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I sure hope gasoline is not subject to this 30% tax. It is my understanding that most of the larger oil companies do not pay their fair share of taxes now, so why would they lower the price of a gallon of gas? Also, I wonder if the fair tax is going to eliminate all of the Highway Use taxes that help fund our interstate system?
How is it a massive tax cut if embedded taxes equal the FairTax?
If I create a widget for $100 and $23 of that cost is associated with taxes for my corporation, payroll taxes, and associated accounting charges to manage it... and this is replaced with a $23 fair tax that is included in the price, there is $0 savings or cost to generate that widget. However, the consumer would not be paying an income tax, which is where the enormous tax cut would be seen.
If I were a consumer of that widget, I would pay $100 in either scenario. However with a fair tax, if I earned $50,000 per year, ignoring state & local taxes, I would take home $50,000 per year. With our current income tax, I would take home 40,942.50, again ignoring state & local taxes. That $100 widget would represent .200% of my income with fair tax, and .244% of my income with an income tax.
I don't know if this is the case. I have not seen anything on it. However, it is based on poverty standards, so if those standards are nationwide, then I guess the prebate is the same, as well.
I don't think this was a goal of the Fair Tax, even if it is true.
Where are you going with this?
I'm not going anywhere with this... it's a valid question. Seeing how the prebate is fixed nationally, do you (anyone who supports the fair tax) feel it is fair that people who live in Dallas, TX where we have a low cost of living would get the same prebate as those who live in San Jose, CA where there's a high cost of living?
I sure hope gasoline is not subject to this 30% tax. It is my understanding that most of the larger oil companies do not pay their fair share of taxes now, so why would they lower the price of a gallon of gas? Also, I wonder if the fair tax is going to eliminate all of the Highway Use taxes that help fund our interstate system?
The FairTax replace the following: Federal income taxes including personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes.
The cost of production would come down enough to match the cost of the FairTax, but it wouldn't cover the various gas taxes. Likewise, the cost of building and maintaining highways will come down, so maintenance costs should likewise come down.
I'm not going anywhere with this... it's a valid question. Seeing how the prebate is fixed nationally, do you (anyone who supports the fair tax) feel it is fair that people who live in Dallas, TX where we have a low cost of living would get the same prebate as those who live in San Jose, CA where there's a high cost of living?
I am not sure, but I think there may be discussion on that subject. It's something I've also thought of. Possibly the country could be divided into regions (this is just my thinking on the subject) with different prebate levels for the various regions. As it now stands, the national poverty level may not be fair because of various programs that use poverty level numbers. I'll see what I can find out.
I'm no fan of the fair tax, so I have no pony in this race. Your statement makes no sense to me... if the consumption tax is paid with a prebate for up to $X per year's worth of consumption tax, then 100% of their spending wouldn't be taxed... only ((($Y - $X)/$Y)*100) percent of their income, where $Y is the salary, assuming one *must* spend their entire earnings on *basic* survival.
I think you could easily argue that the dollar amount the prebate is based upon is biased against areas with high cost of living. Assuming the prebate covered $10,000 of purchases, this could cover a whole lot more in Kansas than it could in Hawaii or New York.
OK. I should have been clearer. 100% of income not subject to the prebate would end up being taxed for the average middle class person.
Um, no. When your earnings keep you at the poverty level, so that you are spending money only on essentials, you are basically living tax free, since you get the prebate each month.
Really? The average rent in NYC for a 2 bedroom apartment is about $1400 a month.... well over the poverty line. Other goods cost roughly 20% more, especially food. So many, many people well above the official poverty line would be spending well over their prebate allowance for necessities.
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the goods costs about the same as before, AND they get the prebate...so people earning just enough to get by actually end up with MORE than they had before the Fair Tax...so one more time...what is the downside?
Not at $40K a year, which is barely getting by in NYC.
There are a number of people who are tax experts who either know nothing about the FairTax or they are in the "a little knowledge is dangerous" category. Still others have an axe to grind because they are lobbyists. And, still others like to be able to manipulate things and people by making promises for bridges to nowhere or other kinds of pork.
With all due respect, the organizers of FairTax have an elaborate plan based on dozens of dozens "best case scenarios", based on assumptions about consumption habits and other unproven economic theories.
It doesn't take anyone a whole lot of analysis to conclude that if any number of the "best case scenarios" does not follow the plan, then the entire revenue stream and effect becomes null and void.
The strongest protesters on this thread have asked those hard questions, but no one seems to answer them other than posting a link to the Fair Tax page on that question... And the Fair Tax page does not PROVE their assumptions, just postulates them.
Really? The average rent in NYC for a 2 bedroom apartment is about $1400 a month.... well over the poverty line. Other goods cost roughly 20% more, especially food. So many, many people well above the official poverty line would be spending well over their prebate allowance for necessities.
Not at $40K a year, which is barely getting by in NYC.
Look, I don't know how else to say it...you get to keep 100% of your paycheck, goods cost the same as before, and you get a prebate every month...how is any of this bad?
Look, I don't know how else to say it...you get to keep 100% of your paycheck, goods cost the same as before, and you get a prebate every month...how is any of this bad?
And how is that revenue neutral?
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, the organizers of FairTax have an elaborate plan based on dozens of dozens "best case scenarios", based on assumptions about consumption habits and other unproven economic theories.
