Posted by
King Vinyl on Saturday, December 25, 2010 11:29:38 AM
I love the concept of the "fairtax" it's just that I'm not quite sure what would actually end up being different between it and our current mess of a system once it's the law. No, Neal I ain't buying your book to figure it out. But I do have a serious question and a serious solution to the problems I see with the fairtax.
First off we all know that 23% would be substituted it a purchasing transaction for the "embedded" taxes a product incures on it's way to the consumer. But I don't understand what the difference is. Let's say we are talking about an American made hammer you can('t) buy at a hardware store. I understand the foundery crew isn't burdened with an income tax, the guy who puts on the rubber handle, the sticker engineer, or the hardware store employees. However does not the wholesale transactions and the raw materials to the plant incure this sales tax and if so is that not embedded?
I'm a construction contractor do I charge a 23% tax to my customers and if so who but the IRS would collect that? At some point the realization of facts has to occur; our tax code is so complex only because the lengths Americans are willing to go not to pay. It reminds me of welfare checks when Neal was talking about the energy aassistance lines in Georgia. People will spend countless hours being non-productive to beat the tax code the same way they try to game the system for their heat bill.
There are two problems I see with fairtax. First there is the collection method for this 23% and exactly what industries will pay it and how to rain in the black market that will surely seek to avoid it. The second is this prebate crap and that is the Led Zep in this whole thing it absolutly sinks fairtax because it to will be so exploited as long as citizenship=residency. Also families will subdivide their dwellings in order to recieve duplicate payments and the Democrat will surely use it as an extension welfare.
The bottom line is you have to drop the prebate it's stupid to star writting checks to people just because someone thinks they need their essentials at an untaxed level. What the faitax guys should look into is simply providing all Americans with coupon cards. These coupon cards would give them 23% off to a certain dollar amount determined as their essential outlays monthy. That way they have got to spend the money to receive a "prebate".
Secondly you have got to structure the collection process to require weekly or at most monthly payments by vendors to the government. There will have to be some sort of a licensing requirement and an enforcement mechanism with strict penalties for noncompliance. If not this would only seem to be a tax on commercial store sales and would be a boone to ebay, craigslist and garage sales everwhere.