Fair Tax - FairTax.org

[kwerner]

Have you guys heard about this proposed FairTax?

Sounds pretty cool to me as a US citizen and as a business owner. Their website says that if put into effect it would "abolish federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities."

They even have this handy Calculator that estimates what your tax burden is currently and what it would be under the Fair Tax plan.


Their website goes on to say:

"The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.

The FairTax:

Enables workers to keep their entire paychecks
Enables retirees to keep their entire pensions
Refunds in advance the tax on purchases of basic necessities
Allows American products to compete fairly
Brings transparency and accountability to tax policy
Ensures Social Security and Medicare funding
Closes all loopholes and brings fairness to taxation
Abolishes the IRS"


Just interested if any Fastlaner's have looked into this...

 

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[MikeC]

I remember I saw a documentary once that talked about the income tax. Apparently there is actually no real law that you are required to pay income tax. The IRS basically can arrest people who don't pay taxes even though there isn't a real law to back it up. Pretty scary, if you think about it.

I'm all for abolishing the income tax, but I'm not knowledgeable enough in taxes to know what the effects would be. Only one way to find out!

 

[^eagle^]

The idea is great but It will never fly due the cozy relationship between the banks and the government. The Federal Government relies on tax income and will do anything to protect its future income. That is the purpose of the IRS. It protects the interest in collecting money through extortion. Now th Government can go and borrow money through the use of bonds becuase it knows it can extort the money to pay off those bonds through the IRS.

If you can read through the Frank Dodd bill that was just passed. This was basically the largest money grab in US history. They are even trying to strong arm other countries to not do business with US citizens so that the money stays onshore so they can guarantee the future tax revenue. My fast lane plan fell victim to this bill.


I am still studying this and trying to figure it into my fastlane plan but we are basically locking down our borders in the US to keep the money form leaking out. Making the tax laws simple is not in the governments best interest. It is purposefully complicated so the average Joe remains dumb and over pays his taxes.

 

[TaxGuy]

I agree with ^eagle^ it's too idealistic.

The funny thing is my uncle is a big supporter of a flat tax and he said to my dad "If we had a 15% flat tax, you'd be out of business". Being the professional my dad is his quick witted response was "well we'd still have to figure out 15% of what" - thus even a flat tax would require a tax professional to figure out your taxable income

As for this, it'll never fly, the IRS is too big and powerful to just lay down and die for a "fair tax" not to mention they could always pull the "it'll kill jobs" card. Considering that my dad's best friend was an IRS auditor for over 30yrs(and also one of the nicest guys you'll ever meet), there are good people that work there contrary to what most people think.

 

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[kwerner]

As for this, it'll never fly, the IRS is too big and powerful to just lay down and die for a "fair tax" not to mention they could always pull the "it'll kill jobs" card.

Yeah, I really don't see the downside to it; keeping an inefficient system in place, like the IRS, just for the sake of keeping it in place doesn't make a lot of sense to me. You know, people used to have to carry a bucket and walk to the nearest river to get their water; would it have made sense for their governments to stifle a more efficient method for people to get water, just for the sake of already having buckets??

 

[^eagle^]

The only way to get rid of the IRS is to bring down the banking industry. And you can only do that by not paying interest. If all the American people paid off all their debt the banks would collapse. Try getting THAT to happen. A debt Free America would be a better campaign.

 

[GlobalWealth]

Morally (imo) the proposed fair tax is the best possible scenario. You only pay tax on your consumption so you buying habits affect your lifestyle as opposed to bureacracy.

Personally I would love to see this happen. But the consequences are vastly reduced spending by the masses which would have a negative impact on GDP.

Taxes are a major motivation for making decisions. From the billionaire to the $8/hr worker, taxes affect the decisions we make.

If you are taxed 25% of all of your purchases, you can imagine that consumption will inevitably decline. Income tax is something the common man has little or no control over. But he can control what he spends at Walmart every week.

And if he retail spending increases by 25%, then he is going to be more conscientious with his shopping habits.

I believe the long term affect of a fair tax would greatly improve the economy of this country (or any other that implements it), but there would certainly be short term pain.

And therein lies the rub. Politicians are voted into office for short terms so they want the biggest impact during their tenure to solidify their re-election potential or that of their successors.

No politician wants to jeopardize his campaign so he will shy away from legislation that improves the long term economic outlook at the expensive of the short term economy.

 

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[Rem]

I like the idea of paying taxes as you consume. Then you don't get nailed with a bill from the IRS every year. You adjust your spending on what you can afford and the price is included at check out if you will. Prices will seem higher due to that but at least you can adjust accordingly.

 

[kwerner]

The only way to get rid of the IRS is to bring down the banking industry.

Maybe I'm just naive to the matter, but I don't see the correlation between the IRS and the banking industry.

Now if you would have said the Fed and the banking industry, yes, I would agree with that; but the former, I don't understand.

 

[Rem]

I think that through indoctrination society has held onto the belief that the IRS is needed. In reality, it is not. I would wake up in the morning, put my pants on one leg at a time, eat breakfast, earn money, be with my family in the evenings, brush my teeth and go to bed. On the weekends maybe I will go fishing. Never once did I need the IRS to assist me in any way shape or form.

 

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[TaxGuy]

This thread is starting to get political and I hope the moderators will step in before it gets ugly

I think that through indoctrination society has held onto the belief that the IRS is needed. In reality, it is not. I would wake up in the morning, put my pants on one leg at a time, eat breakfast, earn money, be with my family in the evenings, brush my teeth and go to bed. On the weekends maybe I will go fishing. Never once did I need the IRS to assist me in any way shape or form.

Yes the IRS is inefficient and an example of bureaucracy getting in the way of what should be a simple program. That said, nothing in this country ever works as planned and there's plenty of great theories that just don't work in the real world.

To better understand this, there was a recent newsletter I got from GlobalWealth that explained the necessary evils of the tax system. I'll let Bobby explain this himself, but what I got out if it is that in order for our democracy to run properly they need operate in a surplus which means either cutting the budget or levying taxes- unfortunately cutting the budget is out of the question with all the jobs and industries that would be affected so the other solution is raising taxes which is of course very unpopular.

Bottom line is we could argue about this until we're blue in the face, but the best thing we could do is just focus on building our businesses to the point that we can influence major decisions instead of just talking about it on a web forum

This is why I believe MJ made one of the rules not to talk about politics

 

[^eagle^]

Maybe I'm just naive to the matter, but I don't see the correlation between the IRS and the banking industry.

Now if you would have said the Fed and the banking industry, yes, I would agree with that; but the former, I don't understand.

The government purchases bonds through the private sector (Ie goldman Sachs) . The NY leader of the Fed is a former partner of Goldman Sachs. These types of "alliances" occur everywhere in the upper levels of the government. Big business is trying everything they can to keep their corporation propped up including corporate welfare which I think is ridiculous. But government is only interested in getting re elected. Not what is best for America.

 

[GlobalWealth]

Maybe I'm just naive to the matter, but I don't see the correlation between the IRS and the banking industry.

Now if you would have said the Fed and the banking industry, yes, I would agree with that; but the former, I don't understand.

The relationship is the incestuousness of the Fed and the Treasury department (IRS) and the Fed and the banking industry. Remember the Fed is owned by the large national banks and the chairman is picked by the president and confirmed by congress. In addition, 100% of Fed profits are paid into the Treasury.

 

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[GlobalWealth]

This thread is starting to get political and I hope the moderators will step in before it gets ugly

I'm not sure where you are reading political or ugly. It is discussing the political aspects of fair tax, but has not gone partisan (at least yet).

 

[GlobalWealth]

but the best thing we could do is just focus on building our businesses

agreed here. we are not in the position to affect policy change so as entrepreneurs our job is to focus on productivity increases through our businesses.