Fair Tax is Fair

Article By Writer Michael Kraft Author: Michael Kraft
Published: July 12, 2007
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This volume of insight into the advantage of the fair tax was posted as a comment by one of our always intelligent readers. Thank you to Ian for this resource.

Here is why the FairTax MUST replace the income tax. The FairTax is:

• SIMPLE, easy to understand
• EFFICIENT, inexpensive to comply with and doesn’t cause less-than-optimal business decisions for tax minimization purposes
• FAIR, loophole free and everyone pays their share
• LOW TAX RATE, achieved by broad base with no exclusions
• PREDICTABLE, doesn’t change, so financial planning is possible
• UNINTRUSIVE, doesn’t intrude into our personal affairs or limit our liberty
• VISIBLE, not hidden from the public in tax-inflated prices or otherwise
• PRODUCTIVE, rewards, rather than penalizes, work and productivity

Its benefits are as follows:

FOR INDIVIDUALS:
• No more tax on income - make as much as you wish
• You receive your full paycheck - no more deductions
• You pay the tax when you buy “at retail” - not “used”
• No more double taxation (e.g. like on current Capital Gains)
• Reduction of “pre-FairTaxed” retail prices by 20%-30%
• Adding back 29.9% FairTax maintains current price levels
• FairTax would constitute 23% portion of new prices
• Every household receives a monthly check, or “pre-bate”
• “Prebate” is “advance payback” for monthly consumption to poverty level
• FairTax’s “prebate” ensures progressivity, poverty protection
• Finally, citizens are knowledgeable of what their tax IS
• Elimination of “parasitic” Income Tax industry
• NO MORE IRS. NO MORE FILING OF TAX RETURNS by individuals
• Those possessing illicit forms of income will ALSO pay the FairTax
• Households have more disposable income to purchase goods
• Savings is bolstered with reduction of interest rates

FOR BUSINESSES:
• Corporate income and payroll taxes revoked under FairTax
• Business compensated for collecting tax at “cash register”
• No more tax-related lawyers, lobbyists on company payrolls
• No more embedded (hidden) income/payroll taxes in prices
• Reduced costs. Competition - not tax policy - drives prices
• Off-shore “tax haven” headquarters can now return to U.S
• No more “favors” from politicians at expense of taxpayers
• Resources go to R&D and study of competition - not taxes
• Marketplace distortions eliminated for fair competition
• US exports increase their share of foreign markets

FOR THE COUNTRY:
• 7% - 13% economic growth projected in the first year of the FairTax
• Jobs return to the U.S.
• Foreign corporations “set up shop” in the U.S.
• Tax system trends are corrected to “enlarge the pie”
• Larger economic “pie,” means thinner tax rate “slices”
• Initial 23% portion of price is pressured downward as “pie”
increases
• No more “closed door” tax deals by politicians and business
• FairTax sets new global standard. Other countries will follow

While many vested interests are motivated to demagog this well-researched plan, those who want to become part of the solution can start here: http://snipr.com/ftnow

Demand TRUE tax reform of your representatives in Congress: http://snipr.com/scrapthecode

Fair Tax advantages are huge over current income taxes

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4 Responses to “Fair Tax is Fair”

Greg Cruey on July 12th, 2007 9:28 am

A big selling point for the “fair tax” seems to be that it is “progressive.” I’m not sure what “progressive” is meant to mean in the context of this tax proposal, but the so-called “fair tax” proponents seem to what to say that their tax proposal treats everyone the same while at the same time treating the poor in a manner that is “progressive.”

Define progressive. It sounds like double speak. “We’re concerned about the poor and so to show our concern we’re going to treat them exactly the same way we treat doctors and lawyers…”

We tax money. We tax it when it moves. I agree that the current system is fragmented and obtuse, and that there are loopholes that should be closed. But I haven’t heard a moral argument for taxing money when it moves away from you (when you spend it) instead of when it moves toward you (when you make it). Yet the “fair tax” crowd functions with a tone that presuppose the moral superiority of their position.

The truth is that the “fair tax” reduces the percentage of the federal budget that is collected from the rich and increases the percentage of the federal budget that is collected from the poor. It does so by NOT TAXING money that rich people decide not to spend. Rich people have the luxury of not spending large portions of their income; the poor (along with many in the lower half of the middle class) spend almost every penny they make in order to make ends meet. Under the “fair tax” those people (teachers, nurses, police officers, most military personnel, most industry workers, etc.) will pay taxes on a much larger percentage of their income than what doctors, lawyers, bankers and stock brokers will pay taxes on. How is THAT fair?

The fallacy of the “fair tax” position is that they make it sound like normal Americans don’t have to spend their money if they don’t want to.

As badly as America needs tax reform, the “fair tax” (and most other sales tax proposals) are only fair to the rich…
Ian on July 13th, 2007 12:57 am

A key point that you’re missing, Greg, is that FairTax is not limited to taxing current earnings as is the income tax. FairTax captures past capital, e.g. that inheritance passed down to the kids, as well as current earnings when they are traded for goods / services.

Thanks to being taken for a ride by the large money banks, the Fed, and their accomplices in assuring interest payments thereto from wage-earners’ paychecks via withholding, we’ve arrived at a CRISIS point from which the FAIRTAX can deliver us. BUT THE WINDOW OF OPPORTUNITY WILL PASS. SHOULD WE FAIL TO ENACT THE FAIRTAX, MELTDOWN IS ASSURED. Don’t believe ME? Believe Prof. Kotlikoff, and BE VERY AFRAID:

http://snipurl.com/meltdowninprogress

PS Thanks for the vote of confidence, Mike.
Michael Kraft on July 15th, 2007 2:09 pm

No problem, great content for our readers.
Nick on July 15th, 2007 11:27 pm

Tim Carnes the grassroots candidate that is aiming to take down Lindsey Graham supports the Fair Tax Plan.

The Fair Tax group in South Carolina cannot endorse any one candidate, but they can point out those candidates that support the fair tax plan as Tim Carnes does.

Check him out for yourself:
www.carnesforsenate.com