Profane Kahuna

Interesting proposal. That would drastically reduce California’s tax revenue.

How would California make up for that....reduce spending, increase the state income tax, increase the sales tax?

Chris99

The FairTax, as a federal tax, is supposed to be revenue neutral (for the first year) compared to today’s system:

“What assumptions have been made about government spending?

The FairTax Plan is devised to be revenue neutral for the first year of operation. It raises the same amount of revenue as is raised by current law. After the first year, revenue is expected to rise because of the growth generated by this plan. At that time the American people, the Congress, and the president will have to decide whether to lower the tax rate or to spend the additional revenue.”

https://fairtax.org/faq?fbclid=IwAR0...NJ6ftgfBNwjyEs


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Profane Kahuna

That’s interesting but what does it have to do with FXLAX’s desire to abolish annual property taxes in California?

Chris99

Sorry, I should have included this as well (especially the last couple of sentences):
“How are state tax systems affected, and can states adequately collect a federal sales tax?

No state is required to repeal its income tax or piggyback its sales tax on the federal tax. All states have the opportunity to collect the FairTax; states will find it beneficial to conform their sales tax to the federal tax. Most states will probably choose to conform. It makes the administrative costs of businesses in that state much lower. The state is paid a one-quarter of one percent fee by the federal government to collect the tax. For states that already collect a sales tax, this fee proves generous. A state can choose not to collect the federal sales tax, and either outsource the collection to another state, or opt to have the federal government collect it directly. If a state chooses to conform to the federal tax base, they will raise the same amount of state sales tax with a lower tax rate — in some cases more than 50 percent lower — since the FairTax base is broader than their current tax base. States may also consider the reduction or elimination of property taxes by keeping their sales tax rate at or near where it is currently. Finally, conforming states that are part of the FairTax system will find collection of sales tax on Internet and mail-order retail sales greatly simplified.”

This info is all in the FAQ link I posted. I thought I saw FXLAX mention the FairTax and thought this might be what he/she was getting at about the CA property taxes...


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Profane Kahuna

So eliminate property tax but make sales tax 30% ?

BlueMoon

Happens in Michigan, I factored my property taxes on what I was paying for the house not what the previous owner was paying. Seems like his/her real estate agent should have told them this, or had done some research.

Galaxy5

We use the same goods and services. I probably pay 8 times what she pays. How is that fair?

Chris99

No. States can keep their current rates or lower their sales tax rates. Since there will be a much larger tax base (everyone who buys new goods or services—no more loopholes), they will probably be lowered. Or they can keep the same rates they have now and eliminate property taxes because of the extra income. It would be best if you read the entire FAQ because it explains everything much better than I can.

ShyGuy

How about cutting back on spending on failed liberal policies? Do you want to know how much LA county alone wasted on battling the homeless “problem” in 2019? With literally nothing to show for it.

Excargodog

I wouldn’t call endemic typhus nothing...


https://www.forbes.com/sites/chuckde.../#16986a19610d