Fair Tax would be a nightmare and would destroy America’s economy

August 11, 2010 by Brian D. Hill
Filed under Brian D. Hill's Articles, Featured Showcase, Financial, USWGO

Author: Brian D. Hill

A fair tax proposal will destroy the American economy, end the middle class, and will make the poor debt enslaved peasants to the super rich.

The reasons a Fair Tax will be a horrible mistake, a nightmare, and give more power and money to the super rich are below.

Services, all store bought goods, and even raw materials will be taxed, twice or more depending on how many times it exchanges hands.
Gas prices, Oil prices, and electric prices will skyrocket under the Fair tax proposal and this isn’t under cap and trade, yet!
The Fair Tax will be socked to the poor and make it harder to purchase anything they need since everything including food will be double or triple taxed under the National Tax.
The states rights amendment of the Constitution would be violated since this Tax will be enforced on all states from the Federal Level.
It wouldn’t matter what class you are, all will be taxed the same way besides the super rich will buy without paying the taxes as always, the super rich will cheat their taxes.
All prices will skyrocket including costs of Internet service.
The Internet will crumble as many Web Hosts will raise their prices to comply with the Fair tax and the rising electric cost. Many legit web sites will start dropping not including illegal warez sites and websites dealing in illegal profits, although illegal sites may fall as well as legit ones if the Internet dies. Web Hosts will also start limiting more bandwidth even on virtual private servers as their electric costs will skyrocket
If coal goes to the power plant that’s taxed since it’s sold to the power companies, gas prices is the same principle so gas will slightly go up due to excessive Fair Taxes, then as people purchase electricity that will be heavily taxed and prices will be higher so that the corporation can have us pay for their taxes. So in other words electricity could be doubled and that is without cap and trade.
Everything in the store level, web hosting level, service level, and even grocery stores that accept Food Stamps purchases will be double or triple taxed because when food producers sell to grocery stores it gets taxed then when grocery stores sell the produce to the people it gets taxed so a 20 cent tax on the dollar can become 40 cents or even 60 cents.
Rest Homes will heavily tax the seniors living there.

So this Fair Tax sounds like a nightmare because since the Fair Tax proposal abolishes the Income Tax all National sales taxes will be higher like maybe from 10 cents to possibly 40 cents since the Government would rely even more on materialism to make this work. Also this means the Government will go after all people who cure illnesses even more since it frees them from being forced to purchase medicine and Health Insurance which will also be Fair Taxed.

According to Wikipedia this is what the Fair Tax is:

The FairTax is a proposed change to the federal government tax laws of the United States intended to replace all federal income taxes^[1] with a single broad national consumption tax on retail sales.^[2] The plan has been introduced into the United States Congress as the Fair Tax Act (H.R. 25/S. 296). The tax would be levied once at the point of purchase on all new goods and services for personal consumption. The proposal also calls for a monthly payment to all family households of lawful U.S. residents as an advance rebate, or ‘prebate’, of tax on purchases up to the poverty level.^[3]^[4] The sales tax rate, as defined in the legislation for the first year, is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes). This would be equivalent to a 30 percent traditional U.S. sales tax ($23 on top of every $77 spent—$100 total).^[5] The rate would then be automatically adjusted annually based on federal receipts in the previous fiscal year.^[6]

With the rebate taken into consideration, the FairTax would be progressive on consumption,^[4] but would also be regressive on income at higher income levels (as consumption falls as a percentage of income).^[7]^[8] Opponents argue this would accordingly decrease the tax burden on high income earners and increase it on the middle class.^[5]^[9] Supporters contend that the plan would decrease tax burdens by broadening the tax base, effectively taxing wealth, and increasing purchasing power.^[10]^[11] The plan’s supporters also argue that a consumption tax would have a positive effect on savings and investment, that it would ease tax compliance, and that the tax would result in increased economic growth, incentives for international business to locate in the U.S., and increased U.S. competitiveness in international trade.^[12]^[13]^[14] Opponents contend that a consumption tax of this size would be extremely difficult to collect, and would lead to pervasive tax evasion.^[5]^[7] They also argue that the proposed sales tax rate would raise less revenue than the current tax system, leading to an increased budget deficit.^[5]^[15]

In recent years, a tax reform movement has formed behind the FairTax proposal.^[16] Increased support was created after talk radio personality Neal Boortz and Georgia Congressman John Linder published The FairTax Book in 2005 and additional visibility was gained in the 2008 presidential campaign. A number of congressional committees have heard testimony on the bill; however, it has not moved from committee since its introduction in 1999 and has yet to have any effect on the tax system. The plan is expected to increase cost transparency for funding the federal government, and supporters believe it would have positive effects on civil liberties, the environment, and advantages with taxing illegal activity and illegal immigrants.^[12]^[17] There are concerns regarding the proposed repeal of the Sixteenth Amendment, removal of tax deduction incentives, transition effects on after-tax savings, incentives on credit use, and the loss of tax advantages to state and local bonds.

So the arguments they will use to sell the Fair Tax to the whole world including America would be, It will reduce peoples materialism and means America will use less resources, Nobody will complain about the Income Tax, it’s good for the environment but it will ruin all non profit Organizations because there will be no tax deduction rights so less money will be given to non profit organizations and they will be forced onto Government grants and being told what to do 24/7 by the Government.

The Fair Tax is a trap and will further be an attack on the poor and Middle Class because even though 7 cents is the North Carolina state tax a forced National sales and services tax plus the abolishing of the Income Tax will mean that all sales and services tax will be dimes higher per dollar.

A Fair Tax will also mean that corporations won’t have to worry about any forms of income taxes and the poor will struggle even more then before. This will mean that many poor folks may head to black markets just for buying regular necessities. Although if the black markets get shut down it may mean more poor folks will demand Government assistance so more will be at the mercy of Uncle Sam. Also if sales taxes become even more Nationalized under the Fair tax proposal fishing may become illegal as a permit only covers fishing and not how many fish you can fish for.

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Tags: American Economy, economy, Fair Tax, Fair Tax Proposal, Internet will be destroyed under Fair Tax, National Sales Tax, National Service Tax, Nationalized Sales tax, Nationalized Service Tax, Nightmare, Non profits down under, Start of socialism, Tax Nightmare, Web Hosts increasing costs

Comments

9 Comments on "Fair Tax would be a nightmare and would destroy America’s economy"

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Steve Keller on Thu, 12th Aug 2010 7:53 am

Wow! Where do I begin? The author is so off base it isn’t even funny.

“Every raw material will be taxed.” WRONG!!! The end user of a product or service is the only one to pay tax. Raw materials and business relate expenditures are not taxed.

“Everything including food will be double or triple taxed under the National Tax.” WRONG!!!!! The FairTax will eliminate double taxation. With our current system we are at least double taxed on everything we buy. With our current system, you buy with after tax dollars, and you pay all the embedded taxes that are passed on to the consumer. As mentioned above, raw materials and business relate expenditures are not taxed.

“The FairTax will be socked to the poor.” WRONG!!! Under the FairTax if your family’s income is at poverty level or less you will pay no tax, your prebate will eliminate any tax you pay. For example, the current poverty level for a family of four is $29,140. If you spent this entire amount on new goods and services, you tax will be $6702. This is the exact amount you would receive as a prebate.

“It wouldn’t matter what class you are, all will be taxed the same way.” This is correct as it should be. Our current system punishes productivity. What a mistake! This is why trillions of dollars, that could be used to create jobs in the US, are invested offshore.

“All prices will skyrocket” Wrong!!!!!!! When you eliminate all the current embedded taxes and compliance costs, prices will only slightly increase; but remember your paycheck will be much larger. No more payroll deductions. You will receive your gross pay.

“It will ruin all non profit Organizations” Wrong!!!!!!!! Most people do not contribute so they can receive a tax deduction. Receiving your gross pay will make it easer for people to contribute.

NoGovNoTax on Thu, 12th Aug 2010 3:42 pm

This is the biggest bunch of horse dung I’ve ever heard from an Anti-fairtaxer. This guys is full of it, don’t believe a single word in this article. Brian Hill is a Pathetic Liar and doesn’t have his head screwed on straight. Pull your head out of your income taxed a-hole!!!! My rants holds more water than your lies. I won’t even waste another thought on trying to argue with an absolute liar.

Sorry but, fair tax 1 point. Brian, -1 point. Try again douche nossel.

David on Thu, 12th Aug 2010 4:38 pm

Point by point…

1. Wrong. Completely contrary to the language/content of the FairTax bill. This point is either a flat pout lie or evidence of ignorance.

2. See #1. You really have no idea how the FairTax is designed do you?

3. More lies or ignorance (take your pick). See the monthly “prebate” feature of the FairTax designed to cover the taxes on all necessities. The FairTax is the least regressive tax plan currently under any sort of consideration.

4. And this is different to any other federal tax on individuals how? *crickets chirping*

5. Please explain how the “super rich” will avoid a “sticker price” tax assessed at point of sale.

6. How will the FairTax cause skyrocketing of prices? Since businesses (you know, those folks who actually create jobs and pay wages) will have a massive burden in tax compliace costs raised, thus having more money available to pay wages, to factor into competitive prices, etc., this “prices will skyrocket” bugaboo is disingenuous at best and evidence of massive ignorance (or dependence on the ignorance of your audience) as well. And since everyone who works will have a bigger paycheck automatically–since NO federal taxes would be withheld–any price adjustments would allow the average consumer to, within some limits, pick and choose how much taxes he wished to pay, a perk now mostly reserved for tax cheats and the “super rich” you so despise.

7. Gobbledegook. Completely unsupported assertion. Great argument technique. Not.

8. Simply and totally wrong. You really haven’t read the bill or even its summary, have you? This is, again, completely contra the actual contents of the FairTax proposal. Again, either you are exhibiting massive ignorance or you are lying. Which is it?

9. Again, no. The FairTax would be levied ONLY at the RETAIL sale. Wholesale purchases by grocers, auto parts stores, contractors building homes, etc., would all be free from the tax. ONLY the final purchaser pays the tax–and in the case of groceries, utilites, etc., the monthly “prebate” is designed to cover the taxes on the necessities.

10. Now, that’s simply and blatantly a lie. Unless, of course, unscrupulous nursing home crooks assess a “tax” they are not allowed to under the law, and such crooks have abounded since the dawn of time anyway.

Scare tactics work better when you base them on truth rather than bogus, manufactured non-factoids.

John on Fri, 13th Aug 2010 4:22 am

What you described is NOT the FairTax it’s the VAT tax. The FairTax would make the US the largest tax haven in the world and turbo charge the economy.

NoGovNoTax on Wed, 8th Sep 2010 4:46 pm

Fairtax
Luxury flat consumption tax. Simple.

ray on Fri, 10th Sep 2010 11:14 am

Wow. I suppose checking your facts with actual legislation would be uncalled for since wikipedia has been sourced. Even then wikipedia does a decent job of explaining the wide perameters of the idea. All I see in the points spewed the bullet points of those who wish to demagogue the FairTax.

As David posted an excellent counter point by uneducated pointe, i see no reason to do so. I will simply refer anyone wishing to educate themselves with fact, and not hyperbole, to check out the following sources:

http://www.fairtax.org/PDF/HR25_2007.pdf

fairtax.org

The FairTax Book: Saying Goodbye to the Income Tax and the IRS by Neal Boortz and John Linder

FairTax: The Truth: Answering the Critics by Neal Boortz and John Linder

The Pocket Idiot’s Guide to the FairTax (Pocket Idiot’s Guides)

America’s Best Kept Secret: Fairtax: Give Yourself a 25% Raise

FairTax: Can it save the failing U.S. economy?

Daar Fisher on Tue, 5th Jul 2011 1:50 pm

Quick List of “FairTax Fixes” – Working together, as Democrats, Republicans, Independents, we can fix America’s tax system. Here are some of the “fixes” we can expect by passing the FairTax Act:

• Returns control of the family purse to the family.
• Income tax withholding ended.
• Federal gov’t paid, only as families spend and benefit.
• “The rate” is an easily-graspable indicator of fed. costs to families.
• Only those who are genuinely subsistent pay no tax.
• The income tax code is gone.
• Social engineering gone with the tax code.
• Lobbyist numbers shrink by half – no more tax favors.
• FairTax far less prone to corruptible manipulation.
• The wealthy pay their fair share.
• Taxpayers have “new at retail” purchasing “strike” power to express displeasure.
• Externalizes taxes that are buried in prices – makes true tax load visible.
• FairTax can be jettisoned prior to export, enhancing our exports, and correcting current border problems.
• Trillions of dollars resting off-shore is repatriated.
• The U.S. becomes the global home of business formation, and will set the pace for other nations.
• Prebate replaces bureaucratically code-mediated credits, deductions with cold hard cash against EVERY CITIZEN’s basic needs.
• No more income tax returns.
• No more IRS.
• No more threats by IRS (audits, interest, penalites, and worse!)
• Income tax withholding ended.
• Minimizes ability of gov’t to compete against private enterprise (non-tax exempt) thereby encouraging “limited gov’t.”
• Eliminates the current “permission to live” income tax (i.e., tax liability ceases to be incurred by working).
• Purported 4th Amendment violations of income tax system, fixed.
• Purported 5th Amendment violations of income tax system, fixed.
• Purported 1st Amendment violations of income tax system, fixed.
• FairTax clears away the confusion and clutter (and intended Congressional obfuscation) that hampers a clearer focus on Congressional spending because it ends the ability of pitting poor against rich.

The FairTax does not purport to fix Congress’s spending problem (that is not its domain); it does, however, remove impediments to focusing on the issue, increases taxpayer’s ascension to wealth, and provides options to express their displeasure (other than ceasing to make income).

What your ACTUAL TAX RATE will be under the FairTax: http://whatyoupayunderfairtax.blogspot.com/

Daar Fisher on Tue, 5th Jul 2011 1:53 pm

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