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The FairTax bill is designed to simply replace the funding source to the federal government from an income base to a consumption base. It has nothing to do with the spending programs of the federal…"
Replace All Federal Taxes on Income with the Fair Tax Act , HR 25 and S 122
E Wolf's Discussions
On Implementation of Fair Tax - Taxed Twice on Savings?
Started this discussion. Last reply by chiefcook Sep 30, 2010. 87 Replies 0 Likes
OK, so I have money that has already been taxed in savings or wherever. Say $1,000. On implementation of the Fair Tax, I now need to spend 23% more for a product using money that I've already paid…Continue
E Wolf's Page
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Ron Wenrich replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"My conclusion is that FairTax can only work if we try to keep take-home pay (and retail prices) about the same as before ON AVERAGE and accounting for the prebate. Thus, minimum-wage earners would NOT have a reduction in salary. This is the only way…"
Ron Wenrich replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"I'm coming to this party a little late. Hank, I agree with a lot of your thinking, and your math is right on. But, I'm wondering if we're not thinking about savings and retirement funds in a jaded light.
When we put a dollar into…"
Ron Beyer replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"Hank, If we all get 100% of our gross pay (tax free), then as you mentioned prices there would be a large increase in retail prices (you said 18%), thus reducing the value of existing savings accounts. That is why for fairness, people with after-tax…"
Terry Warns replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"Ron,
It would be simple for the investment company to withhold a flat amount for each and every withdrawal. By trying to implement a graduated rate, it now requires much more paperwork.
Also if it was a flat 10%, then some people will bite the…"
Ron Beyer replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"Hank, I'm not assuming the same gross pay. I'm assuming the same after-tax take-home pay, so wages will be reduced by about 23% on average to keep take-home pay the same. This is consistent with retail prices (including consumption tax)…"
Ron Beyer replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"I did some thinking to figure out how much withdrawals from tax-deferred savings accounts (traditional IRA and 401K) should be taxed under FairTax. (Hank suggested 10%.)
I like the following rule: A person who has all his savings in a traditional…"
cary henderson replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"> You are obviously new to the FairTax. The whole idea behind the Fairtax is to do away with taxation on income. I know this goes against all that most people in this country have known all their lives, but we used to have freedoms here. The…"
Ron Beyer replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"I did some more studying before reading the above messages of Terry and Hank, and came to the same conclusion that there is no problem with double taxation, but instead traditional IRAs and 401K's should be taxed. My reasoning is that take-home…"
Terry Warns replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"Hank,
First of all, in their current $53K of purchases there is at least 5K in embedded taxes (9% of 53K). So I would compare $7K to $5k. In addition, I agree there might be some price inflation which would be reflected in the SS received by the…"
Terry Warns replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"Hank,
I look at it differently. Yes taxable savings may be taxed twice. I think the real problem is tax deferred savings is being only taxed once(FairTax). If that was reconciled somehow, then would the arguments be different?
Based on your belief…"
Terry Warns replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"Hank,
So what your analysis says is that there is really only 9% imbedded tax on goods and services?
Can you reconcile why FT says it is 22%? It is a big difference.
This probably leads one to believe that we need to leave FICA alone and replace…"
Terry Warns replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"If you believe the Fairtax does not have room for improvement and compromise, then you will be disappointed.
For instance, let's say there is one change such as continuation of the Estate Tax over $5M. That is the only change. Let's also…"
Terry Warns replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"It is incorrect to assume that that the goods and services seniors purchase does not have imbedded taxes, they do. Look at this equation:
Under current System:
Price = Cost + Tax.
Our current prices include both real costs plus the taxes on those…"
Terry Warns replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"I look at the business sale differently.
Under the current system, taxes effect every business sale and is reflected in the price. So yes you would sell your business for $1M and pay $333K in taxes the day before the Fairtax. But you would sell…"
Steve Keller replied to E Wolf's discussion On Implementation of Fair Tax - Taxed Twice on Savings?"There is no way to completely solve this problem. One idea that could help is to offer a higher prebate based on the age someone starts receiving S.S. benefits. For example at age 62 you could receive an additional $100 per month; if you wait until…"
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Comment Wall (2 comments)
- At 5:18am on July 18, 2010,
Jamie Wheeler said… - WOWZA.....you are busy! I hope you are also directing other FairTax supporters to the consolidation of supporters as this site not to mention its AWESOME networking capabilities!
- At 5:17am on July 18, 2010, Jamie Wheeler said…
- E Wolf, WELCOME, WELCOME, WELCOME, to FTN from the desert section of WA state! Be sure to go to all the candidate's websites in your state and send them an email asking them if they would "endorse the FairTax on their website & pledge to cosponsor the FairTax upon being elected".
Gooooooo FairTax! Now go get all the FairTax supporters you know signed up on here, FTN, so we can boast of over 10,000 supporters! Have a great week!
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