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Thread: HR 25, the "fair tax" bill

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    Master political analyst Dittohead not!'s Avatar
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    HR 25, the "fair tax" bill

    Being considered currently in Congress:

    This bill is a tax reform proposal that imposes a national sales tax on the use or consumption in the United States of taxable property or services in lieu of the current income and corporate income tax, employment and self-employment taxes, and estate and gift taxes. The rate of the sales tax will be 23% in 2019, with adjustments to the rate in subsequent years. There are exemptions from the tax for used and intangible property, for property or services purchased for business, export, or investment purposes, and for state government functions.
    Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines.
    Opinions?

    source
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    Veteran Member bajisima's Avatar
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    I just don't see how it passes in states without any sales taxes. Both my senators are opposed. It also doesn't have a lot of exemptions for others. I don't see it going anywhere.
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    Chubby Member
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    I think the key proposal is simply that the IRS disappears in a few years.

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    Southern Strategy Liberal OldGaffer's Avatar
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    Veteran Member cpicturetaker12's Avatar
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    Quote Originally Posted by Dittohead not! View Post
    [COLOR=#333333][FONT=Arial]Being considered currently in Congress:



    Opinions?

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    A/the consumption tax has been floated for all my adult life. I don't know who fights it more, taxpayers or BUSINESS. I guess I could research what the US Chamber of Commerce has to say and that will likely tell us everything we need to know.

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    Veteran Member cpicturetaker12's Avatar
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    Quote Originally Posted by splansing View Post
    I think the key proposal is simply that the IRS disappears in a few years.
    That's silly. Someone will have to ADMINISTER collection of taxes for decades to come. Period. Maybe they can rename like one us those 'made up' sounds good DRUG names. How many of us have some kind of instrument with long term tax implications? They'll be around for a long long time.
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    Veteran Member bajisima's Avatar
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    Quote Originally Posted by cpicturetaker12 View Post
    That's silly. Someone will have to ADMINISTER collection of taxes for decades to come. Period. Maybe they can rename like one us those 'made up' sounds good DRUG names. How many of us have some kind of instrument with long term tax implications? They'll be around for a long long time.
    It is odd though in the age of computers that we still file taxes. Everything is all online now and we just file it. There is no reason why our companies, banks etc couldn't do that for us. It isn't like the old days where banks of people were needed to read it all, its all done electronically now. I saw one country (think it was Finland) does it all electronically no need to file anymore its done for them. We seem antiquated.

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    Spock of Vulcan Ian Jeffrey's Avatar
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    Political problem: There will not be sufficient votes in the Senate.

    Financial problems: It could price too many people out of various markets, with negative effects for business. Plus, at least according to the summary, there is no exemption for food or other necessities, and a monthly rebate may be insufficient to promote affordability.

    Constitutional problem: "The states have the responsibility for administering, collecting, and remitting the sales tax to the Treasury." The federal government presently has no constitutional authority to require the states to collect taxes for it.

    Stupid provision: "[T]he bill terminates the national sales tax if the Sixteenth Amendment to the Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this bill." It does not make a constitutional difference whether the 16th Amendment is repealed or not, since the tax is already (at least presumably) constitutional with or without an income tax.

    Furthermore, in the absence of the 16th Amendment does not mean there can be no future income tax, as the amendment was passed in the first place to clarify previous case law that bounced around between the constitutionality and unconstitutionality of a federal income tax; a repeal amendment would have to specify that there shall be no federal income tax, something that may not be ratifiable, and which would cause the bill to terminate and leave the federal government without a tax structure.

    Preliminary judgment based on the above: It is a bad idea, though possibly fixable.
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    RNG
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    First, if it is going to work, all transactions will need to be taxed at that rate including what are currently under capital gains and stock market transactions. If not, and this is a criticism of the rebate too, you start getting exceptions and exclusions and a way to game the system and the potential for various injustices and it becomes a mess.

    But I still don't like it because it is still regressive.
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    Master political analyst Dittohead not!'s Avatar
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    I couldn't find where the bill addresses real estate. Imagine a 23% tax on buying a house! It would make renting more attractive, unless, of course, the tax is to be collected on rent as well.

    and cars: buy a new car for $30,000, relatively cheap nowadays, and pay a tax of over six thousand dollars. Auto dealers just might not like that idea.
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