Replace All Federal Taxes on Income with the Fair Tax Act , HR 25
I Could Use Some Open Discussion From Valuable Supporters Of FairTax
I have read the FairTax books and studied them. I have read the Fair Tax Act of 2009. I feel comfortable answering questions in my personal life and on Twitter.
If the idea of "progressive" starts and ends with the prebate then that answers my concern. It doesn't satisfy the potential misconception for others that have never read the books or had FairTax explained to them. A sales tax on consumer goods and services or the exemption of tax (prebate) may be described as having progressive effects as it increases a tax burden on high end consumption or decreases a tax burden on low end consumption respectively. This should be explained to a greater extent, or enlighten me by telling me where I missed the explanation.
If you are politically motivated as I am and are conservative to boot, just the word "progressive" has a negative connotation. What we have now is progressive taxation, and I don't need to explain how bad that is. Progressive can have a negative impact if it refers to a specific political ideology, or if it refers to taxation. One word can make or break a deal, and we need every positive possible.
The opening line in explanation of the FairTax on the website states :
“including a progressive national retail sales tax”
This can be very misleading when it actually is a fixed 23% sales tax on goods and services, so the mention of progressive seems out of place.
With Obama-nomics and his unprecedented spending, how solid is the 23% when we are on the hook for a $24 trillion deficit? I have a Congressman who shows an interest, but I will not push if I cannot be convinced there is no ambiguity in the legislation or promotional media.
If the idea of "progressive" starts and ends with the prebate then that answers my concern. It doesn't satisfy the potential misconception for others that have never read the books or had FairTax explained to them. A sales tax on consumer goods and services or the exemption of tax (prebate) may be described as having progressive effects as it increases a tax burden on high end consumption or decreases a tax burden on low end consumption respectively. This should be explained to a greater extent, or enlighten me by telling me where I missed the explanation.
If you are politically motivated as I am and are conservative to boot, just the word "progressive" has a negative connotation. What we have now is progressive taxation, and I don't need to explain how bad that is. Progressive can have a negative impact if it refers to a specific political ideology, or if it refers to taxation. One word can make or break a deal, and we need every positive possible.
The opening line in explanation of the FairTax on the website states :
“including a progressive national retail sales tax”
This can be very misleading when it actually is a fixed 23% sales tax on goods and services, so the mention of progressive seems out of place.
With Obama-nomics and his unprecedented spending, how solid is the 23% when we are on the hook for a $24 trillion deficit? I have a Congressman who shows an interest, but I will not push if I cannot be convinced there is no ambiguity in the legislation or promotional media.
Replies to This Discussion
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Permalink Reply by Gale Joy on
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What happens to the money of someone that has saved and saved and saved. Paid the income taxes on the money before and during the saving process. Let's say they have saved all their money to retire and purchase a $1,000,000 boat and sail the world the rest of their lives.
They were expecting to buy this boat with a modest let's say 6% sales tax. With the FairTax it would be 1.2 million.
Is there anything in place for this type of person?
It would be similar with any kind of saving plan/retirement plan correct? They would have paid the taxes expecting a certain amount and then would have to pay 23% on everything. Correct?
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Permalink Reply by cary henderson on
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> I would guess that this person would be a member of the baby boomer generation (mine). This person has lived in a life style beyond the dreams of average people all over the earth. He/she has consumed more on average than anyone in any other country. This person will still receive more in benefits than those of any generation before or since. At the same time, to pay for those benefits, our government has also devalued our currency leaving less in purchasing power. A great deal of that consumption and those benefits will be paid for by future generations who will not enjoy the same quality of life.
> Now it is admirable for any person to have worked and saved that much, but that was done in a system that is unsustainable. We cannot go back in time to fix that system. What we need to do is change our tax code to one that is sustainable, and fair to future generations. The FairTax will begin to fix the whole system.
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Permalink Reply by Jim Tomasik on
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BINGO!:
"Now it is admirable for any person to have worked and saved that much, but that was done in a system that is unsustainable. We cannot go back in time to fix that system. What we need to do is change our tax code to one that is sustainable, and fair to future generations. The FairTax will begin to fix the whole system."
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Permalink Reply by Sean Fagan on
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I decided to throw my hat into the ring with a few simple points...
While the current tax system is "progressive" it is also oppressive and counterproductive as well. Oppressive? Consider the current plans for the IRS to levy fines and penalties if you don't get health insurance, consider that the government decides how much tax you will pay and don't forget about the strong-arm tactics of the IRS. Counter productive? It discourages achievement and actually encourages people to earn less in order to pay less taxes.
The FairTax is progressive in the same sense of the current system (the more you spend the more tax you pay vs the more you earn), except it is not oppressive (you get to decide how much in taxes you pay by your spending decisions). It actually encourages achievement - you are free to earn as much as you can without having to worry about taxes.
I believe the post by Chiefcook did an excellent job of answering your question on how the FairTax is progressive and you should now be equipped to discuss it with your Congressman. If you're actually asking for a better explanation to be put on the website, then you need to direct your question to FairTax.org (AFFT).
Joy, sorry but you're wrong. We hear this question a lot from people who say they will be double taxed when they retire and it is a silly argument. Everyone seems to forget that the FairTax replaces the embedded taxes on new goods and services. So that million dollar boat will still cost a million dollars, not the 1.2 million as you suggest and they will pay even less if that same boat is "newsd". The same holds true for any new product or service retirees buy and the net result is zero difference - and don't forget they too will get the prebate and their social security earnings will never be taxed again.
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Thanks for the info.
I never actually thought about the fact that the boat would actually probably be a little cheaper since there would be less expenses that the business would have to pay.
Gale
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Permalink Reply by Steve Bang on -
Ron,
You raise a very good point. I think that word is there to appease those that think it's important. I suggest you do push your congressman to co-sponsor. I did here and have Brian Baird (D-WA) very close. Feel free to call me, as there is much more to discuss. Generally, I challenge everyone to name a better way to grow the economy than the FairTax. No one has ever come back with anything. Why? Because there isn't. Stick to the economic issues and the rest becomes minutia... I am at 360-210-7189.
Steve
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Permalink Reply by Ron Teidel on
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My Congressman is Kevin McCarthy (CA-22) and he has held true to being who he says he is. He has always responded to my inquiries and I see no reason why he will be hesitant to listen to my pitch on FairTax. I'll report back with hopeful success.
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Permalink Reply by Barny Rubble on
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Isn't the rebate also flat? It's the same for all individuals- the tax rate times the poverty level- so, as your spending increases, the percentage of your refund decreases. The opening line could then read:
"combines a flat national retail sales tax with a flat rebate"
Of course the combined effect is progressive but you don't have to include that.
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The prebate is based on household size and yes, it is a set amount. However, it does not decrease, you get the same amount every month. I'm not sure about the math in terms of percentages - how would increased spending impact the prebate? Unless you mean as a total percentage of all taxes paid.
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Yes, as total spending increases, the rebate decreases as a percentage of total taxes paid.
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Ok, I'll agree. But I'm not sure of the value of this statistic and your point overall. Given enough of variables you can use statistics to either prove or disprove your argument depending on which side of the fence you are on. For example, my current tax rate decreases as I earn less income - should I then think that the current tax system is fair? Conversely, should I then think the FairTax is unfair because the percentage of the prebate in terms of overall taxes decreases as I consume more?
I guess I'm missing something here.
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Ron Teidel was asking for an alternative to the term 'progressive', which some conservatives view in a negative light. I've noticed that people who don't like 'progressive' tax proposals tend to favor 'flat' tax proposals. Since both the Fair Tax and the rebate are flat, the only point of my fist reply was to suggest to Ron that he use the term 'flat' instead of 'progressive' in ads targeting conservatives.
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