Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
Editorials & Other Articles
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
General Discussion
In reply to the discussion: Blasphemy: a National Sales Tax would be MUCH better than our present or any Income Tax system [View all]Mariana
(15,628 posts)28. The "Fair Tax" is actually a 30% sales tax.
They calculated it differently than sales tax is normally done, to deceive people into thinking it's a lower rate than it is. However, they do tell the truth in their FAQ:
https://fairtax.org/faq
I know the FAIRtax rate is 23 percent when compared to current income taxes. What will the rate of the sales tax be at the retail counter?
30 percent. This issue is often confusing, so we explain more here.
When income tax rates are quoted, economists call that a tax-inclusive quote: I paid 23 percent last year. For every $100 earned, $23 went to Uncle Sam. Or, I had to make $130 to have $100 to spend. Thats a 23-percent tax-inclusive rate.
We choose to compare the FairTax to income taxes, quoting the rate the same way, because the FairTax replaces such taxes. That rate is 23 percent.
Sales taxes, on the other hand, are generally quoted tax exclusive: I bought a $77 shirt and had to pay that same $23 in sales tax. This is a 30-percent sales tax. Or, I spent a dollar, 77¢ for the product and 23¢ in tax. This rate, when programmed into a point-of-purchase terminal, is 30 percent.
30 percent. This issue is often confusing, so we explain more here.
When income tax rates are quoted, economists call that a tax-inclusive quote: I paid 23 percent last year. For every $100 earned, $23 went to Uncle Sam. Or, I had to make $130 to have $100 to spend. Thats a 23-percent tax-inclusive rate.
We choose to compare the FairTax to income taxes, quoting the rate the same way, because the FairTax replaces such taxes. That rate is 23 percent.
Sales taxes, on the other hand, are generally quoted tax exclusive: I bought a $77 shirt and had to pay that same $23 in sales tax. This is a 30-percent sales tax. Or, I spent a dollar, 77¢ for the product and 23¢ in tax. This rate, when programmed into a point-of-purchase terminal, is 30 percent.
Edit history
Please sign in to view edit histories.
Recommendations
0 members have recommended this reply (displayed in chronological order):
62 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
RecommendedHighlight replies with 5 or more recommendations
Blasphemy: a National Sales Tax would be MUCH better than our present or any Income Tax system [View all]
Goodheart
Sep 2019
OP
Are you suggesting a sales tax or a VAT as is commonly used in Europe?
The Velveteen Ocelot
Sep 2019
#1
If food and clothing were exempt (except alcohol and luxury clothing) it could work n/t
Blaukraut
Sep 2019
#7
Sales taxes in general are regressive so legislators have to build in some protections for the less
CTyankee
Sep 2019
#13
UUnfortunately, the tax structure you described above disproportionately affects really poor people
intrepidity
Sep 2019
#53
I am cognizant of this as my husband is the (volunteer) chairman of New Haven's Homeless
CTyankee
Sep 2019
#58
Enforcement is 1) too complicated 2) too expensive 3) too difficult 4) impossible.
Goodheart
Sep 2019
#15
Yes, a National Sales Tax or a VAT would be simple and there would be no evasion...
Girard442
Sep 2019
#12
because the rich have eaten away at the income tax code and haven't done as much to the sale tax.
unblock
Sep 2019
#23
Sales taxes are not regressive if they're not universally applied across all purchases.
Goodheart
Sep 2019
#22
"you could not find a single credible economist to agree with your position."
Goodheart
Sep 2019
#50
You do a VAT on top of income tax. It pays for medicare for all. You do both.
applegrove
Sep 2019
#52