| Subject: |
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Sticky: Re: Re: Ask Me Questions!! -- Fair Tax Plan |
| Name: |
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Terry |
| Date Posted: |
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Aug 17, 06 - 10:59 PM |
| Email: |
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TBMisc@BAeBiz.com |
| Website: |
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http://www.WorkBootPlanet.com |
| Message: |
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Why is a 23% sale tax better than what we've got? When you totally do away with the Federal Income tax, Social Security, AMT, Corporate and business income taxes, capital gains taxes, medicare taxes, self-employment taxes, estate taxes and gift taxes, 23% sounds reasonable. All these currently exceed 23% for most people. And all these would be repealed with the passage of HR 25 / S.25.
A key here is that the "Fair Tax" plan is a replacement for, not an addition to the existing tax structure.
This comprehensive change in the tax structure of the US would have a dramatic and positive economic impact for us. The nature of our tax and regulatory requirements has created a negative environment where many companies have relocated their corporate HQ in other countries (Daimler-Benz / Chrysler for instance) thereby causing an economic drain to foreign soil. Further, foreign corporations are disinclined to locate their HQ and often their operations here for the same reasons. This change would result in the US becoming a one-of-a-kind tax haven (for businesses), drawing corporations here from all over the world. Remember, businesses are the source of jobs, so that would mean more jobs for Americans.
Domestic businesses spend an enormous amount of resources to operate their businesses in a "tax effective" manner. Business decisions are made, not just because it is a good business decision but because of the tax impact. I personally spend 40 - 60 hours / year just in doing my taxes (that is non-productive time). Just imagine if all that time (how many billions of dollars of productivity) were directed to actual productive work, instead of satisfying the tax man.
And if that isn't enough, the hidden economy (which isn't currently taxed) would be paying taxes and contributing to the maintenance of our governmental functions. Who are the hidden economy -- people paid in cash and not reporting, tax cheats, criminal activities, etc. Some estimates place this at more than 10% of the GDP (Gross Domestic Product). The IRS recently reported this at $345 billion in lost tax revenues.
From what I've read and studied, the middle class would not be hit hardest. The only people who get a break are people below the poverty level (and I personally think that is reasonable). Everyone else would pay the same based on our expenditures. People couldn't escape it by using all the tax loopholes or operating in the hidden economy. Given the total impact of more people contributing (through taxes on their purchases) and eliminating all the other taxes, I don't know of any who would not be better off.
One other thing I like about this plan is that it makes taxes very visible to each one of us. We will see it with every purchase. Consequently, we will be much more aware of and sensitive to tax increases and will be more likely to raise our voices when unnecessary things are being added to our tax burden. Current taxes are often not very visible to people. Ask ten people what they make and (if they are willing to tell you) they are likely to tell your their take-home pay, not their total before taxes.
BTW, as I understand it, barter transactions are already taxable, unless one choses to operate in the hidden economy.
I'm going to challenge you (and everyone) to dig deeper into the "Fair Tax" plan. I encourage you to get a copy of "The Fair Tax Book" by Neal Boortz and John Linder. You can also go to http://www.fairtax.org/ to do research. I know you have a ton of stuff to learn, but this one is worth the effort. There are already about 55 representatives co-sponsoring this bill in the House.
This plan needs a deep and open examination and active public debate. It's a whole lot better than putting band-aids on the existing tax structure. We've been doing that my entire life with little positive results. |
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