I bought a sandwich combo yesterday for lunch advertised at $7.29. By the time I was done handing over cash, it REALLY cost $7.73. That's nearly $0.50 extra. If that was all the tax I actually paid for that sandwich, then it would be a pretty good deal. Unfortunately, here's the other hidden taxes that got rolled in that $7.73:-Property taxes for the restaurant, payroll, Social Security, and Medicare taxes for the employee that made the sandwich, the truck driver that delivered the food to Blimpie, the distribution center employee who shipped the material for the sandwch, the farmers that grew the wheat for the bread, jalapenos, sweet peppers, lettuce, and onions that went on the sandwich, and the farmers who raised the chickens, and for the people who killed and processed then shipped the chicken, and all the truck drivers associated with those processes, along with the property taxes for the distribution center and all the farms! They are all taxed at all stages of the game, and that gets passed right along to me, the guy that already gets my income taxed!
Sure, 25% doesn't sound too bad when it's said like that, but then you get taxed again on absolutely everything that you buy for a compounding effect that generally adds up to most people paying around HALF of your money to the government at some stage.
We need the Fair Tax NOW! The Fair Tax is taken at the retail sales counter, and NEVER FROM YOUR PAYCHECK! There are no Value-Added Taxes (VAT) like they have in Europe, everything that you could pay is on your receipt, and you will NEVER have to report how much money you make to the government. The IRS is banished forever from our great country. Under the Fair Tax, you know exactly how much you pay in taxes, and the total amount of taxes you pay can never be hidden from you by politicians who make a living stealing your money.
Stop telling me that "it's a good idea, but they'll never pass it". Who's they, and why are you voting for them? This is more important than a political party! Hold their feet to the fire or we'll throw the tea in the harbor and start over!!!
10 comments:
That was a great way of explaining the Fair Tax Act. I do agree with some of what you are saying, but my problem with a system like this is that it will only work as long as businesses conduct themselves in an ethical manner. history has already shown me that most businesses will not.
That's a fair point, but the income tax only works if people *and* businesses conduct themselves in an ethical manner, which is exactly as unlikely to happen as a business behaving ethically, because businesses are run by people.
At least with businesses, there's 1/10th of the people that are in charge of filing, meaning there are 10 times the Federal agents to investigate fraud! Plus, now drug dealers and prostitutes will have to pay taxes, and we don't have to spend post-tax money on college tuition or retirement plans!
I still believe that the fair tax alone would not work. Maybe if there was some additional Resource Use tax, companies may use fewer resources to cut down on their tax expenses. The company that uses the fewest resources, will be able to then charge a lesser amount for their product, and therefore would gain a larger market share.
I've heard some buzz about switching to a Value-Added tax scheme instead of a retail tax. Is anybody interested in that discussion?
Basically, they both accomplish the same thing through different paths, but the VAT is completely hidden from the consumer, which makes it perfect for politicians and the object of our freedom-loving scorn.
I think a VAT may go over easier with the populus, because it passes the tax-paying duties over to producers, which require about 7x as much red tape as the Fair Tax would, which is only collected once on one level of sales instead of a myriad of production phases and scales.
I think people would be happier not knowing how much tax they actually pay, or at least feeling like they don't pay any at the register, which is sad because VAT's don't give a taxpayer any idea at all how much tax they just paid. It's like an 8-lane interstate for pork!
How does the state sales tax work in Texas? Both Florida and Texas don't collect income tax, they get it from the retail sales register.
...and last I heard, the Texas governor's debate was about how to spend the surplus they collected. It sounds like it's working marvelously there.
Here in Texas, we pay a 6% or so sales tax to the state for just about everything except non-prepared foods and items meant for re-sale. Then, we pay an additional 1-3 percent depending on the city for a local sales tax. We also charge property taxes and corporate franchise tax for all comapnies that do business or utilize resources from the state.
In Arlington, we pay a total of 8.5% of sales tax in order to pay for JerryLand (the new Cowboys Stadium.)
That 8.5% is only high when compared to the 6% that I already pay in sales tax, then they go again and hit me up by docking my pay by 6%. I'm paying 6% of my remaining 6%, and it doesn't include property taxes, either.
There concensus among local accountants and economists is that if you included the service sector and internet sales, the Georgia state sales tax would drop to 2.5% and be revenue-neutral against the income tax. This isn't about being rich, either- you pay 6% if you make $7,000 a year or more.
At 2.5%, it's a tax break for absolutely everybody. 23% Federal tax is a tax break for everybody too, because the actual amount of tax we pay is hopelessly hidden behind everything but the speculation of research economists, but it estimated to be on the order of 20-28% depending on the type of retail good we're talking about. Throw in the pre-bate system, and you'll end up paying about 11% to the feds if you spend $50,000 per year under the Fair Tax.
Hey, at least you gotta love Johnny Isakson's (R-GA) bill- the one to abolish the current tax code by 2010 and make Congress replace it!
I'm a strong supporter of the Fair Tax, but as long as we replace the income tax then I will be happy. Maybe a VAT system is more appealing, but whatever we do, this obnoxious and unconstitutional horseshit born from class warfare and monstrous government spending cannot become a staple of the economy, because Social Security and Medicare will not be able to survive unless we re-think this whole process.
Thanks for the article BLA. I have a few questions:
I wonder what would happen to gas prices if this consumption tax is passed? And how will Americans react?
Will this Fair Tax be applied to the following hypotheticals:
The girl down the street who babysits your kids
The boy down the street who mows your lawn
Doctors, dentists, and etc.
Will they have to collect sales taxes? In essence, will the IRS be replaced by businesses since they, in fact, will be collecting taxes instead of the government?
Can't this be construed as a major blow to the federal government rather than help for the American taxpayer? Furthermore, won't we just replace the IRS with a different bureaucracy (or the same bureaucracy with a different name) since some agency has to collect the national tax?
Will the rebate system for the poor be no more than a redistribution of wealth? The rich surely won't be receiving many rebates.
When we pay a tax on consumption, aren't we basically paying for the permission to live? Isn't it implied that people won't be able to sustain life unless they pay the state a tax right off the bat?
Just a few questions to get the juices flowing!
These are great questions which require substantial answers, so I'll answer them in a full post with graphics in a new post next time I get a chance.
Sure thing bro. I know you're probably going to make quite the case. I'll be looking forward to it!
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