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I think this makes more sense than our current system. What do you all think?

http://www.fairtax.org/site/PageServer? ... about_main

If you boil it all down, a "fair" tax is always one that somebody else pays.

This is a basically a consumption tax, which are by nature inherently regressive. They have added a few whistles and bells to try to make it less so, but by the time politicians are done modifying it to take away the regressive nature of the tax, I suspect it'll end up as complicated as our current tax system.

I dunno, there is a whole accounting industry set up around our current tax system. Since any new tax system will likely be written by accountants, you can about be guaranteed they'll muddy up the regulations to ensure their continued employment.......

One "+" for the fair tax is that everyone would see how much federal taxes they are paying. So many people simply get there paycheck and don't pay any attention to the deductions, all they know is they always get lots of money back in April and they love it! If more people realized how much money the government is taking from us I think the city folk might start to vote a little different.

Kevin, I agree with you about the politicians mucking it up after their done with it, but that's the whole point of it is to keep it simple. Now I know this isn't going to happen, not now anyways with all the jack-offs we seem to keep reelecting. But I think if we can eliminate 40-60% of the incumbents with people that have integrity and a desire to follow the constitution and the limits it places upon his/her position then maybe we can have some sort of a "fair" tax. The main issue with me is the prebate checks the would give and just exactly how that could be manipulated and exactly what or who's data are they using to determine the size of them.

RM, I never get why people get so excited about getting a rebate, unless you're expecting one from The State of California, but the government has had 12+ months to use your OVERPAYMENT of taxes to pay the bills. Would a bank give you a FREE loan, hell no. I'll be damned if I'll give them one either. I'll take all my pay thank you. Just don't be stupid and spend all your money. Save a little each week and save all your receipts and file an itemized tax return if possible. I've always thought that the government should send us an itemized invoice every year and we pay like any other bill. One thing I know is we should not have a tax system that will throw you in jail if you don't pay. That seems like the most asinine thing. They should just give you a job at the IRS!

Grzyadms4x4 wrote:They should just give you a job at the IRS!

The "wink" means your 100% joking, right?
I'm still getting used to trusting all of these facial expressions.

Here is a link to an appropriate bumper sticker. Not so much applicable to the fair tax idea as it is to the oversized power grabbing government we have today.

http://shop.wnd.com/store/item.asp?DEPA ... EM_ID=2455

Along lines of the bumper sticker R.M. linked, a peice written by Harry Browne 6 years ago:

Freedom from the Income Tax

by Harry Browne

April 15, 2003

Someday, I hope, April 15th will no longer be Tax Day (the day your income tax return must be filed) but instead will be known as Freedom Day — a day to remember the huge, expensive, intrusive, and meddling government that was once was and that we should be on guard against forever.


That can come only after we repeal the income tax and reduce the federal government to a size that can subsist on just the tariffs and excise taxes already being collected. No flat tax, no "fair" tax, no replacement tax of any kind — because government has been made so small an income tax is no longer needed to finance it.


Impossible?

Not at all.


A Little History

Many people aren't aware that America — conceived in liberty in 1776 — didn't have a permanent income tax until 1913. In fact, the Constitution of the United States prohibited an income tax.


For over a century, the U.S. government survived quite well without an income tax. It operated a small, constitutional government on the revenue from tariffs and excise taxes.


Tariffs are taxes imposed upon imported products, and excise taxes are imposed at the manufacturing level on domestic products. Because those taxes affect the prices of products, they were self-limiting. That is, the taxes couldn't produce unlimited revenue to the government.


If a tax was raised too far, the product would be priced out of the reach of the consumer, sales would fall, and the tax revenues would fall.


Thus, relying on tariffs and excise taxes, the U.S. government was able to raise only so much money and no more. The same was true of state and local governments: there were built-in limits to how much they could tax.


As a result, in 1913 federal, state, and local governments combined took in taxes only 8% of the national income.


But that changed quickly with the passage of the 16th Amendment, authorizing an income tax. In contrast to tariffs and excise taxes, income-tax rates can be raised upward and upward and upward, since most people can't choose to stop working in order to avoid the tax.


That meant the federal government now had virtually unlimited resources to do whatever the politicians wanted. Respect for the Constitution disappeared almost overnight. The U.S. government plunged the nation into World War I, a strictly European war, something it couldn't have done without the income tax to finance the war effort. (The top rate quickly zoomed upward to 77% from 7% where it had been set in 1913.
)

Today governments at all levels take 47% of the national income. That means you work nearly half your life to support the welfare state. And now there's no topic on which the politicians refuse to consider legislation. Your entire life is fair game for them to enact rules.


Benefits

Imagine what would happen if we repealed all forms of federal income tax — including the personal income tax, the corporate income tax, Social Security, the estate tax, and the gift tax. A world of benefits would quickly come in the wake of repealing these taxes.


The first benefit is the most obvious: all the money you're paying in income taxes will be yours — to spend, to save, to give away as you see fit, not as the politicians think is best for you, best for the nation, and — most of all — best for them.


You are the one who gets up every day to go to work. You're the one who puts in long hours. You're the one who makes your job what it is.


What have the politicians done to earn that money?

Absolutely nothing.


What claim should they have on your earnings?

Absolutely none.


When we repeal the income tax, all that you pay now in income and Social Security taxes will be yours at last — to do with as you see fit.


If yours is the average American family, that means over 10,000 dollars a year that's been going to the politicians that will stay in your hands.


Every dollar you earn will be yours — to spend, to save, to give away as you see fit — not as the politicians think best for you, for the nation, or for themselves.


They won't have a claim on a single dollar you earn.


So what will you do with that money when they no longer take it away from you?

* Will you put your children in private schools — where you could get exactly the kind of education you believe best for them? No more wondering why more time is spent learning to be a good citizen than learning about history, geography, reading, ‘riting, and 'rithmetic. No more fighting the Board of Education to try to get the curriculum changed. You pick the school that fits your idea of what a school should be.


* Will you start that business you've always dreamed of?

* Will you move into a better neighborhood, take your family on a better vacation, arrange a much more comfortable and much more secure retirement?

* Will you help your church or your favorite cause or charity in a way you've never been able to do before?

What will you do with that money?

At last, it will all be yours — and the government will no longer have a claim on it.


Other Benefits

That in itself is reason enough to want to end the income tax.
But here are three additional benefits:

* There will be a similar increase in take-home pay for everyone you do business with — your customers or your employer — meaning that people will have more money to spend on what you have to offer.


* A similar increase in take-home pay will occur throughout America, unleashing the biggest boost in prosperity that America has ever seen. There will be a job for everyone who can work and charity for everyone who can't.


* Your life will be your own again: an end to government snooping into your finances, an end to keeping books for the IRS, an end to fear of an audit, an end to rearranging your financial life to minimize your tax burden.


And there's a fifth benefit that's probably the greatest of all: No longer will the federal government have the resources to run our lives. It will be unable to continue ruining what was once the best health-care system the world has ever known, destroying American education, making millions of people dependent on welfare, subsidizing foreign dictators and meddling in explosive foreign affairs.

Our Chance

Repealing the income tax is the issue on which we can rally Americans to cut government truly to the bone — the bone being the functions authorized in the Constitution. Without the resources to meddle in our lives, the government will have to withdraw to the limits of the Constitution.


There isn't space here to cover all the ramifications, objections, and possibilities surrounding this subject, but the American Liberty Foundation is launching a project to acquaint the American people with the benefits to come from returning to constitutional government through the total and immediate repeal of the income tax.


Reports and programs will be issued dealing with ways that government functions can be better handled outside the government, how downsizing the federal government will lead to downsizing state and local governments (and possibly even foreign governments!), how even those who don't pay income tax today can benefit from the repeal and in fact be induced to help us.


This is a fascinating subject because it is the single subject that automatically encompasses an end to practically every other ill the federal government has inflicted upon us.


And the rewards it offers provide an opportunity to reach all Americans with a message of a better life — leading perhaps to April 15, 2010, when we celebrate Freedom Day instead of Tax Day.

This only won't work as long as too many people believe anything, government included, is too big to fail or are too afraid of real change.

Interesting read Libby. From what I've read the 16th amendment wasn't correctly ratified by some states. From what I've read, several stares violated their state constitution by voting for the amendment and that with those states omitted from the tally there wasn't enough states to ratify the amendment.

As it stands I wouldn't mind paying the current tax rate if we axed about 1/2 - 3/4 of the budget, and applied the new "surplus" in tax revenue to the national debt. If we don't get that way down, when Social Security and Medicare chickens come home we are seriously screwed.
That is why I think Obama wanted the European countries to pass their own bailouts instead of loans, that way the whole world can be in one huge clusterfu@# of debt. Then when the chickens come home to roost all countries will be bankrupt and will default on their loans. This means that no one can pay anyone and all the world leaders can say, "oops were sorry, why don't we all wipe the slate clean of our debt and start again". But they said, "No Barak", as they should, so we'll be owned by the Saudis, Chinese, and who ever else has loaned us money in about 40 years.

Great days ahead...