The FairTax?

Exactly what taxes are abolished? The FairTax is replacement, not reform. It replaces federal income taxes including, personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes.

How much do pre-tax prices for goods and services go down under the FairTax? All goods and services already contain the embedded costs of the current tax system in their prices. When these embedded taxes are removed, prices come down. Dale Jorgenson, Ph.D., former chairman of the Economics Department at Harvard University, has projected an average producer price reduction of 22 percent for goods and services in just the first year after the adoption of the FairTax. In addition, the FairTax lowers compliance costs by an estimated 95 percent and the removal of these costs will force prices down even lower.

What about border issues? It is unlikely that “shopping across the border” in Canada or Mexico will result in any cost savings to the consumer. Remember, the FairTax is revenue neutral and therefore price neutral. This means the final cost of retail goods and services after the FairTax remains very close to the same levels found in the marketplace today. With regard to interstate competition, since all states have the same federal sales tax rate, the federal sales tax is not an incentive to cross state lines to avoid the tax.

price neutral? if the corporate tax component of retail price can be easily translated into sales tax component, and not raise the price and provide adequate government funding, why they hell are we still paying income taxes, etc? does this seem like total bullshit to anyone else?

i’m all for talking about some kind of tax reform, but when propenents of system X are spouting goofy stuff like this, it seems to me that system X might not be as good as they are making it out to be…

Isn’t it instructive that this is called the “fair” tax? I mean, seriously, what the hell kind of label is that?

I smell a political agenda…

Hasn’t it been shown time and time again that income taxes are more progressive and sales taxes are more regressive? Why would anyone aside from the rich want to replace income taxation with higher sales tax?

well, i think that you could create some kind of fair sales tax, as long as their was a big exemption or tax exemptions or something. but with $12K exemption and no exceptions, i don’t think this is the one.

i also love their idea of sending everyone a check for $1000 every month. like, everyone. that sounds efficient.

You couldn’t really do this – not practically. You’d have to track every single purchase – can you imagine the paperwork? Sales tax, where it applies, is slapped right on the purchasing price and collected from the retailers which naturally don’t know how rich their customers are, or even their identity (and would you want them to know?).

You know what, I don’t even care anymore, let’s just do their stupid rich person tax and if there’s a revolution and I have to become Overlord of the Midwest with an eyepatch and minions and oil is super precious and I have a midget on my back and everyone farts around looking for Thunderdome or Waterworld or the Postman or whatever, then so be it.
I don’t care.

Could even be kinda fun.

Imagine all the jobs that would be lost by those who make a living by telling people with money how they should spend it to get the most out of it.

I’ve come to entertain the thought that the resistance to easier, fairer, and less complicated taxation of the public and private sectors are supported by this entire ‘class’ of people and that is why these things are so hard to hammer out.

Got to love special interests?

I’ve come to entertain the thought that the driving force behind making the tax system ‘fairer’ is to change the distrubution of the tax burden and that any lip service to making it ‘simpler’ is simply a marketing tool.

Got to love marketing?

Let’s do it! I’ll buy a big old house, pay its taxes and mortgage tax free ad infinitum and grow most of my own food. Couple that with a tech industry job and I’ll rich, rich, RICH I tell you!

Or waitaminnit are they going to charge sales tax on houses too? Oops.

Say goodbye to the only bright spot left in the economy…

I get the feeling that ‘bright spot’ is the headlamp of an oncoming train :)


The “Embedded Tax”, Or How Money Doesn’t Grow On Trees
Posted by Jesse Taylor at 12:07 PM

One of the key points of the Fair Tax plan was the idea that there were “embedded taxes” due to business tax costs in every purchase you make. Silly me - I was under the impression that the “embedded tax” idea jibed with the way they were using it. Linder and Boortz continually make it seem as if the costs in an embedded tax come from business-only taxation costs, namely income taxes and built-in taxes and tariffs.

Free Republic, of all places, contacted the guy who did the embedded tax study, and comes back some rather disturbing news for Fair Tax supporters: the entire idea as presented in the book is nonsense.

Dale Jorgenson, the originator of the study, makes it crystal clear that the only way to see a drop in consumer prices is if employers cut your gross pay to the level of your current net pay. If you got a bigger paycheck after the Fair Tax was instated, it would mean consumer prices wouldn’t go down - you might think that’s a wash, but keep in mind the 30% Fair Tax hasn’t been applied yet…and few of us pay an equivalent amount in income and payroll taxes.

The Fair Tax would keep wages at their current level and raise consumer prices. As it relates to cost of living, it would be an across-the-board tax hike for the vast majority of American workers. Don’t you just want to rush out and support this plan today?