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It wouldn't end them keeping data on everyone ... here's what they have to say about how it would work:
http://www.fairtaxvolunteer.org/smart/sketch.html

To ensure no American pays tax on necessities, the FairTax plan provides a prepaid, monthly rebate (prebate) for every registered household to cover the consumption tax spent on necessities up to the federal poverty level.

So unless you're registered and providing ALL your financial info, current up to the last week (to properly adjust your "prebate level" in the case of job loss, etc), you'll be paying higher taxes.

Okay, first of all, the way you're calculating it, the proposed national retail sales tax tax rate isn't 23%, it is 30%. The 23% rate they give is what they call 'tax inclusive.' For example if the sales tax is 5% then a $1.00 item would have a cost with tax of $1.05 but the 'tax inclusive' rate is only 4.8% because $0.05 is only about 4.8% of $1.05. See this question in the fairtax.org FAQ.

Next, food and medical expenses are taxed under the reasoning that rich people spend much more on their neccecities than poor people do. See this question in the fairtax.org FAQ.

Instead of exempting items by category, every family in the country gets a check in the mail equal to the amount of taxes they will pay on spending up to the poverty level.

Lastly, the point I think the original post with regards to overhead cost (mom and pop vs Walmart) was making was that the effort involved in managing the collection of taxes is proporitonally greater for a mom-and-pop business with few transactions than for a large company like Walmart with many transactions. I'm not sure I believe that argument either, but I have other problems with this proposed national sales tax.

Okay, first of all, the way you're calculating it, the proposed national retail sales tax tax rate isn't 23%, it is 30%. The 23% rate they give is what they call 'tax inclusive.' For example if the sales tax is 5% then a $1.00 item would have a cost with tax of $1.05 but the 'tax inclusive' rate is only 4.8% because $0.05 is only about 4.8% of $1.05. See this question in the fairtax.org FAQ.

Next, food and medical expenses are taxed under the reasoning that rich people spend much more on their neccecities than poor people do. See this question in the fairtax.org FAQ.

Instead of exempting items by category, every family in the country gets a check in the mail equal to the amount of taxes they will pay on spending up to the poverty level.

Lastly, the point I think the original post with regards to overhead cost (mom and pop vs Walmart) was making was that the effort involved in managing the collection of taxes is proporitonally greater for a mom-and-pop business with few transactions than for a large company like Walmart with many transactions. I'm not sure I believe that argument either, but I have other problems with this proposed national sales tax.

Then, where are these "hidden" taxes again?

Like I said, it's all covered on the site:

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#2

"It replaces federal income taxes including, personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes. "

Payroll taxes? If we eliminated payroll taxes, you'd just see your salary decrease by 15%.

Why would your salary DECREASE if your employer and you are both paying less in taxes?

Great, I can no-longer deduct my mortgage interest

First, this deduction you value so highly is on the high taxes you are forced to pay now. You'll be paying less in taxes in the future, therefore a deduction like this is not needed.

Second, interest rates should drop, for a variety of reasons covered on the fairtaxvolunteer.org site, if the fairtax is implemented.

Refer to these two answers:

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#21
http://www.fairtaxvolunteer.org/smart/faq-main.htm l#28

Great, I can no-longer deduct my mortgage interest, but I have to pay a 23%/$69k hit on $300k?

I don't really understand what you mean by 23%/$69k hit on $300k. What $300k?

If I buy a "used" house I don't have to pay it? Take a wild guess what that will do to new home construction? Not good.

The problem is you are only thinking about part of the issue. Yes, if you bought a new home, it would be taxed. But what you're not asking is would new homes cost as much as they do now? No -- because the taxes on all the business-to-business goods and services that it takes to build those new houses are eliminated. New house prices would drop, and even after the tax is added, you're not talking about a big difference between new homes and used homes. Same as the difference we have now, a premium is paid for new homes.

Here's another answer to this issue:

http://en.wikipedia.org/wiki/FairTax#Housing_price s

If you "simplify" the system like this, all other things will NOT remain equal.

Exactly. They get better.

I'm not missing the point, I'm disagreeing with it.

Based on the comments above, I still think you're not informed enough about how the FairTax would work to judge it as harshly as you're doing.

Then, where are these "hidden" taxes again?

Like I said, it's all covered on the site:

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#2

"It replaces federal income taxes including, personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes. "

Payroll taxes? If we eliminated payroll taxes, you'd just see your salary decrease by 15%.

Why would your salary DECREASE if your employer and you are both paying less in taxes?

Great, I can no-longer deduct my mortgage interest

First, this deduction you value so highly is on the high taxes you are forced to pay now. You'll be paying less in taxes in the future, therefore a deduction like this is not needed.

Second, interest rates should drop, for a variety of reasons covered on the fairtaxvolunteer.org site, if the fairtax is implemented.

Refer to these two answers:

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#21
http://www.fairtaxvolunteer.org/smart/faq-main.htm l#28

Great, I can no-longer deduct my mortgage interest, but I have to pay a 23%/$69k hit on $300k?

I don't really understand what you mean by 23%/$69k hit on $300k. What $300k?

If I buy a "used" house I don't have to pay it? Take a wild guess what that will do to new home construction? Not good.

The problem is you are only thinking about part of the issue. Yes, if you bought a new home, it would be taxed. But what you're not asking is would new homes cost as much as they do now? No -- because the taxes on all the business-to-business goods and services that it takes to build those new houses are eliminated. New house prices would drop, and even after the tax is added, you're not talking about a big difference between new homes and used homes. Same as the difference we have now, a premium is paid for new homes.

Here's another answer to this issue:

http://en.wikipedia.org/wiki/FairTax#Housing_price s

If you "simplify" the system like this, all other things will NOT remain equal.

Exactly. They get better.

I'm not missing the point, I'm disagreeing with it.

Based on the comments above, I still think you're not informed enough about how the FairTax would work to judge it as harshly as you're doing.

Then, where are these "hidden" taxes again?

Like I said, it's all covered on the site:

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#2

"It replaces federal income taxes including, personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes. "

Payroll taxes? If we eliminated payroll taxes, you'd just see your salary decrease by 15%.

Why would your salary DECREASE if your employer and you are both paying less in taxes?

Great, I can no-longer deduct my mortgage interest

First, this deduction you value so highly is on the high taxes you are forced to pay now. You'll be paying less in taxes in the future, therefore a deduction like this is not needed.

Second, interest rates should drop, for a variety of reasons covered on the fairtaxvolunteer.org site, if the fairtax is implemented.

Refer to these two answers:

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#21
http://www.fairtaxvolunteer.org/smart/faq-main.htm l#28

Great, I can no-longer deduct my mortgage interest, but I have to pay a 23%/$69k hit on $300k?

I don't really understand what you mean by 23%/$69k hit on $300k. What $300k?

If I buy a "used" house I don't have to pay it? Take a wild guess what that will do to new home construction? Not good.

The problem is you are only thinking about part of the issue. Yes, if you bought a new home, it would be taxed. But what you're not asking is would new homes cost as much as they do now? No -- because the taxes on all the business-to-business goods and services that it takes to build those new houses are eliminated. New house prices would drop, and even after the tax is added, you're not talking about a big difference between new homes and used homes. Same as the difference we have now, a premium is paid for new homes.

Here's another answer to this issue:

http://en.wikipedia.org/wiki/FairTax#Housing_price s

If you "simplify" the system like this, all other things will NOT remain equal.

Exactly. They get better.

I'm not missing the point, I'm disagreeing with it.

Based on the comments above, I still think you're not informed enough about how the FairTax would work to judge it as harshly as you're doing.

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#12

# Is the FairTax fair?

Yes, the FairTax is fair, and in fact, much fairer than the income tax. Wealthy people spend more money than other individuals. They buy expensive cars, big houses, and yachts. They buy filet mignon instead of hamburger, fine wine instead of beer, designer dresses and expensive jewelry. The FairTax taxes them on these purchases. If, however, they use their money to build job-creating factories, finance research and development to create new products, or fund charitable activities (all of which help improve the standard of living of others), then those activities are not taxed.

Steve

I believe these answer your question:

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#5

"Is the 23% FairTax higher or lower when compared to the income taxes people pay today?

Most people are paying that much or more today - much of it is just hidden from view. The income tax bracket most people fall into is 15 percent, and all wage earners pay 7.65 percent in payroll taxes. That's 23 percent right there, without taking into account the 7.65 percent employer matching! On top of that, you have to add in all of the hidden taxes embedded in the price of everything you buy, from goods (averaging 22 percent) to services (averaging 25 percent).

Effective tax rates vs. stated tax rates
Because the 23-percent FairTax would not be imposed on necessities, an individual spending $28,808 would pay an effective tax rate of only 15.6 percent, not 23 percent. That same individual will pay 17.3 percent of his or her income to federal taxes under current law."

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#6

"Does the FairTax rate need to be much higher to be revenue neutral?

The proper tax rate has been carefully worked out; 23 percent does the job of: (1) raising the same amount of federal funds as are raised by the current system, (2) paying the universal rebate, and (3) paying the collection fees to retailers and state governments. Unlike some other proposals, this rate has been independently confirmed by several different, non-partisan institutions across the country. Detailed calculations are available from FairTax.org."

Steve

I believe these answer your question:

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#5

"Is the 23% FairTax higher or lower when compared to the income taxes people pay today?

Most people are paying that much or more today - much of it is just hidden from view. The income tax bracket most people fall into is 15 percent, and all wage earners pay 7.65 percent in payroll taxes. That's 23 percent right there, without taking into account the 7.65 percent employer matching! On top of that, you have to add in all of the hidden taxes embedded in the price of everything you buy, from goods (averaging 22 percent) to services (averaging 25 percent).

Effective tax rates vs. stated tax rates
Because the 23-percent FairTax would not be imposed on necessities, an individual spending $28,808 would pay an effective tax rate of only 15.6 percent, not 23 percent. That same individual will pay 17.3 percent of his or her income to federal taxes under current law."

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#6

"Does the FairTax rate need to be much higher to be revenue neutral?

The proper tax rate has been carefully worked out; 23 percent does the job of: (1) raising the same amount of federal funds as are raised by the current system, (2) paying the universal rebate, and (3) paying the collection fees to retailers and state governments. Unlike some other proposals, this rate has been independently confirmed by several different, non-partisan institutions across the country. Detailed calculations are available from FairTax.org."

Steve

"...so that poor people will pay more of the tax burden."

Mod parent troll.

This is completely false and misrepresents the FairTax system. If you read:
http://www.fairtaxvolunteer.org/smart/faq-main.htm l
you will find that people of low incomes are exempted from the FairTax altogether.

At a certain point (generally at about $100k), the vast majority people quickly stop consuming their income and start hoarding it. Oh sure, some will burn through it on booze, drugs and hookers, but most start shoving that capital back into capital.

Which is otherwise known as "investing", which is generally a good thing, providing money for loans, growing businesses, etc.

"The higher that income gets, the smaller the percentage of it that is consumed. So, your "fair" tax would, dollar-for-dollar, tax someone making $100k the same as someone making $1M

So what? If a millionare wants to reign in his spending to match that of someone making $100K, so what? You may be interested in: http://www.fairtaxvolunteer.org/smart/faq-main.htm l#48

...and I got news for you, that "used property" exclusion? Well, they ain't makin' any new land, so guess what will happen to the price of dirt? Well, until we're vacationing on the Moon.

But they are, of course, making new houses and other buildings. You might be interested in: http://www.fairtax.org/pdfs/TreatmentOFhousing.pdf

"We need 2.5T to keep the proverbial lights on in the federal government. You WILL PAY FOR IT SOMEHOW."

The Fair Tax has been set up with an initial rate of 23%, which is calculated to directly replace the funds currently used to keep the lights on by the Federal Income Tax.

"A "prebate?" So, everyone gets a monthly check for the taxes on the first $14k of income, assumed to be consumed? Gah... That is going to eliminate the bureaucracy precisely HOW?"

The prebate has nothing to do with income. You might be interested in: http://www.fairtaxvolunteer.org/smart/faq-main.htm l#3

"Business purposes = no tax? Again, people nearing or exceeding $100k routinely put their entire damned lives on Schedule C (or into corporations) for exactly this purpose."

This is a valid area for concern. But remember, people cheat on their taxes today. The goal of the Fair Tax isn't to make a more cheat-proof system (though I believe it does just that), but rather to make a simpler, fairer system of taxation.

Steve

At a certain point (generally at about $100k), the vast majority people quickly stop consuming their income and start hoarding it. Oh sure, some will burn through it on booze, drugs and hookers, but most start shoving that capital back into capital.

Which is otherwise known as "investing", which is generally a good thing, providing money for loans, growing businesses, etc.

"The higher that income gets, the smaller the percentage of it that is consumed. So, your "fair" tax would, dollar-for-dollar, tax someone making $100k the same as someone making $1M

So what? If a millionare wants to reign in his spending to match that of someone making $100K, so what? You may be interested in: http://www.fairtaxvolunteer.org/smart/faq-main.htm l#48

...and I got news for you, that "used property" exclusion? Well, they ain't makin' any new land, so guess what will happen to the price of dirt? Well, until we're vacationing on the Moon.

But they are, of course, making new houses and other buildings. You might be interested in: http://www.fairtax.org/pdfs/TreatmentOFhousing.pdf

"We need 2.5T to keep the proverbial lights on in the federal government. You WILL PAY FOR IT SOMEHOW."

The Fair Tax has been set up with an initial rate of 23%, which is calculated to directly replace the funds currently used to keep the lights on by the Federal Income Tax.

"A "prebate?" So, everyone gets a monthly check for the taxes on the first $14k of income, assumed to be consumed? Gah... That is going to eliminate the bureaucracy precisely HOW?"

The prebate has nothing to do with income. You might be interested in: http://www.fairtaxvolunteer.org/smart/faq-main.htm l#3

"Business purposes = no tax? Again, people nearing or exceeding $100k routinely put their entire damned lives on Schedule C (or into corporations) for exactly this purpose."

This is a valid area for concern. But remember, people cheat on their taxes today. The goal of the Fair Tax isn't to make a more cheat-proof system (though I believe it does just that), but rather to make a simpler, fairer system of taxation.

Steve

A great example of how to move in that direction is the Fair Tax which gives a one-for-one tax credit for charitable donations.

You're mistaken on this point. I'm a Fair Tax advocate myself, and it has no provision for a tax credit for charitable deductions. The Fair Tax is a retail-level sales tax, and it's unaffected by whatever you donate to charity. See #12 in the FAQ.

-jcr

I've said it before... anyone who has these kinds of problems with the Fair Tax doesn't understand it. Businesses will have to pay taxes, too... the final purchase of anything will be taxed. Yes, doctors will be paying the Fair Tax on their medical supplies, and acocuntants will be paying the Fair Tax on their calculators.

From http://www.fairtaxvolunteer.org/smart/faq-main.htm l:

"Business-to-business purchases for the production of goods and services are not taxed."

You were saying?

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#2
is the list of taxes to be abolished. What federal taxes won't it abolish?

For those of you inclined to support this approach, the petition is available at the Web site: http://db.fairtaxvolunteer.org/petition.php Where it asks for your organization you may want to choose "Other" and fill in "Slashdotters."

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#1

In the fair tax plan, low income folks are protected.

"Something seems wrong about that to me..."

Your vague uneasiness leads me to think that you may not have read up on the fairtax. Here, I'll make it easy for you...

Their FAQ

--

Only problem is that percentage of poor people's income spent on buying goods (necessary goods like food, clothing, etc.) is MUCH higher than rich people's income spent on buying goods (even when you factor in $35 million for Gulf Stream Jet). Why should poor people pay more (in relative scale) than rich?

I suggested two ways to alleviate that situation, one of which was to index all items and charge people by a percentage of what they make. So if a person making $100,000/yr pays $30,000 for a car, then a person making $10,000 would be charged only $3,000 for the same car.

Somehow, you found that to be an argument against taxation and called it idiotic.

You then proceeded to talk about taxation again, and stated:

Do you think the guy who is making the minimum wage and barely making by will be happy to know that he paid exactly same amount of money (as the rich people)...

The second part of my first paragraph was to comment on that position (If all were taxed at a flat rate of, say, 10%, then one making $10,000 would pay $1,000 and one making $100,000 would pay $10,000), and I can see that I could have made the connection clearer.

Perhaps the point you were trying to make in your first posting was that the FairTax would be more burdensome on the poor than the rich since it is levied on purchases. The FairTax supporters claim this will not be the case, for a number of reasons. See http://www.fairtaxvolunteer.org/smart/sketch.html/ .

Under a rigid flat tax, the poor won't pay as much as the rich. Under our current, highly flawed, system the poor don't pay as much as the rich, but many rich people pay less than most of the middle class. The flat tax could prove to have the same flaws if all the current loopholes were carried over.

I am not yet convinced that the FairTax proposal will work, but as it is written, overall the poor will not pay the same as the rich. For some interesting views against the FairTax, see http://economics.about.com/cs/taxpolicy/a/fairtax. htm/ and http://www.mises.org/story/1814/

No matter what system of taxation or what system of government is established, there will be those who take advantage of the system to the detriment of others. Mankind does not have the moral capacity to govern fairly.

*sigh*

How do you figure that their dollar would be worth less? The idea is that their dollar would be worth exactly the same; they would simply be spending their dollars at the till rather than through an income tax return. It's not inflation because they end up spending exactly the same, if not less due to no preparation.

As for your aside, take a look at the Fairtax FAQ, specifically question 9, which asks if spending is a reliable source of taxation. It turns out it's probably more reliable than income, which varies more based on the economy.

*sigh*

How do you figure that their dollar would be worth less? The idea is that their dollar would be worth exactly the same; they would simply be spending their dollars at the till rather than through an income tax return. It's not inflation because they end up spending exactly the same, if not less due to no preparation.

As for your aside, take a look at the Fairtax FAQ, specifically question 9, which asks if spending is a reliable source of taxation. It turns out it's probably more reliable than income, which varies more based on the economy.

If the rich are paying no taxes today because of their fancy tax lawyers, and they don't pay any taxes under FairTax (actually impossible but I'll grant it as a hypothetical right now) then where is the harm? The rest of us are already paying all the taxes and we just want it collected in a different way.

Seriously though, you should read up on the FairTax as your objections are all addressed.

See http://www.fairtaxvolunteer.org/smart/faq.html and http://www.fairtaxvolunteer.org/smart/rebuttals.ht ml for the responses to your issues.

If the rich are paying no taxes today because of their fancy tax lawyers, and they don't pay any taxes under FairTax (actually impossible but I'll grant it as a hypothetical right now) then where is the harm? The rest of us are already paying all the taxes and we just want it collected in a different way.

Seriously though, you should read up on the FairTax as your objections are all addressed.

See http://www.fairtaxvolunteer.org/smart/faq.html and http://www.fairtaxvolunteer.org/smart/rebuttals.ht ml for the responses to your issues.

I haven't read through the PDF documents, but here is a link for some rebuttals. I will read them later when I'm off work. At any rate, you may very well be correct in that a national flat tax might be bad for the poor, but I can't say for sure. But given this is a rather basic concern, it might be found here.

http://www.fairtaxvolunteer.org/smart/rebuttals.ht ml

Money is useless unless spent. What is the point of being a billionair if you can't buy a big boat and other such things. Sure they may not buy that boat today, but at some time that money needs to be spent. You can be sure the rich will spend it sometime.

There is no reason we can't exempt these things in a fair tax.

Someday he will die, and then that money will pass one to someone who will spend it.

you'll have to document all of your purchases to qualify for the "spending up to the poverty level" rebate
Nope. A check for the amount of tax that would be charged at the poverty level comes every month. See the FAQ.

Not true at all. FairTax proposes a monthly rebate to low-income people. Read the FAQ:

http://www.fairtaxvolunteer.org/smart/faq-main.htm l#3

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

http://www.fairtax.org/

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

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

I think the rate they're talking about is 23%, maybe a little less.

Well, they've done some mathemagic on that number to try to make it look better. See the FAQ. 23% of $260,000 is about $60,000.

From what I understand, though, the price of the home would drop quite a bit, because there wouldn't be any income taxes (or tax compliance costs) embedded in the cost of building the home.

I seriously doubt that the income tax savings on a $260,000 home would be anywhere near $60,000. Most labor in a new home construction is performed by low-income workers who pay little or nothing in income taxes.

And I thought the "FairTax" proposal imposed a tax on services, as well as goods. So wouldn't the contractors have to pay a tax on the services being provided by the construction workers? Or is that just a big loophole?

And then, what about the building materials? If I buy a brick, do I have to pay taxes on it? Or is there an exemption for building materials, or something? The whole thing seems like a bunch of hand-waving to me.

Oh yeah, what if I am my own general contractor? What if I buy the building materials and hire the workers and build the house myself. Then there is no sale, so am I exempt from sales tax? Would I have to then pay sales tax at the point that I resell the house?

Also, there is no tax on used goods. If you buy a used home, there is no sales tax collected.

What about repairs? Do you have to pay sales tax on repairs? If you hire someone to make the repairs? If you do the repairs yourself? Would you actually save on taxes by building the house then selling it, then repairing it, rather than building it, repairing it, then selling it? It just doesn't make sense. Why should someone who only buys used goods get through his whole life without paying any taxes?

And, when you sell a home there is no capital gains tax.

Capital gains taxes on the sale of a property you live in were already pretty much eliminated years ago anyway (a married couple gets a $500,000 gain tax free every 5 years).

Keep in mind that I am not an economist or an expert on the FairTax plan and, for all I know, it could be a terrible idea.

From what I've seen, it seems like it is.

The current tax system MUST be overhauled, though, and I don't have a better plan.

I agree with you that the current tax system sucks. I'm especially opposed to the regressive FICA tax. But I think the best plan is to cut spending. I think we could probably cut it all the way down to zero eventually. This would of course put a larger burden on the states, but states could raise property taxes a bit to compensate.

That's correct. I think the rate they're talking about is 23%, maybe a little less. But, yes, there would be sales tax on the new home. From what I understand, though, the price of the home would drop quite a bit, because there wouldn't be any income taxes (or tax compliance costs) embedded in the cost of building the home. The companies involved, including contractors, in the building of the home would lower their prices since they don't have to pay income taxes. Why wouldn't they just pocket the money? Because their competitors will eat them alive by reducing their own prices. And don't forget that your net income will be signicantly higher with the removal of the federal income tax, Social Security, and Medicare.

Also, there is no tax on used goods. If you buy a used home, there is no sales tax collected. And, when you sell a home there is no capital gains tax. The FairTax also replaces personal, estate, gift, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes as well.

Here's a pdf that describes it much better than I can: http://www.fairtaxvolunteer.org/pdf/homebuilder.pd f

Keep in mind that I am not an economist or an expert on the FairTax plan and, for all I know, it could be a terrible idea. The current tax system MUST be overhauled, though, and I don't have a better plan.

if the government converted to a flat tax, but exempted some of the consumption (say, vouchers that would exempt $1000/year in transportation and food costs, or the first $2000 in housing) would you call that system more or less fair than a straight consumption tax? I would side with more fair, since there is a certain minimum level of consumption that needs to be done in order to survive. I don't believe that necessities ought to be taxed . . .

I'm saying that the poor generally spend all their money on necessities, and even have to forego things that people even a little better off would consider necessities.

The FairTax takes this into account by providing a monthly check at the beginning of each month that will cover the taxes that would be paid on the bare necessities, based on the size and status of the family. E.g. a married couple with 2 kids would get $480 at the beginning of each month to offset $480 worth of taxes paid on bare necessities.

Here is more information on how the rebate works.

Wow, you really have no idea what a federal sales tax is all about. Right now, the multi-millionaire on vacation doesn't pay taxes because s/he's not earning income. With a sales tax (which includes services), they would be paying taxes.

As far as what it does to poor families... ummm, how about not having to pay any taxes?!? There would be a rebate given to everyone below the poverty line which would effectively have them not pay any taxes.

In conclusion, in order to pull your head out of your ass, see the FairTax website. :-)

The tax brackets were such that most people were below the level where they were even required to file or have taxes witheld.

It seems to me that a more reasonable strategy for shifting to consumption taxes would be to phase them in while simultaniously pushing the brackets UP one at a time.

This is what I'm complaining about: All the good ideas seem to be championed by the overzealous who make them look like bad ideas.

For that, I will refer you to the FairTax FAQ. The short explanation is that there's a "prebate" equal to the taxes that would be paid on spending up to the poverty level, to make the tax progressive and make it so that those who earn/spend less pay no (or negative) taxes. In addition, used goods are not taxed; therefore, those who wish to can lessen their taxes this way as well (especially on things like cars and homes).

Try this.

After reading a lot of the material there and elsewhere, I'm very intrigued. Its not like this is way outside the mainstream, its endorsed by many Republicans, and is a plank in the Texas GOP Party's platform. Do a Google, and you'll find a lot of talk about it (and support).

Unfortunately, one criticism of it that is true, is that there are too many entrenched interests that like the way things are now. And part of the plan includes repealing the Constitutional Amendment that allowed the federal government to tax individuals, and the process of repealing a Constitutional Amendment is not an easy one.

So as much as I like it, it would take an enormous grass-roots effort to make it happen, and I don't know if such a thing is possible in this country anymore.

Before you go much further, have a look at the plan for a national sales tax. It's at Fairtax. It would be about 23%, but it would replace all other taxes and would refund (by way of a monthly check) those taxes paid on essentials. Looks damned good to me.

More info here

The people that found this country understood what they were doing when they made the Constitution. They made it amendable in case the future held things they didn't expect... but they also wanted to keep the checks and balances they intended 225 years ago. One of those was between the states and the federal government. Think about where they came from... They came from places where the federal government got out of control and nobody could do anything about it. The Tories and the Whigs are the same as the Democrats and Republicans today. They sit at tables and go round and round until everyone loses interest and gets frustrated and nothing is ever fixed. One of the things the Founding Fathers did NOT want is a state-mandated religion... and by them saying that, over the next 200 years it's gotten to point that saying the word "God" in any publicly owned building can get you fined. That's ridiculous.

Another thing they didn't want is a federal income tax. They had no problem with sales tax, as long as it was kept within reason, but the first Secretary of Treasury, Alexander Hamilton, wrote an article about the views on income tax and sales tax in the Federalist papers (No. 21). The link to a good portion of that article is here.

The Founding Fathers knew the dangers of having a government too powerful, and even built in provisions for a revolt, should things get out of control. The most obvious provision is the right to bear arms, which is the 2nd amendment. Apparently they thought the right to bear arms was just slightly less important than the right to freedom of speech, press, assembly, and religion.

At the same time, the Founding Fathers did make a few mistakes... they didn't allow black people or women to vote. In their day, they didn't recognize those individuals as people in the same standing in society as land-owning white males. That's why they made the Constitution amendable... but not alterable.

Saying that any country that allows their citizens to vote is a democracy is a very, very dangerous assumption. By that logic, Iraq was a democracy. Obviously, there are more criterion to meet to be a democracy than allowing people to vote.

Again, I have to say that relativity is of some value in comparison, but it's only a comparison... not a static evaluation. Let me put it this way... there's far more room for improvement than there was 100 years ago. Does that make my stance a little more understandable?