How could it be possible that the only opinion I have read is a negative one when this thread itself was started by YOUR positive opinion? You have posted nothing but positive opinions from the start!
Ok, split a hair on this.
I heard about the fair tax. I decided to read more about it. I read both positive and negative opinions of it (the VERY FIRST opinions I read were positive, on this very forum!). I came to the conclusion that the negative points raised outweighed the positive ones.
I think I found an answer to your concern with just creating a business & walking in & not paying the taxes. Let me know if this answer your concerns. A lot of info here on answering the evasion issues.
If it does, then what do you have to say about the Fair Tax?
http://www.fairtaxblog.com/20050824/evasion-potential-of-the-fairtax/Allow me to act like Boortz for a moment. Boortz has the annoying habit, anytime someone brings up some false statement about the plan, wildly exclaiming “Sir, you don’t understand the plan.†I hate it, because it sounds so much like what a snake oil salesman would say. But I’ve got to do it:
Dale, you don’t understand the plan. :-)
First, let me explain the two main evasion methods that I can see. The first is sellers of goods and services just simply not reporting their sales, and thus not paying their taxes. The second is buyers who have “business exemptions†going into a store, flashing their “exemption certificateâ€, and thus not being charged the tax.
What makes either of these possible is the idea that the taxes are tracked only at the final retail level of sale. I.e. that business-to-business (B2B) transactions are never even reported to the tax agency. Thus, there is no way to detect at the final point whether this has been paid.
And that is where it is false. I refer at several points in this section to the FairTax Act of 2003. I recommend occasionally referencing the sections that I mention if you’d like to fact-check me.
First, the possibility of just flashing your exemption card and not paying tax. In the FairTax bill (sec 509), for a business to sell goods without collecting the tax, they must have the companies exemption certificate on file, and must keep complete records of all transactions for a period of 6 years. Purchasers must keep a record of all taxable goods bought for a period of 7 years. Thus, for a business to sell you goods without charging you tax, they need to have complete information on your business on file, and they need to report (sec 501.a.2) every month on those sales. This will limit most companies willing to sell you anything without charging you the tax mainly to B2B transactions.
This means that for most of what we consider “retail†transactions, the tax will always be charged. You can’t walk into Walmart, flash a card, and not pay the tax. When you do pay, then, the cashier will give you a reciept (sec 510) that contains all the necessary information for you to claim a refund of that tax when you file your monthly reports. This means that if you sell goods or services, and you don’t report that to the government, I wouldn’t suggest trying to get the refund for the goods you purchased. I think that will toss up a major red flag in their system.
Under the FairTax, any seller of taxable goods and services is required to report all sales at every step to the tax administration agency. This means that if I am a primarily B2B seller, I need to report the sale and that the tax was not charged to my customer. It works exactly like a VAT in the reporting stage. For example, I work for a company which makes computer equipment, and 99% of our revenue is B2B transactions. Thus, for any of our major customers, we’ll have their exemption certificates on file. For any new customers, just as we may have different credit terms, we will be forced to charge the tax and provide a proper receipt. Even though we’re almost exclusively B2B (and it wouldn’t matter if we were exclusively B2B), it is required that we take note of whether our customers are or are not tax exempt. And frankly, we’re not going to put our butts on the line to save them from their taxes.
But please, keep jumping through hoops to explain why your opinion is reasonable and valid while my opinion is ignorant and flawed. I find it interesting that you have no interest in "following the money" when it comes to promoting this tax change, yet you insist that the money must be followed for those who support the status quo.
I always follow the money. It is what majority of the time leads to opinions on thing.
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