Are you in favor of the FairTax; That is, a National Sales Tax that eliminates the IRS and the Federal Income Tax?

[Adaeva]

The FairTax is a proposal to replace all major sources of the federal government’s revenue—the individual income tax, corporate income tax, estate and gift taxes, and payroll tax—with a national sales tax and rebate, abolishing the Internal Revenue Service (IRS) in the process.

[abc3643]

For the most part, yes, I am for the Fair Tax. I had that idea myself years ago for the same reasons.

However, there are a few problems.

1. The Fair Tax at the Federal level doesn't affect taxation at the state level. In other words, people are still subject to the whims of states and their taxation policies. For instance, I live in Missouri. Every year, I have to pay "personal property taxes" on my vehicles. And that's on top of the initial sales tax to buy the vehicle and then the periodic registration and inspection fees and monthly insurance. I dislike that; when I lived in New York, I still had to I still had all of that except that I didn't have to pay "personal property taxes" - New York doesn't have those taxes. You buy it; you pay sales tax; that's it. Same reason why I don't like real estate property tax but I accept that as a necessary tax since that is a more stable form of income for a government.

2. The Fair Tax would have to be flexible regarding different rates for different items. This is because taxation is a major tool of "fiscal policy" or macroeconomics. Taxation can influence purchasing and that is important for the culture. For instance, smoking isn't just bad for people, but it's bad for society because of the health problems it induces. More people being cared for because of smoking leaves less resources to care for others. So, short of outlawing smoking, heavily taxing smoking products is a way to disincentivize people from smoking; it gets them to quit or not start because it's just too expensive.

3. Some people will have incomes so low that any taxation can be difficult. To help these people get ahead, their sales tax would need to be lower - OR - part of their sales tax is placed into an account for them to help them save. One problem with this is that purchases would be tracked... as well as their income, thus the IRS would still be needed.

4. Sales taxes are an unsteady source of revenue. During economic boom, revenue will be good, but during a recession, revenue will drop. This makes it very difficult to plan a budget. Of course, that same problem exists with income taxes too, but the Federal government has other taxation methods and fee policies to help generate revenue.

I DO like the idea of a national sales tax because that will tax the rich more than the poor. There is an inherent fairness to it because money is worthless until you spend it. I don't like income taxes or estate taxes because they adversely affect people's ability to save, invest, or otherwise being able to get ahead. With a national sales tax, once you use the money spending on something, the government gets a cut - a "usage fee" so to speak.

I could go on and on about this topic for hours.

[Adaeva]

As proposed, every household would receive a monthly rebate equal to the tax rate time the poverty level. I believe that means that households that spend less than the poverty level the rebate would exceed the tax paid on purchases.

[WindAtMyBack]

Yes, but maybe not that extreme. I definitely favor people paying for what they use. But that also includes taxes on things that benefit everyone collectively.

The things is that there are so many hidden government expenses that don't appear in the budget. Taxes give the government some control over the taxed. For example if a person or company gets a tax deduction for donating to a charity, the lack of income to the government is really a government expense. It doesn't appear as an expense on the budget, but it is.

If people or companies are not taxed, the government can't give a deduction for taxes. So the people or companies no longer give to those charities. The charities no longer receive those funds. So either the charities would no longer be funded to the same extent, or the government would have to increase the "fair tax" to compensate for the loss of donations by individuals or companies.

That's just one example. It's actually far more complex than that.

[BCA6010]

Realistically speaking, the IRS wouldn't actually disappear; it would just be replaced by something else meant to ensure the new taxation methods were being accurately collected, a new headache that most people outside of business finances wouldn't really have to deal with.

The main upside to this new tax method is that it would be based on actual consumption of goods and services rather than effectively punishing you for advancement. It would at the same time encourage a more frugal lifestyle, and also be much harder for anyone of any wealth class to game the system, or for tax enforcement to be weaponized for political reasons. Calling it "fair" is pretty accurate in that sense, and would be much easier to enforce than a flat income tax like what is popular among libertarians.

The downside is that it most likely wouldn't make a big difference for most people once you run the numbers at the end of the year, and predicting tax income for budgeting purposes in the federal government would be very hard... Of course right now our government just makes it up and prints money as it goes and may as well just not collect taxes at all, so... Overall it would be a net gain, but more for limiting and simplifying a function of government than anything else.

[SnowedIn]

I'm going to side step the issue about the Fair Tax itself and focus on the idea of abolishing the IRS. If someone's opinion is that the IRS should be abolished, fine, that's a perfectly valid opinion. BUT -- who does the money collection and administration and enforcement, etc? The problem with these grand ideas is that they don't think of the mechanisms behind it. Fine: abolish the IRS. Who collects the national sales tax? Who checks that it is properly collected, disbursed, stored, etc? Who enforces it?

Abolishing organizations is not the panacea folks think it is.

[Adaeva]

Retailers will collect the FairTax just as they do now with state sales taxes. All money will be collected and remitted to the U. S. Treasury, and both the retailers and states will be paid a fee for their collection service.

[genericname85]

fair tax can't exist. cause if you tax rich people for a "fair" ammount, they'll just leave the country to live somewhere that doesn't tax them as heavily. cause that's an option for them. the average joe can't just get away from his nine to five and leave the country. that's why you can hit him with tax at full force.

[OddBeMe]

No, because rich people don’t pay sales tax. This is an actual conspiracy of rich fcks trying to brainwash dumb Americans to keep more of their money.

If anything, poor people should pay no sales tax and we increase capital gains taxes, as well as tax each stock transaction.

[Ryfyle]

"No, because rich people don’t pay sales tax. This is an actual conspiracy of rich fcks trying to brainwash dumb Americans to keep more of their money."

So rich people don't buy anything?

[OddBeMe]

@Ryfyle they buy stuff through their companies. Look it up.

[OddBeMe]

I literally submit sales tax exemptions for “company purchases” to the Comptroller’s office.

[Ryfyle]

@OddBeMe That means there Companies get taxed more and they can't write it off as a business expense. Even if they send that to the Comptroller, its not like you can't just audit the fuck out of them.
Secondly, who fucking cares? Tax the rich and then what? It just happens to go right back into their pockets through government contracts. My paycheck gets gutted by payroll and income taxes and I get fuck all for it.

[OddBeMe]

@Ryfyle woah partner, I think we’re actually friends on this issue.

But being a business owner, I can be exempt from paying sales tax if it’s a business purchase. There are tons of exposes online, it’s not a secret, ceos, rich people, even movie celebs have “businesses” that technically own their house, car, buy groceries etc.

Yeah we see them on the street with Starbucks cups. But serious sales tax they don’t pay.

[OddBeMe]

As for taking money out of your check…uhh yeah. That’s what us libtards have been screaming about for decades. The debt gets huge and the politicians take it out on our paychecks.

And by the way, I can also use those business purchases as business expenses. But you can’t use taxes as expenses. And I pay double the social security tax that your employer pays for you.

I’m saying we level the playing field a little by taxing where the money actually is.

[Ryfyle]

Money has a has a interesting habit of being invisible until it moves. And retards shit themselves when they hear "Tariffs". Either Way, income tax just fucks people out of there own brow sweat for fuck all and there's far more lucrative revenue sources then fucking over your beleaguered citizens for pennies. The consumption tax would be do able if there was no exemption and was at a mere 10%

[OddBeMe]

@Ryfyle here’s the issue, the bottom 50% pay little to no tax because they don’t make enough. All the money is in the decreasing middle class or upper 10%. And from there 1% have nearly 40% of all the wealth in the country.

So forget politics, where do we get money for the government. Because without it we have anarchy.

[Ryfyle]

@OddBeMe
"here’s the issue, the bottom 50% pay little to no tax because they don’t make enough. All the money is in the decreasing middle class or upper 10%. And from there 1% have nearly 40% of all the wealth in the country. "
Thats fucking Mitt Romneys Neocon bullshit. 14% of my paycheck disappears weekly for fucking nothing. Our "government" is a fucking farce and no longer represents the people it fleeces every day. Enjoy your fucking boot on your neck because I'm done paying for it.

[gorydetails]

100% for the fair tax.

[Astarlessnightsky]

Wouldn't this make everything super expensive?

[SaoirseS]

Nope.

[msc545]

No tax is ever applied fairly.