FairTax. Yay or Nay?

[gwprod12]

You say that the FairTax is stupid because the Federal Reserve shouldn't exist...

 

So, let's say this: If the federal reserve didn't exist tomorrow and we used gold bricks as currency, would we no longer have to pay taxes? Would the federal government not want taxes?

 

You're conflating the issue (as usual). You're saying we shouldn't pay taxes. That has nothing whatsoever to do with HOW we pay taxes.

 

And for someone who's so rabidly against being taxed on their income (Since government will NEVER give up wanting it's revenue), you should embrace the FairTax.

[Former PC Fanboy]

The Fairtax is a good idea. Real prices of goods would only rise 3-4% because the hidden taxes would be removed. Estimates are that 20% of a product's price are the hidden taxes, so a 23% national sales tax would really only add roughly 3% to the cost of an item.

 

The economy would expand heavily, up to 10% a year, as trillions of dollars in tax shelters come back.

 

What people don't understand is that the income tax is only paid by middle class and some upper class people. The richest of the rich don't pay it because their money comes from investments (ie Capital Gains tax).

 

The Capital gains tax rate is 15%, and you do not need to pay for Social Security or Medicare or anything like that from it. So a multi millionaire today pays 15% on money generated for him, where as a hard working family that has a combined household income of $75,000 (not rich by any means especially in a big city) pays 24%+ in addition to 12.4% social security and even more for medicare/aid.

 

As far as the FairTax affecting the poor people, it would not affect them in any negative way. In fact, a family who shops at a thrift store or buys 2nd hand goods on ebay would not pay taxes on almost anything other than food - which if they shop at independent grocery stores and avoid expensive junk food - would be more than covered by the prebate.

 

In fact, the tax burden for poor people would be reduced by up to half according to some estimates.

 

What people also don't seem to understand is that taxation AFFECTS behavior. People who make arguments against the FairTax assume that people will spend and act exactly the same under a FairTax as they do now. This is fundamentally false. If you put a high tax on new goods, people who can't afford the tax will buy used goods instead. Rich people probably will continue buying luxury items as they wouldn't care about a modest 3% increase in price.

 

The prebate covers the tax up to the poverty level, so it is easy to imagine a scenario where a savvy family would buy mostly used goods - doesn't mean in bad shape but just pre-owned or "open item" - and use their prebate to cover the tax on food and end up paying 0% taxes. It is also easy to imagine a scenario where someone who only pays a 15% capital gains tax (and deducts a lot from it too so he pays far less anyway) would have to pay the full tax on that new BMW or Ferrarri.

 

Also, people who do not pay income taxes such as illegal immigrants, drug dealers, prostitutes, and tax cheats (and there are a lot of them) would also contribute, meaning everyone would have to chip in less to produce the same amount of revenue.

 

In interest of full disclosure and to state my qualifications, I have a Bachelor Degree in Business Management (which requires courses in accounting, finance, management, marketing, and economics, so I am very well versed in these areas including tax law). I think its only fair that other people who are on either side also state their credentials so we know if they are basing their information on a solid foundation of education and/or experience or partisan politics.

[gwprod12]

There is one serious negatory, however, that just occured to me... (it could be a positive too)

 

Since much of what people buy is financed, taxing spending instead of income would cut down spending on credit, which might damage the economy. I am no economist, so I don't know what the result would be.

 

Former PC Fanboy: I'm glad you were able to put what I think in a more succinct form. I have no credentials when it comes to economics or finance or business. Thanks for your perspective!

[JonTheSavage]

You say that the FairTax is stupid because the Federal Reserve shouldn't exist...

 

So, let's say this: If the federal reserve didn't exist tomorrow and we used gold bricks as currency, would we no longer have to pay taxes? Would the federal government not want taxes?

 

You're conflating the issue (as usual). You're saying we shouldn't pay taxes. That has nothing whatsoever to do with HOW we pay taxes.

 

And for someone who's so rabidly against being taxed on their income (Since government will NEVER give up wanting it's revenue), you should embrace the FairTax.

 

This is my entire point. Since the Fed Reserve Act was ILEGALLY enacted by congress in 1913, the IRS soon followed, and NOBODY in the country paid taxes between 1776, and the 1950s. So what is the point of people paying taxes AT ALL??? We never needed to between the beginning of America to the 1950s! You see what is wrong here? Its the largest scam in history.

 

Who prints the money? Why do the people who print the money need money if they print it?

 

You can't fix the problem, by further throwing money AT the problem. Just elimiate the Fed Reserve, and you elimiate inflation, AND income tax. Problem solved. Besides. %20 of American's don't even PAY income taxes. It is not a mandatory law. THERE IS NO LAW that says you have to file a 1040. Why force an unessecary tax on %20 of people?

 

The IRS is nothing more than a collection agency for the Federal Reserve.

Take the time, and watch this documentary. It will explain it in a nutshell.

http://video.google.com/videoplay?docid=53...h&plindex=0

[gwprod12]

This was YOUR entire point? As I understand it, it was OryHara's entire point.

 

For shame.

[JonTheSavage]

This was YOUR entire point? As I understand it, it was OryHara's entire point.

 

For shame.

 

Don't play dumb. You know it is me.