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A very good friend of mine has a small business. He was doing well so he hired a couple of people and expanded. As he did, he had to worry about managing more people, benefits for them, increased paperwork etc. This goes along with expansion and is expected. The ability to serve more customers brought in more money. As a result, he moved into a higher tax bracket. The higher tax bracket left him with the same amount of personal income that he had prior to his expansion, but now he had increased work and stress for the same income. The end result is that he downsized; the employees lost their jobs; he has less stress and makes the same money.
Huckabee talks about a guy who is trying to help his son get through college. He takes on a part time job which then puts him into a higher tax bracket. In effect, the guy is being punished for working more. This is what the FairTax would prevent, since there's no tax on income (among others)...not to mention no tax on tuition...
Even though though all spending is taxed, nobody is paying more now for goods than they were before the Fair Tax. If their weekly grocery bill is $100 before fair tax, it's still about $100 after Fair Tax. Only now they get a monthly prebate and they have 100% of their paycheck to spend.
So where is the downside?
The whole point of changing the tax system is to make it more fair.
There is nothing fair about taxing someone on their consumption when 100% of their spending is consumption for basic survival. In contrast, those with more disposable income consume a LOT less, and therefore are taxed less (in proportion to what they have.) In essence, you have created a system that taxes those with the near least, the most.
The whole point of changing the tax system is to make it more fair.
There is nothing fair about taxing someone on their consumption when 100% of their spending is consumption for basic survival. In contrast, those with more disposable income consume a LOT less, and therefore are taxed less (in proportion to what they have.) In essence, you have created a system that taxes those with the near least, the most.
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.
I just read a paper by one of the main participants in shaping the FairTax, called, Is the U.S. Bankrupt?
I would agree to anyone who says that we can't go on the same path indefinitely; the status quo is what has been getting us into this bind.
We're absolutely broke... look at what the GAO is saying. We have to reduce spending!
But this is why the fair tax worries me... it provides an avenue to introduce Americans to a federal consumption tax, similar to a GST elsewhere... and a reintroduction of a federal income tax. I'd rather we concentrate on the income tax code itself, and spend just as much time looking at reducing spending on a federal level.
We're absolutely broke... look at what the GAO is saying. We have to reduce spending!
But this is why the fair tax worries me... it provides an avenue to introduce Americans to a federal consumption tax, similar to a GST elsewhere... and a reintroduction of a federal income tax. I'd rather we concentrate on the income tax code itself, and spend just as much time looking at reducing spending on a federal level.
Americans, once introduced to the FairTax, will not stand for another tax in addition to the FairTax. I firmly believe the FairTax will NOT be revenue neutral, but will in fact bring in more revenue than the income tax. Reasons are as follows: 1) economic growth will follow, which will mean more spending and more revenue 2) we'll be taxing people not currently taxed via the income tax -- illegal aliens and millions of travelers 3) the repatriation of $11 trillion dollars into the economy. I think we can stabilize Social Security and Medicare. But I do think it would greatly help with someone at the helm who'll not be shy about the word, "veto."
I think we've spent millions of man-hours working on the current income tax system. It seems to me it's been like running on a treadmill, and the treadmill is winning...
From TaxFoundation.org, a poll taken last year, dated April 17, 2007:
Taxes Complex, Support for Tax
Reform (http://www.taxfoundation.org/files/sr154.pdf - broken link)
With the April 17 tax deadline looming,
we asked people about the perceived complexity
of federal income taxes. When asked, “How
complex do you think the current federal income
tax is?” an overwhelming 83 percent said
the federal income tax is very complex or
somewhat complex. This represents a slight increase
from 2006, when 80 percent said taxes
were very or somewhat complex. Just 2 percent
said federal taxes are not complex at all, and 10
percent said they’re “not too complex.”
Two-thirds of U.S. adults said they
favor complete elimination of the
estate tax. Just 19 percent opposed
elimination, while 15 percent were
unsure.
After asking about tax complexity, we
asked people whether Congress should reform
the federal tax code. As in previous surveys we
found overwhelming support for federal tax
reform. Seventy-eight percent believe the federal
tax system needs “major changes” or “a
complete overhaul.” Just 3 percent said the
federal tax code is “fine the way it is,” while 15
percent said it only needs some minor changes.
These are people who take their 1040's to H&R Block. What percentage of the people knows enough about the tax code to make a single intelligent statement about it? And these are the people whose advice we should start taking on national tax policy issues?
These are people who take their 1040's to H&R Block. What percentage of the people knows enough about the tax code to make a single intelligent statement about it? And these are the people whose advice we should start taking on national tax policy issues?
They are taxpayers
They are Citizens
They are Voters
They have EVERY RIGHT to have input into EVERY policy of THEIR Government!
They have EVERY RIGHT to have input into EVERY policy of THEIR Government!
Who the hell are you to suggest otherwise????
This is why we have a representative democracy. This is why you call a plumber when you have a leaky pipe, and a surgeon when you need a heart transplant.
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"Is the U.S. Bankrupt?"
