Quote:
Originally Posted by Voidwar  The Fair Tax is idiocy. It is a VAT tax, and haphazardly applied.
Used cars would be worth 23% more than new ones under this silly tax.
How would it impact New homes vs existing ones ?
If you try to tax while they spend, they will simply spend outside your taxing jurisdiction. Tax while they earn, since your government provides the umbrella under which they do so.
The proper tax is 20% of income no deductions. (capital gains IS income)
20 cents of the first dollar, 20 cents of the millionth dollar.
The "fair tax" is a poorly thought out plan, based on an initial error of where to apply taxation. |
Based on what you said you would be in favor if a flat tax then? (20% across the board) The problem I see with that is that if it's not
claimed as income, it can't be
taxed as income. It would be the same as we have now. The way that people would get around all of it is simple really.
(example)
If I am an international corporation (can be set up by an attorney for almost anyone that can afford it) then any money I make is sent to the account of the international corporation by mail or wire transfer. Since the money goes to an international corporation, no taxes are withheld for services. I simply withdraw money from the corporate account, thus...i pay no taxes since I have no income. (This stuff happens now.)
As far as capitol gains (such as with selling a house) It's not applied evenly as it is right now. You only owe CGT from the proceeds of your home if you lived owned it less than 2 years. (Think of it like a "flip this house" tax). The fair tax does have it's flaws. Such as, if everyone started saving their money, taxes drop and the government is forced to tax other things.
Recession would cause a drop in tax input to the government as well.
The current tax system has all of law abiding middle America covering the tab for everything. LOW income actually gets a kickback, while HIGH income can afford tax shelters, offshore accounts, and hedge funds.
The problem is, people that make a lot of money are always going to have ways of not paying taxes. The trick is to make them pay for it by way of the expensive items they buy. Not only that, but the people that report no income at all but are driving a new car every year. As things stand now, as an active duty military member, I pay 21.4% in federal taxes (Federal, FICA, Social Security, Medical tax). I am lucky enough not to have to pay state taxes since I am from a state that does not require active duty military to pay state tax. If I did pay it however, I would be at around 36% of my annual pay taken out. A Flat tax would actually decrease the amount of capitol available to the government.
Do you have any thoughts on the other ideas I had? I would like to hear them if you do.