I am from Massachusetts, which is commonly known as Taxachusetts, so I know a lot about paying taxes. I dream of moving to Florida and New Hampshire, where there are no income or sales taxes.
Not only do I despise paying the income tax, but also paying for the accountant. But going to a national sales tax or what is being called the Fair Tax Act is not the answer.
For congressional Republicans to be pushing this movement is a mistake. They are shooting themselves in the political foot. A better idea would be focusing on reducing taxes not redistributing them and creating a huge new entitlement.
The Fair Tax would eliminate the IRS, the federal income tax, gift taxes, the capital gains tax and the estate tax. Sounds great? I agree. However, it would create a 30% sales tax. Ouch! Every product we buy would now take an extra 30% out of our wallets. So if you bought an item for $10, you would be paying a total of $13. People will despise this burden and blame Republicans if passed. Living in a state with a 6.25% sales, I can tell you first hand that sales tax is not considered a fair tax. One of the most popular weekends in the people’s republic of Massachusetts is the sales tax free one that happens every August. This is the only time of year you don’t see a sea of Massachusetts licenses plates in New Hampshire mall parking lots. People hate the sales tax and actively work to avoid it.
Do you know who will get hurt the most with a national sales tax? Answer: seniors and the middle class. Who always votes? Answer: seniors. Who regularly votes for Republicans? Answer: the middle class. See a problem? I do!
For seniors hoping to have some tax relief in their golden years after spending a lifetime of paying income taxes, they would now get hammered every time they wanted to buy something. No senior would ever vote for a Republican candidate again.
Sales taxes are regressive taxes hurting low-income people the most. To help lessen the burden of the 30% sales tax, the Fair Tax people have added to their plan a new entitlement program. The Fair Tax organization is proposing sending a monthly check to every citizen as a prebate. Everyone would get a regular check from the government. What could go wrong? I think we saw during the pandemic what happens when our government hands out checks. No one works!
The last thing Republicans should ever be proposing is more entitlements. We have to stop being an entitlement nation.
So while the Fair Tax would eliminate many taxes, it would create a new tax, the biggest entitlement in the history of our nation and a new bureaucracy. That’s not the conservative way.
Instead of creating a new tax and a new entitlement, Republicans should be working towards lowering our tax burden. Like Democrats have incrementally worked to have government take over health care, the GOP should be incrementally eliminating taxes.
Allowing this Fair Tax vote is one deal Speaker Kevin McCarthy should not have agreed to!
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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Right now, as a retired senior on very fixed income, I would be crushed by a national sales tax. Income tax for my wife and myself are very very lenient. If this were to pass, I would stop shopping at any establishment that cooperated with the national sales tax and buy everything I could on a black market. I’m normally a law-abiding citizens, but this would be almost impossible to absorb. we worry about 8% inflation, how about 23% inflation – deadly. I would imagine, most seniors would buy used vehicles from their family members for a dollar or two, with cash, clandestinely, providing payment close to the fair market value of that automobile. You’ve got a think of the unintended consequences of any new policy. The national sales tax would have an innumerable negative consequences. Don’t go there!
Just curious, Kent, what if everything you bought was reduced in price because the manufacturers didn’t have corporate taxes or income taxes? The premise of the flat tax hinges on the reduction of the price of goods, because the suppliers and manufacturers would be able to drop their prices, yet maintain their profits. In the end, your cost (last I checked) would be about a 1% increase. When you consider the prebate, that 1% is typically paid for. I recommend looking into it further. Lots of people just hear about the sales tax and fail to consider the reduction in price before that tax. It’s pretty much a wash. What do you think?
I am amazed at how ignorant the author of this article is regarding how the Fair Tax works. It is NOT a sales tax added to the purchase price of goods. It replaces the federal income tax, and employers and employees shares of Social Security and Medicare taxes that are imbedded in the cost of what you buy. If something cost $100 before the Fair Tax is implemented, it will still cost $100 afterwards, but now the revenue to run the government would come out of the sales price, instead of being deducted from your paycheck and the employers profits. So, besides the cost of goods remaining the same, your take home pay would increase. Furthermore, the Fair Tax proposal includes a monthly stipend for the government of about $900 as a rebate of the taxes ot essential items such as prescription medications and food. But don’t take my word for it, as I may have some of the details wrong; go to the fairtax.org website and check it out.
Per Fairtax.org You will get an instant raise in your pay!
They keep forgetting to mention you still have to pay 23% on everything that is considered taxable. So you’re really not getting an instant pay raise to the extent that you get to keep your 7.65% and 15% as mentioned in the article. It appears to me this is very typical of government trying to hide what’s really happening and fooling the average individual.
Do you believe what you posted?
For any plan that get’s rid of the ugly stinking and predatory IRS, I’m going to remain open minded to.
People so easily forget how much they’re already paying for things, when the money is just taken from them in a different way. It shows how easily you can trick people into paying more, just by what you call the different types of taxes. They are TAXES no matter how you look at them, whether it’s sales tax, income tax, licence fees, property tax, late penalties, or your employer “pays” them.
Another good reason to get rid of the IRS is how much they actually cost us. No one is figuring that horrible truth into it: they ADMIT to taking 60% of what they take from you, as the cost of taking it from you. That’s only what they admit to, and I would bet [based on other research] they take much more than that. That is not just ridiculous. It’s robbery of the tax funds you DO pay, which mean you have to pay alot more to “fund” your government.
Making a sales tax of 30% to compensate, shows just how much you’re being ripped off AS IT IS. Of course if you aren’t making any money anymore, you aren’t going to pay income tax or social security anymore anyway, so you will be eating it, with this. I guess what they’re doing is trying to win younger votes at the expense of punishing retirees.
The last I read regarding this subject was that around 90% of republicans in congress do not support this so-called Fair Tax Act in its current form. Unfortunately, news articles on the internet are all over the place in “facts”. This author did not include any information or data regarding how well Republicans in general like this proposal. So chastising Republicans at this point seems unnecessary until it is proven that Republicans in any significant number actually support this.
Written by a registered independent voter.
True and how about chastising the democrat party for stealing money the nation doesn’t have to get their kickbacks from their partners in crime?
Please read this book.
You are ALREADY paying the 30% before you ever see the money. The analysis in the article gets LESS credible from that point.
Few people, VERY few, understand how much tax they really pay, because of the many ways and angles they come at you for it. There are more taxes than most people can name, or are aware of. And you pay for them one way or another.
The other problem is, that it’s not even just what YOU pay, but what you pay extra, due to what other people have to pay. For example, you pay more for everything from the start, because of all the red tape and taxes the store has to pay. It ALL goes into the prices you pay, BEFORE the sales tax. That alone could easily lower the cost of your purchase enough to compensate for the 30% tax.
One thing a replacement sales tax would do, is simply make it more obvious how much of what you’re paying is actually due to taxes.
Call it the “Visible Tax”. Or maybe “most of your taxes in one tax”.
Maybe it’s an attempt to do something like they do in Europe, with the VAT. I don’t know whether that’s good or bad, but getting rid of the IRS is such a needed and overdue move, I have to remain open to it at this point. Those who don’t have to deal with the IRS directly may not see the beauty of this, I suspect, but those of us who have them ever breathing down our necks will.
Next point, if this is truly a good move, I can understand why most business-as-usual “republicans” are against it.
The concept of the “Fair Tax” is intriguing. But politics and people being what they are, exceptions and carveouts would begin even before it was passed into law. We would end up with an even bigger mess than we have now with the IRS. And, sorry Holly, but I forsee that an income tax would be reintroduced within ten years even if a Fair Tax was instituted. The appetite of buraucracy is unending and unstoppable.
Not a good idea to surrender before the effort, and how much worse could the tax manipulation by politicians be with a simpler tax system in place of the current income tax system? The current problems and corruption exist in the complexity of the income tax system.
Make it simple, eliminate income tax totally.
I do see your point, but the best part of this [as I see it], is forcing tax rates out in the open where even the bureaucracy supporters can’t hide anymore from it.
See my comment above, regarding all the taxes and hidden taxes we pay otherwise. Most of what the bureaucracy gets away with is in hiding it from the average uneducated person.
The more conspicuous bad policy is, the more the public will oppose it. While we know they will try to continue finding more ways to tax us, keeping it obvious and directly painful is over-all better than keeping it hidden.
Similar to a disease brewing in your body with no sign or pain, as soon as you feel the pain, you will do something about it. Corruption thrives much more in hiding – or in a shell game – than when it’s blunt and in-your-face.
True, but at least this proposal would make those on welfare and in the underground economy pay something. Smaller, less expensive, less intrusive government is always preferable, especially at the federal level. I wonder how much tax Crack Hunter paid.
Plus, a sales tax is more visible than an income tax deducted from your paycheck. Could create a groundswell for tax cuts/smaller government.
Also, all illegal immigrants would be paying tax on all their purchases, AND they would have a huge incentive to become citizens to be eligible for the monthly prebate.
Amen!! This Flat tax, as well as a VAT tax, is regressive and adversely affects, frequently and mostly, the poor and middle class. The wealthy would do quite well under either of these. Additionally, these sorts of taxes will throw a number of people out of work, including the IRS, wish me that be so bad 😊, accountants, etc.
Reduce expenses, government waste, allow people to grow their personal wealth through hard work and investing properly for their situation, so they can pay their own way. Give them the opportunity to provide income to low income individuals, if necessary, through charities that provides for the needs of individuals, not the government. The Constitution does not provide for the government to distribute our funds for such purposes. Let me make that decision.
I am very disappointed at the one-sided presentation of the Fair Tax that is given in this article. The Fair Tax would be a massive game changer, and a benefit to all of us. There is a lot to it, as it changes so much of what we are used to.
To everyone, please read up on this idea and withhold judgment until you have a comprehensive understanding. Here is the 1st paragraph from an article in the Wall Street Journal: “Something remarkable happened last month. On Jan. 9, Georgia Rep. Buddy Carter introduced the “Fair Tax” bill to the House of Representatives, and secured a promise of a floor vote. The bill eliminates the personal and corporate income tax, estate and gift tax, payroll (Social Security and Medicare) tax and the Internal Revenue Service. It replaces them with a single national sales tax. Business investment is exempt, so it is effectively a consumption tax. Each household would get a check each month, so that purchases up to the poverty line are effectively not taxed.”
How about the government live with in its means and the funding should only come from tariffs!
“funding should only come from tariffs!” – THAT is actually in the constitution!
Essentials, such as food, medicine, should not be taxed at all. Getting rid of bloated bureaucracy (IRS) should reduce government spending significantly.
The simplest way:
1.No tax on essentials: basic foods, such as fish, meat, chicken, etc., on basic clothing, medicines, etc.
2.flat tax of 9% on NONE essentials, including special/expensive foods like lobster, crab, etc.high fashion cloths, such as evening gowns, tuxedos, etc.
3.Make it a constitutional amendment, so it cannot be modified at the whims of congress.
Hmm – seems to me that the biggest complaints are more about the percentage for the so-called ‘fair tax’ than the concept. I admit it has been a while since I saw a reasonable analysis as to how ‘high’ that percentage would have to be to generate the same ‘revenue’ as the current flawed system but I suspect it is way below the proposal.
BYW – we are already ‘paying’ a VAT as it is – how much federal tax is on gasoline??
Ms. Robichaud, I respect your concerns for creating a plan such as you have described, but the Fair Tax, as it is very carefully explained by people who have studied the system, is nothing like what you have described. If all you see is “30% tax” and run screaming, you’ll miss the point. I won’t try to explain it here, but I do strongly recommend everyone, particularly those who are considered media, should go to FairTaxNation(dot)com, and learn for themselves before screaming.
Just as an incentive, calculate your own tax freedom day, then calculate your actual income if there were no income tax, etc. Compare that number to a 30% sales tax, and you’ll find you’re in much better shape. Why are we taxed on what we make instead of what we buy? Learn, then comment.
There are three areas of concern, to me at this time, regarding the Fair Tax.
There are brilliant minds at work, testing the numbers to determine the feasibility of the Fair Tax system. I only hope our elected representatives have the wisdom to listen, patiently and thoroughly, to these bright economists and mathematicians before reacting one way or the other, as the author has here.
Given the scope of the proposition, I would hope Congress would give more attention to it than it has before. The usual sophomoric hearings, reminiscent of high school speech and debate class, which grant a mere 5 minutes of Q&A time, are not sufficient to properly assess the pros and cons of revamping the tax structure of the largest economy the world has ever known.
I wonder if the plan could be put into practice in a handful of receptive states before becoming a national revenue system. That would be an undertaking, but perhaps better, if possible, than demolishing the entire current system in hopes of the new system working out as intended.