This would stop all the Gambling Tax Confusion -Fair Tax Act

[aggie01]

Maybe this should be in the politics thread but since there are so many people in this forum concerned (and rightly so) about there taxes...and I didn't want to hijack another thread (i.e. Poker and Taxes....This is why there is so much confusion )...I'll put it here.

Bill HR-25, the Fair Tax Act is a national sales tax and repeals the Federal Income Tax all together. Get more info here Fair Tax Act (http://www.fairtax.org) (www.fairtax.org).


Did you guys know this is actually a bill being looked at in congress.
And there aren’t many Senators or congressman against it, but a lot who won’t commit to it. Write your congressman. Or explain to me why you don't like this idea. As someone that must pay taxes on gambling, and being fed up with the way things are screwed up in every way in the current tax code, but especially for taxes on gambling, we need to support this bill.

crap...wrong address, I fixed it now.

[tubalkain]

Very funny.

The link is redirected to Bananaz Bar and Grill... we've been had.

[aggie01]

Sorry, just fixed the link...oops

[MicroBob]

i'm only barely familiar with the national-sales tax legislation.

I think there might be a lot of people in favor of this (obviously I certainly am).

I was just talking about it the other day to a friend of mine....but admit to not knowing too much about it and also not knowing what kind of chance it has of actually getting passed.
But people are pretty fed up with the current tax system so, who knows??


Is this something that small-business owners would be against (since they'll get clobbered on their purchases of goods and services) or are they already getting clobbered enough already that they would like it also?

What groups are typically against this bill?? (speak slowly for idiots like me who struggle to understand stuff like that).

[aggie01]

Actually the fair tax act is a “consumption" tax not a "sales" tax. What that means for small business owners it that if you buy goods for your business you do not pay the taxes on it, only things bought for personal use.

[Corey]

[ QUOTE ]
What groups are typically against this bill?? (speak slowly for idiots like me who struggle to understand stuff like that).

[/ QUOTE ]

Everyone who is against highly regressive tax structures, namely Members of the House of Representatives who want to keep their jobs.

[aggie01]

How is this a regressive tax? Check this out.
How lower income families are protected (http://www.fairtaxvolunteer.org/smart/faq-main.html#13)

[Corey]

Regressive doesn't mean "hurts only the poorest of the poor." Such a system is clearly more regressive than the current federal income tax. We all can see that.

However, I am not trying to make an argument against this system. The point I am trying to make is policy makers view this system as regressive; as such, any fair tax bill would never make it through both chambers. Furthermore, to get the 16th ammendment repealed, you would need 3/4 of state legislatures or 2/3 of both houses. That is my point, legislators are against this bill and even a small minority can kill it.

I do not want to go any farther with this discussion on this board. That's what the politics board is for.

[jdl22]

It's pretty obviously a regressive tax. Do you consume a higher or lower percentage of your income when you earn more money? The answer is obviously lower and hence this is a regressive tax.

[LinusKS]

Microbob,

Various versions of flat taxes, or sales taxes are always circulating on the internet.

They always include at least two misstatements of fact.

The first is a wildly inaccurate guesstimation of the rate at which goods and services would have to be taxed to make up for the loss of the income tax. To make up for the loss of income taxes, the national sales tax would need to be somewhere in the 30-40% range - on top of whatever state and local taxes you already pay.

The second lie is that income taxes are somehow inherently complicated.

They're not. What makes them complicated is things like the home interest deduction - which (naturally) people who own homes like. You don't have to have a mortgage deduction to have an income tax. It's just that people like it, so it's there.

Sales taxes are actually more complicated than income taxes, because they have to be paid every time you buy a donut (or whatever). Income taxes only need to be figured once a year.

Besides, why should a single mother working at Denny's pay an extra 30% for diapers so that Bill Gates can collect his $20 billion a year tax-free?

[ QUOTE ]
i'm only barely familiar with the national-sales tax legislation.

I think there might be a lot of people in favor of this (obviously I certainly am).

I was just talking about it the other day to a friend of mine....but admit to not knowing too much about it and also not knowing what kind of chance it has of actually getting passed.
But people are pretty fed up with the current tax system so, who knows??


Is this something that small-business owners would be against (since they'll get clobbered on their purchases of goods and services) or are they already getting clobbered enough already that they would like it also?

What groups are typically against this bill?? (speak slowly for idiots like me who struggle to understand stuff like that).

[/ QUOTE ]

[LinusKS]

Also, abolishing the progressive income tax wouldn't mean you didn't have to pay taxes on your income anymore - you'd still have to pay Social Security and Medicare taxes. Unless you abolish them too.

[Shoe]

[ QUOTE ]
Also, abolishing the progressive income tax wouldn't mean you didn't have to pay taxes on your income anymore - you'd still have to pay Social Security and Medicare taxes. Unless you abolish them too.

[/ QUOTE ]

Those would be replaced by the national sales tax too.

[CountDeMonet]

"The first is a wildly inaccurate guesstimation of the rate at which goods and services would have to be taxed to make up for the loss of the income tax. To make up for the loss of income taxes, the national sales tax would need to be somewhere in the 30-40% range - on top of whatever state and local taxes you already pay."

The 13% flat tax in Russia has been a raving success. Where do you get that bizarre 30-40 number from?

"The second lie is that income taxes are somehow inherently complicated.

They're not. What makes them complicated is things like the home interest deduction - which (naturally) people who own homes like. You don't have to have a mortgage deduction to have an income tax. It's just that people like it, so it's there."

Nobody is saying "inherently". They're just saying the current tax code is complicated. Which it obviously is. You've created a straw man argument.

"Sales taxes are actually more complicated than income taxes, because they have to be paid every time you buy a donut (or whatever). Income taxes only need to be figured once a year."

No, they are obviously not more complicated. National sales taxes will be figured automatically by the register, no fuss or muss. State sales tax is already figured into most purchases, this will just be at a higher number than before. Easy.

"Besides, why should a single mother working at Denny's pay an extra 30% for diapers so that Bill Gates can collect his $20 billion a year tax-free?"

You're kidding right? Single mother's will not be paying 30% extra for their diapers. They will just be paying their tax at point of purchase. Your argument is disingenous.

CountDeMonet

[Emperor]

aggie I have been pushing The Fair Tax Act ever since I read about it. I think it is the GREATEST thing since sliced bread EXCEPT for a couple of problems.

Corey is "obviously" ignorant of the macroeconomic conditions which make a tax regressive or progressive. Ignore his comments. I would bet that no one on the planet could accurately predict whether it would be more or less progressive than the current tax system. Let alone Corey.

The problems with a national sales tax:

1. It doesn't help the US government track money laundering like an income tax does.

2. Everyone would buy their consumer items via their company. I know I would.

3. It encourages saving for retirement, too much. With such an incentive to save, people would stop spending. American's being the greatest consumers in the world would bring the world economy to a screaching halt. (at least until balance was achieved)

Most states use a combination of consumer(sales) tax and FLAT TAX. Personally I think this is the best balance.

Too bad neither will happen. Legislators love our convuluted, $10B/yr costing, tax attorney loving, impossible for layman to understand tax system. They love it for one reason. It gives them POWER.

[Corey]

I didn't want to post again on this topic as it's not relevant to internet gambling, but I can't belive you had the nerve to call his post disingenuous just lines after this beauty:

[ QUOTE ]
The 13% flat tax in Russia has been a raving success. Where do you get that bizarre 30-40 number from?

[/ QUOTE ]

You are making a direct implication that the national sales tax would be around 13%. Clearly 30-40 is a better estimate as income, social security, and medicare taxes all need to be replaced. Taking a single, 50k earner, that's 12.x% in social securit, 3% for medicare, and give him an effective 15% tax rate. He/His Employer puts in approx 13-15k per year in tax revenue.

Now, to make the same contribution, mr. 50k would have to spend around 100k to make the same contribution. Clearly that doesn't make sense, but an even bigger issue arise when you relize the top tax earners are going to be paying LESS tax than they are now.

Replacing the income tax with a national sales tax of 13% would, and I don't think I'm exaggerating here, throw the world into economic and political chaos through mechanisms of international finance.

[Shoe]

If you go to the link in this post, and read the F.A.Q, it states the tax would be 23%. Where are you getting 13% from?

[rusty JEDI]

[ QUOTE ]
If you go to the link in this post, and read the F.A.Q, it states the tax would be 23%. Where are you getting 13% from?

[/ QUOTE ]

The 13% did not come from Corey, it was a reply to a different poster.



[ QUOTE ]
You're kidding right? Single mother's will not be paying 30% extra for their diapers. They will just be paying their tax at point of purchase.
CountDeMonet

[/ QUOTE ]

I agree with this statement. I am not American, but will guess it works the same way as it does in Canada. Someone who is making a very small amount like a student pays no tax. Suddenly they will be paying 23%


Also i see online purchases like ebay as a massive problem to this tax. How do you add the sales tax to it. Is the post office going to start ripping open every package?

Also anyone on the Canadian border would be much better off to just jump across. Of course you are supposed to declare, but is that going to happen?

Another disadvantage is tourism. Who is going to go on vacation to America and buy any goods. They will maybe go for a trip, but certainly wont spend on goods like they do now.

What about Americans living abroad that pay taxes? They suddenly arent paying any tax to the US.

I have not taken the time to read it, so maybe it takes account of these things.


rJ

[TheMetetron]

[ QUOTE ]
Also i see online purchases like ebay as a massive problem to this tax. How do you add the sales tax to it. Is the post office going to start ripping open every package?

[/ QUOTE ]

The seller would be responsible for new items. Theoretically, the same in how they are supposed to be responsible for state sales tax for sales within their state. Also, used items wouldn't be taxable under this system.

[CountDeMonet]

I never said we would have a rate of 13%. I never implied it. I asked for clarification. Where did he get the number 30-40. I simply stated the fact that Russia's rate was 13% and they were quite happy with it.

The only thing that was implied by that statement is if he is going to quote a number and say other numbers are wildly exaggerated he ought to provide some evidence why we should think that way. Other than that is just his opinion. Unless it is offered that way, which it wasn't. The rest is all in your head.

Again for clarification I did not call his post disingenous. I called the diaper line disingenous. Look the word up and you will find it fits perfectly. It is a disingenous argument.

[nnoobi]

The FairTax act is a 30% sales tax.

their own faq (http://www.fairtaxvolunteer.org/smart/faq-main.html#47)

They call it 23% because it uses pre-income-tax dollars.

It does seem like a plan to destroy the American tourism industry and luxury goods market.


rabbit

[Jamey Saunders]

[ QUOTE ]
They call it 23% because it uses pre-income-tax dollars.

[/ QUOTE ]
They use pre-income-tax dollars because under the Fair Tax there is no income tax.

Also, what hasn't been mentioned is that there is an embedded tax of approximately 22% in everything that we purchase today. In other words, the manufacturers of the products we buy pass on their "corporate income taxes" to us included in the price that we pay for those goods. Under the Fair Tax, market forces will, within a short period of time, push prices down, because those manufacturers will no longer have those taxes to pay. Their cost of business went down, so they can lower their prices. (And they will, because at least one of their competitors will think, "Hey, I can drop my price and undercut Company X and gain market share." What do you think Company X will do? Drop prices. Eventually, prices will reach equillibrium again, but without the embedded tax.)

The Fair Tax also takes care of the poor by providing every American with a monthly rebate of the taxes that would be paid on the "necessities of life", such as food, clothing and housing.

As for the rate, the OMB (Office of Budget and Management) put the rate at around 23%, although more current projections put it at around 18% just to be able to keep tax revenues at the current rate.

The Fair Tax would also tax tourists to the US, who don't pay income taxes, as well as the very well-off who don't work, but live on their savings. (No income = no income taxes, even if they're billionaires.)

The last thing is that if the US abolished the income tax, the corporate income tax would not exist, and the US could conceivably become the world's largest tax haven for businesses. Imagine the effect that would have on our economy.

Yes, I'm a proponent of the Fair Tax. Have you guessed by now? /images/graemlins/grin.gif

[Jamey Saunders]

Oh, yeah, one other thing...

Someone mentioned the difficulty of calculating the tax at the point of sale. Not necessary, as by law the tax would be included in the marked price, just as it is with gasoline. Whereas with your state sales tax (if you have one), if you go to purchase an item that costs $20, you have to do the mental math to tell you that at a 7% sales tax rate it'll cost you $21.40 to get out of the store with the item, under the Fair Tax if you purchase an item marked $20, you'll pay $20 (plus your state sales tax, which you do already).

At the end of the year, the business owner's tax filing would look something like this:

"How much were your retail sales this year? Send us 18%. (Or whatever the percentage is...)"

[Shoe]

I also would like to see this bill passed.

If it did pass, I'm assuming all of the states will need to get rid of their income tax too and replace it with a state sales tax in the same manner? Or would that be up to each state too decide?

[Patrick del Poker Grande]

[ QUOTE ]
I also would like to see this bill passed.

If it did pass, I'm assuming all of the states will need to get rid of their income tax too and replace it with a state sales tax in the same manner? Or would that be up to each state too decide?

[/ QUOTE ]
States would still tax however they want, just as they are free to do now.

[LinusKS]

[ QUOTE ]
"The first is a wildly inaccurate guesstimation of the rate at which goods and services would have to be taxed to make up for the loss of the income tax. To make up for the loss of income taxes, the national sales tax would need to be somewhere in the 30-40% range - on top of whatever state and local taxes you already pay."

The 13% flat tax in Russia has been a raving success. Where do you get that bizarre 30-40 number from?

"The second lie is that income taxes are somehow inherently complicated.

They're not. What makes them complicated is things like the home interest deduction - which (naturally) people who own homes like. You don't have to have a mortgage deduction to have an income tax. It's just that people like it, so it's there."

Nobody is saying "inherently". They're just saying the current tax code is complicated. Which it obviously is. You've created a straw man argument.

[/ QUOTE ]

No. What I'm saying is that simplification of the tax system has nothing to do with a sales tax.[ QUOTE ]


"Sales taxes are actually more complicated than income taxes, because they have to be paid every time you buy a donut (or whatever). Income taxes only need to be figured once a year."

No, they are obviously not more complicated. National sales taxes will be figured automatically by the register, no fuss or muss. State sales tax is already figured into most purchases, this will just be at a higher number than before. Easy.

[/ QUOTE ]

Easy for you. (Except for the part about paying a higher number than before). More complicated for the businesses that have to account for the tax - especially small business people who provide services who don't pay any sales tax right now.[ QUOTE ]


"Besides, why should a single mother working at Denny's pay an extra 30% for diapers so that Bill Gates can collect his $20 billion a year tax-free?"

You're kidding right? Single mother's will not be paying 30% extra for their diapers. They will just be paying their tax at point of purchase. Your argument is disingenous.

CountDeMonet

[/ QUOTE ]

Uhh... so they won't be paying more... they'll just be paying their tax...

which just happens to be more.

What were you saying about disingenuous?

[LinusKS]

[ QUOTE ]


The 13% flat tax in Russia has been a raving success. Where do you get that bizarre 30-40 number from?

[/ QUOTE ]

Oops. Missed that one.

The numbers are very simple. The US economy is worth about 11 trillion a year, according the the CIA World Factbook (http://www.cia.gov/cia/publications/factbook/geos/us.html) .

The current level of spending of the federal government is about 2 trillion, according to the Heritage Foundation (http://www.heritage.org/Research/Budget/BG1710.cfm).

If you subtract out government spending from the rest of the economy, that leaves a $9 trillion tax base.

Divide the one by the other, and you need a 22% national sales tax to pay for the government.

However, that's assuming every single good and service produced in the United States was subject to that tax - every haircut, every cup of coffee, every diaper, and every house.

If you exclude something - and virtually all the plans exclude something - you have to increase the taxes on everything else to make up for it.

[LinusKS]

The national sales tax is a massive attempt to shift the tax burden away from the rich and onto the backs of the poor, and to trick middle-class taxpayers into supporting it with phoney math and double-talk.

("Prices will go down! So it will be like you're not paying any tax at all!")

If you make $1 billion a year, and you spend $50 million, you pay tax under the NST on 5% of your income.

If you make $12,000 a year, undet the NST, and spend $12,000, you pay tax on every penny you make.

And if you spend $13,000 (for example, by selling what you have to get by), you pay tax on more than 100% of your income.

If you think that's fair, you'll like the NST.

And if you look forward to spending an extra 20% - or 30% or 40% - on the next new car or house you buy - you'll love it.

[rusty JEDI]

[ QUOTE ]


And if you look forward to spending an extra 20% - or 30% or 40% - on the next new car or house you buy - you'll love it.

[/ QUOTE ]


I bet the banks are going to love this.

When you start your career you are at the lowest paid level, and under the current system your taxes are less. At this time you are also getting your life started and buying a house and a car. Under this fair tax system think how much bigger your mortgage and car payments will be. These 30% bigger loans add up to a lot more interest paid to the banks.

rJ