A thread for Dave...

[donquixote99]

Originally Posted by icenine

I think you are describing a Value Added Tax or VAT, which is extremely non-progressive.

Got that right. The 'Fair Tax' transfers tax liability from income to consumption. If you have high income you love it; if you spends most of your disposable income on consumption, you should hate it.

[BlueStreak]

Except most people who make more, spend more. Bigger homes, estates, more expensive cars, boats, airplanes, etc., etc........................

I seriously doubt you will find very many millionaires/billionaires living very far below their means.

You also must consider that income can be, and often is, hidden. Interest from offshore accounts is a prime example.

[JJIII]

Originally Posted by donquixote99

Got that right. The 'Fair Tax' transfers tax liability from income to consumption. If you have high income you love it; if you spends most of your disposable income on consumption, you should hate it.

Check out the "Prebate" provision.

[bobabode]

JJ must've been reading the lefty LA Times...
http://www.latimes.com/business/la-f...,770122.column

[bobabode]

Originally Posted by JJIII

Check out the "Prebate" provision.

It's still a regressive tax, John. You can dress a pig up in crinoline and ribbons and put lipstick on it but you'd better not take it home to Ma.

[JJIII]

Originally Posted by bobabode

It's still a regressive tax, John. You can dress a pig up in crinoline and ribbons and put lipstick on it but you'd better not take it home to Ma.

See here...


"The FairTax is regressive and shifts the tax burden onto lower and middle income people"

The truth: The FairTax actually eliminates and reimburses all federal taxes for those below the poverty line. This is accomplished through the universal prebate and by eliminating the highly regressive FICA payroll tax. Today, low and moderate income Americans pay far more in FICA taxes than income taxes. Those spending at twice the poverty level pay a FairTax of only 11.5 percent -- a rate much lower than the income and payroll tax burden they bear today. Meanwhile, the wealthy pay the 23 percent retail sales tax on their retail purchases.

Under the federal income tax, slow economic growth and recessions have a disproportionately adverse impact on lower-income families. Breadwinners in these families are more likely to lose their jobs, are less likely to have the resources to weather bad economic times, and are more in need of the initial employment opportunities that a dynamic, growing economy provides. Retaining the present tax system makes economic progress needlessly slow and frustrates attempts at upward mobility through hard work and savings, thus harming low-income taxpayers the most.

In contrast, the FairTax dramatically improves economic growth and wage rates for all, but especially for lower-income families and individuals. In addition to receiving the monthly FairTax prebate, these taxpayers are freed from regressive payroll taxes, the federal income tax, and the compliance burdens associated with each. They pay no more business taxes hidden in the price of goods and services, and used goods are tax free.

How can the FairTax generate lower net tax rates for everyone and still pay for the same real government expenditures? The answer is two-fold. Firstly, the tax base is dramatically widened by including consumer spending from the underground economy (estimated at $1.5 trillion annually), and by including illegal immigrants, those who escape their fair share today through loopholes and gimmicks. In addition, 40 million foreign tourists a year will become American taxpayers as consumers here. Secondly, not everyone's average net tax burden falls. For households whose major economic resource is accumulated wealth, the FairTax will deliver a net tax hike compared to the current system.

Consider, for example, your typical billionaire, of which America now has more than 400. These fortunate few are invested primarily in equities on which they pay taxes at a 15 percent rate, whether their income comes in the form of capital gains or dividends. In addition to having the income from their wealth taxed at a low rate, the principal of their wealth is completely untaxed either directly or indirectly. Assuming they and their heirs spend only the income earned on the wealth each year, the tax rate today is 15 percent. In contrast, under the FairTax, the effective tax rate is 23 percent. Hence, the very wealthy will pay more taxes when the FairTax is enacted. In a nutshell, those who spend more will pay more but low, moderate and middle income taxpayers will benefit from the greatest gains in reduced tax liabilities.

For more information on this topic, see Why the FairTax Will Work.

http://www.fairtax.org/site/PageServ...t_fairtax_four

[JJIII]

One of the most important aspects (and the one that makes it very hard to implement) is the fact that the Fairtax takes away from Congress and lobbyists the ability to buy votes with special tax exemptions. That scares every one in Washington to death.

[icenine]

Originally Posted by BlueStreak

Except most people who make more, spend more. Bigger homes, estates, more expensive cars, boats, airplanes, etc., etc........................

I seriously doubt you will find very many millionaires/billionaires living very far below their means.

You also must consider that income can be, and often is, hidden. Interest from offshore accounts is a prime example.

so under the fair tax they could have proxy buyers, or simply move overseas.
Like I said a billionaire could purchase enough to live on for say 5 years in 2013...and not buy anything until 2018...avoiding any tax for those years

[icenine]

so go after undocumented immigrants and the so called "hidden economy" of the poor while letting the rich off the hook by instituting a regressive sales tax that could easily be evaded by those of means

sounds like bullshit to me

[BlueStreak]

Is the sales tax still paid by the "proxy buyer"?

If they move overseas, they no longer pay US income or sales tax anyways.

I don't see how you still insist it is a regressive tax. Under this model, you only pay on what you spend.

If you're poor, you spend $3.80 on a bag of Ruffles. If you're affluent, you buy fancy high-end chips made from organic potatoes boiled in clover fed Black Angus fat from cows that slept on feather beds, cooked by a French chef and cost $18 a friggin' bag.

Is the same dollar amount the same for each purchase?

No.