joether
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The problem I have with the Fair Tax concept, OrionTheWolf, is that I dont trust the backers of it for a nanosecond. When this concept first emerged, it was backed heavily by very wealthy business men. Those folks poured quite a bit of money into advertising to give it that 'right pitch' to the American public. After a score of years, quite a number of economists came out against the concept as it benefitted the super rich while stifling the middle and lower classes. They pointed out (the older version of the site you posted: fairtax.org), that the numbers simply did not add up correctly. The fair tax concept assumed people's behaviors would stay the same with a minor change over time in to positive grounds. The economists believed not only would the numbers decline, but the fair tax percentage would either have to be raised or applied to an even greater selection of goods and services than before. Hence, why the concept never really gained traction in the public eye. But its been kicking around in conservative circles for years; mostly by those that hate the IRS for one reason or another.
quote:
From the Fair Tax site..
What remains are retail outlets collecting the FairTax.
Yes, let's privitized the IRS, what could POSSIBLY go wrong with that? We'll get rid of those pesky Union workers, and force more people into unemployment now that the IRS doesn't have to deal with collecting taxes. Yeah, real 'brilliant' of an idea.
Given that the folks at Fair Tax dot org will promote their idea like a product or service from a business, rather than be 'up front', 'honest' and 'trustworthy', I decided to do some digging....
quote:
A 2006 study published in Tax Notes by the Beacon Hill Institute at Suffolk University and Dr. Laurence Kotlikoff estimated the FairTax would be revenue-neutral for the tax year 2007 at a rate of 23.82% (31.27% tax-exclusive).[
Source 1
That is were the 23% number comes from folks. It takes a few things into assumption (foolishly though): A) The US Debt does not rise, B) The US Deficit does not increase, C) The budget is the EXACT same as it was in 2007 as it is for 2011 or 2012 (or very close to it).
quote:
In contrast to the above studies, William G. Gale of the Brookings Institution published a study in Tax Notes that estimated a rate of 28.2% (39.3% tax-exclusive) for 2007 assuming full taxpayer compliance and an average rate of 31% (44% tax-exclusive) from 2006–2015 (assumes that the Bush tax-cuts expire on schedule and accounts for the replacement of an additional $3 trillion collected through the Alternative Minimum Tax).
Source 1
2007 Federal Budget and information: Revenune: $2.57 Trillion, Budget: $2.71 Trillion, resulting in a Deficit of: $161 Billion. At that time, the US Debt was 'only' $8.95 Trillion. So that 23% your promoting OrionTheWolf, is based on 2007 figures, NOT, 2011 or 2012.(Source 2)
2011 Federal Budget and information: Revenue: $2.17 Trillion (estimated), Budget: $3.82 Trillion (estimated), resulting in a Deficit of: $1.65 Trillion (Estimated), US Debt: $15.1 Trillion (Estimated). If the Bush Tax cut had expired, OrionTheWolf, the actual Deficit would have been cut down by $1.3 Trillion (my figures, not the sources, OTW). (Source 3)
2012 Federal Budget and information: [note: this has not be finalized as of yet] Revenue: $2.627 Trillion, Budget: $3.729 Trillion, Deficit: $1.101 Trillion; US Debt is unknown at this time given the current framework has not been agreed to. (Source 4)
Since its noted the Bush Tax cuts did not expire, the Brookings Institution's figures of a 31% 'Fair Tax' rate is also....low. Want to take a guess at the actual 'Fair Tax' percentage given the damage listed above, OrionTheWolf? Its no where in the same universe as that 23% you have been quoting. Try double that amount....
Which method do you think the Middle and Poor classes will go with: The current system in all its beauty and ugliness? Or the Fair Tax rate that slams 'em for 34-39%? Yes, your correct, that the propponents of this concept, Fair Tax, will argue that everyone is trying to inflate the numbers for 'fearmongering' purposes. The evidence is right there on the table; I even placed down the source material I got those numbers from.
The Fair Tax concept does not exist in the favor of the Middle or Poor classes, as the entire concept is based on 'spending'. Americans since the 1940's have been trying to find ways to increase their spending limits. At first it was just one breadwinner. Then the wife worked a part time job. Then the wife had to work full time. Then it was maxing out the credit cards. After that, was placing one's home as collatoral for even more money. Then 2007 hit, and everything came crashing down on many Americans. Unfortunately, many of these folks just do not understand that they've been programmed to think in this manner of 'spend, spend, spend' at an eary age. Not being able to spend money has screwed them up. So along comes this Fair Tax that promotes 'You will keep more in taxes and allowed to spend MORE!' That's like heroine to an addict as far as these folks are concern. As the economists have pointed out, as the figures above point out, and the material that follows (including the material myself and others have said on this thread), the Fair Tax concept is really not a wise change to the system. Heck, it has trouble with this concept I keep reading about everywhere (pro or con sites on the Fair Tax): Revenue Neutral.
Fact Check dot Org's take on the Fair Tax....dated 2007
The bottom line is, the Fair Tax will hit folks that make LESS than $200,000 (and that's figuring in the prebates), than those earning more than $200,000. In fact, those who make less than the $200,000 mark, will pay the lion's share of the federal budget (per figure 9.4 of FactCheck's page on the concept). How does this benefit the majority of Americans (since only about 4% of them make over $200,000/year)?
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