

Now, lets look at it from a government perspective. What do you suppose the Feds will do if tax revenues don't meet their expectations? That's right -- they'll just raise the tax rate (already happened in Europe). That will lead to lower sales, and businesses will adjust their prices, etc., etc.

I'm not a big fan of income taxes, but the problem is not the method of taxation, it's the damned size and growth of federal and state governments! We can't afford what we're doing now, so shuffling a few pieces of the bureaucracy around isn't going to magically make it all better.

~I'm retired now so I don't pay much income tax. FICA took a big chunk when both wife and I worked. $!500 is the most we ever paid in income tax.in one year. A lot of low income workers pay little income tax, but lots of FICA. The 30% will hit them hard unless the plan includes a rebate like "fair" tax.
We can fix one of the problems with "fair" tax by reducing by about 15% the rebate given single persons. This means many will remain part of a household instead of jumping though hoops to qualify as single.
If persons and entities who gross more than one million dollars per year are require to collect sales tax on used items as well as new, that will will give the poor and lower middle class and very small businesses a break and collect perhaps a billion dollars from the rich and large organizations selling used things.
There will be a lot of people lobbing to get their product or service exempt from the 23% federal sales tax. It will turn into a mass of confusion, if we start allowing exceptions such as doctors and lawyer fees, tolls, licences fees, interest and penalties on credit cards, traffic fines... I suggest none of these be exempt, except perhaps transactions under one dollar, and perhaps some charities~

cant believe we actually have some common ground.

there are entire industries built around the tax code. can you say H&R Block? (not to mention smaller firms, both independent & franchises such as Mr Tax).

then there are the charities. without tax deductions some of them might just go away.

oh and lets not forget many of the financial products designed to be tax favored. that would include one of my favorites . . . real estate
~ can the "fair" tax be fixed or is their an alternative to the Income tax. Please comment, refute and/or embellish. Neil~