What does the Fair Tax plan mean to you?
Posted in Personal on April 21st, 2008Over the years I have paid a lot of money into taxes. I consider my self lower middle class because I struggle to pay the bills so my wife doesn’t have to work. I’m not really sure if the amount of money I do make puts me at a middle class or not, and it really doesn’t matter.
I know that sounds bad to say I’m lower middle class, and the people that have both husband and wife working may even make more than me. The thing is that, I have tried to position my family so that my wife doesn’t have to work. This means that I only have 1 running car, and I have a car that broke down on me. Because of the payments of the 1 car, I’m not able to get the other car fixed or buy another car. The bills for the most part get paid each month and I’m swimming in debt.
I have about 25% of my check go to taxes. State, Federal, Social Security, and Medicare. I pay State taxes because I live in GA. The Federal, SS, and Medicare are all Federal taxes, yes SS is a tax, and not a contribution. To me contribution means that it is a choice, and SS is forced on everyone.
So lets say that FlatTax or FairTax was in place. I would get 100% of my check, minus the State Taxes. So lets for get about the State Tax for a minute. If you make $1000.00 before taxes you would get a check for $1000.00. This money would be used any way you see fit. If you would like to save it, then it would be your choice. If you chose to spend it on an item and the FairTax was set at a rate of 25%, then an item that was $100.00 would cost you $125.00.
Now there is the saying with the money that companies would save not having to deal with payroll taxes, that products would decrease in price. So the $100.00 might be as low at say $80.00. At a 25% rate, that would make the item $100.00. So, looking at that, you would still only spend $100.00 on the item instead of $125.00.
Something else to look at with your $1000.00. 25% of 1000 is 250. That is a 1 to 4 ratio. I hope you see what I’m getting at. At a 1 to 4 ratio, or .25 or 25%, of your $1000.00 you have paid in taxes. That $100.00 item has cost you $125.00 already.
So looking at the possibility of saving the $25 for everyone $100 you spend sounds great. It is like buying 4 $100 items and getting the 5th one free.
I’m sure it is a lot more complicated than that on the back end. I’m really not sure that the Big Business people would ever go for having to pay Federal Taxes on items that they buy. By that I mean that if you make enough money, or are high enough in a company you do not pay any taxes. Some CEOs get a bonus from the company or it comes from the share holders to pay for the CEOs taxes. That is also taxed the next year, and so another bonus is given the next year to cover the taxes, and the cycle continues.
I’m all about people paying their fair share. Right now you may be spending the $125.00 on the $100.00 item, while the owner of your company is paying $100.00 on the $100.00 item.
Not only is it not fair, but you are the one that is helping him be able to avoid paying taxes. That is called tax evasion in the country. People like that belong in jail.
I pay my taxes, even if I do believe that I should be paying them. I don’t really have a choice. Pay them or go to jail. I would much rather it be done fairly, so that everyone, including the non U.S. citizens, pay taxes. There are really to many loop holes in the system now and a fair tax would fix about 90% of them I feel.


