Marilyn Rickert's Blog (53)

Testimony of

Karen Walby, Ph.D.

Chief Economist

Americans For Fair Taxation

Before the

House Committee on Ways and Means

Hearing on Fundamental Tax Reform

January 20,…

Check out the Forum post by Ben McCoy:

Question: is there a credit for individual ROTH IRA accounts?

No, there is not a credit for individual ROTH IRA accounts?



However, the FairTax legislation totally repeals the current income tax on Social Security benefits.



The bill also adjusts the Social Security benefits indexing formula, commonly known as the cost of living adjustment or COLA, so that benefits increase to the extent, if any, that the federal sales tax results in higher costs to seniors.…

Question: How does the "transition inventory credit work"?

The effective date of the FairTax is January 1 with the income tax repealed on Dec. 31^st (the day before). The “items for sale” on retailer’s shelves will still have the cost of embedded taxes in them. That is why the…

How the FairTax pertains to rental property.



The consumption of residential housing services is taxable. In renter-occupied housing the tax is collected on a monthly basis and in owner-occupied housing, the tax is collected up front when the home is purchased for the first time.



The landlord is a seller of housing services. He/she must register with the state sales tax collection agency and file sales tax reports (probably quarterly for a person who owns…

FairTaxers:



Yes, the press and politicians will probably refer to a VAT (Value-Added Tax) as a national sales tax, so it is important for FairTax supporters to understand the differences between the two so that we can answer questions from the public.



Actually, they have much in common, but the differences are critical.

Nate and others contributing to this thread:



SS benefits are not directly based on the taxes one pays in, they are determined by the individuals wages. This reporting is maintained under the FairTax.



The section of the law you included defines wages to be reported to the Social Security Administration for the purpose of determining social security benefits. The FairTax definition of wages is the same as that used currently to determine SS benefits.



As you know…

Marilyn,



Sec. 202 of HR25 creates a Sales Tax Bureau in the Dept. of the Treasury. The purpose of the bureau is coordination of the state administration of the federal sales tax. As you know, the states have all of the expertise in administering sales taxes, so the FairTax takes advantage of this by having the states collected the federal sales tax along with their state sales taxes. The states can do it much more efficiently using existing systems.



The IRS is…