Fair Tax - Good idea?

[codger]

Talk show host Neal Boortz has been shilling for his new book on the "Fair Tax" . This is a new tax program that claims that it will replace the existing Fed tax system. And will be revenue neutral. Boortz insists that it's not a flat-tax, or national sales tax.

I don't plan on buying a copy of the book, but wonder if anyone on this board is familiar with Fair Tax concepts. Can someone explain it in either 60 words or less, or ten bullet points? I contend that if a tax plan can't be explained simply, it can't be sold to the American voter.

[John Masterson]

codger,

I think you'r exactly right that it must be able to be explained easily to have a chance of being accepted by the public.

I have heard of the Fair Tax, but I do not know the details.

I do think Americans will want some way of helping out the poor in any tax system...there are more and more poor in America as the middle class splits today...with many falling lower, and some raising higher economically.

--- JM

[The Gorn]

Geez. ONE way to help the poor is to make *any* sort of employment available. I have a 60ish brother who could hardly even land a fast food job.

I'm not ranting at you, but the structural problem in this economy is that even the sh*t jobs are scarce unless you fit the employer's **exact** psychological profile of an ideal candidate.  I think the use of computer kiosks for employment applications (in places like Sam's Club) is intended to wash out the lowest skilled people *WHO DO NOT EVEN NEED COMPUTER SKILLS IN THE FRIKIN' JOB!!!!*.

[codger]

According to Boortz, the poor don't pay income tax now, and won't under the Fair Tax provisions.

[codger]

"I think the use of computer kiosks for employment applications (in places like Sam's Club) is intended to wash out the lowest skilled people *WHO DO NOT EVEN NEED COMPUTER SKILLS IN THE FRIKIN' JOB!!!!*. "

Great minds think alike. I was wondering about the employment kiosk in my local Wal-Mart. Most of the employees don't need any computer skills. Most never go near a cash register. I think it's labor-saving tool that allows HR to wliminate people without having to actually face them, or expend any effort on the process.

With the concerns about mad cow disease today, cattle are treated with more concern than most job applicants.

HR is one of the points at which corporate America presents its face to the public. It's not a pretty face in most instances. The shabbily-treated applicant will likely not buy (or buy as much) from the place that crapped on him/her. Further, they'll likely bad-mouth the place to family and friends.

The current HR process tries to find a perfect employee profile, and pretends to expect that perfect employee to be there long-term, even yhough the data says that most of them are gone after less than six months. Maybe they sould dissect their hiring and retention "processes".

[manwslohand]

I've heard the "Fair Tax" talk but can't remember what it actually was. Seems it was a percentage of money transactions thru the banking system.

Personally, I want to see a national sales tax. I'm sorry, but the "poor" don't deserve to be opted out of the paying the bills. If you base taxation on consumption then everybody pays; drug dealers, illegal immigrants, poor, rich, etc.

The thing I think we're missing is the illegal immigrant equation. This is a VERY substantial number of people now and will only increase in the future. At some point, the tax system simply must be restructured to include them.

The other issue of a sales tax is the stability. Stats show that during this last downturn the states with sales tax only revenue were much more stable than income tax states. I think it also helps the general populace keep an eye on what they're actually paying. It's too easy to not think about money you never have in your hands and is taken from you by your employer.

[Fortune Green]

Overview of the Fair Tax

In place of all current federal taxes, the FairTax would place a 23 percent tax on the final sale of all goods and services. Exports and business inputs (i.e. intermediate sales) would not be taxed.

Individuals would file no tax return at all. Businesses would only need to deal with sales tax returns. The IRS and all 20,000 pages of IRS regulations would be abolished.

Under the FairTax, no federal taxes would be withheld from employees' paychecks. Social Security and Medicare would be funded by sales tax revenue.

http://usgovinfo.about.com/cs/taxes/a/aafairtax.htm

[codger]

The states/counties/municipalities would (could) continue to collect the existing sales taxes? Then the ultimate consumer would be paying something like 30% on purchases?

The current imbedded intermediate (hidden taxes) will be eliminated?

What about services?  interest received?  investment income?

Maybe the new tax is simple, but comparing it to the existing scheme makes it appear more complicated and vague.

What are the chances of passing anything this sweeping?

Most of the simple minded among us can just barely get their mind around Malcom Forbes's federa sales tax idea.

[TRexx]

Quote:What are the chances of passing anything this sweeping?

Zero.  

Tweaking the tax code to favor individuals and or industries is  the most powerful tool available to our elected officials.  I can't see them giving that up.

They only thing that would work would be a huge grass roots movement. But the last election showed us that most people are more concerned with "values" issues than economics.

[The Gorn]

>> The current HR process tries to find a perfect employee profile

There's even more to it than either of us is suggesting in these posts. I have read that the employment kiosks ask a battery of questions related to morality and on the job ethics that are intended to gauge the candidate's suitability. Many of the questions are 'trick' questions and duplications of other questions that appear to be designed to catch the candidate in an inconsistency. My brother took one of these tests at a Sam's and said it was about an hour to fill it out.

[manwslohand]

There's two things that give it a chance:

1) Immigration issues - too many illegals that are outside the system
2) Phasing it in - No way we can just switch overnight but if we institute a small percentage national sales tax, then slowly increase it as the income tax is done away with it could be implemented.

[codger]

Phasing it in - No way we can just switch overnight but if we institute a small percentage national sales tax, then slowly increase it as the income tax is done away with it could be implemented.

Sounds good, but can you name one federal govt program that was eliminated when it was no longer needed?

Remember, the fed was once a watchdog for the upper limits on the usery percentage on consumer credit. They raised the ceiling "just to get us through a rough spot." Then they solemly swore that they would reduce them once the inflation rate was lowered. "Right away". Of course the states individually jumped on that bandwagon. That was when Jimmy Carter was president, and we were all freaked out at 18% credit card interest ceilings!!!

They're (govts in general) not historically capable of phasing anything. It would require fiscal restraint. But they're damned good at raising things to heretofore unimaginable heights.

Always remember, the two goals of any elected office holder are:
1. Get elected.
       and after achieving #1,
2. Get re-elected.

That's it. It's that simple.

The Bush tax cuts qualify as a modern day miracle in my estimation.

MSH, I think that you're confusing Fair Tax with National Sales Tax. They're completely different animals, from what I understand anyway.

[Rastus P Shagnasty]

This Fair tax WOULD apply to home sales as well.  If you chew on that for a while and think about the ramifications of tacking 23% of the price of a house.  Talk about popping the bubble!

[John Masterson]

Fair Tax guy:  "Hey, where's everybody going? Don't you want to here more details about this great tax plan??"


--- JM

[DG9]

Quote:Many of the questions are 'trick' questions and duplications of other questions that appear to be designed to catch the candidate in an inconsistency.

Many, many years ago I took a series of "tests" for an FTE position.  The HR drone actually came out and told me that in the personality profiling portion they had multiple questions for just that purpose so I BETTER NOT LIE!

HR = How Ridiculous

Oh BTW, I passed the HR process, eventually got the offer (within a week), but had already taken a contract position elsewhere at a MUCH better rate while waiting for the "results".  He who hesitates...

Funny how it is easier to snag a contract in a brief phone conversation versus weeks of interviews and testing for an FTE position.   Oh well, works for me.