FairTax Plan

[pontifex]

is any tax fair?

 

[mugs]

Since this was bumped for some reason:

Originally posted by: mugs
Does anyone have an answer for this?
<blockquote>quote:
Originally posted by: mugs
How would the FairTax plan handle someone who has a lot of money in savings? Seems like I'd be paying a huge sales tax on top of the huge income tax I already paid on that money.</blockquote>

 

[Queasy]

Originally posted by: mugs
Since this was bumped for some reason:

Originally posted by: mugs
Does anyone have an answer for this?
<blockquote>quote:
Originally posted by: mugs
How would the FairTax plan handle someone who has a lot of money in savings? Seems like I'd be paying a huge sales tax on top of the huge income tax I already paid on that money.</blockquote>

You'd be taxed when you use it. If you don't use it, you're not taxed.

As for the "huge sales tax" bit, conceivably, you'll be paying approximately the same amount for new goods and services that you paid prior to the Fair Tax.

Example: Approximately 26% of the price of a new American car is embedded taxes. Take away all the corporate and payroll taxes and replace that 26% embedded tax with a 23% inclusive Fair Tax.

Different product have different levels of embedded taxes but it is generally 20-26%.

 

[imported_Lothar]

Originally posted by: Queasy

Originally posted by: mugs
How would the FairTax plan handle someone who has a lot of money in savings? Seems like I'd be paying a huge sales tax on top of the huge income tax I already paid on that money.

You'd be taxed when you use it. If you don't use it, you're not taxed.

As for the "huge sales tax" bit, conceivably, you'll be paying approximately the same amount for new goods and services that you paid prior to the Fair Tax.

Example: Approximately 26% of the price of a new American car is embedded taxes. Take away all the corporate and payroll taxes and replace that 26% embedded tax with a 23% inclusive Fair Tax.

Different product have different levels of embedded taxes but it is generally 20-26%.

So If I earned $100k in income, already paid $35k in federal taxes on that earned income and put the remaining in my savings, I should expect to be taxed 25-30% on the remaining $65k in my savings when I decide to spend it eventhough it's already been taxed?

 

[ElFenix]

Originally posted by: Lothar

Originally posted by: Queasy

Originally posted by: mugs
How would the FairTax plan handle someone who has a lot of money in savings? Seems like I'd be paying a huge sales tax on top of the huge income tax I already paid on that money.

You'd be taxed when you use it. If you don't use it, you're not taxed.

As for the "huge sales tax" bit, conceivably, you'll be paying approximately the same amount for new goods and services that you paid prior to the Fair Tax.

Example: Approximately 26% of the price of a new American car is embedded taxes. Take away all the corporate and payroll taxes and replace that 26% embedded tax with a 23% inclusive Fair Tax.

Different product have different levels of embedded taxes but it is generally 20-26%.

So If I earned $100k in income, already paid $35k in federal taxes on that earned income and put the remaining in my savings, I should expect to be taxed 25-30% on the remaining $65k in my savings when I decide to spend it eventhough it's already been taxed?

in Queasy's example the cars are actually cheaper post fair tax than they were pre fair tax. so, the question becomes, would you like cars that are cheaper or the same cars that are more expensive?

basically, the fair tax takes all the taxes that are hidden in the cost of a product (labor taxes, income taxes on the seller, etc.) and puts them right out for the world to see.

 

[Turin39789]

won't work and will never happen. just another fantasy to give us a nef thread.

Personally I think we should have unicorns give birth to golden griffons and use those to pay for our government. Is as likely to happen.

 

[Glavinsolo]

Originally posted by: Turin39789
won't work and will never happen. just another fantasy to give us a nef thread.

Personally I think we should have unicorns give birth to golden griffons and use those to pay for our government. Is as likely to happen.

You do know that several candidates for Presidency are using fairtax as their running platform.

 

[Glavinsolo]

Originally posted by: pontifex
is any tax fair?

I like being able to drive to work and see trees in the median, paved roads, government programs, social security, medicare. I will do my part in order to help pay for those things.

 

[Turin39789]

Originally posted by: Glavinsolo

Originally posted by: Turin39789
won't work and will never happen. just another fantasy to give us a nef thread.

Personally I think we should have unicorns give birth to golden griffons and use those to pay for our government. Is as likely to happen.

You do know that several candidates for Presidency are using fairtax as their running platform.

They will not be elected.

Several candidates running for presidency are not human.

 

[dainthomas]

Originally posted by: Glavinsolo

Originally posted by: Turin39789
won't work and will never happen. just another fantasy to give us a nef thread.

Personally I think we should have unicorns give birth to golden griffons and use those to pay for our government. Is as likely to happen.

You do know that several candidates for Presidency are using fairtax as their running platform.

Probably the kooky ones who also think we should repeal child labor laws and mine the Mexican border.

 

[Glavinsolo]

Originally posted by: Lothar

Originally posted by: Queasy

Originally posted by: mugs
How would the FairTax plan handle someone who has a lot of money in savings? Seems like I'd be paying a huge sales tax on top of the huge income tax I already paid on that money.

You'd be taxed when you use it. If you don't use it, you're not taxed.

As for the "huge sales tax" bit, conceivably, you'll be paying approximately the same amount for new goods and services that you paid prior to the Fair Tax.

Example: Approximately 26% of the price of a new American car is embedded taxes. Take away all the corporate and payroll taxes and replace that 26% embedded tax with a 23% inclusive Fair Tax.

Different product have different levels of embedded taxes but it is generally 20-26%.

So If I earned $100k in income, already paid $35k in federal taxes on that earned income and put the remaining in my savings, I should expect to be taxed 25-30% on the remaining $65k in my savings when I decide to spend it eventhough it's already been taxed?

If you earned $100k in income, you won't pay the $35, you will have $100k in your possession. You will be taxed at the counter or online.

It seems I am very bias for this fairtax. However I have two major caveats for this tax before I am fully behind it.

1) How easy will it be for congress to raise the fairtax after it is implemented?

2) When products that have embedded taxes are changed over to fairtax system how exactly will we know they are at the same price point when those taxes have been taken out. It would be an easy way for companies to artificially raise the price of their good or service.

 

[Queasy]

Originally posted by: Glavinsolo

Originally posted by: Lothar

Originally posted by: Queasy

Originally posted by: mugs
How would the FairTax plan handle someone who has a lot of money in savings? Seems like I'd be paying a huge sales tax on top of the huge income tax I already paid on that money.

You'd be taxed when you use it. If you don't use it, you're not taxed.

As for the "huge sales tax" bit, conceivably, you'll be paying approximately the same amount for new goods and services that you paid prior to the Fair Tax.

Example: Approximately 26% of the price of a new American car is embedded taxes. Take away all the corporate and payroll taxes and replace that 26% embedded tax with a 23% inclusive Fair Tax.

Different product have different levels of embedded taxes but it is generally 20-26%.

So If I earned $100k in income, already paid $35k in federal taxes on that earned income and put the remaining in my savings, I should expect to be taxed 25-30% on the remaining $65k in my savings when I decide to spend it eventhough it's already been taxed?

If you earned $100k in income, you won't pay the $35, you will have $100k in your possession. You will be taxed at the counter or online.

It seems I am very bias for this fairtax. However I have two major caveats for this tax before I am fully behind it.

1) How easy will it be for congress to raise the fairtax after it is implemented?

May actually be more difficult. Think of how they raise taxes now. They target groups of people or certain industries or certain transactions for tax increases. Most people don't care because they don't see it affecting them directly. Can't do that with the Fair Tax because it affects everybody.

2) When products that have embedded taxes are changed over to fairtax system how exactly will we know they are at the same price point when those taxes have been taken out. It would be an easy way for companies to artificially raise the price of their good or service.

The same market forces that are in play today that drive prices down will be in play after the Fair Tax. One example used is that of the airline industry after one federal tax was removed from all airlines. It took less than a day for the marketplace to reduce ticket prices because one airline dropped their prices with the tax while others thought they could keep it the same. The other airlines quickly followed suit and dropped prices.

The pressure to drop prices by the amount of embedded taxes that are removed will likely be great because the public will know and will be putting pressure on those companies to do so.

 

[MixMasterTang]

I support it because I don't like our current system and think we need a change. For the people that disagree with it, do you think our current system is better? Or what would you suggest as an alternate? You may disagree with parts of it, but no proposed plan is going to make everyone 100% happy.

 

[Glavinsolo]

Originally posted by: MixMasterTang
I support it because I don't like our current system and think we need a change. For the people that disagree with it, do you think our current system is better? Or what would you suggest as an alternate? You may disagree with parts of it, but no proposed plan is going to make everyone 100% happy.

Exactly the point, the people who seem to be against the fairtax haven't read it in its entirety. It's not perfect but it is a better direction than the flat tax and is greatly better than our current system.

www.fairtax.org

 

[imported_Lothar]

Originally posted by: Queasy

Originally posted by: Glavinsolo
2) When products that have embedded taxes are changed over to fairtax system how exactly will we know they are at the same price point when those taxes have been taken out. It would be an easy way for companies to artificially raise the price of their good or service.

The same market forces that are in play today that drive prices down will be in play after the Fair Tax. One example used is that of the airline industry after one federal tax was removed from all airlines. It took less than a day for the marketplace to reduce ticket prices because one airline dropped their prices with the tax while others thought they could keep it the same. The other airlines quickly followed suit and dropped prices.

The pressure to drop prices by the amount of embedded taxes that are removed will likely be great because the public will know and will be putting pressure on those companies to do so.

That would not work in industries with little to no competition.

Microsoft will cut prices of Vista by 30% after this "FairTax" law is passed?
My electric company and Comcast will reduce my bills by 30%?

Wishful thinking...

 

[Queasy]

Originally posted by: Lothar

Originally posted by: Queasy

Originally posted by: Glavinsolo
2) When products that have embedded taxes are changed over to fairtax system how exactly will we know they are at the same price point when those taxes have been taken out. It would be an easy way for companies to artificially raise the price of their good or service.

The same market forces that are in play today that drive prices down will be in play after the Fair Tax. One example used is that of the airline industry after one federal tax was removed from all airlines. It took less than a day for the marketplace to reduce ticket prices because one airline dropped their prices with the tax while others thought they could keep it the same. The other airlines quickly followed suit and dropped prices.

The pressure to drop prices by the amount of embedded taxes that are removed will likely be great because the public will know and will be putting pressure on those companies to do so.

That would not work in industries with little to no competition.

Microsoft will cut prices of Vista by 30% after this "FairTax" law is passed?
My electric company and Comcast will reduce my bills by 30%?

Wishful thinking...

MS - who knows. they march to the beat of their own drummer. public pressure may come into play though.
Electric company - likely because of public pressure reinforced by gov't pressure.
Comcast - competition from satellites and phone companies plus public pressure plus FCC pressure.

 

[Pepsi90919]

it's not "yay or nay"

thank you

 

[Capt Caveman]

Crunching the numbers, a fairtax would not work. Also, the assumptions of costs of goods and services, spending, savings, etc is laughable.

 

[mugs]

Originally posted by: Queasy

Originally posted by: mugs
Since this was bumped for some reason:

Originally posted by: mugs
Does anyone have an answer for this?
<blockquote>quote:
Originally posted by: mugs
How would the FairTax plan handle someone who has a lot of money in savings? Seems like I'd be paying a huge sales tax on top of the huge income tax I already paid on that money.</blockquote>

You'd be taxed when you use it. If you don't use it, you're not taxed.

As for the "huge sales tax" bit, conceivably, you'll be paying approximately the same amount for new goods and services that you paid prior to the Fair Tax.

Example: Approximately 26% of the price of a new American car is embedded taxes. Take away all the corporate and payroll taxes and replace that 26% embedded tax with a 23% inclusive Fair Tax.

Different product have different levels of embedded taxes but it is generally 20-26%.

If I don't use it, I was already taxed. If I do use it, I've been taxed twice. I got screwed because I was smart enough to save my money.

I'm talking about money I have in savings pre-Fair Tax.

 

[Queasy]

Originally posted by: mugs

Originally posted by: Queasy

Originally posted by: mugs
Since this was bumped for some reason:

Originally posted by: mugs
Does anyone have an answer for this?
<blockquote>quote:
Originally posted by: mugs
How would the FairTax plan handle someone who has a lot of money in savings? Seems like I'd be paying a huge sales tax on top of the huge income tax I already paid on that money.</blockquote>

You'd be taxed when you use it. If you don't use it, you're not taxed.

As for the "huge sales tax" bit, conceivably, you'll be paying approximately the same amount for new goods and services that you paid prior to the Fair Tax.

Example: Approximately 26% of the price of a new American car is embedded taxes. Take away all the corporate and payroll taxes and replace that 26% embedded tax with a 23% inclusive Fair Tax.

Different product have different levels of embedded taxes but it is generally 20-26%.

If I don't use it, I was already taxed. If I do use it, I've been taxed twice. I got screwed because I was smart enough to save my money.

I'm talking about money I have in savings pre-Fair Tax.

Well, that money is getting taxed twice anyway. When you buy a product or a service you're paying the taxes for the company that made that product or provides that service. The company doesn't pay the matching contribution for employee's Social Security, Medicare, etc etc. You do. Same with all the other taxes and the added cost of companies keeping up with the tax code.

As mentioned before, the Fair Tax isn't perfect and there will obviously be some speed bumps in transition. But it is far better IMHO than the current system which only serves to benefit politicians, special interests, and lobbyists.

 

[Glavinsolo]

Originally posted by: Capt Caveman
Crunching the numbers, a fairtax would not work. Also, the assumptions of costs of goods and services, spending, savings, etc is laughable.

Crunching the numbers of income tax with social security and medicare will not work in the future...Care to elaborate? Why are the assumptions of goods and services laughable? Competition will be at all time high since smaller businesses will have standing ground where they obviously doesn't have now.

Think, right now, where do you shop, where do you eat, where do you buy groceries from etc?

I bet it is mostly huge companies since they can provide the best price to you for what you want. Which leaves much to be desired as I prefer family owned operations that offer unique service. I want my life to be interesting not: Hey babe I just got some stuff at walmart, I picked up dinner at Olive Garden and a bottle of wine over at Publix and heading home.

Why do so many people want to be docile sheep when it comes to changing decades old policies? This country is falling apart, fairtax and other policies similar to its vision are ways from stopping the cancer that is growing within.

 

[mugs]

Originally posted by: Queasy

Originally posted by: mugs

Originally posted by: Queasy

Originally posted by: mugs
Since this was bumped for some reason:

Originally posted by: mugs
Does anyone have an answer for this?
<blockquote>quote:
Originally posted by: mugs
How would the FairTax plan handle someone who has a lot of money in savings? Seems like I'd be paying a huge sales tax on top of the huge income tax I already paid on that money.</blockquote>

You'd be taxed when you use it. If you don't use it, you're not taxed.

As for the "huge sales tax" bit, conceivably, you'll be paying approximately the same amount for new goods and services that you paid prior to the Fair Tax.

Example: Approximately 26% of the price of a new American car is embedded taxes. Take away all the corporate and payroll taxes and replace that 26% embedded tax with a 23% inclusive Fair Tax.

Different product have different levels of embedded taxes but it is generally 20-26%.

If I don't use it, I was already taxed. If I do use it, I've been taxed twice. I got screwed because I was smart enough to save my money.

I'm talking about money I have in savings pre-Fair Tax.

Well, that money is getting taxed twice anyway. When you buy a product or a service you're paying the taxes for the company that made that product or provides that service. The company doesn't pay the matching contribution for employee's Social Security, Medicare, etc etc. You do. Same with all the other taxes and the added cost of companies keeping up with the tax code.

As mentioned before, the Fair Tax isn't perfect and there will obviously be some speed bumps in transition. But it is far better IMHO than the current system which only serves to benefit politicians, special interests, and lobbyists.

I'm still getting taxed more than people who don't have money saved no matter how you look at it. I can buy the same $50 worth of stuff as some guy with no savings under the FairTax, but I'm buying it with money that has already been taxed (income tax) and the other guy is buying it with money that hasn't been taxed.

 

[Lazy8s]

It's a good idea and is we were starting a new country it would be worth a try. The problem is it taxes people twice. Anyone who has had their money taxed this supposed 23% already would then have it taxed again when they spent it. I doubt any retired people would appreciate their entire life savings getting taxed twice. And don't say they can just buy used, someone shouldn't have to buy everything used just because we change tax plans. I live in atlanta and I called Boortz to ask this. Needless to say when I told Belinda my question I didn't get put on the air.

 

[Auryg]

Originally posted by: Lazy8s
It's a good idea and is we were starting a new country it would be worth a try. The problem is it taxes people twice. Anyone who has had their money taxed this supposed 23% already would then have it taxed again when they spent it. I doubt any retired people would appreciate their entire life savings getting taxed twice. And don't say they can just buy used, someone shouldn't have to buy everything used just because we change tax plans. I live in atlanta and I called Boortz to ask this. Needless to say when I told Belinda my question I didn't get put on the air.

I'd rather be taxed twice than have social security and the such completely crash in 30 years.

No matter what, something needs to change, and there will definately be some speedbumps..we just need to minimize them, somehow.

 

[Lazy8s]

Originally posted by: Auryg

Originally posted by: Lazy8s
It's a good idea and is we were starting a new country it would be worth a try. The problem is it taxes people twice. Anyone who has had their money taxed this supposed 23% already would then have it taxed again when they spent it. I doubt any retired people would appreciate their entire life savings getting taxed twice. And don't say they can just buy used, someone shouldn't have to buy everything used just because we change tax plans. I live in atlanta and I called Boortz to ask this. Needless to say when I told Belinda my question I didn't get put on the air.

I'd rather be taxed twice than have social security and the such completely crash in 30 years.

No matter what, something needs to change, and there will definately be some speedbumps..we just need to minimize them, somehow.

I have listened to Boortz for years and I have never heard him even hint that the Fairtax will fix Social Security. If you really want to support something stick to what it does do (eliminate income and some embedded taxes) not toss out crazy brainwashed junk, it just makes any valid points you had get totally lost.

Besides, if we doubled the income tax (you getting taxed twice) we could provide socialized helthcare and keep social security. If you really want to be taxed twice feel free to pay mine.

Originally posted by: Glavinsolo

Originally posted by: Capt Caveman
Crunching the numbers, a fairtax would not work. Also, the assumptions of costs of goods and services, spending, savings, etc is laughable.

Crunching the numbers of income tax with social security and medicare will not work in the future...Care to elaborate? Why are the assumptions of goods and services laughable? Competition will be at all time high since smaller businesses will have standing ground where they obviously doesn't have now.

Think, right now, where do you shop, where do you eat, where do you buy groceries from etc?

I bet it is mostly huge companies since they can provide the best price to you for what you want. Which leaves much to be desired as I prefer family owned operations that offer unique service. I want my life to be interesting not: Hey babe I just got some stuff at walmart, I picked up dinner at Olive Garden and a bottle of wine over at Publix and heading home.

Why do so many people want to be docile sheep when it comes to changing decades old policies? This country is falling apart, fairtax and other policies similar to its vision are ways from stopping the cancer that is growing within.

I like this arguement as well. The assumption is that when embedded taxes come out volume sales will have no advantage over smaller companies. Let me make this clear, if you get bulk discounts before the taxes, you will get them after as well. If anything, Walmart will increase their profit margain more and be able to run out even more small businesses. Besides Boortz says ALL THE TIME on his radio show that the point of the fair tax is that prices would not change at all in the end, they would stay the same (keep dreaming Boortz it makes for great radio). Bottom line is, small stores would still have to charge more than large corporations.

Don't get me wrong I really like Boortz. However if you listen to his show at ALL he talkes about being on the NY Times best seller list and Amazon.com best seller list at least as much as he talks about the Fairtax. Boorz is a businessman. He talks ALL THE TIME about how smart people should earn and keep all of their money and he plans to earn as much as he can before he retires. He has the perfect business plan. Write a book about a tax plan that sounds as good as communism and he's instantly millions richer and nothing actually happens. THAT is why I am such a fan of his. He has never hidden that this book was about HIS profit first and foremost.