Financial Question For the Weekend
April 4, 2008 by Erik Folgate
Filed under FAQs
The tax deadline is 11 days away. It’s probably one of the worst times of the year for those of you that have complicated taxes. I’ve had mine done for the past month, because my wife doesn’t work and we don’t have a ton of complicated investment income at this point. So, I thought that I would start this debate:
Are you in favor of the Fair Tax? Please explain your answer if you are in favor or opposed.
If you aren’t familiar with the fair tax, go check out their website or check out the book at your local library. Do your research about it, formulate an opinion, and let’s discuss it in the comments section. I am in favor of it, but i’ll get into why in the comments section. I’ll just say this: Imagine an April where you could do whatever you want and not have to think about doing your taxes!
The Fair Tax would raise the costs of good about 33%. If that is not bad enough, there is no guarantee that the Federal Government would not later impose the income tax again (when they wanted more money). Then we would be taxed twice. Collecting this tax would also be a nightmare, the retailer would have to deal with this & probably raise prices b/c of this.
The real solution is to shrink the size of government & to impose strict controls on its future growth.
maryland, you need to research the fair tax more, because it would not raise the price 33%.
When you buy something right now, there is already about 23% worth of taxes built into that price from the taxes that retailers, distributors, and manufacturers have to pay to get that product to you.
if you eliminate all of those taxes, companies will be forced to lower their prices due to the law of free market economics. One company will find a competitive edge by lowering their prices and the others will follow suit. They won’t collude, because there’s so much incentive for the company with the weaker market share to lower their price if it’s costing them 23% less to deliver that product.
You do have a good point about the federal government still passing an income tax later on down the road. But, we as citizens would have to make sure this didn’t happen. We are the ones that elect gov’t officials, so we would have to put in place those that believe in what is working. Plus, if the fair tax DID work well and everyone was liking the fact that they never have to deal with the IRS again, then no sane politician would vote for another income tax.
I’m all for repealing the 16th and enacting the FairTax.
Taxes do two things. They generate revenue and they affect behavior. The federal income tax generates billions in tax revenue but does it at the expense of discouraging work.
I’m an example of this. Thanks to the highly compensated employee clause of the IRS’s 401(k) regulations, I purposely asked my boss to let me only work 36 hours per week so that my pay would drop and I could pay less in taxes by investing the full 15.5K in my 401(k). I chose to work less because of our tax system.
The FairTax would stop punishing the most productive Americans and it would save us billions in wasted time filing taxes in the atrocity of a tax code that we currently use.
I couldn’t have said it better pharmboy. it discourages people to work more, because working more for hourly workers means they’ll be put into a higher tax bracket.
We spend BILLIONS every year spending money to file our taxes, and it can all be changed by heavily taxing spending, rather than productivity.
Also, for those of you who haven’t researched the fair tax, it would send you a pre-bate every month to reimburse you for taxes you incur for necessities such as food and household goods.
How does the US match up with other countries when it comes to taxing? Are other countries taxing like the FairTax or how we traditionally have been taxed? Not that that would be the decision maker but I’m just curious.
I am heavily in favor of the FairTax – it is a comprehensive tax reform bill that not only will fix the IRS, but stimulate our dying economy!