Second, Fair Tax Questions and Advantages
August 25th, 2010
This video follows the prior video “First, Why We Need the Fair Tax”. It answers questions about the Fair Tax, how it affects people at different income levels, its advantages, how it increases the well being of Americans by trillion per year, and what you can do.
many if not most(the only exception I can think of is motorized vehicles) manufactured items go through at least an importer distributor before the reach the retailer. How do their costs and, expectation of profit figure into the tax or ultimate altimate the consumer pays for an item?
Forget the lazy. How about the worker, who doesn’t buy into the consumption gain beyond life’s necessities. They will pay lower taxes, but there in no guarantee they will save or invest in a manner that will help the general economy. The sales pitch sound good, but ifs and buts remain. don’t they?
I’m sure there will be ifs and buts as with any new system of taxation. Speaking from my own experience, I don’t think our spending habits will change any. It would really benefit us since we don’t make too many major purchases unless we really need them. We’ll be able to save much more.
The estimate is that interest rates would go down by roughly 25%.
Unlike a Value Added Tax (VAT), which taxes the value added at each stage of production/distribution, the Fair Tax applies only at the final step, the purchase by the consumer, who has to pay the sum total of the costs at all stages.
Yes that was clear in one of the vids. Rather than paying the taxes of the manufacturer, and assorted middlemen. The consumer will be paying taxes on the profits of the previously mentioned. I’m unsure, how one is better or worse than, the other. No wonder reform is so difficult. Sigh…
That’s an interesting estimate. The interest on the 2 credit cards, that I still have to pay off the remaining balance on have rates less than 20%. For the time being, anyway.
Like women’s suffrage and civil rights.
I’m still sceptical. Fair Taxers say that the price of goods and services will stay the same because the 23% embedded taxes will be removed. What assurance do we have? Just because the cost of producing something goes down 23% dousn’t necessarily mean the producer/retailer always lower the cost 23%. It’s dirt cheap to move production to 3rd World Countries, but Companies don’t pass ALL of those savings on to the consumer.
MuckRaker85 I have run a business before and maybe you have also. Example: Best Buy & Circuit City are across the street from each other. I’m on the 3rd corner your on the 4th. so that I can compete with big box and you I lower my prices 15%. You lower your 17% to compete with me. Now were competing with big box retailers who chose not to lower prices but who are now loosing because we now have more door traffic. You see it everyday with gas stations. Whats stops one from charging $10 per gallon
“Just because the cost of producing something goes down 23% dousn’t necessarily mean the producer/retailer always lower the cost 23%.”
Free market competition will force producers/retailers to lower costs/prices. If I were a retailer, I’d lower my prices and force the bigger guys to lower theirs or die. Don’t you think WalMart would jump on this? They’d lower their prices just to get the jump on competition.
Unions and high labor costs forced most of the companies you mention to move overseas.
A person in the 15% income tax bracket with a $500/mo rent has to earn $647 in order to pay their income taxes and payroll taxes and have $500 left over to pay the rent. Under the FairTax, the same $500 rent plus the 23% Fair Tax amounts to $649- a $2 increase, oh no! But then the prebate shows up and not only covers the extra $2 in the rent but refunds the Fair Tax on groceries, gas, utilities and more. Beware the lies and half-truths, America needs the FairTax.
Due to the competiveness of the free market, you can bet prices will come down. Say you’ve got 3 companies making T-Shirts. One will obviously sell theirs cheaper because the volume will produce more revenue. Result? The other 2 will also compete for your business. After all, these businesses will know that YOU know how much is tax and how much is profit. There’ll be no way to hide it.
Walmart has said they will drop their prices literally overnight. Free market competition (remember that?) will assure the cost of items go down. If a company doesn’t drop their prices..another one will and they’ll get the market share.
It’s mostly coincidence. The Fair Tax would greatly increase the savings rate, which would in turn cause interest rates to plummet.
I already support the FairTax. Read the book, and talk to FairTax folks at the FairTax vendor booths at tea parties. Once we make it happen, we’ll wonder why it took us so long.
The Fair Tax does not apply to rent. Only to retail sales and services. Rent is not a service.
(bobbiesfairtaxblog*blogspot*com/2007/11/does-fairtax-tax-rentals*html)
“Investment property is not taxed under the FairTax, but the rents are taxed. Both owner-occupied and renter-occupied housing is taxable under the FairTax. With owner-occupied housing, the tax is collected up front at time of sale. With renter-occupied housing, the monthly rent is taxed as it is collected by the landlord.”
Idk, maybe it’s out of date.
@waiting4guffman 23% is simply the inclusive tax rate. The exclusive tax rate is 30%. Example: widget costs $1000. $230 goes to feds. So, a 30% tax rate on $770 equals $1001.
You republican morons are mathematically challenged.
Dan – will this eliminate state income taxes? We get ripped off three ways here in Michigan: federal, state, and local income taxes. Enough is enough! I’m tired of seeing the corporations and the rich weasel out of paying their fair share while people like me face poverty in paying our share. Where is our relief?
@earlymusicus Great question! The Fair Tax will only correct federal taxes, but perhaps it will set a good example for state and local tax reform.
@aegisforex
So you propose comparing the tax exclusive rate for the FairTax to the tax inclusive rate of the current system (personal, corporate, FICA taxes)? Youre comparing apples and oranges and seemingly so to ensure the current system remains. It doesnt matter what numbers you use, just make sure you use either all exclusive or all inclusive rates to compare FairTax to current system. It becomes a no-brainer when you’re honest about the numbers.
@oterj0 Every unbiased study that I’ve read states the opposite. If it seems to good to be true, it probably is. The current proposal is simply not revenue neutral.
@aegisforex
Every unbiased study states the opposite of exactly what? All I’m saying is you can look at the FairTax as 30% if you choose, just make sure when you compare to the income tax you use tax exclusive rates as well. What “studies” disagree with that logic?
the fair tax wont work, nice idea but wont work, what is to stop a small business from writing up their sales for far less than the actual amount, 3k worth of furniture, for 300.00 and they get a 2700 “tip” from the buyer,answer NOTHING.
Hey I am sll for a different tax system, but the fair tax isnt it, also it would incentify LOTS of trading and bartering,doesn’t anybody see this ??????