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Fair Tax Book

Old 04-01-2008, 10:38 AM
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Default Fair Tax Book

I was suprised that I haven't seen any posts on the newest fair tax book by ya'll who think it's a good idea. I got it and read it a few days after it came out. I have to say that it did a lot better explaining the idea than the first book did, but it still has some big assumptions that I think are a little far fetched. I also think there are some issues that are significant that may be looked over. In my opinion it's still not the way to go and I'm not a fan.
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Old 04-01-2008, 10:54 AM
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Default RE: Fair Tax Book

I support it, but I know it will never happen.

Look at it this way. Imagine the FairTax was the way it is right now. Now imagine that somebody comes along and tells you that they're going to keep portions of your check, you won't get the prebate check, and every year you're going to have to file a bunch of complicated forms to the IRS by April 15th, and if you do this wrong there will be penalties.

Um, I'll take the FairTax, thank you..
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Old 04-01-2008, 12:19 PM
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Yea I read the quote in the book, however changing from one crappy system to another one isn't the way to go. What we really need to do is get rid of most of the deductions and lower the tax rates accordingly. If the government wants to give people money, just let them give it to them, not hide it in the tax code.
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Old 04-01-2008, 03:14 PM
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Default RE: Fair Tax Book

Seems to me that a tax on consumption beats an income tax in every way. So what are the big, far fetched assumptions?
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Old 04-01-2008, 03:39 PM
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Default RE: Fair Tax Book

What's so wrong with just having a flat tax on income with no "dodges" of any kind? Take 15% of what I earn to run the fed and state goobs and let me keep the rest to invest or spend as I choose. If the goob thinks they need more than that then the goob is too big and needs to trim down to what it was originally supposed to be.
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Old 04-01-2008, 04:32 PM
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Default RE: Fair Tax Book

ORIGINAL: kevin1

What's so wrong with just having a flat tax on income with no "dodges" of any kind? Take 15% of what I earn to run the fed and state goobs and let me keep the rest to invest or spend as I choose. If the goob thinks they need more than that then the goob is too big and needs to trim down to what it was originally supposed to be.
I don't think there's anything wrong with a flat tax. It's a hell of a lot better than this distaster we've got right now.
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Old 04-01-2008, 07:01 PM
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Some things....like the fact that even if you get rid of the "22 percent inbeded taxes" then all the companies in the world are going to come rushing back to the U.S.....Sure getting rid of taxes is going to help, but when these companies are paying 1.00 an hour for labor in foreign countries when they'd have to pay 15.00 here......a lot of them are still going to stay there because it's cheaper for them, even with less taxes. Also, this big assumption that they're going to completely get rid of those "imbeded taxes." First of all, in the book, the authors like to use whichever assumption is best for their purpose (either that all of workers will keep the same take home pay, or they will take the increase in pay) they should use 1 assumption or make it very clear what will happen using both estimates, each time they bring it up.
Second, I have yet to hear them explain whether or not businesses will have to pay the consumption tax when they buy things as final consumers. If they do have to pay the tax (like say when a manufacturer buys company cars or purchases services from other companies, do they have to pay the 30% tax on that?) then there are still going to be some inbeded taxes....maybe not a whole 22 percent, but there would still be a significant percentage of inbeded taxes)......if they don't have to pay the consumption tax on these things, then you'll see a bunch of new businesses pop up, because I'm gonna start the ShepdogWV, sole proprietor ship and buy everything "for my business" and just use it.
Also, they make a valiant effort to try and convince people this sales tax is 23%....but I'm sorry that is not how sales taxes work, companies will always cover their costs and what profits they want AND THEN add the tax to it, that's just the way it works.
Finally, I really think that this will greatly increase the economy just over the border in Canada. Seriously, tell me you wouldn't make the 6 hour trip up to Canada to buy a vehicle to save from paying a 30% tax.
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Old 04-01-2008, 08:21 PM
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Default RE: Fair Tax Book

Sure getting rid of taxes is going to help, but when these companies are paying 1.00 an hour for labor in foreign countries when they'd have to pay 15.00 here......a lot of them are still going to stay there because it's cheaper for them, even with less taxes.
Shep, you disappoint me. I thought you had some Econ back ground. The US has the most productive workers in the world. As long as we maintain that productivity level, companies can afford the cost of higher wages here in the US. It's the labor cost per production not hourly cost that makes the difference. When your skill level/education level is weak, so is you hourly pay. Hence my arguement we need a drsastic change in our education system. Now more then ever, since the latest report shows over 30% of our inner city schools kids are dropping out.

Second, I have yet to hear them explain whether or not businesses will have to pay the consumption tax when they buy things as final consumers.
sure why not. They pay it now anyway.
Also, they make a valiant effort to try and convince people this sales tax is 23%....but I'm sorry that is not how sales taxes work, companies will always cover their costs and what profits they want AND THEN add the tax to it, that's just the way it works.
Never have run a business have you? I don't mean it as negatively as it sounds. First and formost thing you do is worry about making a profit. If you don't you won't be around long. You have to maintain cash flow. If your manufacturing something, you need the market price to be 8 to 10 times your cost. Anything less won't cover all the rest of the overhead that comes with running the business. So bottomline, companies already run off that model today and it won't change tomorrow. They will maintain the same profit margin.

The national sales tax educates folks as to what it costs to run the government. Too many people out there believe the government just prints money to stay a float. There is another group who believe their take home pay is what they earned and someone else pays taxes. There is still more who don't realize 18% of their pay is stolen from them to pay medicare and SS. There are countless others who see a check from the Government in the spring as a great bonus, not realizing they lent the government their hard earn money interest free. The only way to educate the folks is to have them pay it at the register so they see why they need to get educated and learn about the political process. Thet just might begin questioning their friends who game the system instead of today, those who celebrate when the get free money.


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Old 04-01-2008, 09:57 PM
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Yes the U.S. does have the most productive workers in the world and that's what keeps a lot of businesses here. However, changing the tax system will not make our workers more productive...many industries have already decided that the cheap labor overseas outweighs the productivity in the U.S. The Fair Tax will not change this and there will be many industries that even lowering the tax rate in the U.S. will still not outweigh the other costs that companies save from being in other countries. I'm just pointing out this is one thing that they don't explain to people, except for one passing sentence in the middle of talking about how everybody and their brother are going to come here to start businesses.


Exactally, the Fair Tax talks about how they are going to get rid of all the inbedded taxes that are in the price of products. If businesses are required to pay the fair tax on products they use as a final consumer then they are still going to have some inbedded taxes. I'm not arguing that it won't get rid of a lot of the inbedded taxes, but atleast a part of the ones we get rid of will be replaced by some new inbedded taxes (i mean you're going to be paying taxes on all of your equipment, supplies, some of your overhead, etc.) This is especially important because all through the book you hear about how prices are going to stay the same since they're getting rid of inbedded taxes.


Yet again, that is my point. (Actually my background is in Accounting, with pretty strong learning in economics....I'm sorry if I have phrased my argument crappy before) Businesses are still going to worry about their profit margin first after the fair tax......so they are going to find out what they want to sell the product for, in order to get the profit they want, and then they are going to add on the Fair Tax. Sure you can claim that the businesses are going to think about the whole package when they price the product, but that's not reality. The price of the product is going to be the same for businesses to keep their profit margin (since we are assuming that the worker keeps their entire paycheck, so there wouldn't be any decrease in cost of production) and they are going to add whatever they need to on top of that in order to pay the tax to the government. That's 30%....if they want to make an argument that a 30% sales tax is better than a 23% income tax, then that's fine, but don't try to change the way a sales tax is applied to the price of products. (this is where you see that people in higher income tax brackets will benefit more from the Fair Tax than lower income people will........I'm not saying that it is a regressive tax, but to think that people in a higher income tax bracket don't get a bigger benefit is nieve)


I'm not claiming that the process that we have now is the ideal situation. Why don't we get rid of all of the deductions and lower all of the tax rates. Then the government can vote on subsidies to give out to everyone (or some people), if they really want to. This will make things more transparent also, instead of being able to hide it in our tax code.
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Old 04-01-2008, 10:01 PM
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Default RE: Fair Tax Book

I'm keeping an open mind, but that book has to be near the bottom of my priority reading list right now.
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