FairTax

[mr.72]

This idea has been around for a long time.

Mike Huckabee included it as part of his platform. Too bad we didn't nominate him.

It's a great idea, but has zero chance of actually becoming law. This is because it takes the power to raise money away from the Federal government. If I am in control of my own spending, then I am also in control of my tax spending. So when times are tough and I back off on my spending, then the gov't also is deprived of funds, and they cannot increase tax rates in order to make up for the shortage.

One other problem with it is that abolishing the IRS puts a ton of people out of work instantly.

Another problem is that a bunch of people who think the purpose of taxes is to punish the rich for being successful will never support it. You'd be surprised how many people hate the rich. Further an additional large number of people hate "powerful big businesses" and will not support anything that they think is "corporate welfare" aka reducing taxes "paid by corporations".

Yet another problem is that a bunch of other people don't understand the current tax system, don't realize that they don't pay any taxes right now, and will believe it when their favorite politicians tell them that the Fair Tax will cause them to have to pay more in taxes (which, for some people, may be true, depending on their spending choices).

And finally, most people are completely ignorant of economics, their own tax rate, deficit spending, who is their congressman, whether this is a democracy or a republic, where their tax money goes, whether they pay taxes, etc. So since most people can't comprehend the value of the Fair Tax, then most people will not support a change to the status quo.

All of the problems are political, except the IRS & accountant jobs cut which will impact our economy to some extent.

[TDDude]

If the system of witholding from paychecks was eliminated, then people would actually see and feel exactly how much was taken every week. If that were to happen, there would be a tax revolt by the end of the month.

Try having to work for someone who forces his "employees" to be contractors. One finds out very quickly what the tax rate is because that quarterly check hurts.

[Ace_Inthe_O]

I agree that Fair Tax would be great but I doubt we will ever see it. I guess we will continue to punish people for being successful.

[BigBlueDodge]

Well, the FairTax is probably a stretch for the US, at least right now. I think a more probable step would be to implement a flat tax, on tax rate that everyone pays. The current tax system is just not fair because it does not take into account various external factors (for example, a guy making $150K a year in Manhatten lives much worse than a guy making $150K a year in Topeka Kansas). Some interesting facts (http://www.american.com/archive/2007/no ... -the-taxes" onclick="window.open(this.href);return false;)

* The top 5% of income earning individuals pay over half of all income taxes paid each year
* The top 10% of income earning individuals pay 68% of all income taxes paid each year
* The bottom 50% of income earning individuals pay only 3% of all income taxes. Yes, that is 1/2 of America only pays 3% of the total income taxes paid each year.

Our tax system is setup to penalize people for becoming successfull. There has to be a change. The Fair Tax is maybe too extreme. I suggest that the goverment start focusing on the Flat Tax idea.

[KBCraig]

I have always liked Boortz, but he lost his mind on this one. He spent so much time crafting the plan and writing the first book that he's unwilling to concede that it has any flaws. He reacts to criticism by shouting down the critic. He tries to downplay obvious concerns through disingenuousness and sometimes --yes, I'll say it-- downright dishonesty.

Without tackling it point by point, I'll just point out the obvious: there is no way that such a system could be implemented without harm, unless you could flip one giant switch and instantly change from thousands of discrete federal taxes, into this one tax.

The problem is that there is not one giant switch, there are millions of them.

The biggest switch that must be flipped is the 16th Amendment. You would have to be insanely gullible to trust Congress to stick to a sales tax, when they only have to pass a bill to start collecting income tax too. "Temporarily", of course -- just like any state where they've passed a new taxation method while promising to do away with another. They soon wind up with sales and property and income taxes, which is why we fight so hard against a state income tax in Texas.

The "Fair Tax" could pass with a simple majority of both houses and the president's signature. That's easy -- laws pass that way every day that Congress is in session. Repealing the 16th, though, can only be done by passing another amendment -- a process so deliberately burdensome that it has only happened 17 times since the Constitution was ratified.

I'm 100% behind Boortz if he wants to repeal the 16th and then talk about a different method of taxation. I really don't want to replace the income tax with a sales tax, though. As Ron Paul has pointed out, if we rolled federal spending back to what it was 10 years ago, we could eliminate the income tax and replace it with nothing.

[flb_78]

There is no such thing as a "Fair Tax". The only "Fair Tax" is NO TAX.

[BigBlueDodge]

There is no such thing as a "Fair Tax". The only "Fair Tax" is NO TAX.

Unfortunately, without NO TAX, there would be NO POLICE, NO FIREMEN, NO PARKS, NO SCHOOLS, etc. As much as we dislike them, Taxes are needed to support society. I have no problem paying taxes as long as I'm paying my equal share. It's when I have to pay more than the guy next to me, just because I chose to go to college, get my bachelors and got a good job, and the guy next to me chose to drop out of school, get on welfare, and pays ZERO to the government.

The constitution says all men are created equally, but evidentally government thinks that all men's pocket books are not.

[KBCraig]

There is no such thing as a "Fair Tax". The only "Fair Tax" is NO TAX.

Unfortunately, without NO TAX, there would be NO POLICE, NO FIREMEN, NO PARKS, NO SCHOOLS, etc.

If people wanted those things, of course they would exist. Either privately or publicly, funded either voluntarily or through user fees. The market would determine which model worked best in each case.

This is about federal taxation, which doesn't provide police, fireman, or schools; federal parks nominally operate on a user fee system.

[Liberty]

There is no such thing as a "Fair Tax". The only "Fair Tax" is NO TAX.

Unfortunately, without NO TAX, there would be NO POLICE, NO FIREMEN, NO PARKS, NO SCHOOLS, etc. .

you say tnhat like its a bad thing. Volunteer Fireman and Militias have work just fine. In many communitys..
None oof these are Federal functions anyway.

[stevie_d_64]

Anything we can do to limit or eliminate from the government is a good thing...Power, revenue generation and the overbearing enforcement of those issues gets a thumbs up from me...

[Lumberjack98]

I very much favor the FairTax. I also believe that it will not become reality due to it's transparency and power that it would give to each individual (Two things all government speaks in favor of, but in reality votes against).

[KBCraig]

I very much favor the FairTax. I also believe that it will not become reality due to it's transparency and power that it would give to each individual (Two things all government speaks in favor of, but in reality votes against).

One of the FairTax arguments is that the income tax is hidden; it is embedded in the cost of everything we purchase. This is a very valid argument. Why, then, does the FT plan set it up as an "inclusive" tax, where the tax is hidden within the purchase price, rather than added on at the point of sale? Why does Boortz shout down and cut off every caller who points out that it is a net 30% sales tax, rather than a 23% "inclusive" tax?

What "power" does it give to individuals? That's a new argument to me.

[nitrogen]

What "power" does it give to individuals? That's a new argument to me.

Easy: The power to affect your own tax rate.
If times are tough, you buy less, therefore you are taxed less.
The problem being, during tough times, the government probably wants more money, therefore this can set up a "feedback loop" of problems.

Problems that probably should be solved by cutting spending, but what the heck do I know about anything?

[mr.72]

Why does Boortz shout down and cut off every caller who points out that it is a net 30% sales tax, rather than a 23% "inclusive" tax?

Because normally those arguments are intended to fudge the numbers for comparison's sake. Normally the argument is that it's a 30% sales tax, which is more than what most people pay as a percentage for income tax. The problem is that you are comparing an exclusive 30% tax rate to an inclusive income tax rate. So the argument gets shut down simply in order to make sure we are comparing apples to apples and that Boortz doesn't inadvertently add to the misinformation campaign about his own idea.

And as far as control goes, if you only buy "essentials" then you don't pay any taxes. Period. So I can decide that I don't want to pay taxes, and I won't. The problem is that the government will never respond to people reducing their spending by government reducing spending. They will try to increase the tax rate, or the number of things that are taxable, so that the government can sustain their spending habits. People's incomes are far more stable than their spending, so income tax provides a more predictable revenue stream than does a sales tax. That is the very reason why the Fair Tax will never pass. Lawmakers will never vote away their own power to take away your money.