One very important argument against the "Fair Tax"

[jmowreader]

Or the "unfair tax," depending on your point of view.

This is the "national sales tax" that some of the Repuke candidates, plus Mike Gravel, are promoting.

If you go to the Fair Tax website, it describes what this is--a federal sales tax levied on new items; no sales tax will be levied against "used" items.

Let's see now...

most of the cars sold in America today are used cars
most people buy "used" houses
most rich bastards buy "used" yachts
the trade in "used" airplanes is brisk
"used" products dominate the extreme luxury goods market, but they call this stuff "classic" merchandise.

Let's see now...a $55 model of a Gulfstream V business jet carries a 40-percent federal sales tax, but a two-year-old $55 million real one has no tax at all. Is that "fair"? The Repukes say it is.

[TheCowsCameHome]

1. When kooks like Boortz et al support these things I get suspicious quick

Just hearing them hawk this plan tells me to be very careful, since their ilk usually dumps on the working stiff.

[Johonny]

2. well

clearly the fair tax has possible hope of generating enough funds to run government. It's a back door policy to bankrupt social programs and eliminate the new deal.

[TexasBushwhacker]

3. If they only tax new items

wouldn't that bring the production of new items to a grinding halt, or at least put a big dent in the house building industry, the auto manufacturers, etc.?

[stahbrett]

9. Maybe, but the proponents say...

Manufacturing costs would drop because many of the "hidden" taxes on business would go away. Also, if used goods become more valuable, their prices would rise somewhat, making their prices nearer to the new versions.

Also, people will have more money because the federal income, medicare, and social security taxes/withholdings will no longer be withheld.

[jmowreader]

13. There's also a psychological effect going on here

Anyone proposing this scheme is seriously antitax. I think they'd actually pay a premium for used goods--yes, they'd pay MORE for used than for new--just because none of the money was going to the government.

[stahbrett]

14. I think that is true for many people, but I wouldn't say it was all of them

A pure sales tax is regressive. That throws a lot of people in the camp that doesn't like the concept of a "fair tax", which gives out monthly rebates to cover the sales tax on some level of spending. That automatically makes it a progressive tax, rather than a regressive one.

For example, if you spend $40,000 in a year, and the monthly rebate offsets the taxes on $20,000, then you're effective tax rate is cut in half. Someone who spends $120,000 in a year, with the same rebate that offsets the taxes on $20,000, would pay a higher effective tax rate. So the more you spend, the higher the effective tax rate. Anyone spending up to and including the rebated amount would have an effective rate of 0%. Plus it means that companies who move manufacturing offshore are not avoiding taxes when they bring those products into the country to sell them, taking away an incentive to move those jobs overseas.

Like I said in an earlier post, the exact "Fair Tax" plan that is being advocated by Boortz is not what I'm supporting - but I think that conceptually it has some good parts, which could be potentially be used to created a much better tax system than we have now.

[jmowreader]

18. If "better" means "unworkable," let's hear it for consumption taxes

The intent of the "Fair Tax" is to eliminate all current taxes and to replace them with a consumption tax. A consumption tax without "monetary" taxes--income, capital gains and the like--can't work because consumption alone won't bring in enough revenue.

Let's use Germany as an example. They have two taxes which are very similar--the "value added tax" which is levied on the ultimate consumer, and the "turnover tax" levied on middlemen. The tax rate is 19 percent. They also have individual and corporate income taxes.

I guess if you jacked the value added tax up to about 60 percent and cancelled a lot of Germany's social spending you might be able to run the government without taxing money, but I doubt it.

[stahbrett]

19. You may be right

Like I said, from a conceptual/philosophical point of view, I like the idea. Whether it can be implemented in real-life successfully or not is not something I'm convinced of.

Here's a question though... aren't taxes viewed by businesses as simply business expenses, along the lines of rent or leases, etc.? Aren't business expenses bundled into the price of goods and services? Monopolies aside, if there is a competitive market for widgets, and there are 5 widget makers, and you reduce the cost of doing business, one of those widget makers will try to get an advantage by lowering prices, forcing the other widget makers to follow. At least in theory. :)

[jmowreader]

20. They certainly are...

I just looked at these cocksuckers' website. They aren't going to tax materials used for the production of retail goods...which, of course, will push the tax rate even higher, since they're talking about revenue neutrality.

This shit gets better as we go along. These fuckers are talking about using state sales tax collection authorities to collect the federal income tax. I thought Repukes were AGAINST unfunded mandates.

[stahbrett]

22. Could be wrong, but I thought that the fair tax plan does give the tax collector a small amount (nt)

[HereSince1628]

4. Most stock purchases are of "used stocks," gotta protect those capital gains

This has been the goal since before Reagan. The mechanisms have varied, but it's always the same goal. Don't tax the wealthy for making money it's not only unfair it's counter-revolutionary.

[stahbrett]

5. The 2-year-old $55 million jet would have already HAD taxes paid - 2 years ago (nt)

[jmowreader]

11. Well, yeah...

but under the current tax system, every time someone buys that airplane taxes are owed. Under Boortz' system, the only time taxes would be paid on it would be when the factory sold it to the first purchaser.

[stahbrett]

12. Correct - I'm in the minority on this, but I like that concept

I'm not sold on the specifics of the actual "Fair Tax" plan as set forth on their website, but I do like the concept of a consumption tax, offset by some sort of monthly rebate (to avoid it being punitive on the poorer among us), so that people would be (a) encouraged to save, (b) tax folks who currently don't pay income taxes very much (trust fund kids, such as Paris Hilton), and (c) less apt to have special interests write in exemptions for this corporate interest or that corporate interest.

[Zywiec]

6. Do you think rich people are buying used cars?

If most of the cars sold in America today are used cars, I would think that benefits the majority of working Americans. What rich person wants a used car?

You also say most people buy "used" houses. Again, wouldn't that benefit the majority?

The trade in "used" airplanes is brisk? Can you show me a figure where so many people would be "getting over" trading in their airplanes? How many people are we talking about here, .05% of the population?

[jmowreader]

15. I know rich people buy used cars

Rich people, of course, don't go to the same used-car lots you and I do. They go for "classics."

Look at Jay Leno, for instance...he owns 80 cars and 80 motorcycles, and of all those maybe a dozen were purchased new.

A mint 1957 Thunderbird or a 1932 Ford coupe are highly sought after collector's items, and they're worth a fortune...but to the "Fair Tax" people, they're just used cars.

And as for the concept that the tax-free sale of a used house would benefit the majority...not so, at least not in the grand scheme of things. If people won't buy new houses, people won't build new houses...which means that all the people who carpenters do business with (not just building materials stores, but doctors, car lots and donut shops) won't receive money from carpenters. It's an ugly spiral we really don't want to get into.

[FormerDittoHead]

17. Yes, rich people buy new cars

Check this baby out:
http://cgi.ebay.com/ebaymotors/2007-Black-Mercedes-Benz-S65-w-Rear-Cam-Nav-and-Pano_W0QQitemZ370027191779QQcmdZViewItem?hash=item370027191779

$155k takes it away! (no tax on your income or anything under the "FairTax" SCHEME!

[unpossibles]

7. hmm. While I am no fan of the "Fair" Tax, I do see one benefit

a reduction in consumption and creation of new goods, thus a reduction in waste of resources and in pollution.

But I am still against it.

[TahitiNut]

8. Rent is "new" but an apartment building built in 1960 is "used"

Electricity is "new" but a power company is "used." Gasoline ins "new" but an oil well drilled 25 years ago is "used."

When will they propose a sales tax on the sale or exchange of corporate stock?? (I won't hold my breath.)

[truedelphi]

10. I woul d love to see people pay for things they buy rather than taxing wages

Why?

Because under any fairly set up system, the working poor person doesn't end up paying.

Food and meds are not taxed under the system.

People who are part of the underground economy get to pay, for a change. There is some serious big money there.

Buy clothes regularly at Bloomingdales, and you pay.

Pay only rent, only groceries and the occasional pair of shoes at a thrift store and you don
to need to worry.

The spenders pay for a change and the working poor can keep what they have gotten off the sweat of their brow.

[sabbat hunter]

21. under the fair tax

you would pay tax on your rent, food, medicines.

see fairtax.org

everything is taxed because according to them you cannot exempt anything otherwise you develop all new lobbyists who will lobby to get their item exempt

[truedelphi]

24. That may be a fair tax to them - but not to most of the working poor

[MaryCeleste]

16. Still something has to be done to simplify and fix the current system

[lastliberalintexas]

23. It's also regressive, economically oppressive and

would likely have to be around 35-40% in order to fund the federal government in any reasonable manner. About as stupid an idea as Ron Paul wanting us to return to the gold standard.