The Grassroots Corner August 30, 2021

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  • Source: FAIRtax
  • 08/30/2021
HOSTILE ARGUMENT: With the FairTax tax I'll be paying tax on services which I never paid before

This Grassroots Corner continues a series on hostile questions and comments that people may raise about the FAIRtax. Many of these suggested responses will be good comebacks for you to have in your pocket when you need them. Some of these suggested responses can be too long to insert into an actual conversation.  You may want to boil them down to where they'll be more useful when you're talking face-to-face with someone attacking the FAIRtax.

This week, we take on the criticism that the FAIRtax will start taxing certain goods and services that have never been taxed before.

It’s true that the FAIRtax will be levied on many goods and services that currently escape taxation under many of today’s sales taxes.  Groceries and clothing sold at retail will become taxable.  Your accountant, your lawyer, your doctor, your barber, your financial advisor and every other service provider you do business with will have to start including the FAIRtax in the fees they charge.  Rent also becomes taxable under the FAIRtax.

It may seem strange to many Americans, but taxing these kinds of goods and services is not an entirely new idea.  In Germany and Austria, legal fees are subject to their Value Added Tax. Hotel rooms and bed and breakfasts also pay the VAT.  And here in the US, a variety of taxes are added to the cost of hotel rooms.

Regardless of what other countries do, the question still remains.  Why is charging sales tax on food, clothing, and services fair in the United States? Let’s start by examining how employment in the service sector of the U.S. economy has grown.

According to an article published by Pearson Education on July 25,2013, 1956 marked the first year where white-collar workers in technical, managerial, and clerical positions outnumbered blue-collar workers. Industrial America was giving way to a new society, where most of us worked with information rather than producing goods.

Since then, service jobs have made up a greater and greater percentage of total employment.  In the mid-1990’s, 76% of American jobs were in the service sector.  By 2010, it was up to 84%.  In other words, anyone who was planning to enter the workforce in 2010 had about an 84 percent chance that he or she would be working in a service organization. Without doubt, the percentage of workers in the service sector is even higher today.  There’s no doubt that we are living in a post-industrial economy.

Sales taxes originated in an industrial economy, where most people worked in jobs that led to production of concrete, tangible consumer goods. Today it’s different. It only makes sense that the sales tax base should adapt to today’s circumstances.

But doesn’t taxing food, clothing, and rent hurt those least able to afford the tax? Without adjustment, the answer to that question is “Yes.” To address that problem, the drafters of the FAIRtax built in the Family Consumption Allowance.  That’s the amount of every family’s spending that will not be subject to the FAIRtax.

Everyone still pays the FAIRtax at the cash register on every purchase, but the amount of FAIRtax collected on that level of spending is refunded to every legal household at the beginning of every month in a payment we call the “prebate”.  The net effect of the prebate is that no family takes a dime out of their own pocket to pay the FAIRtax until they have provided for their basic necessities—like food, clothing and rent.

Here’s another thought about fairness. Most people who are in this country illegally, who work for cash under the table, or who make their living by less than legal means are not paying the Federal income tax.  But these people still need to feed and clothe themselves and have a place to live.

By taxing food, clothing, rent and other necessities, the FAIRtax makes sure that people who are currently evading the income tax will become taxpayers and pay their fair share of the overall tax burden.  That’s only fair, isn’t it?

I would love to hear from you about how to squeeze this explanation into a soundbite.

 
Yours In the FAIRtax Movement!

Jim Bennett
AFFT Grassroots Coordinator & Secretary

 

🇺🇸   Call For Pictures & WriteUps - When others see your activity, they are inspired, the process snowballs and Representatives, Senators and, yes, even the President start to listen to you and me. Please send your material to me at Jim.Bennett@FAIRtax.org.

🇺🇸   The Official FAIRtax Store - Don’t forget to order your FAIRtax gear from the FAIRtax Store.

🇺🇸   We've Got You Covered, If You Let Us Know - If you are planning an event, we have event insurance coverage available for you. Email me the "who-what-where-when" and I will obtain for you a COI. Once the event is underway, it's too late.

🇺🇸 CPAC Finally, save the dates: February 24-27, 2022 (probably), for either Orlando, Florida, or Washington, D.C. (National Harbor, Maryland). Plan to be at the CPAC (“Conservative Political Action Conference) annual convention. The FAIRtax Guys were there this year and say next year we need to turn out in numbers. You don’t need to be a conservative to attend and help the FAIRtax.

 

 

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Americans for Fair Taxation® is a 501(c)(4) non-profit, non-partisan grassroots organization solely dedicated to replacing the current income tax system with a fair, simple and transparent national consumption tax – the FAIRtax® Plan. We rely entirely on contributions from concerned citizens like you who want a tax system that will generate jobs and stimulate the economy. Welcome to the FAIRtax team!

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