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I STRONGLY favor a VAT style system. As long as there are no exemptions (which is what makes the current system so convoluted anyway) it would make the playing field level, for all.
The savings issue isn't one. Once people get used to the tax they will go back to previous spending levels, and since their paychecks will be larger (no automatic tax deductions) people would feel like they have more income anyway. That, and since there are no such deductions, you will have all your income at once, not waiting for a refund (which is your money, the .gov simply took too much and is giving it back to you way after the fact).Leave a comment:
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This is just what I have been saying for years, ABOLISH the IRS and a National VAT at 16% other than food and shelter.Leave a comment:
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Exactly! Or as much as possible.This country has a fundamental problem with waste (not recycling, reducing, or reusing), spending, and not saving. With this proposal it would help to slow and/or reverse all the negative aspects of these traits.
This abolishes the capital gains tax as well, so if you were to continue buying and selling stocks for a profit for your entire life and didn't spend any of it (what's the point of that?) you would pay no taxes (aside from the brokerage fees).What happens to the stock market, mutual funds, and retirement funds?
Investors prosper greatly under this plan, since corporations face lower operating costs and individuals have more money to save and invest. The reform significantly enhances the retirement savings and/or retirement spending power of most Americans. The purchase of stocks is considered a purchase for investment purposes and not personal consumption so they are purchased tax free. The service fees charged by the broker, however, are personal consumption and therefore subject to tax.Leave a comment:
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Wouldn't this encourage saving all income, instead of spending it (IE numbing the flow of money). What about stocks? Sales tax on them?Leave a comment:
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Lets talk about the Fair Tax proposal
We were talking about this in another thread but I think it warrants its own. I'd like to hear what you guys think about the Federal Fair Tax proposal, why it would work or wouldn't work, the benefits and drawbacks, etc.
Below is a quick summary. You can find more information at http://www.fairtax.org
The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.
The FairTax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.
The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.
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