Jiro

but don't you understand?

under Fair Tax, federal income tax will be abolished and so will other silly taxes. that means you'll have more spending money in your pocket to buy whatever you want even though that tax will be higher than now but hey you'll still have more money for yourself.

Income Tax is one of the biggest killjoys for people like me. According to tax bracket I'm in, my estimated federal income tax is between $5,000 - $8,000

Sales Tax in NJ is around 7% and under Fair Tax, it might hover around 20% - 30% but hey - that's fine with me!!!! Let's assume that under Fair Tax, national sales tax is 30% so if XBOX costs $200... that means $60 in tax which means XBOX will cost you $260 and that's all! Under current tax system, XBOX will cost you $214 (including 7% sales tax in NJ) but you'll have to pay for income tax and bunch of other taxes.... which means you're paying more to government under current system than under Fair Tax.

If you're concerned about poor people not being able to afford same things that rich people can buy because of 20%... don't worry. The government will issue prebates and/or exemption for those who makes under $15,000/year (or whatever the range is that government decides). The government will most likely exempt certain items from tax as well.

read FactCheck.org: Unspinning the FairTax to understand better about Fair Tax.

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ki4jgt

I've been saying this forever. When they first started out with "We are the 99%". I've had a problem with that phrase since the beginning. We are America. We are 100%. The only reason the 99 have a problem with the 1 (or what they're hinting around to) is because the 1% is richer than them.

This is exactly what I hear every time I hear "We are the 99%"

We are the 99%. We have problems with the government because we're not considered by it anymore. We never spoke up. We never said we were here. We never told the 1% what we thought. We just left them in their place and assumed they would speak adequately for us.

After we haven't used any of the rights afforded to us by the constitutioin, to tell these people what we think, we some how seem to blame every single individual who falls in the 1% range of the richest people in our country. We don't know what they have or haven't done. We don't know if they've had a hand in the politics that have crippled us or not. We're just upset at them because they have more money than us and instead of ignoring the rights given to them by the system, they used them for all they were worth.

Now we expect them to pay the tab.

Don't get me wrong. I respect the 99%. They're hard working people but America works as a 100% basis ONLY. All (rights) for one and one (right) for all.

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ki4jgt

Bill can't pay anyone's share (not even his own). The U.S. is in so much debt, that if EVERY American was charged 100% of their income, we couldn't even pay off the interest of what we owe.

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Foxrac

Hey... haven't talk to you in long time.

I do understand about Fair Tax after learned in few years ago when Reba gave rich information about Fair Tax and I had plenty of conversation with her via PM to get more understand about how Fair Tax works.

You paid $5,000 to $8,000 per year for federal income tax, or just per month? It will be helpful if you post about annual income in round number, however it is not my business to ask because it is too sensitive information. I just have no idea about how much percent are you paying. In old time, when I was employee at Walmart and my federal income tax was 12% after subtract around $17,000 with $3,650 personal exemption to make $13,350 taxable income. Filing annual tax is just painful and I know some people screwed it up to make end to pay more taxes than average rate, even my parent screwed it up for years until they got huge tax refund last year.

It isn't disagree to say about our tax system is flawed, just like you said in your post and any tax reforms are needed to fix the flawed tax system.

I have bad reaction to Fair Tax because I don't like to pay national sale tax at all. I do know about many states have sale tax so I never like it, it is just part of life and not bad if tax rate is too low. I'm more comfortable to pay income tax than sale tax, however I'm not say if current tax system in US is comfortable to me because I haven't work to make much money to be justified on how much tax that I will pay.

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Jiro

it's per year.

but under Fair Tax, you don't pay income tax and you'll have more money in your pocket than under current system. For people making under maybe $15,000 a year, they either do not have to pay tax or will receive prebate.

but Reba is not rich and neither am I nor you. Why do you think she supports Fair Tax?

Why are you more comfortable with paying income tax than sales tax??? I don't get it. I think you don't understand because of math. I have a feeling that you think you'll be paying lot of money on small things at store.

Let's see - 30% national sales tax under Fair Tax system

For $5 notebook - the tax is $1.50
For $50 game - the tax is $15
For $200 iPhone - the tax is $60
etc. etc.

Counting all estimated sales tax you have paid in one year... you're still paying less than income tax! Stop thinking about paying a lot for a product because of high sales tax. You're forgetting that you do not have to pay OTHER TAXES which means you'll have MORE money for yourself to buy.

so you prefer to pay more in income tax than sales tax???

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Foxrac

In bold, your feeling about how I think is correct and I never have any experience with national sale tax and Fair Tax in my life. I'm more worried about Fair Tax will applies on medical bill, prescription drugs, new house, new car, mortgage bill, etc than small stuff like Xbox 360, iPod, games, notebook. I have no idea about how draft will looks like because the congress never carry Fair Tax to debate and start draft on it.

Yup, Reba supports Fair Tax because our current tax system has TOO MANY loopholes, painful to file the annual tax form, tax codes have over thousands of pages to make too much to figure it out, IRS has rights to take houses, cars away if you don't owe any taxes and too way to be overpayment in taxes. She just want more simple tax code, more fair and national sale tax to make easier to figure about how much will you pay for.

For last question, I'm in scrambled thinking to answer this question so not sure for now.

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Jiro

Fair Tax is a FEDERAL TAX. That means under Fair Tax, there won't be federal income tax, personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes. Business purchases will not be taxed.

The only things that will be taxed are personal goods and personal services. Used goods are tax-free. This may also means state will reduce other taxes such as state sales tax and/or property tax.

and you don't have to worry anymore about high medical/prescription cost because of Obamacare.

correct. under Fair Tax, it's simple. Just pay federal sales tax and that's it.

Why worry about high sales tax? It doesn't matter if federal sales tax is too high for you because it means a product is very expensive like $5,000 Breitling watch or $50,000 BMW sport car. You can't afford those anyway regardless of tax system.

There's no federal sales tax for USED car or any used products. Many poor/average people buy used products anyway. About IRS seizure - don't worry about it. It's relatively rare because it's too much of a hassle and wasted money for IRS. Most of seizures are done by banks.

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Reba

Rich people spend more, so they would pay more in taxes under the Fair Tax system.

Also, with Fair Tax, there would be no IRS around to harass people.

VamPyroX

I should offer to mow Bill Gate's lawn for one day. With what he'll give me, I'd pay off all my dues plus have enough to last me a year or two without working.

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VamPyroX

That's a good one! Hehehe!

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TXgolfer

This is my biggest concern with the Fair Tax. Other than this I pretty much like it.

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Jiro

oh? why?

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TXgolfer

Hard to say how it would play out. What do you think a 30% tax would do to the price of used cars? Demand for new cars? Same with houses? And electronics?

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Banjo

Frankly, I always have hated the idea of imposing a sales tax on used products. It doesn't make any sense to pay a sales tax on an used product is because the previous owner already had paid the sales tax.

So why tax the same product twice?

Used cars are cheaper to buy due to less fees and taxes. The new cars here are sold with a lot of fees and taxes included. The second you leave the car lot, your car is suddenly worth a hell lot less than what you paid for it.

TXgolfer

Sales tax is the same for new and used in TX. But yes you are right about new car value just on depreciation alone.

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Reba

An explanation of Fair Tax and used items:

Americans For Fair Taxation: Ask the Expert

Jiro

hmmm I think this went over my head.

I don't see anything wrong with not imposing tax on used car because it makes sense. it's economical and earth-friendly in a way because it encourages people to use used products till its death since most of products in landfill are in perfect working function. it's a waste of resource.

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Jiro

yep. exactly as I thought. makes no sense to "double tax" on used product since it's already paid for in the first place.

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VamPyroX

Yeah. I agree.

I've thought the same thing when it came to buying used stuff like at pawn shops and game stores.

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TXgolfer

Well a POSSIBLE consequence could be people keeping their stuff longer and buying used more often....which is WONDERFUL for the enviroment, I agree....but MAYBE not so good for the economy.

Such a move COULD ( ) create a much higher demand for used products causing a loss of production jobs AND an increase the price of used goods. That is a pretty bad combo. (especially for lower incomes that buy mostly used products now)

Not to mention a decrease in consumption of new vehicles (thus a decrease in imports) due to new taxes might not be received well by foreign manufacturers. In fact it could result in a loss of exports or an increase in the cost of other imports.

Alot of "ifs" and "coulds".... I have no idea what would happen, just playing devil's advocate

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TXgolfer

I agree with you on this.

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Jiro

ah.... good point

however... of course if Fair Tax caused a shift from mass consumption of new products to used products... that would create new jobs for selling used products, refurbishing used products and moving used products around. and plus - perhaps this move may revert back to old time where products used to be more reliable and longer lasting.

I'm not really that concerned about loss of production jobs because there won't be any jobs anyway in the long run when environmental disaster will become unrepairable. How many more pristine land must be destroyed for landfills? How many more superfund sites can we tolerate?

What dies comes a new life so I'm sure there will be new kinds of jobs after a loss of production jobs. Detroit went kaput and we managed just fine.

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Jiro

the sight of this is just abysmally sad


I'd prefer this over mega-store and I think Fair Tax would create more mom n' pop stores... I hope

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TXgolfer

I think we would get used to the Fair Tax and it would be great long run. I think the transition to the Fair tax might be pretty painful for a few years.

And yes many jobs would transfer from production to sales and repair. The problem I see is that our system relies on growth.

And as you know....I am an environmental nut too so i see alot of good that can come from this too. (Note avi)

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Reba

About Fair Tax trade:

"Puts imports and domestic goods on a level playing field. Exports are not subject to the FairTax, since they are not consumed in the U.S.; but imported goods sold in the U.S. are subject to the FairTax because these goods are consumed domestically.

This makes US goods more competitive at home and abroad. FairTax is border adjustable tax consistent with WTO criteria."

Americans For Fair Taxation: FairTax Versus Obama Tax Plan

Reba

I think there will always be a market for "new stuff." Enough Americans will always want the latest products to keep retailers busy.

Reba

Also:

"How does this affect U.S. competitiveness in foreign trade?

Because the FairTax is automatically border adjustable, the 17 percent competitive advantage, on average, of foreign producers is eliminated, immediately boosting U.S. competitiveness overseas. American companies doing business internationally are able to sell their goods at lower prices but at similar margins, and this brings jobs to America.

In addition, U.S. companies with investments or plants abroad bring home overseas profits without the penalty of paying income taxes, thus resulting in more U.S. capital investment.

And at last, imports and domestic production are on a level playing field. Exported goods are not subject to the FairTax, since they are not consumed in the U.S.; but imported goods sold in the U.S. are subject to the FairTax because these products are consumed domestically."

Americans For Fair Taxation: Frequently Asked Questions Answers

Reba

Double post. Don't know why.

Jiro

why haven't we switch to Fair Tax yet? let's goooooooooooooooooo!!!!

Paying income tax is no different from paying "protection money" to thugs.

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Foxrac

You have to elect the politician who support Fair Tax but it won't be easy.

The conservatives are very scrambled with views on tax policies, some want flat income tax, some want make Bush tax cut permanently, some want Fair Tax and some want alternative to income tax like no taxes at all, similar to Hong Kong. I haven't heard about any liberal politicians support Fair Tax.

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