Justin Douglas Weis (weisside) wrote in wastrepublicans,
Justin Douglas Weis

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Fair Tax Explained (Partial)

What if you did not have to pay income taxes, capital gains taxes, Social Security Taxes, Medicare Taxes, corporate taxes, small business taxes, interest taxes, minimum income taxes, various utility / usage taxes and death taxes? If you are just a W-2 earner, you really only pay income taxes, Social Security Taxes, Medicare Taxes. Your gross yearly wage has been 60,000. If you had been paying all of these taxes, your take home was approximately 3,800 a month. Lets say you are not paying those taxes any longer. Now your monthly income is 5,000 a month.

Wondering where the government is getting their funding aren't you? We will get to that.

Remember when I said that if you were a W-2 earned that you really only paid income, SS, and Medicare taxes? That is not entirely true. You also pay corporate taxes and everything else that is associated with business taxes. Infact, business do NOT pay taxes. Business collect money from you, the consumer and pay the government. Thats right, those taxes are all "wrapped up" in the cost of the products you buy. Lets use a $1.00 bag of bread for example. What taxes have already been levied against that product before you buy it? Well, the farmers that grow the wheat pay all those corporate taxes. Not to mention all the taxes on employees for the farm, all the embedded taxes in his equipment costs, the taxes for the land, the taxes for his product and then the gains taxes when he sell to the local grain warehouse. That warehouse then pays taxes on the purchase from the farmers then again on the sale to the production plant. Then there are tons of taxes on that production plant and finally it ends up in the distribution network of you friendly local grocery outlet.... which they pay the wholesale taxes on. All of these taxes are embedded taxes that raise the price of your loaf of bread. What if all of those taxes were taken out? The price would be approximately 24-28% cheaper on all goods. Since we live in a free enterprise system, strong competition would quickly cause prices on all good to drop.

So, where does the government make its money?

The government makes its money off a federal sales tax. This federal sales tax would be 23%. 23%!@#$@ ARE YOU CRAZY! Yes, I am not. Please, reread the above. This is called the fair tax system. Currently our tax system is completely out of control and spiraling to a nasty demise. Companies move their production to other countries because of taxes, not because of cost of labor. If I open a manufacturing plant here and sell widgets in Mexico, I have to pay all the taxes in Mexico for the import and the sale and in turn I have to pay taxes again in the US for the sale, export, and gains in Mexico. Back to the 23%... You are then thinking, that bag of bread will now cost $1.23!! No, it will not. Two things to consider are, 1) The original price of that product will be 24-28% less than it was before and 2) The consumer will now have more spending power because his/her income is not taxed.

This system actually creates more money than the current system and makes the US the most business friendly country in the world. This will bring jobs from all over the world and boost our economy.

What about fixed income? People in poverty? Homeless? Prebate. Pre + Rebate = Prebate. This prebate would be for basic needs for low income families.

Hopefully this sparked some interest and gets you to visit to learn more about the Fair Tax Movement

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