Tilted Forum Project Discussion Community - View Single Post - Our Current Tax System

AVoiceOfReason · 08-21-2005, 06:11 PM

I thought I'd bring this one back up, since the book by talk show host Neil Boortz and Congressman John Linder is now out and selling pretty well.

I've read it, and while I was already inclined to believe that replacement of the current tax on income with a tax on consumption was a fairer way to raise money (so long as there were rebates to insure the poor were not hardest hit), I'm even more in favor of it now. Many of the objections raised by critics are addressed, and I'll touch on a few here.

1. The rich won't pay as much is cited as an objection. Well, if they spend, they will, but let's say they save and invest instead of eating more than at the poverty level. The saved money will be available to be lent to someone that IS spending, buying machinery or equipment and paying the tax on the purchase. Or maybe it will be invested in adding help, thus creating more jobs and thus more wager earners to spend the money.

2. The problem with the home mortgage and chartiable deductions disappearing is really no problem at all for anyone that has thought it through. Those deductions, as well as virtually all others, are deductions or credits against INCOME, lowering the amount of INCOME tax being paid. Since there is NO income tax, there is nothing to deduct against.

3. It will drive up prices is a fallacy. Yes, there will be a 23% tax on goods sold at the retail level, but there already IS an embedded tax on everything we buy in the store anyway. Take chicken soup, for example. The grower of the bird is taxed on his income when the bird is sold. The maker of the can and label is taxed. The soup maker is taxed when it is sold to the supermarket, and the supermarket is taxed as income when the can is sold. All those taxes along the chain drive up the cost of the goods by about the same 23% we'd be paying under a national sales tax. Remove the taxes from every step in the production chain and the prices go down at the retail level.

4. The idea that some will cheat a new system is advanced but is laughable, given the lengths that folks go to now to avoid and evade paying taxes. A national retail sales tax will be more efficient, since Target and Best Buy are already collecting a sales tax in most states, and they aren't going to collude with a taxpayer--a customer--to cheat, since they get a small percentage of what they bring in for collecting it.

That's enough for now. I don't think the FairTax is a perfect system, and probably can't defend all objections to it, but I will be willing to see if a specific objection is covered in the book and try to address it here.

08-21-2005, 06:11 PM	#92 (permalink)
AVoiceOfReason Psycho Location: Greenwood, Arkansas	I thought I'd bring this one back up, since the book by talk show host Neil Boortz and Congressman John Linder is now out and selling pretty well. I've read it, and while I was already inclined to believe that replacement of the current tax on income with a tax on consumption was a fairer way to raise money (so long as there were rebates to insure the poor were not hardest hit), I'm even more in favor of it now. Many of the objections raised by critics are addressed, and I'll touch on a few here. 1. The rich won't pay as much is cited as an objection. Well, if they spend, they will, but let's say they save and invest instead of eating more than at the poverty level. The saved money will be available to be lent to someone that IS spending, buying machinery or equipment and paying the tax on the purchase. Or maybe it will be invested in adding help, thus creating more jobs and thus more wager earners to spend the money. 2. The problem with the home mortgage and chartiable deductions disappearing is really no problem at all for anyone that has thought it through. Those deductions, as well as virtually all others, are deductions or credits against INCOME, lowering the amount of INCOME tax being paid. Since there is NO income tax, there is nothing to deduct against. 3. It will drive up prices is a fallacy. Yes, there will be a 23% tax on goods sold at the retail level, but there already IS an embedded tax on everything we buy in the store anyway. Take chicken soup, for example. The grower of the bird is taxed on his income when the bird is sold. The maker of the can and label is taxed. The soup maker is taxed when it is sold to the supermarket, and the supermarket is taxed as income when the can is sold. All those taxes along the chain drive up the cost of the goods by about the same 23% we'd be paying under a national sales tax. Remove the taxes from every step in the production chain and the prices go down at the retail level. 4. The idea that some will cheat a new system is advanced but is laughable, given the lengths that folks go to now to avoid and evade paying taxes. A national retail sales tax will be more efficient, since Target and Best Buy are already collecting a sales tax in most states, and they aren't going to collude with a taxpayer--a customer--to cheat, since they get a small percentage of what they bring in for collecting it. That's enough for now. I don't think the FairTax is a perfect system, and probably can't defend all objections to it, but I will be willing to see if a specific objection is covered in the book and try to address it here. __________________ AVOR A Voice Of Reason, not necessarily the ONLY one.