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Joshua Pritikin · Joined: 10 May 2008 07:13 pm Posts: 3

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| Consider this: You buy a 300,000 home the year before the fair tax is enacted. Now, according to your side's arguement, the price of that home drops by 25% to 225,000. A person buying a new home comparable to yours will pay 292,500 but 67,500 will be tax. If you had to sell for some reason, even if you could get the 300,000 you paid, the government would realize 90,000 of your sale and you could not even recoop what you owe.

Before you go criticizing the FairTax, you should take care to understand how it works. The tax is only assessed on sales of new products. Sales of used products are not taxed.

In your example above, you did not specify whether the home purchases are new homes or a used homes. Most homes on the market are not newly constructed. Hence, after the FairTax is enacted, most house purchases will be made with pretax dollars. That's a much larger tax break than the mortgage interest deduction. With the mortgage deduction, you don't pay tax on home loan interest, but you still pay tax on the principle. Under the FairTax, you don't pay tax on the principle either (for used homes).

Bill Pelland · Joined: 25 Feb 2008 07:34 am Posts: 386

I think you all need to go and read the whole bill; not the spin put out by the fair tax web sites, but the bill 1025 in the house. Some of what you will learn:

1. Homeowners will be responsible for tax on money paid to domestic help such as housekeepers and gardeners.

2. Large sellers, who collect more than 100,000 in taxes in a year (435,000 is sales) will be required to pay their taxes on a weekly basis.

3. The states that have sales tax now will be responsible for collecting the tax.

4. The states collecting the tax will be responsible for audits and will have the authority to garnish wages, place liens on property, and collect a 1% per month penalty on uncollected taxes..

5. To get the prebate, every household will have to file a form with the federal government yearly and provide social security numbers for all living in the house over 2 years old.

6. The federal government will send out checks on a monthly basis, provided you have submitted the proper documention.

7. The state collection agency will remit all dollars due to the federal government on a weekly basis.

ARE ANY OF YOU GETTING SCARED YET?

By the way, the state of Texas will receive 1/4 of 1% of the tax collected for the feds for this wonderful thing they are [i]willing[/i] to do.

I could go on but great grandson is here. Happy Reading!

Bill Pelland
Murchison, Tx

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