Slashdot Mirror

How is that fair? Bill Gates deserves to have more of his income confiscated because... Really I want to know. How is taking more money from someone just because they have it fair? On the flip side, how do you justify giving government benefits to someone who has not contributed? In 2003 the top 5% of income earners paid 54.36% of the income taxes. The top 10% paid 65.84%. The top 50% paid 96.54%. That means the bottom 50% of income earners paid a whopping 3.46% of all income taxes. The only way this would be fair is if you vote's weight was directly proportional to the amount of taxes you paid.

Your not looking for a fair tax system, your looking for a way to feel good by kicking the rich in the beanbags. Go read The Fair Tax Book by Neal Boortz before you start ripping the Fair Tax as unfair gifts to the wealthy. It's an short (208 Pages) and easy read for small minded people like yourself. And take solace in the fact that Neal will have to pay confiscatory taxes on the money he makes on you.

...and the FairTax is the solution.

I'm a donating member and you should be too.

My preference would be to repeal the 16th Amendment and replace it with nothing.

Mine too.

Short of that this is the next best thing: http://www.fairtax.org/

I've thought and read a lot about the "Fair Tax" proposal, and I suspect it'd wind up being almost as complicated as the income tax system.

No problem, we could switch over to the Flat Tax very quickly. Take your income, subtract your personal and dependent deductions (well over $40K for a family of four), and pay a percentage of what's left (usually 17% in American proposals). Besides saving $billions in labor, it will likely increase compliance as it will be less worthwhile to dodge it.

Unfortunately, reformers are split between the Flat Tax and Fair Tax, aka national sales tax. The problem with the Fair Tax plan is that it will require the repeal of the income tax amendment, which will take years under the best circumstances. The Flat Tax requires no constitutional changes. At the very least the Flat Tax could be used as a stopgap measure. Then there's the slight problem of Congress losing the ability to sell tax loopholes to lobbyists (awww). Personally I think wiping out the source of much of the corruption in Washington is a Good Thing.

Wikipedia Flat Tax.

> Of course, it can't be as simple as just simplying the tax laws Why not? My preference would be to repeal the 16th Amendment and replace it with nothing. Short of that this is the next best thing: http://www.fairtax.org/

http://www.fairtax.org/

The people at the fair-tax website advocate a much simpler method. I recomend reading the FAQs if you have doubts about the idea. Like it or hate it, it is an interesting proposition.

It's actually 23% (or 30, depending on whether you calculate it inclusively or exclusively). In case my sig has changed by the time you read this, you can research it at the fairtax website

As far as it being a lovely but unpossible idea, keep in mind the same was said about women's suffrage and the civil rights movement.

Two Words:

Fair Tax

http://www.fairtax.org/

Which is exactly what The Fair Tax will do.

Maybe you have signatures hidden or something, but his is: http://www.fairtax.org/ Read that and come back when you have something to say relevant to that.

How about a flat tax system and just dump the bloated IRS all togeather?

http://www.fairtax.org/

Well, one thing the whole USA has been procrastinating about for decades is fixing the tax system.

-jcr

How do you cheaply compute what software? There are so many varieties of computer software and titles and the amount you can download every day becomes bigger. And what about Open-source? Does it then become simply a hardware/computer tax? What about PDAs? Or mobile phones? It seem like any scheme would end up hiring more state employees to calculate all this crap than it would bring it. But perhaps that's the entire point.

But that's government for you - instead of making one flat rate tax (perhaps as a sales tax on consumables) to pay for themselves - they end up chiseling money from you here and there. Of course, the purpose of all this diffusion is so that you don't realize how over-taxed you are (and how overbloated the government budget is) - it gives the people have too many targets to attack. And if the taxes are hidden, even better (like gas taxes).

I'm sure the same manipulative logic goes behind surcharges on (esp. utility) bills.

http://www.fairtax.org/

http://www.fairtax.org/

Why don't they just implement the fairtax and be done with all these other convoluted ideas?

As a matter of fact, such legislation is already being considered that would abolish the current US tax system. Of course, it is being opposed by
a) lobbyists who make a living of getting more favorable tax legislation for their clients
b) companies and individuals who make a living of deciphering the current tax code (H&R Block and the like)
and c) politicians who have built their careers getting fewer and fewer "low income" americans to pay no tax at all and maybe even get a refund from the taxes they didn't pay.
Check it out:
www.fairtax.org

"Support the Fair Tax. http://fairtax.org/ "

"Grow up. No really, you should try it."

Come up with a 1) hypothesis 2) that can be tested and 3) can be used to make correct predictions, and then you might have an argument. Attempting to equate fantasy with proper science is dishonest and you deserve to be mercilessly mocked for it.

Hmm.. a troll with backward arguments, no supporting evidence, and an "I won't bother to point out actual problems," is modded insightful. I'm not sure why that's at all surprising, but I'll respond to your speculative arguments anyway.

the % necessary to even begin to make up the difference would be insanely high.

The % has been calculated at 23%. Is that high? Sure. But not as high as the 28% I paid on my income, plus the time and money I spent to do my taxes (which I did "myself," but the software was still $30). But even if that figure is inaccurate, and the percent would need to be exactly the same -- 28% -- the simplification of the tax system would save billions, which would (theoretically) lower my taxes in the long run. At worst, it frees up money for other programs while at the same time creating other benefits (listed at http://www.fairtax.org/).

the poor and middle class get screwed out and the rich get a massive tax break.

That's the claim in every tax change. Nobody ever says, "the rich sure get screwed on this one!" No matter what the tax plan, no matter what party passes the bill, the poor and middle class are always the "victims." But whose interests are really served by maintaining the status quo? I submit that it's certainly not the poor and middle class.

Here's the reality: the plan would provide a monthly tax credit based on family size to ensure that people (all people) aren't paying taxes on necessities. (It works out to credit on roughly the first $400 of spending per month per person).

In reality, the wealthy already have huge tax breaks with the current system. That's the problem. They have tax shelters, massive writeoffs, nonprofits, shell corporations, etc., etc. Corporations get even larger tax breaks, incentives, and other stealth subsidies. By taxing spending instead of earnings, everyone would be paying their fair share, especially corporations.

Whether it's rampant opportunities for fraud(With no IRS, how will you make sure people pay the sales tax?)

There's no greater opportunity for fraud than with the current system. In fact, there's less opportunity because the system is simplified. Maybe you've heard the theory that the more complex a system becomes, the more difficult it is to prevent catastrophic failures? It only takes a nick in an o-ring to bring down a rocket. Business will still need to submit paperwork listing their sales and submitting a check for the taxes, but the IRS won't be anything like the monstrosity it is today.

to the massive invasion of privacy necessary to enforce it (now, instead of tracking your income, the gov't tracks *all* your purchases)

That's simply nonsense and you know it. I pay sales tax every day, and the state doesn't track my purchases. And yet several states' governments are funded through sales tax alone. The businesses are held accountable, and there's zero incentive for them to sell without taxing.

Here, I'll toss you some legitimate arguments in case you ever want to shill for the rich corporations again: "This could cause 'sticker shock,' and consumer spending might drop significantly as a direct result," or "Saving billions sounds good, but it's really just a drop in the bucket when you're talking about the federal budget. Additionally, it would take years for the cost savings to balance out the initial expendature needed to overhaul the tax system."

I'm pretty sure there's more to the math than you're assuming. Don't forget that "deductions" will also disappear under the Fair Tax -- your net income will equal your gross income, not your currently taxable income. And don't forget the monthly prebate for the sales tax you would be expected to pay on poverty-line necessities.

You're also forgetting that in the Fair Tax proposal, taxes are only assesed on purchases made by individuals -- corporations don't pay a dime. I'd say that's a substantial enough tax benefit to draw/retain business.

Plus, rather than having to pass on to the consumer the cost of the taxes that they currently pay (and the cost of preparing/planning for them), corporations will be able to (a) expand their business, create jobs, and grow the economy; (b) pay their employees more; and/or (c) lower the prices they charge for their goods and services. Market forces will ensure that this happens, in some combination.

So, at the end of the day, you will be taking home more because your employer is passing on some of their tax savings to you, while what you do take home will go further because companies will also be passing on tax savings to their customers. If the economy grows as much as the Fair-Tax-friendly economists believe it will (http://fairtax.org/pdfs/Open_Letter_President.pdf ), tax revenues would actually rise and the actual percentage needed to maintain revenue neutrality would actually drop -- so you could be paying less than 23% at the register.

What tax system would you choose for the society you will live in before you discover the actual alternative into which you are born? Is it fair to newborn children that some are born into wealthy families and others into poor families or that some are born with great talent and others with physical or mental handicaps? To me, a fair tax system is one that balances incentives to work hard and grow the economy with the moral understanding that people don't all start out equally.

Try the Fair Tax Plan www.fairtax.org. It is currently a bill in congress. Write your congressmen!!

FairTax would never work. Why? Because the sales tax would have to be something like 50% on everything you buy. That would seriously put a samper in spending for the immediate future, possibly enough to cause a big ol' recession. Come on, would you head to the car dealership, see a nice new car for $20,000, and then follow through with the purchase when you find out it's going to cost $30,000 with tax?

Do the math, AC. Or better yet, read up on those who've done the math, instead of pulling figures out of the air.

The plan is designed to be revenue-neutral, so all the money that is supplied to the federal government for road work now will be there after the plan is enacted. How much you use the roads does not necessarily affect how much you pay in taxes. How much gasoline you purchase at the retail level does.

You can learn more about it here: http://www.fairtax.org

http://www.fairtax.org/

This is why the US of A needs the FairTax.

It would do away with all this income tax malarkey. At least at the federal level. Once that happens, it's a good bet that individual states would follow suit.

Or we could move to http://www.fairtax.org/

The problem with a Wages Tax is that it would transfer more power from the people to the government. Most people wouldn't know or care how high or how low taxes are. The only way people would be able to tell that taxes are going up is that they would either start getting paid less or the prices of all goods would go up. And when the price of a good goes up the extra taxes wouldn't get blamed, it would be because the evil corporations wanted to make more profit. Politicians wouldn't be worried about raising taxes becuase they know this won't be getting blamed for the increase in the price. It happens today when the taxes on cigarettes go up. People complain that the prices are going and they blame the tobacco industry for it instead of the taxes which really caused the price to increase.

With something like the fairtax if you make $20000 you take home $20000. You then pay taxes on the money you spend for new goods at the retail level and on any services that you use. Rich people still end up paying more because they spend more and poor people still pay less. And to keep people from paying taxes on the basic necessities of life everyone would receive a prebate check every month on what you are expected to spend on those necessities up to the poverty level.

then we agree fully. As you see in my above post, I am libertarian. The go't needs to get out of this. And if we used the fair tax ( http://www.fairtax.org/ ) than we wouldn't have to worry about tax breaks at all.

My response to the taxes point would be to help lobby for the Fairtax. Fairtax would cause small biz ownership to soar (among other benefits).

Actually I have no problem with taxes, but having to pay taxes on top of taxed items is just insane. Want a sales tax proposal that makes since... http://www.fairtax.org/ Consumption taxes means that Bill Gates pays taxes on what he purchases not on what he makes, it means that I pay taxes on what I purchase.

This is a good idea. At one time having internet purchases be tax free was a good incentive for business to buy into this new fangled world wide web thingy. Now it is time for the web to start playing by the rules and paying its dues.

Taking it a step further, taxing internet purchases is also part of the Fair Tax - a much better idea, imho, as this is just one small part of a much bigger plan.

it is more often the result of a system that is designed to reward the spender and punish the saver. The tax laws and fiscal policies of this nation make saving relatively unattractive for even the most determined savers among us

Excellent point. If inflation is 3% and a CD earns 3.5%, you'll actually lose money because taxes will make the effective return less than inflation. This is one of many reasons why we need something like the FairTax. At the very least, capital gains taxes should be indexed for inflation.

http://www.fairtax.org/

Depending on where the parent lives, his local police may or may not be funded by income taxes. Here in Florida we have a state sales tax (and an extra 1% sales tax here in Sarasota county) that covers all of our public services. If you decide not to tax income taxes here, only the federal government is getting the shaft. This is one reason I like the FairTax, because you wouldn't have to worry about income taxes at all, and EVERYONE would pay when they spend their money regardless of how they made it.

1. I'm a libertarion, not a Libertarion. I'm a moderate.
2. I never said corporations would be paying sales taxes among themselves. For one thing, this encourages excessive vertical consolidation*
3. The wealthy always manage to avoid taxes. However, they're going to have a hard time avoiding sales tax on their home, cars, clothes(unless they visit another country), food, etc. If they try to shelter it under the aegis of a 'corporation', well, that 'business' is subject to audit.
4. It sounds like you're talking more about a merger. I know, it's wierd, but I don't worry about taxing that stuff. Only retail level stuff. Look up Fairtax.
5. Sure, and we have this big problem about people avoiding taxes by working for a business for free, while the business gives them gifts of vehicles, a house, and generous amounts of cash. Which would you rather try to audit, which is more likely to be correct(within a reasonable margin of error for the amounts of money involved): 10% of american households, or 10% of businesses with retail operations?
6. Why do you think that taxes are part of the cost of running a civilization? Why do we need to tax wealth(instead of income)? How about we just mandate that every worker work for the government one week out of the year? Besides, it's not like I advocated eliminating taxes entirely. I suggested the idea of eliminating payroll taxes, and going with a sales tax. It's relativly easy to avoid income tax. It's a bit harder to avoid a sales tax. Even drug dealers, prostitutes, and politicians will end up paying the sales tax.

You -- the worker bee, or "sap"
Guess what, comrade, I'm hard to categorize under the old communist ideas. I'm a working bourgeoisie. I own stock. Not enough to support myself yet, but I'm working my way towards that point.

Besides, have you ever wondered why so many of the 'socialists' and people who encourage large amounts of government are rich? The huge amount of complex tax regulations helps to ensure that their exclusive little club remains just that. It puts barriers in the way of joe schmoe who's the first to graduate from college in his family, and is looking to build a business from scratch. It means that a business of five people needs a dedicated accountant, or hire a firm. They definitly need a lawyer on retainer. Meanwhile, they pay for a staff of lawyers and accountants to hide most of their income.

A simple system is usually far harder to 'game' than a complex one. It levels the playing field.

*Example: A breakfast cereal company owns the Farm, the factory, the delivery trucks, maybe even the stores, fertilizer plant, box&liner manufacture.

The problem with switching to a sales tax is it totally hammers the poor who spend most of their income to survive and so are heavily taxed

Every national sales tax proposal includes a universal rebate, where every taxpayer gets a check from the government every month which covers the tax on spending up to the poverty level or thereabouts. The poor would have a very low effective tax rate, often zero or negative. See the FairTax site for more details.

You can give sale tax exemptions for food, and other essentials, but then you are back to a situation where the government is picking winners and losers

Yes, government-granted exemptions would be a bad idea.

So a fair sales tax merely leaves fundamental needs untaxed. Raw food, uncut cloth, some minimum healthcare and primary shelter costs (established by economists per county/town), educational materials (notebooks, etc), daily public transportation: none of those retailers would collect sales tax. Equity transactions would pay a sharply lowered sales tax, to reflect their intangible nature, and the growth value of cycled transactions. But everything else would pay something like a 25% sales tax, shared among all enclosing jurisdictions. With a $12T economy, that's $3T, which is 15% higher than the current Federal budget.

And I was simply sticking a one-liner out there. Sheesh, I need to add Fairtax to my sig too.

My general idea of a good tax system would be one that taxes new goods, except for food and medicine.

In order to avoid paying the tax on what you buy(so you can't go and buy a TV and claim it's for your office), you'd have to be a registered business and file some sort of return(That means that you should have some sort of sales, and you'd be taxed on those).

Another plus if the government followed through on the fair tax system would be the sharp reduction in the number of returns to process: Instead of the IRS processing say 100 million returns they could just process the returns of all the businesses large and small (say 1 million). Look at the benefit: 99% of the manpower at the IRS would not be needed as the number of returns to process is 99% less.

Enforcement and penalties would be easier to perform but would be likely unecessary. The 'Big Brother' infrastructure is already in place: The businesses bank their earnings with a bank who report it all to the IRS. Going the 'cash in a mattress' route will not help business who cheat on their taxes. The IRS knows where these businesses are via the local governemnts that have these business 'on file' and can simply 'stake them out' or raid them and confiscate everything.

All that will be left are people running underground businesses out of their home.

Then there could be a return to bartering: No cash changes hands and no income to tax(?)

Fair tax isn't regressive at all.

A flat sales tax is neither regressive nor progressive.

but you'll have to document all of your purchases to qualify for the "spending up to the poverty level" rebate

Nope. It's automatically assumed. If you're living below the poverty line, the monthly check will rebate you more than what you paid in tax. The cost savings from not having to document all that would easily exceed the costs. As to who gets it, well, the idea is for all US Citizens and legal (Working?) immigrants.

Fairtax

It will benefit everyone (except slimy DC lobbyists)...

http://www.fairtax.org/

http://www.fairtaxvolunteer.org/smart/faq.html

the fair tax would cover strippers and drug dealers and high power execs and tourists from other countries and, well anyone who buys non-essentials.

f) If not a Nat'l Sales Tax, why doesn't some politician repeat what Jack Kemp said about a postcard-sized return? Our tax code is Byzantine, tough to understand fully without a full-time background in it, even in the simpler forms. It's worse if you want to take advantage of any of the many, many loopholes. Most taxpayers haven't a chance.

It's time for the Fair Tax. Read the FAQs.

The tax system is too complicated... we need the Fair Tax.

Simply put, the FairTax replaces the way we're currently taxed - based on our annual income - with a tax on goods and services. The FairTax is a voluntary "consumption" tax: the more you buy, the more you pay in taxes, the less you buy, the less you pay in taxes.
It's simple.

Everyone pays their fair share of taxes, and with the FairTax rebate, spending up to the poverty level is tax free. The Federal government is fully funded, including Social Security and Medicare, and you don't need an expert to determine your Federal taxes.
It's simple.

Read the FAQs

Everyone agrees the current Federal income tax system is broken. Patching up the existing code is pointless. It's time for a fresh approach, a fair approach.

"A national sales tax would hurt low wage earners the most as they would be using the majority of their wages on food & basic necessities."

http://www.fairtax.org/

How does the FairTax protect low-income families and individuals and retirees on fixed incomes?

Under the FairTax plan, poor people pay no net FairTax at all up to the poverty level! Every household receives a rebate that is equal to the FairTax paid on essential goods and services, and wage earners are no longer subject to the most regressive and burdensome tax of all, the payroll tax.

Hardly. Not everyone pays a percentage. Almost half the workers in the U.S. pay no income tax at all. And, in fact, they get quite a sweetheart deal -- many of those people get a "refund" which is far larger than the amount that was witheld in the first place (refundable credits).

The problem with a national sales tax is that middle to low income earners spend a larger percentage of their earnings. Upper class earners spend a much smaller percentage of their wages. A national sales tax would hurt low wage earners the most as they would be using the majority of their wages on food & basic necessities. The little $ they might have left after their purchases and their tax burden won't be enough for an adequate savings.

It's been my experience that most upper class earners spend virtually everything they earn. They might spend a slightly smaller amount as a percentage of their income, but, 85% of $200,000 is a lot more real dollars than 95% of $25,000. Admittedly, I pulled those numbers out of my ass, they're just for illustration purposes ;)

As structured in H.R. 25, everyone gets a monthly check to prevent exactly what you describe. It's actually a pretty well thought-out plan. You can read more about it at http://fairtax.org/.

What a disgusting and truly saddening post to read. It really breaks my heart to see someone become so dependent on the government...I'm sorry, but it really makes me want to vomit, to see how far we've sunk in the last 200 years.

Check out the Fair Tax Plan. Their proposed solution is similar to what you describe, including the tax credit (though it's based on estimated living expenses, not reciepts).

Eh. Parent link was supposed to be fairtax.org.

It's not fair that taxes are applied to a CD, but not applied to an iTunes download. Solution:

Repeal the tax on the CD and cut government spending.

A similar technique will solve all other cases of taxation that aren't fair.

No, if you want fair, you either tax nothing, or you tax everything the same across the board.

One such plan in the works is the Fair Tax. It is a plan to consolidate the federal income tax, Social Security tax and several other taxes into one federal sales tax. It also lobbies to have the 16th Amendment repealed so the government can't institute another income tax without another Constitutional Amendment. There is currently a bill in the House and Senate about this, HR25 and S1493.

All services and new goods would be taxed equally. Used goods would not be taxed to prevent double taxation. Every person in the country with a SSN would get a monthly prebate check to account for the sales tax on things up to the poverty level. Its a prebate check because its given in advance so low income households don't suffer. With that plan, everyone would pay their fair share. If you don't want to pay taxes, don't buy things you don't need.

People would finally be able to take home everything they rightfully make. The only exception would be people living in states that have a state income tax.

Spend the hour or so to read the FAQ on the Fair Tax site. It answers alot of questions people how about the plan and what it does. After that, write to your representitives with your opinions.