Fair Tax

"The Fair Tax would guarantee that they would pay federal taxes, paperwork or not." My opponent assumes that people who illegally snuck into the country and often send the money they make back to their families will spend money on services and goods. There are very few taxable services that Illegal Aliens would need, such as a place to live, and many ways to get around it. They could rent rooms, stay at homeless shelters, stay at a church (Catholic), and others. Illegal aliens don"t buy plasma TVs, get manicures, or other luxuries the Average American can enjoy and even if they did, the criminal element which often comes with immigration could surely provide for that need. "Con also argues that the effects of the GST (another name for a Value Added Tax implemented in '00-'01) in Australia has hurt the economy. Apples and Oranges. The GST replaced some taxes, but they still have an income tax and capital gains tax. [1] The Fair Tax replaces all other taxes. Furthermore, a VAT is different from the Fair Tax in that it is often invisible on the receipt, and is open to more fraud on the producers' level because of how it is enforced and calculated. [2]" "flat tax...does not bind the amount of goods purchased with the well being of our national coffers." The point I was trying to make was when goods cost more, people buy less of them and when that"s the only way government makes money, you"re shooting yourself in the foot. This paradoxical effect will simply keep pushing up the tax rate. Here"s an analogy, I own a house (America) and you currently pay rent (income tax). One day a little birdy says to me, don"t make them pay rent, instead make them buy all their goods from you and make a profit by jacking up prices (fair tax). I get out my calculator and abacus, number crunching ensues. I figure out that it takes a 34% mark up to get what I was getting before, so I open up shop all happy. Time goes by and I realize that I"m coming up short and I"m hemorrhaging money, sticking with my idea I raise the mark up to 40% (I do pay water and electricity (socialism)) to stay afloat. Ironically I get even less money then before because people realized that they could get all the same goods and services elsewhere for 40% less and since I"m not collecting rent I go broke :( One could argue my tenants would have shorted me on rent, which is true, however I can tell whether or not they have paid rent due to my book keeping and my slow cousin (the IRS) who I use to intimidate them into paying. With this new approach, I can"t tell if they are just being thrifty or cheating me out of my hard earned money. "No tax plan or rate can solve the current issues with our national coffers. The real problem is with ever increasing government spending. I argue that either the Fair Tax or a lower Flat Tax would be better for the country specifically because it's primary concern is NOT the national coffers. " So going broke isn"t a bad thing? "Also, I didn't come up with the current Fair Tax rate of 30%, but from what I understand, it is based off of gov't spending figures, which I'd like to see reduced. When gov't appetite is reduced, the Fair Tax rate can be reduced." Your assuming that government spending will be reduced, and considering that currently we only have Neo-Cons and Democrats, we are screwed. "Covetous as people are, a flat tax would be more prone to be modified to a multi-tier system like we have now to "stick it to the rich." The Fair Tax would eliminate the ability of the government to tax income (legally) by repealing the 16th Amendment. [3]" What makes you think that the government wouldn't change your fair-tax proposal to favor the poor? Government is known to take a simple idea and make it ten times more complicated. The fair tax would work well if we had a minuscule federal government, however in our day and age it is not a good solution. The problem only compounds itself when we consider all the alternatives to buying goods through a large store since the internet, globalization and companies evading the tax. Is the flat tax perfect, no, but it is the least flawed of the two systems. It doesn't rely on a sales tax, which discourages sales (which considering that a sales tax is the only way government makes money will increase), [1][2][3] and instead taxes at a flat rate which doesn't discourage making more money or sales. [1] http://smallbusiness.chron.com... [2] http://www.investopedia.com... [3] http://en.wikipedia.org...