For several years I have been a supporter of the “Fair Tax”. When I originally heard of the idea I liked it since it taxes the underground economy. All of the people who are flying under the IRS radar by getting paid in cash will instantly become tax payers! Waiters, drug dealers, illegal immigrants, all will become part of the tax system. Yes, even the kid down the street that cuts your grass becomes a taxpayer. when he spends the money on a new Xbox game and double McCheeses he pays the fairtax! If he puts it in the bank and saves it for college .. no tax. For a long time that is all that I needed to know. That was enough for me.
As time went on I realized that there is a LOT more benefit to this type of tax system.
Here are just a few of the high points as I see it
- Everybody pays but the monthly prebate will keep it from being a burden on low income earners. High income earners who spend more will pay more.
- Everybody keeps 100% of their paycheck! Plus they get a check in the mail every month to offset the cost of the tax on basic necessities.
- It encourages saving. Think about it – banks will become better capitalized and it won’t take a government bail out!
- It will attract business (and jobs) to the USA.
- It’s incredibly simple.
- As I already mentioned, there is no avoidance by getting paid in cash
- Foreign visitors pay tax when they spend here!
- By removing all of the hidden, embedded taxes and replacing them with one simple tax the cost of goods and services will remain the same.
- It keeps politicians from trying to buy our votes with our own money by finagling tax policies! There will still be plenty of debate on how to spend the money though.
Can we support the entire US budget on a sales tax? Well, there are two parts to that. Congress needs to enact a reasonable budget and then stick to it. Government spending is a whole other issue. However, two of the largest government economies in the world are supported without income tax! That’s right Florida and Texas have no state income tax. They completely support the state governments with a sales tax. It’s not even like the fair tax because it does not remove the hidden and embedded taxes form the cost of goods and services.
I have looked at the fair tax from many angles and at this point I cannot see any reason to not support it.
For more information on the Fair Tax visit www.fairtax.org
Here are links to a few previous posts that I have written about the Fair Tax.
http://activerain.com/blogsview/754924/How-about-some-REAL-tax-reform
http://activerain.com/blogsview/934776/Real-Estate-and-The-Fair-Tax
http://activerain.com/blogsview/932104/Will-the-American-Republic-endure
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Here is another one in a series of short video clips about the fair tax.
Just for reference, in this series of ads the guy on the right is our current tax system and the guy on the left is the Fair Tax guy. Enjoy!
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“The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money" Alexis de Tocqueville 1805-1859
"Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude." Alexis de Tocqueville 1805-1859
Bob Southard, e-Pro, Realtor ®, Solid Source Realty, Inc. Buy a home, Sell a home, in Powder Springs, Marietta, Kennesaw, Acworth, Dallas, Hiram,and Cobb, Paulding, Douglas, North Fulton, South Cherokee, County, Ga. Call me for all of your real estate needs.
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770-656-9134
Copyright © 2008 By Bob Southard, All Rights Reserved
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Bob Southard, e-Pro, Realtor ®, Solid Source Realty, Inc. Buy a home, Sell a home, in Powder Springs, Marietta, Kennesaw, Acworth, Smyrna, Dallas, Hiram,and Cobb, Paulding, Douglas, North Fulton, South Cherokee, County, Ga. Call me for all of your real estate needs. Visit my website
Call me for all of your Real Estate needs 770-656-9134 Copyright © 2008 By Bob Southard, All Rights Reserved
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Bob,
I like it. It makes sense. It is even better than a flat tax. How do you sell it to the myriad special interest groups?
How is it different than the Flat tax? I like the idea. It always bugged me that some are able to shelter so much income and not pay their fair share. But I bet that CPA's will fight it!
Robert - They are similar but different. The flat tax uses one tax rate for everybody instead of progressively higher taxes on higher incomes like we have now. However, the flat tax does not remove any of the embedded taxes formt he cost of goods and does not address corporate taxes. Also I think it is collected just like our current taxes. We file a return and pay. I am pretty sure that the question is dealt wiwth more in depth on www.fairtax.org. BTW - most cpa's like it. Instead working on tax avoidance for their clients they can actually help them make sound business decisions to grow and expand their busienes.
Ray - Special interests will still have their say in how the government revenues are spent. For the people they represent - what could be better than keeping 100% of your paycheck AND getting a check in the mail every month?
Good stufffff! I really enjoyed. Great post Take care and God Bless. Have a wonderful weekend
Bob,
I think it is a great idea and have thought so for awhile. I really never even thought of all the cash paid people. That would be great to tax the drug dealers!!
Bob,
Nice post. You should consider posting it in my Tea Party group that I formed to debate about our tax structure. Of course we talk about other stuff too, but that is tha main focus. Here is the link:
http://activerain.com/groups/teaparty
Thanks Bob, I have heard people use the term "flat tax" and explain it as a consumption tax in the past. the way we are going now I dont think we will see it come into play anytime soon.