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ironsides
LSU Fan
new york, ny
Member since May 2006
5331 posts

re: Fair Tax = no more IRS problems


But power man under a fair tax you wouldn't have any deductions at all so the problem is fixed the tax deferment wouldn't be allowed





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Zach
LSU Fan
Member since May 2005
61021 posts

re: Fair Tax = no more IRS problems


quote:

If you are paying taxes, the IRS will always be a problem/

No, the Fair Tax specifically calls for the abolition of the IRS. Receipts from sales taxes goes to Treasury Dept.






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HailToTheChiz
Auburn Fan
Behold, SKYWHALE!
Member since Aug 2010
6798 posts

re: Fair Tax = no more IRS problems


Isn't the fair tax based on having taxes already implemented in goods prices therefore not requiring other taxes?





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Zach
LSU Fan
Member since May 2005
61021 posts

re: Fair Tax = no more IRS problems


I'm working from memory here because I read The Fair Tax book years ago.

Currently, you are paying an 'imbedded' tax. Let's say it costs 10 bucks to make a widget. The widget sells retail for 11 bucks...1 dollar profit.

The new sales tax runs it up to 13 bucks.

However, currently the manufacturer, distributor and retailer all pay corporate taxes to the IRS. So, the cost of those taxes are imbedded into the price of the widget as it flows from manufacturer to consumer. Thus, the 11 dollar widget is currently selling for 13 (1 dollar profit, 2 dollars imbedded taxes) not 11 dollars.

Thus price of widget is 13 in the status quo. Price of the widget is 13 under Fair Tax. No increase in price.






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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120328 posts

re: Fair Tax = no more IRS problems


quote:

But power man under a fair tax you wouldn't have any deductions at all so the problem is fixed the tax deferment wouldn't be allowed


Right

Going forward

But in the scenario I'm talking about person A and B could have been doing what they're doing for the last 20 years

Person A really comes out lucky compared to person B because they've ALREADY benefited from the tax advantages of their account while person B was positioning themselves to benefit from it decades later.

How does the fair tax take things like this into consideration? Or does it?

Why can no one answer the question?






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TrueTiger
LSU Fan
Chicken's most valuable
Member since Sep 2004
8870 posts

re: Fair Tax = no more IRS problems


quote:

Why can no one answer the question?


I think you are correct that this is one of the very few downsides. But the upside far outweighs it.

There is a group wanting the government to simply confiscate 401k and IRA accounts. That would be a real catastrophe.






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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120328 posts

re: Fair Tax = no more IRS problems


quote:


Thus price of widget is 13 in the status quo. Price of the widget is 13 under Fair Tax. No increase in price.


Oh so I don't pay any income taxes and everything costs the same? Sounds too good to be true.






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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120328 posts

re: Fair Tax = no more IRS problems


quote:


I think you are correct that this is one of the very few downsides.

Seems like there could be a way to fix it though

Maybe a slightly larger prebate for those people?






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Beer Bryant
Alabama Fan
In a Hidden Bunker
Member since Jan 2012
8792 posts

re: Fair Tax = no more IRS problems


The FairTax is a national sales tax that treats every person equally and allows American businesses to thrive, while generating the same tax revenue as the current four-million-word-plus word tax code. Under the FairTax, every person living in the United States pays a sales tax on purchases of new goods and services, excluding necessities due to the prebate. The FairTax rate after necessities is 23% and equal to the lowest current income tax bracket (15%) combined with employee payroll taxes (7.65%), both of which will be eliminated.

The FairTax provides a progressive program called a prebate. This gives every legal resident household an “advance refund” at the beginning of each month so that purchases made up to the poverty level are tax-free. The prebate prevents an unfair burden on low-income families.

Tax evasion and the underground economy cost each taxpayer an additional $2,500 every year! But by taxing new products and services consumed, the FairTax puts everyone in the country at the same level at the cash register. Further, only legal residents are eligible for the prebate.


What is the Fair Tax?






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Zach
LSU Fan
Member since May 2005
61021 posts

re: Fair Tax = no more IRS problems


quote:

Oh so I don't pay any income taxes and everything costs the same? Sounds too good to be true.

No.
You don't pay any income taxes. You pay more sales taxes. And every item has the same price tag on it. Thus, you have no net increase in out of pocket expenditure.






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Zach
LSU Fan
Member since May 2005
61021 posts

re: Fair Tax = no more IRS problems


quote:

The FairTax provides a progressive program called a prebate. This gives every legal resident household an “advance refund” at the beginning of each month so that purchases made up to the poverty level are tax-free. The prebate prevents an unfair burden on low-income families.


Nope. The prebate is based on a calculation of 'basic necessities of life'. How they determine that is worrisome. The prebate goes to EVERYONE, including millionaires. This is from the book, not your website, which may be tweaking the issue.

If the Fair Tax is proposed as a bill the prebate discussion is gonna be a bitch.






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Five0
USA Fan
Member since Dec 2009
4655 posts

re: Fair Tax = no more IRS problems


quote:

If the Fair Tax is proposed as a bill the prebate discussion is gonna be a bitch.


Why?


quote:

The prebate goes to EVERYONE, including millionaires.


Hence, the name. Everyone is treated fairly. Treating different people and groups differently is precisely how you have all the loopholes now.






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themunch
LSU Fan
Moultrie Ga
Member since Jan 2007
8434 posts

re: Fair Tax = no more IRS problems


If you are paying taxes, the IRS will always be a problem/

No, the Fair Tax specifically calls for the abolition of the IRS. Receipts from sales taxes goes to Treasury Dept.


Someone is still controlling how much YOU pay or do not pay and can influence your life and income accordingly.






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