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USA TODAY's article "Inmates stole $39 million from the IRS in 2009" serves to highlight that the wealthy are not the only ones trying to get extra money back, avoid taxes or pay less than their obligation under the current federal tax system. Income tax evasion and fraud cut across all income tax brackets (News, Cover story, Wednesday).
USA TODAY's article "Inmates stole $39 million from the IRS in 2009" serves to highlight that the wealthy are not the only ones trying to get extra money back, avoid taxes or pay less than their obligation under the current federal tax system. Income tax evasion and fraud cut across all income tax brackets (News, Cover story, Wednesday).
To me getting rid of the present tax system and institute a Fair Tax system would be less wasteful. People would not have to do all this paperwork reporting taxes, no huge bureaucracy running the system, and not being able to cheat on taxes. You buy something you pay right on the money your taxes, take care.
What would the tax rate be on this fair tax system?
When I read the book "The Fair Tax" it does not set an exact number. That is a number that would have to be suggested. I read the book a little while ago and the best I remembers that he does suggest a rate range but I do not remember so I won't quote him, sorry. The book is very interesting. He also does ask for opinions on improving his suggested system. He does not claim it to be perfect so he ask readers to provide ideas to improve it, take care.
Just tax all income over the poverty rate at the same rate, regardless of whether it was earned or a windfall like inheritance or interest. No deductions, no credits, no exemptions.
Just tax all income over the poverty rate at the same rate, regardless of whether it was earned or a windfall like inheritance or interest. No deductions, no credits, no exemptions.
In principle I agre with you as a compromise but you know what? The problem I see is that many people disagree what actually is a poor person. A while ago I started a thread asking people what is their criteria to be considered poor. I had veried answers. Many factors come into play. I am sure you are aware that many people that are in the poor bracket are so much better off that many other people because they get so much money through other sources and they do not report it. Many of these sources of income are cheating the government, thus the taxpayer, in their income report besides other means. That is why even though in the spirit of intent I am with you but I would not agree with such suggestion, take care.
Kinda of a blunt tool though, someone living at national poverty rate in Mississippi might be living a bit larger than someone in California.
That is why national programs like National Health care can be good in some states and not so good in others and also be wasteful. That is why the state should handle their programs at their level. The tax the federal government should be to maintain it but without so much bureaucracy and to only take care of the duties delineated for them at federal level by the Constitution, take care.
What would the tax rate be on this fair tax system?
The Fair Tax is a consumption tax on all goods and services purchased new within the United States, levied at the point of sale. This includes food and medicine, but not pre-owned mansions, second-hand mega yachts or used Bentleys.
To match the current revenues that are earned via the current tax system of progressive income taxes, regressive payroll taxes and inheritance taxes on estates of $5 million or more, the Fair Tax would have to be 40% or 45% exclusive, to start. (Please note that the current revenues are not enough to balance the budget). It is expected that the Fair Tax would need to be adjusted on a regular annual or semi-annual basis.
The poor (as defined by the current federal poverty level, roughly $12K for individuals to $40K for heads of large households), who spend all of their money on goods and services just to get by, get a tax pre-bate that reduces their Fair Tax hit to a minimum.
The high income earners, who tend to invest and save much more than they spend, would pay sales taxes only on the purchase of goods and services that they can't structure under a corporation (no corporate taxes, no taxes on corporate benefits) and on goods and services that they can't purchase and enjoy overseas. Depending on how much is saved/sheltered/offshored, the tax break can be enormous.
The working middle class (earning anywhere between $40K and 70K per year) will see their effective tax rate rise, and in some cases double.
If you think people earning a million dollars a year are paying far too much in taxes and if you think that those people earning less than the median wage should pay twice or three times as much in a national consumption tax that they currently pay in income and payroll taxes, then you'll like the Fair Tax.
But then again, the Fair Tax isn't about simplifying the tax code...that could be done with a simplified income tax. The Fair Tax is merely a smoke screen for repealing the 16th Amendment to the United States Constitution.
The Fair Tax is a consumption tax on all goods and services purchased new within the United States, levied at the point of sale. This includes food and medicine, but not pre-owned mansions, second-hand mega yachts or used Bentleys.
To match the current revenues that are earned via the current tax system of progressive income taxes, regressive payroll taxes and inheritance taxes on estates of $5 million or more, the Fair Tax would have to be 40% or 45% exclusive, to start. (Please note that the current revenues are not enough to balance the budget). It is expected that the Fair Tax would need to be adjusted on a regular annual or semi-annual basis.
The poor (as defined by the current federal poverty level, roughly $12K for individuals to $40K for heads of large households), who spend all of their money on goods and services just to get by, get a tax pre-bate that reduces their Fair Tax hit to a minimum.
The high income earners, who tend to invest and save much more than they spend, would pay sales taxes only on the purchase of goods and services that they can't structure under a corporation (no corporate taxes, no taxes on corporate benefits) and on goods and services that they can't purchase and enjoy overseas. Depending on how much is saved/sheltered/offshored, the tax break can be enormous.
The working middle class (earning anywhere between $40K and 70K per year) will see their effective tax rate rise, and in some cases double.
If you think people earning a million dollars a year are paying far too much in taxes and if you think that those people earning less than the median wage should pay twice or three times as much in a national consumption tax that they currently pay in income and payroll taxes, then you'll like the Fair Tax.
But then again, the Fair Tax isn't about simplifying the tax code...that could be done with a simplified income tax. The Fair Tax is merely a smoke screen for repealing the 16th Amendment to the United States Constitution.
Very good analysis. Outstanding.
But Wait, there is more.
When I went digging further, they were including tuition and books to be taxed, as well as .gov sales/purchases -- meaning the tax itself would include the cost of the .gov it was supposed to be funding.
As you noted, business "expenses" would be exempt (a loop-hole so wide you could fly a corporate jet through it), and they do not mention that State and Local government sales taxes would still exist adding together to over a 50% tax on purchases.
Black/gray/and flea market sales would replace retail overnight.
Overall, the "Fair Tax" is a pack of lies and bait for chumps.
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