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Originally posted by semperfortis
It is an excellent idea and as the OP pointed out, will never make it as it really does make a lot of sense and virtually puts a major government entity out of business....
Originally posted by The Walking Fox
The problem with the fair tax - and all other flat taxes - is that it ends up costing the most for those with the least to spend.
The answer is to clean up our current tax system. It's supposed to be progressive, but nearly eighty years of certain someones trying to prevent the top 5% of the nation from paying a single red cent, paired with other certain someones constantly trying to make it more equitable without ticking off the first group...
The poor will pay ZERO taxes. All the federal taxes will be paid by people who earn and spend above the poverty level.
HR25 is progressive, not regressive. There's nearly no overhead expense to these rebates, because the government already writes checks for about 1/3 of all citizens right now. A check to each adult (more likely an electronic transfer) will cost nearly nothing, compared to the amount of money that's moving.
[See My Foot Note.]
NOBODY that supports John Linder's HR25 will allow BOTH the current complicated system AND the simple national sales tax-with prebates systems to coincide. There's no way HR25 supporters will allow BOTH the old and the new systems to both exist. If HR25 can't happen without the income tax, that HR25 won't happen.
posted by Generbur
Folks- Bare with me a second. Poverty level for a couple with two children right now is $27,000. Let's assume the family spends every dime they earn, buying the bare essentials to live on at the poverty level (medicine, food, heat, shelter...). After HR25 comes, roughly $6300 (23 percent) of all the money they paid for this modest living would go to pay Uncle Sam. You're right, the land lord would charge the HR25 tax rate for that retail good or service.
Aaah,,,, but let's suppose every couple with two children, regardless of how much they earn and how much they spend, gets back at the end of each year, that exact same $6300. That is, the poverty family would be completely reimbursed the entire amount they paid out in consumption tax to Uncle Sam. They'd be totally "untaxed".
posted by Generbur
Oh, you might say: Well... we need to lower the budget of the federal government! Yea! Answer: Once the cost of the federal government is on each and every sales receipt, and it's "in your face" all the time, the people will vote out the porkers and vote in Ron Paul. That is, reducing the budget for Uncle Sam will be far easier once HR25 is passed and in place, and the percentage (is it really 40 percent? Wow!) will be out in the open.
posted by xpert11
When a sales tax is introduced the price of living goes up and consumer demand would go down. A sales tax is an artificial way of increasing or adding to the cost of living. Remember that a sales tax would add to existing housing and energy costs etc. So all things considered including what I have posted above you wouldn't want go above say 15% in terms of the level of taxation. Note that while the people that spend the most pay the most GST everyone pays the same 12.5% tax rate on what they buy. A tax rebate wont help someone who is struggling to pay the bills half way thou the year.
But all of the above does not matter unless you can prove Don wrong because if the fair tax wont produce enough revenue the idea is dead on arrival.