The “Un”Fair Tax
May 28th, 2009 at 3:47 pm by MicheleDo not get this oppressive National Sales Tax idea (the Value Added Tax) confused with the Fair Tax.
The value-added tax, or VAT, as it is called, amounts to a tax-on-everything — or TOE, for the acronym-inclined. It’s a tax on goods that’s applied in pieces throughout the chain of production and distribution and results in an increase in the cost of virtually everything you buy.
Some conservatives have called for something similar — the so-called Fair Tax — that would replace the federal income tax system with a national retail sales tax.
These ideas are not similar.The Fair Tax seeks to eliminate federal income tax and the IRS and replace our current tax system with one federal sales tax added only at the retail level. Since it eliminates taxes and costs throughout the chain of production, the price of the end product will not increase from what you’re paying today. There’s something called a prebate that covers spending for necessities and gets refunded to the taxpayer: a family of 4 will get a check from the government for about $540 every month. The Fair Tax also encourages businesses that have left the country due to burdensome tax laws to return. How many jobs would that create? Jobs where the employees bring home their entire paycheck? Employees who buy stuff?!
But critics of the VAT say it would almost certainly not be implemented as a replacement for the income tax system — rather, it would be just another tax, on top of the income tax, the state sales tax and everything else.
“This isn’t a tax reform proposal that the White House is talking about. This is a new source of income for the government,” said Max Pappas, public policy vice president at FreedomWorks. “The government needs big taxes and we’ve got big government, so now they’re trying to decide how to pay for it.”
Call me Captain Obvious, but every turn for this administration seems like a wrong turn. I’ve been hoping in vain for “every three lefts to make a right”, but it just doesn’t happen that way anymore. Which might be okay, since I suspect I’ll get taxed for making right turns before too long.
May 29th, 2009 at 10:21 am
The wild ideas surrounding taxation policy will only get more and more weird. States in particular are being more creative in coming up with ways to legally extort wealth from citizens. (for a look at some of the more ‘creative’ tax ideas floating around, you can look at: http://firstconservative.com/blog/political-humor/political-humor-creative-taxation )
The VAT is dangerous. Does anyone truly believe Obama would make the national sales tax a flat rate and then eliminate the income tax? Those that believe this should be preparing to move to China to follow their job there. Excessive Obamataxation will only drive more business and jobs out of the country.
May 29th, 2009 at 1:07 pm
My biggest problem with the fairtax is this prebate business. I’m supposed to expect that the feds are going to be able to work this out for everybody in America EVERY MONTH?!
Woo! Thank Goodness we got rid of that bloated IRS that had to figure out taxes once a year.
May 29th, 2009 at 5:43 pm
The prebate a preset amount determined by the number of people in the family,period. It doesn’t matter whether you’ve installed green energy appliances, operate a home based business, or gave to charity. Our government already figures out how to pay various amounts monthly to welfare recipients, those on unemployment, social security and disability.
With the FairTax, the “bloated IRS” wouldn’t have to figure out the myriad of tax exemptions, loopholes, amended returns, mistakes etc. “once a year” for every American (which isn’t exactly a once-a-year issue), that they deal with in the current convoluted tax system. They have come up with a whole host of creative ways to rob me, and create bureaucracies to make it happen.
Make all of those go away, set up one national retail sales tax and one check automatically deposited monthly. So where’s the difficulty, Exador?
I think the real problem is that we would know when we were getting screwed because we would no longer be confounded by our tax system. That’s why I don’t think the Fair Tax will happen.
May 29th, 2009 at 6:34 pm
Huh. Ok, so they send out a set amount based on the number of people in the home? I wonder how that would adjust, depending on location. Living in Manhattan isn’t the same as living in Montana. Also, how would that adjust with inflation?
May 29th, 2009 at 9:57 pm
It doesn’t adjust. It’s the same everywhere. The link I provided for the Fair Tax site tells all about the prebate and what it covers. Beauty of the internet. Information at your fingertips without some opinionated chick arguing with you:)
http://www.fairtax.org/site/PageServer?pagename=about_faq_answers
May 29th, 2009 at 10:04 pm
Clarification: Adjusts based on the poverty index guidelines for that year. Hawaii and Alaska are different for some reason. So it seems that the poverty index would change due to inflation, so the prebate would adjust too.
January 7th, 2010 at 7:58 pm
H.R. 25 or the FairTax Act is the best way to go. A complete replacement to all payroll and income taxes, it would supercharge the economy. The savings would be outstanding. The hidden pass through taxes embedded in all prices would be gone. Export items would no longer have that built in tax component and would be more attractive overseas.
The anchor on production would hoisted aboard the ship and full steam ahead.
Illegal liens would pay as much as anyone else but not be allowed to collect the prebate. More details can be found at http://www.fairtax.org