Stones Cry Out

"The FairTax is a voluntary “consumption" tax: the more you buy, the more you pay in taxes, the less you buy, the less you pay in taxes."

Egads! I didn't realize that consumption was voluntary. All these years I've been buying food and clothes, as well as paying the rent and power bill when I didn't have to. All that food, clothing and shelter were optional. I could have lived just as well without them. I merely chose to spend money on them. Yeah, right.

Let's at least be honest about what this consumption tax is. It is a tax that will fall far more heavily on the poor than on the rich. The poor have to spend virtually every cent they make on groceries and rent, where tax collection will be almost total. There is nothing voluntary about that. The rich spend more for services (i.e. lawyers and fitness consultants), where payment can be under the table and taxes evaded. And the rich can spend their money in places without such a tax. How many struggling single mothers of three vacation on the Riveria?

And what happens when a family crisis like an illness develops, requiring travel, hotel bills, etc.? A family's income won't rise and may even drop. But the money they have to spend and thus the taxes they'll have to pay will increase enormously. A serious illness will mean a rise in taxes that would never happen under an income tax scheme. In that situation and a thousand others, this is a tax that falls most heavily on the weakest among us. Under this awful scheme the taxes you pay can rise much faster than your income. Its not difficult to imagine a typical middle-class family, forced to spend far beyond their income for a child's illness, paying IN EXCESS OF 100% OF THEIR ANNUAL INCOME IN TAXES. All it takes is a rapid increase in involuntary consumption.

And this doesn't get into all the ways the tax can become a scam. This national sales tax will do what similar value-added taxes have done in Europe. It will drive sales (particularly of services) underground and corrupt almost everyone. In France I went with a friend to rent a rototiller. The rental store had two prices, one if you paid cash and didn't need a receipt, another if you wanted to pay by check. The substantially cheaper former meant no taxes were being paid.

Then there are the allegedly humanitarin kickbacks to make up for its burden on the poor. That'll result in all sorts of corruption and force government intrusions into family life worse than anything the IRS has ever done. And yes, getting a check on the first of the month may help mommy cover all the extra taxes to feed the kiddies in the coming weeks. But what if daddy goes out and spends it all in one drunken binge. Ask any cab driver what happens in the ghetto the first Friday after monthly welfare checks come out.

For the life of me, I can't see why anyone thinks this sort of tax reform makes sense. Some people must hate the IRS so much they've become totally irrational.

--Mike Perry, Inkling Books, Seattle

Author: Untangling Tolkien

Editor: Eugenics and Other Evils

Editor: The Pivot of Civilization in Historical Perspective

That's some vehement rhetoric. So we should set up our taxes based on making sure the drunk husbands out there can't spend their prebates on booze?

Now I know you've read at least a little bit about the idea or you wouldn't have made the comment about the prebate at the end of your rant. Yet you still try to state that the poor would pay virtually total. The prebate covers taxes up to the poverty level and you know it. That's a 0% tax, in case your calculators out of reach.

You have a point on the catostrophic circumstances issue, but other than that you have alot of what if's and maybe's that are already happening in some form or fashion. People already cheat on their taxes (and I'm figuring the bulk of them aren't the poor!), and try to tell me seriously that there isn't already plenty of corruption in the current system.

There are far more advantages, in my mind, to the Fairtax system than the current system. So if it DOES pass and become the new system...I hope you can find something depressing to do on April 15th. ;)

That's some vehement rhetoric. So we should set up our taxes based on making sure the drunk husbands out there can't spend their prebates on booze?

Now I know you've read at least a little bit about the idea or you wouldn't have made the comment about the prebate at the end of your rant. Yet you still try to state that the poor would pay virtually total. The prebate covers taxes up to the poverty level and you know it. That's a 0% tax, in case your calculators out of reach.

You have a point on the catostrophic circumstances issue, but even so, your poor family still is not paying any more CASH than they would under the current system. According to the studies so far we an expect prices to stay relatively level with only a slight increase. Other than that you have alot of what if's and maybe's that are already happening in some form or fashion. People already cheat on their taxes (and I'm figuring the bulk of them aren't the poor!), and try to tell me seriously that there isn't already plenty of corruption in the current system.

There are far more advantages, in my mind, to the Fairtax system than the current system. So if it DOES pass and become the new system...I hope you can find something depressing to do on April 15th. ;)

No tax system in this country will work for long if it doesn't include capital gains and estate taxes. Who's promoting Fair Tax, the rich and they're trying to sell it to those with least to gain, me and you.

Maybe you Fair Tax folks don't understand the concept of compund interest. If you have a billion in the bank, you will be making scads of compound interest drawn from the labor of people who work and borrow. Say that when you die you now have 10 billion - that you made tax free - and pass it on to your kid and he does the same...compounding all the while. In less that 2 generations you now have a handful of people with ALL the money. What they most likely will do with it (because that is what they have done in the past) is to buy up as much property as they can; driving up prices.

But the property tax they pay will fund the government right? Almost. Not they, but the people with normal incomes, who have to rent because they can no longer compete, will pay the property tax for them - putting even more untaxed money into the coffers of the rich.

How about the sales tax? Who cares. The rich will buy what they want for themselves to consume overseas, tax free, again. And let's not forget that money buys political influence

Welcome back to the Gilded Age folks, before hugely popular movements at the turn of the 19th century America gave the aristocracy in this country the choice: 1) either socialize the country or 2) enact capital gains and estate taxes on the rich to redistribute wealth back to the commons.

Reference: http://www.pkarchive.org/economy/ForRicher.html
--KC

A few points in opposition:

By unequally taxing home purchase and rental, the FairTax creates a universal, explicit, and substantial tax penalty on those who are unable to buy a home and who therefore must rent. While the current tax code unfairly treats renters, the FairTax does so more egregiously. Embedded components of rent which are paid indirectly by renters (e.g. property taxes) are taxed, while similar components paid directly by homeowners are untaxed. As a result, a homeowner can spend more on housing than a renter and also more on other things, yet pay less tax.

By using a one-size-fits-all "poverty" threshold, many low-income Americans will be taxed on necessities (despite claims by supporters) when they cost more than a poverty-level income. For example, in some parts of the country, a single renter will start paying tax before he's done paying the rent on a 1-bedroom apartment. At that point, all his other necessities will be taxed.

Many conservatives argue, in other contexts, that the "poor" actually spend considerably more than their reported incomes would suggest, based on Consumer Expenditure Survey (CES) data. If CES data are correct, the poor will actually be taxed substantially under the FairTax.

While those who do not spend above the poverty level will indeed be untaxed, the unequal taxation of rent and homeownership will probably result in the highest effective tax rates being paid by those who earn more than the poverty level - say, 200 percent of poverty - but are unable to buy homes. This unequal taxation will redistribute many billions of dollars from renters to homeowners.

I don't understand everyone's hatred for the "rich". A strikingly high percentage of american families now earn over $100,000 annually. We are a rich country. I am a poor college student barely scraping by and I say if people earn their money, let them keep it. This is America. Most wealthy people didn't simply inherit their wealth. Many are entrepenuers who earned it through hard work, or people who went to school for years and years to earn PhDs. Why do they have any less right to their money?


No, Fair Tax is exactly what we need. The comment about many families spending more than they earn is true. Under Fair Tax, they would be punished for doing that by paying much higher taxes beyond their prebates. However, this would be a great incentive to save money. Instead of having complicated finnancial schemes to avoid taxes while investing and saving money, ALL moeny not spent is pre-tax. One point that hasn't been made clear yet here is that poor families would not pay ANY taxes up front. People would be taking home a much larger paycheck, even in lower income brackets. 100% take-home with no social security tax or medicare separately taxed. There would be a greater incentive to work overtime, knowing that you wouldn't be taxed a higher rate on those earnings and thereby increasing income.


I for one advocate a system where those who save will be rewarded. And for Mike's post, yes consumption is indeed voluntary. We need food, but do we go to a sit down restaurant or stay home and have a $.25 box of mac and cheese? Do we buy the latest in fashion or do we shop at thrift stores and off clearance racks? Do we need a 4 bedroom home when there it is a family of four? Again, as a college student supporting myself by only working part time, I face many of these realities.


Those families spending beyond their income need to learn discipline in their soending habits. I've been in many ghetto areas where people are living on welfare and yet have outstanding stereo and home theater equipment with the largest CD collections I've seen, yet not enough money to buy food for their children. The problem with too many in this country is the distortion of "needs" and "wants", and governmental policy cannot be warped to try to coddle these individuals. We are a free nation. Freedom implies accountability and responsibility for self.


Exceptions obviously exist and there are many people who, through disability or uncontrollable circumstance, cannot make it on their own. We can and must help those people. But an entire tax system should not be designed around them under the guise of being "fair" by taxing the wealthy nearly 50% in some tax brackets. That is ludicrous.

I completely agree with Jon. And for the poor-sympathizers out there, they need to remember that the FairTax is designed to be revenue neutral. Or so is my understanding.

In other words (although I definitely wouldn't mind less government handouts), the tax would not abolish assistance programs, like food stamps, Section 8 housing, Aid to Dependent Children, etc. etc.

AND in my opinion, if people got to keep all the money they spend on federal tax and SS, they just might be a little more generous when it comes to giving to charities, who in turn serve the poor. And the argument that people give to charities just to get a tax-deduction doesn't hold a lot of water since only a fraction of it is deductible.

I happen to manage a charity, and it's unbelievable how many able-bodied people we see living off the government, or poor single moms having more and more children to get bigger handouts. And what happens when those children grow up? Most likely, they inherit the entitlement mentality from their parent(s). But I digress.

Other postings talk about how unfair the FairTax is to the poor, but how about how unfair the current tax system is to people who work 40+ hours a week and dutifully pay taxes? We end up picking up the tab for (a) people who evade paying taxes and (b)millions of illegal immigrants who work but don't pay taxes, yet take full advantage of our medical system and other things that they can get from OUR government for free. And who's picking up the tab? Those tax-paying citizens.

There will always be churches and charitable organizations to make sure that those people that REALLY need help will get it. And there will always be people like me who get a lot of satisfaction in being able to help said people.

But, like the previous post said, a good portion of the "poor people" that everyone seems so worried about just needs to learn some accoutability and responsibility. And they may have to learn the hard way.