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The current tax code needs to be changed - few would argue differently.
That said, and after reading the posts on this thread, pro and con, and many of the links, the one thing that comes to mind is, the "FAIR TAX" will be very difficult to sell to the American people. And, if the American people do not buy into this, or any other, program - we are dead in the water.
This program is far too confusing IMHO
Agreed. Some sort of hybrid might be more marketable that combines a lower flat tax with a lower consumption tax. The individual states tax structures also need to be taken into consideration.
Agreed. Some sort of hybrid might be more marketable that combines a lower flat tax with a lower consumption tax. The individual states tax structures also need to be taken into consideration.
In my uneducated opinion, the FIRST thing that would need to be done, BEFORE ANY changes are made, is to decide what this nation needs money for - and how much.
Again, IMO, a line by line review, of every expenditure we do should be done and hard decisions made - which expenditure is not necessary and should be eliminated totally.
Then, which expenditures can be reduced.
Then, which should be increased.
IMO uneducated opinion, we need to, as a nation, decide how much in taxes is REALLY needed
The fair tax could work if you made low income exceptions.
Approx $150/month for food
Approx $200/month for healthcare
Approx $600/month for housing (flexible based on area)
Approx $200/month for bills (gas, electric, unexpected expenses)
Couple that with a minimum wage based on housing costs for a given area and it could be fair.
I don't see how making a poor person who has to have basic necessities pay taxes on them just like a person living "Lifestyles of the Rich and Famous". Spending a minimum amount is inevitable and most poeple that don't make a lot, don't spend a lot and shouldn't be taxed in that same way as those that spend in excess.
Thus, the reason for the prebate. It provides those below the poverty line the money to pay for taxes on the essentials.
What is fair about taking money from taxpayers to pay for the essentials for non-taxpayers, unless you're a supporter of Karl Marx's system?
The fair tax could work if you made low income exceptions.
Approx $150/month for food
Approx $200/month for healthcare
Approx $600/month for housing (flexible based on area)
Approx $200/month for bills (gas, electric, unexpected expenses)
Couple that with a minimum wage based on housing costs for a given area and it could be fair.
I don't see how making a poor person who has to have basic necessities pay taxes on them just like a person living "Lifestyles of the Rich and Famous". Spending a minimum amount is inevitable and most poeple that don't make a lot, don't spend a lot and shouldn't be taxed in that same way as those that spend in excess.
$150 for food per month? I don't think we could get by on less than $70 per WEEK! (We spend between $100-$200 a week currently, and still economize when we can.) Milk, costs over $4 a gallon, and we go through at least 2 gallons a week!
I'm just saying that the BASIC necessities should not be taxed. I don't get the point about prisoners. Yeah we spend a lot on them, well when you keep them clustered together with 2 or 3 to an 8 x 10 cell of course you're going to need to get lots of guards to prevent riots from breaking out.
Yes, I got the point. Just trying to establish some context. Your $13,800 annual prebate base is actually about 35% higher than what the FairTax folks would allow, but it still falls well short of what we spend on basic maintenance costs for prisoners. In a somewhat desperate attempt to defuse complaints over the regressive nature of the FairTax, something that rates very poorly in focus groups, proponents have tacked on this idea of a prebate for expenditures, but only up to the poverty level. The poverty level? Is that really the appropriate cut-off point, or is it that this is merely some attempt to appease critics by tossing them a crumb? Heck, a gross income of 130% of the poverty level will qualify you for food stamps, and other social service programs have income eligibility limits that are considerably higher than that. One can't help but wonder whether this level of FairTax stinginess exists only because moving the cut-off any higher than the poverty level would force an abandonment of the stated revenue-neutral rate of 23%, and that's something that plays very poorly in focus groups as well. Are there any real arguments for the 1.0 times poverty rate level, versus 1.5, or even the prisoner-rate of 2.0 times the poverty level? If so, I'm not sure that I've seen them...
In a somewhat desperate attempt to defuse complaints over the regressive nature of the FairTax, something that rates very poorly in focus groups, proponents have tacked on this idea of a prebate for expenditures, but only up to the poverty level. The poverty level? Is that really the appropriate cut-off point, or is it that this is merely some attempt to appease critics by tossing them a crumb?
I bought milk here, yesterday - and it was not on "sale" for $2.80. When on sale, we get it as low as $2.20
I have no idea. But that it what it costs. I have seen a lot of people say it costs them $5.00. I consider myself lucky. (Oh, and if I get to the supermarket, it might be $3.80, but I don't go to the supermarket every single time I need milk.)
Agreed. Some sort of hybrid might be more marketable that combines a lower flat tax with a lower consumption tax. The individual states tax structures also need to be taken into consideration.
If you wanted to move toward a consumption tax, you could simply add a deduction to the current code that exempted net deposits to qualified savings and investment accounts. If you spent it, you'd be taxed. If you socked it away, you wouldn't. We already have this (and more) re IRA's, 401-k's, and various special purpose savings accounts. Maybe just expand the deductability of net contributions to saving, thereby making spending more and more the locus of taxation.
In my uneducated opinion, the FIRST thing that would need to be done, BEFORE ANY changes are made, is to decide what this nation needs money for - and how much. Again, IMO, a line by line review, of every expenditure we do should be done and hard decisions made - which expenditure is not necessary and should be eliminated totally. Then, which expenditures can be reduced. Then, which should be increased. IMO uneducated opinion, we need to, as a nation, decide how much in taxes is REALLY needed 'Elst, no tax program will be "Fair"
This process exactly goes on every year as a part of the normal budget process, first within agencies, then between agencies and OMB, and then between OMB (et al) and Congressional appropriators. People think you just walk in and ask for money and get it, when the truth is that there is fierce competition for funding, and that unless you can put some serious bang for the buck on the table, your budget request is going to get slashed or cut altogether. The same is true of course with all this 'pork' that people think they can find. What makes it through into the budget is the cream of the crop. For every one of those odd-looking earmarks that made it in, there were ten that wound up on the cutting room floor, and many of those were actually good ideas as well.
In FY2008, the federal government expects to pump about $2,918 billion into the economy in the form of federal spending. Some of that will go into your pocket. Some will also go into the pockets of your neighbors, making them more able to afford to become your customers. If you're about average, something close to 20% of your personal and corporate receipts will have been derived directly or indirectly from government spending. You don't complain much about this.
In exchange for that, the feds expect to collect $1,226 billion in individual income taxes and $343 billion in corporate income taxes. Payroll and unemployment taxes will account for about $915 billion, excise taxes for $66 billion, customs duties for $29 billion, and estate/gift taxes for $26 billion. Add in miscellaneous and other and you get $2,659 billion in expected total receipts. You complain a lot about this.
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