What About Me? A FairTax Question.

The Fair Tax Blog ^ | March 23, 2006 | Bill Rollyson

[84rules]

When discussing the FairTax with most Americans, this is the underlying question many of them have. In most cases, the answer is that the FairTax is better for them than the current system.

But another question should be asked first. “What about me” in comparison to what? Usually the question is asked in relation to their current circumstances. Unfortunately, these current circumstances are based on twin fantasies of continued economic prosperity and freedom under the current system. As Bill Gross, well known bond fund manager of the PIMCO funds observed, “250 million Americans sitting around thinking up ways for the rest of the world to support us is not my idea of a real world outcome.” Or as Kent Conrad, a Democratic senator from North Dakota, points out, “We’re not preparing for what we all know is to come,” We’re all sleepwalking through this period.”

“I just came from a panel with Alice Rivlin of Brookings and Bob Bixby from the Concord Coalition and we couldn’t stop agreeing on the long term budget danger”, stated Brian Riedl, chief budget analyst at the conservative Heritage Foundation in February 2006 (as reported in the Boston Globe).

And so it is. Whether from the left or the right, there is broad agreement we are on a path that is unsustainable. As David Walker at GAO stated in November 2005, “”We face a demographic tsunami” that “will never recede.” And more recently, “Our current course doesn’t just threaten our future economy and quality of life, but also our long-term national security.”

So first, let’s understand, the FairTax should be compared to the reality of the current path we are on, not the fantasy that lays on the surface. Think you have some special break under the current tax system?

[84rules]

An excellent article about the FairTax. The five qualities covered are: Change in direction, Control, Visibility, Equality and Accountability.

Change in direction comes the fact that American corporations will become muchmore competitive, control shifts from the government to the taxpayer, taxes become more visible since they are paid right at the cash register, everyone pays the same rate regardless of class standing and the cost of government can no longer be hidden from the taxpayer.

[manwiththehands]

I for one am tired of being punished for being single, and marrieds and parents having more and more kids being rewarded with the current tax code. Being married and having kids is a reward in and of itself. The government has no business subsidizing it.

[Man50D]

Fair Tax ping!

[ancient_geezer]

A Taxreform bump for you all.

If anyone would like to be added to this ping list let me know.

John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.

H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.

Refer for additional information:

• search: "national sales tax" OR "national retail sales tax" OR "fairtax"

[socialismisinsidious]

I'm tired of the AMT...I am married with 7 kids and there are no 'rewards' for me tax wise b/c of the AMT.

You are right of course in that our tax code should not be a vehicle for social engineering, but that is exactly what it has become.

[Bigun]

Mr. Rollyson is absolutely on target with this piece! I wish everyone in the country could have the opportunity of reading it!

[EternalVigilance]

You are right of course in that our tax code should not be a vehicle for social engineering, but that is exactly what it has become.

That is what it was always intended to be, actually.

Roosevelt's New Dealers, the architects of withholding, made it clear that it was all about social engineering, not just revenue collection. They were very open about it.

[EternalVigilance]

Bill Rollyson BUMP!

[groanup]

Good article.

fair tax bump

[Eagle of Liberty]

OUR TAX CODE SUCKS! WE NEED IMMEDIATE REFORM!

Mail your US Representative and Sentors to get them on board.

[ovrtaxt]

One subject that nobody ever discusses is the effect of a NRST on other nations, particularly those that aren't free. The FairTax would transform the US into the biggest tax haven on the planet for business. As a FairTax America begins to siphon off jobs, businesses, talent and brains from nations with a socialist (or worse) economy, they will have to make changes just to stay alive. Either economic totalitarianism or freedom will be the result.

Control freak nations like Islamic states and communist holdouts will have to grant freedom to their citizens, or become our economic slaves.

This free economy, coupled with a transparent from of taxation, will rock the world.

[groanup]

This free economy, coupled with a transparent from of taxation, will rock the world.

Worth repeating.

[Zon]

And so it is. Whether from the left or the right, there is broad agreement we are on a path that is unsustainable. As David Walker at GAO stated in November 2005, “”We face a demographic tsunami” that “will never recede.” And more recently, “Our current course doesn’t just threaten our future economy and quality of life, but also our long-term national security.”

The first country to implement a consumption tax as the sole means of funding the government. Considering international tax competition it's not a mater of if, but when.

The first industrialized country that converts to a consumption tax will have such an advantage over other countries in gaining new jobs, business and economic boom that other countries will have to follow suit or else suffer job losses and economic slow down.

It will be an upward spiral of prosperity and freedom leaving in it's wake a downward spiral of poverty and enslavement.  United States can lead or follow. It makes the most sense to lead. As it is already at the front lines in the war against terror.

The great escape. The real effective and winnable global war on poverty

[concretebob]

PING to the FairTax Thread, Brendan.

[ancient_geezer]

It is of interest that Ludwig von Mises strongly favored consumption taxes over income taxes with good reason. In fact he very explicitly concentrated on retail sales taxes over all other forms of consumption taxes perceiving the detrimental effects of even tariffs on trade and encouraging competition and entrepeneurship in advising Austria the best economic course to take to recover from the devestations of WWII and socialist economies.

 

Ludwig von Mises as Policy Analyst: Monetary Reform, Fiscal Policy, and Foreign Exchange Controls by Richard M. Ebeling
Heritage Lecture #754

http://www.heritage.org/Research/PoliticalPhilosophy/hl754.cfm#pgfId-1023417

"Austria, Mises said, would be a poor country. The destruction of war, the consumption and misuse of capital, the destruction of a large portion of the Austrian entrepreneurial class due to the expelling or murder of so many Jewish businessmen and financiers, and the debilitation of the labor force from death and permanent injury in battle would require Austria to turn its back on its socialist, interventionist, and welfare-statist past. Only economic freedom and hard work could restore Austria from a condition that we might nowadays loosely refer to as "third world" status.

Fiscal policy, therefore, would have to be designed to do everything possible to unleash private sector incentives and opportunities for investment, capital formation, and entrepreneurship. Virtually all taxes, Mises suggested, should be skewed toward consumption and away from production. What type of broadly based consumption taxes? He proposed:

• (1) excise taxes on alcoholic beverages, tobacco, and related tobacco products;
• (2) a sales tax exclusively on the sale of goods and services to the final consumer; there should be no explicit or hidden value added taxes;
• (3) a progressive consumption tax based on housing expenditures, but with an exemption for housing expenditures for those in the lower income brackets;
• (4) a tax on luxury automobiles for private or personal use;
• (5) a tax on lottery winnings;
• (6) a stamp tax on playing cards;
• (7) administrative fees for certain government services, such as issuing patent rights, brand name registrations, determination of weights and measures, and "official stamps" to cover the cost of providing various types of documentation;
• (8) a wage tax paid by employers that was not deducted from the employee's salary to fund existing social insurance programs; and
• (9) a moderate net profits tax on shareholders and limited liability partnerships when annual disbursements exceeded 6 percent of the enterprise's capital assets; retained earnings by the enterprise would be exempt from taxes so as not to discourage capital formation.

Except for the net profits tax and the wage tax for social insurance costs, all income and business earnings would be completely tax-exempt. And a perusal of Mises' proposed list of taxes clearly shows that he thought that, besides the general sales tax, the fiscal burden should primarily be in the form of what nowadays would be classified as "sin taxes" and a narrow selection of "luxury" expenditures. Mises' long recognized advocacy of "laissez-faire" did not mean a hands-off indifference to the path taken by the market economy. What would be produced, where and how goods would be produced, and for which segments of the consuming public would be determined by the pattern of market demand and the profit-driven entrepreneurs. As Mises expressed it in the early 1940s, "If there is any hope for an new [economic] upswing [at the end of the war] it rests with the initiative of individuals. The entrepreneurs will have to rebuild what the governments and politicians have destroyed."

***

It should be mentioned that Mises' apparent concession to the welfare state in his listing among his fiscal suggestions of an employer's tax for social insurance expenditures did not mean his belief in their desirability or necessity. This was clearly an admission that, given the political currents, not everything could be reformed at once. For example, in 1942 Mises was invited to lecture in Mexico for six weeks during which he had the opportunity to studying the economic conditions in the country. The following year, in 1943, he prepared a lengthy monograph for an association of Mexican businessmen on "Mexico's Economic Problems." His recommendation was to not establish social insurance programs in the first place. If part of the cost of such social insurance schemes falls on the shoulders of the employers, it would only succeed in raising the cost of employing workers, with the negative effect of pricing some members of the work force out of the job market. At the same time, such government-mandated insurance policies restricted the freedom of the employee to weigh the opportunity costs of allocating his income in various ways more reflective of his own preferences and that of his family.

[Zon]

If I'm not mistaken, Mises identified economic freedom a necessity of gaining lasting freedom and that without economic freedom there could be no real freedom.

This was clearly an admission that, given the political currents, not everything could be reformed at once.

A tactic of many antagonists is to "refute" the advocates' sound arguments because they don't achieve 100% purity with the objective.

For example, the argument that the FairTax is a unfair because every person should pay the same amount of tax. While I agree that every person should pay the same amount of tax, the end goal is to replace all taxes with user fees. It's just not possible to accomplish that in one fell swoop. Ditto for the prebate -- at the appropriate opportunity that will be phased out.

[freedumb2003]

.I am married with 7 kids and there are no 'rewards' for me tax wise b/c of the AMT.

The purpose of tax policy is to reward people for fecundity?

[socialismisinsidious]

Do you always read half a post and then knee jerk?

read the rest: You are right of course in that our tax code should not be a vehicle for social engineering

see, reading the entire post is not difficult and it probably took you all of half a minute.

my point was: not everyone with kids gets a 'reward' via the tax code, and that the AMT and the income tax both stink precisely b/c of what your are complaining about.

[freedumb2003]

I stand corrected.

Sort of.

[ancient_geezer]

A tactic of many antagonists is to "refute" the advocates' sound arguments because they don't achieve 100% purity with the objective.

Which is often nothing more than an argument designed to retain the status quo without admitting to it.