gfn wrote in
:

On May 25, 5:42*pm, RD Sandman wrote:
gfn wrote
innews:7c91830c-c968-4f08-9c9e-77bc0350d428@
y19g2000yqk.googlegroups.com:

Sure I do. *The "flat tax" has the government deriving its
revenue from the income tax.

Yep....at a flat rate for everybody.

As does the FairTax. *Best part is the consumer pays it only when
the
y
buy something. *They decide when to pay it, not when the government
decides you owe it on payday.

It looks like they are trying to mix sales tax with the old luxury
tax.


The FairTax is effectively a replacement of the compliance costs that
are already built in to every product and service you buy.

Not quite since those compliance costs are not the same revenue source as
the income tax. For your Fair Tax to work, that revenue source from
income needs to be added.....so it isn't simply the 'before' costs added
to the price of purchase.

The luxury
tax would have been a tax on top of that.

And to cover the loss of revenue from the income tax being removed, it is
also added into that Fair Tax number.

The FairTax is related because it is a flat sales

tax that generates revenue from sales. *It replaces the income
tax as the method of funding government. *If you fully
understand the FairTax
you will see exactly where I am coming from.

Then to keep it from becoming regressive you must drop that sales
tax from certain items, like food, housing, public transportation,
gasoline, etc.. or you end up with the poor paying a much larger
percentage of their income on those taxes than the wealthy.

Nope, There are two reasons why it's not regressive. *First, people
pay no net FairTax at all up to the poverty level.

Which means that someone, somewhere needs to know your income.

*Every household


No, they just need to know how many people are in your household.
That determines the prebate, not one's income.

How do you you receive that prebate? Do you get a check every month?

receives a rebate that is equal to the FairTax paid on essential
goods and services.

I looked at the prebate schedule. *Where in there does income come
into it for that poverty level? *

It doesn't. Nor does it need to. It only needs to figure what the
cost of essential goods and services are for a family of X number of
people. A family of four that makes $100,000 requires the same
essential goods and services as a family of four that makes $50,000.

And how is that prebate received?

From what I see, it is based on number of
adults and number of dependents.


Correct, that's all that is needed.

*Second, per my example an item that costs $100 today still costs
$100
under the FairTax.

* If that's regressive then sign me

up.
The poor are always going to pay a larger percentage of their
income on everything. *No tax system is going to change that.
*Isn't that what the bulk of this thread is about?

Not on a flat tax like I proposed. *The difference is slight,
depending on your income, but it is there.


Not sure I follow. If taxpayer A makes less than taxpayer B, assuming
both buy the exact same thing then taxpayer A is always going to pay
more of a percentage of their income for buying something.

My flat income tax proposal is on income not goods.

The FairTax is a replacement

for the income tax.

Yes....and a flat tax is another method of figuring income tax.

Yeah....and they both accomplish the same thing. *The FairTax is
better because a flat tax still involves taxing income which
then leads to exemptions, deductions, and keeps the 16th
amendment in place as well as the IRS, and I can go on and on
about the pitfalls of our current tax system.

A flat tax on income replaces the current tax system. *If properly
administered it only has ONE deduction and that is poverty level
wages for a family of four. *Everyone gets that ONE deduction, or
exemption if
you prefer, and no other. *You can do your tax on a postcard.

Under the FairTax you don't have to worry about deductions or
exemptions. *You don't even have to do your taxes on a postcard
because there is nothing to do. *April 15 would be just another
beautiful spring day.

Here's the problem with the flat tax, it retains the invasive
income tax administration apparatus and can easily revert to a
graduated, convoluted mess, as it has many times over many years.

And your fair tax needs to know number of adults in the household
along with number of dependents. *

Correct. Again as it should. That's how the prebate is determined.

And how is that prebate handled? There is really nothing in the proposal
that indicates that.

There is also nothing there that prevents it
from becoming another convoluted mess. *Congress can **** up a
bowling ball.


Yes, congress can **** up a bowling ball. In fact, the first
implementation of our current tax system was just a handful of
progressive tax brackets (several flat taxes if you will),

Prograssive tax brackets do not a flat tax make.

with no
exemptions, no deductions, etc. And look what happened. There is no
reason to believe a flat tax would wind up going back to the
convoluted mess we have now.

I think you meant to say "wouldn't". Anyway, there is no reason to
believe that a Fair Tax wouldn't either.

Plus, you would still have a tax code,
the IRS, the 16th Amendment, compliance costs, and on and on and on.
Under the FairTax the tax code – gone, IRS – gone, 16th Amendment –
gone, compliance costs – gone.

That said, congress can raise the FairTax rate just as it could raise
the flat tax rate or can and does raise the income tax rate. The
current income tax is effectively hidden.

So are the costs contained in the Fair Tax. I saw no provision for
showing them.

It's just taken every
paycheck and I bet 99% of workers don't even know how much is being
taken out every week. Out of sight out of mind.

That would effectively be the same with the Fair Tax. You would have it
taken out on every purchase but no indication of what all was in it in
what amounts.

They just accept
that government takes it.

Same with your sales tax.

Purposely designed that way by government.
The FairTax is highly visible (displayed on your receipt) and there is
only one tax rate.

That isn't the problem. Taxpayers DO know what is in their income tax.
They do not know what portion of that Fair Tax is the replacement for
income tax, what portion is corporate taxes, what portion is government
taxes for whatever purpose when Congress changes the percentage of the
Fair Tax.

Changing that will be harder for congress to do.
Why? Because the FairTax affects EVERYBODY. The income tax does
not. Right now, almost 50% of workers pay no federal income tax.

The only folks who would pay no federal income tax under my proposal
would be those who income was below the federally declared poverty line
for a family of four and EVERYBODY gets that one and only deduction.

It's easy for them to say raise taxes on the top 50% that actually
pay.

No, it isn't or Obama would have done it in lieu of extending the Bush
taxcuts.

Raising the FairTax means raising it on them too. Good luck to
any politician trying that.

As does raising the income tax percentages or do you think politicians
make less than the poverty level?

*In addition, a

large part of the burden of the flat tax -- the business tax --
will remain hidden from people in the retail price of goods and
services.

This is an interesting point since there are supposedly intelligent
folks in this newsgroup that don't understand that all businesses end
up passing all their costs to the consumer in the price of the
product or service. *If they don't, after awhile they go under.

Under a flat tax, individuals would still file an income tax return
each year. *Postcard or not, it's still a return. While this is a
simple postcard, the record keeping requirement is still there.
Under the FairTax, individuals never file a tax return again, ever!

Federally, that could be true, however, when looking at state and
local taxes, it is bull****.


Not could be…would be. There would be no federal filing.

Which isn't done with state and local taxes anyway. They currently get
used as a deduction on federal income tax, but even though there is no
federal income tax, they still need to do state taxes. All they have
saved is entering a number.

But, to
your larger point, the FairTax is a replacement to the federal income
tax, not state income taxes.

Which is what I said.

Federal taxes are what is at issue
here. So, what would you rather do on 4/15? File federal, state and
local tax forms; or just a state and local?

When I do my federal taxes, TurboTax, for example, also does my state
taxes. The extra time for the state tax is about 5 minutes.

*Under

the flat tax, the payroll tax would be retained and income tax
withholding would still be with us.

Yep.

Under the FairTax, the payroll
tax, which is a larger and more regressive tax burden for most
Americans than is the income tax, is repealed.

No, actually, it isn't. *It is simply placed in the Fair Tax.


And once the FairTax is implemented none of that is withheld from your
paycheck.

My point was that it was still there. You just don't see it or really
know how much it is.

With the exception of state and/or local withholding you
keep 100% of your check. So, the payroll tax that is now effectively
incorporated into the FairTax is paid by you only when you buy a new
good or service. It's not automatically withheld from your pay. YOU
decide when to pay it. Not the government. So, where's the downside
to that?

Knwing what is in it and how much each entity is. For example, assume
your percentage of 23%. Now, certain corporate taxes get changed. Your
Fair Tax rate has to change to cover that. So now, this year it is 24.5%.
How does the consumer know which changed.....the income tax portion, the
corporate portion, the FICA portion, the whatever portion?

Under the FairTax, what

you earn is what you keep. No more withholding taxes; no more
income tax.

Just more taxes on the point of sale while all taxes from state and
local governments remains intact.


You are not accounting for the removal of the 23% built in costs that
YOU ARE ALREADY PAYING on every good and service that you buy (that
government doesn't even get, by the way – just wasted dollars).

Yes, I am and it isn't 23% or the Fair Tax could not be 23% and cover all
those costs plus the amount currently from income taxes or FICA.

FWIW, all costs of doing business are placed in the price of the product
or service that is produced. Anyone who doesn't understand that won't
understand either your Fair Tax or my flat income tax proposal.

When
those built in costs go away you are back to the same price.

Not really. You have added additional taxes to that proposal in the form
on income tax replacement and FICA and federal sales taxes which were
part of certain purchases.

See my
previous example.



It uses a flat 23% as the revenue generator.

Call it what you will, the FairTax is a winner.

You may think so. I don't. I think it needs too many
adjustments so that it does not become regressive.

I don't think so, I know so. *Tell me how this is regressive?

snip......

Same taxpayer......buys $100 worth of groceries.....pays $123 for
them.

Stop right there. *That's incorrect. *Under the FairTax the $100 of
groceries will still cost $100. *There's no need to even go any
further with your example.

I was speaking of the actual worth of the product. *Yes, there are
business taxes, etc.. in there but one cannot generate a new tax
without adding to what is already there. *So a product which today
costs $100 plus city and state sales taxes will now cost the
difference between the 23% sales tax and the old taxes on the product
plus city and state sales taxes. *What you have done is taken the
taxes previously included the product price and moved them into your
Fair Tax in addition to the hit on that tax replacing federal income
taxes and FICA.


Nope. The item that costs $100 today will still cost $100. Here's
why. The built in compliance costs are, on average, 23%.

Then where did you put the replacement for the income tax? It has to be
there or the feds are missing a major, major part of their revenue.

Take that
away and your $100 now costs $77 (which already include the state and
city taxes you mention). Replace those compliance costs with the
FairTax and you are back to $100.

See above.

Rich guy, he eats the same, so he buys a $100 worth of
groceries...pays
*
$123 for them. *Which one spent the bigger percentage of their
incom
e
o
n
a necessity? *OK, let's fix it....we will not pay that tax on
groceries....oooops, you just generated an exception. *

Three suggestions for you to find out why as well as any other
questions you might have:

1) go visit fairtax.org and read it from front to back. *Pay
particular attention to the FAQ.

I have.


mmmmmmm okay....

2) Buy and read "The FairTax Book" by Linder and Boortz.

Why? *If they can't explain it on their website..........


Boortz and Linder didn't create the web site. They are advocates of
the FairTax and have their own writing on this. You can fit a whole
lot more into a book than you can a website. You really need to read
the book. You will not regret it.

3) Then buy and read "FairTax:The Truth: Answering the Critics"

It will all become crystal clear.

I am familiar with sales tax schemes, they have been around for
years.
*
With exemptions, they become just as convoluted as the current
system. Excise luxury taxes were another attempt to soak the rich
as poor poeple would never buy luxury taxed items. *How did that
work out?

You may be familiar with sales tax schemes, but it's clear you
aren't familiar with the FairTax. *Instead of speculating as you
have done above why not go visit the site and base your criticisms
on the plan itself? *You will find that many of the things you
raised above are answered there.

Been there, read it.


Not all of it then because many of the questions you asked that I'm
replying to come right from the web site.

Look, I'm with you that a flat tax would be better than the current
system. *Problem is that it, as opposed to something like the
FairTax
,
leaves itself open to far more manipulation than the FairTax. *The
ta
x
code itself is evidence of just that.

Are you trying to say that Congress cannot **** with the Fair Tax as
much as they can **** with a flat tax? *I don't think so.


That's exactly what I'm saying and I explained why above.

LOL!!

--
Sleep well tonight....RD (The Sandman)

If you woke up this morning....
Don't complain.