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Dave2 wrote:

sjfcontrol wrote:Since it would be problematic to eliminate a sales tax only for the poor, and only on necessities

Not really... That's why there's no sales tax on non-prepared food. I think I remember seeing something about deductions for first-time home buyers, too. I can't think of any way out of sales tax on clothing, but you can get that pretty cheap if you focus on functionality rather than trendiness.

tbrown wrote:

sjfcontrol wrote:Seems a pretty slick way to do it to me.

Progressives are very slick when it comes to getting the camel's nose under the tent.

Happily Ever After wrote:

sjfcontrol wrote:You are "redistributing" it to yourself.

If that was true, they could simply lower the tax rate for everyone, making the Fair Tax [sic] actually a fair tax by charging everyone the same nominal and effective tax rates. There's no need to pass it through the government's hands at all, if the goal is to redistribute my wealth to myself. Just let me keep it.

But that's not their plan. Instead, they intentionally put a handout into their plan, and do a lot of hand waving to distract people from the fact that it's a handout. That's socialist weath distribution no matter how hard they try to spin it.

JALLEN wrote:

rm9792 wrote:
Never said it was the same tax. You have 2 types of income, earned and unearned. I am not talking Law here just theory. Income is any money or value incoming to you. Heirs did not have the money, then upon death they do, it is in fact unearned income. Now the IRS has it set at different rates and exclusions but I am strictly speaking high level that it is in fact income therefore as yet untaxed. My background is I am 6 classes short of my bull in Accounting/Finance. I am currently in Federal Taxation at UHCL and had this same discussion last week with the instructor, an IRS Auditor.
I still don't believe it should be taxed but the double taxation argument will not work to help end it as it simply isn't true. I for one would like to stop renting my property from the state and just pay higher sales taxes. At least then if I am ever in hard times I would never be homeless.

So, this is one of those, "It is impossible in theory, but works well in practice" issues that theorists like to debate, high level theorists, like IRS auditors?

What's a "bull" in Accounting/Finance? Maybe an abbrev., like U.N. for "utter nonsense?"

What's UHCL?

Happily Ever After wrote:

JALLEN wrote:

Happily Ever After wrote:

sjfcontrol wrote:A prebate makes the effective rate progressive.

And consequently unfair.

How so?

The handout (prebate) is socialist wealth redistribution. That makes it unfair.

Disclaimer: I'm from Texas, not California.

Happily Ever After wrote:

sjfcontrol wrote:A prebate makes the effective rate progressive.

And consequently unfair.

Kythas wrote:

Jaguar wrote:

rm9792 wrote:It is not double taxed. Yes the money your parents earned was taxed as income to them when they earned it. However when they die and it goes to you then it becomes income to you as yet untaxed by you. You were not in posession of the money or property till their death so now that you have income you must pay taxes on it. However, that being said I think estate taxes are out of line and should be abolished. If it must be kept then the rate should simply be the same as your regular tax rate.

So you also support sales tax at garage sales?

I'm of a split mind on this. Taxing things at resale (that is, not the initial sale of the item) is double taxation. For example, an item is taxed once when it's originally purchased. It shouldn't be taxed again at each additional resale.

However, if we do away with property taxes, government would still need some form of revenue, and a sales tax best fits that bill. But what about taxing products after the initial purchase? Eliminating this would create a huge second-hand economy, because people will respond to the no-tax incentive in their purchase. How would this work? Would we not charge sales tax on used cars? After all, they've already been taxed once. Houses? Only the initial purchaser of the house when new would pay sales tax? These would crush the new home and new car industries, as people would only want to buy used cars and homes to avoid the taxes.

Then we'd get into the mode of "What items are taxable at resale?" and this would create a complex code of what used items to charge taxes, and the point of a fair tax is to simplify, not list each item or item category as taxable/non-taxable.

So, for simplicity, perhaps all items - even at garage sales - should be taxed at resale. But then, the person holding the garage sale would probably need a tax permit, adding to the complexity.

Maybe only collect taxes from businesses which have a business license? But that would spawn a black market of people selling items from the trunks of their cars, or from their homes.

There's really no easy, one size fits all answer.

The FairTax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed. A prebate makes the effective rate progressive.