I am a retired tax lawyer (JD, LLM in Taxation)/CPA, with no financial stake in ANY tax system. I can support every comment I make – for supporting details, call Stephen C. Eldridge tel. 423-532-7337.
The so-called “Fair Tax” (“FT”) is a fraud – it is MORE WEALTH REDISTRIBUTION – AND – a financial SCAM.
In their own words, FT proudly advertises that it is MORE PROGRESSIVE (INCREASES WELFARE). The Prebate is advertised as merely repaying the poor for any FT they pay, but it actually would pay them far more than any FT they might pay and also gives the working poor free SS/Medi.
The Prebate is NOT a refund of FT paid, it is a new $600B ENTITLEMENT, leaving many Americans receiving a monthly check from the federal governmentt – a very bad idea for those of us who are not socialists. More poor people will be receiving free SS/Medi.
The FT hits us with a 40-70% in-your-face retail sales tax that would spark a taxpayer rebellion which would destroy our 70% retail-sales-sensitive economy. 40% = 30% FT + e.g., 10% State sale sales tax, and 70% is the rate needed at a sample 30% FT evasion rate (the FT incredibly assumes ZERO evasion and ZERO intentional reduction in spending and ZERO migration from new to used goods).
IN ADDITION to that 40-70% tax, the FT contains several HIDDEN TAXES.
1) FT’s 30% rate is really 42+%; the 12+% is hidden by having fed + S/L govts paying FT – they must get that money from you.
2) The initial 30% rate is 1-5% short. Plus, any other revenue shortfall will have to be made up by raising more FT (or a NEW Income Tax). The fed budget will rise for a) SS benefits because the FT-guaranteed SS COLA of almost 30%, b) fraudulent new SS benefits, c) COLA’s payable to all federal retirees – and more FT (or a NEW Income Tax). We would be required to fund these.
The NEW IRS (i.e., the STAA) may well be far worse, far more invasive than today’s IRS (the buyer is liable to pay FT and get/show a receipt). We may well have to file an “Annual FT Summary”. We may well wind up with BOTH a NEW Income Tax AND the FT.
Seniors will start to pay for SS/Medi again and will pay a 2nd-3rd tax on their earnings. Middle class seniors will pay more tax under FT and will lose purchasing power because of the 15-30% price increase.
What we need is a Flat Income Tax with No Deductions, No Exemptions, No Credits and a 10% rate, with business income taxed to shareholders on a very simple basis (i.e., no corporate income tax) – See H.R. 1040, but with changes as noted here. Call your representatives in Congress and let them know that this is what you want.
Stephen C. Eldridge