Following are a couple of paragraphs taken from a FairTax Volunteer letter. We discussed the impact on tax lawyers, tax preparers and CPA's a while back and I thought this was an interesting addition:
"I have talked to a couple of tax preparers and a CPA, and they are the first to admit our current system is way too complex. Blue ribbon economists have projected the Gross Domestic Product would jump 10% the first year, and continue at that rate for the foreseeable future. People with accounting skills should have no trouble finding new work in such an environment.
As far as the impact on the middle class is concerned, all except the very highest tax brackets would enjoy a net savings on their effective tax. The reason for that is that the FairTax opens up a much broader base to be taxed, including non-reported income, illegal activities, loopholes, and tourists. The FairTax is a win, win, win."
Also, I have posted a new FairTax Calculator in the links section. There are easy-to-answer questions that lead to a logical conclusion that gives you a side-by-side comparison of your own tax situation comparing the income tax with the FairTax. Give it a try.
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3 comments:
Bobbie,
Your friends CPA's etc. are not entirely correct. It turns out that retirees woth incomes from $20,000 to $60,000 would have lower effective tax rates under current law.
As for the new Fairtax calculator,I’ve been playing around with it and I think it may have a major glitch.
I entered all the right data faithfully from my last income tax return, and when I got to the next to last page, the calculator informed me that my income tax effective rate was 0%-that’s right-zero. Even though I told them earlier that my effective tax rate was 9%? When I proceeded to the Assumptions page, I selected yes on a pretax price decrease,and at the default 10%, sure enough, the comparison page now told me my effective income tax rate was 9%, the correct answer. And by the way, my effective tax rate and purchasing power were all more favorable under current law at the default setting. Which I already knew from some of my previous studies.
When I selected a 22% pretax price decrease, the results completely flipped, and my income tax effective tax rate went to 19%?? And the Fairtax was more favorable on all counts.
I don’t understand what is going on with this thing, but unless one first changes some assumptions, the results seem to be garbage. And, I assumed the pretax price decrease would only affect the Fairtax. After all, why would anyone assume a price decrease under current law? Yet, the results for the income tax changed drastically due to this price decrease entry.
I plan to email the AFFT Communications Director and raise these questions. I’ll let you know what he says. Meanwhile, am I missing something? Are you getting similar results. Does the fact that I’m retired, yet couldn’t enter my pension income account for my problems?
Help!!! Anyone?
Hi Dutchman! I was going to send a copy of your comment to the AFFT, until I read further and noticed that you had already inquired about the possible glitches in the FairTax Calculator. Thanks. Hope you get things worked out. Maybe you are just one of those people who "fall through the cracks", huh.
Bobbie,
I'm much too big to fall through any crack!! Here is the email I received from AFFT
"Thanks Hank.
Unfortunately, we are discovering some bugs. I am passing along your e-mail to the designers.
Ken"
I'm hopeful they can fix any problems, because it is a good aid to understanding Fairtax personal economic comparisons to current law. And that's important, because despite all the high sounding reasons for supporting the Fairtax, in the final analysis, most people are not driven by public virtue, but by private interest. That is why we have the type of Constitution that we have.
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