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Fair Tax

Deudalus

Golden Member
Jan 16, 2005
1,090
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With all the arguing about the Flat Tax I think honestly the way to go is the Fair Tax.

The Fair Tax basically taxes everyone based on what they buy.

The beauty of this tax is that you can make certain things tax free. These things would be any type of food, utilities, used goods like cars, and so on and so forth. This makes it less regressive.

You can further give people back pre-bates at the beginning of the month if they are lower on the income scale which covers any taxes that they pay.


This tax is great beyond that because people are taxed on what they CONSUME! You want people to go green? Want people to consume less? Tax people based on what they consume!

It is impossible to avoid this tax so no more stories of Warren Buffet's secretary paying more taxes than he does.

You would no longer have "tax cheats" who get in trouble and can't pay their taxes living in prison along with rapists and murderers.


The IRS and the War on Drugs has made more Americans criminals than any two things in American history.

This solves that problem. No more filing your taxes, your taxes are paid every time you purchase something.

What would be wrong with that?
 

Hacp

Lifer
Jun 8, 2005
13,923
1
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With all the arguing about the Flat Tax I think honestly the way to go is the Fair Tax.

The Fair Tax basically taxes everyone based on what they buy.

The beauty of this tax is that you can make certain things tax free. These things would be any type of food, utilities, used goods like cars, and so on and so forth. This makes it less regressive.

You can further give people back pre-bates at the beginning of the month if they are lower on the income scale which covers any taxes that they pay.



This tax is great beyond that because people are taxed on what they CONSUME! You want people to go green? Want people to consume less? Tax people based on what they consume!

It is impossible to avoid this tax so no more stories of Warren Buffet's secretary paying more taxes than he does.

You would no longer have "tax cheats" who get in trouble and can't pay their taxes living in prison along with rapists and murderers.


The IRS and the War on Drugs has made more Americans criminals than any two things in American history.

This solves that problem. No more filing your taxes, your taxes are paid every time you purchase something.

What would be wrong with that?
How is this tax fair? If I want to eat less to save up to buy a new car, I'll be paying more tax than someone who uses all is money on food. It is not fair in any way. Also, how is pre-bates fair?

Fair tax to me is everyone pays the same rate no matter how much or how little you earn. End of story.
 

Deudalus

Golden Member
Jan 16, 2005
1,090
0
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How is this tax fair? If I want to eat less to save up to buy a new car, I'll be paying more tax than someone who uses all is money on food. It is not fair in any way. Also, how is pre-bates fair?

Fair tax to me is everyone pays the same rate no matter how much or how little you earn. End of story.
That's only because you aren't thinking.

Pre-bates given to people below a certain poverty level means they are being refunded for certain things that they buy that are generally considered necessities. Like soap, detergent, things like that.

The idea is to make the necessities in life taxed less and less.

Beyond that, you are taxed based on what you purchase.

Poorer people spend a higher percentage of their money on necessities. If you make those things tax free then they are largely not paying taxes.

Rich people spend a higher percentage of their money on non-necessities. So you tax the boats, the yachts, the personal planes, the high end cars. You know the things that the uber-rich right off on their taxes as a "corporate need" and whatnot. You do realize that you can currently write off season tickets to the Lakers, trips, 5 star dinners, golf memberships, and plenty of other things right?

A flat sales tax doesn't care what its fore (pun intended), it only cares if money is spent on a non-necessity.


Do you truly think that someone making 30k a year pays the same amount of money in sales tax as someone who makes 1 million per year?

If so you sure do have some fuzzy math.
 
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Hacp

Lifer
Jun 8, 2005
13,923
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That's only because you aren't thinking.

Pre-bates given to people below a certain poverty level means they are being refunded for certain things that they buy that are generally considered necessities. Like soap, detergent, things like that.

The idea is to make the necessities in life taxed less and less.

Beyond that, you are taxed based on what you purchase.

Poorer people spend a higher percentage of their money on necessities. If you make those things tax free then they are largely not paying taxes.

Rich people spend a higher percentage of their money on non-necessities. So you tax the boats, the yachts, the personal planes, the high end cars.


Do you truly think that someone making 30k a year pays the same amount of money in sales tax as someone who makes 1 million per year?

If so you sure do have some fuzzy math.
As I said, everyone should pay the same rate on everything. You call soap a necessity but how many poor people use liquid based soaps instead of a plain old cheap bar? Now you punish the people who buy the bar soap to save money by taxing them higher on the car they are trying to save for.
 

Deudalus

Golden Member
Jan 16, 2005
1,090
0
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As I said, everyone should pay the same rate on everything. You call soap a necessity but how many poor people use liquid based soaps instead of a plain old cheap bar? Now you punish the people who buy the bar soap to save money by taxing them higher on the car they are trying to save for.
Umm no I'm not.

You already don't pay sales tax on used cars. You have the option to buy a pre-owned car if you want.

The point is that it would make people not live in fear of the IRS, it would mean people pay based on what they consume, and it is not at all regressive.
 

3chordcharlie

Diamond Member
Mar 30, 2004
9,859
1
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As I said, everyone should pay the same rate on everything. You call soap a necessity but how many poor people use liquid based soaps instead of a plain old cheap bar? Now you punish the people who buy the bar soap to save money by taxing them higher on the car they are trying to save for.
If that's your way of thinking, you should prefer a prebate system to one where some categories are tax-free.

What you really want is blood from stones. Even someone trying to live on $10k a year would fork over $2K+ under any realistic fair tax system. The very idea of finally getting to stick it to those uber-rich poor folk must be getting you all hot 'n bothered already!
 

QuantumPion

Diamond Member
Jun 27, 2005
6,010
1
76
How is this tax fair? If I want to eat less to save up to buy a new car, I'll be paying more tax than someone who uses all is money on food. It is not fair in any way. Also, how is pre-bates fair?

Fair tax to me is everyone pays the same rate no matter how much or how little you earn. End of story.

Your example doesn't make any sense. Both of those options are equally fair, as both persons chose what they spend their money on.

In both a fair tax and a flat tax, everyone pays the same rate no matter how much or little you earn. What makes the prebates fair is that everyone gets it regardless of income. The difference between the fair and flat tax is that in the fair tax, everyone gets to chose how much total tax they pay based on what they want to buy. Both are equally fair, but the fair tax is more _free_.

Either system would be infinitely better then what we have now.
 

Hacp

Lifer
Jun 8, 2005
13,923
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Your example doesn't make any sense. Both of those options are equally fair, as both persons chose what they spend their money on.

In both a fair tax and a flat tax, everyone pays the same rate no matter how much or little you earn. What makes the prebates fair is that everyone gets it regardless of income. The difference between the fair and flat tax is that in the fair tax, everyone gets to chose how much total tax they pay based on what they want to buy. Both are equally fair, but the fair tax is more _free_.

Either system would be infinitely better then what we have now.
Prebates don't make it far for anyone except the ones not paying taxes. Everyone should pay the same rate no matter what. Why punish productive people just because they earn more money?
 
Dec 10, 2005
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Prebates don't make it far for anyone except the ones not paying taxes. Everyone should pay the same rate no matter what. Why punish productive people just because they earn more money?
Yeah! Screw those lazy poor people.
 

Hacp

Lifer
Jun 8, 2005
13,923
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Your example doesn't make any sense. Both of those options are equally fair, as both persons chose what they spend their money on.
Either system would be infinitely better then what we have now.
Except the person who chooses to spend less on tax free soap pays more in taxes for his car, while the person who enjoys a luxury line of soap pays no tax at all.
 

QuantumPion

Diamond Member
Jun 27, 2005
6,010
1
76
Prebates don't make it far for anyone except the ones not paying taxes. Everyone should pay the same rate no matter what. Why punish productive people just because they earn more money?
What? I said exactly the opposite. Under the Fair Tax, everyone pays the same rate, period. Everyone gets the same prebate to cover the minimum cost of necessities. How much total, actual dollars you pay only depends on how much you chose to spend, and on what. That's not punishment, that is freedom.

IMO the fair tax is "more fair" than the flat tax, because it still taxes rich people that buy expensive things but have no income.
 

Hacp

Lifer
Jun 8, 2005
13,923
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What? I said exactly the opposite. Under the Fair Tax, everyone pays the same rate, period. Everyone gets the same prebate to cover the minimum cost of necessities. How much total, actual dollars you pay only depends on how much you chose to spend, and on what. That's not punishment, that is freedom.

IMO the fair tax is "more fair" than the flat tax, because it still taxes rich people that buy expensive things but have no income.
What about a frugal stud who tries to live on the bare minimum so he can purchase a nice home or car later on in life? He gets screwed by the annual prebate.
 

QuantumPion

Diamond Member
Jun 27, 2005
6,010
1
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Except the person who chooses to spend less on tax free soap pays more in taxes for his car, while the person who enjoys a luxury line of soap pays no tax at all.
So? Its their choice to make. One person chooses to buy a car and pay more taxes, the other guy chooses to pay less tax but go without a new car. I don't see the problem here.
 

Hacp

Lifer
Jun 8, 2005
13,923
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So? Its their choice to make. One person chooses to buy a car and pay more taxes, the other guy chooses to pay less tax but go without a new car. I don't see the problem here.
The problem is that one person is gaming the system by taking advantage of a tax break that they shouldn't have. Everyone should pay the same rate period. That is fairness.
 

QuantumPion

Diamond Member
Jun 27, 2005
6,010
1
76
What about a frugal stud who tries to live on the bare minimum so he can purchase a nice home or car later on in life? He gets screwed by the annual prebate.
Maybe you are not understanding the definition of prebate.

"Prebate:
The FairTax prebate is a rebate of taxes paid on spending up to the poverty level. It is paid, in advance, on a monthly basis and is equal to the FairTax rate times the family consumption allowance."
 

bfdd

Lifer
Feb 3, 2007
13,312
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I wish we had the fair tax sales tax type deal around 8-10% for Federal, switch more "power" to the States and pay around 20-30% income tax to more local governments(like my state.) The reason I would prefer that is because UHC would work much better as a state to state type deal, rather than the national level. That's my opinion on the matter.
 

Hacp

Lifer
Jun 8, 2005
13,923
1
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Maybe you are not understanding the definition of prebate.

"Prebate:
The FairTax prebate is a rebate of taxes paid on spending up to the poverty level. It is paid, in advance, on a monthly basis and is equal to the FairTax rate times the family consumption allowance."
I am talking about someone who spends less than the allowance. He can't save his prebate for later when he goes to buy his new car can he?

Edit: Wow never mind. You're talkinga bout something totally different. This is just a government handout plain and simple. You have a person earning nothing getting a rebate for earning nothing. A whole new class of entitlement.
 

Deudalus

Golden Member
Jan 16, 2005
1,090
0
0
Prebates don't make it far for anyone except the ones not paying taxes. Everyone should pay the same rate no matter what. Why punish productive people just because they earn more money?
I still don't think you get it.

You aren't punishing productive people just because they earn more money. You aren't punishing anyone.

You are COMPLETELY AND TOTALLY doing away with the IRS and income taxes.

You are taxed (or as you call it punished) based on what YOU CHOOSE TO BUY.

If a poor hood rat wants 30" spinning rims on their car, they pay sales tax on it.

If a rich person wants to buy a ferrari, they pay sales tax on it.


You are taxed on what you CHOOSE TO BUY. Its all in your hands.
 

QuantumPion

Diamond Member
Jun 27, 2005
6,010
1
76
The problem is that one person is gaming the system by taking advantage of a tax break that they shouldn't have. Everyone should pay the same rate period. That is fairness.
Choosing to not buy something in order to not pay sales tax is not "gaming the system" any more than working less hours to avoid paying income tax.

You seem to be of the mindset that if everyone doesn't get the same amount of money and pay the same amount of tax then something is "unfair".
 

Hacp

Lifer
Jun 8, 2005
13,923
1
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I still don't think you get it.

You aren't punishing productive people just because they earn more money. You aren't punishing anyone.

You are COMPLETELY AND TOTALLY doing away with the IRS and income taxes.

You are taxed (or as you call it punished) based on what YOU CHOOSE TO BUY.

If a poor hood rat wants 30" spinning rims on their car, they pay sales tax on it.

If a rich person wants to buy a ferrari, they pay sales tax on it.


You are taxed on what you CHOOSE TO BUY. Its all in your hands.
That makes sense, but why have prebates or tax exemptions?
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,907
173
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Umm no I'm not.

You already don't pay sales tax on used cars. You have the option to buy a pre-owned car if you want.

The point is that it would make people not live in fear of the IRS, it would mean people pay based on what they consume, and it is not at all regressive.
Where the heck did you get this idea?

Of course the sale of used goods requires sales tax.

And your assumption in your OP that you can't cheat on a 'sales tax' is dead wrong. VAT fraud is a big deal in Europe.

Edit: You won't get rid of the IRS either, a VAT requires an awful lot of work by the IRS etc

Fern
 

Hacp

Lifer
Jun 8, 2005
13,923
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Choosing to not buy something in order to not pay sales tax is not "gaming the system" any more than working less hours to avoid paying income tax.

You seem to be of the mindset that if everyone doesn't get the same amount of money and pay the same amount of tax then something is "unfair".
Ok there are two things I'm talking about here. One is making "necessities" tax free. They shouldn't be tax free. You pay taxes on what you spend. You spend on food, you pay taxes on food. At the same rate.

The second is this prebate nonsense. No prebates. You will have situations where people not earning a cent get prebates. Thats entitlement.
 

QuantumPion

Diamond Member
Jun 27, 2005
6,010
1
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I am talking about someone who spends less than the allowance. He can't save his prebate for later when he goes to buy his new car can he?

Edit: Wow never mind. You're talkinga bout something totally different. This is just a government handout plain and simple. You have a person earning nothing getting a rebate for earning nothing. A whole new class of entitlement.
It's not an entitlement because everyone gets it. It is a rebate on taxes paid for the first x thousand dollars of sales tax you pay. But instead of getting the money back after you pay it, the government estimates what the average person pays and sends you a check in advance. That way people living paycheck to paycheck aren't unduly burdened.
 

Hacp

Lifer
Jun 8, 2005
13,923
1
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It's not an entitlement because everyone gets it. It is a rebate on taxes paid for the first x thousand dollars of sales tax you pay. But instead of getting the money back after you pay it, the government estimates what the average person pays and sends you a check in advance. That way people living paycheck to paycheck aren't unduly burdened.
So a bum making and spending no money gets a free rebate check every month to leech off of. Great.
 

QuantumPion

Diamond Member
Jun 27, 2005
6,010
1
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Ok there are two things I'm talking about here. One is making "necessities" tax free. They shouldn't be tax free. You pay taxes on what you spend. You spend on food, you pay taxes on food. At the same rate.

The second is this prebate nonsense. No prebates. You will have situations where people not earning a cent get prebates. Thats entitlement.
The reason why the prebate deal came to be is because in order for the fair tax to be revenue neutral, it would have to be something like 25%. That is a very high sales tax for people on fixed incomes and would be burdensome. If you can think of a better way to have a fixed rate sales tax that only applies after you've paid an $x threshold I'd love to hear it.
 

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