Submitted by Tom, Dec 17, 2007 18:39

I am responding to the poster named "FairTaxFraud", who has been all over the net posting verbatim the same silly nonsene. Here's what he/she posts:

"The working poor spend everything they earn to live on consumption (living paycheck to paycheck) so they are taxed on everything they earn under the FairTax (and most would say "everything they earn" means 100 percent). The rich spend only a fraction of their income on consumption so that are taxed on very little of what they earn. In other words, under the FairTax the poor will pay taxes on 100 percent and the very rich are taxed on only 5 percent (or less).

What You Lose Under the FairTax

1. The Home Mortgage tax deduction - no more deduction your mortgage interest - no incentive to buy a house.
2. The Per-Child tax deduction for dependants - no more help for large families.
3. The deduction for State and Local taxes - tack on the taxes.
4. The College Tuition tax deduction - sorry kids.
5. Roth IRA - will be taxed twice because your money is taxed again when you spend it.
6. Charitable Contributions deductions - no help for the faithful.
7. Child Care Credits - no more help for single moms and poor families with kids.
8. Refinancing Points deduction - no more incentive to refinance.
9. Health Insurance Premiums deduction - no more help for the sick.

What You Gain Under the FairTax

1. New 30 percent tax on every New House or property you buy.
2. New 30 percent tax on Cars, Boats, Campers, Home Appliances, TV's
3. New 30 percent tax on Food, Clothing, Shelter, Rent, Electricity, Gas, Phone Service
4. New 30 percent tax on Medicine, Surgical procedures, Hospital stays, Dental Services
5. New 30 percent tax on Legal Services, Trial Services, Legal Advice, Legal Winnings and losses.
6. Double Taxation on Roth IRA's or retirement money you took as a lump sum.
7. Your consumption is now directly linked to inflation - prices go up - your taxes go up.
8. Interest on Credit Cards, Loans, and Mortgages now taxed at 30 percent on top of what you owe.
9. You now have to pay the government for permission to live in America by paying taxes on all you consume."

Let's take these one by one. First, about the poor. This poster conveniently (intentionally?) ignores the prebate. This is the refund of federal taxes paid based on poverty level spending. This mechanism is the reason the recent Presidential Commission on Tax Reform stated that the Fairtax is the only plan that COMEPLETELY UNTAXES THE POOR. He talks about how much the rich versus the poor are taxed on what they earn. Newsflash my friend...NO ONE psys any tax on what they earn because there will be no more income tax. How hard is this really to understand? Pretty tough for some apparently.

Then his whole list of "deductions" you no longer get. Guess what? You no longer get them because you no longer need them. You don't pay income tax anymore!! Complaining about deductions on your income tax when the income tax is gone is absurd. If you had a 50-cents-off coupon for bread, but when you got to the store they were giving bread away, would you complain because you couldn't use your coupon? Not likely, but this guy uses the same logic.

Then the silly list of "new 30 percent taxes". Okay, really do we have to go over this again? All of this is very clearly laid out at the Fairtax website, or in the Fairtax book or myriad other places. But, for those with short attention spans, a quick synopsis follows. First, it's a 23 percent inclusive tax. Second, you first must consider the embedded taxes that are removed before the new federal tax is added. That means prices will see a modest increase, perhaps 10 percent. Third, you no longer have any Fed. witholding, so you get your entire pay. Your increase in take home will more than offset the added tax in what you buy. Fourth, once again every household gets the prebate which offsets more of the tax.

Again, as I posted before, it's dishonest people like this that muddy the debate. His points might be valid if we were discussing a general sales tax with no mechanisms to address them. But we are not. The plan has been extensively researched and does address all those things. Read the plan, read the legislation, then come back and offer serious, legitimate debate.

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