Fair Tax is NOT FAIR!

Published on November 29, 2007 By COL Gene In Politics

Last night several candidates talked about the so called “Fair Tax”. That is a proposal to replace Federal Income, Medicare and Social Security taxes with a sales tax up to 30%. It was touted as FAIR which is a lie pure and simple. This is another Conservative plan to further lower the taxes on the wealthy.

Let’s take a look at just what a 30% sales tax would do.

The wealthy taxpayers only spend a portion of their income. Any income that they did not spend would escape this tax. A person with an annual income of $500,000 who spent $250,000 would pay taxes only on the $250,000 and would have an effective tax rate of 15%. A person with an income of $50,000 who most likely spends all of their income would have an effective tax rate of 30%.

A person with a $500,000 annual income pays $14,500 in Medicare taxes; $6,500 in Social Security Taxes and about $125,000 in income taxes for a total of $146,000. If they spent $250,000 of their $500,000 income under the Fair Tax they would pay $75,000 in tax (30% of $250,000). Their taxes would be cut in half!

A person making $50,000 pays $1,450 in Medicare; $3,200 in Social Security and $3,000 in income taxes for a total of $7,650. Under the Fail Tax they would pay $15,000 (30% of $50,000) Their taxes would be doubled!

In addition, how the low and middle income tax payers would pay this increased tax is a mystery!

YES this a FAIR Tax for ONLY the WEALTHY!

Comments (Page 2)

COL Gene

on Nov 29, 2007

The "rich", that you have such a jealousy for, have the majority of tax burden in this country.Socialism doesn't work gene, understand that.

We did NOT have Socialism during the 1990's when the wealthy paid a little more in taxes! That is a worn out excuse the wealthy use to perpetuate their GREED!

Gideon MacLeish

on Nov 29, 2007

We did NOT have Socialism during the 1990's when the wealthy paid a little more in taxes! That is a worn out excuse the wealthy use to perpetuate their GREED!

And just when I was giving you credit.

When I remember that you consider ME one of the rich, I have to laugh at this!

Jythier

on Nov 29, 2007

Gid, how can he consider you rich, and then consider you poor enough to need government assistance?

That is why we need to remove all the special interest provisions, increase the threshold where the AMT takes effect to a point where it does not impact the middle income tax payers and make it impossible for the wealthy to avoid paying taxes. There are also many small business owners that cheat on their taxes by charging personal items and work to their company. They keep cash payments and do not report the income and then claim the Acc Rec. is open and get a second bite by deducting it from any revenue they do report. That is why Bush reducing the number of IRS agents was not a smart move! At a time when we are running a deficit we should insure that as many as possible are paying their taxes.

You miss the point. They pay taxes, on paper, but really, that money is coming out of the poor's pockets, not theirs. See, they will, instead of paying a worker, not pay their workers and pay their taxes with it. You will see lower wage jobs, jobs gone, more unemployment, and less overall taxable income in the economy - enough to make up the difference between the pre-increase tax revenue and the post-increase tax revenue.

COL Gene

on Nov 29, 2007

Reply By: Gideon MacLeishPosted: Thursday, November 29, 2007We did NOT have Socialism during the 1990's when the wealthy paid a little more in taxes! That is a worn out excuse the wealthy use to perpetuate their GREED! And just when I was giving you credit.When I remember that you consider ME one of the rich, I have to laugh at this!

I do not know what you wealth is and it makes no difference. What I have said is correct. We did not have anything like Socialism during the 1990's in the U.S. when the upper income groups paid a little more in taxes. The wealthy should never have been given a tax cut because the SURPLUS that was used by Bush to justify the tax cuts DID NOT EXIST. Just as O'Neil and Greenspan said the tax cuts should have been tied to the available surplus. NO Surplus NO tax Cuts! Since there was no Surplus we should collect all the tax cuts since 2001 the wealthy received

Gideon MacLeish

on Nov 29, 2007

The wealthy should never have been given a tax cut because the SURPLUS that was used by Bush to justify the tax cuts DID NOT EXIST.

Thanks for pointing out another Clinton lie. Because Clinton most certainly led us to believe there was a surplus.

Gid, how can he consider you rich, and then consider you poor enough to need government assistance?

I have no idea. Out one side of his mouth, he basically says I should be dead, as I cannot live on what I am making. Out the other side, he says I am wealthy. I give up trying to figure out which I am.

Island Dog

on Nov 29, 2007

You are wrong and I have shown you that.

LOL. Keep believing that gene.

We did NOT have Socialism during the 1990's when the wealthy paid a little more in taxes! That is a worn out excuse the wealthy use to perpetuate their GREED!

A "little more in taxes" is not going to solve anything gene, something else that has been shown to you. You are so obsessed with taxing rich people you don't see anything else.

You want income redistribution so some Americans have to pay for the laziness and irresponsibility of others. America has turned into a nanny state way too much already, we don't need people like you making the problem worse.

Since there was no Surplus we should collect all the tax cuts since 2001 the wealthy received

HAHAHAHAHAH!

COL Gene

on Nov 29, 2007

Reply By: Gideon MacLeishPosted: Thursday, November 29, 2007The wealthy should never have been given a tax cut because the SURPLUS that was used by Bush to justify the tax cuts DID NOT EXIST. Thanks for pointing out another Clinton lie. Because Clinton most certainly led us to believe there was a surplus.

That is CRAP. Bush was the one that said there was a $5.7 Trillion dollar Surplus and it was Bush that insisted on three tax cuts for which there was NO justification or money to pay for them! CLINTON had NOTHING to do with the Bush Tax Cuts! When Clinton left office we had a Balanced Budget which Bush destroyed the very first year he was in office and EVERY year thereafter!

Even if we had the Surplus Bush claimed we also had a National Debt of $5.8 Trillion dollar at the beginning of 2001 so even if the Surplus Bush claimed were real we should have used it to pay down the debt before granting tax cuts!

A "little more in taxes" is not going to solve anything gene, something else that has been shown to you. You are so obsessed with taxing rich people you don't see anything else.

Yes it will reduce the deficit!

Gideon MacLeish

on Nov 29, 2007

That is CRAP.

Wow. SO even when I'm nice to you, you're going to treat me like I'm an ignorant child. Nice. Guess I learned MY lesson!

Here's a clue for you, Col. Just because we disagree doesn't automatically mean that I'm wrong any more than it automatically means that you're wrong. I'd love to actually have an intelligent discussion on these issues, but it's impossible as long as you keep calling my point of view "crap!"

COL Gene

on Nov 29, 2007

Reply By: Gideon MacLeishPosted: Thursday, November 29, 2007

That is CRAP.

Wow. SO even when I'm nice to you, you're going to treat me like I'm an ignorant child. Nice. Guess I learned MY lesson!

What you said is CRAP! Clinton had NOTHING to do with the Bush tax CUTS!

COL Gene

on Nov 29, 2007

You also fail to acknowledge there was no Surplus which was the justification Bush used for the tax cuts! HOW can you give something back when there is NOTHING to give back?

Island Dog

on Nov 29, 2007

Yes it will reduce the deficit!

No it won't. You can't raise taxes on a select amount of Americans, than increase welfare programs at the same time.

Tax increases should be spread across to everyone.

ncjessica

on Nov 29, 2007

You shouldn't bitch about something you dont understand. If you happen to be in a low income family you would get a check back each month to make up for the tax you would pay on the necessary items you buy just to live. There for you only pay taxes on the extra things. Plus having this tax would eliminate taxes on business which would lower the price of everything so it would balance out and we wouldnt even really notice the tax. AND this would also solve the problem of illegal immigrants not paying taxes because in order to buy something they would pay a tax.

danielost

on Nov 29, 2007

i think that this tax should be 36% split evenly between state and federal and then dump all other taxes in the country. with the exception of gas tax. and use that tax for what it is supposed to be used for, roads.

COL Gene

on Nov 30, 2007

Reply By: Island DogPosted: Thursday, November 29, 2007

Yes it will reduce the deficit!

No it won't. You can't raise taxes on a select amount of Americans, than increase welfare programs at the same time.Tax increases should be spread across to everyone.

Ability to pay MUST be part of any tax. I said we must FIRST balance the Budget and begin repaying the Debt BEFORE we commit to new social programs. Another problem with the Fair Tax proposal is that its supporters claim it is Revenue Neutral. If that is true, it will not solve the following issues:

The current annual Budget Deficit.

Repaying the $10 Trillion of Debt.

The Added money Social Security will require.

The Added money Medicare will require.

The Fair Tax as I have shown will be another tax cut to the wealthy because much of their income will be untaxed. If you consider an athlete who makes let's say $10 Million and spends a million on things that this Fair Tax would apply, they would be paying at the rate of 3% Tax. 90% 0f the income would not be taxed. The more you make the better the Fair Tax is to you while people who must spent 100% of their income will be screwed!

COL Gene

on Nov 30, 2007

I contacted the Fair Tax group and asked then if their proposal would be applied to services as well as things. Like Legal and medical services as an example. I could not get a straight answer. What about things like repairs or the many other services? There is talk about eliminating the IRS. WHO would collect all this tax and handle it from Millions of companies. If it were to apply to services, the problems of both collection and how would average people afford such an added tax on things like medical expense or repairs must be addressed.

We need to keep the Progressive income tax and limit the allowed deductions to about two pages of basics. You take your total income (lines 7 through 19, from the 1040) and subtract an allowance (lets say $15,000 per person) for each member of your family, any un reimbursed medical or other losses, local and state taxes, mortgage interest on up to two homes, charitable deductions and then apply the tax rates to the balance. We should restore the higher rates on the two top brackets, retain the lower rates on the middle income tax payers and add a new tax bracket for those that have annual incomes over a million dollars after deductions of let's say 50%. We balance the budget, set aside about $200 Billion per year to pay down the debt, and use any additional surplus to increase the trust funds of Social Security and Medicare.

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