What about the flat tax? Would it be better and easier to pass?

The flat tax and the FairTax share some important similarities. They are both flat-rate taxes that are neutral with respect to savings and investment. The flat tax, however, retains the invasive income tax administration apparatus and can easily revert to a graduated, convoluted mess, as it has many times over many years.

Very few people really understand the flat tax. Its authors will tell you it is a consumption tax that uses the income tax system for implementation. Only an academic or government bureaucrat would dream up a consumption tax that needs the invasive income tax apparatus for its application, when one can simply have a retail sales tax and reduce the bureaucracy by 90 percent or more! In addition, a large part of the burden of the flat tax -- the business tax -- will remain hidden from people in the retail price of goods and services.

In contrast, the FairTax is simple, easy to understand, and visible. It cannot be converted into an income tax.

Under a flat tax, individuals would still file an income tax return each year similar to today’s 1040 EZ. While this is a simple postcard, the record keeping required to fill in the blanks is still long and burdensome. Under the FairTax, individuals never file a tax return again, ever! Under the flat tax, the payroll tax would be retained and income tax withholding would still be with us. Under the FairTax, the payroll tax, which is a larger and more regressive tax burden for most Americans than is the income tax, is repealed. Under the FairTax, what you earn is what you keep. No more withholding taxes; no more income tax.

Notwithstanding flat tax proponents’ honorable intentions, income tax reform has been less than a success in the past. Congress has tried to reform the income tax again and again, with the result being greater complexity and, generally, higher rates. The problem is the income tax, and it is time to stop tinkering with it.

Flat tax supporters have made major political attempts to pass their reform, including the efforts of former Majority Leader Dick Armey and presidential candidate Steve Forbes, and yet their efforts have not progressed politically for several years. With every debate, the flat tax loses grassroots and congressional support to the FairTax. It is time to junk the entire income tax system and start over with a tax system that is more appropriate for a free society and better able to meet the needs of the information age.

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Anyone can take any great idea and make it look bad.  Flat tax need not be complicated and large.  It depends on how you design it.   Fair tax has to give the taxes to the feds.  The flat tax has to go to the feds.  You either have all the public businesses do it (collection) or employers do it.  I don't see the difference.  Get rid of all the loopholes and make the catagories how you want.

Such as singles 15 per cent, married 13 per cent, business whatever per cent.  No loopholes, no itemizing, no need for audits means the size of IRS could be as small as it would be with Fair Tax.  Fair unbiased easy and simple to administer, everything is already in place.  All you have to do is make sure they do pay same as Fair tax. 

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(CM) theSuperPatriot said:

Anyone can take any great idea and make it look bad.  Flat tax need not be complicated and large.  It depends on how you design it.   Fair tax has to give the taxes to the feds.  The flat tax has to go to the feds.  You either have all the public businesses do it (collection) or employers do it.  I don't see the difference.  Get rid of all the loopholes and make the catagories how you want.

Such as singles 15 per cent, married 13 per cent, business whatever per cent.  No loopholes, no itemizing, no need for audits means the size of IRS could be as small as it would be with Fair Tax.  Fair unbiased easy and simple to administer, everything is already in place.  All you have to do is make sure they do pay same as Fair tax. 

 

What you are saying...15 % for singles, 13% married...etc. is not fair!! 

The size of the IRS with the FairTax would be.....well...0!!! No IRS at all! Nada!! A savings of what....20 billion/year???

With a flat tax, there would still be an IRS.... 

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Whatever the numbers turn out to be.  Just an example.   You don't think singles and marrieds pay the same rate now?  Well they don't.  The IRS would be 1/20th of what it is now.  So?

No IRS, how?  Who receives the taxes the President?   Who checks the companies.  Get rid of the IRS to creat more state, great trade.

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SP,

The flat tax would be an improvement over what we have.  But it is still:

1) invasive of privacy - you have to report all your income or you are breaking the law

2) drag on productivity - at the margin, especially if the tax is progressive, you will be more inclined to spend time in leisure than in productive work, simply due to the tax

3) drag on savings and investment - unless you claim that capital gains and interest are not taxable income

4) not transparent - this is true when payroll deductions are used as the method of collection and would not apply if everybody had to write a check to pay all of their taxes, but payroll deductions are usually applied and only applied on income taxes

5) tax avoidance is high and results in poor investments for tax purposes, which may not be as much of a problem with a true flat tax, but read the promises about the original income tax and imagine what a newly implemented flat tax would look like in 50 years.

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There should be only one tax for the individual, a consumption tax. Does not matter if you are married or single or if you children or not. You pay your tax at the cash register at the time of purchase.

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I fail to see any logic except for maybe privacy.  But then where's the privacy of medical care, Social Security and other payday payments.  Are you saying my SS payments per pay check aren't based on how much I earned?  I beg to differ.

I don't see the logic or believe you that dropping down from paying 50 per cent to 15 per cent income tax is a drag on productivity.  I work hard cause my boss pays me, I'd work harder to pocket 35 per cent more pay.

Drag on investment?  More money brought home, more saving, more investing, more spending more economy.  Principle of less tax with Bush works if the government doesn't overspend.

Transparant as heck.  If most pay the same flat tax rate then it's as transparant or more than even fair tax.

Tax avoidance is because you have to work 5 or 6 months for taxes.  It's obvious that a flat tax which is 35 per cent lower would help minimize avoidance in the first place. 

The rich couldn't avoid their 15 per cent (instead of 0 per cent) you would have more taxpayers not less.

If the rich have to pay tax on everything they buy then they will buy elsewhere and not pay any tax at all.  There will be businesses that pop catering to getting goods for the rich that they don't have to pay tax on.  They will not only stop buying goods in America but they will not buy goods made in America.  Like a Costco for the rich outside of our borders.

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The flat tax and the FairTax SCHEME are not equal in regards to savings. The FairTax SCHEME is a double tax on the savings of the people who paid income tax on those savings when they were earned.

The flat tax only taxes income, ALL income, no deductions, no loopholes.

The FairTax SCHEME is very complex with many loopholes, For instance new housing that is purchased for investment is not taxable but new housing purchased for owner occupancy is taxable at a 23% rate (according to linder and boortz calculations ) but at a 34% rate according to the presidents council that looked into tax reform. Either 23% or 34% is a pretty good incentive to find a way around this tax. A simple way would be for a man (John) to have his brother (Bob) buy the house (under the pretense of investment) and then rent it to John for less than the payment. After three or four years Bob can show that the house is not a good investment (he’s not even getting the payments made with rent) so he sells it tax free (it’s a used house now) to John and the 23-34% tax is avoided.

Further . . . . as a general rule of thumb a house should rent for 1/100 of its purchase price. If I purchase a house for $300000 as an investment . . . FairTax SCHEME free, it should rent for about $3000 a month. If I purchase the same house for owner occupancy I would have to pay the FairTax SCHEME of 23-34% raising the out of pocket price to the purchaser nearly to $400000. Financed at a 6% rate (if you can find it) the payments would be $4000 a month. You would have to think real hard about buying at $4000 a month as opposed to renting for $3000 a month.

 

A vehicle is also taxed at the 23-34% rate. Tax on a $65000 Mercedes would be $19500 to $22100. With that kind of money at stake you could go to Europe, buy the car, vacation for 2 weeks, return the car to the factory which would clean it and ship it to the US as a used vehicle with no taxes due. Don’t laugh. It was done in the late 50's Early 60's when tariffs were raised on new imported European cars here in the US. We could not raise our tariffs on imported cars coming into the US or the Europeans would do the same to our cars going to Europe.

These are just three of the VERY obvious problems with the FairTax SCHEME. There are many more.

 

‹(•¿•)›

STOP the FairTax SCHEME

The FairTax SCHEME is a Plan to eliminate the IRS and substitute a 23-34% consumption tax on all new sales. The problem is that nearly all savings except some IRAs have already been taxed when earned by the income tax system and this additional point of sale consumption tax would tax these savings a second time at the 23-34% tax rate. That would devastate the savings of nearly all retirees.

STOP the FairTax SCHEME

 

‹(•¿•)›

 

 

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The Economist: The flat-tax revolution

Fine in theory, but it will never happen. Oh really?

THE more complicated a country's tax system becomes, the easier it is for governments to make it more complicated still, in an accelerating process of proliferating insanity-until, perhaps, a limit of madness is reached and a spasm of radical simplification is demanded. In 2005, many of the world's rich countries seem far along this curve. The United States, which last simplified its tax code in 1986, and which spent the next two decades feverishly unsimplifying it, may soon be coming to a point of renewed fiscal catharsis. Other rich countries, with a tolerance for tax-code sclerosis even greater than America's, may not be so far behind. Revenue must be raised, of course. But is there no realistic alternative to tax codes which, as they discharge that sad but necessary function, squander resources on an epic scale and grind the spirit of the helpless taxpayer as well?

The answer is yes: there is indeed an alternative, and experience is proving that it is an eminently realistic one. The experiment started in a small way in 1994, when Estonia became the first country in Europe to introduce a "flat tax" on personal and corporate income. Income is taxed at a single uniform rate of 26%: no schedule of rates, no deductions. The economy has flourished. Others followed: first, Latvia and Lithuania, Estonia's Baltic neighbours; later Russia (with a rate of 13% on personal income), then Slovakia (19% on personal and corporate income). One of Poland's centre-right opposition parties is campaigning for a similar code (with a rate of 15%). So far eight countries have followed Estonia's example (see pages 69-71). An old idea that for decades elicited the response, "Fine in theory, just not practical in the real world," seems to be working as well in practice as it does on the blackboard.

Practical types who said that flat taxes cannot work offer a further instant objection, once they are shown such taxes working-namely, that they are unfair. Enlightened countries, it is argued, have "progressive" tax systems, requiring the rich to forfeit a bigger share of their incomes in tax than the poor are called upon to pay. A flat tax seems to rule this out in principle.

Not so. A flat tax on personal incomes combines a threshold (that is, an exempt amount) with a single rate of tax on all income above it. The progressivity of such a system can be varied within wide limits using just these two variables. Under systems such as America's, or those operating in most of western Europe, the incentives for the rich to avoid tax (legally or otherwise) are enormous; and the opportunities to do so, which arise from the very complexity of the codes, are commensurately large. So it is unsurprising to discover, as experience suggests, that the rich usually pay about as much tax under a flat-tax regime as they do under an orthodox code.

So much for the two main objections. What then are the advantages of being very simple-minded when it comes to tax? Simplicity of course is a boon in its own right. The costs merely of administering a conventionally clotted tax system are outrageous. Estimates for the United States, whose tax regime, despite the best efforts of Congress, is by no means the world's most burdensome, put the costs of compliance, administration and enforcement between 10% and 20% of revenue collected. (That sum, by the way, is equivalent to between one-quarter and one-half of the government's budget deficit.)

Though it is impossible to be precise, that direct burden is almost certainly as nothing compared with the broader economic costs caused by the government's interfering so pervasively in the allocation of resources. A pathological optimist, or somebody nostalgic for Soviet central planning, might argue that the whole point of the myriad breaks, deductions, allowances, concessions, reliefs and assorted other tax expenditures that clog rich countries' tax systems-requiring total revenues to be gathered from a narrower base of taxpayers at correspondingly higher and more distorting rates-is to improve economic efficiency. The whole idea, you see, is to allocate resources more intelligently. Yes, well. Take a look at the current United States tax code, or just at one session of Congress's worth of tax-gifts to favourite constituencies, and try to keep a straight face while saying that.

Once tax codes have degenerated to the extent they have in most rich countries, laden with so many breaks and exceptions that they retain nothing of their original shape, even the pretence of any interior logic can be dispensed with. No tax break is too narrow, too squalid, too funny, to be excluded on those grounds: everybody is at it, so why not join in? At the other extreme, the simpler the system, the more such manoeuvres offend, and the easier it is to retain the simplicity.

In Britain, election notwithstanding, tax simplification is nowhere on the agenda: why not? George Bush has at least appointed a commission to look into tax reform. But its terms of reference are so narrow that it could not suggest a flat tax even if it wanted to. This is a great pity. A flat tax would not eliminate the need for spending control; it would not deal with the impending financial distress of Social Security and Medicare; it would not even settle the arguments about the so-called consumption tax (since in principle a flat tax could take as its base either all income, or income net of savings, in which case it would act as a consumption tax). There are things it cannot do and questions it does not answer. But the gains from a radical simplification of the tax system would be very great. The possibility should not be excluded at the outset.

It is true that the flat-tax revolutionaries of central and eastern Europe are more inclined to radicalism than their politically maturer neighbours to the west and across the Atlantic. Mobilising support for sensible change is far harder in those more advanced places-but not impossible. In tax reform, as 1986 showed, the radical programme can suddenly look easier to implement than the timid package of piecemeal changes. Now and then, the bigger the idea, and the simpler the idea, the easier it is to roll over the opposition. The flat-tax idea is big enough and simple enough to be worth taking seriously.

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SP,

It is hard to be clear in a brief reply.  Let me try again.

Payroll taxes like social security and Medicare are paid only when you work for a business.  Some people don't pay SS or health insurance because they work off the books or because their company doesn't provide benefits (in the case of medical).  But if they don't pay in, they receive less payout when they become eligible.  I have an uncle in this situation now, so I know.  But whether you work on the books or off and whether you have a net income or not, you are legally obligated to provide a tax return.  And you are taxed on more than just your wages and salary.  And even if you have no job, filing a tax return is an obligation, not an option.  Your social security is not based on capital gains and other investment income.

When I say that income taxes are a drag on productivity, I'm not concerned with the rate.  If you tax anything, people will buy less of it and labor is no exception.  If the employer (the customer for your labor) pays the tax on your labor, the employer will be inclined at the margin to buy less labor.  If you as the seller of your labor pay the tax, you are getting less for your labor.  At the margin where you value the extra free time equal to the value of working an extra unit of time for extra incremental income, income taxes will change that point of equality in favor of extra leisure.

When your investments are taxed as income, you must both tell somebody what your investments are (which isn't any body's business) and you must pay tax on the income.  While we all want to make money, at the margin, you will be more inclined to spend now rather than invest for the future since the investment must not only pay you for the time value of the investment, but must also pay for the tax on the income, even though the fruit of your labor was already taxed once before.  There will be less capital available for investment and more spending for immediate gratification simply because there is a tax on savings and investment.  When the government does get around to creating tax shelters and such, just watch the money flow to those typically under productive assets.

When I talk about transparency, I mean as a tax payer.  How many people actually look forward to getting their tax refund back?  It is a poor investment, indeed, to give the government your money to squander for a year and return to you without interest the following year.  When you pay a tax, instead of having it withheld for you, you have greater appreciation for what is being taken.  The beauty for politicians of payroll withholding, is that most of us never miss the money.  It is gone before we see it.  A flat tax would be better if we all had to write a check each month or each year with our total obligation.  The benefit of the Fair tax is that you pay the tax at the point of purchase for every purchase.  It shows up on the receipt.  The price on the menu or sales sticker is different from what actually leaves your wallet.  When Congress raises taxes, you will feel it immediately and every time you shop.  It tends to act as a restraint on raising taxes as elected congress critters will be held to account if they raise taxes that are so visible.

Tax avoidance will always be with us.  Nobody wants to pay more than their fair share and many would like to pay less. If you reduce current taxes by 35% you will also get more compliance.  It isn't about the rate, except that a higher rate always leads to more avoidance.  It is about the schemes for avoidance, legal and illegal.  A true flat tax would minimize the counterproductive schemes for tax avoidance that the current system suffers.  Still, you need an army of IRS auditors to check into your personal affairs to make sure you declared all of your income and paid all of your tax.  With a consumption tax, the business selling something is liable for collecting the tax and the cost of assuring compliance is lower and the cost of not complying is higher when dealing with companies vs individuals.

It is possible to avoid a sales tax.  That has always been my concern, especially given the internet market.  After reading Linder and Boortz's book on the Fair Tax, I am willing to concede it could work.  The cost of avoiding a sales tax can be pretty high.  It is possible, but it may not be economically advantageous.  Nothing is perfect, but I have more confidence and a stronger preference for a consumption tax than an income tax.

A consumption tax is also voluntary.  You can avoid the tax by not buying something.  You make the call.  I'm not entirely convinced that a voluntary tax is a good thing, but it helps alleviate the concern about who pays how much and whether it is progressive or regressive.  And a sales tax is biased toward savings and investment vs consumption.  It is not entirely neutral, but I prefer a tax that is biased in that direction vs one that is biased against production.

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Thanks much you have convinced me along with the articles above The Economist: The flat-tax revolution and The flat tax and the FairTax SCHEME are not equal in regards to savings. The FairTax SCHEME is a double tax on the savings of the people who paid income tax on those savings when they were earned that the flat tax is far superior to any other form.  Again America who had the answer in the seventies is beat out by far inferior countries such as in 1994, when Estonia became the first country in Europe to introduce a "flat tax" on personal and corporate income. Income is taxed at a single uniform rate of 26%: no schedule of rates, no deductions. The economy has flourished. Others followed: first, Latvia and Lithuania, Estonia's Baltic neighbours; later Russia (with a rate of 13% on personal income), then Slovakia (19% on personal and corporate income). One of Poland's centre-right opposition parties is campaigning for a similar code (with a rate of 15%). So far eight countries have followed Estonia's example (see pages 69-71). An old idea that for decades elicited the response, "Fine in theory, just not practical in the real world," seems to be working as well in practice as it does on the blackboard.

Plus I don't trust the states who by the way get federal money to collect the money and give it to the feds so the feds can turn around and dole it back out to the states.    And I do not think a Voluntary tax is fair or would even work.  It's the biggest loophole and that's what a flat tax avoids.

 

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Consumption tax on savings previously taxed as income is an important consideration.  Like I said, no tax plan is perfect.  But if you are worried about your retirement investment, I would be more concerned about inflation and the Fed than about double taxation.

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With both tax plans you have to worry about that anyway.

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One thing about a switch to a consumption tax is that the cost of goods goes down because so many hidden taxes (e.g. employee withholding) and costs (e.g. tax accounting) are eliminated from the production cycle.  So in theory, the sales price will fall by some amount (which Boortz argues is similar to the new tax burden) making the price after taxes nearly the same.  Whether this pans out in practice as well as it sounds in theory is yet to be seen.

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(CM) theSuperPatriot said:

Thanks much you have convinced me along with the articles above The Economist: The flat-tax revolution and The flat tax and the FairTax SCHEME are not equal in regards to savings. The FairTax SCHEME is a double tax on the savings of the people who paid income tax on those savings when they were earned that the flat tax is far superior to any other form.  Again America who had the answer in the seventies is beat out by far inferior countries such as in 1994, when Estonia became the first country in Europe to introduce a "flat tax" on personal and corporate income. Income is taxed at a single uniform rate of 26%: no schedule of rates, no deductions. The economy has flourished. Others followed: first, Latvia and Lithuania, Estonia's Baltic neighbours; later Russia (with a rate of 13% on personal income), then Slovakia (19% on personal and corporate income). One of Poland's centre-right opposition parties is campaigning for a similar code (with a rate of 15%). So far eight countries have followed Estonia's example (see pages 69-71). An old idea that for decades elicited the response, "Fine in theory, just not practical in the real world," seems to be working as well in practice as it does on the blackboard.

Plus I don't trust the states who by the way get federal money to collect the money and give it to the feds so the feds can turn around and dole it back out to the states.    And I do not think a Voluntary tax is fair or would even work.  It's the biggest loophole and that's what a flat tax avoids.

 

 

CM...Please show me the source of your claim that the  FairTax would double tax you.

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Opps. Sorry CM...it was GyroTyro who calls it a scheme and a double tax...

So gyro, please cite your source on the double tax statement... 

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FeedFwd

I would like to inject a few words here.

Your theory that prices will go down is just that a theory, Prices are set by supply and demand NOT BY COST OF PRODUCTION. 

 In theory a Bumblebee cannot fly and engineers can prove the theory but tell that to the Bumblebee. 

First Ronald Reagan is the only man for whom I have ever voted for president. The rest of the elections in which I have voted I have held my nose and voted for the lesser of two evils. With the exception of George Wallace and I only voted for him because I was sure the Republicans would win the election and I wanted Wallace to make a good enough showing to make the Republicans lean farther to the right.

Anyway, one of the things I remember about Reagan was that he opposed withholding taxes from the paycheck , He felt and said that taxes should hurt. His explanation was that if everyone had to come up with their taxes in a lump sum they would pay attention to how much they were paying and when taxes are raised they would be aware of the raise. I’ll make you a bet right now. If you go up to ten people and ask them how much they paid in taxes last year, no more than two will even be able to come close. But if you ask them how much of a refund they got, most will be able to give you a close estimate.

The secret to making people aware of the taxes paid is to eliminate withholding and make the taxpayers come up with a monthly check for their taxes. You do not need to go to the FairTax SCHEME.

You are being disingenuous when you say that the FairTax SCHEME is a voluntary tax and that you only pay it when you purchase something. There is no point to earning a dollar unless you have the freedom to spend it without confiscation. Everyone has to spend money on essential clothing and other necessities. If you don’t plan on spending your earnings I’ll speak to your employer and see if he will pay you in rocks on the next payday. By the way the Income Tax System is also touted as being a voluntary system.

Payroll taxes like SS and medicare are not only paid when you work for an employer, there is such a thing as self employment enrollment in both SS and medicare.

Now as far as privacy goes and who knows what investments you have. There are organizations here in the US that have total record on you or know where to find information on you. I recently inquired about my own records and for free they told me what schools I went to(some 30 years ago), where I lived (4 different states) my drivers record, any home owners insurance claim, who I worked for and my salaries, my investments and who my broker was.  That was for free. A more detailed police record, my bank accounts and savings were available for a fee. Any used car dealer can find out how much you have in the bank with a phone call. When the Credit monitoring companies have records of your CC transaction before you get the bill from your CC company you know they are keeping tabs on you. Revealing personal records with flat tax filing is a null argument.

The FairTax SCHEME is more of a disincentive to save than it is to spend, spend, spend. You mentioned that you have an uncle who worked and somehow avoided paying the SS taxes, medicare etc and now I suppose he has a minimal income with little or no savings. Lets change the scenario slightly, He’s now your father or guardian who worked hard obeyed the laws contributed to SS and other mandated programs. He also knew that SS is not designed to be a retirement fund it is only there to supplement an individuals private pension plans or savings. Not being eligible for a pension plan, as many are not, Your father brown bagged to work, car pooled, always drove older used cars, seldom went on vacations, painted his own house and saved at every corner he could. In fact when you badgered him for those new $120 Rebocs (sp) or that new $90 skate board he substituted something less expensive and put the balance in savings. You were devastated. Now he has retired. Between his savings and SS he can live independent, not luxurious but not having to live with you or in your basement apt.

Now along comes a FairTax SCHEMER and changes the rules mid stream for him and takes 1/3 of his savings in a new FairTax SCHEME. . . .  BINGO there goes His independence, he will have to come to you for assistance like your uncle does now. You look at the 1/3 of his savings that the FairTax SCHEME is taking from your father and think there goes the Rebocs(sp) I couldn’t have and they are riding on the unpurchased skateboard.

That scenario will lead to much less savings not more. The worker will reason . . . . Why save when someone will come along and change the rules just when the savings are needed for retirement,  They did it to DAD

I have two possible solutions to end the double taxation dilemma. . . . .

One alternative could be: Phase out the income tax . . . Make the sales tax optional. The Fair Tax Scheme would be mandatory for anyone born/starting employment after the date of inception. Anyone else who has ever filed a tax return has the option of continuing with the income tax option, or switching to the sales tax option, but you can never switch  from sales tax option to income tax option.

People who continued paying income taxes would have to have some form of ID that could be used at point-of-sale to exempt them from the sales tax.

A second alternative could be: An asset debit tax card. Conduct an audit of all a savers assets, it can easily be done. It is currently done upon the death of the taxpayer to calculate the estate death taxes. For most people it would take: a year end bank statement, an investment statement, an county assessors statement and lenders statements. The total of the assets, minus the debts, is then credited to an asset debit card and given to the taxpayer, When a purchase is made the taxpayer pays for the sale and in lieu of the sales tax, gives the clerk the asset debit card and the amount of the sale is deducted from the payers asset total. When the asset total on the tax debit card reaches zero the buyer then pays the normal sales tax. Any asset appreciation from the date of the inception audit would be subject to the so called "Fair Tax Scheme" . . . . . . . .

 

‹(•¿•)›

STOP the FairTax SCHEME

The FairTax SCHEME is a Plan to eliminate the IRS and substitute a 23-34% consumption tax on all new sales. The problem is that nearly all savings except some IRAs has already been taxed when earned by the income tax system and this additional point of sale consumption tax would tax these savings a second time at the 23-34% tax rate. That would devastate the savings of nearly all retirees.

STOP the FairTax SCHEME

 

‹(•¿•)›

Rayj00

 

read the bottom of my post

GyroTyro said:

Rayj00

 

read the bottom of my post

  The income tax retards economic performance by creating a significant bias against saving and investment through double, triple, and even quadruple taxation.

Initially, wage and salary incomes are taxed when they are earned. Then, if wages and salaries are saved or invested, the resulting benefits are taxed again and again and sometimes again still. All income derived from investment is taxed. If an income-producing asset, such as a stock or bond, equipment or real estate, is sold for more than it was purchased, the increase in the value of the capital investment – the capital gain – is taxed. Corporate income (including capital gains) is taxed at the corporate level and again when it is paid to shareholders as dividends. Intercorporate dividends are also often subject to tax, creating yet another level of taxation. When the taxpayer dies, the estate and gift tax may tax his or her investments one final time.

Replacing the current tax system with the FairTax eliminates the tax bias against investment.

  I cut and pasted the above from a docment at: http://www.fairtax.org/site/PageServer?pagename=about_research_investing

I don't claim to be a FairTax expert, a Flat Tax expert or an expert on the current system. However, I do believe a system that lets ME decide how much to give the government, and not them or my employer,  is a system that has my best interests at hand.....   Wouldn't you agree?

 

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GyroTyro said:

Rayj00

 

read the bottom of my post

 

So let's see..it looks like you are somewhat distrubed that the FairTax could someday become law. Looking at your avatar, you also seem to be somewhat of an activist against the FairTax?

You would be the first I have run into that is actively campaigning against the FairTax! That leads me to believe you either work for the IRS, H&R Block or one of it's competitors.... 

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