Posted by moy23 on 6/25/2014 12:16:00 PM (view original):
Posted by bad_luck on 6/25/2014 11:45:00 AM (view original):Point 1.... I'm not fixated on screwing the rich like some people are. The fair tax taxes everyone equally if they choose to buy something. The wealthy still spend more $$$ than the poor thus they will still pay a higher % of the tax burden. In some cases like cigarettes the current 50% sales taxes will drop to 23% which will help the 28% of those in poverty that smoke to have more spendable money. The prebate is a nice addition and its simple.
Posted by moy23 on 6/25/2014 11:31:00 AM (view original):Sounds like a cluster ****.
Posted by bad_luck on 6/25/2014 10:39:00 AM (view original):From the FAQ.... The answer is no sales tax for the business. See below.
Posted by moy23 on 6/25/2014 10:34:00 AM (view original):So if I run a small construction company and buy a truck, no sales tax?
Posted by bad_luck on 6/25/2014 9:24:00 AM (view original):No. Only the end user pays taxes when the good or service is bought.
What about b2b sales? If I sell a component piece to a company that makes a product, do they pay a tax on that component?
The thought is it will reduce the cost of producing goods because they don't get taxed 15 times along the way.... And through competition drive the end price down which offsets the 23% sales tax for the consumer.
The FAQ has all of this in it. Its a really good tax system.... Its fair and best of all its simple.
Does the FairTax tax used items?
The FairTax does not tax "used" goods but it is important to note that HR25 has a legal definition of the term "used". This is necessary to ensure that items are taxed only once and to prevent tax cheating.
Under the FairTax, for an item to be considered "used" it must be:
(1) purchased before the FairTax is enacted, or
(2) the FairTax on the item must have been previously paid.
Let's look at (1) above. Assume that Joe bought a new car in January of 2012. Let's further assume that the FairTax went into effect on Jan. 1, 2013. Since Joe owned the car before the enactment of the FairTax, it is considered a "used" car. It has the taxes from the existing tax system embedded in its price. Therefore, when Joe sells that car to Bill, Bill will not owe tax on the transaction.
Now, let's consider (2) above. The most common example is that Joe buys a new car for personal use and pays the FairTax on it. If Joe then sells his car to Bill, there would be no tax on it because the tax had already been paid. Let's look at another example. Assume that Joe owns a flower shop business and buys a van to use when making deliveries to his customers. No tax is charged on purchases for business purposes so that the FairTax on goods sold to consumers does not double tax, or put a tax on a tax.
If Joe decides to sell the van to his friend Bill (who is not in business) for use as his personal vehicle, then it would be a taxable sale to Bill. Why? Because Joe did not pay tax when he bought the van for his flower shop. Since no FairTax has been previously paid on that van, it is not considered used and the sale to Bill would be taxable.
If later, Bill decided he did not like driving a van and sold it to someone else, it would not be a taxable sale. Why? Because the tax had been previously paid (when Bill bought it from Joe) making the item "used"; and not subject to tax.
Since you're such a fan of "read the website," check this out:
Point 2.... Their will always be black markets. Right now I can gamble online even though its illegal. I can buy drugs and guns pretty easily. I also can buy things online and skip sales tax. The good news is those IRS agents out of jobs under a fair tax can find a job trying to close these markets. This is probably the biggest drawback to the Fair Tax. The good outweighs the bad IMO.... And if people are doing things illegally I hope they are prosecuted for it.
Point 3... Of course it's a political nightmare... At first. Its a big change and most people fear change. Retirees will get over it. For one it repairs the social security system which is bankrupt.... For 2 they will no longer be taxed on SSI, Pension, IRA incomes. They will have more money... And possibly a prebate too. I'm sure lobbyists will be ****** too... They can't lobby for tax loopholes anymore.
The FAQ addresses a lot of these issues.... Like social security and mortgage interest deductions.
1) 23% is a big tax increase for almost everyone. Most people with middle class incomes only pay between 10% and 15% in Federal Taxes
. The poor pay between 0% and 10%, usually. You not fixated on screwing the rich. You're fixated on screwing the poor and middle classes.
2) Arguing that people will find a way around a law is a terrible argument against a law. On the other hand, the way around this law is simple and legal. Buy used whenever possible. I think this would drive revenue down and force the tax rate to go up even more.
3) It's an everything nightmare.
- It's not simpler, it's convoluted and difficult to enforce.
- It raises taxes for the vast majority of the population.
- It lowers taxes for people who can actually afford to pay high taxes.
The fair tax is a scam, thought up by rich people who don't like paying a lot of taxes. It's packaged with the word "fair" and sold to idiots who are convinced that they too will one day be millionaires.