Except that by elminating income taxes, you have reduced the cost of doing business, making it less burdensome to do business legally. Furthermore, you can not purchase McDonalds illegally. People will still follow the law, because that is how our society functions. Some people will also still not follow the law, and be it income or sales tax, that wont change. What WILL change is people who make income off illegal activity will still have to make legal purchases, only now they will be paying federal taxes.

That said, when dealing with consumer pyschology, nothing is certain. But, we know the problems with the current system, whereas the possible problems with the fair tax are unknown. Fear is no reason not to suggest change.

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http://www.fairtax.org

Elminate all taxes on income and replace with a national sales tax.

The FairTax is a horrible idea.
Most of the purported good things will not exists under the FairTax plan.
First, we have the name. How in the world is taxation fair? How can the process of taking money from one person and giving to another person be fair? The senselessness begins at the name of the tax.

Second, this will do nothing to end class warfare. The prebate check, or "the key to fairness" is the exact opposite of this. It is through the prebate check that government will be able to play class warfare. I know that the law, as it is currently written, does not allow for this, but the income tax rate was orginally about half a percent, and look at it now. The point is, lawmakers will change the law to help themselves. So, how will gov't play class warfare with the prebate check? They will give a higher prebate check to poorer people and a smaller prebate check to rich people. Why would we expect anything different from politicians?

Third, this idea that we will make more money, and be taxed the same amount. Boortz and Linder set out the scnerio to look as if the FairTax will be a huge gain because our current gross paycheck will become our net paycheck under the FairTax Plan. At the same time, because of the many taxes that are abolishied because of the FairTax, the prices of goods will decrease by about 22% (I think that is the number.) However, one of the factors that is supposed to be reduced is employee payment. Boortz and Linder say that because employers won't have to pay employees as much money, the price of goods will fall the predicted 22%. So, in order for prices to fall the predicted 22%, employees must gross less money! It is really odd that Boortz and Linder correctly point out that competition will cause the price of goods to fall once taxes are lifted, but they don't apply this same principle to wages. Now, I am not saying that falling wages as a result of a decrease of taxes is bad; I am only pointing out something that is wrong with the plan.

4th, no hidden taxes. What? Boortz and Linder correctly point out that the withholding tax is one of the worst things that gov't does. Why is it particurlrly bad? It tricks people into thinking they are paying less than they really are because the money is taken out before the see it. This has enabled gov't to raise taxes to a very high level. If people had to pay 20% of their income every April, they would raise hell. But if it is taken little by little without people's knowledge, they aren't nearly as upset. But, the FairTax is included in the price of a good. The same exact thing will happen. The rate will be raised, but because it is included in the price of a good, no one will really realize the increase. And yes I know that the amount of FairTax that is charged will be on the recipt; the amount withheld from one's paycheck is on the pay stub- this doesn't really help the problem in either case.

5th, no more income tax (or other taxes)- this is just scary. Even if the 16th Amendment is repealed, what is to keep Congress from re-implementing the income tax. Sure, it would be unConstitutional, but why would we expect that to stop Congress from doing something? An amendment was required to make alchohol illegal at the federal level; there is no amendment giving the federal government the power to make drugs illegal, but they do it anyway. Does everyone see the parallell?

After the FairTax, it will only be so long before a politician say something like, "Well, rich people are really getting away with murder with this FairTax deal." Of course this isn't really true, but it doesn't need to be true, politicans lie all the time. He will continue, "We are in a .....Emergency, and we need more revenue. So, as a temporary measure, we are going to reinstate a .5% income tax and the top 1% incone earners." Before we know it, we will all be paying both a FairTax and an Income Tax.

Okay, so those are some of my objections. I didn't read the wiki article, but I have read the Fair Tax Book several times. I am sure that I missed some neagatives, and maybe even some postives. But, I think that, on net, the FairTax is bad.

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"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."
-Thomas Jefferson in his first inauguration address

Most of what you said is correct, but mostly hypothetical, so its difficutl to argue. Suffice it to say, there has been tons of research done on every aspect of the fair tax, and the negatives you acknowledge are pointed out, and minimized as best they can. As you said, and as Fair Tax supports have said, there is no plan that can fairly take a large sum of money from people and transfer it to the govt.

But, I can address your third point about how implementing the Fair Tax makes you more money. Im not aware that the Fair Tax supporters say that, but practicly the Fair Tax does remove withholding, so you immediately get your whole paycheck. This doesnt affect the wage that and employee makes, however. But, it does affect the 7% SS tax that a biz has to pay directly, as well as all corporate taxes, which are reflected in sales prices. Competition does the rest, bringing product prices down. But then sales tax is added on. So, as the research points out, the end result is slight different levels of taxation, and lest cost of business due to ending compliance costs.

But, if you end judgment is that is is bad, then so be it. You may need to read the new book coming out, Fair Tax: Answering the Critics. Also, if you dont like it, what is your ideal tax system, and does it really stand up to critique?

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http://www.fairtax.org

Elminate all taxes on income and replace with a national sales tax.

The hypothetical things I said are no more hypothetical than the implicit assumption made by FairTaxers that politicians will remain honest under that FairTax. The only difference is that experience indicates that I am correct and the FairTaxers are wrong: politicians usually engage in trickery. Why this would be different with the FairTax is beyond me.

I know that the FairTax reomoves withholding. But, once employees are netting more money, competition will take effect and the price of labor will decrease. This is how competition affects every market. There is no reason that labor is any different. So, after the FairTax goods will cost the same amount of money, and people will be netting the same amount of money that they currently net. So, at best, this makes the plan a wash. Then we have the other things I mentioned to consider and it becomes clear to me that the FairTax is not a great idea.

My ideal tax system is a system in which no one is taxed. The upshot of this, is, of course an anrachic system. I have discussed this on another thread, and I don't think a discussion of it here is approproate.

Changing the tax system misses the point. The point is that taxation is unjust. The FairTax taxes people more than the income tax, so it is worse than the income tax. The real problem is spending, not taxation.

I have to go, I will expand this post if you want me to do so.

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"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."
-Thomas Jefferson in his first inauguration address

Some grafhics

Ireland: Fair tax

Scandinavia and Belgium: taxes on Labor and production

First picture: Prosperity ranking in 26 countries

Second picture: Prosperity level in 26 countries

Third picture: Total employment in private sector



Judge yourself.

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Hier ons bloed. Wanneer ons recht
Here our blood. When our right

Ireland has an income tax with a top rate of 41%, not a fair tax.

What Ireland did do to bring about that remarkable growth was make education free all the way through college and put in National Health.

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“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

While the possible changes to the bill as written is a valid argument, not knowing what those changes are going to be makes it difficult to argue them. When congress has a serious debate on the Fair Tax, then I can argue against it. Till then, its futile. I can only support the bill as it is proposed.

Beyond that, my ideal system is actually a flat fee system. But you have to have some kind of tax. How else do you pay for the common defense? I dont think taxation is unjust as long as it applied fairly and simply, and you have a chocie in whether to pay it.

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http://www.fairtax.org

Elminate all taxes on income and replace with a national sales tax.

By definition, a tax is something which people do not have an option to not pay. How do people have an option whether or not to pay the FairTax?

As for paying for the common defence I would have to ask you what common defence? The common defence of the world? Nation? State? City? Or some other arbitrary group of people? Is there a reason I should be forced to pay for the defence of people in Maine? Is there a reason people in Maine should be forced to pay for the defence of people in Georgia?

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"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."
-Thomas Jefferson in his first inauguration address

Yes, the reason is because you choose to remain in this country. By so doing you agree to follow the laws, including the constitution, which specifies that the govt shall defend the peoples lives. To do this, they need taxes. And by staying here you are choosing to pay tax.

But, under the Fair Tax, you could technically avoid paying taxes buy never buying anything. Thats unrealistic of course. But the choice is still there.

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http://www.fairtax.org

Elminate all taxes on income and replace with a national sales tax.

The virtue of my being in this country does not, in any way, mean that I give my consent to be taxed. Taxation was illegitimate when it began, and it is ilegetimate now. If I choose to live in a high crime area, this is no way means that I am giving my consent to be robbed.

Do you think that the income tax is voulantary. After all, you could avoid paying it by never working...

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"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."
-Thomas Jefferson in his first inauguration address

As I said, living in this country is voluntary, therefore by choosing to live here, you agree to follow the law, which may mean paying taxes. As you said, technically the income tax is voluntary as you are not forced to work. Even if you work you can get out of it, like the 40 million that already do.

I dont see how living in a high crime area relates to this, as crime is illegal, so how could choosing to live somewhere where things happen to you that are forbidin, mean consent? Bad example.

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http://www.fairtax.org

Elminate all taxes on income and replace with a national sales tax.

What makes an action wrong? Is an action wrong because it is against moral law, or is an action wrong because some people say it is?

What I gather from your post is that you believe that things are wrong because they have been forbidden by a group of people, namely the government. According to this idea of right and wrong, nothing is wrong unless the gov't says it is. So, if gov't didn't makes laws against theft, theft would not be wrong. Taking this one step further, if gov't says that it can steal, then that is not wrong. After all, gov't decides what is right and what is wrong. If gov't says that it can steal, the the action of the gov't stealing is not wrong.

This is, of course, insane. But this is the conclusion that is implicit in your argument. If it is wrong for a private indivdual to steal, it is wrong for a group of private indivduals to steal, and it is wrong for a group of private indivduals to get other people to steal for them.

While taxation is not against statutory law, it is against moral law. The only just use of statutory law is to codify moral law. Governments cannot legitimatly "make law", they can only codify existing, moral law.

So, I ask you, what makes government different from private indivduals? How do you reconcile your views with Jefferson when he wrote that government derives its just powers from the consent of the governed? Or do you disagree with this argument that Jefferson makes?

If you agree with it, and continue to maintain that my living in America is the same as giving my consent, how can you justify the American Revolution? Weren't the colonists simply giving their consent by living in an English territory? And, it was much more simple for them to get what they wanted than it is for me to get what I wanted. All they had to do was move to England and they would have had the same rights as every other Englishman.

__________________
"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."
-Thomas Jefferson in his first inauguration address

liberty1776, how do you propose the government acquire the funds it needs to fulfill its Constitutional obligations if not through taxation (which it has always been Contitutionally authorized to do)?

Exactly! Now you are seeing my conclusions: End government.

Jefferson wrote that government derives its just powers from the consent of the governed. I beleive in this statement. I never gave my consent to the US government for it to tax me. Therefor, it is unjust for me to be taxed.

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"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question."
-Thomas Jefferson in his first inauguration address

I agree on a theoretical basis, but in practice, taxation is a necessary evil. Many on this board put forth various variations on a socialist utopia. They're doomed to failure because they ignore the realities of human nature. 'Zero taxation' is a libertarian/anarchist utopia and doomed for the same reason.

I don't have a problem with this, but I do object to the abuse of the Constitional taxation authority to fund extra-Constitutional 'obligations'. If taxation was kept down to an appropriate level, you'd have far fewer people complaining and/or noticing that taxation is, at its core, theft.

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Today's forecast: Government corruption.

Tomorrow's forecast: 100% chance of more 'politics as usual'

Maybe it's finally time to vote Libertarian