Posted on 12/18/2007 5:03:19 AM PST by Kaslin
Shortly after 911 one of my conservative friends said that the country was going to hell in a hand basket. He declared that the conservative movement had officially lost its way in America and that the fall of the republic was near. I disagreed with him then. But I must admit that the current selection of Republican candidates has me more worried than I’ve ever been.
Despite the negative outlook, I think there is one last chance for America to regain its past glory and, perhaps, to turn back the tide of socialism that threatens our future prosperity. This last chance comes in the form of a single piece of legislation which, if passed, will cure almost all of what is ailing America. I know that seems like an extreme position but I think it can be argued persuasively.
If you are not convinced that the Fair Tax is the single greatest piece of legislation ever written, please take the time to list half a dozen things you hate about the current political climate in America. Then consider seriously the effect the Fair Tax would have upon that which you dislike about this country. I’ve done so in the space just below:
Jesse Jackson. Recently, I heard something really stupid coming from a black man. He said that the “3/5 of a person” racism of the 18th Century was still a reality in the 21st century. As evidence supporting his claim, he said that a black family makes about 3/5 as much as a white family makes today. I didn’t bother trying to challenge his statistics because I’m just so damned tired of these arguments about “institutional” racism.
The reason why there is black/white income disparity in America is because white people control all of the large corporations. But those large corporations were medium sized corporations before they were dubbed “large.” Before that, they were small businesses.
We’ll never solve this racial disparity issue until at least a quarter of a century after there is an explosion in black-owned small businesses. That cannot happen as long as a poor black man has to hire an attorney to set up his business (for tax purposes) and an accountant (to help him navigate the tax code) before he hires a single worker – one who is not employed for the sole purpose of dealing with tax issues too complicated for the average business owner to understand.
The Fair Tax will solve these problems by abolishing the IRS. Within ten years, I predict that the black/white income disparity will be cut in half. In 25 years, it will be virtually non-existent. When this happens, we will no longer have to listen to racial antagonists like Jesse Jackson. Some day, people like Jackson can go back to counseling adulterous presidents while themselves committing adultery.
Al Sharpton. I don’t like Al Sharpton. He once sodomized a white friend of mine and wrote “cracker” on his forehead after smearing him in fecal matter. Actually, that isn’t true. But I thought that telling outrageous lies about racial incidents that never occurred would land me a regular spot as a race relations expert on The O’Reilly Factor. But, in all seriousness, the reason we won’t have to listen to this national embarrassment in the aftermath of the fair tax is the same as above.
Local Government Waste. Just a few miles from my house, the local government has been over-seeing the expansion of 2.3 miles of road connecting Market Street with Oleander Drive. They have been working on this project for 42 months. If they were to complete the work today, that would come to an average 556 days per mile. Why does it take 556 days per mile to turn a two lane road into a four lane road?
During the last 42 months I have heard some local politicians talk about re-naming Market Street because it might be offensive to blacks (reminding them of the local slave market which happens to have been located near Market and Water Streets in downtown Wilmington). But what offends me is that it takes government contractors 42 months to extend 2.3 miles of road. The Fair Tax is the only thing that can help.
By constantly reminding people of government spending (23% on every purchase) the Fair Tax is a powerful psychological weapon in the war against government waste – whether local, state, or federal. As long as the IRS uses the withholding tax scheme, people will remain ignorant and apathetic with regard to government spending.
Global Warming. For the record, I am a staunch supporter of global warming. I prefer seeing women in bikinis as opposed to mini-skirts and snow boots. But I cannot applaud all of this senseless research on global warming. The Fair Tax will help us cut down on all forms of senseless government spending including, of course, excessive federal research grants. If we do not do something soon, we will soon see Volvos with “Stop Continental Drift” bumper stickers next to the ones saying “Stop Global Warming.”
Marxist Feminists. Marxists feminists are simply irritating. I know, because I work with these people. They are incapable of interacting with men – especially capitalist men – without allowing their sexism and their ideology to cloud their judgment. Sadly, one of these people has a good chance of becoming president. Marxist feminists will never again be taken seriously after the Fair Tax is enacted. This is because no brand of Marxism will ever again be taken seriously.
The ACLU. Ever get tired of hearing about prayer in schools and the intelligent design debate? Me too.
The ACLU has made a living off of litigating “separation of church and state” cases in our public schools. It has made a lot of conservatives ask what can be done to eliminate the ACLU from America. But I propose that we solve the problem by eliminating public education from America, which will indirectly eliminate the ACLU. There aren’t enough nativity scenes to keep these people in business without our failing public education system to help them get by.
With the aforementioned psychological leverage provided by the Fair Tax, we will no longer have to worry about the public dumping more money into the sinking ship that is know as public “education.” And once we have private education we will again be able to teach about the evils of socialism and government waste to children not under the supervision of unqualified educators drawing a paycheck from a government that is performing functions it was never meant to perform.
Aside from ending sentences with prepositions, there are few tasks this brilliant piece of legislation is not completely up to. If we can just find a president who is committed to the Fair Tax our best days may be yet to come.
Yeah.. but some women have no right to be in a Bikini in the first place:-)
I’m sorry, but this is just stupid. It’s almost like the writer opposes the fair tax so he’s making a parody of “wonderful things” that the fair tax will cure.
It isn’t supposed to be a parody, is it?
For the record, I’m a Mike Adams fan..
Also for the record, I support the FairTax idea — although I’d be more sanguine about its prospects if we could somehow enact it without the involvement of Congress....
But this article is a collection of non sequiturs such as to be the envy of any High-School-Level Marxist tract writer...
I can only hope that Mr. Adams wrote this piece tongue-in-cheek (something he does very well) and I’m just too caffeine-deprived this morning to get the joke.....
Aw geez - not this !@#!@ again!
Yeah....just off the top of my head...Hillary, Nancy P and Helen Thomas....think about that and try to sleep tonight !!!
thanx. I can never find that pic when I want it;-)
The biggest two problems with the US government and taxation are:
1) The government is allowed to hide the outrageous level of taxation through employer withholdings.
2) The government is doing all they can to shift the vast majority of taxation onto a minority of the population (albeit a powerful minority), while attempting to make the majority of the non-tax-paying population dependent upon the government, effectively ensuring their population base.
To get really serious about tax reform, first off EVERYONE would have to pay an income tax, and they would have to write a check to the government, at least once a month. That is what would spur serious tax reform.
Unfortunately I don’t think that we’ll see it, since something like the “Fair Tax” would transfer so much power away from the federal government, and congress in particular, that there’s no way they would allow themselves to lose power like that.
Mark
I have a serious question for any pro-Fair Taxers out there. I’m not goofing around - the plan is interesting but I would like to know how the proponents address what I see as a flaw.
Having spent many years in retail, I can say this: when the local merchant is responsible for collecting sales tax for his state or municipality, not every penny of it finds it’s way to the government coffers.
I am not saying that every merchant is a thief, of course not, but many merchants struggle to make ends meet, and the temptation to under-report income is simply too great to pass up. And that’s when they are collecting 6,7 or 8% on behalf of the government. Can you imagine when it’s 23%?
All I can say is that there will need to be TONS of enforcement.
Currently, merchants in my state reimburse the government on a monthly basis. Until they send that check in, the money that technically belongs to the government is sitting in their checking account. A typical small business, say one grossing $2M per year, is selling approximately $166K per month.
Again, assuming all of that is taxable, he would be collecting, in a 7% municipality, about $11,600.
At 23%, he would be “holding” over $38,000. A month! The temptation to skim a little bit of that off the top is huge.
Bottom line, how do Fair Tax advocates address the very common problem of sales tax evasion.
Can you imagine when it's 30%?
Until they send that check in, the money that technically belongs to the government is sitting in their checking account. A typical small business, say one grossing $2M per year, is selling approximately $166K per month.At 23%, he would be “holding” over $38,000. A month! The temptation to skim a little bit of that off the top is huge.
`(1) IN GENERAL- Any registered seller that is not a small seller shall deposit all sales taxes collected pursuant to section 103 in a particular week in a separate segregated account maintained at a bank or other financial institution within 3 business days of the end of such week. Said registered seller shall also maintain in that account sufficient funds to meet the bank or financial institution minimum balance requirements, if any, and to pay account fees and costs.
`(2) SMALL SELLER- For purposes of this subsection, a small seller is any person that has not collected $20,000 or more of the taxes imposed by this subtitle in any of the previous 12 months.
`(3) LARGE SELLERS- Any seller that has collected $100,000 or more of the taxes imposed by this subtitle in any of the previous 12 months is a large seller. A large seller shall remit to the sales tax administering authority the entire balance of deposited taxes in its separate segregated account on the first business day following the end of the calendar week. The Secretary may by regulation require the electronic transfer of funds due from large sellers.
`(4) WEEK- For purposes of this subsection, the term `week’ shall mean the 7-day period ending on a Friday.
Flat taxers are sort of touching with their childlike attachment to their "precious". Unfortunately like young children who believe in Santa Claus they are fated to disillusion.
Anything that seems too good to be true, is. Thus it is with the flat tax once you start to understand how it would work in the real world, if it ever was put into effect. Which it won't.
The same problem that you’ve just postulated exists today, only in the form of failure to pay amounts withheld from paychecks to the government. The IRS eventually catches them and the penalties are draconian.
With the sales tax, there is an incentive built into the bill for those who are collecting this tax to file and pay on time. Retailers can legitimately keep .25% of the amount collected and timely remitted or $200, whichever is greater.
No tax law can or will change the fact that failing businesses will use whatever cash they have available to stay afloat. And I don’t believe the Fair Tax will increase the opportunities to do so.
WAGES: It has been made clear by many proponents of the FairTax that they are expecting 100% of their current gross pay, and that many employer/employee wage relationships, including those for government workers are controlled by contract. So, we'll assume every wage earner gets to keep 100% of their current gross pay. Everyone can figure out for him or herself what that gives them in terms of a take-home pay increase.
BUSINESS COSTS: If we assume that businesses get to keep their half of the payroll taxes (7.65% of all payroll costs up to first $95k per employee), plus taxes on corporate profits (average <2% of Cost of Goods sold) and some tax compliance savings (being generous we'll call this 1% savings), this gives the business about 8% of cost savings with which to potentially reduce prices.
PRICES: For domestic goods, if we assume that the entire 8% is passed along to the consumer, this means that pre-tax prices will be 92% of present day prices. That $10 twelve pack will now be $9.20. Of course, the twelve pack of imported beer is still $10 pre-tax. Once the 30% FairTax is added, the price of the domestic beer will be $11.96 and the price of the imported beer will be $13.00 even. So, domestic prices will go up about 20% and imported item prices will go up about 30%.
GOVERNMENT EXPENSES: Since the government expects this plan to enable them to purchase the same things they purchase now, they will need to raise sufficient revenue in order to achieve purchasing power parity. Since they will be paying the 30% FairTax on every item, we can assume that for stuff they buy, they will see the same 20% price increase on domestic items and 30% increase on imported items as other end consumers. So they will need to increase their dollar intake by this 20%+ to enable them to buy the same amount of stuff. And, of course all government salaries will have the 30% FairTax paid on the salary, less the employer half of the payroll taxes, so this is a net 22.35% increase in the cost of the entire payroll of the US government (and states too, but that is another can of worms).
ENTITLEMENT COSTS: Since the social security payments are linked to CPI, when this 20%+ price rise slams through the economy all the social security checks will have to be raised to cover this massive FairTax caused inflation. They will rise by at least 20%, and a litle more because the basket of goods will include some imported items like oil. Medicare/medical expenses will have the FairTax added, for a 20%+ increase.
GOVERNMENT PURCHASING POWER PARITY: with the cost of Payroll, plus everything they buy, plus the entitlements, all going up 20% plus we can assume that the governement will need to collect approximately 20%+ more of the new inflated dollars in order to buy what they are today with today's more stable dollars.
FAIR TAX RATE: Assuming nothing else changes regarding purchasing behavior, size of the government, etc. this means that the 30% FairTax would need to immediately raised 20% (to 36%) just to bring in all the inflated dollars that are required to fund the govt at present level. The price of domestic beer is now $12.50 and the import is $13.60. This assumes no evasion and no reduction in spending by consumers on new goods and services when the large sales tax is imposed. (an unrealistic assumption by the FairTaxers)
SAVED MONEY: All dollars that are post-tax savings would be devalued by the FairTax inflation by 20% in terms of what they can buy with their hard-earned and saved after-tax money.
Does this sound like a utopia to anyone? Isn't it very likely that a 36% sales tax (or much higher like 50%) will cause consumption to suffer and/or transactions driven into a barter system or the black market where they cannot be taxed. And every dollar that is taken from the legitimate economy is another increase that is needed in the FairTax rate in order to feed the government the amount of money it needs.
Isn't is likely that we will end up with an income tax again on top of the FairTax when this all plays out?
And once people either stop buying, or buy used, or barter for services, or buy on the black market, or funnel purchases through their businesses for a tax exemption, it is very likely that the FairTax inclusive rate would be 33%-- which is an exclusive rate of 50%, making the problem worse.
The FairTax plan makes the false ASSUMPTION that 23% inclusive will be enough to fully find the government at today's level.
FairTaxers generally agree that the FairTax will cause higher prices and FairTaxers think that these will be ok because the purchasing power is what matters. Wage earners will receive a pay increase with their 100% paychecks to compensate for the higher prices.
Domestic prices will rise about 18-25% after a small (max 8%) price cut and then the 30% FairTax is added-- and rise the full 30% for foreign items.
Stick with me here for just one more minute. The government will also need a "raise" to pay the higher prices (because the government pays the FairTax on everything too), and it will take the form of additional revenue that needs to be raised. That additional revenue can ONLY be raised by increasing the FairTax rate, there is no other source to generate revenue. So, the 23% rate when multiplied by 1.18 is now 27.1% inclusive, which is 37.2% exclusive.
And that assumes no reduction in the base. If we assume just the very minimum that the base reduces 8% due to reduction in shelf prices-- ie. no reduction in unit volume of sales, just an 8% lower price for everything, then we need to divide the 27.1% by 0.92 to get a new inclusive rate of 29.5%, which is 41.8% exclusive. And this assumes ZERO evasion, and the same exact level of unit sales as now.
Most recently the FairTax commission found that the FairTax Rate was grossly understated by the FairTax people and that the actual rate would have to be MUCH HIGHER than 29.87% exclusive due to 1)government paying itself tax and 2) erosion of the taxable base due to all factors. Just a 15% erosion in base, coupled with a Federal government costing 20% more than presently (the cost with the FairTax added) makes the rate 33% inclusive which is 50% exclusive.
The FairTax people need to go back to the drawing board and plug in the new reality where prices go up 18-25% and stick that in their models and see what somes out the other side. It won't be pretty is my expectation.
I want to see elimination of corporate taxes, elimination of death taxes, additional reductions in the marginal income tax rates until we find that we are the Laffer optimal point.
In addition I want to see Social Security privatized, and I am willing to pay extra money to pay for those who were promised this benefit, and never receive a penny of it myself. I also want to see Medicare reformed from top-to-bottom. I also want to see Tort Reform to reduce the exorbitant costs of insurance on our medical costs. And we need to reduce the scope of the Federal Government to its constitutionally mandated responsibilities and get rid of the rest. The Golden Goose that is America is way too fat and needs to be put on a severe diet.
These are what we need to do, incremental improvements in what we already have. This is already working and we should keep at it...even Boortz seems to think so. Boortz (9/20): "...the economy continues to go like gangbusters. We are right in the middle of an historic economic boom. Don't let the mainstream media or the Democrats tell you otherwise...we've never had it so good...
The Fair Tax is not a tax on income! It will replace federal income taxes with a national sales tax. A business owner will have zero tax on income with The Fair Tax and therefore have no need to under report their income!Unless it's a service business, then it's 23% of your gross income.
I respectfully take a different stance as to what are the two problems with the US government and taxation are:
$3 trillion and over 50,000 lobbyists - concentrated through just over 500 people.
I’m sorry, but this is just stupid. It’s almost like the writer opposes the fair tax so he’s making a parody of “wonderful things” that the fair tax will cure. It isn’t supposed to be a parody, is it?I thought the exact same thing when I read this.
It can be summed up in one word, denial.
However, I found THIS review by Mike Adams of the Neal Bortz book, and it suggests (again in comic form) that Mike was favorable to this new tax plan back in 2005: Why Boortz and Linder Must be Purged (don't be fooled by the title)
Since it may not be parody, I'll just say that anybody who supports the fair tax because people will stop supporting public education and it will go away has got to be joking.
First, most education is financed by local property taxes.
Second, most people push their government to maintain those taxes sufficient to fund the public schools, and push to raise those taxes when necessary. It's very hard work to convince people that education is overfunded.
All income still has to be reported for SS purposes, so it leaves the door open to “excise taxes” on “rich people” who don’t “spend enough”...
You're income tax example is irrelevant as it ignores one very obvious point. The Fair Tax is not a tax on income!
I'm sorry, that was poorly said. When I said "under-report income" I meant that they would understate revenue from sales. I daresay it's a sad but true fact that many small cash-business owners survive by doing so.
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