The tax system we have now is a mess. The IRS is corrupt. And you all want to go against a plan that would eliminate decades of pain and criminal activity by the government? The FairTax is worth a try. If it doesn't work out after a few years, fine, we'll try something else. Until then, shut up!

Why so? whhat would you deduct it from?

On average you have to earn $125.00 to have $100.00 inyour pocket.

Deductions
UNDER THE INCOME TAX
OK, lets say you made $125.00 ( I'm keeping the number simple)
Mr. Income tax takes $25 in withholding. You now have $100.00 in your pocket. You donate that to the church.
At the end of the year, Mr. Gov't says you get a $10.00 deduction but no interest on the money they kept all year.
You came out with $115.00 available to you and $10.00 given to the Gov't. So out of your $125.00, you gave $100.00 to the church and got back $10.00 for your trouble.

UNDER THE FAIRTAX

OK, lets say you made $125.00 ( again, I'm keeping the number simple)
Mr. Income tax takes $0 witholding because there is no income tax to withhold from..
You now have $125.00 in your pocket. You give $100.00 to the church.

So out of your $125.00, you gave $100.00 to the church and you kept $25.0.

NOW YOU PICK….. Do you want $10.00 from an income tax deduction or $25.00 from the FairTax not taking your money in the first place??
Ashford Schwall

the people that don't earn as much and therefore have to spend a greater percentage of their earnings are reimbursed proportionally greater by the prebate, insofar as a 500 prebate is proportionally greater to a 25,000 earner than a 100,000 earner.

reply:
Just to be sure that my point is clear; you're right, it doesn't work that way now, and will not work that way in the future.
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webdog said:
(Please don't tell me the price of that $100,000 Porsche is going to drop by 30%. It's made in Germany.)
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reply:
Another very good point sir. The cost of imports will not drop in the same manner as the price of domestic goods. That is one of the intended boons for domestic manufacturers. Within the states, import prices will rise overall by the amount of the Fairtax, but domestic product prices will remain the same overall. That means that to remain competitive in our market foreign manufacturers will have to set up shops here and hire Americans to work in them.
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webdog said:
>>>>Quote "If you sell to someone in Texas from a business in Maine, the overseeing organization will be able to watch the transaction at both ends."

Can you not see that this as yet unnamed agency you envision is getting near omnipiscent?
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reply:
I don't know about omniscient or omnipresent, but it will have a very deep and broad overview of all levels of commerce, yes. The thing which makes it so non-intrusive compared to the IRS is that it will look at ONLY public business transactions. You will never have to expose your personal financial information unless you find yourself under investigation for tax fraud, and then it will take a court order, not just a request from the local IRS office. Another very good incentive for keeping good business records.
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webdog said:
>>>>Quote "Wait until the displaced IRS agents are filling the positions of enforcement in the state agencies tasked with collection/remittance, and they are no longer distracted by all the paperwork and investigation which currently bogs down income tax collection. "

>>>>>Quote:When every state is working together to track not only interet sales, but intrastate sales through brick and mortar establishments, the system will become much more homogeneous, and integrated, not to mention simpler.

50 different states, controlled by 50 different governors and legislatures are NOT going to setup a system to improve on the IRS, no matter how screwed up the IRS is.
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reply:
It won't be fifty different states setting it up, just one agency at the national level. The states will be in the role of collector/remitter, not legislators. They won't make the rules, and they won't enforce the rules. They will only collect and remit.
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webdog said:
Your enthusiasm and your faith in human nature are commendable, but human nature is what it is. Wishing otherwise will not change it, and just because I understand that doesn't mean I spend my time curled up in a ball.

I promise to read your response, but I will not be responding. Takes me to much time.
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reply:
Oh I don't know. People surprise me pleasantly all the time. Smile at a stranger or hold a door open and you get a completely different reaction than if you just meet their glance, pass judgment, and keep walking. Give people something worthwhile to work toward, some feeling of belonging to a group that is working for good, and a reasonable hope of success, and there's no telling what good might come of it, or how soon it might come to fruition. Add to that an actual understanding of the goal and the benefits of attaining it and miracles happen.

I've had enough of being drained because very wealthy men think of government service as a way to make themselves and their friends richer, and I've had enough of just whining about it. This is a way to get their shenanigans out in the open, and move toward changing the organizational underpinnings which make those shenanigans even possible. Time to shine a light on the roaches and chase them back where they came from.

We'll know when we've succeeded, because they will no longer be willing to spend tens of millions of dollars to get voted into a job that only pays two hundred thousand. Consider that while you're thinking about how hard it might be to hold the little guys accountable under the new system.
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Also, for just a moment, put aside the discussion of the Fairtax. Isn't there something outrageously wrong with the fact that we (lower/middle class making less than $100,000/yr) are paying nearly forty five percent of our gross salaries to taxes both obvious and hidden; national, state and local?

That is not an exaggeration and I for one find it impossible to either excuse to myself, or further tolerate and greet with inaction.
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Keep asking questions, and if you can't find anything against it except your conviction that people will never let it work, then maybe you might want to reweigh the possible benefits, against the difficulty inherent in change, even for the good. Peace out.

Like I said about the Porsche, it's not worth trying to scam the system for 7%. 37% ($37,000)is entirely different, especially with a more compliant system. No, it doesn't work that way now. You can only deduct the depreciation off against your profits on the business, which of course would be miniscule. (Please don't tell me the price of that $100,000 Porsche is going to drop by 30%. It's made in Germany.)

>>>>Quote "If you sell to someone in Texas from a business in Maine, the overseeing organization will be able to watch the transaction at both ends."

Can you not see that this as yet unnamed agency you envision is getting near omnipiscent?

>>>>Quote "Wait until the displaced IRS agents are filling the positions of enforcement in the state agencies tasked with collection/remittance, and they are no longer distracted by all the paperwork and investigation which currently bogs down income tax collection. "

>>>>>Quote:When every state is working together to track not only interet sales, but intrastate sales through brick and mortar establishments, the system will become much more homogeneous, and integrated, not to mention simpler.

50 different states, controlled by 50 different governors and legislatures are NOT going to setup a system to improve on the IRS, no matter how screwed up the IRS is.

Your enthusiasm and your faith in human nature are commendable, but human nature is what it is. Wishing otherwise will not change it, and just because I understand that doesn't mean I spend my time curled up in a ball.

I promise to read your response, but I will not be responding. Takes me to much time.

reply:
De nada. Give respect, get respect.
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webdag said:
I'm glad you understand that it's a prerequisite to changing the system to have a way to stop politicians from corrupting it. When congress has a very low approval rating, but people approve of their own congressmen, because their own congressmen work to bring home the pork, how are the bums going to get thrown out?
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reply:
Prevent them from allowing exemptions of any sort as I already pointed out. If they cannot pay their special interest supporters with exemptions from paying their fair share, the only quid pro quo will be pork. The pork is visible already, and would have already gotten the response it deserved if people truly understood - at the register - how much it is costing them.
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webdag said:
Somehow you have to change human nature to make people less self-interested or overthrow this democracy. I don't believe for a second people are going to be more upset with taxation just because they see it on the cash register reciept...
...but there's no revolt happening on that front, and if that ain't shoved in your face I don't know what is.
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reply:
Same as before. I can't debate with cynicism. The only answer to that is hope. I have it. You say you don't. Dead end.

Curling up and saying it'll never work accomplishes nothing.
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webdag said:
A couple questions for you about your plan. If I want to buy a new Porsche, can I start a paper route and claim my new Porsche as a business expense and not pay sales tax on it?
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reply:
Is that how it works now?
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webdag said:
I believe we're not going to be embedding any taxes in anything until it gets to the final consumer. Is the government going to make me justify that my business needs a Porsche instead of a Saturn, or are they going to take my word for it?
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reply:
Is that how it works now?
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webdag said:
If they do require justification, ...
...Sweet!
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reply:
IBID.
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webdag:
This subject reminded me that when I was a kid, living on a farm, we had our own gas tank. My father signed a form every time gas was delivered, claiming that the gas was to be used for farming and therefore no road use tax was paid. Every time my father filled up the car out of that pump, which was every time he needed gas, he would keep looking down the road to make sure the tax man wasn't watching him. He was a sharecropper with five kids and barely making a living, so don't be too critical. That's the only thing I know of that he ever cheated on.
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reply:
He was one man running a small family business and cheating on a ridiculously small portion of the total value of his total custom. If he were slightly more affluent and filling not only his vehicle, but those of you, your siblings, your close-by uncles, aunts, and cousins, how long do you think he would have gone unnoticed. Nobody keeps a secret like someone who tells no one else.
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webdag said:
So if this tax even gets close, I'm going to be the first in line for a paper route, and a private gas tank, for "business" use only, of course.

I don't know if this has been trumpeted yet, but this plan would certainly generate a society of "entreprenuers".

No one in their right mind is claiming the current system isn't being cheated, but this scheme would be much easier to cheat.
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reply:
So you think that it's going to be easy to cheat?
Perhaps. But only if you, as a business, stay small and don't get greedy or stupid. Generally though, those who see opportunity knocking where it appears that the boss is not looking are both greedy and stupid.
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webdag said:
The reason more people don't cheat on sales taxes now is because they're too small to be worth it.
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reply:
The reason government doesn't pay serious attention to this sort of cheating is because the amounts are so small (relatively speaking of course). Wait until the displaced IRS agents are filling the positions of enforcement in the state agencies tasked with collection/remittance, and they are no longer distracted by all the paperwork and investigation which currently bogs down income tax collection.

I already made this point in my reply to Reformer.
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webdag said:
Even with the current low 7% sales tax rate I know of examples. Does anybody pay sales taxes on jewelry anymore, or does the transaction look like it happened over the internet? (Go get'em reformer) Increasing the rate to 37% will turn a lot more people dishonest. Then the rate will have to go up, and more people will cheat, and people will know others are cheating, so they won't want to be the only suckers paying the bills, so it will spiral on until we're all sneaking into Canada to get a subsistance wage landscaping job.
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reply:
Once again I have to point out that the tax rate is not being increased, just moved out of where it's hidden in the price of the product, and down as a clearly visible cost at the bottom of your receipt.
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reply:
This whole section (between the lines of plus signs) is an attempt to make the concept of enforceability look somehow naive. It fails once everyone stops laughing and looks at reality. When every state is working together to track not only interet sales, but intrastate sales through brick and mortar establishments, the system will become much more homogeneous, and integrated, not to mention simpler. Since it will be a national tax, there won't be any interagency communication problems. If you sell to someone in Texas from a business in Maine, the overseeing organization will be able to watch the transaction at both ends.

This whole notion that one can somehow avoid paying the correct amount in taxes by claiming he didn't keep the tax records required to be kept for seven years is only espoused by those who don't, or won't, understand the new paradigm. Right now there is a hodgepodge of laws and agencies and enforcement procedures for individual states and that allows larger businesses operating across state lines to obfuscate a lot. It also allows small businesses to hide behind the sheer number and diversity that weighs down poorly resourced state enforcement efforts.

When everybody works under the same set of SIMPLE rules, and record keeping is standardized from coast to coast, you gain economies of scale that simply don't apply to the fragmented situation that exists today. These economies will apply not only to organization, but also to data collection and sharing amongst agency offices.
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The Free Market System will prevail in all aspects, including the response of the government to the need for a much larger, (larger relative to state collections, not relative to the IRS) better organized enforcement system. If cheating goes up , so will enforcement. If the sales tax is the only (or largest) revenue steam, the government will make enforcement a priority and not a secondary response.

I'm glad you understand that it's a prerequisite to changing the system to have a way to stop politicians from corrupting it. When congress has a very low approval rating, but people approve of their own congressmen, because their own congressmen work to bring home the pork, how are the bums going to get thrown out? Somehow you have to change human nature to make people less self-interested or overthrow this democracy. I don't believe for a second people are going to be more upset with taxation just because they see it on the cash register reciept. If your claim proves true, and the total cost is going to stay the same, they're going to look at their credit card bill at the end of the month and shrug. If people were prone to action based on outrage, where is the outrage when merchants quote one price then tack on their chisel charges at the end of the sale, e.g. rental cars, hotels, phone serivce; even the oil change monkeys add on "shop towel fee" or "environmental cleaup fee". Do you pay those, or do you scream bloody murder? Even the illusion I'll get a benefit out of a tax is easier to swallow than those garbage fees, but there's no revolt happening on that front, and if that ain't shoved in your face I don't know what is.

A couple questions for you about your plan. If I want to buy a new Porsche, can I start a paper route and claim my new Porsche as a business expense and not pay sales tax on it? I believe we're not going to be embedding any taxes in anything until it gets to the final consumer. Is the government going to make me justify that my business needs a Porsche instead of a Saturn, or are they going to take my word for it? If they do require justification, then isn't the government running my business? Can I claim that it's 90% business and 10% pleasure and pay 10% of the sales tax? If I did that, and I'm caught riding it around on Sunday afternoon, I'll claim it's my 10% time, prove otherwise.

When I buy a new house, I'll be sure to setup a home based business first, and that business is going to require 90% of the floor space of my house. It'll use 90% of it to warehouse shipping popcorn, or anything to take up floor space. When I go out of business, do I have to then go pay the sales tax on the remaining 90%? What if I sell the house, or the car? They're both used, do I have to collect sales taxes on them at that time? If I sell them to another business person, and he sells them to a non business person, 100 years from now, does the tax have to be paid then?If I sell them both to my brother for one dollar each, I probably wouldn't mind paying 30% tax on that. Then he'll probably sell these "used" items back to me for about the same price. Sweet!

This subject reminded me that when I was a kid, living on a farm, we had our own gas tank. My father signed a form every time gas was delivered, claiming that the gas was to be used for farming and therefore no road use tax was paid. Every time my father filled up the car out of that pump, which was every time he needed gas, he would keep looking down the road to make sure the tax man wasn't watching him. He was a sharecropper with five kids and barely making a living, so don't be too critical. That's the only thing I know of that he ever cheated on.

So if this tax even gets close, I'm going to be the first in line for a paper route, and a private gas tank, for "business" use only, of course.

I don't know if this has been trumpeted yet, but this plan would certainly generate a society of "entreprenuers".

No one in their right mind is claiming the current system isn't being cheated, but this scheme would be much easier to cheat. The reason more people don't cheat on sales taxes now is because they're too small to be worth it. Even with the current low 7% sales tax rate I know of examples. Does anybody pay sales taxes on jewelry anymore, or does the transaction look like it happened over the internet? (Go get'em reformer) Increasing the rate to 37% will turn a lot more people dishonest. Then the rate will have to go up, and more people will cheat, and people will know others are cheating, so they won't want to be the only suckers paying the bills, so it will spiral on until we're all sneaking into Canada to get a subsistance wage landscaping job.