H.R.25 - Fair Tax Act

To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States. view all titles (3)

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  • Official: To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States. as introduced.
  • Popular: Fair Tax Act as introduced.
  • Short: Fair Tax Act of 2011 as introduced.

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Displaying 1-30 of 163 total comments.

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SOMDBrewmaster 08/10/2012 3:00pm

I like the idea of a fair tax (sales tax) but think that 23% is a scam. 23% would only result in a nominal cut for people making over $80K/yr. The extra money in your pocket from witholding would be immediately offset by a 23% increase in prices. To be fair, a sales tax would have to be 10% or less, matching the lowest nominal rate. To implement that and fully fund the government, the government would have to reduce it’s spending by 2/3… AIN’T GONNA HAPPEN. Which would mean more borrowing and printing money, driving up inflation and prices… and we all know that wages aren’t keeping pace with prices. If passed, this bill would prolong the hurt because the government can’t cut spending and prices would go through the roof.

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shreyajason 12/19/2011 7:41am
in reply to wjohns612 Dec 03, 2011 11:45am

Very good post. I realize that I was totally wrong about this issue. I guess you learn something new every day. Lesson learned Ms. Right! Nice website, informative on the road.
Criminal Defense Attorney Carson City Nevada

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molonlabe 12/04/2011 9:09pm

Not only is this a bad idea because it would in effect make a regressive tax. This law would eliminate the IRS only to create an equally sized or potentially larger bureaucratic organization required to collect the national sales tax.

wjohns612 12/03/2011 11:45am
in reply to phanya2011 Dec 02, 2011 11:54am

This may be a little outdated, but I found this analysis of the Fair Tax on FactCheck.org and found it informative. Thought it might be a helpful resource for this forum…

Unspinning The Fair Tax

phanya2011 12/02/2011 11:54am
in reply to christapher Jan 13, 2011 8:07am

I would like to see a summary of what an individual will pay tax on in the way of service and consumer goods. I tried to figure out what is and is not taxed, but it wasn’t too clear to me. I think it said there is a sales tax on rent, real estate, and ‘consumer goods,’ but I wasn’t sure if that included food or not. No tax on items purchased for business or investment. Taxable services aren’t real clear, either; apparently a business pays sales tax on salaries and benefits paid to employees for their work unless they are “employed in the regular course of business,” which I don’t understand; why else would they employ anyone? Maybe they mean outside people or part time people. Payments to domestic workers are taxed.

darkart1 11/28/2011 5:24pm
in reply to maxim80 Oct 15, 2011 11:06am

Maxim80, please read about the fair tax and learn about it, you are right now paying an embedded 27 per cent , and the 23 per cent will REPLACE that. The main reason 99 per cent of people that are against it is that they have no clue and won’t take the time necessary to learn anything about it. Read through these posts and you may start to have a clue and understand that it would benifit you, be fair and fix alot of problems that exists with the over complicated and unfair tax code that exists now.

darkart1 11/27/2011 7:40pm
in reply to Soichiro Jan 06, 2011 12:20pm

That is not true at all, the more money you have the more you spend, your percentage argument don’t cut it. Also there is already a 27 per cent embedded tax in everything you buy now. A 23 per cent tax will simply replace this. And you can always buy used items, cars, houses etc. there is no tax that way at all. Your cost of living will not be taxed either by means of a prebate. I’m not by any means rich but if you understand it it works out better for even us in the 30-40K range workers. I buy used cars, my house was already lived in, NO Tax on either. Anything else would be same price because the fair tax replace an already embedded 27per cent on everything you buy now. I personally would love to get my paycheck without taxes taken out and choose whether I pay more or less taxes with that extra money. Read all the info on it and you will see that it would be better for those with less income as well.

soitgoes12 11/22/2011 8:09pm

I guess they want consumer demand to be even lower.

maxim80 10/15/2011 11:15am
in reply to saber Feb 07, 2011 8:35pm

Bingo…I want to see them tax bartering. This would be a throw-back to the middle ages in terms of tax collection. The rich would no-doubt find a way around it, and the rest of us would have to resort of ‘victory garden’ and ‘black market’ bartering.

maxim80 10/15/2011 11:09am
in reply to cklopez Sep 13, 2011 5:26pm

You may want to check your facts. If the IRS spent $0.53 for every dollar collected they would constitute the largest expenditure of the Federal Gov., but they don’t. The number 1 expenditure of the FG is Social Security and Medicare/Medicaid.

maxim80 10/15/2011 11:06am

This could have been conceived only by a person who is completely out of touch with the middle class America. If you want to hurt the economy more than it already has been, H.R.25 is definitely the right tool. Let me put this into layman’s terms. If I have to pay in excess of 23% sales tax (in most states this would be added to an existing sales tax, for my state WI, that’s 23% + 5.5%), I will make or grow anything that I can, before I purchase. I will barter before I purchase anything. My spending and the spending of most middle class people will definitely go down dramatically. Considering that consumer spending is the #1 driving factor of our economy, what do you think is going to happen here????
It goes without saying that the sales tax is the most regressive form of taxation. It’s shifting the tax burden from the wealthy to the middle and lower class. This bill is anything but fair.

judahmahay 09/22/2011 10:25pm

You can now support the Fair Tax Act on WhiteHouse.gov at http://wh.gov/gn6

cklopez 09/13/2011 5:26pm

I am personally for a flat tax rate on anything you decide to buy. I believe the idea of “paying for taxes only when you want to” is the best way to go. I personally despise the income tax because it is the equivalent of someone saying “Give me your money before you get it”. There is no sense of control, and it is a fact (Per IRS) that the IRS spends 53 cents of every tax dollar it collects to collect it! If it was collected by businesses, and just sent to the Treasury each year there would be 1) No tax evasion (or nearly none I’m sure someone will manage to do it anyway) and 2) A severe cut in the overall expenditures to collect. Also I think it would do the opposite, if the rich like to buy their “toys” and “lavish luxuries” a 23% will make sure they pay their share. In the end I’m sure numbers will show they will end up paying more.

FairTaxer 07/12/2011 8:28am
in reply to Sapphireyes Jan 25, 2011 2:49am

OriginalBAC151,

You are incorrect in assuming that the FairTax will “disproportionally hit lower and middle income families/citizens”. Take a few minutes to look into the Prebate and how it untaxes those families/citizens. You may be surprised to know that a family of 4 spending $30,000/year will actually have a FairTax rate of 0%; whereas the same family of 4 spending $2M/yr will pay the full FairTax rate of 23%.

OriginalBAC151 06/03/2011 2:54pm
in reply to judahmahay Feb 10, 2011 11:51am

judahmahay,

Your argument here is faulty relating to running for office, just look at Obama, he didn’t come from a family background with wealth…he was able to raise more cash for his election than any other candidate in presidential election history, all without public funds!

OriginalBAC151 06/03/2011 2:47pm
in reply to shomas Jan 28, 2011 9:43pm

shomas,

I don’t disagree with your first statement, but don’t totally agree with it either. :) However, the burden of taxes are shared by both consumer and the seller. Albeit the consumer does bear the brunt of the tax when imposed.

I’ve lived overseas, Japan, Korea, Germany and visited England, France, Austria etc., I’ve paid what is called Value added Tax otherwise known as VAT on items purchased in stores as a consumer. I’m curious, have you? In those countries I just laid out, all have extremely high income taxes as well!

To combat the “China’s” of the world, as a country we can impose what is called a Tariff, which is essentially a tax on any imported goods, of course this can be pinpointed to specific types of goods and on a graduated basis depending on the good. This coupled with a Flat tax rate on income will accomplish your last paragraph as deductions and exemptions will be removed. This is the direction I would like to see the US go…

OriginalBAC151 06/03/2011 2:33pm
in reply to keenen Feb 06, 2011 5:38pm

Keenen,

No offense but you need to “invest” some money in your education and take a basic Macro and Micro economics class available at your local Community College near you!

Soichiro is correct, this 23 or 28% sales tax across the board will disproportionally hit lower and middle income families/citizens at a time when the economy is already at it’s knees.

However, as shomas says, right now Corporate taxes are at 35% which is a contributing factor to Companies within the US and outside the US whether they choose to produce a product in the US or Canada who by the way has been lowering their Corporate taxes lately and next year will be just 15%!

Of course if you were a large Company and you had the choice of paying big Government 35% of your earnings or 15%, what Country would you choose to start producing in?

peacerenity 05/15/2011 2:10pm
in reply to ShuRugal Jan 24, 2011 8:14am

You need to read the bill. In the Fair Tax, prebates are given at the level that a person living at the poverty line (about $20,000 per year) is calculated to require for food, shelter, etc. In short, everyone gets cash payments for 23% of necessities to offset what they’ll be paying in taxes on that amount. So people that live frugally (the poor and the lower middle class) would pay little, no, or actually make money from their taxes.

Thus, the Fair Tax targets those who spend lots of money beyond the poverty level—aka the rich. But that’s okay, because they’re being taxed because they choose to spend more.

On an unrelated note, these “millionaire CEOs” who save 90% of their income are actually investing it in the economy, not hiding it in their mattress. Spare me the class warfare.

peacerenity 05/15/2011 2:03pm
in reply to Chiefcook Feb 23, 2011 6:54am

I think you should clarify that when you say “no exemptions” you aren’t counting the prebate as an exemption.

I agree on the not exempting necessities part. If you didn’t have to pay taxes on food, shelter, etc., then someone can buy incredibly expensive food and live in a million dollar house and pay no taxes. Just seems like a bad idea.

peacerenity 05/15/2011 2:00pm
in reply to judahmahay Feb 10, 2011 11:51am

You’re forgetting about the fact that wealth doesn’t guarantee political success. Just look at the stigma placed on Romney and Whitman who spent their own money to try to get elected: many people accused them of trying to “buy” the election and it backfired on them.

Plus, if someone comes from a really wealthy family like the Rockefellers, many people would accuse them of being out of touch with normal Americans and their wealth would be a political liability. There’s more at play than just money.

The thing with public financing of campaigns is an ideological thing. Public financing means that Republicans can be forced, through their taxes, to fund the campaign of a Democrat whom they disagree with, and vice versa. It’s kind of like using tax money to fund abortions through Planned Parenthood: people don’t like their money being abused (as they see it).

peacerenity 05/15/2011 1:51pm
in reply to keenen Feb 06, 2011 5:18pm

You need to do more research.

First, since the Fair Tax would get rid of corporate taxes, payroll taxes, etc., which are built into the cost of the car and make up a good portion of the car’s cost, the base price of cars would go down and after you tacked on the 23% it would only cost a little bit more than originally.

Second, since you wouldn’t have taxes on income and capital gains, people would have more to spend.

Third, the estimated amount that we would save on the simplified compliance with the tax code is about $400 billion. That’s because currently employees and individuals spend a lot of time filing their taxes when it could be used on other things. We’d also save several billion per year by being able to cut the IRS down to a fraction of its current size. Currently 30% of the income taxes collected are spent as a cost of collecting them.

Fourth, most states project that they would be able to lower their rates as well due to the ease of compliance.

Chiefcook 05/07/2011 11:49am
in reply to TEFinnegan Apr 22, 2011 7:00am

Competition will kick in on day one! In 2005 GM introduced “employee pricing” on new autos to clear out their inventory before the next model year. How long did it take Ford, Chrysler, Toyota and other mfg’s to join the pricing market? DAYS

WalMart introduced a new generic prescription drug program of $4.00. How long did it take Walgreens, CVS, Publix and other drug outlets to match it? DAYS. And Publix then began providing certain prescriptions for $0.00.

Basic economics will bring down the prices as the businesses will compete for their market share. Do not forget that the “inventory tax credit” lowering the existing inventory on Day One by 23% to off set the already paid income tax costs is there. All Consumers will know this and will shop elsewhere if the business does not lower their prices!

Chiefcook 05/07/2011 11:39am
in reply to tom989 Apr 22, 2011 9:47am

A flat tax is still a tax on income. We started with that in 1913. Look where it went. There are too many loopholes that get added to it creating a large mess. There is still the payroll taxes in place which is the most regressive tax around. It hurts the low income people the most. The FairTax eliminates all of these. The prebate eliminates any need to untax the basic necessities. Low income people can buy used goods and avoid paying taxes. It is also good for the environment as items are recycled. The wealthy will be paying more dollars in taxes because they will buy new and expensive items.

SignOfTheDollar 05/06/2011 1:59pm
in reply to Soichiro Jan 06, 2011 12:20pm

Can we please get over the class envy.

Check your reasoning: under FairTax, the wealthy will still pay more in taxes by virtue of the fact that they spend more at the retail level (where the tax is applied).

tom989 04/22/2011 9:47am
in reply to Mouseclone Jan 07, 2011 3:34am

I would imagine a graduated flat tax would be more effective with no loopholes for deductions, etc.


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