What's your opinion on the Fair Tax?

Mal Reynolds · 01-08-2008, 05:10 AM

The Fair Tax is basically a national sales tax designed to replace the income tax. Under this system, we will stop paying income and payroll taxes. The revenue will come from an increase in sales tax, which might go up from 23-34% depending on who you ask.

Fair Tax is considered a pretty radical idea. However, Mike Huckabee, a serious presidential candidate has made this tax system part of his platform.

I love the idea of getting rid of the IRS and the disincentive to work created by the income tax. But I'm also worried that the middle class will end up shouldering most of the burden under the Fair Tax.

You can find more information here at Factcheck.org.

What's your take?

Joanne · 01-08-2008, 06:06 AM

My husband just read The Fair Tax Plan by Neil Boortz. He said it was a good book for someone wanting to know more about it. He said his opinion is it sounds good on paper but he doesn't ever see it coming to play.

jhanseth · 01-08-2008, 06:16 AM

I think this is a terrible idea. It will only increase the widening class divide. That website you linked to claims that tax would be levied on things like doctor's bills, legal fees... and RENT.

Even if people are bringing home more money in each paycheck, consumer goods and services will be more expensive. The middle class will be hit really hard.

Mal Reynolds · 01-09-2008, 02:58 AM

Quote:

but he doesn't ever see it coming to play.

Is it because it is impractical or is it because it is too radical to be taken seriously by the public?

Quote:

tax would be levied on things like doctor's bills, legal fees... and RENT.

Good point. To gain my support, the Fair Tax needs to exempt certain categories of purchase, like rent up to the median level of your neighborhood and basic health care costs.

frozemud · 01-13-2008, 10:44 AM

My biggest issue with the Fair Tax is the "prebates".
If I understand correctly, everyone gets a check equal to what the tax would be on poverty-level consumption. I read about this a little on another forum:

The downside to this that you still have a regressive tax. At the very bottom the tax will net out to next to nothing but as you go up in income it will take a higher and higher bite until you get rich enough (about $200,000/year) for the % to start falling.

One way to solve this is to just make the check so big that you don't care. This carries with it three problems:
1. Do we really want to make it easier than it already is for people to have a living without working?
2. If the prebate check is big, the tax rate is going to have to be high. Much higher than 23%.
3. The middle class is unfairly hit with the largest burden as percentage of income.

The other solution would be to target the checks by monthly income. You could do some useful things with this such as not sending checks to people who don't work and have no disability that prevents them from going to work.

But then they are selling this as an elimination of the IRS and of all paperwork tracking income so it kind of defeats the purpose.

To be honest, I don't find that doing my taxes is such a huge burden. It takes me about 1 to 2 hours once a year. The rest of the time I don't think about my taxes.
What I do tend to think about is the way that my taxes are being spent. Let's work on that first. Unnecessary wars would be the first item I would strike from the budget.

Xin Lu · 01-13-2008, 03:08 PM

I actually wrote a pretty long post about it a while back. It's here:
Is There Really a Fair Tax? — The Baglady

I think it's pretty unfair as it is structured right now, but it may be improved.

rstlne · 01-14-2008, 02:50 PM

I would much rather see a reduction in government spending first. In my mind, the Fair Tax is a mere reshuffling from one form of taxation to another and accomplishes very little.

Milehimama · 01-14-2008, 06:32 PM

I like the *idea* of the fair tax, but I just don't see how we could possibly actually apply it in our country. Also, what about kids who have income (not allowance). Are they going to get a pre-bate, too?
If it ever comes to pass, I forsee a LONG list of exclusions and exceptions as the various lobbying organizations hit Washington hard.

Our current system really burns me up though - I'm taxed when I make the $ by the IRS, and I'm taxed when I spend the money via sales tax! In some parts of Charleston, SC the tax is a whopping 17% (for a dinner at a restaurant with an alcohol license. Way to encourage tourism.)

beansac · 01-15-2008, 06:06 PM

If we totally removed the personal income tax, the federal government still takes in the same amount of money as it did 10 years ago WITH the personal income tax. I would want to have the income tax removed with a more localized welfare, medicare and other socialist programs. That way, it would be more voluntary, because it would be easier to remove it if the community (city, state, etc.) thought it was ineffective. It would also be more efficient because the smaller a bureaucracy is, the harder it is for fraud, corruption and "bridges to nowhere."

I think the Fair Tax is like the PATRIOT Act; is a good sounding, but is actually terrible and is working to reverse the freedoms of this country.

In the end though, it would hurt the poor because the rich could find ways around paying a sales tax (it's my business, so I don't sell anything to myself), but the poor couldn't.

Anthony Marrone · 01-15-2008, 07:10 PM

The Fair Tax will repeal every other federal tax currently on the books in the United States. When Warren Buffet testified in front of Congress he believed in maintaining several taxes currently in place (including the Estate Tax) and also believes he should pay more taxes. I'm more likely to take my tax advice from Warren Buffet than from a preacher from Arkansas (a la Mike Huckabee). The Fair Tax will penalize middle-income and upper middle-income Americans most, because they consume a disproportionately high amount relative to their income.

01-08-2008, 05:10 AM	#1
Mal Reynolds Junior Member Join Date: Jan 2008 Posts: 16 Reputation: (10)	What's your opinion on the Fair Tax? The Fair Tax is basically a national sales tax designed to replace the income tax. Under this system, we will stop paying income and payroll taxes. The revenue will come from an increase in sales tax, which might go up from 23-34% depending on who you ask. Fair Tax is considered a pretty radical idea. However, Mike Huckabee, a serious presidential candidate has made this tax system part of his platform. I love the idea of getting rid of the IRS and the disincentive to work created by the income tax. But I'm also worried that the middle class will end up shouldering most of the burden under the Fair Tax. You can find more information here at Factcheck.org. What's your take?

01-08-2008, 06:06 AM	#2
Joanne Senior Member Join Date: Jan 2008 Location: Originally from New York City, now in Florida since 2002. Posts: 131 Reputation: (43)	My husband just read The Fair Tax Plan by Neil Boortz. He said it was a good book for someone wanting to know more about it. He said his opinion is it sounds good on paper but he doesn't ever see it coming to play. __________________ My Myspace Page Forever Parents Adoption Shop

01-08-2008, 06:16 AM	#3
jhanseth Junior Member Join Date: Jan 2008 Location: Portland, ME Posts: 18 Reputation: (10)	I think this is a terrible idea. It will only increase the widening class divide. That website you linked to claims that tax would be levied on things like doctor's bills, legal fees... and RENT. Even if people are bringing home more money in each paycheck, consumer goods and services will be more expensive. The middle class will be hit really hard. __________________ Blueberries and Lobster / Living and Eating in Portland, Maine

01-13-2008, 03:08 PM	#6
Xin Lu Wise Bread Blogger Join Date: Jan 2008 Posts: 237 Reputation: (40)	I actually wrote a pretty long post about it a while back. It's here: Is There Really a Fair Tax? — The Baglady I think it's pretty unfair as it is structured right now, but it may be improved. __________________ Blogs I Write: The Baglady @ http://baglady.dreamhosters.com Wise Bread @ http://wisebread.com/xin-lu

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01-13-2008, 10:44 AM	#5
frozemud Member Join Date: Dec 2007 Posts: 50 Reputation: (10)	My biggest issue with the Fair Tax is the "prebates". If I understand correctly, everyone gets a check equal to what the tax would be on poverty-level consumption. I read about this a little on another forum: The downside to this that you still have a regressive tax. At the very bottom the tax will net out to next to nothing but as you go up in income it will take a higher and higher bite until you get rich enough (about $200,000/year) for the % to start falling. One way to solve this is to just make the check so big that you don't care. This carries with it three problems: 1. Do we really want to make it easier than it already is for people to have a living without working? 2. If the prebate check is big, the tax rate is going to have to be high. Much higher than 23%. 3. The middle class is unfairly hit with the largest burden as percentage of income. The other solution would be to target the checks by monthly income. You could do some useful things with this such as not sending checks to people who don't work and have no disability that prevents them from going to work. But then they are selling this as an elimination of the IRS and of all paperwork tracking income so it kind of defeats the purpose. To be honest, I don't find that doing my taxes is such a huge burden. It takes me about 1 to 2 hours once a year. The rest of the time I don't think about my taxes. What I do tend to think about is the way that my taxes are being spent. Let's work on that first. Unnecessary wars would be the first item I would strike from the budget.

01-14-2008, 02:50 PM	#7
rstlne Senior Member Join Date: Jan 2008 Location: New Jersey Posts: 364 Reputation: (115)	I would much rather see a reduction in government spending first. In my mind, the Fair Tax is a mere reshuffling from one form of taxation to another and accomplishes very little.

01-14-2008, 06:32 PM	#8
Milehimama Senior Member Join Date: Jan 2008 Posts: 116 Reputation: (13)	I like the idea of the fair tax, but I just don't see how we could possibly actually apply it in our country. Also, what about kids who have income (not allowance). Are they going to get a pre-bate, too? If it ever comes to pass, I forsee a LONG list of exclusions and exceptions as the various lobbying organizations hit Washington hard. Our current system really burns me up though - I'm taxed when I make the $ by the IRS, and I'm taxed when I spend the money via sales tax! In some parts of Charleston, SC the tax is a whopping 17% (for a dinner at a restaurant with an alcohol license. Way to encourage tourism.)

01-15-2008, 06:06 PM	#9
beansac Member Join Date: Jan 2008 Location: Chicago Posts: 32 Reputation: (13)	If we totally removed the personal income tax, the federal government still takes in the same amount of money as it did 10 years ago WITH the personal income tax. I would want to have the income tax removed with a more localized welfare, medicare and other socialist programs. That way, it would be more voluntary, because it would be easier to remove it if the community (city, state, etc.) thought it was ineffective. It would also be more efficient because the smaller a bureaucracy is, the harder it is for fraud, corruption and "bridges to nowhere." I think the Fair Tax is like the PATRIOT Act; is a good sounding, but is actually terrible and is working to reverse the freedoms of this country. In the end though, it would hurt the poor because the rich could find ways around paying a sales tax (it's my business, so I don't sell anything to myself), but the poor couldn't.

01-15-2008, 07:10 PM	#10
Anthony Marrone Member Join Date: Jan 2008 Location: Syracuse, New York Posts: 56 Reputation: (18)	The Fair Tax will repeal every other federal tax currently on the books in the United States. When Warren Buffet testified in front of Congress he believed in maintaining several taxes currently in place (including the Estate Tax) and also believes he should pay more taxes. I'm more likely to take my tax advice from Warren Buffet than from a preacher from Arkansas (a la Mike Huckabee). The Fair Tax will penalize middle-income and upper middle-income Americans most, because they consume a disproportionately high amount relative to their income.