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Flat Tax or Fair Tax?

Michael94 Wrote: Jan 31, 2013 10:09 AM
If forced to make a choice between the so-called Fair Tax and the Flat Tax, I'll choose the Flat Tax, because, in spite of the name, the Flat Tax is more fair all around. Sales taxes, which is what the Fair Tax is, are regressive in nature. In other words, even though tax rates are the same for everybody, the poor will end up paying a greater percentage of their income in taxes than will the wealthy. This is because the working poor who, by necessity, are not able to save or invest, spend their entire pay check on necessities. The upper middle class and the wealthy will purchase those same necessities and some luxury items, but will be able to save and invest part of their incomes, which savings and investments are not taxed.
latebloomer Wrote: Jan 31, 2013 11:55 AM
An illuminating difference between the two sides of the aisle. The Right defines an equitable tax burden by how much tax is paid. The Left defines it by how much remains after payment.

Not saying where you generally stand but, you've clearly bought into the leftist argument on this.
Richard_B Wrote: Jan 31, 2013 10:55 AM
You need to understand the Fair Tax before you make claims. Go to www.fairtax.org and search for the word "prebate". Due to the "prebate" the poor would NOT pay the sales tax out of their own pocket. Another advantage of the Fair Tax is that the poor would not have payroll taxes to pay. SS and Medicare would not be withheld from anyone but it is the poor who would be the most benefited. Since the employer would also be relieved of the SS tax, the savings could be passed on to the worker. The whole idea that the employer contribution is some sort of gift is bs. The worker had to earn that money just as they had to earn enough gross profit for their employer to cover all expenses. Even a worker for a non-profit company must earn their keep.
Ned6 Wrote: Jan 31, 2013 4:10 PM
Totally agree. Some form of "prebate" is the best way to make the FairTax, Flat Tax, or VAT progressive. It also avoids potential manipulation by politicians to favor particular behaviors, often influenced by special-interest lobbying.
hjismsm105 Wrote: Jan 31, 2013 10:53 AM
It seems that what everybody that advocates for some type of tax based on income don't take into account are the people that do most of their work off the books. And I know a bunch of them. They do work for home owners and side work for businesses that do not hand out 1099s reporting their income to the IRS, so I see no need for that changing with a flat tax. And then, having showing very low or no income makes them eligible for all the government gimmies. Some may think this is a minor problem but I see a lot of it that goes on in my area and I can assure everybody reading this that it is a big problem.
Ned6 Wrote: Jan 31, 2013 3:59 PM
You forget that the tax on salaries is embedded in the final cost of the product or services as is the tax on profits. The FairTax is based on cost, which is ultimately made up of salaries and profits, if you go back through multiple stages of production. Therefore the tax on consumption is not avoided with an income tax. In fact, the FairTax is easier to avoid, since the combination of FairTax and State sales tax will add a cost of 35-40% to services provided, where buyer and seller both have an interest in not reporting the transaction.

I’m at Hillsdale College in Michigan for a conference on taxation. The event is called “The Federal Income Tax: A Centenary Consideration,” though I would have called it something like “100 Years of Misery from the IRS.”

I’m glad to be here, both because Hillsdale proudly refuses to take government money (which would mean being ensnared by government rules) and also because I’ve heard superb speeches by scholars such as Amity Shlaes (author of The Forgotten Man, as well as a

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