Posted on 09/01/2007 6:18:37 AM PDT by Man50D
The Sunday Wall Street Opinion Journal published an article (8/26/07), "Fair Tax, Flawed Tax" (link below) by former Deputy Assistant Secretary of the Treasury for Economic Policy (1988-1993). It is obvious that the Journal editors and Mr. Bartlett didn't do their homework.
Many citizens will dismiss the FairTax Plan out-of-hand by reading this distorted play on words from the pen of Mr. Bartlett. Dismissing his assertion of the FairTax being connected to the Church of Scientology — a gorgeous lie to behold — he proceeds to lambast FairTax supporters with so-called evidence that it will not work and will cost more at the cash register by tacking on a 30 percent National Sales Tax.
Mr. Bartlett's proclamation of "FairTax" facts lack the knowledge that millions of citizens know from reading the book by radio talk-show host Neal Boortz and Congressman John Linder (R.,GA), "The FairTax Book." And the fact that the IRS will disappear from our lives. Those citizens know that Bartlett is way off base on the FairTax Plan.
He gets into trouble right away by giving examples which do not represent the FairTax. Anyone familiar with how the FairTax would work knows that any product, right now, includes embedded corporate-business taxes. So much so, that we citizens don't really know for sure how many taxes we're paying on any one product and service. [Don't Rug Cleaner services and Doctors pay taxes in running their medical practice (business)? Aren't a few taxes passed on to consumers and hidden in the price of those services?]
Researchers and analysts, after years of study and exposing those taxes to the light of day, have ascertained that the estimated embedded taxes are around 22 percent. Folks, that's after withholdings from wages and before the state and local sales taxes are added to your purchase at the checkout. But you'll never know it.
What Bartlett failed to accentuate about the FairTax Plan is the fact that the hidden embedded taxes are eliminated from the price and then, only then, is the 23 percent included. He offers a weak example: retail product price tag, $1.00, adds a national sales tax of 30 percent to make it $1.30. His big Calculation Error exhibits an example unrelated to the FairTax plan at all.
The True FairTax Plan would subtract the embedded corporate tax of 22 percent and add 23 percent —
$1.00 - 22 % = $0.78 $1.00 x 23% = $0.23 + $0.78 = $1.01 OR $0.78 x 29.5 % = $0.23 + $0.78 = $1.01
Depending on how you figure the FairTax math, either way, it comes out about the same.
Another distortion by Mr. Bartlett: The prebate to "all" households is not based on amount of annual income, but on the number of people in a household.
Mr. Bartlett's warped article makes a mockery of the FairTax Plan but also exposes either his lack of knowledge or his complete and intentional distortion. Other FairTax opponents have weighed in with their own skewed versions of FairTax facts, but this article takes the cake when it comes to misrepresentation. It is a brilliant example of how to persuade people to be "anti-something without really trying," much like global warming.
The faithful to our current tax system, promoting class warfare and progressive tax exemptions, are going to fight against the FairTax Plan to the end. The present IRS tax code with its thousands of pages plus more added annually by Congress continues to obey the Second Law of Thermodynamics — order to chaos. Disorder is what we experience now. It is time to replace this monster.
A near-future "FairTax" book will respond to all the criticisms. Both Rep. Linder and Sen. Saxby Chambliss (R., GA) have introduced the FairTax bills (HR25 and S.1025) in Congress. You may see the content of the bills online at Rep. Linder's site or through the American FairTax Organization (links below).
Attacked from all sides, FairTax proponents must continue to hammer home to the public the facts versus the distortions. The mainstream media, lacking its own FairTax education, doesn't recognize the errors and distorted lies of those promoting other tax reform agendas and calling them "FairTax" as Mr. Bartlett has done.
We Americans must educate ourselves and understand this total replacement of the IRS plan so we may make informed decisions. Read the book. Explore the links below to truly understand the FairTax Plan and its simplicity. It will benefit all of us — government, citizens and the corporation-business sectors.
Fair Tax ping!
Funny, no mention of how workers and business onwers will have to accept a pay cut so this 'math' works out.
I’m not criticizing your rant, I just don’t understand something.
The Fair Tax is supposed to replace all federal taxes, including income tax, correct?
The article states that all “embedded taxes” add up to 22%, with no definition of what those taxes include. Then it states that the Fair Tax will replace these taxes, plus the Income Tax, with a tax of 23%.
Unless my math is wrong, you are saying that a 1% sales tax will bring in as much revenue as today’s Income Tax. I am highly skeptical that your math works.
Not funny at all as your statement has no basis in fact and is therefore unworthy of mention.
309 replies so far.
Thanks.
A popular part of the sales pitch for the Fair Tax is that it eliminates the eeevvviiilll IRS.
Assuming the IRS is completely eliminated and it’s thousands of employees are looking for work, what mechanism exists to collect the revenue generated by the Fair Tax?
And, FWIW, I'll point out that I don't like the IRS any more than you do. But the IRS is just a collection agency. They don't write tax law.
Part of the problem is the way Boortz and Linder are using the idea of embedded taxes. In an eight-year-old study paid for by AFFT, Harvard economist Dale Jorgenson noted that because the taxes paid by everyone in the chain of production are embedded in the cost of goods, prices could decline an average of 20 percent if all those taxes were scrapped. The FairTax Book devotes an entire chapter to this idea.
What The FairTax Book fails to mention is that prices can only fall this sharply if companies cut wages. I asked Jorgenson about this, and he agreed. Say your salary is $100,000 a year today, but you take home $80,000 after taxes.
Your company is still paying that extra $20,000. In a FairTax world, it will save that money, and be able to lower its prices accordingly, only if it can reduce your salary to $80,000. In other words, your take-home pay is the same as before. Sure, you'd get to "keep 100 percent of your paycheck," as Boortz and Linder repeatedly write, but it would be a smaller paycheck. That's kind of a big thing to leave out.
I pressed the point with Boortz and Linder. Boortz denies that the book intentionally overpromises. The introduction, he notes, emphasizes that "this book isn't about saving a penny in taxes." But he concedes that the book is confusing about this, and vows to correct it in later printings. Fair enough.
The more I hear about the “Fair Tax”, the more I lean towards the “Flat Tax”, but only if it is 10-15% max. All indications is that a Flat Tax would give our government more money than it could ever spend. If this is actually true, then why wouldn’t the government go to a Flat Tax? I think that the answer to this question is that it’s not about the money. It’s about taking more and more money away from the people to have more control over them. Keep the people broke and you have control.
Oh puh_leeez. The man who the fairtaxers paid to do the story stated that. Why fairtaxers must lie to promote their cause is beyond me. See my referenced post above.
story = study....
This brings up a good point. If the Fair Tax system has to be explained as much as it is..........If people have to lie about it as much as they do, something is wrong with it. Another reason I like the Flat Tax. Send the government 10% of your income and go about your business.
2) The Bait & Switch: When a claim is made and your opponent refutes it, don't try to respond, simply change the subject. Example:
Lefty Debater: I think we all know what kind of job George Bush has done with the economy. Right off the bat, he got the economy into a recession.
Conservative Debater: Excuse me, but you're incorrect. The recession started under Bill Clinton, not George Bush. Lefty Debater: Well what about his tax cuts? They're for the rich, the rich I tell you!
Conservative Debater: What about getting rid of the marriage penalty and increasing the child tax credit? Are you arguing that only rich people get married and have kids?
Lefty Debater: Haliburton, did I mention Haliburton? What about that, huh? I guess you want to dodge that issue. The best part about this from the left-wing debater's perspective is that since they (the lefties) never acknowledged they were wrong, they can feel free to make the exact same incorrect claim in future debates. Stupid Debating Tricks
A FairTax BUMP, for my children and grandchildren!
How does a flat tax tax the likes of Ted Kennedy, say, who doesn’t have “Income” per se, but lives off of a trust?
At least the flat tax would tax those folks, as well as the drug dealers et al who are part of the underground economy.
The only way I would support the fair tax would be if they repealed the 16th amendment. Without that we could wind up with both.
Assuming the IRS is completely eliminated and it’s thousands of employees are looking for work, what mechanism exists to collect the revenue generated by the Fair Tax?
The tax, being included in the quoted purchace price, will be collected at the point of purchase, and forwarded to the US Treasury Department. Just like state sales taxes are handled -- seller collects and sends to the state's revenue department.
The difference is that this tax will NOT BE ADDED ON TO THE SALES PRICE, it is a part of it.
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