When all federal taxes on income are removed, That also eliminates the 23 percent embedded taxes present in all new goods and services. Fair Tax simply replaces the embedded federal taxes with a one-time only 23 percent inclusive national sales tax on all goods and services at the retail level. Used items have no federal sales tax. Prices remain the same and we only pay taxes when we buy things. Flat Tax retains all embedded taxes, Prices remain the same and we continue paying all federal taxes on income. Https://fairtax. Org/articles/fair-tax-better-option-than-flat
In 2 Samuel 24, King David considered taxing the people. To God the Personal Income Tax is considered claiming ownership of people. That’s why there was none before 1913 in America.
Every empire that did that fell. So will America if they don’t switch. I actually think it is too late.
Its simple, Efficient, And gets rid of loop holes!
1. If you have expensive tastes and like blowing money well guess what you will pay more taxes! (left likes when the rich pay more)
2. If you are poor you pay fewer taxes because you have to be more frugal.
3. Everyone will pay into the system which includes non-citizens, People payed under the table, Even tourists just visiting, There is no loop holes.
4. How about the fact you actually take home a bigger pay check instantly! And have more control over where your money goes.
5. Businesses save money across the board from small companies to large including the federal government because time and money will no longer be wasted dealing with filing tax forms every quarter or year, Tracking all your spending, Audits, And the IRS essential becomes obsolete or smaller.
I can go on and on.
The only thing I would make tax free or limit are the essentials (items you need not want):
1. Essential Foods. Like Fresh Produce, Dairy, And meats.
2. Housing. Not necessarily tax free but a curve where the more expensive the house the more you pay. Ex. 200K would be 3% but 400K would be 10%. But based on the median home price for the area.
3. Utility bills. Water, Gas, Electrical.
I would vote and support and candidate who supports a federal sales tax.
Those of us in the middle class are carrying the load of debt in this country. We need to get everyone who benefits from the commons to pay there fair share. We could save millions if not billions of dollars which could be used to keep our military at top levels of readiness. We need to have the best to keep China and Russia in check so there ruthless governments cant spread there corrupt way's.
At the rate the Government is spending , it might be the easiest way to reduce the National Debt and the $100's of billions in interest we are paying each year. That money used for interest could go to more important things. If we had a growing surplus , that interest could go onto the budget.
Sales consumption tax works for me. No tax on basics, housing, food, clothing and medicine/medical. When it comes to housing I mean those paying rent. If you are buying a home than maybe a 1 or 2 % tax which helps over infrastructure (sewer, power, safety, ..Ect). Personal vehicles 5 to 10 % for infrastructure ( roads, bridges, safety). Everything else 12 to 17%. EVERYONE pays including corporate America and city, county, state and fed governments no exemptions. Medical/prescriptions/dental/vision exemption except for elective procedures (ie...Tinted glasses vs standard or standard dentures vs implants, appendix removal vs tummy tucks or implants that change or modify your appearance).
Fair tax would save on tax prep hassle and cost, reducing compliance costs and tax evasion. It would also drastically reduce congressional corruption and the corporate lobbying industry weight on consumer prices, as there would be no tax code into which to lobby tax favors. A federal sales tax should include a monthly prebate to each household to cover the taxes on a poverty level of spending, or exempt certain goods from taxation like most state sales tax programs do. The trade balance and domestic jobs should see improvement, as imports would now be subject to the sales tax and domestic producers would not have the expense of income taxes. To make it more progressive than The Fair Tax, however, I would include a small (like 0.1%) tax on investment transactions (trade value, not earnings), except for trades within retirement or eductational savings accounts.
This idea is so simplistic, fair and easy to implement it will probably never happen. Not to mention the fact that the entire IRS department would be out of work.
Plenty above have provided the necessary facts and figures. I just wanted to add to the "Yes" column of votes.
It would follow the same processes as used in states with sales tax; it would involve fewer entities as only sellers would be dealing directly with the government; it would be fair because I believe that in most or all states with sales taxes, essential items such as food, medicine, etc. are not taxed at all, so non-essential items only would be taxed. Of course, there will be lobbing over what items are "essential"...
Federal Sales tax would discourage spending (incentivize saving) which is good for long term stability. Also u could give a flat credit back which takes out the regressive aspect. Current income tax disincentivizes hard work, which is stupid. We should encourage work, and allow people to keep what they earn.
The leak is in spending; fix the leak and then we'll figure out how to decrease taxes. Otherwise, this is just an alternative way to raise money that will be wasted. Many people confuse *lower* taxes with *fair* taxes - which is an oxymoron in the first place: "fair" and "tax" shouldn't even be in the same phrase.
If you actually do the math, you'll find that this doesn't lower anything; just moves the costs from the rich to the poor. I think those who earn their money should keep it - including the rich. But creating a vast economic gap between the rich and the poor is not exactly the way to avoid a 1780 France. Do we really want to eat cake?
Think about it. Say, someone makes $30,000/year. Under current (2014) brackets, they'll pay income tax (15%) on $21,074 of it. That's a $3161.10 tax liability. Fair Tax is going to be about 23%. Let's say they spend $1300/month on rent, utilities, and groceries (all supposedly exempt from a nation-wide tax...But since when has our government agreed to permanently exempt anything?), and the remaining $1200/month goes to gas, clothes, non-grocery items, furniture, electronics, entertainment, and dining out. That's $14400/year, which, in a 23% tax comes to a $3312 tax liability.
And that's if our notoriously waffling government keeps it at 23%.
Besides hurting those with lower income, we're tempting people to buy internationally, producing a shortage of American jobs - and tempting people not to buy at all, which is good for long-term economy, but fatal short-term. We shouldn't punish for earning money, but should we punish for providing the means for people to earn money - i.E., buying? We're supposedly putting the IRS out of business, which sounds great, except we're transferring the workload from them to the shoulders of the sales tax collectors - businesses. That will be doable for the large retail stores, but small businesses spend hours every month (I know; I used to be a bookkeeper for a small store) filing taxes. Do we really want to make it harder for them to make ends meet?
The tax system needs serious work. But I think people are so in love with the "Fair Tax" name, they aren't paying attention to the ramifications.
In the past few years, the income of the top 1% has increased 275%, and the flat tax would just worsen this! The rich would have no income tax, and the sales tax would be a mere part of their yearly income. In addition, why should we tax those making $50,000 yearly the same amount as those making $1,000,000 yearly? Furthermore, if we decrease the salary of the poor, a chain reaction will occur, as they will be forced to use more healthcare provided for them.
Many people buy things in the store, including kids. With sales tax, kids would have to pay more for the things they like. A little kid also doesn't have to pay income tax, seeing how they don't make money. I think that federal income tax is the better way to go.
No matter how gleefully supporters argue that a federal sales tax will encourage people to save, they are merely obfuscating the fact that this saving comes at the expense of spending that creates demand, and it is always demand that creates economic growth. Nothing supply-siders say about giving businesses money to "create jobs" addresses the basic economic fact that it is demand that creates jobs.
People do not create businesses in order to add jobs to the economy, they crate businesses to make money, and the only way they can make money in a capitalist system is by meeting demand. No demand, no business. No demand, no new jobs.
Therefore any, and all, arguments supporting supply-side stimulus are merely ideological, and are not accurate.
Federal sales tax sounds like a good idea at first, but there are many problems with it. Among these problems would be that it discourages consumption, which in the long run, hurts our economy. It is also unfair because it taxes the poor at a much higher rate than anyone else. If a poor person has to spend 100% of their pay check to get by, then they get taxed on 100% of their pay check. Whereas a rich person might only spend 20% or 30% of it, leaving them largely untaxed.
There are basic needs that every person, rich or poor, must have. To tax heavily the basic needs and services that everyone must purchase is to place an undue burden on the poor. Certain basic things would become completely unaffordable for those who didn't have much money. The rich and poor would basically be paying the same taxes, but it would cripple the poor while not affecting the richest. This is not a humane concept.
If income taxes were eliminated and replaced with sales taxes, the hardest hit would be the lower class, who can't afford to save money and have to spend everything they have simply to keep on going from day to day. The wealthy, by contrast, would save all their money, investing it in ways that wouldn't be taxable, thus maintaining a 'rich get richer' feedback loop that would ultimately destroy the economy.
Everyone (rich and poor) needs to buy things like food, clothes, utilities and these expenses often take up the majority of poorer peoples income. If they are paying the same tax levels on these as those who earn a lot more money, their percentage of tax paid is going to be much higher than those on higher incomes which is unfair. Income taxes also have their problems but ideally under this system those in poverty should pay less tax and is thus a more equitable system.
I live in a state where there is no income tax, but we pay a 9.25% sales tax on everything we buy. The problem with sales tax is that the people who can least afford to pay it have to carry the burden of it. Those who are able to pay the extra, might not seem bothered by it. I can understand the temptation to use a sales tax, especially on unessential items. But, when you buy $100 dollars worth of groceries, then have to pay an extra $9.25 on top of that, it will bust your budget if you have a limited income. Now, suddenly, you are out of the $10 you needed to buy diapers for the kids. This is the kind of regressiveness that a sales tax can cause.
A sales tax appears to be equal across the board. It is not, however, due to the fact that there is a certain amount of things that are necessities that everybody must purchase. If the income tax is abolished, lower income people will pay a greater percentage of their income in tax than higher income people, simply because lower income people spend a greater percentage of their income than higher income people do.