The FairTax: Truths, Half-Truths, Lies, and Recommendations

FAIRTAX - FAIRTAX - FAIRTAX - FAIRTAX

How to turn the FairTax proposal to a simpler Personal Expenditures Tax proposal. Banks instead of retail businesses should be the collectors of consumption tax when it involves non-physical currency. Taxing consumption directly from individual bank accounts will lead to a greater reduction in auditing costs, compliance issues, and much lower sale prices. Then, in addition, the tax should only be added by the seller to the sale price when physical currency is being used, currency which may be withdrawn from bank accounts or even directly from paychecks free of federal taxation.

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[MrJjjd1]

"Actayally, the IRS collects taxes no matter what the source" in response to the FairTax taxing the underground economy,

sure, drug dealers, the mafia REGULARLY report their income and file 1040 forms, right? Wrong, however, under the FairTax they WILL contribute to the revenue of the U.S. because what is the use of making all that untaxed money if you can't spend it and all of them will buy something AND pay the tax!

[kmarinas86]

@MrJjjd1

No.

1) Instead of illegally hiding THEIR INCOME to evade their income taxes which THEY must collect according to current law, they would illegally hide THEIR SALES to evade sales taxes which THEY must collect according to FairTax law.

2) Instead of a portion of their spending going to pay for EMBEDDED INCOME TAX, a portion of their spending goes to paying for the EMBEDDED FAIR TAX.

The underground ALREADY evade sales and income taxes.

[batterieacid]

This video is a Half truth!

[SamSlay46]

The folks that argue will foul language about the benefit of the FairTax are coming from ignorance. Otherwise the need for profanity would not be necessary. This is just like what I heard from an attorney once. 1st you are the facts. If that will not work in your favor 2nd argue the law and if this still does not work 3rd just curse and argue maybe you can confuse them. See if this applies to the 12 Fly above.

[kmarinas86]

@scragsma

"developing the capability you propose for each system would be hugely expensive."

I still don't believe this. You've got to convince me that it costs 100's of millions of dollars to implement a new banking fee. If you can't do that, then you are not getting through to me.

[scragsma]

@kmarinas86 It makes no sense to duplicate for banks a function that already exists, well-tested and routine, for the retailer. The retailer would still have to keep it, for state/local taxes. Banking systems may be integrated, but they are all different (hence the need to integrate), and developing the capability you propose for each system would be hugely expensive. Add the extra work for the retailer in having two different types of transactions (cash/other), and there's no benefit at all.

[scragsma]

@kmarinas86 Retailers already collect sales taxes. Not having them collect an additional federal sales tax is not going to save any money, nor will it cost more than 5 minutes of adjustment to their software - the accounting mechanisms are already established and well tested. On the other hand, developing similar mechanisms for banks is a whole new endeavor, and due to differences in kinds of financial institutions the cost of design, test, and implement those mechanisms would be very high.

[kmarinas86]

@scragsma

"It's MORE of a hassle to have two different places the sales tax could be collected,"

You're using sales tax as the denominator of possibilities when the transactions should be the denominator of possibilities.

If it isn't cash, then the seller doesn't collect it, ONLY the bank does. If it is cash, then ONLY seller collects it. In each case, only ONE collector is valid. Banks can't tax directly from cash-only transactions. Electronic cash registers tell apart cards, cash, & checks.

[kmarinas86]

@scragsma

"And if you think taxing paycheck deposits is not in the picture, it's already been proposed (independent of Fair Tax) that the federal government collect a 1% tax on EVERY TRANSACTION they make - taken from the depositor's account. If banks are forced into the businees of collecting taxes on purchases, I guarantee they'll push for this 1%."

It sounds like you have mostly given up on the power of the people!

[kmarinas86]

@scragsma

"The mechanism for banks to collect the tax would have to be set up, a huge, expensive undertaking, while most states/localities already have sales tax and modifying accounts to add and track a federal tax is relatively minor."

Not true. All they do is add on a fee, something which they do on a REGULAR basis. They can do this with a little bit of coding. Banking systems are already digitally integrated. Your argument would have worked prior to the 1990's, I'll give you that much.

[kmarinas86]

@scragsma

"plus the seller has to remember to charge and track the extra federal tax (in addition to state/local which they'd always collect anyway) ONLY when the payment is in cash.""

The seller is a computer. Remember that "software" you spoke of? It's not a human being. Why do you make it sound so difficult, as if it handing cash transactions at the checkout had to involve "remembering"? There is such a thing as a "cash" button.

[kmarinas86]

@scragsma

"A federal sales tax would be a minor modification to the software. Banks don't do tax accounting now, and developing that function would be incredibly expensive."

How so? We are simply talking about a flat rate charge, not the boondoggle that we know as the Federal Income Tax. Banks charge numerous types of fees every day. Each bank really only needs a few lines in its journals each month to recognize their "tax expense". Whichever proposal, the software modifications are minor.