FairTax

[tracydani3]

It can only be compared to the VAT tax in that it is a tax paid at the time of purchasing something.

If I am not mistaken, the UK, much like Germany still has many other taxes along with the VAT.

The idea of the FairTax is to completely replace the current system (getting rid of everything else) and only having the FairTax. This would in effect make it very simple (except as j2 has said, the implimentation, working out the kinks, where do the people currently in those tax related jobs go etc.) compared to our current system.

For example, no tax season or returns to file for. Some of the ideas for what to do with people in those jobs are to put them into other areas of law enforcement. They would be able to concentrate on the smaller amount of people who do need to keep records such as businesses to help prevent trying to get around the system.

I believe they say that about 250-300 billion dollars is used every year in tax accounting and enforcement. Money better spent elsewhere for sure.

I will need to look into it more in the next few days because I am not sure what, if anything happens to the social programs in place currently. I imagine they are still there as the taxes are still being collected, just in a more efficient and (hopefully) fair way.

It is a system that I do not see getting put in place for some of the same reasons that j2 has mentioned, but if it is something that has great potential it is something I may be willing to get off my lazy butt to help promote

[MagicNakor]

That would put a lot of people out of work....won't someone think of the accountants?

[j2k4]

That would put a lot of people out of work....won't someone think of the accountants?

Accountants are just lawyers without the attitude.

[Skweeky]

Poor Biggles

[JPaul]

I really don't think a system based entirely on indirect taxation would work, neither do I think it would be fair.

For example Males A and B have the same income. Neither pay any direct taxes and only pay tax on the purchase of goods or services.

However Male A is married with children. Male B on the other hand is single. Simply because he has a bigger family Male A spends all of his income and as such pays tax on all (or most) of it. Male B on the other hand spends half of his income and saves or invests the rest. As such he pays half the tax of Male A.

In our system there is direct and indirect taxation. For the direct taxation the Govt controls how much is paid by individuals, based on their circumstances. You may not agree with the specific methods used, however the concept is surely right.

However individuals have some control over how much they pay in indirect taxes, e.g. VAT.

Using televisions as an example;

Don't buy one, pay no VAT

Buy one for £117.50, pay £17.50 VAT

Buy one for £235, pay £35 VAT

So individuals have a degree of control over what they choose to spend money on, therefore how much indirect tax they pay. There is the further argument that the person who can afford the better telly can better afford to pay a greater ammount of tax.

We need mixed tax systems, for both social and economic reasons.

[tracydani3]

@ JPaul

Here is the prebate chart as an example of what you are talking about.


The single guy and the married guy would get a different prebate off-setting the difference in family size. In effect, they will not pay taxes until they spent proportionately more money. The prebate is paid monthly and is meant to cover any taxes paid by buying essential products/services up to the poverty level.

Then just as you say, they are able to exercise a certain amount of control over their taxes by making decisions that suit their income for items not deemed essential.

EDITED TO ADD: Here is the link to the FAQ which answers a lot of this stuff if you are interested.

[Mr JP Fugley]

Thanks for that.

The most obvious problem any Govt would have with that system would be that they were relying on traders to honestly collect the taxes and declare them. You only have to look at tax fraud in the UK to see what a problem it causes. In this system the Govt would be giving much more control to traders and as such the opportinity for frauds of all sorts.

PAYE, whilst far from being fraud free is much easier to regulate and ensure that the correct amounts are paid. Indeed if people do not make the proper tax returns the Govt simply takes away all allowances and taxes everything until the tax return is made.

I can see the attractions of the system however I am a fan of a mixed system of taxation.

Thanks for bringing the subject up.

[j2k4]

Personally, I've don't think anything beyond a flat federal tax on income is necessary, based only on income, with no exceptions, and no returns.

States could drop their income tax and shift to sales-based taxes, laying aside exemptions for industry and other business-even churches should pay, provided doing so gains them free expression.

States should feel compelled to chase businesses to host, and treat them fairly.

Go ahead and do away with that god-awful bureaucracy, and let the pols learn to budget.

Fat chances all around, though, and that is a fact.

Absent some cataclysmic financial upheaval, nothing of the sort will ever happen; another thing we can thank the activist courts for.

I have real difficulty getting interested in half-measures...

[Rat Faced]

There is a finite amount that Rich People spend, and the rest gets saved/invested... all this money will not be taxed, as it is now.

The total percentage of income paid as taxation therefore goes up in the Lower Paid, and down for the Higher Paid.

The burdon of Taxation falls more upon the lower paid, the ones that need to spend all their income just to survive.


I'd rather they took it all as Income Tax... i then know the rest of its mine. Can't stand stealth taxes.

[j2k4]

There is a finite amount that Rich People spend, and the rest gets saved/invested... all this money will not be taxed, as it is now.

Just as a point of interest, Brother Rat, it seems your sentiment is structured so as to reflect poorly upon the rich.

By what measure do you deem such investment (per highlighted) as a negative, or an affront, to the less-than-rich?