So what's the difference between the FairTax vs. Flat Tax vs. IRS?
Here is a SIMPLE CHART that compares the FairTax with today's income tax and the so-called "flat tax."
No matter how you look at it, the FairTax leaves more money in more taxpayers' pockets.
FairTax.org has created a calculator that lets you enter in your tax-relevant information and compare how your taxes under the FairTax compare to what you pay today. Keep in mind that this is a real-world model based on today's horribly complicated tax code. If you are in the middle of wrestling to figure out your own taxes, much of the information needed for the calculator may be at hand. In any case, the complexity of this calculator is necessary in order to accurately assess your details as they apply in the current system and are not a reflection of the FairTax. As you work with the calculator, imagine how you will be freed of all the time and money associated with preparing tax returns and how simple our tax lives will be under the FairTax.
CLICK HERE to launch the calculator. (Please note, you will need Microsoft Excel or the free Open Office from OpenOffice.org installed on your computer to launch the calculator. We are developing a java version that will not require special software like Excel in order to work. We appreciate your patience. In the meantime, if you cannot launch the calculator click here to get a tax comparison worksheet that you can print and complete manually.)
2 comments:
There is no reasonable equity of distribution under the current INCOME tax system. What's more, the Tax Code has become a "tinkerer's paradise" for 53% of the lobbyists who game it in Washington DC. It's a lucrative business, and the U.S. TAXPAYER pays for ALL of it in higher prices (i.e., a hidden tax which is incomprehensible to the average working person).
Prices after FairTax passage would look similar to prices before FairTax - not "30% higher" as opponents contend - competition would see to it. So, the FairTax rate (figured as an income-tax-rate-non-comparative, sales tax) on new items would be 29.85% (on the new, reduced cost of items because business isn't taxed under FairTax - thus lowering retail prices by 20% to 30%), or 23% of the "tax inclusive" price tag - this is the way INCOME TAX is figured (parts of the total dollar).
The effective tax rate percentages, that different income groups would pay under the FairTax, are calculated by crediting the monthly "prebate" (advance rebate of projected tax on necessities) against total monthly spending of citizen families (1 member and greater, Dept. of HHS poverty-level data; a single person receiving ~$200/mo, a family of four, ~$500/mo, in addition to working earners receiving paychecks with no Federal deductions) Prof.'s Kotlikoff and Rapson (10/06) concluded,
"...the FairTax imposes much lower average taxes on working-age households than does the current system. The FairTax broadens the tax base from what is now primarily a system of labor income taxation to a system that taxes, albeit indirectly, both labor income and existing wealth. By including existing wealth in the effective tax base, much of which is owned by rich and middle-class elderly households, the FairTax is able to tax labor income at a lower effective rate and, thereby, lower the average lifetime tax rates facing working-age Americans.
"Consider, as an example, a single household age 30 earning $50,000. The household’s average tax rate under the current system is 21.1 percent. It’s 13.5 percent under the FairTax. Since the FairTax would preserve the purchasing power of Social Security benefits and also provide a tax rebate, older low-income workers who will live primarily or exclusively on Social Security would be better off. As an example, the average remaining lifetime tax rate for an age 60 married couple with $20,000 of earnings falls from its current value of 7.2 percent to -11.0 percent under the FairTax. As another example, compare the current 24.0 percent remaining lifetime average tax rate of a married age 45 couple with $100,000 in earnings to the 14.7 percent rate that arises under the FairTax."
Further, per Jokischa and Kotlikoff (circa 2006?) ...
"...once one moves to generations postdating the baby boomers there are positive welfare gains for all income groups in each cohort. Under a 23 percent FairTax policy, the poorest members of the generation born in 1990 enjoy a 13.5 percent welfare gain. Their middle-class and rich contemporaries experience 5 and 2 percent welfare gains, respectively. The welfare gains are largest for future generations. Take the cohort born in 2030. The poorest members of this cohort enjoy a huge 26 percent improvement in their well-being. For middle class members of this birth group, there's a 12 percent welfare gain. And for the richest members of the group, the gain is 5 percent."
It's well past time to scrap the tax code and pay for government the way that America's working men and women are paid - when something is sold.
(Permission is granted to reproduce in whole or part. - Ian)
Fairtax calculator lacks a few things -- like reality.
Why doesn't the calculator ask you how much rent you pay? Cause rent is taxed 30-40% under fairtax.
Why doesnt the calculator ask how much medical bills you have? Cause medical costs are taxed 30-40% under the fairtax.
Why doesnt the calculator ask how much car, health, and life insurance you pay? Cause all insurance premiums are taxed under the fairtax.
You have to wonder about a "calculator" to show how much you will "save" when it avoids all questions about the things you will be taxed on the most.
Suppose you pay 1000 a month rent -- thats 300 -400 in tax, but the fairtax calculator left that out.
Suppose you have 500 dollars a month medical expense -- thats 200 dollars in tax. But fairtax calculator "forgot" to have you calculate that.
Suppose you have 200 a month life insurance, and 200 month car insurance. Thats about 150 dollars in tax. But the calculator "forgot" to have you list such things.
The entire fairtax plan is like that -- a farce, a sham, a complete bit of nonsense.
You think they didn't ask about your rent, medical bills, and insurance, because they didn't want you know its taxed?
You don't think people would do that on purpose, do ya?
Naaaa -- couldn't be.
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