FAIR TAX

[RNG]

There is a significant groundswell for a new type of taxation growing in America. It is Fair Tax. Essentially it is our GST, but only GST. No other taxes. Some fairly high-powered economists in the US figure that putting the Fair Tax at 27% would be revenue neutral. And that includes sending everyone a "prebate" cheque of whatever the poverty line amount is at the start of the year. Your thoughts?

[dre]

There is a significant groundswell for a new type of taxation growing in America. It is Fair Tax. Essentially it is our GST, but only GST. No other taxes. Some fairly high-powered economists in the US figure that putting the Fair Tax at 27% would be revenue neutral. And that includes sending everyone a "prebate" cheque of whatever the poverty line amount is at the start of the year. Your thoughts?

The problem with taxing consumption alone and not income is that you risk discouraging consumption. In an economy driven by... you guessed it... consumption. Youre also up again the massive success that the "progressive graduated income tax" has been, in building stable prosperous societies in the western world. Not to mention it would be a very regressive tax, that would shift the tax burden from investors to consumers.

On the positive side... you would reduce frivalous consumption, and reduce the money spent on non-durable consumer goods, and you would encourage investment... But it would be hard to find stuff to invest in if consumption was on the decline

I just dont see it happening to be honest.

[Jack Weber]

Is this something like Steve Forbes Flat Tax idea?

'Cause if it is,they can take it out to sea and sink it....

If it's purely a consumption tax,I tend to agree with Dre because the idea presupposes that we will all just keep consuming things,(by that I mean other than necessities).This endless consumption mindset is what is at the heart of the massive personal debt problem in the West.

What would happen to tax revenue once the consumer is tapped out?

[scribblet]

I don't see anything wrong with a flat tax as long as all the loopholes are closed and we all have to pay it.

[Michael Hardner]

There is a significant groundswell for a new type of taxation growing in America. It is Fair Tax. Essentially it is our GST, but only GST. No other taxes. Some fairly high-powered economists in the US figure that putting the Fair Tax at 27% would be revenue neutral. And that includes sending everyone a "prebate" cheque of whatever the poverty line amount is at the start of the year. Your thoughts?

You know it's a Fair Tax, because the guys who want to do it named it "Fair Tax".

Is the Fair Tax a fair tax ? The term "fair" is completely subjective. We decide what is fair and what isn't. The heyday of Canada and the US is considered to be the mid-20th century when the infrastructure was built on a top tax rate that was very high, and a graduated system that increased the rate slowly from low to high earners.

These taxes are just about cutting taxes to the highest earners, period. That would be a good idea, if it worked. Does it ? We would see. As it is, there are revenue challenges everywhere with states going broke. During America's golden era, the highest earners paid over 300% of what this system proposes.

[Michael Hardner]

And ask yourself this: what is this tax supposed to fix ? Is the goal to make taxes more fair ? If so, who benefits the most from it ? Why are their needs prioritized when they have seen the most benefit from tax reform since the 1970s ?

[Jerry J. Fortin]

And ask yourself this: what is this tax supposed to fix ? Is the goal to make taxes more fair ? If so, who benefits the most from it ? Why are their needs prioritized when they have seen the most benefit from tax reform since the 1970s ?

It would "fix" Revenue Canada, it would eliminate it.

Look folks what the government needs is a stable revenue stream, thats why we have the system we have. Its not a fair system at all, the one we have. The more you make the more you pay. Even so its here and going nowhere fast. If we did get another system we would likely just pay more not less.

[Topaz]

It seems to me no "fairtax" can't come into being until we get government to quit raising the national debt. It took the Libs 11 years to rid the PC's debt and how long is going to take to get rid of this government deficits? More pressure should be put on this or taxpayers will never have a fair tax when the government has over spent. Our income taxes are the main revenue for the government's income especially since corporate taxes are being cut.

[madmax]

There is a significant groundswell for a new type of taxation growing in America. It is Fair Tax. Essentially it is our GST, but only GST. No other taxes. Some fairly high-powered economists in the US figure that putting the Fair Tax at 27% would be revenue neutral. And that includes sending everyone a "prebate" cheque of whatever the poverty line amount is at the start of the year. Your thoughts?

BE AFRAID!!! BE VERY AFRAID!!!

[msj]

It would "fix" Revenue Canada, it would eliminate it.

Look folks what the government needs is a stable revenue stream, thats why we have the system we have. Its not a fair system at all, the one we have. The more you make the more you pay. Even so its here and going nowhere fast. If we did get another system we would likely just pay more not less.

The CRA (Canada Revenue Agency - not Revenue Canada) has a very large GST division.

Switching to only a GST type tax would not eliminate the CRA. Might make them a bit smaller, but not by much.

Only taxing through a GST type tax also is not a stable revenue stream. The government is quite diversified in it's revenue streams through income taxes, fees, GST, tariffs, and other taxes.

For the government to switch to only a consumption tax would create less stability in their revenue streams.

As for our system being fair - I pay more tax as my income goes up and I think that is perfectly fair.

[Alta4ever]

It seems to me no "fairtax" can't come into being until we get government to quit raising the national debt. It took the Libs 11 years to rid the PC's debt

I don't know what world your living on, but on this one the chretien liberals did not rid the country of trudeau and mulroony's debt, they just paid some of it down.

[ToadBrother]

There is a significant groundswell for a new type of taxation growing in America. It is Fair Tax. Essentially it is our GST, but only GST. No other taxes. Some fairly high-powered economists in the US figure that putting the Fair Tax at 27% would be revenue neutral. And that includes sending everyone a "prebate" cheque of whatever the poverty line amount is at the start of the year. Your thoughts?

If there was such a thing as a fair tax, it would have been discovered by now, considering taxes in one form or another have existed at least 6,000 years (and probably longer, since the transition from nomadic to settled urban living).

All taxes will, one way or the other, be unfair to some group.

[bloodyminded]

If there was such a thing as a fair tax, it would have been discovered by now, considering taxes in one form or another have existed at least 6,000 years (and probably longer, since the transition from nomadic to settled urban living).

All taxes will, one way or the other, be unfair to some group.

I think you're right.

As it stands, we've all decided, in our monumental moral vaccuum, that those who can best afford it, and who have materially benefitted the most from our system, should pay the highest proportion.

Evidently, this is unreasonable, and is simply going too, too far.

[Jack Weber]

If there was such a thing as a fair tax, it would have been discovered by now, considering taxes in one form or another have existed at least 6,000 years (and probably longer, since the transition from nomadic to settled urban living).

All taxes will, one way or the other, be unfair to some group.

http://www.fairtax.org is the place to read about this...

It seems to be a LibertariCon's wet dream....

[wyly]

It will never work...it'll drive entire sections of the economy underground...as it is now at least those who are part of the underground economy now still pay income tax...

[RNG]

http://www.fairtax.org is the place to read about this...

It seems to be a LibertariCon's wet dream....

I will admit that the name sucks. But I guess you will just have to color me a LibertariCon. And I'm proud of it. I only object to the Con part if you assume I think the government can tell people who they can and can't play hide-the-wienie with. And other screwed up family value and fundie religious stuff. (Note the great self control in that last word.)

[Jack Weber]

I will admit that the name sucks. But I guess you will just have to color me a LibertariCon. And I'm proud of it. I only object to the Con part if you assume I think the government can tell people who they can and can't play hide-the-wienie with. And other screwed up family value and fundie religious stuff. (Note the great self control in that last word.)

Excellent...

Then Alberta must be the perfect place for you...

Now go pump the oil because we all need that revenue and then you can play hide the weenie with whomever you like...

[msj]

It will never work...it'll drive entire sections of the economy underground...as it is now at least those who are part of the underground economy now still pay income tax...

Exactly right.

The government diversifies it's tax base for many reasons.

To collect information about people/companies/businesses/entities to cross reference against other information is one of those reasons.

Contractors have been learning this lesson lately and I have seen some very large tax audit assessments that are a direct result of the inter-linked income-tax/GST/filing-of-information-slips systems that we have.

If it were not for this system then Canada would be like Greece.

At the same time, I like HST because those who do under report their income for income tax purposes (waiters being a particularly annoying example) will at least pay HST when they spend some of that unreported income (although this would be another reason to legalize and tax pot since many tips just go to pay for weed anyway).

[August1991]

Switching to only a GST type tax would not eliminate the CRA. Might make them a bit smaller, but not by much.

Only taxing through a GST type tax also is not a stable revenue stream. The government is quite diversified in it's revenue streams through income taxes, fees, GST, tariffs, and other taxes.

For the government to switch to only a consumption tax would create less stability in their revenue streams.

As for our system being fair - I pay more tax as my income goes up and I think that is perfectly fair.

I have to largely agree with msj, with the added point that Bermuda applies the so-called "Fair Tax" of the OP, and so do most European countries where VAT typically ranges around 20%-30%.

The problem with taxing consumption alone and not income is that you risk discouraging consumption. In an economy driven by... you guessed it... consumption. Youre also up again the massive success that the "progressive graduated income tax" has been, in building stable prosperous societies in the western world.

Uh, by your logic, any tax discourages whatever is taxed. Income taxes discourage, uh, income. Ie. work.

Dre, in the long run, is our economy driven by consumption, or work? When it comes to sustainability (to use a recent buzz word), is a consumption society even sustainable?

----

As to your argument about "stable prosperous societies in the western world", look at my comment above about VAT rates in Europe. (For the sake of my argument, I'll assume that you're a Progressive Leftist Metrosexual who hates Harper and Bush but loves European-style coffee shops.)

In Canada, our equivalent VAT rates are around 12% or so. I note that Norwegians pay a higher sales tax rate on food (13%) than we pay on everything. The Norwegian HST on non-food items is 25%. Maximum Norwegian income tax rates are comparable to Canada - around 50%.

Edited September 28, 2010 by August1991

[punked]

Bring it on. I would love to see Canadian goods being purchased here and smuggled into America and sold on the black market to beat the tax. It would be great for the boarder economy in Canada. I would kill America but it would be great for us.

[RNG]

Exactly right.

The government diversifies it's tax base for many reasons.

To collect information about people/companies/businesses/entities to cross reference against other information is one of those reasons.

Contractors have been learning this lesson lately and I have seen some very large tax audit assessments that are a direct result of the inter-linked income-tax/GST/filing-of-information-slips systems that we have.

If it were not for this system then Canada would be like Greece.

At the same time, I like HST because those who do under report their income for income tax purposes (waiters being a particularly annoying example) will at least pay HST when they spend some of that unreported income (although this would be another reason to legalize and tax pot since many tips just go to pay for weed anyway).

You realize you just supported the misnamed Fair Tax, don't you?

[August1991]

The government diversifies it's tax base for many reasons.

That's a terrifying concept. The government is applying portfolio theory to its tax base?

Imagine what would happen if Statistics Canada applied the same concept to data collection!

At the same time, I like HST because those who do under report their income for income tax purposes (waiters being a particularly annoying example) will at least pay HST when they spend some of that unreported income (although this would be another reason to legalize and tax pot since many tips just go to pay for weed anyway).

The problem there is that restaurants/waiters don't collect the HST.

IOW, prostitutes and drug dealers may not pay income tax, but then they don't collect HST either on the services they offer. So, it's a wash. Whether income tax, or HST, people can evade taxes.

The advantage of the HST over the income tax, from the perspective of government and tax evasion, is not in the diversification of taxes. It's in the fewer tax points to collect from. Tax collectors have fewer people to deal with, and hence they are more likely to detect fraud.

In the case of the income tax, bureaucrats in Canada have to deal with about 10 million or so filers, wage earners, coupon clippers etc.

With GST, the bureaucrats have about 100,000 or so filers. In a sense, tax collection has been privatized. A major advantage of VAT/HST/GST over income tax is that the government has fewer dealings with people. We the people (or at least sellers) collect the tax, and have an incentive to do so through GST refunds.

Moreover, the Canadian GST was designed to enumerate/identify every transaction. That ID# puts the fear of the Lord into people. (Gun registry? The GST people know everything about you. Each GST purchase is recorded separately.)

Edited September 28, 2010 by August1991

[RNG]

I really don't believe that consumption, after a bit of an initial pause, would suffer. Our society is far too materialistic. So I buy wieners for $3.95 and pay 27% on that. The rich bastards buy filet at $35.99 and pay 37% on that. My kid buys a car across the back fence and pays zero, the rich bastard buys his brand new Merc and pays 27%. Works like a charm. What's wrong with that?

[ToadBrother]

That's a Moreover, the Canadian GST was designed to enumerate/identify every transaction. That ID# puts the fear of the Lord into people. (Gun registry? The GST people know everything about you. Each GST purchase is recorded separately.)

Huh? I've done plenty of GST quarterly returns, and not on a single one have I ever sent in the receipts. The Feds know nothing about the purchaser of goods. It's not like there's some big data bank. The GST number isn't used to track anything.

[August1991]

I really don't believe that consumption, after a bit of an initial pause, would suffer. Our society is far too materialistic. So I buy wieners for $3.95 and pay 27% on that. The rich bastards buy filet at $35.99 and pay 37% on that. My kid buys a car across the back fence and pays zero, the rich bastard buys his brand new Merc and pays 27%. Works like a charm. What's wrong with that?

Where did you get the money to buy this stuff? I assume you had to earn it.

So, you either pay "income tax" or "spending tax" (GST). If you live paycheque to paycheque, there's no difference between the two taxes. 10% of your income is 10% of your spending.

True, if you save, you pay less under the GST now than with income tax. Of course, you'll eventually pay the GST when you or your children spend your savings.

Edited September 28, 2010 by August1991