Re: A "fair tax" would kill us!

JC wrote:

"Matthew Scott" <scottm@xxxxxxxxxxxxxxxxxxxxxx> wrote in message news:CoSdnVuSep89IErbnZ2dnUVZ_jydnZ2d@xxxxxxxxxxxxxxx

Alan Lichtenstein wrote:


Matthew Scott wrote:

Alan Lichtenstein wrote:
Add to that the issue of various state income taxes which you'll still have to pay under such 'Fair Tax proposals.' Proposals to dedicate a portion of that tax, only serve to further reduce Federal Revenues and give low tax states windfalls and further penalize high tax states.

That little snippet for me sounds the death knell for the fair tax. There are only a handful of states which don't have an income tax (many if not most expressed as a percentage of federal tax due), and I'm unaware of much discussion by proponents of how the states will almost all have to modify their tax statutes. Many large cities are in the same boat.

Proponents of the Fair Tax are now claiming that they have built in some mechanism which will give grants to states in lieu of state taxes. However, they really don't spell out exactly what that mechanism is, nor do they project any numbers, as well as not showing how discrepancies between state tax rates would be equalized under their proposals.

In short, this is just another scheme that the wealthy concocted to pull the wool over the poor dumb Yahoos so they'll keep on voting Republican against their financial self interests.

The flat tax may be just another evil rich Republican plot but there is, in many quarters, a deep sense of dissatisfaction and frustration with the current revenue code. When the code is some umpteen thousand pages of legislated complexity, there is real reason to question the underlying philosophy. The ability and willingness of the Congress to legislate tax breaks for special interests is also contentious.

I strongly expect the status quo to prevail, but it's difficult to defend it.


My way is the best. A flat tax on a combination of income and assets with no exceptions, no exemptions and no deductions. If you get caught cheating you go to jail.


Based on what you write, it would appear that you are taxing gross and not net income. Do you see no problems with that?

Would you differentiate between personal and business income? Corporate vs. Partnership vs. Sole proprietor income?

With respect to assets, would you tax assets each year, as it seems your 'simple'scheme implies. And if so, how do you get around the double taxation penalty?

Sometimes simple ideas present complex problems.
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