Fair Tax

POSTED BY: Hero
UPDATED: Friday, August 29, 2025 15:17
VIEWED: 3993
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HERO

Monday, January 7, 2008 9:21 PM

Mike Huckabee(R) is big on the Fair Tax idea.

In short this is scrapping the Income Tax and just about every other form of tax we pay in favor of a 30% consumption tax (ie a national sales tax).

Hard on the poor? Don't worry, everybody gets a check to offset what they pay up to the poverty line. So a family making $30,000 pays around 7% while a fella earning $125,000 will net out at around 19%.

Now me, I like the idea. I'm thinkin some of you Ron Paulies ought to consider it as well (cause the war can't be your only issue).

H

EVILDINOSAUR

Monday, January 7, 2008 9:26 PM

certainly sounds like it's make life easier

"Haha, mine is an evil laugh."

AURAPTOR

Monday, January 7, 2008 9:33 PM

I believe the number is more like 23% , and not 30%.

It is not those who use the term "Islamo-Fascism" who are sullying the name of Islam; it is the Islamo-Fascists. - Dennis Prager

" They don't like it when you shoot at 'em. I worked that out myself. "

HERO

Monday, January 7, 2008 9:49 PM

Quote:
Originally posted by AURaptor:
I believe the number is more like 23% , and not 30%.

No its 30%...just looks like 23%.

Say you buy gum...$1.00.
Plus 30% tax its...$1.30.

That $.30 is 23% of $1.30. I know that makes no sense, but thats where the 23% thing came from.

H

FLETCH2

Monday, January 7, 2008 10:04 PM

Ok the problem I have with a "Fair Tax" is this, the tax is "fair" to who exactly? Every time the tax code changes there are winners and losers and I'm sure the losers don't see the changes as being "fair."

So who wins and who loses by this proposal? The Government needs $X a year to operate. Taxation is about paying for X and the Tax code about who pays what part of X. Since X is not getting any smaller if I pay less towards X then someone else pays more.

So who pays less and who pays more?

HERO

Monday, January 7, 2008 10:08 PM

Quote:
Originally posted by Fletch2:
Who wins, who loses?

Biggest losers are the rich and the poor.

The rich can get by with no income (or set things up so it appears they have no income) and thus many will pay little. But they do buy things...thus under this system they would be taxed.

The poor don't pay taxes. They would now be forced to pay a large tax on essential things...like food. The plan offsets this by writing a check to everyone for the amount of tax they would pay up to the poverty line, thus eliminating the burdon on the poor (unless they blow their check, in which case they will be in serious trouble).

H

FLETCH2

Monday, January 7, 2008 10:16 PM

Then why not just exempt essentials? When the Value Added Tax was introduced (and that is effectively what we are discussing here right not just a basic sales tax) the EEC exempted food, energy, kids clothes and books from the extent of the tax.

GEEZER

Monday, January 7, 2008 11:49 PM

Quote:
Originally posted by Hero:
Mike Huckabee(R) is big on the Fair Tax idea.

In short this is scrapping the Income Tax and just about every other form of tax we pay in favor of a 30% consumption tax (ie a national sales tax).

Hard on the poor? Don't worry, everybody gets a check to offset what they pay up to the poverty line. So a family making $30,000 pays around 7% while a fella earning $125,000 will net out at around 19%.

Now me, I like the idea. I'm thinkin some of you Ron Paulies ought to consider it as well (cause the war can't be your only issue).

Couple of points for consideration.

The poor folk still have to pay the Fair Tax at point of purchase, and wait for a refund somewhere down the line. You can consider this either enforced savings or an interest-free loan to the government. Currently, if their income is low, they don't pay much in income tax withholding, just SS, medicare, and unemployment, plus can get Advance Earned Income Credit added to their check.

Social Security will require a complete rewrite, since individuals won't be paying into their own accounts any more. The money would just come out of the Fair Tax pool. How do you then determine who's eligible, and for how much? Pretty much the same problem for Medicare.

People who have made business or personal finance decisions based on the current tax laws are screwed.

Could probably come up with a few more complications without much trouble.

Not saying that a consumption tax isn't an alternative, but it ain't gonna be as simple a change as some would have you believe.

"Keep the Shiny side up"

LEADB

Tuesday, January 8, 2008 12:07 AM

Quote:
Originally posted by Fletch2:
Then why not just exempt essentials? When the Value Added Tax was introduced (and that is effectively what we are discussing here right not just a basic sales tax) the EEC exempted food, energy, kids clothes and books from the extent of the tax.

What is essential? Water from the faucet? What if I fill my swimming pool with it? Bottled water? Wait, my well isn't acceptable drinking water, so why are you taxing -my- purchase of bottled water??? (Just an example, my water is fine). Drinks are essential, yes? Water, milk... what about soda? Beer? Wine? A really smooth bourbon? Food is essential, yes? Wheat. Bread. Sugar? Chocolate? Fine chocolates? So where do you draw the lines? Instead of having a complex, impossible to understand income tax, we have a complex, impossible to understand consumption tax. I kinda like the 'tax everything, then send the rebate.'

I'm more concerned about how the impact to investment this will have. I buy a silver spoon, that's taxed. I buy a silver coin? Wait, that's an investment vehicle. I buy 100oz silver ingot. Clearly an investment vehicle. I buy a box of wheaties, it's taxed. I buy a bag of wheat to grind at home, it's taxed. I buy a bushel of wheat to re-sell. Investment? I buy two tons of wheat to re-sell, clearly commodity trading. So, there will either have to be some form of complexity or we'll have some serious impacts to certain investment/commodity trading activities.

KIRKULES

Tuesday, January 8, 2008 12:12 AM

I like the idea of the "fair tax", "flat tax" and many other ideas that would be better than our current system. The problem is that they will never happen. The current system has to many special interest perks and loop holes that those who receive them will never give them up. Also their is the problem of the 16th Amendment. I would never support the "fair tax" unless the 16th Amendment was simultaneously repealed. Can you you imagine the Dems in power with the "fair tax" and still having the constitutional power to impose an income tax again. Wouldn't take but a few years and the Dems would have us paying both the "fair tax" and income tax at the same time.

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