Fair Tax

[JackBingham,CPF]

My accountant just e-mail this link to me. Any thoughts?

http://www.fairtax.org

Jack

[wpfay]

My first thought when I heard about this was that the cost of used goods (cars in particular) would probably go up because of increased demand.

How will the common family perceive the change? Sure, they'll have more money, but will the increased costs of, say, custom picture framing, reduce the population of customers even more (They'll be staying away in droves)?

[JFeig]

Once established burocratic establishments are near impossible to eliminate. It sounds good; but, not in my lifetime.

[Cliff Wilson]

It's interesting, but I'd be much more in favor of a flat rate income tax.

At 15% - 18% no deductions, no exceptions, the government would have at least as much (and some calculations say more) money to spend, and everyone would pay their faior share!

The "graduated tax peopel" think it's not fair to low income people, but every analysis I've seen says they would pay less and the "high" income people (without their deductions) would pay more.

What could be more fair?

[Jerry Ervin]

Before I start let me state for the record I am a Republican.


Here is why taxation at the retail purchase point can never be "Fair". The average family in the US making under $100,000 per year will spend 100% of their income for housing, transportation, etc. The average American making over One Million a year will spend around 20% of their income. So the lower income people will be paying taxes on 100% of their income, and the rich will pay taxes on 10 or 20% of their income.

This is "Fair"?

How about instead, we all pay the same percentage of income on taxes and have no taxes for someone at or under the poverty level.

Our Constitution states that "all men are created equal", however we are not all taxed equally. We punish those that succeed and do well.

I guess what I am asking for is a "Flat Tax". That is the only "Fair" one I know of.

[J Phipps TN]

I'm with you Jerry!

Although, I think it should be across the board, even in the poverty level, or else you'll have those who will not cross over the poverty line just to keep from paying taxes. This way, everbody contributes and has a right to say I'm a participating member of society.

Jennifer

[Richard Darling]

The Fair Tax sounds like it might make life simpler for the individual. But it also sounds like the government would now turn its attention to me, the small business, and make my life more difficult in making sure the fair tax was collected and passed on to them.

By the way, we don't have a sales tax in Montana.

[Jay H]

Correct me if I'm wrong Jerry cause I'm pretty slow and not real bright.

But Family A spends all of their 100k. Family B only spends 20% of their Million. That means that family B is taxed for 200k. Meaning they will pay double in taxes compared to family A.

I think that’s fair under this system because they bought twice as much stuff. You think its fair that family B pay even more than double simply because they earned more money? If so, how exactly is that NOT Socialism?

[Jay H]

Originally posted by J Phipps TN:
Although, I think it should be across the board, even in the poverty level, or else you'll have those who will not cross over the poverty line just to keep from paying taxes. What?

[TheDoctah]

A flat tax on income seems the least intrusive means of collecting tax across the board. The simplification of a flat tax on all income from dollar one would be a great thing. The problem with exempting some dollar amount or certain individuals is that it creates complications and opportunities for fraud. If it's straight off the top there's no way to weasel out of it. Not having to deal with filing income tax forms would be a boon to those of us with complicated returns (can you say small business owner?)

[Cliff Wilson]

Jay, it's not how the tax is collected, but how much and how it's used that tuens it into socialism.

[TheDoctah]

BTW, guys, there is <u>always</u> an angle to show a tax is unfair. Always. A perfectly fair tax is impossible to create, and would be a nightmare to administer.

[Jay H]

I would think a flat tax would be a great way to do it. I'm skeptical that this will ever happen but it would be nice!

But be careful what you ask for because we already know that the top 1% of wage earners pay 1/3 of the taxes and the top 50% pay about 95% of all taxes. So in the case of a flat tax what we would be looking at is the lower wage earners paying MORE income taxes. This is because they currently don't pay hardly ANY taxes right now and the flat tax would create a huge void that the government would have to fill. Since the guys that were footing the bill doesn't have to anymore because of a flat tax, who will?

[Pat Murphey]

I can't believe that small business owners are naive enough to believe that there is any flat tax that would be "simpler". The only thing complicated on my tax return is my Schedule C. Does anybody believe that a flat tax will simplify the determination of profit and loss. As for the "fair" tax, who's going to do the work of collection and reporting. All any of this relates to is the fight over who pays. Does any body think that, when over half the people pay no income tax that there will be the political will to change that. No, what is going to happen is that the payroll tax will become graduated and the majority will make the minority pay ALL of the taxes. Wait and see.

Pat :D

[CAframer]

Irrespective of the merits or demerits of the "fairtax" organization's beliefs they are surely smoking something if they think there is slightest likeliehood of realizing their tenets. Let's consider some of their major points:

Abolishes the IRS ... GET REAL!

Closes all tax loopholes ... GET REAL!

Brings transparency and accountability to tax policy ... GET REAL!

Enables workers to keep their entire paycheck ... GET REAL!

DEFINITELY smoking something!

[J Phipps TN]

Originally posted by Jay H:
</font><blockquote>quote:</font><hr />Originally posted by J Phipps TN:
Although, I think it should be across the board, even in the poverty level, or else you'll have those who will not cross over the poverty line just to keep from paying taxes. What? </font>[/QUOTE]Jay,

I'm talking about the Flat Tax. Jerry saied no one under or at the poverty level should have to pay.

This is what I think,

Lets say the poverty level is 10,000 a year (I'm sure it is more then that but for figures let's say 10,000)
If a person has a chance to change jobs and make 10,500 a year and start paying taxes what do you think they will do? they will stay right where they are. With a flat tax you don't deal with
this kind of thing. Everybody wants to do better.

It's like the people who live in housing projects (not all of them) and are on Wellfare and won't go to work becuase they will have to start paying their own rent and electricity. If they make too much they will have to move and start paying their own way. I'm sure most would not anyway, but there are always those who will take advantage. This way no one can.
It's sounds stupid but beleive me, I have seen it. Some people would rather depend on the goverment. Tennessee is a Welafare State and we see alot of this.

I think it just holds people back. Just make the tax flat across the board starting with the 1st dollar earned. It's not discrimnation, it's fair to everyone.

Jennifer

[Jay H]

Jennifer, I belive the overwhealming majority of those living in poverty are doing everything in their power to get out of it.

I can tell you disagree and I'm fine with that, but I just wanted to add that anyway.

[Bob Carter]

I believe consumption tax has merit

Let's take three scenarios

Low income family goes to McDonald's-spends $25; tax is 10% or $2.50

Bob takes wife to Ruth's Chris-dinner is $200-tax is $20

Charles Barkley goes to dinner at Christopher's, eats alone (okay, it's hypothetical), spends $200.00 taxed $20.00

Chuck and I are taxed identically. Is that fair? Other guy goes to Mickey D's with entire family. Is that fair?

Except Chuckie will do that 4 times a week, I might do it 2-3 times a month, so the gov't gets our proportional "fair" tax. Now, I can stay home and "cheat" the govt, ot Chuckie can have Nike or ESPN pick up the tab and "cheat", too

But, don't we all "cheat" a little?

At least, this way, those that do have more wil spend more (and be "taxed" more) without a lot of dodges and shelters

My bitch? License plate fees

In this state you pay based on the value of the car and the age of the car.

I like nice cars and let's say that over 10 yrs, i will get three new cars. Each car has a "transaction" tax of say, $1000 (sales tax, registration, whatever you wish it still is a tax) and let's say that YR 1 license fees is $1000 (it goes down 10% per year). After 10 yrs and in YR 10 I just got my 4th car, my taxes are $13,130

Same 10 yrs and someone has a 12 yr old Honda. They have paid 10 yrs of depreciating fees, no registration taxes and maybe $1000. They havecontributed little to the staff coffers, zero to the economic growth.

Is that a "fair" tax?

I don't get an extra lane or two-just the same "if you can afford the vehicle, you can afford the tax"

Pretty much the same as any other consumption I do. I "got it, wife's gonna spend it" mentality. Except, I get banged thoroughly around thehead and shoulders in April, too

Fair tax?

Not in this lifettime

[Mike LeCompte CPF]

Long in agreement with Neal Boortz's book about this BUUUT my financialadvisor says it will never work only because somany big pension plans are hinged on tax-free muni bonds. Once one of these tax vehicles are put in place tax free bonds are no longer needed. Then what happens?

O and those "poor people"; seems to me that all ships rise at the same sea level so they would pay the same tax rates on items like everyone else. Plus, how much "tax" is "hidden" in the various products we buy already?

But you gotta read the Boortz book. It makes sense, but the tax-free bond/hinged to pension thing is kinda iffy

[Pat Murphey]

Mike?

Why would anyone invest in tax-free bonds in a pension plan? The yields are generally lower and withdrawals from a tax deferred pension plan are taxed at ordinary income tax rates regardless of plan investments. My background includes many years of monitoring airline pensions from the union side - both defined benefit and defined contribution plans.

Pat graemlins/kaffeetrinker_2.gif

[Mike LeCompte CPF]

pat: I thought the guy I was talking to was referring to the taxfree bonds as investments FOR the plans, not in the plans. You know, the BIG corporate pensions.

As an example,we're investing in tax-free instruments OUTSIDE our sheltered IRAs and others because the yields are stable and returning about the same as our taxed stocks/mutuals while retaining some consistency of growth, esp. when "laddered" for maturation dates

Anyway, the point of the topic was these tax-free shelters would no longer be necessary under an alternative tax plan and could cause drastic drops in financial markets.

[FramerDave]

The Fair Tax Book by Neal Boortz and John Linder answer every question and objection raised here. The fact of the matter is that it would work.

THE FAIR TAX BOOK ON AMAZON (http://www.amazon.com/gp/product/0060875496/qid=1145648648/sr=2-1/ref=pd_bbs_b_2_1/103-2122521-2554212?s=books&v=glance&n=283155)

To those who scoff and say "get real" to the possibility that we would ever get rid of the IRS, I say how do we know if we just roll over and play dead? How can we ever gain if we do nothing?

[Mike LeCompte CPF]

and for those of you who don't know the congress, Linder is a rep from GA who is at the forefront of federal tax overhaul

[mickdermesser]

Typically pension plans do not need tax sheltered investments, but wealthy investors in high tax brackets do well with them. If you do away with tax-free bonds, everyone who has invested in them will take a loss. Then moving forward, state and local governments would need to increase their interest rates, which in turn will increase local taxes.

[Danimal]

Flat Tax? Hasn't that song already been played? Doesn't anybody remember the Tax Reform Act of 1986? That was a flat tax and look what has happened to it. No, a flat tax is not the answer.

Read the book, it makes a lot of sense and I believe it would work. I also believe it will never pass. Why? Because it takes one of the biggest tools away from politicians: The ability to grant tax breaks to big business in return for "favors". Face it, the main thing politicians are interested in is getting re-elected. Unless the voting public makes it very clear that they will vote out any publicly elected official who opposes the bill, they will just thumb their noses at it. Americans have become too apathetic to do that. Our tax system is broken but the majority are too busy watching American Idol to care.

Just my $0.02 (after taxes)

Read the book.

[PhotoKris]

Originally posted by Jay H:
Jennifer, I belive the overwhealming majority of those living in poverty are doing everything in their power to get out of it.

I can tell you disagree and I'm fine with that, but I just wanted to add that anyway. I agree with Jennifer on this, one of my last coworkers told my boss NOT to give him a raise because then he would make too much and have to take his 4 kids off state health insuance and pay for it himself. Then he wouldnt be able to afford his remote controlled airplanes, daily dunkin donuts and take-out lunches. That is a quote from him. I know of plenty of people with that attitude. Goes along with the people who play the unemployment system--- work till you qualify for it, get yourself fired, collect till it runs out, start over again...

[J Phipps TN]

There are more of those kind of people out there then the general public would like to beleive.

VA does it right, they give them 3 years to pull themselves togather and then they cut them off.


Jennifer

[Jay H]

There is another example of when you hit a magic income level, ALL of wellfare is cut off too.

I know if I had a family and was trying to better myself, I would take into account that at 1 more dollar a year ALL of my support would be cut.

That doesn't for one second mean that I still wouldn't want more than what I currently have. I would just be very methodical about how I get it.

I guess its easy to make blanket statements like this from a throne.

[Pat Murphey]

If you are over age 62 and retired in New Jersey (Married, filing jointly), tax on $99,999 of gross income is $1,600 after a $20,000 retirement income exclusion. If your income is $1 more - $100,000 - the tax is $2,700 because you lose the exclusion. And, you also lose a homestead rebate that approximates $500. Nice $1,600 penalty for earning that dollar. Gotta love those Democrats taxing the "rich".

Pat :mad:

[J Phipps TN]

Jay,

I'm not speaking from any type of throne. I can't beleive you would say that. graemlins/shrug.gif
I just stated a plain fact. There are people out there that use and abuse the system. I didn't say everybody, but they are out there.

All I said was that no matter how much money a person makes in this country, we should all pay the same percentage of taxes. If me or anyone else needs assistance from the goverment, I should still have to pay a portion of that back to the goverment. That's only fair!
It makes everyone be apart of the process.

Just my opinion, I don't think that makes me judgement in any way!

Jennifer graemlins/kaffeetrinker_2.gif

[stshof]

Originally posted by Jay H:
I guess its easy to make blanket statements like this from a throne. This is really unfair. I don't believe Jennifer made any blanket statements. She was just expressing what she has observed. I agree with her, too. graemlins/thumbsup.gif
I also agree with her that your "blanket" statement that the majority of people living in poverty are trying to get out is incorrect. You personalized your observation by telling us what you would do and that's fine, but there's a lot of people who have lost their pride and self esteem because of a flawed system of providing them with their basic needs.
Believe it or not, for some that's enough. graemlins/shrug.gif

[J Phipps TN]

Thank you Sue

Jennifer

[Jay H]

I know there was a time when we got WIC. I'm thinking briefly we got foodstamps but I can't be certain about that. My wife was the only one that was strong enough to "get er done". I was too crushed and horrified with the whole experience. I for one couldn't wait to better myself and get out from that situation.

What we learned was that it wasn't all that hard to do because its just not easy to get aid. She was a bank teller and I was a cook and we had a kid. At a combined income between $15-$18/hr. we made to much money for state insurance and some other things we had applied for.

Having been there, begging for help (literally) and being turned away or treated like a third class citizen was in no way shape or form a pleasant experience.

As we talked with friends and family during that time, we learned that many people we knew had done similar things. I wouldn't have guess that in a 1000 years some of these people had accepted aid.

Later as a construction worker, I was a regular at the unemployment office signing up for benefits. That too was always unsettling.

So please understand how I take your views as elitist. The system does trap people and many, either by choice or force, submit to the system. Some might be dependent on the system but I will always contend, from experience, that it is not easy or pleasant. It lends itself to one thing and that’s getting out from under it. We did it in just a few months and vowed to never go back!!!!!

I’m ok with a pigpile if you want. But I find your outlook on the world both inaccurate and just down right depressing.

[J Phipps TN]

Jay,
I too was right where you were. I too had to have help. It was WIC also and I was thankful for it and no, it wasn't fun or anywhere I wanted to be. And I too hope to never go back there, But not everyone feels the way we do.

My husband is a policeman and maybe that is why I have the out look I have but the reality of it is, there are people out there who need it and then there are those who just "use" it!

I think if you have a line of cut off, there will always be those who will want to and work to stay just below that line.

It's sad but very true.

That is the reason I can say I'm not speaking from a throne of any kind.

Tax is what we were talking about, and I still say start with the first dollar and make it a percentage across the board.

Jennifer

[Bob Carter]

Jay-I cannot remember where I saw it, but I am most certain that the figure for those that had received gov't benefits like these was in the 30% range. I thought it real high, but when you think about it, many people do have those very real needs you described.

Good for you that it was a temporary solution (as most would agree was the designed intent). It's the generational life style that irks many of us

[framah]

The problem seems to be the absolute cutoff of benefits. The one dollar more syndrome.
If there was a graduated system, then if a person got a raise their bennies would be lowered but not the same as the raise. Otherwise, why bother? There needs to be an incentive to work hard and get off of welfare but most are getting minimum wage and a raise still isn't enough to live on so they will still need some help.

Then again, if they don't make an active effort, then a deadline is given and a cutoff is made. When the end of the benefits are REALLY in sight, it's amazing how many can find work.

[Cliff Wilson]

I've seen both. Many as Jay describes and many "milking the system."

My wife works in the medical field and can give you MANY examples of people getting free care and lots of "help" yet taking multiple vacations to the old country and going out to dinner regularly.

I know a contractor that is a member of a minority group. He complains regularly that he can not hire entry level workers in his minority group. (NOT trying to bash a particular group here!) He says the young men (just out of high school, usually a trade school) won't work for a reasonable starting wage because they get "almost as much" for not working.

I think there are segments of our society that are "taught" to use the system. And, others (like Jay) that are taught to want to stand on their own two feet.

There has to be a way to help those that need help and kick those that need it in the a$$.

I don't know the answer, but I know what we have today is broken.