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.
In listening to the discussion, it struck me that a retail tax on goods and services, but no sales tax on wholesale or to make product - i.e. no Corporate or business would be paying any tax, would shift the burden to people. The high income earners will form businesses to shelter purchases from the 23% sales tax proposed. The rest of us, without money to manipulate purchases through shell companies will foot 100% of what previously was collected from businesses and Elitists (as well as middle income earners).
Retail sales occur when businesses sell goods or services to households. Business-to-business transactions are not retail sales because the purchase is used as an input, not as household consumption. Household-to-household sales of goods or services are not included, either, since tax should have already been paid when the good was originally sold to a household from a business. For example, the sale of a newly constructed home to a family that will occupy it is a retail sale. But the sale of that same newly constructed home to a business that is planning on renting it to others is not a retail sale. Nor is a sale of an already existing home from one occupant to another.
Measuring the sales tax rate would seem to be a simple problem. Suppose a good costs $100 and there is a $30 sales tax placed on the item. Most people would probably consider that to be a 30 percent sales tax, since the tax is 30 percent of the selling price. This is known as the tax-exclusive tax rate. An alternative would divide the $30 tax payment by the total cost to the consumer ($100+$30), making it a 23 percent rate. This is known as the tax-inclusive tax rate. Sales taxes are typically quoted as tax-exclusive rates. Income tax rates, however, are typically quoted as tax-inclusive rates. For example, a household that earns $130 and pays $30 in taxes would normally think of itself as facing about a 23 percent (30/130) income tax rate.
Although there is no one true method of reporting the rate, it is crucial to understand which approach is being used, since the tax-inclusive rate will always be lower than the tax-exclusive rate and the difference grows as the rates rise. At a rate of 1 percent the difference is negligible, but a 50 percent tax-exclusive rate corresponds to a 33 percent tax-inclusive rate.
Both the Schaefer-Tauzin (S-T) and the Americans for Fair Taxation (AFT) plans would attempt to tax all goods or services purchased or used in the United States. Exemptions would be provided for business purchases for resales, purchases to produce taxable property or services, and exports. Expenditure on education would be exempted on the grounds that it is an investment. The sale of newly constructed single-family homes would be taxed, as would improvements to existing single-family houses. Already existing owner-occupied housing would be exempted. All financial intermediation services would be taxed. The tax would exempt expenditures abroad by U.S. residents and half of foreign travel, but tax domestic expenditures by non-residents. Notably, the proposals would tax all federal, state, and local government consumption items, as well as government investment in equipment and structures.
Although it seems like a great idea at first glance if you take the time to think about it, it is not as equitable as you think and could destabilize the US economy and places the financial burden on the middle class and poor. Most arguments say that it makes everyone pay their fair share but it doesn't really. They say it will eliminate tax shelters for the rich and businesses but it doesn't. In fact it has the potential to destroy the US economy. Even if necessities are untaxed which isn't guaranteed the rich would just buy in other countries to save 23%. Foreign investors in US companies would look for investments elsewhere where they can save an instant 23%. High dollar luxury purchases suddenly move overseas. Why would anyone want to pay 23% every time they made a stock purchase. Most investors would look to invest overseas or use foreign banks and brokerage firms to avoid paying sales tax. The tourist industry would suffer. My dollar is now worth 23% more if I go to Canada, Mexico or Europe. The only people that wouldn't be able to afford that is the poor or lower middle class. If there was no IRS or income tax than most likely you would have to pay sales tax on housing, food, medication and other things that were tax free. A 15% flat tax would be more fair. With a Flat Tax you could still eliminate the IRS and filing taxes, loop holes, etc. With Fair tax you are just creating easier loop holes and ways to avoid paying taxes. I could go on. This is just me thinking about it for an hour or so. Flat tax not Fair Tax!
Unless all basic necessities are tax free, any consumption tax will affect those who have less more then the wealthy ones. This will cause the poor to have even less to spend, which will increase their need for additional assistance, or the spiral into abject poverty. Consumption taxes do not bring in more revenue and are a ruse used by the rich to relieve themselves of the burden of providing for those they exploit for profit.
Elderly living on social security alone and disabled vets would now have their living expenses increased. VA benefits and social security were not taxed with the income tax. This would be devastating. Food stamps would have to be increased. More people may become homeless. Guess maybe an 80 year old woman could get a job so she could pay her "fair share".
People must pay their bills and put food on the table, so they must earn an income. The purchase of a particular product, or any beyond the necessities, is contingent on numerous individual factors, such as financial stability, disposable income, and current obligations. Additionally, the calculation of Gross Domestic Product involves the analysis of governmental income based upon verifiable and stable sources of tax revenue, whereas the proposed system would shift government income to a system that is unpredictable at best and mathematically chaotic at worst. Imagine experiencing stock market declines on the governmental level such that nations begin to rise and fall according to market trends. That would be the result of this move. Furthermore, the combination of income and sales taxes would introduce the same element of unpredictability while also straining the open market by causing immediate false inflation. The only viable application I can think of for this idea is the introduction of federal sales taxes on cheap, high-traffic products such as alcohol and cigarettes, treated as windfall profits for government, and used to soften budget deficits in an intentionally unanticipated manner such that fiscal year outcomes become perpetually better than expected.
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.
In theory, a federal income tax might seem fair, because people with more money would pay more taxes if they spend more money. However, people have many basic needs, and there are a lot of people who can't afford to pay more spend more than they already are. People with a lot of money would have a choice of not paying more tax by not buying unnecessary items, while low income people who only spend on basic needs would not have the choice.