Will there be any changes to the language of the FairTax Bill in 2011?
HR-25 of 2009 added one new section known as the FairTax sunset clause. This resolved one of the questions as to could the FairTax be put in place without the repeal of the 16th amendment.
You have been very vocal on your beliefs in what should be changed in HR-25. That was not my question.
My question is simply if the introduction of the FairTax Bill "that is being introduced in Jan 2011" will have any changes to the prior bill?
I believe Hank wants to be the one to write the bill. He should make an appointment with Rob Woodall to bring up these ideas. I agree with some of his points but I just want to see the bill get passed. To try and change so much at this point would put it off even further. HR25 is so much better than what we have now as it is. Let's just work on getting it passed.
I've wondered about taxing government. However, I realize it currently pays the embedded taxes under the current system. The prebate may be a problem since the wealthy clearly don't need it. Of course they may not apply for it. I've considered that the prebate could be the "smart card" that is pin based and only removes the tax rather than give an income.
I have been told there is one minor change to date for the next session. The prebate where it says a child over the age of 2 needs a Social Security card will be changed. Now children get a SS card almost at birth so the provision is no longer needed. I have also been told the bill is under further review. I will pass along anymore information if and when it becomes available.
I see three areas that would need to be changed to make FT viable. There should be a real solution on collection, compliance and audit utilizing 21st century technology where States can piggyback on the FT without any cost and pick up Internet sales. Along with the state not paying FT, this would go a long ways in resolving a major roadblock that does not even effect the FT assumptions.
The second item that would have to be changed is the government giving FT rebates based on insurance claims. It is ill concieved.
The third item is how eliminating the tax preference on employer paid health care expenses will get any support. This alone will cause health insurance costs raise 65% to over 100% to the end consumer.
Here's some changes I'd make.
You are only eligible for the rebate if your income is below 250,000. There are problems with that however, since not everyone reports their income.
include the repeal of section D, E, and F of the internal revenue code. This includes the alcohol, tobacco, gasoline, taxes and other random taxes like 911 fee and other embedded taxes.
Remove the provision to tax the state government.
Re-calculate the rate to be revenue neautral. The current income to the government is less than it was when it was originally calculated.
I was thinking more like $150,000. When folks apply for food stamps (ebt card) they have to show a check stub or other proof of income. The prebate could be the same since it does have to be applied for. Those that do need it will but that's one reason I feel most people in the upper income levels won't bother.
The problem with the Prebate is that it would become a large entitlement program. If you choose $250K, then you only eliminate 2% of the prebate, not enough to make a rate change difference. I think you have to eliminate at least 50% or even 75% to lower the rate and it not being a large entitlement program. I agree that there are other programs that could be used to administer the prebate.
One thing that I always thought made sense would be to tax the income of the upper 2% of folks. Let say those making over $250K. You eliminate 98% of all tax returns by giving a standard deduction of $250K, there is no need to file. You could flatten the tax rates to 10% for first $750K, 15% for next $4M, 20% after $5M. This change alone would significantly reduce the FT rate and provide the upper income a significant tax holiday and the FT becomes more progressive.
If removing the Prebate from the top two % would not make a difference in the overall rate, why do it at all? The idea of the FairTax is that there are no exemptions! Leave the FairTax as written. All this does is try to keep the class warfare in place, which the FairTax eliminates. Also, without having to report income for the income tax system, where would you measure who these people are?
The odds are that the top 2% of the people will not worry about the Prebate and not submit their forms anyway.
> Carefull here, Chiefcook is right, your getting back into the class envy tax income mode. There are people making $250,000 who are treading water or sinking. Wealth is what is able to be spent, and that is what the FairTax taxes.