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| *Ostroff, Fair and Company>>>United States Taxes |
Have any of you looked at the proposal for changing the tax code? |
Check out Fairtax.org. The idea would eliminate witholding completely. Replacing it with a national sales tax. Before you condemn it, read about it. Interesting idea. The Fair Tax Bill would implement a federal tax based upon "consumption" in place of "income/earnings".It taxes all new goods and services at the retail level. There is no tax on used retail sales and no taxes on businesses. (They do not pay the taxes now. It is a cost of doing business and the consumer pays it.) The individual determines how much tax they pay upon how they spend their money. It would be true that low income people would pay a higher percentage of their income under a retail sales tax basis where everything is taxed. However there are a number of things that would greatly alter this statement. If low income family by all their clothes at a local thrift store, they would pay NO federal taxes on these items. If they buy a used car, there would be NO federal taxes. You cannot buy used foods, therefore they will be spending their food stamps or income on foods. (Many low income families will still qualify for food stamps.) They will pay federal tax on this food, but they will also receive the prebate every month. If they are buying high priced meats with their food stamps rather than lower priced meats, they will pay more federal taxes. It is all based upon "how they spend their money" The wise low income family could easily get by with paying less federal taxes in a month than the amount received in the prebate! This results in a ZERO percent tax bracket! Remember the Fair Tax Bill only shifts the source of the federal tax revenue. It does not change any spending programs of the federal government. However everytime there is a purchase of new goods or services, the receipt or invoice will clearly show how much federal taxes are being paid. The amount of federal taxes being paid under the current system is hidden. Once the American people see exactly how much federal tax dollars are being paid, there will be an uproar and the Congresspersons will be pressed to reduce their spending allowing the taxes to be lowered. There are a great number of items that are very positive about the Fair Tax. I am waiting to see someone that can provide documented information that there is a better tax reform change. Everyone will agree that our current tax system is the worst one around in the United States. There are a plethora of theories on how to "fix" the tax code. It all depends on your perspective as to which "fix" you espouse to. For instance, a lower income family, increasing the sales tax put a strain on their already fragile financial situation. The fairtax will increase taxes overall, and specifically on people who spend a larger amount of their income, those people making less than $200,000. Just think about this - the wealthy people are the ones who have sponsored this tax because they will pay less tax overall. The fairtax is also supposed to eliminate our budget deficits. So if there is more tax collected overall and the wealthy are going to less tax, who do you think will make up the difference? Also, the proposed rate of tax would not be the actual rate. They have just used that rate to provide examples in order to gain support. http://www.irs.gov/app/understandingtaxe... Check this out...... good luck imho - mucho tax experience |
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