Peter, if you don’t mind, I would like to address comments from the 2nd two paragraphs of your original post.

“Is it possible retail sales could drop significantly with the imposition of a consumption tax? My neighbors have decided to take responsibility for their own destiny. They have a large garden, chickens, a cow, as well as a portable sawmill. They produce as much of their own food as possible, they have a wood burning furnace [using wood collected from their own property] so they don’t buy taxable heating fuel; and with their own saw mill they produce their own lumber for their building needs. Working towards self sufficiency, their retail purchases along with the associated consumption tax paid would drop significantly. What happens if a “significant” portion of Middle America does the same? Will the federal government start punishing people for becoming self sufficient?”

I’m sure many people have this preconceived notion that “oh, well, I’ll just become self-sufficient and not pay the tax”, but come on, we have to look at this realistically. Most people nowadays are WAY too busy to go chopping down trees to make firewood, or chasing chickens for dinner. That’s why we have these new fancy things called -SERVICES- where we pay people to do that for us.

Sure, that’s good for some people, but “a “significant” portion of Middle America”? Highly unlikely!

AFFT, has poured over $25,000,000 into researching the FairTax and its effects on America. I recommend taking the time to read some of that research. It is actually very informative. http://www.fairtax.org/research

“Will I be committing a federal crime if I have my neighbor process some of my trees into lumber, allowing me to build a barn, if in exchange I help them install a fence around their pasture?”

Absolutely NOT! In fact, isn’t THAT what America is about? The FREEDOM to choose to do that if you wish. Under our current tax system, however, you probably ARE in violation of some tax code. Have you looked it up? Try finding that in the (now) 83,000+ pages of IRC tax code.

Want to read the FairTax Bill? Here it is, in its entirety, on a 34 Page PDF: http://fairtaxer.files.wordpress.com/2011/08/hr25-112th-congress.pdf

“This is barter, and neither of us would pay a consumption tax on product or labor. In the USSR battering increased from around 5% to over 50% once a similar consumption tax was implemented.”

The “similar consumption tax” you speak of is the VAT. The Value Added Tax. The VAT is a tax on each level of production of every product produced. In essence, our current income tax code already has a VAT, because our current income tax code taxes the employers, employees, and products within each company within the US.

“Why do the fair tax proponents discount the real possibility of retail sales dropping significantly with the imposition of a new consumption tax?”

Because we strongly believe in the research that has been paid for by the Americans For Fair Taxation (AFFT). Over $25,000,000 and 16+ years has been put into the FairTax. Wouldn’t you trust that over the word of some third-rate politician who stands to lose money because of the FairTax? I certainly do.

Peter,

After your response to what John (NOT Joan) wrote, I’m left wondering if you’re interested in anything other than your own agenda.

I understand your position and commend you for standing your ground, but when this many people have clearly stated that you need to give the FairTax a chance. Wouldn’t it behoove you to open up a little more and give the FairTax a serious look?

Here are my answers to your concerns, I hope they are acceptable:

1. Do you think there won’t be any federal tax collection agency?

Not like the IRS there won’t be. As John mentioned, the “tax collection agency” will collect taxes ONLY from the 50 States. Section 401 of HR-25 Authorizes States to Collect the Tax. They remit those taxes to the United States Treasury and are reimbursed 0.25% of the tax remitted.

2. Who will send out the prebates?

That will be the Social Security Administration. This, I believe, is for a couple reasons. First, the FairTax ensures SS/MC are fully funded. Second, the SS# of every individual who qualifies for the Prebate will be verified. An unintended consequence of the FairTax is that SS Fraud will also be reduced.

3. Who will collect the money from the states or retailers?

As mentioned in #1, the United States Treasury will collect from the States. States will collect from Retailers (as they do now in 45/50 States).

4. Do you not think that the benefits will increase for the needy to cover the increased cost of living?

The FairTax helps “the needy” more than any other group. Here are just a few reasons how:
A. The FairTax untaxes ALL spending up to $2,500/mo. (depending on family size)
B. The FairTax puts federal income taxes back in their paycheck.
C. The FairTax puts SS/MC (FICA) taxes back in their paycheck.
D. The FairTax removes embedded taxes from all goods and services.
E. The FairTax untaxes ALL used goods, which the poor use more than anyone else.
F. The FairTax ends the practice of taking more from the poor as they work harder and earn more.
G. The FairTax will return many jobs the poor used to have, but which got shipped overseas.
H. The FairTax increases the number of new jobs, which allows the poor to work their way out of poverty.
I. The FairTax effectively ends the IRS, which have used their power to terrorize and intimidate the poor.
J The FairTax dismantles a tax code that is so complex and convoluted the poor, and no one else, can understand it, and replaces it with a very simple tax system.
K. The FairTax replaces a tax system that requires expert help, which the poor can’t afford, with one that doesn’t require any help to understand.

5. Do you not think bartering will increase?

It may. But if it does, is that not OUR choice? America is not run by politicians, it is run by the people, for the people. I understand your concerns, but let’s not forget who you are campaigning for.

My question to you is this: Has bartering increased in the 45/50 states which collect sales taxes now? If it has, then it is insignificant. Otherwise, the Liberal Media would be all over it.

What is more likely is that, in the beginning, people will hold on to their money. (The FairTax does promote savings and investment). But then after people start to realize that what we have is permanent (not like the temporary Bush tax cuts), they will then start to spend more of their money because they have more to spend. If we are one thing, it is that we are a Nation of Spenders. Furthermore, donating to charities is also estimated to increase under the FairTax. The more money people have, the more they want to contribute to the needy.

6. Do you not think people will devise innovative ways to become self sufficient to beat the tax?

Let’s hope so. This Nation was founded by innovative people who devised ways to build and create the America that we live in today.

That doesn’t mean that people will stop spending money on frivolous products that make their lives easier. Would I grow a tomato to top my salad? Absolutely! Would I build a bicycle to get to work? Not likely.

7. Half the population does not pay taxes now. Do you think they will simply pay the consumption tax without complaint, or do you think they will try to figure out how to get around the tax?

Half the population not paying taxes now is due solely to our Income Tax system. That 1/2 which you speak of includes Illegal Immigrants, Tourists, and the Underground/Shadow economy. The FairTax is the only tax system that can (and will) effectively and efficiently collect taxes from them just as it does the hard working, legal citizens of the USA.

Once again, I URGE you to give the FairTax a more serious look. I do thank you for asking questions. That does say a lot about your character.

Thank you

Robert Williams
@TXFairTaxer (Twitter)

How’s that for starters?

So if rich pay less and the poor pay nothing, and you’re taking in the same amount of money, the middle class end up with the bag.

Again, you’re ignoring the $19 Billion from Illegals, the $8 Billion from the Illegal Drug trade, the $7 Billion from prostitution/pornography, the $38 Billion from tourists, and the $345 Billion from the Underground/shadow economy. That is a total of $420 BILLION in Annual Tax Revenues that our Rich, Poor, and Middle-class will never have to pay out of pocket again. That means LOWER TAXES for ALL legal US citizens.

We both know illegals get fake ids and their bosses withold taxes to make sure they’re looking like they comply.

That is OUR point exactly. Under the FairTax it won’t matter because those illegals still have to purchase stuff to survive. THAT is where the FairTax hits them…not by “bosses withholding income taxes”.

Something tells me you’re not understanding the concept of having EVERYONE pay their fair share. Good Luck!

Next you say by taking money that rich people pay (34% of their income currently) and lowering it to 23% (if they spend every dime they earn. Then you say that poor won’t pay taxes because of the prebate. Finally you say the Fair Tax is revenue neutral.

So if rich pay less and the poor pay nothing, and you’re taking in the same amount of money, the middle class end up with the bag. Don’t fill me with that broader tax base crap. We both know illegals get fake ids and their bosses withold taxes to make sure they’re looking like they comply.

I’m not trying to insult anybody, I briefly supported the Fair Tax. I know you’re trying to better your country and make things easy for business to thrive and lift the tax burden off people. I’m just afraid to inform you that the Fair Tax will not do either of these.