FairTax FACT: Eliminates Social Security withholding.
FairTaxFraud: This sounds like a good idea on the surface – make everyone pay for social security without a maximum limit. If the estate, gift, and capital gains taxes were not repealed then this might work. However, by eliminating taxes on estates, gifts, and capital gains, there will be a $700 billion shortfall. This must be made up somewhere. There is also a $400 billion deficit not covered by the FairTax with interest to pay. As written, the FairTax will simply shift the burden to the middle class and cut benefits or raise retirement ages. The alternative No-Tax Plan would pay off the national debt, make education and health care tax-free, and fully fund the social security system.
FAIRTAXER: I’m not sure how FairTaxFraud came to their conclusions, because they don’t show any of their work, but according to “Taxing Sales Under the FairTax: What Rate Works?” there is no shortfall or deficit. In fact, the FairTax completely closes the $430 BILLION annual tax gap, collects taxes from as little as 98% of people in the USA, and attracts international businesses that will bring 10,000,000 jobs to the USA. With 10M new jobs there will be no shortfalls or deficits, as the American economy will explode and allow EVERY US citizen to buy, save, or invest the money they have earned; without having a Government that over-steps boundaries or steals from its citizens.
Back on the subject of Social Security withholding. The FairTax eliminates the highly regressive payroll taxes being taken from both you and your employer; without eliminating the Social Security and Medicare programs. What the FairTax has done is included the Social Security Rate and the Medicare Rate in the calculation of the FairTax Rate. So now, instead of a small group of citizens (Income Earners below $110,000) paying into the SS/MC programs for EVERYONE, every person in the US who purchases new goods or services will be paying into the programs. In case you haven’t figured it out, with more people paying into the SS/MC systems, less money will be required to ensure they are funded. As less money is required to fund them, the rates will decrease. As the rates decrease, so will the FairTax rate. Understand how that works now?
“The alternative No-Tax Plan would pay off the national debt, make education and health care tax-free, and fully fund the social security system. ~FairTaxFraud”
Let’s give them the benefit of the doubt and agree that their plan will do what they say it will. Knowing what we know about the inefficiencies of ANY income tax system, ask yourself this question: How efficient would this no-tax plan be? Not nearly as efficient as the FairTax would be.