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The FairTax Plan -- A Brief Summary And Full Text
fairtaxgroups.com — The FairTax proposal is a comprehensive plan to replace federal income and payroll taxes, including personal, gift, estate, capital gains, alternative minimum, Social Security/Medicare, self-employment, and corporate taxes. The FairTax proposal integrates such features as...
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- ih2005, on 01/31/2008, -0/+2Gov. Huckabee's advocacy of the FairTax ( http://snipr.com/irsgone ) is the single most important policy position in this election. Research findings explain why:
The FairTax rate of 23 percent on a total taxable consumption base of $11.244 trillion will generate $2.586 trillion dollars – $358 billion more than the taxes it replaces [BHKPT] ( http://snipurl.com/whatratewks ).
The FairTax has the broadest base and the lowest rate of any single-rate tax reform plan [THBP] ( http://snipurl.com/baserate ).
Real wages are 10.3 percent, 9.5 percent, and 9.2 percent higher in years 1, 10, and 25, respectively than would otherwise be the case [THBNP] ( http://snipurl.com/realwages ).
The economy as measured by GDP is 2.4 percent higher in the first year and 11.3 percent higher by the 10th year than it would otherwise be [ALM] ( http://snipurl.com/econbenes ).
Consumption benefits [ALM] ( http://snipurl.com/econbenes ) :
• Disposable personal income is higher than if the current tax system remains in place: 1.7 percent in year 1, 8.7 percent in year 5, and 11.8 percent in year 10.
• Consumption increases by 2.4 percent more in the first year, which grows to 11.7 percent more by the tenth year than it would be if the current system were to remain in place.
• The increase in consumption is fueled by the 1.7 percent increase in disposable (after-tax) personal income that accompanies the rise in incomes from capital and labor once the FairTax is enacted.
• By the 10th year, consumption increases by 11.7 percent over what it would be if the current tax system remained in place, and disposable income is up by 11.8 percent.
Over time, the FairTax benefits all income groups. Of 42 household types (classified by income, marital status, age), all have lower average remaining lifetime tax rates under the FairTax than they would experience under the current tax system [KR] ( http://snipurl.com/kotcomparetaxrates ).
Implementing the FairTax at a 23 percent rate gives the poorest members of the generation born in 1990 a 13.5 percent improvement in economic well-being; their middle class and rich contemporaries experience a 5 percent and 2 percent improvement, respectively [JK] ( http://snipurl.com/kotftmacromicro ).
Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax [THBPN] ( http://snipurl.com/lessregress ).
Charitable giving increases by $2.1 billion (about 1 percent) in the first year over what it would be if the current system remained in place, by 2.4 percent in year 10, and by 5 percent in year 20 [THPDB] ( http://snipurl.com/moregiving ).
On average, states could cut their sales tax rates by more than half, or 3.2 percentage points from 5.4 to 2.2 percent, if they conformed their state sales tax bases to the FairTax base [TBJ] ( http://snipurl.com/staterates ).
The FairTax provides the equivalent of a supercharged mortgage interest deduction, reducing the true cost of buying a home by 19 percent [WM] ( http://snipurl.com/homebenes ).
ALERT: Kotlikoff refutes Bruce Bartlett's shabby critiques of the FairTax ( http://snipr.com/bbrebuke ). - MadKennyP, on 01/31/2008, -2/+1"If a product costs $1 at retail, the FairTax adds 30%, for a total of $1.30. Since the 30-cent tax is 23% of $1.30, FairTax supporters say the rate is 23% rather than 30%. This is only the beginning of the deceptions in the FairTax."
"Rejecting all the tricks of FairTax supporters and calculating the tax rate honestly--by including the higher spending that it mandates and by being realistic about what could actually be taxed--professional revenue estimators have always concluded that a national retail sales tax would have to be much, much higher than 23%. In 2005, the U.S. Treasury Department calculated that a tax-exclusive rate of 34% would be needed just to replace the income tax, leaving the payroll tax in place. But if evasion were high then the rate might have to rise to 49%. If the FairTax were only able to cover the limited sales tax base of a typical state, then a rate of 64% would be required (89% with high evasion)."
"IN SHORT, THE FAIRTAX IS TOO GOOD TO BE TRUE, AND VOTERS SHOULD NOT TAKE SERIOUSLY ANY CANDIDATE WHO SUPPORTS IT."
Dan Bartlett; deputy assistant secretary of the Treasury for economic policy from 1988 to 1993.
http://www.opinionjournal.com/extra/?id=110010523
Huckabee calls his proposal a "fair" tax. But it's a mammoth tax cut for the crowd making more than $200,000 a year and a substantial tax increase for those making between $30,000 and $200,000 a year. Is Huckabee's FairTax smoke and mirrors? Yes. Is it voodoo economics? Yes. But remember one more thing: It is more reality based than the proposals of the establishment Republican candidates.
-- Slate, Jan 7, 2008. http://www.salon.com/opinion/feature/2008/01/07/hu ...
Jon Chait: “Basically, trying to explain why the Fairtax is a bad idea is like trying to explain why having trained elephants perform open-heart surgery on every first-grader in America is a bad idea. The whole idea is one bit of lunacy stacked upon another, so when you focus on any one element of it, you let the other side suck you into arguments about details — maybe there could be benefits to preemptively fixing the hearts of six year olds! Perhaps elephants do have the potential intelligence to one day perform this task!! — that inadvertently make the plan sound semi-credible.” http://blogs.tnr.com/tnr/blogs/the_plank/archive/2 ...- EMW45, on 02/04/2008, -0/+1Your argument is filled with inaccuracies and nonsense. You obviously don't fully understand the FairTax at all.
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