Dollar Value

The FairTax is a proposed comprehensive reformation of the American tax system. The economist-developed, nonpartisan legislation would abolish all taxes on the federal level – income taxes, gift taxes, estate taxes, capital gains taxes and more – and replace them all with a federal retail sales tax.

It also issues “prebates” to Americans to ensure that no one pays federal taxes on spending up to the poverty level (e.g. no taxes on food or basic necessities), repeals the 16th Amendment that gives congress the power to lay and collect taxes, and abolished the IRS.

The FairTax would not tax people based on earnings, but only on what they choose to spend on new good or services. As it removes federal withholding taxes, it enables people to keep their whole paychecks. The prices of items would be expected to drop as something called the “embedded tax” disappears. Embedded taxes are those taxes paid along every step of production for any given product that raises the final price.

Proponents of the FairTax claim that it is efficient, fair, and nondiscriminatory, but as with any proposed legislation (especially one so comprehensive), there are criticisms. Critics say that to remain revenue neutral, the sales tax would have to be fairly high. The FairTax bill proposes a 23% sales tax, but opponents claim this number is actually closer to 30 or 35%, which could drive up prices. Others claim that the FairTax unfairly shifts the tax burden off the higher income earners.

Proponents claim that the FairTax will increase government revenue, save the government money, and improve the economy which would generate jobs. It would also tax largely untaxed groups of people like drug dealers and illegal immigrants.

The current tax system has problems that need some sort of fixing if this country and its people are to rebound from current economic woes. The FairTax is a proposed fix.

Taxpayers can receive a tax refund when their tax liability is less than the amount of taxes paid or, if the total amount of withholding taxes, plus refundable tax credits is more than what is owed. There are a number of tax deductions or credits that people can claim that can increase their tax refund.

• Work Related Deductions. Work related travel can be claimed as a deduction. This includes the travel itself, lodging, transportation after arriving at the destination, tolls, and parking fees. Work-related education can also be deducted. Keep careful records of travel or work related expenses to be able to claim these deductions.
• School Related Deductions. Student loan interest and tuition payments can be deducted on tax returns. Obtain information from the college regarding tuition payments.
• Charitable Contribution Deductions. Donations to charitable organizations and even the expenses related to the donation like fuel costs can be deducted. Receipts can be obtained from charitable organizations regarding the donation. Be sure to keep these receipts and records of what was donated and what it was worth to help prove the deduction.
• Medical Deductions. Certain medical expenses can be deducted from a tax return. Things that insurance companies do not cover can be deducted. Medical related expenses like fuel costs to get to appointments and costs for special medical equipment can also be deducted. Again, careful records should be kept regarding these expenses if they are to be claimed as deductions on a return.
• Filing Electronically. While not likely to increase a refund, filing electronically can get a refund processed quicker and made available sooner.

There are surely other deductions that people can make that can increase their refund. Many deductions are often overlooked because people don’t know what sort of things can be claimed. If people educate themselves on their taxes and their tax rights, then a larger refund is possible.

Here is a list of simple ways to save substantial dollars and cents.

1. Go generic. Off-brand products, from food to medicine, are less expensive.
2. Cook / eat at home and make your own lunches for work or school. This will significantly cut how much is spent eating out. Make your own coffee too. Starbucks, Tim Hortons and the like are good, but quite pricey over time.
3. Make a grocery list and stick to it. Plan meals in advance and avoid impulse dinner buying. Sticking to a list can keep your grocery bill under control. Use coupons and buy sales.
4. Make use of your local library. Instead of buying books, movies, or music, see what your local library system has.
5. Buy used. When you do buy books, movies, or music, try used. Check eBay, Amazon, Half Price Books and other places. You can get a like new item for much less than what it would cost new. When car shopping, go for a nice used car instead of a new one. Same goes for clothing. Some name brand gems can sometimes be found in places like Goodwill for low prices.
6. Try paying with cash instead of plastic. It’s easy to spend too much using a credit card.
7. Ride your bike to work or school. Bikes don’t use gas. Public transit is cheaper too than having to fill your own tank over and over.
8. Go to the matinee. Evening showings cost more.
9. Make a budget and stick to it. You can track where your money is going.
10. Pay your bills on time and avoid late fees.
11. Finally, just be aware of how much you are spending for whatever you’re buying.

Whether the times are good or lean, we can all afford to save some money. That way, with saved money set aside, big purchases or expenditures like a vacation, car, big screen or whatever will be easier to make.

Gas prices are going up and show no signs of dropping significantly any time soon. In an economic recession when people are already feeling a pinch in their finances, filling up the tank can sometimes tighten that pinch. There are ways to alleviate, even if only slightly, the gasoline pinch.

• Drive calmly. Rapid acceleration and aggressive driving uses more fuel than would normally be used. Calm, controlled driving can increase mileage.
• Avoid excessive braking. Excessive braking means the engine has to accelerate the vehicle more often to get it going again and burns through more fuel.
• Slow down. Driving fast burns more fuel that would be used to propel a vehicle at slower speeds. Also, speeding tickets aren’t likely to alleviate costs associated with driving.
• Use overdrive. Using overdrive reduces the strain on the engine at higher speeds and saves fuel.
• Lighten up. Extra weight can cause the engine to work harder to accelerate and uses more fuel. An extra 100lbs of junk in the trunk can decrease fuel efficiency by around 2%. Avoid storing too many unneeded things in the vehicle.
• Avoid excessive idling. When idling, a vehicle just sits there burning gas. If in stopped traffic, turn off the car instead of idling. If warming the vehicle in cold weather, don’t let it idle for too long.
• Combine trips. Making one trip instead of several small trips can save gas.
• Maintenance. Proper maintenance is very importing to improving or maintaining fuel efficiency. Using the recommended grade of motor oil, keeping the engine tuned, replacing air filters, maintaining proper tire inflation and pressure, using oil additives are all steps that can have a positive effect on efficiency.

Keep these points in mind to either increase a vehicle’s fuel efficiency or just use less gas. It’s a good way to save money.