When things get really really bad, people are likely to start grasping at straws to fix what is wrong. The people of the United States are fed up with the Feds. We are watching elite politicians throw our country down the tubes, spending borrowed money on pay-back schemes, and turning the good people into a debtor nation on a scale unheard of in America. We're sick of it. We're mad. We've had it. And we have few options to stop this insanity.
So one of the floating ideas is that it must be the tax system that is at fault. It follows that Congress has too much power to manipulate current tax policies to suit their own power and political agendas, thereby leaving the burden on the backs of the public. This is true. But do you fix that with another grand sweeping tax scheme? If you use the "bad husband" analogy, as someone recently did while rebutting me, I do not recommend replacing a bad husband with a worse husband....or even an equally bad husband.
Along comes the Fair Tax idea. This is a worse or equally bad husband wanting to take advantage of an abused wife who is desperate to get out of the marriage to the first bad husband. Be careful what you wish for, comes to mind. Wikipedia Fair Tax Explanation Here Per this article here is the tax rate described in the Fair Tax Bill:
The sales tax rate, as defined in the legislation for the first year, is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes). This would be equivalent to a 30 percent traditional U.S. sales tax ($23 on top of every $77 spent—$100 total, or $30 on top of every $100 spent—$130 total). After the first year of implementation, this rate is automatically adjusted annually using a predefined formula reflecting actual federal receipts in the previous fiscal year.
The effective tax rate for any household would be variable due to the fixed monthly tax rebates that are used to "untax" purchases up to the poverty level. The tax would be levied on all U.S. retail sales for personal consumption on new goods and services. Critics argue that the sales tax rate defined in the legislation would not be revenue neutral (that is, it would collect less for the government than the current tax system), and thus would increase the budget deficit, unless government spending were equally reduced.
Notice that "after the first year of implementation, this rate is automatically adjusted annually using a predefined formula reflecting actual federal receipts in the previous fiscal year."
So if you think that after passing the Fair Tax Bill you can breathe a sigh of relief that the rates are set in stone and all will be well in the world, realize that the beginning rate is what sales people call a "loss leader." They get you in the door and then the other shoe drops with higher costs. It's a "come on." A "teaser" rate. And notice that the ACTUAL rate is 30%, not 23%. The bill is written and supported by politicians, so what would make anyone think this is more "fair" to the tax payers?
In all likelihood, as critics point out, the first year receipts from this plan will create deficits. When that happens, what do you think will happen to the rate of taxation? The Fair Tax Bill calls for annual assessments of the rates, opening the door to increasing the rates to meet the Federal spending sprees. That 30% will be 50% before you can blink your eyes. Do you suppose the Federal government will suddenly shrink to fit the receipts? And if you think that, you must immediately go to have your head examined. Post haste!
Also in the article is this:
Personal services such as health care, legal services, financial services, haircuts, and auto repairs would be subject to the FairTax, as would renting apartments and other real property. In comparison, the current system taxes income prior to purchasing such personal services. State sales taxes generally exempt certain goods and services in an effort to reduce the tax burden on low-income families. The FairTax would use a monthly "prebate" system instead of the common state exclusions. The FairTax would apply to Internet purchases and would tax retail international purchases (such as a boat or car) that are imported to the United States (collected by the U.S. Customs and Border Protection).
So the Fair Tax will open internet sales to a Federal sales tax. Which, using court precedents, will automatically open the door for State sales taxes on internet sales. Another consequence of this so-called Fair Tax.
The proponents of the Fair Tax say that their scheme will save us from the horrible ramifications we have been suffering under the income tax system. They say that the income tax system will be eliminated and that will make you so rich that you will gladly pay all of these sales taxes. Since it is the rich who pay the bulk of the income taxes, who do you think will reap the most benefits from the Fair Tax. If you said the rich, go to the head of the line. Of course the Fair Tax people say they can fix that with a "prebate" program by sending rebate checks to every household in America. This creates yet another entitlement program, in fact the largest in American history which includes the entire population. Dependency anyone?
Replacing the income tax with a sales tax on everything you buy is their idea of 'freeing the people' from oppressive taxation. They say the Fair Tax is just a voluntary tax, that if you don't want to pay the sales taxes you can just not buy anything. Hmmmm....how does that work for a young family starting out who needs housing and goods for their growing families? By all means, let's punish those who are trying to buy a house, baby clothes, cribs and strollers, etc. Make them pay more.
Another fall-out discussed on some sites is the pain the Fair Tax creates for retirees. Sure those folks aren't buying as much, but if and when they do, they will be paying twice the taxes. How? Their incomes were already taxed under the current system. Then they will be taxed again by paying the Fair Tax sales taxes if they purchase a new retirement home, or anything else. Whammo....
And, (if I am repeating myself forgive me) the worst part of all of this that I can envision is the Federal government tracking every purchase anyone makes in the United States. When the Federal government decided last year that all of our health information is to be tracked in a Federal data base, where was the outrage? Now people are saying let's go with this Fair Tax which wants to track every single purchase you make in your life. Where is the outrage? How many weapons are you going to give the government to manipulate you and control your life?
Bottom line: The Fair Tax is anything but fair. It is another convoluted boondoggle created by politicians and egghead economists who are just trying to squeeze more money for the government out of the American public and set up a power structure that Americans cannot over-come. Why? Because they can. This Fair Tax is no better than Obamacare. It is a misrepresented scheme brought to you by politicians who do not have the interest of the American people at heart....rather they are lying to get their hands on control over the American people. They would say it is voluntary. Just like Obama said you could keep your insurance policy. The lies just keep coming....from BOTH sides of the aisle.
What I purchase is no damn business of the Federal government. What I buy to eat is no damn business of the Federal government. What doctor I choose is no damn business of the Federal government. What I do with my money is no damn business of the Federal government. If you want to know where we are headed, watch a movie called "Enemy of the State."
If you believe in freedom, do not swallow the propaganda of the Fair Tax. If you want to have your entire life tracked by a Federal data base, you are not an American.