New Tax - If you plan on selling your home then Gov't wants a little now too!

It it seems that FairTax.org has successfully rebutted that argument, unless FactCheck has come across something new.

 

FactCheck's response to AFT's critique:

 

This "Fair Tax" dream has been beaten to death at least twice on 4042 over the last 5 years and it just keeps coming back like that burrito I had for lunch.

My spin when RedClayMud (sorry if I butchered your User Name) and the other pushers of this in the past is that the Rich will get Richer and the Middle Income folks will share a larger burden. But hey that fantasy of killing of the taxman is pretty alluring.

 

As opposed to the studies funded to support the claims of the Fairtax program? It seems you have effectively excluded almost all reasearch on the subject.

 

yeah like that is not happening currently.

 

if everyone pays the same rate who cares how much you pay. It is set up for everyone to get equal treatment now matter how much or how little you make.

 

Even if this is true I think it is wrong. The rich have been given a lot of advantages and I think we/they should pay a higher share.

 

whether you make it or are given it if everyone pays the same amount than it is fair. The first thing they do is make sure everyone has the neccesstities.

For a two adult household with two kids they get a check or debit card each month for $525 to use how they choose. It is given to every legal resident. I love the fair tax and it's equality.

 

One of the main reasons they are taking the revenue neutral approach is to get real tax reform. If they also tried cutting taxes it would be another hurdle as some people think the government never spends enough money.

 

I do agree with factcheck that the tax amt should be listed as it's exclusive figure of 30%. But they made a few assumptions I disagree with or they failed to take some things into acct.
1) They assume there will be 15% cheating just because there is 15% cheating now. The reason for the current cheating is a)the complexity of the current tax code and b)too many loopholes allowing people to hide money in various shelters. Under the fair tax plan, there are much fewer loopholes. If you buy something, you pay the sales tax.
2) The factcheck site talks about the additional accounting that companies will need to do in order to pay the sales tax to the government. Most businesses already pay sales tax and pay payroll taxes. Their accounting will be about the same or less.
3) The factcheck site doesn't mention the taxation on illegal immigrants and drug money.
4) They mention the 150K house costing 190K because of the fairtax. They fail to mention the reduced cost of supplies and labor on the house so that the price would be about 30K less before the tax is applied. So, that same 150000 house would actually be 120000 before the 30% fairtax is applied to it. Therefore, the fairtax will bring the price up to 156000.
5) Factcheck mentions the increased buying power in some nice economic speak. What it boils down to, though, is that the middle class will pay more because they will have more purchasing power. If they purchase more, they will pay more in taxes.

I do think the fairtax needs some tweaking (such as the interest on credit cards) but nothing I've seen on that site, or any other, has convinced me that the fairtax is not the way to go. Can't you just imagine April 15th being nothing more than the day after April 14th?

 

Unless you are a business and of which small businesses are very common. The purchase of anything by a usiness is not taxed, but is supposed to be taxed if it is sold to any individual. There are two loopholes in the system which can be readily used.

Services are not taxed at the present and many use payroll companies to handle that paper work now, which cannot be done with sales tax.

The attempt at tax evasion is easier to catch and convict than drug charges as is noted in history. The majority of the illegals are already paying taxes.

Which ignores the tenet of the market setting the selling price not the cost. The companies will continue to sell at the highest price the market will allow regardless of the fluctuation of their cost. They may use increases as justification to increase the price but rarely do you see it causing an accross the board reduction. Just watch how the gasoline prices go up when the cost to crude changes as compared to when the cost of crude drops.

They are a larger group and just above the limits set for refund so yes they will pay more in taxes.

Can't you imagine being cut back on pay and not paying less in taxes? How about loosing a job? You immediately stop paying the taxes with your last paycheck, but not with the "fairtax" you still pay the taxes with everything you purchase. Medical bills are the major cause of bankruptcy, and now they are going to be 30% higher. How much harder will that be on people and how will the medical profession deal with the added losses? They will be paying the tax to the government and not getting the money from the patients. The from of shoplifting where unpurchased materials are returned for credit will also take that 30% off the taxes but at least the company will not be paying it out in addition.

 

That's only 1 loophole. Owners of small businesses can by things in the name of the company and have it for personal use.

Do most small companies use payroll firms? And how hard is it for a lawyer's office to say, 'I made 100,000 this month. That's 23,000 for Uncle Sam.' That doesn't require a lot of accounting work.

I didn't realize illegals are already paying taxes. I don't know if it's easier to catch tax evaders than drug dealers. The prisons have a lot more drug dealers than tax evaders. But, you are right - the fair tax would have made it near impossible to bring in Al Capone since he was arrested on tax evasion. But, at the very least, their dirty money will be helping to pay for public services.

The market will pretty much demand that the price of the new house go at the lower 156000 price instead of 190000 since the sale existing homes is not taxed. Existing home sales wouldn't be taxed. So a new home costing 190000 would be competing with an existing home priced 150000. Market forces will compel the builder to charge 156000. People may pay 6000 for the luxury of living in a new home. I doubt they would pay an additional 40000.

There is no limit for the refund. Everyone gets the refund. If the poverty rate is 15000, the refund amount is 3450 (15000*.23 ~~ although I don't know if they would use the inclusive or exclusive amt). Everyone, regardless of income would get the 3450 refund. So, if your purchases throughout the year resulted in less than 3450 being paid in taxes you will actually make money. If you make more money and your purchases resulted in 10000 of sales taxes, you would get 3450 back resulting in net taxes of 6550.

If your pay is cut back or if you lose your job, you will be paying less in taxes since you will be purchasing less (at least the common sense of personal finances dictate that you purchase less). Also, the refund is actually a prebate meaning you get that amount at the beginning of each month - so that will be some "income" for you. While they won't come down 30%, the underlying cost of the medical care will come down since there won't be a tax on the equipment and supplies that the doctors/hospitals purchase. Besides, I'm already on record about changing the way our medical system works. Americans spend 2 Trillion each year on healthcare and yet we have 100,000 avoidable deaths due to accidents and another 7-10,000 deaths each year due to drug reactions.

 

Bottom line is that all the growth is causing the counties financial problems. You can say that they need to control their budget better, well guess what, 2/3 of the counties revenue is already spent on Mandated items. Counties need to have alternative revenue sources, other than just property tax. OK, sure, the Home Tax bill isn't passed. OK, then the counties will have no choice but to raise property tax rates. Trust me, you don't want that. See the following links:
http://www.ncacc.org/ltt_050907.html
http://www.ncacc.org/documents/lttpolicybrief2007.pdf

 

Heaven help us if we actually cut spending and stop demanding our government give us everything.

 

The Eternal Flat Tax Plan

http://news.yahoo.com/comics/uclickcomics/20070615/cx_nq_uc/nq20070615

 

No they can also sell used equipment and not charge the tax they are supposed to charge because it is no longer "on the books".

The smart ones with paid employees do.

Except it is not that simple. EACH client must be charged accordingly and whatever taxes are paid must be sent on to the government. If you have 100 customers that pay you you have to track those 100 transactions instead of just paying a total on the cumulative even though you have charged eash customer accordingly. The rounding of the 1/2 cent over a large number of customers could be significant.

How? The market goes to the HIGHEST level regardless of the cost.

I believe it would be taxed on the first sale after the tax was enacted.

How many people would price their hose that much lower? If there are new houses on the market, which are comparable to theirs, they are not going to leave $40,000.00 on the table but will price it accordingly just as they do now when the costs of materials spike.

The builder will not lower the price if it is not going to give the return, they will just not build in the first place and shortly the market WILL allow the price to go up accordingly.

The refund is set to allow the poverty level to be tax neutral and the middle class income is above this rate, which was the point being made. They will pay the total tax that the more wealthy will work around more easily.

Other than food, medical services, etc? The income tax is immediately reduced accordingly even to the point you are not paying any tax, but unless you only spend at the poverty level you still will be paying those taxes even if you have no income.

Again assuming the market does not set the price for products but some cost multiplier is in play.

This will change as fewer people will be able to afford the medical care than now.

 

Hught wrote:

Man, I can't stand liberals.


The rich have not been given anything. In a free society they are paid for the productivity they add to that society. Maybe the grandson was given a boatload of cash by his grandfather ...but that doesn't diminish the fact that someone earned that cash.

It doesn't matter how you slice it and dice it. Taxes will always get transferred to the end consumer, no matter how they are paid. Smaller government should be the goal, not this shell game of who pays what. It is not the government's job to be "progressive" or to redistribute wealth ...unless you think we should be a communist republic (like liberals do). I have enough faith in our society to take care of the truly needy without the government's "help".

 

Or in the case of the "Robber Barons" of old "stole" it .....

Only if you ignore the free market concept and wish to make that connection.

That view is so supportable though out the history too .... debtors prisons and the like were the best of care ......

 

Maybe. You could make an argument for tougher regulations, laws, and oversight in some cases ...but not taxing the rich out of envy or admonishment for "over-consumption", which is what modern American liberalism tries to do.

I don't understand what you mean there.

If we had a society with no middle class where the rich and powerful owned almost everything and were indifferent to the plight of the poor ...you're right it wouldn't work very well. But that would call for revolutionary war, not a communist redistribution scheme.

The purpose of our government should be to protect our basic rights, not to play Robin Hood. The pursuit of happiness, not the guarantee of happiness.

 

Actually, I was just refuting your claim that ever rich person EARNED the money they had and nothing more ....

The taxes are paid from the profits not "passed on" to anyone because the 'anyone' would still pay the same price with or without the tax according to the tenets of the free market. The price is always the highest the market will bear regardless of the cost of production.

What part of the history reference did you miss? There has never been sufficient protection for the poor using only the belief in generosity of the masses.

Your opinion on what guarantees happiness is different from others who see an attempt to guarantee survival only ...