| Subject: |
|
Sticky: 30 %: Fair Tax advocates are low-balling the actual FX rate |
| Name: |
|
Elmer Gantry |
| Date Posted: |
|
Sep 29, 06 - 11:53 AM |
| Email: |
|
elmer__gantry@lycos.com |
| Website: |
|
http://rightforcongress.blogspot.com |
| Message: |
|
From the Wikipedia Fair Tax article:
The FairTax (H.R.25/S.25) is a proposal for changing United States tax laws to replace all federal personal income taxes, payroll taxes, corporate taxes, capital gains taxes, self-employment taxes, gift taxes and inheritance taxes with a national retail sales tax and monthly tax rebate to households of citizens and legal resident aliens. The FairTax would be levied once at the point of purchase on new goods and services. The plan would abolish the Internal Revenue Service (IRS) and create a federal "Sales Tax Bureau" to oversee collection of the tax by existing state sales tax administrations [that is to say, putting the burden of Fair Tax collections upon the owners of American businesses].
The assessed tax rate would be 30% if the FairTax were added to the pre-tax price of a good like traditional sales taxes [in Tennessee] (sometimes called tax-exclusive)
American sales taxes have historically been expressed as a percentage of the original sale price (tax-exclusive); items priced at $100 pre-tax cost $130 with the tax added. The use of the tax-inclusive number in presenting the rate has been criticized as deceptive by the plan's opponents[...]Critics also argue that the sales tax rate would need to be higher in order to be revenue neutral.
A good would be considered "used" and not taxable if a consumer already owns it before the FairTax takes effect or if the FairTax has already been paid on the good. The FairTax would tax all services provided at the retail level. Personal services such as health care, legal services, haircuts and auto repairs would be subject to the FairTax, as would renting apartments and other real property. State sales taxes do not generally tax such services. Education, training, saving and financial investing would be considered an investment (rather than final consumption) and therefore would not be taxed.
Under the FairTax, households would receive a monthly tax rebate (known as a "prebate" as it would be paid in advance) equal to the estimated total FairTax paid on poverty level spending according to the poverty guidelines published by the U.S. Department of Health and Human Services. The poverty level guidelines vary by family size and represent the cost to purchase household necessities. The rebate would be paid in twelve monthly installments equal to 23% of poverty level spending for each household size [there again not based on the tax-exclusive rate of 30%] and is meant to eliminate the taxation of necessities. The formula used to calculate rebate amounts would be adjusted for inflation. To become eligible for the rebate, households would register once a year with their sales tax administering authority, providing the names and social security numbers of each household member. The Social Security Administration would disburse the monthly rebate payments.
The President's Advisory Panel on Federal Tax Reform cited the rebate as one of their chief concerns with the FairTax, calling it "the largest (entitlement program) in American history," and contending that it would "make most American families dependent on monthly checks from the federal government for a substantial portion of their incomes." Based on the advisory panel's tax rate and base (which differs from the FairTax legislation), "the Prebate program would cost more than all budgeted spending in 2006 on the Departments of Agriculture, Commerce, Defense, Education, Energy, Homeland Security, Housing and Urban Development, and Interior combined... |
|
Replies:
|
|
|
|
|
Hey Webmasters! New Photo Album Service Launched - Check it out!
Reply
Home
bravenet.com