A national sales tax on everything but food. Everyone who buys anything, regardless of how they got their income (legally or otherwise) will pay tax on whatever new items they buy be it a Ferrari or a Fiat. If you have a lot of money and want to spend it on expensive items, you pay. If you are relatively poor and don't have much money to spend on consumer goods, you pay very little tax.

No more loopholes, no more thousands of pages of nearly incomprehensible tax code. No more federal, state, or local income tax. It's almost too fair, too perfect.

And what will guarantee this will never come to pass: no more political capital gained by legislating favorable tax loopholes for special interests.

DadZilla3 wrote:

Flat Tax or Fair Tax

Burner02 wrote:

Is the implication here that flat tax wouldn't be fair? That people that make more or spend more should be taxed at a higher rate?

dstieger wrote:

Personally, if I were in charge, I'd say screw it, let's do the sales tax and take the hit on production. But the powers that be would never take that hit to our economy, and I can guarantee you that it would have a negative impact on a lot of people here.

victor809 wrote:

Is the implication here that flat tax wouldn't be fair? That people that make more or spend more should be taxed at a higher rate?

dstieger wrote:

Just asking a question to get the opinions of others.

Don't currently know which way I would vote if given the chance, but do know that we need to do something different.

Burner02 wrote:

Is the implication here that flat tax wouldn't be fair? That people that make more or spend more should be taxed at a higher rate?

dstieger wrote:

On the surface I agree with a national sales tax. I think it's the most fair method of taxing our various incomes.
The problem arises in that it discourages sales and encourages savings. Now, a normal person would say "But Victor, don't we want to encourage savings? Isn't half the problem in our economy driven by people's inability to save?" .... and you'd be right. But to grow an economy you need increased production... that won't happen without consumption, which would be hindered by the sales tax.

Personally, if I were in charge, I'd say screw it, let's do the sales tax and take the hit on production. But the powers that be would never take that hit to our economy, and I can guarantee you that it would have a negative impact on a lot of people here.

victor809 wrote:

My understanding is that the fair tax does something to address the inequity issues that unfairly would affect the poor if we had a flat tax.

It goes something like this. Flat tax is effectively a higher burden on the poor as there are a fixed set of things that are mandatory and a different group that are optional. Milk, food, some clothing, etc consume a higher portion of poor people's incomes than the percent of higher earners incomes.

ONE fair tax proposal I heard would determine the amount that we would expect a person at the poverty level to pay and pre-bate that amount to every registered citizen. Then we would raise the effective tax rate to cover the difference in revenue. So, if we determine that a 3 percent tax is the level we need to have for our country, we would determine the amount a person at poverty would pay and raise the rate to say 4 percent.

An interesting offshoot of this solution would do something about illegal immigration. The current problem is that illegal immigrants consume a ton of resources and pay nothing into the system. With a fair tax system , they would be paying in on all purchases and not receiving the prebates. This lso would provide incentive to get legal as fast as possible.

optional purchases, such as cars, or cell phones, or vacation stays would be paid at the standard rate and be fair. Because they are consuming more, the people who choose to buy them will pay more in taxes.

One caveat though. States that have no income tax and rely on sales tax are hurting still even though the economy is well on the rebound. A huge part of it is that because many purchases are emotional, and a lot of people still have fear about the economy, luxury and optional purchases are lagging and thus the revenu streams are slow to rebound. It will be tough on our country if we do this.....

richokeeffe wrote:

can't believe you snuck that past this crew. I was told very politely recently that I was wrong that things are getting better. Maybe just where I live (MA). We are starting to booooom!

frankj1 wrote:

Actually things are booming in many areas of the country - the public perception about it will trail several months behind the actual turn

richokeeffe wrote:

A flat tax is an utterly foolish idea met to defraud and rape the non-rich.
It is born from people with whose moral compass was sold for greed.

Brewha wrote:

A flat tax is an utterly foolish idea met to defraud and rape the non-rich.
It is born from people with whose moral compass was sold for greed.

Brewha wrote:

A flat tax is an utterly foolish idea met to defraud and rape the non-rich.
It is born from people with whose moral compass was sold for greed.

Brewha wrote:

why do you believe this would happen? there is already sales tax on many items in many states.
Real question Victor, I'm not being provocative.

frankj1 wrote: