« Home | Dodd to Bush: Don't appoint Bolton. Earth To Dodd... » | Another "friend" bites the hand that feeds them » | Cyber war against Al-Qaeda » | France Kicks out Radical Islamists, while the US i... » | State of the Union » | Medical Bill passes house, but Dem Lawyers will fi... » | Bolton left a block blank in his form for UN nomin... » | China's quiet Cold War » | "Left" hooks aimed at Roberts » | What liberal bias in the Media? » 

Monday, August 01, 2005 

Fair(er?) Tax Act, upsides and downsides

HR 25, the Fair Tax Act.
Well, how fair is it? Here are some quick highlights of it (Americans for Fair Tax):

  • Americans take home their whole paychecks
  • No federal sales tax up to the poverty level means progressivity like today's tax system.
  • No tax on used goods. The amount you pay to fund the government is totally visible.
  • Retail prices no longer hide corporate taxes or their compliance costs, which drive up costs for those who can least, afford to pay
  • The income tax exports our jobs, rather than our products. The FairTax brings jobs home
  • The FairTax strategy is revenue neutrality: Neither raises nor lowers taxes so consumer costs remain stable
  • Tax criminals - don't make criminals out of honest taxpayers

At this point, we have every reason in the world to say "Yes" to this. And if you really want details about these bullets, visit the website.

Some of the drawbacks.

This comes from Speakout.org

Now, no easy to read bullets here, mostly just debate style commentary. But the biggest loophole that isn’t covered in the above part is big ticket items. I will quote a specific part here:

“A sales tax on everything would cost the middle class more than they pay in income tax now. A steel worker in Pittsburgh makes $35,000 per year. He buys a house for $150,000 and pays 5.625% on a 30 year fixed note. Without a federal sales tax, he pays $777 per month for his house. With your tax (which will have to closer to 35-40% in order to approximate the federal government's current tax levy), our intrepid steel worker will have to pay at least $52,500 in tax on top of the purchase price. Obviously, he doesn't have this money, so he rolls it into the mortgage. His Mortgage is now $1050.57 per month and he will actually pay over $98,000 to cover the tax. This is on top of the property taxes he has to continue to pay, since property taxes are local and are the major revenue source for local schools. that is, unless you also plan to federalize schools.”

So, here we are, in quite the quanry. I put forth to you: “What do YOU think?”