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Originally posted by MoonMine
reply to post by Total Reality
Isn't it strange that Ron Paul has not signed this bill (yet)?
How odd, I would suspect he would be frontrunner on this one.
Dear Mr. Burton:
Thank you for contacting my office regarding the FAIR TAX. I agree with you that massive tax reform is needed in this country. More specifically, I agree with the provisions of the FAIR TAX which repeal income, payroll, and estate taxes.
As you may know, it’s not easy for me to advocate any new tax! However, I certainly think a sales tax is better than an income tax- PROVIDED the income tax is truly eliminated. I would hate to see America end up with both a national sales tax and an income tax, much like socialist European countries.
However, the real key to tax reform is dramatically reduced spending by the federal government. Until the government spends far less, taxes (in whatever form) will remain too high. While I certainly support eliminating the income tax, I do not want to see it replaced with a high national sales tax which attempts to collect the same amount of revenue. Spending is the real problem.
Please understand that we share wide areas of agreement on tax issues. I will continue to consider the Americans for Fair Taxation plan. Proponents of real tax reform (whether they support a national sales tax, flat tax, or other plan) must unite in their efforts to eliminate the present unworkable income tax structure.
The national retail sales tax rate under the FairTax plan is 23 percent. That is on top of state sales taxes that are currently collected by forty-five states. That is on top of the sales tax that many cities and counties also collect. That is on top of the special taxes that exist on hotel rooms in most areas of the country. I suppose that a national retail sales tax would also apply to gasoline. There is no mention of the federal gas tax anywhere in the Fair Tax Act of 2005. No list of taxes that are supposed to be eliminated under the FairTax includes the federal gas tax. Does this mean that there will be an additional 23 percent tax on each gallon of gasoline?
The FairTax will make it easier for Congress to raise taxes. The initial rate of 23 percent is supposed to begin in 2007. For years after 2007, "the rate of tax is the combined Federal tax rate percentage." This combined percentage is the total of three things: the general revenue rate (stated to be 14.91 percent); the old-age, survivors and disability insurance rate; and the hospital insurance rate. This is all but saying that the rate will be adjusted every year. And it will be very easy for Congress to do so. To raise several billion dollars of additional revenue, all that will be necessary is for Congress to raise the tax rate by one percentage point by small adjustments in one or more of the three items that make up the combined percentage rate. It will be sold to the American people as "a penny for progress," or some other deceitful scheme.
Originally posted by Blaine91555
reply to post by JamesTheScribe
Great explanation. The only thing I would add is to the first Rebuttal. Corporations and Companies do pay retail on supplies and services which would include the sales tax.
Another thing I see confused is that people actually believe that when they say Corporations don't pay taxes it means the Executives don't pay taxes on their huge incomes. They do and in fact the top 10% of wage earners pay most of the income tax.
Corporations do in fact pay taxes on profits. Exxon will end up paying about half its record profits in taxes. The MSM is a bit, shall we say hesitant to give that part of the equation
Originally posted by n0tsympl
its grand idea but it's best left that way it would create more problems than it would solve ie communism...
Originally posted by johnnyg5646
Maybe I'm missing something, but wouldn't this really screw poor people? If I make $500,000 a year and bought $100 worth of clothes and paid $7 in a federal tax, its not much to me. But if a person who makes $20,000 a year pays 7% (or whatever % it is) on items they need to survive, it could represent a larger chunk of their overall income than what they were initially losing to income tax. Depending on what expenses low income people have, this could take a serious toll on their ability to afford necessities.
In the mean time, since wealthy people would not be taxed on incomes from their investments, their wealth could sky rocket out of control. Since wealthy people have large amounts of capital and access to the best financial planners, they could insure a proper ratio of new spending to new income in order to grow their wealth more. This could potentially create an even greater shift in overall wealth towards those that are already wealthy.
Although, I could be looking at this wrong. I'm open to all criticisms of my statements