FairTax of 23% or FlatTax of 10%?

[Anarchist420]

I'd rather have the FairTax, although it's not ideal like a uniform 10% tariff would be.

With the FairTax, you could get rid of the IRS, with the FlatTax, that's less likely.

The FairTax would not be on shelter, medical expenses, or food, plus it would include rebates. Like a 23% rebate of all medical expenses for example.

I'd go with the FairTax.

I also like the FairTax because everyone pays it. With a FlatTax, Paris Hilton and the Rockefeller family would still be paying nothing. Romney likes the FlatTax because he doesn't work.

 

[Brainonska511]

None of the above.

 

[halik]

None of the above.

Second

 

[khon]

The socalled "Fairtax" shifts the tax burden onto the middle class, which is already fast disappearing.

And it would need to be significantly higher than 23% to collect the same amount of revenue collected under current rules.

 

[Anarchist420]

I don't think it would require more than 23%, because if only 2/3 of GDP (which is 15T, 2/3 is 10T) were purchased, than it would bring in 2.3T-600B in rebates (1.7T), which is what we already get. Simply cutting spending to 1990 levels would bring in like a $400B federal surplus.

Even though it shifts the burden evenly, there are rebates and rich people who don't normally pay taxes will pay some taxes.

 

[MotF Bane]

I don't think

Done.

 

[StageLeft]

Who really cares. it would be nice to simplify things but total tax receipts won't go down so end result who really cares.

 

[khon]

I don't think it would require more than 23%, because if only 2/3 of GDP (which is 15T, 2/3 is 10T) were purchased, than it would bring in 2.3T-600B in rebates (1.7T), which is what we already get. Simply cutting spending to 1990 levels would bring in like a $400B federal surplus.

Even though it shifts the burden evenly, there are rebates and rich people who don't normally pay taxes will pay some taxes.

First off retail sales in the US are only around $4.5T anually, so your 10T estimate is way off.

Secondly in 1990 the budget was 21.8% of GDP, today that would equal over $3.1T.

So the numbers actually look something like this:

0.23*4.5-3.1 = $2T+ deficit

And that's without even adding the rebate

More importantly though the "Fair"tax shifts the tax burden away from the rich and towards the middle class. So it doesn't shift the burden evenly at all.

 

[Anubis]

we could just close all the loopholes in the current tax laws so everyone HAS to pay them. What was that number 45% ish of US citizens actually pay taxes

 

[mmntech]

So basically the FairTax is like a giant sales tax, sans income tax. Interesting idea.

One thing's for sure, the tax system in both our countries badly needs to be reformed. It's too confusing for most people. But a complicated system keeps the bureaucracy fat, and they're the ones really pulling the strings. Also makes it easy for governments to extort more money by preying on small mistakes.

 

[QuantumPion]

If the government spends way more then it should then it doesn't matter what tax system we went with, it would be oppressive regardless. E.g. 50% sales tax, 25% flat tax, etc.

Likewise, if the government was actually limited by the constitution in what it could spend money on, it wouldn't matter if we continued to use our current corrupt and inefficient system because the tax burden would be so much smaller.

 

[QuantumPion]

p.s. why does the forum turn all percent signs into % ?

 

[Brainonska511]

p.s. why does the forum turn all percent signs into % ?

It's a forum technical error. Supposedly, % is fine if you type it in the most advanced text box reply setting (see UserCP).

 

[Genx87]

First off retail sales in the US are only around $4.5T anually, so your 10T estimate is way off.

Secondly in 1990 the budget was 21.8% of GDP, today that would equal over $3.1T.

So the numbers actually look something like this:

0.23*4.5-3.1 = $2T+ deficit

And that's without even adding the rebate

More importantly though the "Fair"tax shifts the tax burden away from the rich and towards the middle class. So it doesn't shift the burden evenly at all.

It can be as progressive as we want to make it with prebates. The rich consume a large amount of services and consumables. Which are typically taxed at 3-7%. And they play accounting games with their income so they pay 10%. They are already shifting the burden to the middle and upper middle class. The rich dont pay a large % of their income in taxes already. Even if they are paying a large % of the reciepts.

 

[WhipperSnapper]

I'd rather have the FairTax, although it's not ideal like a uniform 10% tariff would be.

Where are you getting that 10% number from? Are you saying that the federal government could generate the same amount of revenue the a 10% flat tax as with the current system?

With the FairTax, you could get rid of the IRS, with the FlatTax, that's less likely.

Who's going to enforce the tax laws and make sure people pay their taxes? There would still need to be some agency to do that. Also, what about the problem of bartering or under-the-table cash payments? All sorts of schemes would be devised to avoid the taxes, so the government would have to have some sort of department or agency to enforce the tax laws.

 

[Genx87]

How do the states enforce state sales tax law? Apply it to the feds.

 

[ayabe]

Pass. Only the rich and mathematically inadequate support anything like that.

 

[dfuze]

we could just close all the loopholes in the current tax laws so everyone HAS to pay them. What was that number 45% ish of US citizens actually pay taxes

I would like to see this first. Once you collect from all, then you can see what position you really are in.

 

[Atreus21]

Either one beats what we have.

 

[SunnyD]

Tack on property tax, sales tax, state income taxes, misc. "fees" municipalities impose, and you're still losing more than half your paycheck if you're middle class. It doesn't really matter then, does it?

 

[soccerballtux]

The socalled "Fairtax" shifts the tax burden onto the middle class, which is already fast disappearing.

And it would need to be significantly higher than 23% to collect the same amount of revenue collected under current rules.

it's 23% inclusive, which turns out to be about 33% exclusive. So it's basically 33%.

 

[soccerballtux]

Tack on property tax, sales tax, state income taxes, misc. "fees" municipalities impose, and you're still losing more than half your paycheck if you're middle class. It doesn't really matter then, does it?

This is why the problem isn't the tax structure (it never is, that's why the economy always equalizes around a progressive/regressive/fair/whatever kind of tax you want), it's the inefficiencies in the system leaching off the productive. The only way is to reduce the number employed by the government, and allow them to go work for the private sector.

 

[khon]

it's 23% inclusive, which turns out to be about 33% exclusive. So it's basically 33%.

That's a clever trick to make it seems smaller than it is (though 23% inclusive is only 30% exclusive, not 33%), but it's still not enough.

 

[soccerballtux]

That's a clever trick to make it seems smaller than it is (though 23% inclusive is only 30% exclusive, not 33%), but it's still not enough.

There's no tax taken at the register, it's all factored into the price of the item posted on the shelf. That way, WYSIWYG.

Also, there's no amount of revenue that is enough for our government.

 

[dammitgibs]

Either would be better than the mess we have now but I think the flat tax would be less of a disparity between the super rich and the poor