They might if enough people push for it

6/8/2008 9:35:37 PM

That's laughable.

6/8/2008 9:55:05 PM

i dont get why the rich guys in congress wouldnt want this...they'd basically be able to live the good life and not get taxed on it

6/9/2008 3:01:45 AM

They've already paid taxes on their money. They don't want to have to do so again. It would only make sense if they were going to continue to stay in congress for a very long time.

6/9/2008 10:08:59 AM

Quote :

"i dont get why the rich guys in congress wouldnt want this...they'd basically be able to live the good life and not get taxed on it"

Because they are in congress. The income tax is a very effective political tool that they use to buy votes. they also use it to alter the behaviors of americans.

The fairtax takes away that power from them and gives it to the people. THAT is why they oppose it.

7/10/2008 11:18:37 AM

You Got it eyedrb!

Also fat-cat lobbyists will fight the FairTax tooth & nail..since manipulating the tax code is one of their favorite pastimes.

If it is to succeed, The FairTax movement will definitely need to be a populist project. Politicians will never voluntarily vote to reduce their power and influence over us.

7/10/2008 11:32:07 AM

Quote :

"The FairTax movement will definitely need to be a populist project. Politicians will never voluntarily vote to reduce their power and influence over us. "

I agree 100%. However todays population is to lazy and happy to be ignorant to care these days. They would rather discuss Jolie's twins than politics. While Id like to think it can happen, bc I strongly feel this is about the only thing to save this country, I have serious doubts and lack of faith in our politicians and our society.

7/10/2008 11:35:17 AM

since it requires an amendment anyway, why wreck the country with the fairtax when we can get the same benefits by declaring in an amendment that all tax payers must be treated equal. That would eliminate all the income tax shenanigans while avoiding the disaster of a 36% sales tax.

7/10/2008 12:21:58 PM

36% sales tax? come on

I woudl say I think your idea is a move in the right direction, however in a country of over 300M, we only have 140M who pay income taxes.

Also, just fixing the income tax will do nothing to encourage jobs and money to move into this country. imo

7/10/2008 1:43:09 PM

Quote :

"I woudl say I think your idea is a move in the right direction, however in a country of over 300M, we only have 140M who pay income taxes. "

Of those 300 million how many are required to file a tax return and pay income taxes?

7/10/2008 2:20:12 PM

about 140 million

7/10/2008 3:35:20 PM

Quote :

"why wreck the country with the fairtax "

why do you think it would wreck the country?

7/10/2008 3:38:10 PM

^lack of information and bad sense of judgement with a twist for being dramatic. That would be my guess.

7/10/2008 5:47:24 PM

my bosses the other day had like never even heard of this

i was like u didnt hear huckabee say he wanted the taxes to be done on one sheet of paper?

7/10/2008 5:52:24 PM

dnl, im sure more people know more about jolie's twins than the fairtax. Its just the state of things.

7/10/2008 5:54:23 PM

i kinda want a make a thread but i will try here and if it doesnt work i will pm duke to see if its ok if i make the thread


just wondering...yes or no...do you want the fair tax?


i vote yes...hopefully if it sucks we can go back to the old way though

[Edited on July 18, 2008 at 4:50 PM. Reason : ^aahhhhhhh...true...didnt see your post earlier]

7/18/2008 4:49:58 PM

Didn't read the whole thread, so maybe this have been covered, but:

If this passed I'm incorporating myself and buying everything as Slamjamason, LLC. and paying no taxes. So is everyone else.

That or we'll just buy everything from Canada and have it shipped over

7/18/2008 5:07:48 PM

I haven't read the whole 5-page thread, but I think it makes sense just to have a national sales tax. That way people choose how much they pay by controlling how much they buy.

Our current income tax system is screwed up because high earners take the largest burden, which makes little sense since wealthier people don't necessarily use any more government resources than poor people; in fact, they probably use less. Rich people send their children to private schools and don't use public assistance programs, and probably don't even set foot in public libraries, so why are they paying more money than lower earners to support programs they don't even use?

But if you're of the mindset that rich people owe more, they'll pay more taxes anyway with a national sales tax because they generally buy more.

Social security should be done away with too. Workers would no longer pay social security taxes, and payouts would be determined according to how much people have paid in, so people like my dad would get higher payments upon retirement than people like me who have only paid into the system for a couple years.

I think by abolishing social security and income taxes, we'd restore a lot of our privacy as an extra benefit. No more social security numbers and no more reporting income would keep our transactions "off the grid" and force businesses to stop tracking people via SSNs.

7/18/2008 5:15:45 PM

dude. The SSN aint going anywhere, even if SS goes the way of the dodo. That unique identifier is just wonderful to the government, so it will never die.

7/18/2008 6:51:21 PM

Quote :

"If this passed I'm incorporating myself "

You will have to register your business with the IRS..and be able to prove you're a bona-fide business. And they might be watching for this simple-minded type of cheating pretty closely.

And with the FairTax, there will be lee people to watch over for fraud... But who knows... you might get away with ripping off the system.

Quote :

"The SSN aint going anywhere"

You're right...but with the FairTax, now foreign tourists will be paying into the SS system...drug dealers too... and illegal aliens.

7/18/2008 7:04:48 PM

^the drug dealers part of that is what most makes me want it...bout damn time the gov taxed that shit

7/18/2008 8:43:04 PM

What fraud?

Exactly what constitutes a "bona-fide" business per these new regulations?

I really am curious, because I'm interested to see if there is a set of regulations that can be proposed that will accomplish what your goals are of having 0% corporate tax and 25-36% or whatever individual sales tax.

If someone is buying a $2,000,000 house, it is probably worth their while to take the neccesary steps to make it a business expense, even if they have to create a new business, if it means saving $600,000+.

There will be a lot of wealthly people with a lot of money at stake who will work very hard to put as many expenses as they can under the corportate tax structure, and unless you make things very cumbersome for "bona-fide" businesses, I don't see how they won't be successful.

7/19/2008 1:27:55 AM

I like it

1) taxes the wealth on their spending which would bring in more money (their wealth > their income)

2) government would suck in more money

3) encourages saving and investment (retirement, long term economic growth)

4) more incentive to work as income is not taxed (good)

5) simple. no more books on taxes. just pay a sales tax. save huge amounts of govt spending.

7/19/2008 4:52:03 AM

cole you are leaving out some VERY important details:

1. It would take away politicians ability to use the income tax as a political tool. Punishing some people to buy the votes of others and to alter your behavior.(that just isnt thier job). The people would now have control over thier money first, instead of the govt determining how much of what you worked for.. you really need. You control what you pay, not some power hungry asshole fighting for votes.

2. It would instantly make the US the number one spot for businesses and companies. Jobs would be flowing INTO the country instead of out. Right now the US has the second highest coorporate tax rates in teh world. Couple that with our lifestyle and pay, its no wonder they are leaving. Drop the rate to zero and you will see a flood of new jobs with potentially higher pay coming into the US. Also would give us the leg up in the world market. We have one leg injured by costs(labor, land, etc) and the other by taxes(for businesses)

3. It would end the idea of class warfare. A group of voters could no longer claim to demand something and have another group pay for it. Everyone is treated equally, across the board. People would control, not only thier income, but how much taxes they would pay with thier spending habits.

4. Did anyone mention it would double the amount of people paying into SS and medicare?

5. Gives incentives to being US citizens. No longer could you avoid taxes by not being a citizen. If you bought something, you would pay.

7/19/2008 9:38:55 AM

Quote :

"Everyone is treated equally, across the board."

This is akin to saying that by having Mike Tyson punch Lennox Lewis and Dakota Fanning, both Mr. Lewis and Ms. Fanning are being treated equally.

The fact of the matter is that if the sales tax rate is 30%, people of low incomes will be paying out nearly 30% of their earnings. People of high incomes will be paying much lower percentages. This is anything but fair.

7/19/2008 10:55:21 AM

^This was addressed on page 1



[Edited on July 19, 2008 at 12:07 PM. Reason : .]

7/19/2008 12:02:32 PM

Good points 'Eye'

Im a huge fan of this but things this 'radical' would be really hard to transition to. People are set in their ways and there are a lot of morons out there. Not people that necessarily agree or disagree, but people too stupid to understand.

[Edited on July 19, 2008 at 8:25 PM. Reason : ]

7/19/2008 8:25:26 PM

spooky, you are far off. Im assuming you made up the 30% too? Let me ask you according to your calculations is the 30% tax on a 10M home alot more than 30% on a 200k home?

I wont even get into the fact that the prices might actually stay the same.

7/19/2008 11:57:47 PM

Did some calculations. With Fair Tax I would have had about 2k more in my pocket at the end of last year (with the same expenditures). And that's after you include my tax refunds and stimulus check.

I'm in.

[Edited on July 20, 2008 at 6:44 PM. Reason : used 25% just as an arbitrary number.]

7/20/2008 6:37:56 PM

decent idea, but like most ideas it won't happen / have the effect they think it will

7/21/2008 12:32:31 AM

i tell you one thing i hate about those that dont like it...they are like "well, lower income people will pay a higher proportion of their money towards taxes now"....i can literally think of at least 2 reasons why i find that retarded


a) poor people are more likely to buy used
b) its not like poor people buy that much shit anyways

7/21/2008 12:44:49 AM

I hate the idea because it will breed widespread illegality and perverse incentives just like every other 30+% sales tax in human history.

But, as you say, poor people buy used. But if you tax the production of new cars then the price of used cars will also rise, since they are competing goods, keeping older cars around longer and aging the autofleet with all the emergent results: older cars tend to be fuel inefficient, high in maintenance, and unsafe.

If effect, you shift your tax from labor, which workers cannot avoid, to taxing production, which anyone can avoid with enough effort, so less will be produced.

7/21/2008 1:25:37 AM

Quote :

"What fraud? "

I'm assuming the Fraud would result from you buying stuff under the guise of a business expense and then keeping it for your personal use. That would be fraud.

Quote :

"If effect, you shift your tax from labor, to taxing production, "

When you tax something, you generally get less of that activity. When you tax labor/income, you will get less production. The income tax reduces labor. Why should I drive my cab more shifts when it will just push me into a higher bracket and I lose my extra earnings in taxes?

The FairTax will tax consumption, not production. You may get less consumption, maybe people will start saving more..maybe we'll see a shift in consumption patterns (more used purchases etc).

But with the costs of complying with the federal income tax-code, and social security removed, production costs will drop under the FairTax. America will become a tax-haven for companies to set up production. I just hope we pass it before some other country does.

With people getting all of their paychecks, they will in much better position to save up for new cars and new houses if they wish.

7/21/2008 2:26:39 AM

before some other country does? uhhh, they have. an example is australia. ever hear of a VAT tax?

7/21/2008 3:02:47 AM

Quote :

"an example is australia. ever hear of a VAT tax?"

The FairTax is not a VAT tax. A Value Added Tax adds taxes to a product as it makes it way along production. The FairTax is a clear, easy-to-understand sales tax at only the final retail level.

7/21/2008 9:54:14 AM

loneshark, there are already embedded taxes built into the price of the goods you currently buy. At about 22%. For instance when Coke buys thier cans, whoever produces those cans have different costs that affect the price of thier cans, some of that cost are taxes and payroll taxes. So it raises the price to coke when it buys thier cans. Now Coke pays the higher price for the cans and also pays thier taxes and payroll taxes and builds both of those into the final price that YOU pay on the street.

Coorporations dont pay taxes, they collect them. When the cost to produce thier goods increases they raise the price of thier goods. The end consumer is who pays. This would reduce the costs to produce the goods and to employ people and replace it with a consumption tax at the end.

earthdogg, again, you are correct. Taxing labor seems entirely counter productive. But you need to understand, with politicians you have to have a minority to punish while promising something to the majority. Its how you buy votes.

7/21/2008 10:14:52 AM

Quote :

"When you tax something, you generally get less of that activity. When you tax labor/income, you will get less production."

You are bad at switching words. When you tax labor/income, you will get less labor/income. This may result in less production, but it is not an automatic result.

Quote :

"The FairTax will tax consumption, not production. You may get less consumption, maybe people will start saving more..maybe we'll see a shift in consumption patterns (more used purchases etc)."

Not true, the fairtax is very explicit in that it taxes the sale of newly produced items only: existing items are untaxed; and since about half of consumption would be exempt from the tax (used items, services, etc), it is a lie to say this is a tax on consumption. This is a tax on production and people will adjust their habbits away from minimizing income to minimizing production with a lot of very bad results; the biggest of which being the government does not come close to collecting as much money as it thinks it will.

7/21/2008 4:47:38 PM

^ Good post, I had not given much thought to the advantages and disadvantages of minimized production.

Depending on your views on sustainability and the enviornment, I could actually see some advantages to a cultural attitude shift toward maximizing the recycling/resuse of used goods.

It would obliterate resiential development as it is typically seen today, virtually all construction would be infill, assuming that readapting existing structures could get around the taxation.

It could spur the start of a 'landfill rush', which it bound to happen sooner or later, where old trash is dug up and harvested for its material components.

(All of this in some regards would require clarification of what constitutes a "new" good. If every part of a product is used, but it is recombined and recreated in someway, would it be a new or a used good?)

It could significantly stunt the development of new technologies, however.

And there is the underlying problem of whether it could generate the needed tax revunue, as LoneSnark addresses.

How does the fair tax effect imports and exports of goods? This seems to be a fundamental question given an increasingly international marketplace, but I hadn't seen it addressed.

7/21/2008 7:12:54 PM

loneshark, explain to me how it would hurt production? The taxes are already embedded in teh cost of the goods you are already buying. It would lower the costs of the companies to produce such goods. This would encourage coorporations and jobs to come/stay in the US. We would have the most favorable coorporate tax rates...ZERO.

The cost of the good you buy would already contain the fairtax in it. So when you go buy a pack of gum for a dollar. 23cents will be collected for the federal govt, you would only pay 1 dollar, well and the state sales tax.


Slam, that is a good question on the imports/exports. To be honest im not entirely sure how it would effect imports. I figure our exports would be more competitive on the world market since they will now be cheaper to produce.

7/21/2008 7:39:38 PM

Quote :

"If every part of a product is used, but it is recombined and recreated in someway, would it be a new or a used good?"

It would be new and therefore taxable. As such, this would be disasterous for the environment as people would expend vast resources and emit vast amounts of pollution keeping their 1980 honda on the road rather than recycling it for a 2010 honda which gets twice the gas mileage and doesn't leave pools of oil on the road.

The tax treats domestic production and imports the same way while not taxing exports because foreigners are too precious to tax. Or that must be the case, as there is no reason why foreigners should be exempt from paying for our government. But there is the question I raised on page 3 of weather or not used items can be imported tax free. If so, then the damage will be minimal as Canadians take the place of America's new car buyers in the marketplace.

People need to forget the myth that the Fair Tax will result in lower prices; it is simply not true. Corporations only pay taxes on profits and labor contracts will not automatically fall just because you eliminate the income tax. As such, there is no where for corporations to get savings, much less pass them on to consumers.

[Edited on July 21, 2008 at 7:44 PM. Reason : .,.]

7/21/2008 7:42:48 PM

I think its amazing that we are in the middle of a war and the only thing you people are worried about your taxes. You don't even want to pay for the war you started.

7/21/2008 7:43:01 PM

It is amazing we are talking about the economic freedom of the American people and all you can talk about are ways to help pay for wars. You are going to get lots of people killed if you keep insisting on funding whatever war the politicians feel like starting, you Bushite!

7/21/2008 7:47:51 PM

Quote :

"and since about half of consumption would be exempt from the tax "

Where are you getting that statistic from?

Quote :

"How does the fair tax effect imports and exports of goods? "

Some countries remove taxes from items slated for export, making them more attractive. Currently, we do not do this. The embedded taxes increase the price of our products.

Under the FairTax, there would be no federal tax component on any exported products..thus increasing our competitive edge in the world market.

Quote :

" keeping their 1980 honda on the road "

Again, the FairTax allows you more choice in when and where you pay fed. taxes. This allows you to allocate your resources better. It will be easier to save up for that new car.

Lonesnark is correct in stating that prices will not drop under the FairTax. Prices are predicted to stay the same or increase slightly- especially if companies decide to let employees keep their share of the old Social Security deduction.

But consumption is one of the main engines of our economy. The FairTax economists claim that the prices of goods and services will not change enough to turn everyone away from buying new items.

7/21/2008 9:55:06 PM

Quote :

"Some countries remove taxes from items slated for export, making them more attractive. Currently, we do not do this. The embedded taxes increase the price of our products."

Which is good. Afterall, what is wrong with having foreigners help pay our tax burden?

Quote :

"Under the FairTax, there would be no federal tax component on any exported products..thus increasing our competitive edge in the world market."

And has the American people bear the full cost of their government. Why is this good?

Quote :

"Lonesnark is correct in stating that prices will not drop under the FairTax."

That is right: prices will instead jump 30+%.

Quote :

" But consumption is one of the main engines of our economy. The FairTax economists claim that the prices of goods and services will not change enough to turn everyone away from buying new items."

You might be right; it might turn out to simply be a one-time windfall profit of those owning existing products For example, new car prices jump 30+% and used car prices jump 40+% to keep up. But I highly doubt that: cars do not have a fixed retirement age, as Cuba's fleet of 1950s cars demonstrates. If Americans divert that 40+% of the cars worth into keeping it on the road forever, then we can all live without paying money to the government except for replacement parts.

Far more likely, when someone buys a new $20,000 car, or $26,000 after-tax, they will be willing to spend at least $6000 to avoid the tax. As such, they can hire someone in Canada to buy the car for $20,000, drive it for a few hundred miles, and then sell it into the American market as 'barely used' for $25,999.

7/21/2008 10:45:56 PM

Quote :

"prices will instead jump 30+%. "

No they won't. Where did you get that figure from?

Quote :

"when someone buys a new $20,000 car, or $26,000 after-tax,"

From the FairTax experts, they see this a different way. Let's say a car costs $20,000 today.

Once the FairTax kicks in, the 22% embedded federal taxes will be removed- bringing the price of the car down to $15,600.

Now the 23% embedded sales tax is added back in- On the dealer floor, the price of the car is now $20,280. ($4680 tax is 23% of $20,280 - or if you prefer, $4680 is 30% of $15,600. Same tax amount using inclusive & exclusive percentages)

So the car will cost $280 more, but on the other hand...you get your paycheck with no fed income tax withholding, no social security withholding, and no medicare withholding. The average income-earner will get about a 50% increase in take-home pay.

You also get a monthly prebate on all the sales-tax you pay up to the poverty level. And no more stripping down naked for the IRS each year - imagine the savings on tax preparation!

I'd say a 1% increase in prices would be worth that trade-off.

7/22/2008 12:01:45 AM

Intersting. If exports are tax-free under the Fair Tax, then you'll see the U.S. gain massive exporting leverage, and a resurgence of manufacteuring, but you will see no tax revenue at all for this new business.

At that point, though, imports have to be taxed. If you have the fair tax with no tax on imports or exports, then overnight Canada and Mexico will become two of the weathiest countries in the world while the federal government loses virtually all tax revenue. (i.e., every company exports all of their goods tax free to their Canadian partner, and then their Canadian partner exports those goods back into the U.S., to the consumers, tax free)

7/22/2008 12:09:09 AM

Quote :

"every company exports all of their goods tax free to their Canadian partner, "

You won't have to do this. Every company in America will be producing their products tax-free..with no federal tax component at all. Imported items will have the FairTax included into them when they are sold at the retail level.

Countries with VAT taxes who export to the US have an advantage over our exports to them. They can remove the VAT taxes on items before they send them to us, but we cannot take out the embedded taxes on our own goods before sending them away. Once the FairTax is adopted, the playing field will be leveled.

7/22/2008 12:24:58 AM

Quote :

"No they won't. Where did you get that figure from?"

From page 2 of this exact thread. Let me quote myself:
"The company promised to pay me $50,000 a year. It is in my contract. Just because it stops withholding 25% of it for the IRS does not make my salary $37,500. Such would be a violation of my contract with my employer. "
From pages 3 and 4, let me quote myself again:
"As DrSteveChaos pointed out, the sales tax is not 23% but in fact 30%. Similarly, as DrSteveChaos also pointed, I did fail to include the payroll taxes that employers do pay (FICA, SS, etc) which he said was about 6.5%. Therefore, accepting Marx's labor-price theory, we can asume retail pre-tax prices will fall 6.5% due to tax savings before jumping 30% due to the tax. So, what previously sold for $100 will now sell for $93.50 + $28.05tax = $121.55 for an after-tax price increase of 21.55%. This is fine for the employed because their wages are fixed by contract between employer and employee. In effect, everyones bank account will have been marked down about 21% and everyone's contracted salary will have been marked up 21%. Thus, the old and currently wealthy will be poorer overnight and the young and employed will be richer overnight by exactly the same amount. "

"Overall, this would appear to most as a sudden onset of overnight inflation in the amount of 21%. Prices jumped 21%, wages jumped in accordance with your earlier income tax bracket. What will not have changed, of course, is everyone's bank account, which is still the same size as it was before the changeover, it just buys 21% less."

Quote :

"Intersting. If exports are tax-free under the Fair Tax, then you'll see the U.S. gain massive exporting leverage, and a resurgence of manufacteuring, but you will see no tax revenue at all for this new business."

Absolutely not. Exchange rates will adjust to eliminate any new-found exporting leverage back in line with imports and capital flows.

Quote :

"Countries with VAT taxes who export to the US have an advantage over our exports to them. "

Absolutely not. Exchange rates will adjust to eliminate any artificial advantages the Europeans give their exporters. All they are really doing is missing out on the opportunity to tax American consumers. If the try to fix their exchange rate then inflation rates will adjust to similarly eliminate any artifical advantages the Chinese give their exporters.

[Edited on July 22, 2008 at 12:42 AM. Reason : .,.]

7/22/2008 12:25:31 AM

Quote :

"As such, prices for new goods after the tax will be 23% higher. "

You give only part of the story.

In their 2006 study "A Macroeconomic Analysis of the FairTax Proposal", Arduin, Laffer & Moore use the assumption that the employer's share of the payroll tax is the only tax savings that will be used to lower prices.

Using this basis, they estimate that in the first year of the FairTax, prices would indeed increase 24.8%, but wages would rise by 27.4%, and disposable income would go up 1.7%.

By year 10, they estimated that wages would rise 41% and disp. income would rise 11%.

Those who would try to scare you off the FairTax will give you the "Prices could go up 24%!" statement... but then leave out the other part of the prediction that wages would increase higher than prices.

7/22/2008 12:51:15 AM

Quote :

"Imported items will have the FairTax included into them when they are sold at the retail level."

The point is that the consumer would buy these products at the retail level from Canadian businesses, which would then be shipped to the U.S. to the consumer.

Furthermore, as LoneSnark pointed out, with products like new cars, companies can export tax-free to Canadian dealers, who "use" them for 100 miles, and then the cars are imported tax free and sold tax free as used cars.

I can see a whole wave of a "gently used" phenomenon, where you see whole sections of Walmart with "gently used" products, which are basically brand new goods from China, except that the inner plastic bag was opened and retaped at the manufacturing plant before shipping.

7/22/2008 9:28:24 AM