The tax man has cometh!

[Toad]

You still have to register it here. They'd just require copies of the paperwork and tax you based on that.

[Sabre]

Originally posted by Mickey1992
Nor is there tax on the Capital Gains when the stock is sold.  

Correct.  One of the economic positives of the Fair Tax is that it encourages savings and investment, instead of penalizing it.  Plus, you can pass on your estate without paying a whopping death tax on stuff that was already taxed previously...unlike the current system.

[mars01]

This is a bit of a red herring to me. Right now the IRS is responsible for collecting taxes from every business and individual. The Fair Tax would reduce the number of points of collection (and enforcement) dramatically; the FairTax reduces them by about 80 percent (145 million to 25 million). Because 45 our of 50 states already collect state sales taxes, the Fed would contract with state tax collection agencies to collect the federal sales tax. As far as the neighborhood boy or girl that performs fee for service jobs, how would that be any different than today when those jobs are done on a cash only basis? The weakness of this author’s entire case is displayed when he has to go to such a trivial case to make his point.

So it's not going to cost the government any money to police an collect the taxes from all the people selling goods???  Yes I agree what we spend on collecting taxes is atrocious, but how can you say Fair Tax collection won't turn into the same beast with a different coat?

I believe the author is correct in that the Fair Tax does not eliminate a very few special taxes, such as the federal portion of tax on gasoline (I may be wrong, but I though hotel taxes were state taxes, and there fore not addressed by the Fair Tax). What the author fails to note or maybe realize is that hidden in the cost of that gasoline (and hotel room charge, for that matter) are 18-25 percent in hidden tax costs, i.e. the costs added to the product or service all along the way due to taxes eliminated by the Fair Tax. When the cost of producing/providing a product or service goes down, the price to the consumer generally goes down due to market forces.

23% percent on our income, 23% or close to it on everything I buy could potentially dwarf what I pay on my income.

I believe the author is correct in that the Fair Tax does not eliminate a very few special taxes, such as the federal portion of tax on gasoline (I may be wrong, but I though hotel taxes were state taxes, and there fore not addressed by the Fair Tax). What the author fails to note or maybe realize is that hidden in the cost of that gasoline (and hotel room charge, for that matter) are 18-25 percent in hidden tax costs, i.e. the costs added to the product or service all along the way due to taxes eliminated by the Fair Tax. When the cost of producing/providing a product or service goes down, the price to the consumer generally goes down due to market forces.

Again you would think consumer price would go down if this were the case, but we have seen enough cases where that savings just ends up in someone elses pocket and our cost continue to increase.  I.e.  Levis jeans:  Not one pair of Levis are produced in the USA anymore.  All the manufacturing has been sent over seas for cost savings, now why didn't the price of Levis go down??

As for the second post, honestly I think you will see as big an organization and cost needed to police and wage the war on Sales Tax Evasion.  I also believe there would be an underground market born as well.  It is inevitable.

I appreciate this debate and the ideas, but I don't buy it.  I would rather see a flat tax of sorts than coupling the purchase of goods with the funding of government.

[Sabre]

Mars:

I never said it would cost nothing to administer, only that it would be substantially less.  45 out of 50 states already collect state sales tax.  This would be done the same way, and by the same mechanisms.

23% percent on our income, 23% or close to it on everything I buy could potentially dwarf what I pay on my income.

Please tell me how much of each paycheck you currently don't recieve due to federal withholdings?  I know for me it's greater than 23 percent.  Plus, everyone gets a prebate to offset a part of that 23 percent (for a family of four that amounts to around $6700 per year).  Finally, you'd only pay that 23% on what you spend, not on what you earn, and only on new goods and services.

And prices would go down; that is how the free market works.  Not for every item, and not necessarily instantly, but in general.  Of course, I buy Arizona brand jeans, and they are much cheaper than Levis already .

The underground market thing is going on already, as well as rampant income tax evasion.  The simpler the system, the easier it is to monitor and police.  Will Fair Tax eliminate all underground dealings? Of course not.  No system is perfect, but I believe the Fair Tax to be far superior to the economic health of our nation than either a flat tax or the current system.