The Fair Tax

[ABM]

Ever heard of it?

I heard Mick Huckabee recently say, that, if elected President, he'd do everything within his power to have it implemented. As I understand, it's a flat usage tax....thus, effectively eliminating the IRS.

Sounds too good to be true, IMO, though.

 

[Buzz Killington]

no, never heard of it!



www.fairtax.org

 

[Buzz Killington]

I'd love it, personally. Doing taxes sucks ass, I just pay someone a few hundy to do mine for me but its lame having to figure all these stupid expenses and crap out. IRS is so useless, not even the head of the IRS can do his taxes right.

 

[The_Lillard_King]

I find turbo tax easy enough . . .

 

[Blazer_Hippie]

The problem with this "flat tax" is that the difficult part is figuring out the taxable income, not the different tax rates used...if you don't do anything about the calculation of taxable income it is exactly the same difficulty. I'm more a fan of getting rid of most if not all of the activist tax code so it's a lot simpler to figure out the taxable income and less liable to be abused. Often tax incentives don't actually achieve their desired impact, people just manipulate the system to try and qualify for the tax break...

Also, if I remember the calc's from the Steve Forbes flat tax proposal, it would raise the majority of Americans taxes, while lowering taxes on the richest (as you'd expect in a plan championed by a billionaire)

 

[Buzz Killington]

I don't think most people would really notice. They should just tax everyone the same rate, and you just live with that paycheck. no need for complicated write offs and crap like that. Fuck the Schedule C! (whatever the hell that is).

 

[maxiep]

Lots of upside, but some really awful indirect consequences. I am, however, strongly in favor of a complete redesign of our tax code. I make a pretty decent living, but because I can make some deductions others can't, I'll pay less in taxes this year than my assistant.

 

[Blazer_Hippie]

I don't think most people would really notice. They should just tax everyone the same rate, and you just live with that paycheck. no need for complicated write offs and crap like that. Fuck the Schedule C! (whatever the hell that is).

The flat tax deals with the percentage they use (the charts at the back that tell you what you owe). Just changing to a flat tax would still make you go through all the instructions, but the chart you look at in the end would be slightly different. People arguing for only this change are misleading you if they tell you that by itself will make your taxes easier. Essentially they are trying to push through a high income tax cut.

However, if they are talking about real tax code overhaul, that could make it simpler...though so many in power have vested interests in that complicated tax code it's really hard to imagine it going away...plus it's how the government tries influence your actions...

 

[Buzz Killington]

The flat tax deals with the percentage they use (the charts at the back that tell you what you owe). Just changing to a flat tax would still make you go through all the instructions, but the chart you look at in the end would be slightly different. People arguing for only this change are misleading you if they tell you that by itself will make your taxes easier. Essentially they are trying to push through a high income tax cut.

However, if they are talking about real tax code overhaul, that could make it simpler...though so many in power have vested interests in that complicated tax code it's really hard to imagine it going away...plus it's how the government tries influence your actions...

I think they should just auto-deduct anytime you get money and that's the end of it. no tax returns, no thing else.

don't mind sales tax either. don't really notice it all that much to be honest.

would be nice just to put it on autopilot and not worry about it.

 

[Blazer_Hippie]

Lots of upside, but some really awful indirect consequences. I am, however, strongly in favor of a complete redesign of our tax code. I make a pretty decent living, but because I can make some deductions others can't, I'll pay less in taxes this year than my assistant.

I definitely think tax overhaul is in order. It's just way to easy to hide BS in the code and my primary assumption is that most times tax breaks don't have nearly the impact on changing behaviors that they are designed for. I'd be willing to give up everything, including the home mortgage interest deduction if the rules were simple for everyone.

 

[Buzz Killington]

did you guys watch 60 minutes on the UBS bank in Switzerland? pretty funny shit as the only guy who went down was the whistleblower.

 

[Blazer_Hippie]

I think they should just auto-deduct anytime you get money and that's the end of it. no tax returns, no thing else.

don't mind sales tax either. don't really notice it all that much to be honest.

would be nice just to put it on autopilot and not worry about it.

Being slightly liberal, I'm not a fan of sales tax for the simple reason that it's regressive. It taxes a higher percentage of earnings of the poor (because they need to spend all their money to live) rich people get their money and (generalizing) get to keep some of it in the bank. They try to get around that by eliminating sales tax on food, etc...but it seems to me a crummy work-around.

I certainly wouldn't want to get into too much of a debate about the rich's money being invested and driving the economy because it becomes a whole chicken and the egg thing, but in my opinion the tax code could be fairer by radically eliminating deductions then, decreasing the marginal tax rates.

 

[Fez Hammersticks]

Repubs/Demos are too busy thrashing each others proposals

Nothing will ever get done.

 

[Buzz Killington]

Being slightly liberal, I'm not a fan of sales tax for the simple reason that it's regressive. It taxes a higher percentage of earnings of the poor (because they need to spend all their money to live) rich people get their money and (generalizing) get to keep some of it in the bank. They try to get around that by eliminating sales tax on food, etc...but it seems to me a crummy work-around.

I certainly wouldn't want to get into too much of a debate about the rich's money being invested and driving the economy because it becomes a whole chicken and the egg thing, but in my opinion the tax code could be fairer by radically eliminating deductions then, decreasing the marginal tax rates.

...and I like flatter tax rates. I don't like to be punished for success.

as for sales tax, the rich will still pay a more significant amount of the tax as they are more big-ticket consumers (or one would assume so).

 

[hasoos]

Ever heard of it?

I heard Mick Huckabee recently say, that, if elected President, he'd do everything within his power to have it implemented. As I understand, it's a flat usage tax....thus, effectively eliminating the IRS.

Sounds too good to be true, IMO, though.

Yes the same Mike Huckabee who also has used his judgement to pardon violent offenders twice now and had them come back to bite him in the ass. I think I'll wait until some actual economist weigh in on it....

 

[Blazer_Hippie]

Repubs/Demos are too busy thrashing each others proposals

Nothing will ever get done.

Plus EVERYONE needs to give something up for it to get done. How would taking away the mortgage interest deduction go over? or taking away the deduction for charitable contributions? Or child care tax credits/deductions?

It would be the ugliest political hot-potato imaginable so they just keep letting it get bigger and worse...

 

[mook]

I'd be willing to give up everything, including the home mortgage interest deduction if the rules were simple for everyone.

I'm in the same boat. I'd nix all the liberal stuff I tend to like (energy efficiency breaks, etc) just to drastically simplify the damned thing.

Why not just a simple sales tax, with rebates for those under the poverty line and higher taxes on luxury products?

Or just start over with a basic employment tax code without any deductions, and require that every addition or change to the code be handled on a line-by-line basis?

Anything has got to be better than the system we have now.

 

[Blazer_Hippie]

...and I like flatter tax rates. I don't like to be punished for success.

as for sales tax, the rich will still pay a more significant amount of the tax as they are more big-ticket consumers (or one would assume so).

The argument goes both ways.."punished for success" could equally be you should pay a little more for the opportunities you've taken advantage of.

on the sales tax, the % paid will still be less for a rich person that a poor person...hence it's regressive. People can argue which they think is fairer, but I think the 1st step would be to simplify code...

 

[Buzz Killington]

The argument goes both ways.."punished for success" could equally be you should pay a little more for the opportunities you've taken advantage of.

on the sales tax, the % paid will still be less for a rich person that a poor person...hence it's regressive. People can argue which they think is fairer, but I think the 1st step would be to simplify code...

simplifying the code would be good.

 

[Blazer_Hippie]

I'm in the same boat. I'd nix all the liberal stuff I tend to like (energy efficiency breaks, etc) just to drastically simplify the damned thing.

Why not just a simple sales tax, with rebates for those under the poverty line and higher taxes on luxury products?

Or just start over with a basic employment tax code without any deductions, and require that every addition or change to the code be handled on a line-by-line basis?

Anything has got to be better than the system we have now.

I agree. about the liberal stuff. And I've been in some business situations where we were taking advantage of credits, etc..that we clearly qualified for by the letter of the law, but I'm sure if they looked at the real impact we had...we made out like robbers on the transaction. I think most incentives work out that way and aren't cost-effective at all!

 

[The_Lillard_King]

Do posters find turbo tax to be complicated? Because that program has made it very easy for me to do my own taxes and feel like I'm not losing out on some deduction.

I have spoken to a couple accountant friends who have confirmed my thoughts that unless you got complicated taxes or are making a hell of a lot of cash, turbo tax does the same thing as an accountant . . . asks the same questions, allows you to input different figures to see if it is worth it to make a retirement contribution ect.

 

[Buzz Killington]

I did turbo tax a while ago, it seemed so fucking weird to me for some reason....dunno, i just hate dealing with it. Its worth it just to pay someone to do it all for me.

 

[blazerboy30]

I'd be willing to give up everything, including the home mortgage interest deduction if the rules were simple for everyone.

I think this would have drastic downside for millions of people. Those people that can barely afford their homes would all of a sudden have another several thousand dollars in tax to pay.

I would guess this would lead to another housing market crash, along with its affect on the entire economy.

 

[Blazer_Hippie]

I think this would have drastic downside for millions of people. Those people that can barely afford their homes would all of a sudden have another several thousand dollars in tax to pay.

I would guess this would lead to another housing market crash, along with its affect on the entire economy.

Well, all or a significant portion of it theoretically would be offset by the lower marginal tax rate. If you get rid of all the deductions the tax rates needed for equal revenue go down...

 

[julius]

It's an interesting idea, but Huckabee will never be president.

 

[maxiep]

Well, all or a significant portion of it theoretically would be offset by the lower marginal tax rate. If you get rid of all the deductions the tax rates needed for equal revenue go down...

That's theoretically correct, but wrong in practice. Right now, the mortgage tax deduction is a benefit given to property owners by everyone. With a "fair tax", that subsidy is removed, thereby making non-property owners wealthier, but property owners poorer. The same goes for any recipient of a tax break or a subsidy.

 

[mook]

I think this would have drastic downside for millions of people. Those people that can barely afford their homes would all of a sudden have another several thousand dollars in tax to pay.

At the same time, though, I think it would have drastic upside for millions of people. Those who can't afford to buy a house right now might be able to afford one. They'd be paying less in taxes because they wouldn't be subsidizing others who are taking advantage of the deduction. So they could save more for the down payment.

I would guess this would lead to another housing market crash, along with its affect on the entire economy.

I would guess that the increase of foreclosures for the people relying on the deduction would be counterbalanced by a big upswing in the economy as millions of people gain much great clarity and predictability about their personal finances.

I don't know if I will owe the government $5000 this year, or the government will owe me that. I have to plan on owing the government, though, so I'm saving more just in case. I could be using that money to invest in my wife's business, go on a vacation, or buy consumer products. Instead it just sits there. If you multiply my personal dilemma by tens of millions, it suddenly becomes a major drag on the economy.

 

[Blazer_Hippie]

That's theoretically correct, but wrong in practice. Right now, the mortgage tax deduction is a benefit given to property owners by everyone. With a "fair tax", that subsidy is removed, thereby making non-property owners wealthier, but property owners poorer. The same goes for any recipient of a tax break or a subsidy.

I have to first say "Fair Tax" is not necessarily an accurate name...fair is in the eye of the beholder...that's not directed at anyone, just a comment on how people are trying to frame it...

But there are numerous tax breaks and subsidies out there so you can't look at this single deduction in isolation and say with certainty that it's not correct in practice overall.

Regardless, this is the extreme example of a deduction that could go away in the argument. My hunch is there is no way this deduction would realistically go away. The NIMBY principal is hugely at work on any of these changes...that's why they're so hard to even discuss...