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It's called a consumption tax. Mike Huckabee was a big proponent of this very idea.
For those complaining that the burden on the poor would be too great, things like food, clothing, and utilities could be exempted from taxation. This would bring EVERYONE into the taxpaying pool, and everyone would have some skin in the game... including illegals, those working for cash, drug dealers, etc. I'm a big supporter of the consumption tax, plus you get the added benefit of eliminating 90+% of the IRS to boot! Win-win for all!
Only a rebate for a basic food allowance for the truly needy, but not for clothes, etc - nope - cough up the sales tax.
Let's not make it more complicated than it needs to be.
You consume/buy something new - you pay a sales tax.
100 percent elimination of the 16th amendment or a no go.
If everyone paid a higher sales tax on their purchases say 10%, that would make everyone a taxpayer. Then eliminate the income tax altogether. I know it does not have a snowballs chance, because the tax attorneys and CPAs would have a strong lobby. But it would be the most particular and certain way to make everyone pay their share.
Yeah. Let's squeeze the middle class even more at the grocery store. That will do wonders for the economy.
A lot of the so called "poor" are spending a lot of money on drinks and sigarettes and going away...I'm all for letting them pay sales tax
I would love for every poster who is so rabidly anti-poor to give their own income level in dollars and explain what income they consider poor? Just for a general idea of whom we are in fact, actually dealing with?
The government should implement a sales tax on necessities only so that it has a non-volatile and predictable source of revenue every year. The alternative is what we have right now - deficits everytime we have a recession because the sale tax from non-necessities is very volatile.
What's everyone going to do when employment if 25 or 30% and poverty has grown unmanageable and low income working people can't buy half what they used to buy and the middle income working people all tighten their belts and the uppper income can't get loans......well that leaves only the rich paing taxes anyway cause no one else can afford anything. So they might as well pay their fair share of 35% now!
Tier One: Food, Shelter, Clothing, Transportation, Healthcare, and Utilities at a fixed rate tax of 1%...
Tier Two: Restaurants, school supplies, firearms, and home furnishing at a fixed rate tax of 10%..
Tier Three: Small boats, store merchandise, and service industry at a fixed rate tax of 20%...
Tier Four: Luxury goods, yachts, tobacco, alcohol, and airborne vehicles at a fixed rate tax of 40%...
I still don't like a national sales tax unless it is tied to no taxation on income in any manner excluding SS/Medicare/Unemployment/etc which are also protected from the government dipping in those funds...
Vegas Joe, we are already footing most of the bill, this way others who have not contributed in the past would also be paying in. And if they eliminated income tax, you by your purchases would determine how much tax you paid. You would have more control in some areas than you do now.
The wealthy buy big ticket items and would pay more sales tax. The people existing on the taxpayer dime have no business buying big expensive items with everybody else's money. If poverty was not currently defined by how much income you have, some current "government defined poor people" would be not poor.
"For most Americans, the word “poverty” suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. For example, the Poverty Pulse poll taken by the Catholic Campaign for Human Development asked the general public: “How would you describe being poor in the U.S.?” The overwhelming majority of responses focused on homelessness, hunger or not being able to eat properly, and not being able to meet basic needs. That perception is bolstered by news stories about poverty that routinely feature homelessness and hunger. Yet if poverty means lacking nutritious food, adequate warm housing, and clothing for a family, relatively few of the more than 30 million people identified as being “in poverty” by the Census Bureau could be characterized as poor. While material hardship definitely exists in the United States, it is restricted in scope and severity. The average poor person, as defined by the government, has a living standard far higher than the public imagines."
A non-comprehensive list of things that suck about the Fair Tax:
The net effect of the Fair Tax would be to shift the taxation burden even more from the wealthy to the middle class.
Please provide an explanation on how you figure. Don't forget about the prebates, and the fact that you can avoid paying tax by buying used items.
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Business organizations won't have to pay the Fair Tax, but the Federal, State and Local governments will have to pay the Fair Tax.
Correct. That's b/c only things that are purchased at the consumer level would be taxed, and only NEW things. You don't realize that businesses have to embed taxes they have paid into the end price of the product/service, which jacks the price up for the consumer, who again pays sales tax on the item. The gov't is treated just like any
consumer would be as far as taxes are concerned. And for those who are so upset about churches having tax exempt status, they also would be paying taxes and there are no more write-offs for charities.
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The Fair Tax is actually a 30% consumption tax on all new goods and all services. In order to be revenue neutral, the Fair Tax would actually need to be somewhere about 35%.
The Fair Tax is applied to consumer services - something that's never happened before. And things like rent, utilities, cable television, insurance, interest payments, etc are all considered consumer services.
That's a load of crap. Have you ever looked at your cable bill? See all the taxes they add in there? And to boot, sales tax IS paid on some utilities, I just noticed this on one of my bills a few days ago.
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Employee compensation isn't covered by the Fair Tax. That includes non-monetary compensation - as long as the business entity can claim it as necessary for conducting business. Company cars, club memberships, use of the corporate jet, use of the company condo in the Carribean, corporate "business trips", business lunches and dinners - all tax free.
Why would it be included? It's not included now, either. And if it's a legit business expense, it should be a deduction from their profit. Your line of thinking here makes no sense.
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The economists who support the Fair Tax concede that implementing the Fair Tax would immediately throw the nation into a recession.
Who says this? Link, please. Here's something from the FairTax basics page:
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The economy as measured by GDP is 2.4 percent higher in the first year and 11.3 percent higher by the 10th year than it would otherwise be.
I think that negates your assertion that there would be a recession, esp considering our GDP increased by 1.3% in Q2 (preliminary numbers) and .4% in Q1. That basically means we are not even stagnating but declining.
The key words in the red section are "than it would otherwise be."
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The Fair Tax eliminates the IRS - but it replaces it with several new bureaucratic organizations. One will be responsible for tracking American households, issuing monthly Tax Pre-bate checks to each household and combatting fraud concerning those pre-bate checks. A second bureaucracy will track each business organization that sells either goods or services to the consumers and that will ensure that the Fair Tax is being collected and forwarded to the Federal government. Yet a THIRD bureaucracy will be required to track all organizations that sell to other organizations, to ensure that they don't sell directly to the public.
Do you have a link for this spider web of agencies?
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The Fair Tax eliminates Medicare and Medicaid, substituting a voucher program for senior medical insurance - just like Eric Cantor had in his budget proposal.
While the Fair Tax would not apply to used goods, it would cause the price of used goods to rise. People complain about how expensive used cars are now, just wait until used car purchases rise and new car purchases drop because no one wants to pay an extra 30-35% on a Honda Civic.
That's interesting. But it would all equal out in the end, if that phenomenon occurred anyway. Let the market take care of itself. Btw, overall, prices would drop b/c there would be NO embedded taxes anymore. The cost of offering a good or service for sale would drop and that savings is passed to the consumer.
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The Fair Tax falls less on the 'haves' and more on the 'have-nots'. A retiree couple who have already purchased everything for their house, from furniture to appliances to bedding won't be affected, but new families starting out with an empty house or aparment will either pay the Fair Tax on new goods or higher prices for used goods.
So then they don't have to buy new goods. I will say right now that the only new items in our home right now, as far as furniture, are the baby crib, the dining table and our bed. Everything else I got on craigslist.
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Frankly, if you want a plan that taxes Grandma another 35% on her $200 a month medicine that she needs to survive, while a billionaire pays no taxes on his purchase of a ten million dollar home, then you'll jump for joy for the Fair Tax.
There are no taxes on medication or medical anything, so no taxes on Granny's meds. And now you're saying a billionaire would pay no taxes on his mansion. You are correct if he buys a used mansion...that's how the system works. If he bought a new mansion, he would pay the FairTax. It becomes a cost of doing business if you want to purchase a new item.
This post is mainly a lot of liberal talking points, although I do appreciate you trying and giving me the opportunity to correct you so everyone else could get info on the FairTax.
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Now watch, some Fair Tax supporter will call me ignorant, tell me to educate myself, and link the home page for the Fair Tax.
LOL, your post is indeed uniformed, so you need to go educate yourself at the FairTax website (links provided throughout this thread). Honestly, it seems you have done your homework but just don't fully understand how FT would work.
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See, the thing is that I have been to the Fair Tax website, I spent a good number of days going through just part of it, and I already found all of these problems with the Fair Tax Plan.
And I gave you some solutions to set you straight.
Note that, I believe, the FairTax only abolishes the income tax at the federal level. States and municipalities are free to levy their own taxes still. That is the only downside I can see to the FairTax.
If even my ultra-liberal parents can see that the FairTax is the best way to go, I have hope for the C-Ders.
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another anti poor
I will say right now that the only new items in our home right now, as far as furniture, are the baby crib, the dining table and our bed. Everything else I got on craigslist.
