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What part of a VAT affecting new home purchase pricing do you fail to understand? Homeowners already pay additional local taxes (a.k.a property taxes (schools, trash, library, boulevard, EMS services, etc...) which are comparatively low for the renters as reflected in rental rates.
And that's a good thing since its spent on goods and services. Any land value that remains tends to go to the mortgage industry as interest payments, not to the home owner.
The mortgage industry is drop dead stupid easy since the market is what really sets the price of housing( heavily influenced by how loose credit is). The best tax there is is a nationalized mortgage industry. Its basically a market based land value tax. This is a no brainer on ground rents especially.
Their calculator is flawed because it fails to account for the loss of purchasing power renters will face.
This is because rents will not fall under FairTax the way that prices of goods will fall.
I feel if you put in the calculator that you do not have a mortgage it will treat you as if you were a renter. I rent so i did not put a mortgage into the calculator
I feel if you put in the calculator that you do not have a mortgage it will treat you as if you were a renter. I rent so i did not put a mortgage into the calculator
The calculator cares whether you have a mortgage because mortgage interest is taxed at a different rate than goods and other services.
Other than that, it assumes that all your non-exempt spending is taxed at the same rate, and that prices fall for these items.
But as I said, rents won't fall like food and other goods will fall in price.
This is because rental property currently enjoys favorable treatment under the income tax, and taxes currently embedded in rent (income taxes) will fall only slightly. Embedded taxes on food and other goods are considerably greater, so those prices will fall substantially.
The calculator is assuming a substantial drop in price which won't happen for renters paying most of their income on rent rather than on goods.
What most people don't understand about the flat tax is that it would eliminate all other federal taxes. You would have one, flat, income tax.
So lowering the tax rate, while eliminating all other federal taxes, is just silly.
The flat tax rate would have to be higher, but more evenly spread. It would help average citizens make more informed decisions with their money. Sure, your check is smaller, but gas is cheaper, your phone bill is lower, your groceries are cheaper, etc.
The beauty of the flat tax is, coupled with a balanced budget amendment, means that if the government wants to spend more money, taxes have to go up, or spending cut. But its all on the surface, up front, no backroom hand shakes, etc.
I'd settle for a tiers taxrate based on all compenstiopn with no deductions except for number living under income under the income. There is actually one that was presented in teh senate fiance commiteee that is one page and 29 lines long. Just the amounts easily collected that are owned but not reproted would be huge.Its not just the rich who cheat or don't report income.
The calculator cares whether you have a mortgage because mortgage interest is taxed at a different rate than goods and other services.
Other than that, it assumes that all your non-exempt spending is taxed at the same rate, and that prices fall for these items.
But as I said, rents won't fall like food and other goods will fall in price.
This is because rental property currently enjoys favorable treatment under the income tax, and taxes currently embedded in rent (income taxes) will fall only slightly. Embedded taxes on food and other goods are considerably greater, so those prices will fall substantially.
The calculator is assuming a substantial drop in price which won't happen for renters paying most of their income on rent rather than on goods.
Fair tax is one tax charged at the retail level. The fair tax eliminates all other Federal taxes including gasoline. So actually the fair tax would drive up the price of all housing since there will be a 23% tax on the house to buy it. So the owner of a rental will have the ability to ask for rent to cover the sales tax.
In the current structure the renter does not get the home deduction and in a fair tax the renter would not get the home deduction. In the fair tax there would be no deduction since the tax is charged at the point of retail sale.
The calculator will assume any set of figures you wish to put in
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