Tuesday, September 28, 2004

What the FairTax would mean for you

The FairTax would mean that the federal government will no longer be withholding income taxes, FICA, or medicare taxes from your paycheck. If you live in a state with no income tax like Florida or Texas this means you will take home your whole paycheck. It also would mean you will not have to ever file your federal taxes again.

Additionally every month you would get a check to reimburse you for the federal sales taxes you paid for spending up to the poverty level for your household (the Family Consumption Allowance).

These are the upsides.

On the downside every time you purchased a new good or service you would be paying a 23% inclusive sales tax. Any purchase of an old good you make would be tax free. So if you bought a used car, you would pay no sales tax. If you bought used clothes at Goodwill, no sales tax. If you bought an existing house, no sales tax. If you buy land (all land is definitionally used) you would pay no sales tax.

6 Comments:

At 10:45 PM, Blogger Foxtrot XRay said...

Just out of curiosity, how does this situation handle leasing/renting? You can already lease or rent your home, car, and most appliances and electronics.

In fact, you can lease or rent just about anything except for the basic consumables of life.

I'm inclined to think that a taxing situation where all tax was based around the purchase of goods would lead to a dramatic increase in leasing scenarios.

For example, instead of buying a new car, I simply lease one for two years. At the end of the two years, I buy the car, used. If the lease was for roughly the same cost as a car payment + insurance, then it's the same as if I bought the car new without having to pay a dime in tax.

 
At 11:35 PM, Blogger quadrupole said...

Leasing or renting an item is paying for a service. The service is providing you the use of the item. So if you buy a new car, you pay the FairTax on your purchase price at time of purchase. If you lease a new car, you pay FairTax on your lease payments each month. Either way, the tax gets paid once at the retail level.

Does that adequately answer your question?

 
At 5:18 AM, Blogger nope said...

This comment has been removed by a blog administrator.

 
At 9:08 AM, Blogger Mark said...

Pass the fairtax!! Please! We need to see this in action, so we can move on.

Fairtax says federal government can pay taxes to itself! Neal Boortz wrote (Page 148 of his Fairtax Book), "The federal government itself will become a MAJOR taxpayer."

Well, if the federal government can pay 500 billion to itself -- why not pay a trillion? Pay 2 trillion and don't bother to tax people.

Fairtax is an illusion, wrapped in bad math.

Faitax not only depends on taxing, somehow, the governemtn, it also depends on taxing medical care. That means people in nursing homes, people with cancer, the parents of a child with leukemia - a huge sales tax.

Where will the 80 year old alzheimer's patient in a nursing home GET 30,000 a year in sales taxes anyway? There again, the government -- who probably are paying her bills, would have to pay itself its own tax.

Some people would get clobbered with this lunatic tax - anyone with medical bills, anyone who rents (rent is taxed) anyone who pays utilities (utilities are taxed) and anyone who pays insurance (insurance premiums are taxed).

Its simply impossible to tax the government, and impossible to tax many health care patients. THefore, that money WONT be coming in to the treasury.

So the Fairtax would have to rise to over 50% to make up fo that.

Imagine a 50% tax on rent, on utilities, on new houses, on new cars.

People complain about 20 cents federal tax on gasoline. Wait till its 1.50 in taxes. Plus state taxes.

Hey - fairtax folks - your king has no clothes. We need a real solution, not illusions.

 
At 4:37 PM, Blogger Nancy Luckhurst said...

WEll Mark it is obviously know nothing about the fair tax what so ever. Just run your mouth. Try doing some real Research like those of us with a brain have done for a long time. There is no 50% tax on anything. NO if you are in a nuring home you are not going to pay $30,000 in taxes Good God get a grip.

 
At 5:05 PM, Blogger Nancy Luckhurst said...

The FAIR TAX would end lobbying. As written the tax can not be raised without a vote of the people. It would put another $ 910 a month in our house. $462 for the prebate. No more FICA or income tax $240 out of my husband check each month No more medicare tax out of our Social security so another $208.00 in our pocket. We don't buy new cars and we don't buy new houses. Those with who have a whole lot more income than we do buy the new. There is no tax on used with the FAIR TAX. It would bring jobs back into the US. You are already paying hidden taxes on items you buy but you don't see it. Those would go away lowering prices. It would eliminate the IRS. Anyone who is participating in the underground economy would be paying taxes. It is estimated the U.S government loses $500,000,000,000 every year (That is 500 Billion) from lost taxes do to the underground economy. Like I said so the stinking research and quit with the crap stupid stuff you know nothing about. The retailer would be reimbursed for collecting the tax and sending it to the state who would then send it to the Feds. It would eliminate the IRS. Those who are rich would be paying the lions share of the taxes which actually they do now but you of course won't believe that. Illegals would not get a prebate, Visitors to this country would be paying the tax also when they make purchases here. There would be no reason for off shore accounts to protect the rich from paying taxes. It is a win win all the way around. The tax would be about 23%. You would have to fill out a form once a year to qualify for your prebate and have a valid Social security number.

 

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