They call it a “rebate” though. To get a rebate you must spend the money first, then you get it back. To get the money up front before it is spent would be an allowance. To get an allowance that doesn’t have to be refunded if not spent would be unimaginable.
NO, in this Fair Tax system it looks like the poor will have to endure much higher prices on a promise that they will get some of what they spend back later. To be fair they should not have to pay the tax at all if they are on the list to get it all back.
The “rebate” would come monthly, not two months after April 15 of the next year. The rebate system is in the interest of simplicity - othewise, you have issues of verification. Who is poor? What income is counted? How do I hide my income so I LOOK poor?
The moment there is a discrimination between income levels, the whole thing collapses. Then you get… yes… what we have right now.
Exactly, and that’s why I don’t think this system will work.
That’s cool.
I think it will work, and I support it.
| Quote (phoo @ Nov. 08 2004,13:57) |
| NO, in this Fair Tax system it looks like the poor will have to endure much higher prices on a promise that they will get some of what they spend back later. To be fair they should not have to pay the tax at all if they are on the list to get it all back. |
Hey pooh,
I'm not shure if this is nec. true.
They are still working out all the kinks, and I agree this one sounds like it need work.
However I'm not shure that there will be hihger price's at least for products made in the US--here's why.
If an employer previously had to pay a worker "X" amount and the emplyee only took home "Y" amount it cost him more to pay an employee less. This cost get's absorbed into the product.
If this cost is removed from the labor cost of a product it's overall production cost declines. This means "cheaper" products being made. The tax is then added on the retail end and the cost shouldn't raise to the point that your suggesting.--might even go down. Since labor is the highest factor in alot of products. Of course a company could always just keep the difference as profit and let there products price go up. But then they would risk loosing sales, so it's alot of give and take on both sides.
But the main reason I think it's would benifit the US is because the rep.s are already stating that if a product is exported, it avoids the retail tax, and only has to pay a low tarrif or export tax. This sounds great for our economy.
Of course we could always let things continue the way they are and watch our jobs and countie go down the tubes...Unless you have a better idea.
jerm
It’s really a “prebate”, not a rebate. Folk’s are paid in advance. And crooks pay tax with everyone else, when they buy their bling bling. No more hiding work under the table, no need for “cash discounts”.
This arguement has been going on for years. I am in support of a national sales tax and on these terms.
1. The sales tax would only cover luxury items and would not include necessities like food, clothes,utilities and medical.
This would protect the truely poor from spending more tax than they should.
2. First cars and first houses would not be taxed. Again this would help the poor and protect them from the tax.
3. All other items would be taxed evenly. This would allow the wealthy who buy a large amount of consumer goods to be taxed according to their buying habits and wealth.
4. The IRS would be abolished and tax debt prison would be a bad memory.
5. There should be no prebate or rebate. The system needs to be simple and in this system, the poor would not be taxed unfairly. I know this since I spent a decent portion (10 years) of my adult life well below the poverty level. When you are that poor, you do not buy lots of luxury items. You mostly buy food, pay rent and utilities. These items should not be taxed.
6. All items for sale should not be marked pretax and post tax. For instance, if a car is going to cost you $20,000.00 then it should be marked as such. It should not be marked $14,000.00 and then when it comes time to pay, the tax is added on and now it is $20,000. By having the tax already in the price, consumers will not feel cheated by the taxing scheme.
When I was living on the street (for a short while) and still paying tax (social security tax of 15.3%), I realized that the tax code as it stands still hurts the poor. Even if you only make $10,000 a year, you still have to pay $1530.00 for social security. That is a huge chunk of your income compared to those making even $30,000 a year. That is what I call regressive.
just my 2 cents,
Mike
6. All items for sale should not be marked pretax and post tax. For instance, if a car is going to cost you $20,000.00 then it should be marked as such. It should not be marked $14,000.00 and then when it comes time to pay, the tax is added on and now it is $20,000. By having the tax already in the price, consumers will not feel cheated by the taxing scheme.
They can do it at a ball game with hot dogs. What makes me feel cheated is that the hot dog is $6!
They can do it at a ball game with hot dogs. What makes me feel cheated is that the hot dog is $6!
| Quote (DrGuitar @ Nov. 10 2004,08:32) |
| 1. The sales tax would only cover luxury items ... |
Won't that increase imports?
There is always a negative side to proposals like this. Some sector of society or some part of the economy will end up suffering.
The basic rules of modern economy have been around for a long time. There's no perfect economy, things are the way they are for a reason, to hopefully strike a balance between the economic health of a country, and the well-being of all its population.
You can't make a silk purse out of a sows ear. If the economy is in trouble, then juggling with the numbers won't magically fix it.
| Quote (jhonan @ Nov. 10 2004,08:57) | ||
Won't that increase imports? |
I don't see how adding a tax to the cost of luxury items across the board (whether imported or domestic) will increase imports. In fact, if the tax is only for people who buy items in the USA, then exports from the USA will be cheaper and exports will increase. Remember, by no longer taxing industry, their bottom line of cost can drop and products can become cheaper. Of course, we in the US wouldn't see it, but overseas they would. So USA products would actually cost less elsewhere and spur increased monies from overseas to help build jobs here in the US.
Mike
PS.
There always will be nay sayers. And this is good. It is the nay sayers that help find the problems in plans before they are implimented. But the system as it is now is very much broken and being held onto like a wounded dog dragging a broken leg. It's time to cut the leg free and find a new way to walk....
So this is the answer when the black market steps in and more and more individuals start dealing with them, Remember prohibition anyone? Gov. says no more alcohol, Big crime steps in and profits, same will happen with this tax system. WAKE UP AMERICA!
Here’s what I found on the Armey flat proposal:
<!–QuoteBegin>
| Quote |
| Once these changes are taken into account, Treasury’s analysis shows that the typical family would pay close to $2,000 a year in additional taxes under the Armey flat tax. Very rich people, however, would get tax cuts averaging more than $50,000 each. More specifically, Citizens for Tax Justice (CTJ) has calculated the effect of the flat tax on a range of income groups. For simplicity, CTJ focuses on non-elderly couples with two children, based on actual tax return and Census data (adjusted to 1996 levels). The results are similar to those shown in the tables presented by the Treasury and by Hall and Rabushka in 1983. For example: Family income: $25,000. Under current law, a family of four earning $25,000 pays essentially nothing in combined personal and corporate income taxes. Taxes that would otherwise be due are offset by the earned income tax credit, which Armey would repeal. Under the Armey plan, with its proposed exemptions but with a 22.6 percent break-even tax rate, such a family would typically pay $810 in taxes on its $3,600 in fringe benefits and $1,540 as its share of the business tax. Thus, its tax bill under the Armey flat tax would increase by about $2,400. Under the alternative scenario, with a 17 percent tax rate but lower exemptions, this family’s tax bill would increase by almost $3,700. Family income: $45,000. This family would currently owe about $3,800. Under the Armey plan, its taxes would increase by $1,740 to $4,200 a year, depending on the version. Family income: $85,000. Current personal and corporate income taxes on this family would typically amount to $11,140. Under the Armey plan, wage taxes alone would be $10,400 to $11,650. When taxes on fringe benefits and the business tax are added in, this family would owe $4,600 or more a year in additional taxes. Family income: $500,000. Under current law, this family would pay $154,000 in combined personal and corporate income taxes. Under the Armey plan, the family’s tax would be slashed by half or more for a tax cut of between $78,000 and $93,000 annually. |
Great idea - huh?
Taken from - Citizens for Tax Justice
| Quote (MidnightToker @ Nov. 10 2004,13:36) |
| Here's what I found on the Armey flat proposal: |
How could ones taxes be increased by the numbers suggested if a family saves it's new found weath instead of spending it? I thought the whole consept was based on spending? seems pretty simple to avoid the increase, don't spend your money!
And so what, if you spent all the money you made in a year, and ended up paying more in the long run.
At least you would have a job, due to the lower labor cost the companies would benifit.
What good is a lower tax if you are unemployed because all the jobs left your country?
Personally I'd rather put my money in the bank over the year and make interst off it, instead of letting Uncle Sam have it all year get the interest,than give it back. without sharing the added weath. And what about all the revenue losing due to illegal enterprises? I guess our schools, and parks don't need that money either.
Let's just keep things goin' gradually into the gutter, because that's that safest bet.
This counties going in the sheethole, as you have pointed out yourself. Something radical must be done to help us get it back out. If not this idea, give us another one braniac.
You kill me sometimes Mike...
I’m in the Triad area of NC where state and local gov has offered large incentive packages to lure Dell into building a new plant here. Dell has accepted and is looking at several locations to build. Approx. 1500 jobs from the git go. Everyone is excited, but has forgotten the incentive plans to lure Briggs and Straton here several years ago. B&S came and stayed for around 3 years. Now they are in Mexico. So don’t come off about giving big corps. a break so they will stay and create jobs. They only want huge profits so the top exec’s can drain the company for all it’s worth before pulling out on the worker’s who actually did something to make the bucks. Corperate America is a huge sham!!!
Ban all corporations. Anarchy, YEAH!!! 