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Fair Tax - National Sales Tax

Original post made by Me Too, Another Pleasanton neighborhood, on May 24, 2011

While it's not currently a hot topic, what do people out there think about a national sales tax (often referred to as Fair Tax) vs income tax. The basic premise is that we tax consumption instead of taxing production. On the surface, it seems logical to me What do you see as the pros and cons? Does anyone know of a country that operates this way?

Comments (27)

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Posted by Sam
a resident of Oak Hill
on May 24, 2011 at 1:02 pm

I'm not sure but I thought that many European countries use a national sales tax called a "value added tax" (VAT). I'm not sure exactly how they implement it, but it seems that one drawback of a national sales tax - or maybe "advantage" depending on your political stripes-is that it's regressive.

By the way, calling it "Fair Tax" is hardly neutral, isn't it? It's pretty obvious which side in the debate for or against a national tax coined the term "Fair Tax".


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Posted by WOW
a resident of Danville
on May 24, 2011 at 2:06 pm

The reasons European countries use a VAT is because they're are a bunch of tiny socialistic countries without states. They can stick it to you any which way because they've rejected our free capitalist way of living. We have our unsustainable states sales tax. Now some genius wants to levy yet another tax? Just what we need. NOT.
I'm with Sam on this. Sounds like FAIR Tax is just another UNFAIR Tax. (And watch Nancy Pelosi get her liberal high falooting friends out of that one!)


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Posted by Me Too
a resident of Another Pleasanton neighborhood
on May 24, 2011 at 2:30 pm

It is not intended to be another tax, but to replace all federal taxes (not sure about state taxes). Of course the term 'Fair Tax' is not unbiased, but of course someone needed to give a catchy name.


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Posted by Nobody's Fool
a resident of Avignon
on May 24, 2011 at 3:12 pm

Do I have to be the first one to say it? The first thing that we're hear from will be the poor people who will hold up their children and claim they don't make enough to be taxed. The next entitlement group will be the retired and disabled and they'll claim their on fixed incomes and can't be taxed. The next entitlement group will be the blacks who will claim excemptions based upon so called past injustices of long ago. Single mothers, homeless, they'll all be lining up, and the Demoncrats will pamper them and tell them they'll be their nannies.

And just like now the wealthy and corporations are left holding the bag. We need to cut all corporate taxes. Period. We need to show gratitude for them giving everyone jobs. Next we need to pair away the public employee leeches who are sucking our system dry on account of unsustainable liabilities. We all need to step up to the plate and be responsible and accountable. We can't go on funding the entitlements and the teacher leeches when the money isn't there because of tax exhaustion.


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Posted by Jeeesshhh
a resident of Another Pleasanton neighborhood
on May 24, 2011 at 6:44 pm

The above is one of the more disgusting rants you are likely to read in these threads.


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Posted by Spot on
a resident of Danbury Park
on May 24, 2011 at 6:50 pm

Jeeeeeesshhh,

You may not like it but it is spot on and exactly what would happen.


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Posted by Jeeesshhh
a resident of Another Pleasanton neighborhood
on May 24, 2011 at 7:14 pm

In your twisted opinion.


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Posted by Spot on
a resident of Danbury Park
on May 24, 2011 at 7:36 pm

Jeeeesshhh,

If you have an intelligent opinion please express it, if not, please keep your name calling to yourself of just stay off of here.


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Posted by Rae
a resident of Mohr Park
on May 24, 2011 at 7:44 pm

The VAT is actually a big part of . . . wait for it . . . Republican Paul Ryan's "Roadmap for America's Future".

Rep. Ryan proposes to eliminate the "corporate income tax", or taxes paid by entities taxed as a corporation, and replace it with a 8.5% "business consumption tax", aka, "value-added tax (VAT)". The VAT would be paid by the consumer and would be imposed on top of a state's sales tax. So, here in our little area of the world, we'd be paying initially 18.25% on our purchases (8.5% VAT + 9.75% state sales tax). Rep Ryan currently does not propose a limit on how high the VAT would go.

While Rep. Ryan does propose to eliminate the income taxes on capital gains, stock dividends and interest, he wants to continue taxing income that comes from work. The VAT *will not* replace federal income taxes. He says the tax reform part of his plan "promotes work, savings and investment" . . . I guess that's because, so many of us just throw away all that extra money we have on frivolous stuff after paying our bills.

Rep. Ryan's proposal to simplify income tax rates is "two rates and virtually no special tax deductions, credits, or exclusions (except the health care tax credit)". The rates are "10 percent on income up to $100,000 for joint filers, and $50,000 for single filers; and 25 percent on taxable income above these amounts." The proposal includes a "standard deduction is $25,000 for joint tax filers, $12,500 for single filers. The personal exemption is $3,500."

Web Link

While I'd love to see the tax code simplified, shifting corporate income taxes to the consumer does nothing but give one more giant subsidy to big business on the backs of America's taxpayers.

If I, as an individual worker and consumer, need an income tax levied against me in order to motivate me towards "work, savings and investment", why is it that corporations do not require that same motivation? Oh, I forgot, they're the good guys! All those big oil, insurance industry and Wall Street execs and would never take advantage of, or goudge any of us taxpayers after we're paying their tax bills for them . . . right?


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Posted by Dont be fooled again
a resident of Siena
on May 24, 2011 at 8:09 pm

Don't believe Rae. I'd rather consumers pay a fair share of their taxes rather than the corporations which are the life blood of our nation. What we pay for in taxes will be more than made up for by the corporations who will compete to lower their prices to satisfy consumers. Corporations will be free to engage in R and D and drill new wells without being exhausted by unfair taxes. We'll all save money over the long run. More oil, more drugs.

Meanwhile, consumers will be healthier because we'll have recovered from tax exhaustion and won't be saddeled with unfunded liabilities. With elimination of medicare, social security, teacher tenure and other irresponsible programs we save money all around and this will make us truly more sustainable as a nation.

Rae's rant shows how ignorant the liberals are. "Goudge"? What school did she go to? It's spelled gouge, and I didn't have to have any unionized teacher making over 100 grand tell me that.


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Posted by Jeeeesshhh
a resident of Another Pleasanton neighborhood
on May 24, 2011 at 8:12 pm

Spot on can't stand other's opinions. I will repeat mine. The rant by Nobody's Fool is disgusting, and Spot on's opinion expressing agreement with Fool's is twisted. Fool's opinion is full of name calling and Spot on agrees with this, but calls my opinion name-calling. Jeeeesshh......


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Posted by Sam
a resident of Oak Hill
on May 24, 2011 at 8:22 pm

Come on, you're hopping on people's typos now? Sheesh! By the way, what's "saddeled"?


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Posted by independent
a resident of Civic Square
on May 24, 2011 at 8:24 pm

This is a good discussion that needs to be discussed intelligently. Clearly we are awash in unfunded government debt, and hammering the corporations isn't going to help matters one bit. I'm open to elimination of medicare and other unsustainable programs as long as corporations continue to hire and offer consumers goods at a reasonable rate. Jeeesh might not like Spot On's position, but I think Spot On and Nobody's Fool just want to live in a free society where like Martin Luther King said it isn't about the color of your skin or what entitlement group you belong to but about us all being Americans. Just for once we need to be able to say not what's in it for pampered entitlement groups. That's acting irresponsible and being unaccountable to the reality where entitlements are blocking out the sunshine of our fine state. Hard truth is this: where do I come in? What's in it for me and why do I have to be an exhausted taxpaying nanny for the weak who don't take responsibility?


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Posted by Spot on
a resident of Danbury Park
on May 24, 2011 at 8:30 pm

independent,

The number I heard for a flat tax or whatever you call it is 23% and this number would generate the same amount of money as current. There would be no federal or state income tax only a tax on consumption. I also have read that there is a more fair distribution of income to the state because the state in which the purchase is made takes there amount first before forwarding on the allocation to the federal government. It also creates a tremendous amount of competition for the consumer because the more purchased in your state the better the revenue.


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Posted by Me Too
a resident of Another Pleasanton neighborhood
on May 24, 2011 at 9:29 pm

From the little I have read it seems like reasonable proposal as long as its straight across the board (i.e. no entitlements, etc) although I guess the current biggest proponents support some sort of rebate for the poor.

The problems is what are we going to to with all the corporate accountants who spend all their time trying to avoid US taxes?

Honestly, I think that may be one of the bigger benefits. If corporations aren't moving their money to foreign countries to avoid paying US taxes, it would seem like a good thing.

Again, I only know a little about this (and a little knowledge is dangerous) but on the surface, it seems like a reasonable to run a tax.

Again, this is not an additional tax, but a different structure of taxes replacing what we currently have, not in addition.


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Posted by Jeeesshhh
a resident of Another Pleasanton neighborhood
on May 24, 2011 at 9:30 pm

Absolutely a disgusting, name-calling, bigotted rant. Attacks

"poor people .....retired and disabled ... blacks who will claim... so called past injustices of long ago. Single mothers, homeless, ..."

Name calls " Demoncrats... public employee leeches .....teacher leeches ...."

This is an intelligent opinion?

Jeeesshhh....


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Posted by Don't be fooled again
a resident of Siena
on May 24, 2011 at 10:44 pm

"I guess the current biggest proponents support some sort of rebate for the poor."

That's it in a nut shell. The Marxist Demorats proponents see this as just another way to funnel taxpayer money to entitlement groups.

Jeesh can naysay all she wants. Thats all the Demorats know how to do. Won't address the real issues like the survival of this country. I'm not attacking any body. In case she doesn't no it, there's all kinds of entitlement groups out there that are threatening the well being of our county and state. This isn't name calling. And I'm not a bigot. There's nothing bigotted about calling single mothers an entitlement group which is what they are. They're one of the worst. Irresponsible, they should have thought about whose going to foot the bill after they bring more kids into the world. Then Obamacare tries to stuff their needs right down our throats. No debate. Nothing. Harmer told us taxes like this were a Marxist plot. It's in the Communist Manifestoe.


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Posted by Don't be fooled again
a resident of Siena
on May 24, 2011 at 11:23 pm

Here it is, look at this.

"A new study by the Guttmacher Institute, a leading reproductive health research and advocacy group, estimates that unintended pregnancies cost U.S. taxpayers an estimated $11.1 billion dollars a year. Nearly two-thirds of unintended pregnancies -- roughly a million births -- are publicly funded by Medicaid and other government programs, the report shows."

Two points; First, look at how the irresponsible single parent mothers are sponging off of responsible taxpayers. It adds up to over 11 billion dollars a year of unfunded liabilities for Joe taxpayer who gets choked under a mountain of debt.

Second,, look what unfunded program is helping to sustain this entitlement group even though the system is tax starved. That's right. Medicaid. People it's up to us. Let's eliminate all the wasteful programs that have driven us straight into the hell of socialist waste and unaccountability.


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Posted by Night Owl
a resident of Birdland
on May 25, 2011 at 12:36 am

As a single parent I'm in shock and unable to write any kind of rebuttal. Sorry. I'm headed for the wine cabinet.


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Posted by Mark Curran
a resident of another community
on May 25, 2011 at 6:08 am

There is no other tax on earth like Fairtax.

Oh, other countries (like Canada) have a national sales tax. But Fairtax is nothing like anything you have ever seen or heard of before.

See, in the Fairtax fine print are massive taxes on cities and states, much of them has to be paid IN ADVANCE. See HR25, where government is defined as a "taxable person", for example. And see Fairtax document "Comparing Fairtax Base" page 10, footnote 19.

"Fairtax adopts a pre-payment approach to taxing government (wages and benefits). "

This would be 300 billion dollars -- in ADVANCE. The state government of California, would owe 6-7 billion IN ADVANCE, and another 6-7 billion on top of that. Plus, the city of LA would owe 400 million in advance, and another 400 million or so, on top of that.

Every city in CA would owe massive taxes, as would every county.

And no, I am not wrong. When I discovered this absurdity, I contacted three Fairtax "spokesmen" to confirm it. David Kendall, James Bennett, and Ross Calloway. All there confirmed it!

Kendall said "I see nothing wrong with asking city and states to pay" Never mind that they aren't asking, they are hiding that in footnotes and double talk. James Bennett said "WEll, if they don't like it, don't vote for it, it's that simple."

I asked Bennett why they hadn't told city and states about this tax in a candid way, he said "We like to explain the general plan first, and later (during hearings) explain the rest."

This is so absurd, I thought they could NOT be serious. They were serious.

SO is there any other plan on earth like Fairtax? No, because Fairtax is a hoax, really. A political stunt.

To have a national sales tax to replace all other fed taxes, would tax a tax rate of 89%, according to Joint Committee on Taxation report in 2005. To just replace the INCOME tax, you could theoretically use the 23% figure, but NOT to replace all other federal taxes too.

Web Link I have a series of videoes exposing Fairtax as a farce, because it is. Sure it sounds great, because they have no regard for the truth. They are not trying to pass their own plan, it's that goofy.

WE need a new tax code in this country -- we don't need more BS and Balderdash.


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Posted by Dont Be Fooled Again
a resident of Siena
on May 25, 2011 at 8:36 am

Mark Curren is just telling it like it is. The national tax is just another unsustainable tax invented by irresponsible liberals to funnel our hard earned paycheck into entitlement dividends for all the favored groups. It would be turned into an unfunded law and then hold us all hostage while entitlement groups get everything they ask for. Who profits from all the accumulated liability and tax exhaustion? Hint ....... its not the people and its not the Republicans. Need another hint? ...... Its a major party, soon to be made obsolete, that begins with the letter D as in Deceitful.


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Posted by Yet Another Teacher
a resident of Hart Middle School
on May 25, 2011 at 9:39 am

Actually, "Dont Be Fooled Again", "liberals" have nothing to do with the so-called FAIR tax. Representative Paul Ryan is a Republican from Illinois and one of the fair-haired boys of his party.

Mark Curran's analysis and Rae's facts are the only posts in this thread worth reading; the rest are a bunch of fact-free reactionary dribblings.

Let's get it straight: this highly regressive tax is being proposed by right-wing Republicans who are in the pockets of the ultra-rich and the huge multinational corporations, NOT the "liberals".

And no, I don't expect any acknowledgement of this fact from those who have already attacked the "socialists" and "Marxists" and "Demoncrats"...facts do not exist in their universe.


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Posted by Classroom Moniter
a resident of Danbury Park
on May 25, 2011 at 9:55 am

Looks like we have Yet Another Marxist Teacher who is spending the school day pinning her propaganda on the wall. I wonder if she makes her students read her business bashing rants. Ronald Reagan used to say the ten words Americans most dreaded to hear were: "Hi, I'm from the government and I'm here to help you."

I'd be for the Fair Tax because Fairness is exactly what this country needs after 50 years of entitlements. If Ryun and the rest of them can implant the tax and make sure the entitlements don't abuse it, I'm all for it. We still need to eliminate Medicare and Social Security.


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Posted by Johnny boy
a resident of Birdland
on May 25, 2011 at 9:59 am

YAT helps our cause by illustrating how many extra teachers we have and how much of our taxpayers money she or he wastes. Last post was at approximately 0940 which is class time.


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Posted by artlover
a resident of Birdland
on May 25, 2011 at 2:52 pm

BTW- when is Amazon EVER going to have to start paying taxes on things they sell? Usually I'm very government hands off, but this is a massive company that really hurts smaller businesses by getting away with not having to pay sales tax.


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Posted by Me Too
a resident of Another Pleasanton neighborhood
on May 25, 2011 at 2:56 pm

There are enough teacher bashing threads on here, I was trying to actually get some information and perhaps a discussion and all we continue to get are teacher bashing and name calling posts. Thanks to the couple posts with actual thoughts/opinions/information.


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Posted by Boner
a resident of Another Pleasanton neighborhood
on May 25, 2011 at 3:41 pm

I would be all in favor of a flat tax or consumption tax on anything purchased. By this I mean no exclusions from the tax nor any individuals. It would be fair, easy to magistrate, and everyone would have a skin in the game. We could probably do a pretty good job of tracking the money this way as well. Right now it seems that whoever has the best accountant pays the least.


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