Social Security - The most regressive tax of all. It takes a good percentage of your monthly paycheck and you don't even know if Social Security will be there for you when you retire. With the FairTax this withholding will disappear, but Social Security will be stronger than ever, since it will become part of the 23% consumption tax and therefore become a guarantee that it will be there for you as well as your parents and grandparents. Plus it will ensure your children and grandchildren of having that part of retirement guaranteed for them as well.
The FairTax will make Social Security and Medicare healthy again. For independent contractors and business owners, the FairTax will be a double blessing when it comes to Social Security taxes. These people have to pay double what the monthly wage earner pays - their share and the business' share. It becomes a terrible burden at tax time. Independent contractors and business owners have lots of tax write-offs, but they still have to pay their entire Social Security withholding and there are no write-offs for that.
With the FairTax, their Social Security withholding would be a part of the consumption tax so that every time they made a purchase a small amount would be going towards this particular tax and there would be no large lump sum due quarterly like there is now. For monthly wage-earners, the same would be true: You would receive 100% of your paycheck with no tax withholding of any kind.
These taxes would be paid over the year as a part of all new goods and services and only when YOU decide, not every two weeks or monthly as it is now. You would have the use of ALL of your money until you make a purchase. Then and only then will you be paying taxes. Wouldn't you like to keep 100% of your paycheck and YOU be the boss, not the government? The politicians are not going to like this - They will lose control over you.
The Lobbyists will not like this either - they will lose control over the politicians. TAKE BACK YOUR GOVERNMENT! YOU BE IN THE DRIVER'S SEAT!
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7 comments:
How does Social Security "become a guarantee that it will be there for you as well as your parents and grandparents" just because it's paid through the FairTax.
I'd rather take my chances on the FairTax. We KNOW Social Security is doomed with the present income tax structure. Why are you so afraid to change something that is already broken?
The FairTax is designed to collect the exact same amount as the current system. If it collects more or less, the rate is adjusted automatically (no vote required). This happens on a yearly basis. It's hard to see how the FairTax could fix Social Security.
One thing the FairTax does do is increase Social Security payouts by the exclusive FairTax rate. So it can't collect more than the current system but increases payouts by 30%.
Some fix.
All of this talk about SS being bankrupt or "doomed" is just nonsense. Read Bill Bradley's book wherein he claims that the SS trust fund can be made solvent for the next 100 years by (1) gradually raising the retirement age to 70; (2)tax a small amount of any income over the current cap of $96000; (3) bring all state and local government workers into the plan; and (4) use a more realistic "chained" method of calculating annual adjustments. Doesn't sound too difficult- only need Congress to get off the dime. I will certainly agree that Medicare needs immediate attention, but rest easy, your SS pension will be there for you.
You also need to understand that, by including payroll taxes in the list of taxes to be replaced by the Fairtax, and offsetting the tax on poverty level spending by giving everyone a prebate, a large group of workers (estimated at 30 million) may never pay one dime in net federal tax, yet will still qualify for full pension and health care benefits. Is this really good for the country? Talk about Socialism? Compare the number of Fairtax non-contributers to those under current law. Today, less than 1 million workers are able, for a limited number of years, to reduce their income tax to near zero using deductions, exemptions and tax credits, and then totally offset the 7.65% payroll tax amount using the refundable EITC and Additional Child Care credits.
In addition. as a senior retiree, having paid into the trust funds for 45 years, and now drawing a pension as promised by my government, I would be forced under the Fairtax to resume paying into the trust funds with my sales tax dollars. Is that really fair?
No doubt that the payroll tax is regressive, but I tend to think of it more as an annuity or insurance premium. The difference is that with life insurance, you are betting you are going to die, and with SS premiums, you are betting you are going to live long enough to collect the benefits you paid for.
I believe that the Houston tax lawyers badly overreached when they put together the Fairtax scheme. Take the SS considerations out of the mix and the Fairtax might have a better chance of getting approved by the Congress!
Fairtax's one valid point is that it doesnt screw work, like FICA taxes do.
But Fairtax is so flawed otherwise, it wont make any difference. For example -- Boortz claims "the federal government itself will be a major taxpayer."
This is just a shell game. Thats like me paying myself 10,000 a day for cutting my grass. I can write the check, I can even deposit the check, but at the end of the month, I dont have 300,000 dollars.
The fairtax actually COUNTS the government paying itself as income. Thats preposterous. The US Navy can write a check for the 4 billion dollar tax on an aircraft carrier, but the Treasury doesnt gain 4 billion.
The Fairtax HAS to pretend it can tax the federal government to pay the federal government - because if they didnt pretend --they would have to admit the rate wouldnt be 23 -- or even 30%. It would be 43%.
Then -- fairtax wont be able to tax cancer surgery, nursing home, and hip replacements. When the elderly start seeing these taxes on their bills, they will scream bloody murder, and rightly get exemptions.
We do need a better tax code, but we need one that works, that isnt a math myth.
Fairtax is a fallacy, a math farce.
Under the FairTax, how will a worker's Social Security benefit be determined?
Will employers have to pay FairTax on the wages they pay?
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