Replace All Federal Taxes on Income with the Fair Tax Act , HR 25

Is John Huntsman's tax plan better than the Fair Tax?

Is John Huntsman's tax plan better than the Fair Tax? I went to the Huntsman's website to learn more http://jon2012.com/issues/jobs-economy-regulatory-reform This is my opinion on how the Huntsman plan compares to the Fair Tax.

Individual Taxes Excerpt:

Simplify the Personal Income Tax Code and Lower Rates

introduce a revenue-neutral plan that eliminates all deductions and credits in favor of three drastically lower rates of 8%, 14% and 23%.

A plan that is revenue-neutral is good -- the Fair Tax is also revenue neutral but as you will see supporting an income tax is much more expensive that supporting the Fair Tax.

The Huntsman's tax plan does not mention the payroll taxes -- the taxes that most people pay -- so you will need to add 15.5% to each of the rate which would make the rates 23.5%, 29.5% and 38.5% of everything you earn compared to the Fair Tax rate of 23% of what you spend for personal consumption.

Individual Taxes Excerpt:

Eliminating deductions and credits in favor of lower marginal rates

If you donate money to charity -- the Fair Tax rate is ZERO.

If you spend your money on tuition -- the Fair Tax rate is ZERO

If you buy a used item -- the Fair Tax Rate is ZERO

If you make a mortgage, credit card, or car payment -- your Fair Tax rate is ZERO

If you are a citizen or legal resident and not in jail -- your Fair Tax rate is ZERO up to the poverty level

Individual Taxes Excerpt:

Eliminate the Alternative Minimum Tax Wonderful! The Fair Tax does this also.

Corporate Taxes Excerpt:

Reduce the Corporate Rate from 35% to 25%

The Fair Tax reduces the corporate rate to ZERO.

Remember businesses do not pay taxes -- a business only collects taxes (plus compliance costs) from you, the consumer, and passes your money on to the government.

Corporate Taxes Excerpt:

Shift from a Worldwide System of Taxation to a Territorial System Not a clue on the website on how he plans to do this so I will withhold comment until more information is available.

Corporate Taxes Excerpt:

Implement a Tax Holiday for Repatriation of Corporate Profits

Why a holiday? The Fair Tax will allow corporations to bring their profits back to the US at a ZERO tax rate and provides them with a tax system that will encourage them to do so ASAP!

Capital Gains and Dividends Excerpt:

Eliminate the Taxes on Capital Gains and Dividends In Order to Eliminate the Double Taxation on Investment Let's understand this one -- if you make your money from Capital Gains or Dividends you have a zero tax individual tax rate but if you earn your money through your job then you will pay 23.5%, 29.5%, or 38.%. With the Fair Tax we do not care how you earn your money, only how you spend it. If you spend your money on personal consumption you will pay the 23% Fair Tax.

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Comment by Marilyn Rickert on December 26, 2011 at 9:54am: Hi Robert!

I love your suggestion!

Thanks,

Marilyn

Comment by Robert Williams on December 26, 2011 at 8:59am: May I suggest revising the following paragraph to be more accurate?

The Huntsman's tax plan does not mention the payroll taxes -- the taxes that most people pay -- so you will need to add 15.5% to each of the rate which would make the rates 23.5%, 29.5% and 38.5% of everything you earn compared to the Fair Tax rate of 23% of what you spend for personal consumption.

To read:

The Huntsman's tax plan does not mention the payroll taxes -- the taxes that most people pay -- so you will need to add [7.65%; 15.3% if you're self employed] to each of the rate which would make the rates [15.65%, 21.65%, and 30.65%; or 23.3%, 29.3% and 38.3% if you're self-employed] of everything you earn compared to the Fair Tax rate of 23% of what you spend for personal consumption.

(With appropriate changes to the last paragraph as well)

Otherwise, great information. Thanks for posting.

Comment by Frank Gilbert on December 25, 2011 at 8:42pm: Based on what you have here Marilyn, I'd have to say there is no comparison. I like the effort he and his staff made, and if we didn't have the FairTax, it might be worth a closer look. But we do have the FairTax.

Comment by jbennettatty on December 25, 2011 at 4:17pm: This is a succinct and straightforward comparison that is easy for general audiences to grasp. Thanks, Marilyn, for putting this piece out.

~Jim

Comment by Billie on December 25, 2011 at 1:55pm: Good job Marilyn. Thanks

Comment by Glenn J Shapiro on December 25, 2011 at 12:44pm: It seems to e that all polirticians (well, not all) want to keep the income tax in some form as it gives them more power and control than the Fair tax would.