Quote:
Originally Posted by Erik
Very interesting, I like the idea- but there seem to be international loopholes.
If I was rich, couldn't I just fly up to Canada to buy my $10K rolex and get it 23% cheaper up there. Or if I lived close to the border, why not drive across to buy that plasma TV or laptop.
Wealthy folks take lots more vacations than the rest of us- wouldn't they just buy their small high dollar stuff while they were in Paris or Tokyo?
I think Canadian businesses and UPS would be getting lots more business with people internet shopping and having things shipped across the border.
I agree that it would work with perishable food.
Car companies would hate this.
The website mentioned that services would be taxed- I hope that rent would not be taxed.
Again- I like the Fairtax idea- but I'd like to see these questions answered.
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"If I was rich, couldn't I just fly up to Canada to buy my $10K rolex and get it 23% cheaper up there. Or if I lived close to the border, why not drive across to buy that plasma TV or laptop. "
you won't save 23% buy buying outside the US. since businesses will not have the regular business tax, consumer prices will stay the same in the US. Remember that it will not increase the price since the original multi-layered tax that is reflected in current pricess will be eliminated and replaced by the Fair tax which results in a zero increase in product pricing and with some products would actually see a price reduction.
Since all income taxes and payroll taxes (SS and medicare) will not be deducted from your pay you actually have a net increase in buying power. consumer prices stays the same and you take home 100% of your pay. that's a net increase in actual spendable income.
that is one common misconception by people who are just getting introduced to the idea of the fair tax. they think that prices would increase. NO, prices will not increase since the original multi-layered taxes tacked on current prices will be taken out and replaced by the flat rate of the fair tax. that's a zero sum equation which will always result in the same price, yet you still bring home 100% of your earning, and that results in huge increase in spending power for everyone.
all of that is explained in the fairtax.org site. all of it has been analyzed by many respected economists and all analysis points to the same consumer price for new items but a lot lower price for 2nd hand items.
if the rich want to spend money outside the US then that's their prerogative, but the fact of the matter is that US products will have a better chance competing with foreign products since domestic products can actually go down in price compared to foreign products under the Fair Tax.
I strongly suggest that folks go over the wealth of information about the fair tax at FairTax.org to find out all about it and how it can save our economy, Social Security, and boost productivity. it is a tax system far better than any flat tax and will put everyone at the same level. those who consume more will pay more tax and those who can't afford more will have the benefit of lower consumer prices. under the fair tax, basic necessities are untaxed via a rebate to low income individual and families. the gov will keep the taxes paid by the rich and rebate some of it to the lower income families.
The Fair Tax eliminates all current federal taxes including payroll taxes which is non-deductable at current rules. imagine taking home 100% of your pay and having the prerogative to spend it on what you need instead of having the government spend it on pork barrel projects. even if payroll taxes are elimnated under that fair tax, there will be plenty of revenue for the government to be had since all tax-evading leaches will finally be forced to pay their fair share. illegla aliens finally paying some of the benefits their getting from us taxpayers since they will be taxpayers as well. since they are non-registered, the taxes they'll pay via the Fair Tax system will not be rebated to them even if they have low incomes since if you're not in the system how will the government send you a check.
the Fair Tax is a solution that is doable, workable, and has been endorsed by many respectable economist.
again, all of that info can be found at the FairTax.org website. It is a solution that many liberal politicians are blocking since it will reduce the waste in government and all of the loopholes that many rich folks are enjoying right now...and since majority of our politicians are millionaires anyway, they don't want to see the Fair Tax implemented. Many politicians say it will not work yet all analysis shows the contrary.
it will bring in more revenue for the government, level the playing field for all taxpayers, close all loopholes on our current tax system, reduce consumer prices, save social security, force our government to ensure proactive economic policies (since the amount of tax increase equals to the amount of economic improvement), make all people within our borders pay their share of taxes, allow US made products to compete better against foreign goods, eliminate most if not all black markets, and place an effective cap against tax increases via a constitutional ammendment.
it sounds like a winner to me.....probably why many tax and spend politicians have been blocking it.
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