Fair Tax - A Good Concept? - Ferrari Life
 
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post #1 of 9 Old 12-02-2004, 11:33 PM Thread Starter
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Fair Tax - A Good Concept?

I'd like to hash this out. What would be the pros/cons of this:

www.fairtax.org

So no more income tax, just a national sales tax. I'll start.

Pros:

No more yearly filing, so less confusion, less time spent on this
More efficient economy: less money spent for accounting purposes
Everyone pays (in theory)
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post #2 of 9 Old 12-03-2004, 05:49 AM
 
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Con: People who need more, pay more than those who need less.

A good example is Dr. Bob... he eats tons and tons of food (and doesn't get fat... which is annoying) so obviously he would pay more.

I myself eat not even half of what he eats... so I would have a tax advantage.

Another con: People who earn lots of money would see their capital grow more quickly cos they could spend only little of it and save the rest. They would need only a small percentage of their income to provide for themselves.

People on the edge of living can put aside a lot less. They would use only nearly 100% of their income to just being able to survive

So it would cause a greater rift between rich and poor
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post #3 of 9 Old 12-05-2004, 03:19 PM
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Gee, a national sales tax like the VAT in Europe.

Do you think the government will stop the income tax because of the national sales tax or just look at it as another way of getting more money?

8)

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post #4 of 9 Old 12-06-2004, 05:26 AM
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Yes, I would support a pure consumption tax system.
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post #5 of 9 Old 12-06-2004, 04:53 PM
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We had this debate pre-2000, when a GST ("goods & services tax" or "gouge & screw tax") was introduced in Australia.

Here is one article on some issues :
http://www.erc.org.au/issues/text/gs00.htm

To the extend that such a tax is used to reduce income taxes it is strongly regressive, in that people earning more will pay a lower proportion of their income in tax than do lower-paid people.

In Oz it replaced most of the "sales-tax" system which had a myriad of different rates on most goods, with a new flat 10% on everything plus services. The big winners were consumers of luxury items (eg cars!), as the effective tax dropped from around 70% in some cases down to 10% in a few years!

The key to its success seems to lie in how the "losers" of such a change can be properly compensated in a sustained manner & not just given a cheap 1-off handout.
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post #6 of 9 Old 12-09-2004, 02:41 AM
 
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Quote:
Originally Posted by Boxer42
Yes, I would support a pure consumption tax system.
Why? Because you make tons of money ??

A percentage of your income is far more fair on everybody around (specially the slightly poorer people)
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post #7 of 9 Old 12-16-2004, 04:56 PM
 
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People who normally evade income taxes would have to cough it up, so no more "under the table" earnings. However, the rift between rich and poor could grow even more.
Nothing this big would ever be attempted by the Gov't but it is interesting to think about.
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post #8 of 9 Old 12-16-2004, 06:20 PM
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Actually its funny but tax evasion has become much MORE common now that we have a GST / VAT. ha:

Despite Govt promises to the contrary (ie a GST will make tax evasion impossible!), nowadays whenever you need a "service" done like paint your house, call an electrician, etc the chances are the serviceman will offer you 2 prices - one "official" and one for cash (=without GST).

I know that you have always been able to get a small discount for paying cash, as it means that the vendor can avoid declaring the income and save HIMSELF some tax, so he offers you a little off the price. Nowadays however if you pay in cash YOU BOTH SAVE TAX! He saves income tax and you don't pay any GST. In fact, he can offer you a saving (10%=GST) without even taking a cut of his own profit! Now that's incentive!

Naturally this has been taken to by the general population with great enthusiasm, meaning that the tax evasion "industry" is booming.

So, don't believe everything the politicians tell you! :nuts:
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post #9 of 9 Old 12-25-2004, 07:23 PM
 
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I live in Australia and we're one of the highest taxed populations anywhere in the world.

I think our ~100 billion dollars spent on welfare needs to be reduced, and spent on more constructive things - like repairing all of the roads (State Responsibilities, mostly)

Fair tax is impossible, because as long as everyone earns differently they pay a different amount of tax.

Not blowing my own trumpet, but my parents pay 49 cents in the dollar income tax and it is very depressing having to pay enourmous tax bills all the time. I guess you can't do much about it.

As long as our country keeps running the way it is, we can't complain. (I.e. as long as Mark Latham and the Labor Party are in opposition)

Tax is just one of those things that is a part of life. But it seems to me that its a tax on success, here in Australia.
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