"The Official Portrait of Miss InDiana"

"The Official Portrait of Miss InDiana"
aka "Miss Victory"

Wednesday, July 11, 2007

Want to Throw Fair Tax Rally Where You Live?

You want to plan a rally where you live but don't know where to begin? No worries, Hoosiers For Fair Taxation can help! It is important that Hoosier voices are heard at rallies in cities all over Indiana. Just drop us an email and we'll help you get started, answer questions, write press releases, send materials, and even send representatives to help. The tax crisis in Indiana affects all of us and we're here to educate all of Indiana's citizens about Fair Tax reform. Please put "I want to organize a rally" in the subject line.


Greg_Cruey said...

A big selling point for the "fair tax" seems to be that it is “progressive.” I’m not sure what “progressive” is meant to mean in the context of this tax proposal, but the so-called “fair tax” proponents seem to what to say that their tax proposal treats everyone the same while at the same time treating the poor in a manner that is “progressive.”

Define progressive. It sounds like double speak. “We’re concerned about the poor and so to show our concern we’re going to treat them exactly the same way we treat doctors and lawyers…”

We tax money. We tax it when it moves. I agree that the current system is fragmented and obtuse, and that there are loopholes that should be closed. But I haven’t heard a moral argument for taxing money when it moves away from you (when you spend it) instead of when it moves toward you (when you make it). Yet the “fair tax” crowd functions with a tone that presuppose the moral superiority of their position.

The truth is that the “fair tax” reduces the percentage of the federal budget that is collected from the rich and increases the percentage of the federal budget that is collected from the poor. It does so by NOT TAXING money that rich people decide not to spend. Rich people have the luxury of not spending large portions of their income; the poor (along with many in the lower half of the middle class) spend almost every penny they make in order to make ends meet. Under the “fair tax” those people (teachers, nurses, police officers, most military personnel, most industry workers, etc.) will pay taxes on a much larger percentage of their income than what doctors, lawyers, bankers and stock brokers will pay taxes on. How is THAT fair?

The fallacy of the “fair tax” position is that they make it sound like normal Americans don’t have to spend their money if they don’t want to.

As badly as America needs tax reform, the “fair tax” (and most other sales tax proposals) are only fair to the rich…


As I understand it, every citizen receives a prebate each month to offset the cost of the new tax in order to purchase the basic necessities.

The economists say it will work. Quite frankly, it is the only widely appealing plan on the table that protects the middle class. It certainly would not make the middle class worse off.

Also, the poor who already buy a lot of used goods, would not pay tax on used goods.

With 15,000 or so abandoned houses, I bet without a property tax OR sales tax on "used" property, it would make housing very affordable for the poor who get to keep their entire paychecks!

Greg_Cruey said...

You said "citizen receives a prebate each month." That's true (provided they do the paperwork). Paperwork is minimized for rich college grads and the poor high school dropouts have to start doing paperwork to get back money they shouldn't have had to pay in taxes. It will work as long as poor people don't move around too much; but it seems as though there are requirements about documenting your place of residence. The tax proposal makes life much easier for the well to do and intrudes on the lives of the poor and lower middle class.

I teach in a school where 93% of the students have household incomes below the poverty line. Your statement about the poor buying used goods shows a stereotype in your mind. The truly poor have little money left after paying for rent, groceries, and utilities. The idea that there is no tax on a used Dodge Viper at $55K but there is a tax on a new Subaru Impreza at $19K seems unfair to me. Fairness is, after all, an unquantifiable impression - not a measurable truth.

I've heard that the fair tax would abolish income tax. I've not heard that HR25 would abolish the property tax I pay to my county government on my home. Document that for me (tell me where to find it in print).

You think landlords will charge less because property taxes go down? That sounds naïve.

My real point, though, is this... My wife and I both teach. We have six college degrees between the two of us and somewhere in the neighborhood of 11 years of full time graduate work between us. I make a small sum off of writing in addition to my teacher's salary. We have an adjusted gross income just under $90,000 a year. If we managed to put $8,000 in our IRA this year (saved it instead of spending it), our prebate would mean that we paid taxes on 69% of that $90K. If our doctor had an adjusted gross income of $425,000 in the same year and he managed to put $275,000 of that away and live off of a paltry $150,000, he and his wife (assuming they have no dependent children at home) would pay taxes on just over 30% of their income.

How is that fair...?!?

Debbie said...

I'd heard some about the fair tax before. But your recent protests and publicity made me want to take a closer look at the ideas to see what all the fuss is about. I've looked around and bit and sorry, but I did not like what I saw.

Here's one the the more interesting articles I've read about it: