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This is something that will benefit all .. Far Left -- Middle -- Far right...

http://www.fairtax.org

It screws those that have Roth retirement accounts by making them pay taxes twice. They'll pay once when the money was initially earned, and once more when they actually want to spend their retirement money. Not exactly fair in my book. I did read in their FAQ that if a senior citizen buys a used car, or used clothes they don't have to pay the tax. Whew, that's a relief.

Since this replaces the income tax, they would not pay on the money earned that went into the roth.

I have Roth retirement accounts funded with money that I've already paid taxes on. If the fair tax was implemented, how would I avoid getting taxed twice?

I assume you meant if done so after implementation. My misunderstanding.

Someone would get nailed one way or another if there was ever a conversion. A lot a variables there. However, some of us are getting nailed now. Damned if you do, damned if you don't. Funny that we're talking as if this could ever really happen.

Cal Poly Mustang wrote:I have Roth retirement accounts funded with money that I've already paid taxes on. If the fair tax was implemented, how would I avoid getting taxed twice?

I'm pretty sure that Roths would be exempted and new ones wouldn't be available anymore.

Cal Poly Mustang wrote:I have Roth retirement accounts funded with money that I've already paid taxes on. If the fair tax was implemented, how would I avoid getting taxed twice?

That's simple, non-taxable distribution.

Cal Poly Mustang wrote:I have Roth retirement accounts funded with money that I've already paid taxes on. If the fair tax was implemented, how would I avoid getting taxed twice?

The Fair Tax would pay a monthly prebate to anyone that is at or below the poverty line and on fixed incomes. Therefore, as a retired person you would receive a monthly check from the government to cover the amount of sales taxes paid on necessities, such as food clothing and housing, making your purchases basicly tax free. Estimates are as much as $400.00 per month.

coastal89 wrote:The Fair Tax would pay a monthly prebate to anyone that is at or below the poverty line and on fixed incomes. Therefore, as a retired person you would receive a monthly check from the government to cover the amount of sales taxes paid on necessities, such as food clothing and housing, making your purchases basicly tax free. Estimates are as much as $400.00 per month.

When I retire I'll be on a fixed income, but I'm damn sure not going to be at or below the poverty line. I don't plan on retiring and becoming poor. I agree with Purple Pride, in order to be fair to those with Roth accounts the money from these accounts should remain untaxed. Unfortunately, the Not-so-Fair Tax web page doesn't say that's the case with Roth accounts. At least not as far I as I could find. The government basically told people when they opened Roth accounts that the money would be tax free when they were able to take distributions from it. That's the deal I signed up for, and that's the deal I expect the government to keep. I don't think the Fair Tax is going to get very far if they don't address issues like this. I can't imagine anyone with a Roth account would think that this is good idea.

Here is the portion of the Repulican Candidate's debate that was shown on ABC about the Fair Tax.

Cal Poly Mustang wrote:It screws those that have Roth retirement accounts by making them pay taxes twice. They'll pay once when the money was initially earned, and once more when they actually want to spend their retirement money. Not exactly fair in my book. I did read in their FAQ that if a senior citizen buys a used car, or used clothes they don't have to pay the tax. Whew, that's a relief.

The benefit out weighs the costs, even for those with Roth's

coastal89 wrote:

Cal Poly Mustang wrote:I have Roth retirement accounts funded with money that I've already paid taxes on. If the fair tax was implemented, how would I avoid getting taxed twice?

The Fair Tax would pay a monthly prebate to anyone that is at or below the poverty line and on fixed incomes. Therefore, as a retired person you would receive a monthly check from the government to cover the amount of sales taxes paid on necessities, such as food clothing and housing, making your purchases basicly tax free. Estimates are as much as $400.00 per month.

Prebates go to everyone. Amounts differ based on dependents.

Some analysis of the concept of the "Fair Tax":

http://www.opinionjournal.com/extra/?id=110010523

We need the Fair Tax!

HI54UNI wrote:We need the Fair Tax!

Why settle?

I demand an excellent tax!

There are lots of things that I love about the fair tax.

here are two concerns.

1) The prebates reduce the taxes paid particularly on the lower incomes. Since the rich spend a smaller amount of their incomes they are going to pay a smaller amount of the required taxes. So the bulk of the taxes will fall on the middle class as a percentage of income?

2) I realize we have an underground economy now to avoid income and payroll taxes, but wouldn't it get worse to avoid a very large sales tax?

As I said I like the fair tax, but it would only work if you repeal 16th amendment and figure out a way to permanently slow down federal spending. I just don't see it working any other way.

Isn't Forbes for this?

It must be bad if a rich dude is in favor

CID1990 wrote:Isn't Forbes for this?

It must be bad if a rich dude is in favor

I thought he was for the flat tax

Six posters in this thread with <50 post count. Weird.

OL FU wrote:There are lots of things that I love about the fair tax.

here are two concerns.

1) The prebates reduce the taxes paid particularly on the lower incomes. Since the rich spend a smaller amount of their incomes they are going to pay a smaller amount of the required taxes. So the bulk of the taxes will fall on the middle class as a percentage of income?

2) I realize we have an underground economy now to avoid income and payroll taxes, but wouldn't it get worse to avoid a very large sales tax?

As I said I like the fair tax, but it would only work if you repeal 16th amendment and figure out a way to permanently slow down federal spending. I just don't see it working any other way.

As far as to point #2, income taxes are assessed and paid on an individual level. That alone makes it much easier for people to willfully avoid paying taxes. Just like state sales taxes, the The Fair Tax will require businesses to be the ones filing and remitting the tax. For compliance purposes, and by its very structure, it is much easier to "go after" businesses than it is individuals.

Enforcing non compliance for businesses who willfully fail to comply must be swift and severe.
That alone has been a problem with the IRS. Slow to react and letting people off way too easily.

Baldy wrote:

OL FU wrote:There are lots of things that I love about the fair tax.

here are two concerns.

1) The prebates reduce the taxes paid particularly on the lower incomes. Since the rich spend a smaller amount of their incomes they are going to pay a smaller amount of the required taxes. So the bulk of the taxes will fall on the middle class as a percentage of income?

2) I realize we have an underground economy now to avoid income and payroll taxes, but wouldn't it get worse to avoid a very large sales tax?

As I said I like the fair tax, but it would only work if you repeal 16th amendment and figure out a way to permanently slow down federal spending. I just don't see it working any other way.

As far as to point #2, income taxes are assessed and paid on an individual level. That alone makes it much easier for people to willfully avoid paying taxes. Just like state sales taxes, the The Fair Tax will require businesses to be the ones filing and remitting the tax. For compliance purposes, and by its very structure, it is much easier to "go after" businesses than it is individuals.

Enforcing non compliance for businesses who willfully fail to comply must be swift and severe.
That alone has been a problem with the IRS. Slow to react and letting people off way too easily.

Unless that business is a perceived "conservative" business....

Baldy wrote:

OL FU wrote:There are lots of things that I love about the fair tax.

here are two concerns.

1) The prebates reduce the taxes paid particularly on the lower incomes. Since the rich spend a smaller amount of their incomes they are going to pay a smaller amount of the required taxes. So the bulk of the taxes will fall on the middle class as a percentage of income?

2) I realize we have an underground economy now to avoid income and payroll taxes, but wouldn't it get worse to avoid a very large sales tax?

As I said I like the fair tax, but it would only work if you repeal 16th amendment and figure out a way to permanently slow down federal spending. I just don't see it working any other way.

As far as to point #2, income taxes are assessed and paid on an individual level. That alone makes it much easier for people to willfully avoid paying taxes. Just like state sales taxes, the The Fair Tax will require businesses to be the ones filing and remitting the tax. For compliance purposes, and by its very structure, it is much easier to "go after" businesses than it is individuals.

Enforcing non compliance for businesses who willfully fail to comply must be swift and severe.That alone has been a problem with the IRS. Slow to react and letting people off way too easily.

Yes. That was another point I was going to make. The penalty for non-compliance must be a deterrent. Another way of looking at it though is that as opposed to the IRS being slow (which they are), is income taxes at least come from the individual's own money. If a business doesn't remit the consumption tax, they are stealing plan and simple.

OL FU wrote:

Baldy wrote: As far as to point #2, income taxes are assessed and paid on an individual level. That alone makes it much easier for people to willfully avoid paying taxes. Just like state sales taxes, the The Fair Tax will require businesses to be the ones filing and remitting the tax. For compliance purposes, and by its very structure, it is much easier to "go after" businesses than it is individuals.

Enforcing non compliance for businesses who willfully fail to comply must be swift and severe.That alone has been a problem with the IRS. Slow to react and letting people off way too easily.

Yes. That was another point I was going to make. The penalty for non-compliance must be a deterrent. Another way of looking at it though is that as opposed to the IRS being slow (which they are), is income taxes at least come from the individual's own money. If a business doesn't remit the consumption tax, they are stealing plan and simple.

Exactly, and that makes it much easier to enforce and prosecute offenders.

AZGrizFan wrote:

Baldy wrote: As far as to point #2, income taxes are assessed and paid on an individual level. That alone makes it much easier for people to willfully avoid paying taxes. Just like state sales taxes, the The Fair Tax will require businesses to be the ones filing and remitting the tax. For compliance purposes, and by its very structure, it is much easier to "go after" businesses than it is individuals.

Enforcing non compliance for businesses who willfully fail to comply must be swift and severe.
That alone has been a problem with the IRS. Slow to react and letting people off way too easily.

Unless that business is a perceived "conservative" business....

Not really, the Fair Tax is pretty plain and straightforward, in black and white, and easily verifiable through a routine and simple audit. It would be much more difficult for the IRS to target anyone based on their political viewpoints.

Baldy wrote:

AZGrizFan wrote:
Unless that business is a perceived "conservative" business....

Not really, the Fair Tax is pretty plain and straightforward, in black and white, and easily verifiable through a routine and simple audit. It would be much more difficult for the IRS to target anyone based on their political viewpoints.

Mmmmm....you missed my point. The IRS is CURRENTLY slow to react and lets people off too easily, UNLESS you're perceived as a "conservative" business.