FairTax Plan

[ch33zw1z]

So I've been reading up on the FairTax Plan and just wondering how the peeps at AT feel about it. IMO, sounds like a damn good plan.

FairTax Plan website

edit for linkage.

 

[alm99]

Hell yes, thank you Neal Boortz and the senators name that I can't remember right now.

 

[Vette73]

If you think the "fairtax" would work you are a idiot. It is nothing more then a tax cut for the rich.

Do some real research into it and it is pretty clear.

 

[alm99]

Originally posted by: Marlin1975
If you think the "fairtax" would work you are a idiot. It is nothing more then a tax cut for the rich.

Do some real research into it and it is pretty clear.

Right, the idea of actually keeping money that I earn instead of having ripped out of my paycheck before I ever see it is a bad thing? I would rather choose of when to be taxed when I purchase something instead of never seeing the money at all and being taxed again when I buy an item in the store.

 

[Howard]

Originally posted by: Marlin1975
If you think the "fairtax" would work you are a idiot. It is nothing more then a tax cut for the rich.

Do some real research into it and it is pretty clear.

Lazy in, garbage out.

 

[IronWing]

Smoke and mirrors. The plan can not raise the same revenues as the current system w/o much higher rates than the proponents suggest. So either spending gets cut or we borrow the money and pay more interest. There is no such thing as a free lunch.

 

[silverpig]

It seems like sales taxes would have to be ~30% in order for it to work.

 

[foghorn67]

Spending has to be cut. Bottom line. Nobody seems able to do that.

 

[sandmanwake]

I don't trust plans that employ propaganda as part of their name. "Fairtax". "Patriot Act".

 

[Queasy]

Originally posted by: silverpig
It seems like sales taxes would have to be ~30% in order for it to work.

23% inclusive = ~30% exclusive tax.

The inclusive tax percentage is like the percentage taken out of your paycheck. The exclusive tax percentage is how we are typically used to sales tax.

 

[Queasy]

Originally posted by: foghorn67
Spending has to be cut. Bottom line. Nobody seems able to do that.

The purpose of the Fair Tax is not to fix spending or fix social security or fix medicare or fix <insert typical DC BS here>. It is to provide a transparent means of taxation at the federal level and get rid of all the loopholes, exceptions, favoritism, manipulations, and untranslatable laws that currently revolve around the current income tax system.

 

[sandmanwake]

Question. How does this "fairtax" plan deal with retirement plans? Would those who chose to have Roth accounts get any tax credit back for the taxes they've already paid?

If we essentially replace the current system with a national sales tax, then those with deductible retirement accounts, when they start withdrawing, only pay federal tax when they buy stuff. Those who have Roth accounts already paid federal taxes at the time they placed their principal into their account. When they start withdrawing, they'd essentially be paying federal taxes again in the form of a national sales tax. The fairtax.org site's faq essentially implies that people with Roth accounts assume that they'll never pay taxes again--just who is this stupid that they would think this?

So my question remains, what about those with Roth retirement accounts? Would they be essentially be forced to pay federal taxes twice if the "fairtax" is implemented?

 

[Queasy]

Originally posted by: sandmanwake
Question. How does this "fairtax" plan deal with retirement plans? Would those who chose to have Roth accounts get any tax credit back for the taxes they've already paid?

Link

How does the Fairtax help seniors who have paid taxes on their retirement savings or invested in Roth IRAs?

Simply put, the FairTax is a revenue-neutral proposal, raising no more money than does the current system. The FairTax only changes where the money is raised, not the amount.

Additionally, some erroneously believe that people who have invested in Roth IRAs will never pay taxes on this money again. They may not know it, but they are paying corporate income taxes, employer payroll taxes, plus the associated compliance costs that are hidden in the price of every retail purchase they make. Under the FairTax, these hidden taxes are driven out of retail prices. And note, they elect to pay these taxes through their lifestyle choices.

Furthermore, used goods are not taxed because they have already been taxed once when they were new. Therefore senior citizens, like all Americans, do not lose purchasing power, but gain it instead. Moreover, the FairTax preserves the purchasing power of Social Security benefits and seniors receive a monthly rebate so they don?t pay taxes on the purchase of necessities. Tax-deferred investments get a one-time windfall. Savings invested in any long-term, income-generating asset such as a stock, real estate, or a long-term bond that can?t be called, increase substantially in value. Finally, complex estate planning is an artifact of an earlier age.

 

[sandmanwake]

Originally posted by: Queasy

Originally posted by: sandmanwake
Question. How does this "fairtax" plan deal with retirement plans? Would those who chose to have Roth accounts get any tax credit back for the taxes they've already paid?

Link

How does the Fairtax help seniors who have paid taxes on their retirement savings or invested in Roth IRAs?

Simply put, the FairTax is a revenue-neutral proposal, raising no more money than does the current system. The FairTax only changes where the money is raised, not the amount.

Additionally, some erroneously believe that people who have invested in Roth IRAs will never pay taxes on this money again. They may not know it, but they are paying corporate income taxes, employer payroll taxes, plus the associated compliance costs that are hidden in the price of every retail purchase they make. Under the FairTax, these hidden taxes are driven out of retail prices. And note, they elect to pay these taxes through their lifestyle choices.

Furthermore, used goods are not taxed because they have already been taxed once when they were new. Therefore senior citizens, like all Americans, do not lose purchasing power, but gain it instead. Moreover, the FairTax preserves the purchasing power of Social Security benefits and seniors receive a monthly rebate so they don?t pay taxes on the purchase of necessities. Tax-deferred investments get a one-time windfall. Savings invested in any long-term, income-generating asset such as a stock, real estate, or a long-term bond that can?t be called, increase substantially in value. Finally, complex estate planning is an artifact of an earlier age.

I saw that. It does not address my question.

 

[ch33zw1z]

Wouldn't make sense to reimburse everyone for past tax practices.

 

[sandmanwake]

Originally posted by: ch33zw1z
Wouldn't make sense to reimburse everyone for past tax practices.

Exactly. So the "fairtax" isn't really fair to those who chose to have Roth accounts as opposed to deductible accounts since if implemented, those who have deductible accounts would only pay federal tax once in the form of a national sales tax whereas those with Roth had paid once already before putting money into the account and then once more when they buy stuff and have to pay the national sales tax.

Propaganda naming.

Edit:
Oh, didn't we get reimbursed recently (or at least somewhat) because the government continued to tax us for years afterwards for a phone tax that was supposed to have only been used to raise money to fight the Spanish-American war?

 

[drinkmorejava]

I didn't read any of the macroeconomic stuff on the site, but goods costing 20-30 percent more, even with higher incomes, is going to absolutely nuke consumer spending for a few years. Also, if they want to talk about loopholes, how about just buying everything outside the US. Hell, every large online retailer would just pickup and move to Canada; not to mention the impact it would have on domestic retailers. God forbid someone complain about drug prices too.

Consumers are a lot happier when the costs are hidden than if they're staring them in the face.

I'd also like to see what kind of impact this would have on teenage spending. Most either don't have real jobs and get money from parents and family, or have jobs, but for the most part, get almost all of the paycheck deductions back. And the poverty line rebate would apply to households not individual minors, so essentially, they're taking a "real" cost increase of at least 20 percent.

 

[Queasy]

Originally posted by: sandmanwake
I saw that. It does not address my question.

Currently, there is nothing in the Fair Tax to give a credit to those who invested in a Roth IRA or similar plans.

I believe there have been discussions about that but nothing has been decided on. Obviously, that is something the crafters of the Fair Tax will have to consider to get the support or current and future retirees. The AARP is already adamantly against the Fair Tax.

 

[ch33zw1z]

Originally posted by: sandmanwake

Originally posted by: ch33zw1z
Wouldn't make sense to reimburse everyone for past tax practices.

Exactly. So the "fairtax" isn't really fair to those who chose to have Roth accounts as opposed to deductible accounts since if implemented, those who have deductible accounts would only pay federal tax once in the form of a national sales tax whereas those with Roth had paid once already before putting money into the account and then once more when they buy stuff and have to pay the national sales tax.

Propaganda naming.

The way you chose to invest your money was exactly that, your choice. If the Fair Tax Plan was actually implemented, you wouldn't be paying taxes AND national sales tax simultaneously. No use crying over spilled milk, here's to looking to the future for improvements to the tax system, even if that doesn't include the Fair Tax Plan. :beer:

 

[Sunrise089]

The plan is wonderful. People jump on it though without understanding the details...but what can you expect in this partisan age?

One thing to always ask Fairtax critics: they nearly always through out this "It helps the rich and is regressive" argument. Go ahead and ask them how a plan that MAKES THE POOR PAY ZERO NET TAXES is somehow "anti-poor".

The prebate in the Fairtax was genius, or would be in a rational world. Unfortunately there is nothing guaranteeing political opponents of the Fairtax act like rational human beings, so they've decided to take a "ignore and lie" strategy.

 

[sandmanwake]

Originally posted by: Queasy

Originally posted by: sandmanwake
I saw that. It does not address my question.

Currently, there is nothing in the Fair Tax to give a credit to those who invested in a Roth IRA or similar plans.

I believe there have been discussions about that but nothing has been decided on. Obviously, that is something the crafters of the Fair Tax will have to consider to get the support or current and future retirees. The AARP is already adamantly against the Fair Tax.

They should call it the "Fair as long as you don't have a Roth account tax" then. Seems like just a scheme to get more money from the young who have been encouraged to invest in a Roth accounts rather than traditional accounts.

 

[Queasy]

Originally posted by: drinkmorejava
I didn't read any of the macroeconomic stuff on the site, but goods costing 20-30 percent more, even with higher incomes, is going to absolutely nuke consumer spending for a few years. Also, if they want to talk about loopholes, how about just buying everything outside the US. Hell, every large online retailer would just pickup and move to Canada; not to mention the impact it would have on domestic retailers. God forbid someone complain about drug prices too.

The idea is that goods will cost approximately the same because the cost of goods will be reduced with companies no longer having to spend countless amount of dollars on keeping up with Social Security, Medicare, etc plus complying with all the other bits of tax code regulation. The Fair Tax group estimates that a good 20-25% cost of goods is spent merely on the overhead of keeping up with federal law. That is actually how idea of the Fair Tax got started - a businessman realized how much time and moeny they wasted as a company complying with the myriad of federal tax laws.

 

[Queasy]

Originally posted by: sandmanwake

Originally posted by: Queasy

Originally posted by: sandmanwake
I saw that. It does not address my question.

Currently, there is nothing in the Fair Tax to give a credit to those who invested in a Roth IRA or similar plans.

I believe there have been discussions about that but nothing has been decided on. Obviously, that is something the crafters of the Fair Tax will have to consider to get the support or current and future retirees. The AARP is already adamantly against the Fair Tax.

They should call it the "Fair as long as you don't have a Roth account tax" then. Seems like just a scheme to get more money from the young who have been encouraged to invest in a Roth accounts rather than traditional accounts.

Yes...they've spent hours...years planning, talking, writing books, and gaining congressional support just so they can get the people with Roth accounts. :roll: That was their plan all along.

 

[Brainonska511]

Originally posted by: Queasy

Originally posted by: drinkmorejava
I didn't read any of the macroeconomic stuff on the site, but goods costing 20-30 percent more, even with higher incomes, is going to absolutely nuke consumer spending for a few years. Also, if they want to talk about loopholes, how about just buying everything outside the US. Hell, every large online retailer would just pickup and move to Canada; not to mention the impact it would have on domestic retailers. God forbid someone complain about drug prices too.

The idea is that goods will cost approximately the same because the cost of goods will be reduced with companies no longer having to spend countless amount of dollars on keeping up with Social Security, Medicare, etc plus complying with all the other bits of tax code regulation. The Fair Tax group estimates that a good 20-25% cost of goods is spent merely on the overhead of keeping up with federal law. That is actually how idea of the Fair Tax got started - a businessman realized how much time and moeny they wasted as a company complying with the myriad of federal tax laws.

Key word there. Everyone "estimates", but it is always on the extreme side that makes their proposal look better.

 

[sandmanwake]

Originally posted by: Queasy

Originally posted by: sandmanwake

Originally posted by: Queasy

Originally posted by: sandmanwake
I saw that. It does not address my question.

Currently, there is nothing in the Fair Tax to give a credit to those who invested in a Roth IRA or similar plans.

I believe there have been discussions about that but nothing has been decided on. Obviously, that is something the crafters of the Fair Tax will have to consider to get the support or current and future retirees. The AARP is already adamantly against the Fair Tax.

They should call it the "Fair as long as you don't have a Roth account tax" then. Seems like just a scheme to get more money from the young who have been encouraged to invest in a Roth accounts rather than traditional accounts.

Yes...they've spent hours...years planning, talking, writing books, and gaining congressional support just so they can get the people with Roth accounts. :roll: That was their plan all along.

The older generation screwing the younger generation? No planning needed. Just look at at the size of the US debt. When it comes time to collect, who's going to pay, those who did the spending or their children and grandchildren?