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

[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]

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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.

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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:

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

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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]

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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.



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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

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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]

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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

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