# Fair tax act **URL:** \ **Category:** Politics & Elections\ **Created:** [January 24, 2023, 8:14am UTC](https://boards.straightdope.com/t/fair-tax-act/978711 "2023-01-24T08:14:58Z")\ **Posts on this page:** 20\ **Page:** 5
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [January 25, 2023, 2:38pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/81 "2023-01-25T14:38:27Z")
I don’t think under our Federalism system the Federal government could prevent the states from taxing as they see fit (there are a few exceptions in the Constitution) ---
**Author:** ![Great\_Antibob](https://avatars.discourse-cdn.com/v4/letter/g/e47c2d/32.png) [@Great\_Antibob](https://boards.straightdope.com/u/Great_Antibob)\ **Post date:** [January 25, 2023, 2:40pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/82 "2023-01-25T14:40:04Z")
> [@Riemann](#): > > But the _ad hominem_ fallacy only applies to irrelevancies. If you’re trying to determine if a home is secure, a discovery that the locks were installed by a known thief is not an _ad hominem_ fallacy. It’s even implicit in the name they gave the bill (and in the thread title). Similar schemes were called “flat” tax plans in the past but that was essentially admitting they were not progressive by income, hence the rebrand to “fair”. Pointing out that one (desired) purpose is to redistribute tax burden downward is not an _ad hominem_. It’s an intended feature, after all. ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [January 25, 2023, 2:41pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/83 "2023-01-25T14:41:23Z")
> [@Mighty\_Mouse](#): > > It’s almost exactly similar in the sense that it will massively increase taxes on the poor and middle class and massively reduce taxes on the very rich. Not if implemented properly. For example everyone under $50,000 pays 0% then the rate increases at a constant rate until the people making $300,000 are paying 30%. Basically a progressive tax until you get to the rick folk. ETA: Yes I get that a progressive tax is not a flat tax but I think that idea maintains the spirit of a flat tax. ---
**Author:** ![tofor](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tofor/32/13727_2.png) [@tofor](https://boards.straightdope.com/u/tofor)\ **Post date:** [January 25, 2023, 2:59pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/84 "2023-01-25T14:59:07Z")
> [@thorny\_locust](#): > > > [@tofor](#): > > > > > [@thorny\_locust](#): > > > > > > So if you can’t afford to buy a house you’ll have to pay tax on your housing, but if you can afford to buy one you won’t? > > > > Hmm, good point. That seems like a highly unlikely policy proposal, but I don’t know exactly how housing would be managed. > > Looks pretty likely to me, if this is intended to accomplish what I suspect it would be intended to accomplish, if it had any chance of passing. Getting back to the renting question which we left unresolved, according to the Wikipedia article: > Personal services such as [health care](https://en.wikipedia.org/wiki/Health_care), legal services, [financial services](https://en.wikipedia.org/wiki/Financial_services), and auto repairs would be subject to the FairTax, as would renting apartments and other [real property](https://en.wikipedia.org/wiki/Real_property). > [FairTax - Wikipedia](https://en.wikipedia.org/wiki/FairTax) So renting something is not a get-out-of-tax-free solution. > [@Max\_S](#): > > > [@tofor](#): > > > > Individuals would no longer have to file taxes at all. > > Unless you want your rebate, in which case yes, you need to file _every month_. And _everybody_ needs to keep all receipts of all spending for 6-7 years in case of an audit. > > ~Max Where are you getting this idea? I don’t see that in the bill. There is no ‘rebate’, just a flat amount of money sent to each person every month regardless of spending. ---
**Author:** ![Bootb](https://avatars.discourse-cdn.com/v4/letter/b/e19b73/32.png) [@Bootb](https://boards.straightdope.com/u/Bootb)\ **Post date:** [January 25, 2023, 3:22pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/85 "2023-01-25T15:22:01Z")
> [@fedman1](#): > > so the GOP is attempting to pass the Fair Tax Act to replace corporate/personal income tax with 23% sales tax, and maybe others. Since the 16th amendment cites taxing income, would this be considered unconstitutional? > [@tofor](#): > > Unless something has changed in the last few decades, the Fair Tax would replace _all_ federal taxes. Including, if I recall, Social Security taxes. It would require a constitutional amendment, and the amendment would include a prohibition on any taxes not a flat-rate sales tax. Excise taxes have **always** been allowed under the Constitution. Furthermore, contrary to popular myth, the 16th Amendment did NOT provide any new taxing power to Congress. BRUSHABER v. UNION PACIFIC R. CO. , 240 U.S. 1 (1916), called that view “erroneous.” [https://caselaw.findlaw.com/us-supreme-court/240/1.html](https://caselaw.findlaw.com/us-supreme-court/240/1.html) ---
**Author:** ![thorny\_locust](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/thorny_locust/32/431_2.png) [@thorny\_locust](https://boards.straightdope.com/u/thorny_locust)\ **Post date:** [January 25, 2023, 3:25pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/86 "2023-01-25T15:25:43Z")
> [@tofor](#): > > renting something is not a get-out-of-tax-free solution. That doesn’t contradict the earlier problem, which was precisely that renting is taxable. My point is that if buying real estate isn’t taxable while renting it is, that’s massively regressive. People with enough money can choose whether to rent or to buy. People with little money very often have to rent, because they can’t come up with the necessary down payment and fees to buy instead. According to your description _buying_ real estate is a get-out-of-tax-free solution. That’s where the problem is. ---
**Author:** ![leahcim](https://avatars.discourse-cdn.com/v4/letter/l/b4bc9f/32.png) [@leahcim](https://boards.straightdope.com/u/leahcim)\ **Post date:** [January 25, 2023, 3:42pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/87 "2023-01-25T15:42:11Z")
> [@thorny\_locust](#): > > Is there anywhere in the US where those taxes run anywhere near as high as 23%, though? > > New York’s generally considered high tax, and sales taxes where I am run 8%, half of which is the county. I think there’s another percent or two on a hotel room. It’s been a while since I’ve read one of these “fair tax” proposals, but are they still doing that thing where the proposed sales tax rate as quoted is a percentage of the _final_ cost, rather than the initial price (like sales taxes are usually quoted) so the number looks smaller? E.g. The tax on $100 would raise the price to $130, but is still called a 23% tax because (130-100)/130 ~= 0.23, whereas the usual “sales tax” calculation would call it a 30% tax because (130-100)/100 = 0.3. So if you’re comparing to NY’s tax rate, you should be comparing 8% against 30%, not 8% against 23%. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [January 25, 2023, 3:47pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/88 "2023-01-25T15:47:24Z")
If you’re going to try that kind of dishonesty, you must at least call it a “business revenue tax” of 23%. ---
**Author:** ![tofor](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tofor/32/13727_2.png) [@tofor](https://boards.straightdope.com/u/tofor)\ **Post date:** [January 25, 2023, 3:50pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/89 "2023-01-25T15:50:51Z")
It’s only retail sales of new products, so that would be a very inaccurate name. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [January 25, 2023, 3:52pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/90 "2023-01-25T15:52:39Z")
Well, 23% is a very inaccurate percentage. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [January 25, 2023, 3:54pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/91 "2023-01-25T15:54:15Z")
> [@thorny\_locust](#): > > My point is that if buying real estate isn’t taxable while renting it is, that’s massively regressive. Wait what? If this is indeed part of this proposal, this makes it (IMHO) insane. Exactly what you said - this tax would impact poor folks much more. As an example, a friend of mine is divorced, and due to health circumstances, does not own and never will be able to afford to own a house (over 1,000,000 average in my area.) She is very low income, and currently spends a huge proportion of that income on rents (also high in our area). I own a house, and have a good job, and am able to put a chuck of money into savings each month. Under this plan, my friend who is close to the poverty line would be paying more tax than me. And that would be insane. ---
**Author:** ![tofor](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tofor/32/13727_2.png) [@tofor](https://boards.straightdope.com/u/tofor)\ **Post date:** [January 25, 2023, 4:09pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/92 "2023-01-25T16:09:09Z")
As far as I can tell, rents are taxed, land is not, houses are not, except new construction houses are. ---
**Author:** ![thorny\_locust](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/thorny_locust/32/431_2.png) [@thorny\_locust](https://boards.straightdope.com/u/thorny_locust)\ **Post date:** [January 25, 2023, 4:24pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/93 "2023-01-25T16:24:17Z")
> [@leahcim](#): > > So if you’re comparing to NY’s tax rate, you should be comparing 8% against 30%, not 8% against 23%. From the point of view of the tourist, you’d be comparing 8% against 31% or 40%; because the state and local taxes aren’t going away. ---
**Author:** ![eschereal](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/eschereal/32/18939_2.png) [@eschereal](https://boards.straightdope.com/u/eschereal)\ **Post date:** [January 25, 2023, 4:31pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/94 "2023-01-25T16:31:19Z")
> [@tofor](#): > > > [@eschereal](#): > > > > If a person has a run of bad luck, in our society it is not that difficult to just end up homeless. In that case, it is difficult to see how the stipend would not just dry right up, making the ascent out of misery all that much more of a slog. > > I’m not sure what you mean by this. Certainly such things become more difficult without a home, but there are various ways for the homeless to get mail and bank accounts. I imagine hundreds of dollars a month would be enough motivation to make that happen. Reading the link I posted above, that draft would require a family to register with the taxing authority in order to receive their credit. One of the requirements is that they provide their address. Homeless people do not have an address. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [January 25, 2023, 6:37pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/95 "2023-01-25T18:37:48Z")
> **[McCarthy shoots down national sales tax bill as GOP members balk](https://www.axios.com/2023/01/25/mccarthy-national-sales-tax-bill-shot-down-republicans)** > > Several vulnerable New York Republicans said they also oppose the legislation. It will still have hearings in committee. So it will serve its purpose as wildly misleading propaganda, allowing Reps to deliver enormous false statements to the cameras to make them look good, without any need to actually explore real-world consequences. Except a thousand more of these. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [January 25, 2023, 7:52pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/96 "2023-01-25T19:52:39Z")
> [@thorny\_locust](#): > > Is there anywhere in the US where those taxes run anywhere near as high as 23%, though? And, it isn’t gonna be 23%, more like 30%. > [@Exapno\_Mapcase](#): > > Nevertheless, the right has kept plugging away, trying to get around the stupendous obstacle that Americans hate the idea. [How does one do that?](https://www.heritage.org/taxes/commentary/remember-the-flat-tax) > > > At the Heritage Foundation, we’ve done extensive polling on how Americans feel about tax reform. “Flat tax” as a concept does not poll very well. What polls off the charts and what Americans want overwhelmingly from tax policy is “fairness.” Yes, which is why every harebrained loony tax scheme that benefits the wealthy is called (like this one) “Fair Tax act” when is it the opposite of being fair. > [@Exapno\_Mapcase](#): > > That was back in 2015. I will grant that the author also knew that "Democrats will scream ‘tax cuts for millionaires and billionaires.’” They indeed will and are, obviously, because such a plan is totally about tax cuts for millionaires and billionaires. To the right, that’s a feature rather than a bug. > > Flat taxes have been thoroughly debunked, about as thoroughly as a flat earth. … Exactly, good points. > [@Euphonious\_Polemic](#): > > Why am I quite confident that exceptions for megayachts, supercars, rolexes, diamond bracelets and gold plated golf clubs will be somehow slipped into the legislation at the last minute? They already are, those are “investments”. 🙄 ---
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [January 25, 2023, 7:53pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/97 "2023-01-25T19:53:21Z")
> [@Bootb](#): > > Furthermore, contrary to popular myth, the 16th Amendment did NOT provide any new taxing power to Congress. Contrary to your assertion, the 16th Amendment does empower Congress to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. Furthermore, Congress did not have this power prior to the 16th Amendment. Now, it occurs to me that the Fair Tax Act as proposed may violate Art. I, sec. 9: > No Tax or Duty shall be laid on Articles exported from any State. ~Max ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [January 25, 2023, 8:06pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/98 "2023-01-25T20:06:09Z")
> [@Max\_S](#): > > may violate Art. I, sec. 9: “Export” means export to a foreign country. [https://constitution.congress.gov/browse/essay/artI-S9-C5-1/ALDE\_00013596/#:~:text=United%20States%2C%20190%20U.S.%20143,and%20Territorial%20Deannexation%2C%2072%20U](https://constitution.congress.gov/browse/essay/artI-S9-C5-1/ALDE_00013596/#:~:text=United%20States%2C%20190%20U.S.%20143,and%20Territorial%20Deannexation%2C%2072%20U). ---
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [January 25, 2023, 8:17pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/99 "2023-01-25T20:17:25Z")
Suppose Alice is a U.S. citizen who grows and sells oranges in Florida. Bob is a Bahamian citizen who wants to take some Florida oranges home for personal consumption. Alice wants to sell Bob USD$20 worth of oranges. How much tax must she pay? ETA: For convenience, an excerpt from Fair Tax Act covering the exception for exports, > SEC. 102. […] No tax shall be imposed under section 101 on any taxable property or service purchased for a business purpose in a trade or business. […] For purposes of this section, the term ‘purchased for a business purpose in a trade or business’ means purchased by a person engaged in a trade or business and used in that trade or business— (1) for resale, (2) to produce, provide, render, or sell taxable property or services, or (3) in furtherance of other bona fide business purposes. Bob’s purchase is not for resale, it is not to produce/provide/render/sell the oranges, and it is not for any other bona fide business purpose. It is for his personal consumption. ~Max ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [January 25, 2023, 8:29pm UTC](https://boards.straightdope.com/t/fair-tax-act/978711/100 "2023-01-25T20:29:15Z")
If it’s a consumption tax, it’s technically the buyer who has the liability, but the vendor is obliged to collect it. The way this situation is usually handled is that Alice collects the usual amount of tax, and Bob keeps the receipt and can apply for a refund if he can demonstrate that he is taking the oranges home. [Previous page](https://boards.straightdope.com/t/fair-tax-act/978711.md?page=4) [Next page](https://boards.straightdope.com/t/fair-tax-act/978711.md?page=6)