Posted on 09/02/2005 11:01:09 AM PDT by pigdog
Comment: 50 Reasons I Support the FairTax (How many reasons can you give for supporting the present IRS tax system?)
Those Who Know the Facts Love the Fair Tax www.fairtax.org
FairTax and Individuals and Families (Family-friendly tax reform)
1. It allows workers to keep 100% of their pay, with nothing withheld the IRS or for Social Security and Medicare payments.
2. It is revenue neutral with the present income tax system, funding the federal budget at current levels.
3. It shifts the tax to consumption. Records show that consumption is more stable than income, therefore the tax revenue stream is likely to be a more stable and predictable amount.
4. It is progressive, a “prebate” of the tax amount up to the poverty level is given to everyone. This means that those spending below the poverty level have a net gain because the “prebate” exceeds the amount paid in taxes. (Under the present system the working poor pay the payroll tax even if they get a full refund of income tax withheld.)
5. It doesn’t tax pre-owned items – clothes, cars, homes. Only new items are taxed when sold by a business to an individual.
6. It is expected to remove an average of 22% of the cost of American made goods by removing the built-in payroll tax (the other 7.65% of earnings that employers pay), corporate income tax, and other business taxes that are now passed to consumers as an “embedded" tax of approximately 22% due to the cascading of income and payroll taxes paid by U.S. employers, at every step of production, to the U.S. Treasury. Competition will cause prices to fall by approximately that amount, on average.
7. It allows families to save more for home ownership, education, and retirement. An average family making $50,000 will have $7,500 more spendable income.
8. It removes the need for formal accounts of the 401(k), IRA, HSA, etc., varieties. Anyone, rich or poor, will be able to set up any kind of savings or investment account without regard to taxes or the government. No special knowledge of tax law is necessary.
9. It makes educational tuition a tax-free expenditure of tax-free income.
10. It eliminates the income tax and the IRS. Members of Congress and the public overwhelmingly agree that the current internal revenue code is cumbersome, intrusive, coercive, and inefficient.
11. It eliminates 90% of the cost of compliance. American families and American businesses waste an estimated $250 – $600 billion per year (and countless hours of time) doing the paperwork necessary to comply with the current tax code. That is roughly $1,000 – $2,000 annually for every man, woman and child in the U.S. (Businesses typically pass their tax bills and compliance costs on to the consumer, i.e., individuals and families.)
12. It’s simple, unambiguous, and certain, the opposite of the current tax code, 60,044 pages and counting.
13. It assures that no American will find, at the end of the year, a need to get a loan to pay taxes as an alternative to penalties, interest, or cheating.
14. The broader tax base comprises everyone spending money in the U.S., including the ten percent of our economy (an estimated $1 trillion) that today is underground or under the table. Under the FairTax, the illegal drug dealer will pay his tax just like the rest of us when he buys his sunglasses, BMW, and other items, as will those who work for cash and undocumented immigrants, all of whom receive government and societal benefits.
15. It encourages work by letting workers keep 100% of their earnings and giving a rebate, in addition, making the notion that “the more you work, the more money you have”, a reality, unlike the current system where welfare is lost when you go to work, so the first dollars earned after taxes just offset what a welfare recipient is currently receiving in assistance, so working is perceived as disadvantageous.
16. It allows more of the lower income families to become home owners by allowing a second job income above their current income (all tax free) to be applied to a mortgage. Money for down payments for homes is also saved totally tax free, causing it to accumulate faster.
17. It has the result that all lending in America will be at the equivalent of today’s tax exempt interest rates, which are 25%-30% less than today’s taxable home mortgage interest rates. This will create a huge boom in housing purchases and allow existing homeowners to refinance and reduce their cost of homeownership substantially.
18. It allows families to retain farms and businesses in the hands of those who built them through the elimination of the death tax.
19. It allows families to give tax-free assistance to one another by eliminating the gift tax.
20. It gives individuals (and businesses) the right to donate as much as they want to in a given year to charitable causes, without concern for exceeding an allowed limit on giving.
21. It encourages individuals to self-insure, making the health system more direct-pay (no 3rd party pay), thus bringing costs down.
22. It puts an end to the anxiety for honest taxpayers that begins soon after January 1 for most of use, culminating in wondering whether we’ve claimed everything we legally could and nothing we shouldn’t, all without raising questions at the IRS. It makes April 15 just another day. (Perhaps it will be a holiday after the FairTax is enacted!) FairTax and Social Security and Medicare
23. It eliminates the regressive payroll tax that hurts the poor. Currently, every one of us is taxed a minimum of 7.65% on our first-dollar of wages up to $90,000 (the cap for FICA, not Medicare), if we earn that much. It provides funding for Social Security and Medicare at a level equal to or greater than the present.
24. It provides that all 290 million Americans and 51 million visiting tourists fund Social Security and Medicare with their purchases. Today only 110 million workers fund these programs via deductions from their paychecks.
25. It assures that the wealthiest Americans will be voluntarily helping to fund social security with every last dollar they spend above the poverty level. Today, earnings are subject to FICA taxes only up to $90,000. The wealthiest Americans therefore do not pay into the system above that amount. If their earnings are from investments, no earnings fund the Social Security system.
FairTax and the Economy
26. It increases investment in business by eliminating the capital gains tax.
27. It allows for better planning by businesses, because they no longer have to consider tax implications for everything they do.
28. It makes higher employment or better compensation possible in the small business sector, where today it costs approximately three dollars in compliance costs to pay one dollar in payroll and income taxes.
29. It makes American products more competitive overseas by removing the embedded tax from them, thus lowering the prices of our exports, which compensates for low foreign wages.
30. By making our exports more competitive overseas, it lowers our balance of trade deficit and increases employment at home.
31. By removing the embedded tax from them, it makes American products more competitive with imports here, compensating for the low cost of imported products from which taxes have been removed before exportation to the U.S.
32. It encourages investment in companies located in the U.S., thus providing a home for money already in the U.S. and attracting more. The U.S. will be the most attractive tax-free haven in the world for doing business.
33. It encourages repatriation to the U.S. of money held by U.S. individuals and companies now in foreign countries, with no tax consequence. American companies will return from offshore and overseas.
34. It results in a windfall profit, likely to be invested in job-making businesses, for many of those holding taxable corporate high interest bonds at the time of passage of FairTax, since the bonds will not be taxed under FairTax. (Currently, a higher interest rate is usually paid to entice investors to buy the corporate bonds rather than go with the lower interest, but tax free, municipal bonds.)
35. It results in Federal Reserve rates being based on current consumption, which is rather stable, instead of future earnings, which are less predictable, resulting in surer inflation prevention.
36. It reduces production costs for farmers and other subsidized businesses, leading to a reduction in subsidies, thus reducing the federal budget.
37. It moves many individuals now providing tax advice (return preparation, advice, accounting, planning, and records maintenance) into an expansive economy where they will be producing goods and services. There they can add to the standard of living of all Americans and likely earn more than they do currently, instead of shuffling paper for the government (and not contributing anything economically to society).
FairTax and Churches and Non-profit Organizations
38. It frees churches and other non-profit organizations from the expense of filing tax returns and paying their half of Social Security and Medicare payments for employees. There will no longer be any 501(c) (3), 501(c) (4), etc., non-profit tax status, because there will be no more tax to be exempt from.
39. It restores to churches and non-profit organizations the 1st Amendment right to engage in free speech, without fear of losing their tax-free status. FairTax and Rights and Freedoms
40. It restores the 4th Amendment, protecting against unreasonable searches and seizures, from which the IRS presently is exempt.
41. It restores the 5th Amendment, which guarantees the right to due process. Under current systems the IRS has their own courts with their own set of rules not included in the 5th.
42. It restores individual privacy. The government no longer needs to know where you work, what you are earning, and what you are doing with it.
43. It relieves citizens of the risk of facing the shift in burden of proof that is so common with the current system, i.e., the taxpayer is guilty unless innocence can be proved, but even the IRS staff sometimes gives conflicting interpretations.
44. It eliminates the need to have a "marriage" clarification declaring who you live with, as that no longer has any bearing at all on a state or federal sales tax.
45. It eliminates the need for courts to decide which divorced parent gets to take the tax deduction for children.
46. Without FICA to pay, most states, counties, municipalities, and school districts will see a large increase in their state budget revenues, additionally lowering the overall tax burden (State & Federal) for most Americans.
47. It eliminates the administrative costs incurred by states in collection of state sales taxes because states will piggyback the state tax collection onto the national tax collection, for which they are compensated by the FairTax ¼% administrative cost give-back. (Retailers receive an equal amount for collecting the FairTax.)
FairTax and Politics<\b>
48. It cleans up a major flaw in campaign financing, eliminating campaign donations for "tax favors".
49. It eliminates wrangling in Congress over tax cuts, the tax code, and who is or is not paying a fair share of the tax bill, providing more time for debate on more productive issues.
FairTax and the Environment
50. It’s good for the environment. Reportedly, the IRS sends out 8 billion pages of forms and instructions each year. Laid end to end, they would stretch 28 times around the earth. Nearly 300,000 trees are cut down yearly to produce the paper for all the IRS forms and instructions. Also, since it taxes only new items, it would encourage buying tax-free pre-owned cars, clothes, furniture, houses, etc. Reuse is good for the environment, too.
Kenneth J. Van Dellen (with help from friends)
Are you that uninformed with how things work? These bills will get massively reformed if they ever get close to being passed. In order to get Senator X to support it, they add this. In order to get Senator Y's support, they add that. Dems and RINO GOP add amendment A, ect. The current bill is a no go on many grounds. Even if the Presidential Panel should somehow recommend a sales tax, it will look nothing like what is being proposed.
ping
It will change to the extent that only retail purchases as well as services will be taxed under the NRST. It will also change in that you will no longer be deducting these expenses from your taxes due. Instead you will be recouping money spent by your employees for taxes, and reimbursed by you, rather than paying taxes quarterly or monthly. Your deductions recover only the portion of your taxes which correspond to your tax rate. The rest you pay.
Right now at the end of the year I add up all the expenses in various categories and enter these expenses as line items on my corporate tax form. The government is not involved in evaluating each meal, hotel bill, plane ticket, etc and does not have a record of these individual items.
It is obvious you have never been audited by the IRS. You may not have to send the receipts to the government with your return but you must keep them in order to validate the deduction if you are audited. Even those things under $75 which do not require a receipt must be listed, described and dated. Anything you list as a business expense must be verified by the records you keep if you take a deduction for them. I listed many of them in the previous post to you.
Considering all that must be kept to verify deductions, all that must be reported about your business and about you and your family to the IRS now, it is baffling to me that you think a trail of what your business purchased of retail items and services is more intrusive and revealing of you and your business. Not only does the IRS insist on knowing more about your business now than the NRST would reveal but it also knows almost you and your family's history and activities through the personal income tax forms you must file and records you must keep.
To insist that all that is less cumbersome than keeping receipts for only NRST taxable items just seems unbelievable to me.
Dear Mind-numbed Robot,
"I had written a lengthy response to your post addressing each of your points."
Well, what would you call this response? Short?? If this is short, I shudder to think what's long. LOL.
"In the end I decided to trash it." And write an equally-long response instead. ;-)
I shouldn't talk. I figure I can outpost in length all but a few FR posters. * chuckle *
"Your concerns are not so much with the NRST as they are with people, specifically politicians but politicians are just people in particular positions of power."
Well, certainly I have some concerns with the NRST.
But you're right to say that my focus, if not my concern exactly, is with the politicians.
The NRST doesn't change human nature.
"I assume the desire of all of us is to minimize that power and to make what is left work equally well for all of us."
No, not exactly. I do think that our politicians right now do have too much power, because money is power, and would like to reduce it from current levels. However, I don't believe that zero government is the ideal, and if the power of the federal government were reduced too much, I might wind up fighting for more.
I'm comfortable with how politics works, and with the fact that politicians are, well, politicians. I don't see that human nature is going to change, and I regard many of the things that some folks condemn in our system of government as actually being good things, or at least, better than the alternatives.
So, politicians argue, debate, compromise, swap favors, take half-loaves, etc. I view this to be usually superior to the alternative, which is that folks don't compromise, don't swap favors, don't take half-loaves, and one side wins everything, and the other side is left desolate. Usually, this either is, or leads to authoritarian and unstable government. When the losers think that they will be stripped of everything they wanted or previously had, and may not be able to recover it as the levers of power are used to keep them out, well, that encourages armed conflict.
When "losers" get some of what they wanted, or get to keep much of what they had, and when they have a fighting chance to take back power, they tend to stay within the legal and customary system.
So, I'm pretty much okay with politics as we practice it in the US, because, lots of times, folks on either side of most issues DO get something, if not everything they want.
And politicians survive and thrive on negotiating those compromises.
There are certain issues where I'm unhappy with how that process works, especially issues that fatally compromise certain human rights, like the right to life.
But from my perspective, income taxes are not intrinsically evil. Neither are consumption taxes. Nor tariffs. In fact, I don't view taxation as intrinsically evil, at all.
But, when the federal government must collect 20% of GDP, give or take a percent or so, to fund itself, then any system of taxation turns ugly. And must be highly coercive. And will eventually fill with "loopholes" in the effort to make it "fairer." I put both words in quotes, because frankly, one man's loophole is another man's fairness.
Because I'm a small business, I can pretty much write off all my capital investment every year. Because I'm a small business, I don't pay any business taxes at all. I view that as fairness. Others view it as loopholes.
We'll get these loopholes (if they aren't already embedded in the new code) in the NRST. Just give it a little bit of time. That's what politicians do, and they do these things because they have constituencies who want these things.
As for Dr. Keyes, I find him an inspiring speaker, a guy with a lot of ideas, a personally charismatic and charming man (at least on the few occasions I was privileged to meet him), but I'd hardly say that I agree with him on nearly everything.
As Always Right points out, we certainly diverge on the matter of reparations to African-Americans. LOL.
"The NRST will clean it up and make it transparent."
I just don't believe that. I see no evidence to suggest that is true.
sitetest
It will if the people want it to happen.
It's too fair, too logical, too sensible. The f***ups in Washington will never do it.
As for Dr. Keyes, I find him an inspiring speaker, a guy with a lot of ideas, a personally charismatic and charming man (at least on the few occasions I was privileged to meet him), but I'd hardly say that I agree with him on nearly everything.
As Always Right points out, we certainly diverge on the matter of reparations to African-Americans. LOL.
It seemed evident to me, a mistake I make many times as what seems evident to me apparently isn't, that I was referring to Dr. Keyes' opinions as expressed in the article posted, rather than in every word he has ever uttered or every position ever taken. It is mischaracterizations like that by Always Wrong that I no longer respond to him. I consider him a gnat, a pest that adds little to nothing to the discussion. People just waste time swatting at him.
But this bill less so than others, Senator Rongie. The structure and hence the opportunities for political mischief are greatly lessened than the present tax system.
It is baffling to me that you think:
Travel...$65,492 (appearing on a line on a tax return)
is less obtrusive than:
a complete list of each hotel name, location, dates stayed, employee name, amount paid for each of 311 hotel room stays, 103 airplane tickets purchased, 66 cars rented, etc.
Of course I need to keep these records to handle and audit and I do keep these records. But every single business in Americ doesn't have to provide this level of detail to the IRS, only those that are audited. The number that are audited is very low.
It is the FairTax proponents who are claiming a big savings in compliance-- as a small business owner, I don't see the savings, I think it will cost more to get these rebates and take more time.
And there is no doubt that the Happy Tax Compliance Authority (we're the friendly tax collectors!) will have a lot more detail than they have now. This is more intrusive.
Go chew your cud Senator Rongie. The FairTax is NOT being misrepresented - unless by its opponents such as you Squirrels.
"On second thought, since the house and senate bills are identical there will be no need for committee reconciliation. Those who are for it and will vote for it are for it as it is. Either it will pass or it won't."
There will be attempts to add amendments to the bill - there always are. However, those who back the FairTax will have to beat back attempts to compromise the basic principles (one of which is simplicity).
There will almost certainly be political decisions to be made that have to do with compromises that might attract additional votes. That is the way that the legislative process works. However, Congressman Linder has been relatively inflexible to this point and I expect that to continue. If we can get the number of co-sponsors up to 100, Congressman Linder will probably control at least that number of votes. IOW, there will probably be some who vote for the bill on the floor who aren't co-sponsors, and who would be influenced by the bill's primary sponsor. For that reason, I think anyone offering up an amendment that Congressman Linder opposes (or Senator Chambliss in the senate) would have an uphill battle getting it voted in.
Amendments are often offerred up to bills which look like they will pass to thwart the intent of the bill. The opponents are in essence saying, they may pass the bill, but it won't do what they intend it to do. Such tactics are seldom successful, for the simple reason that if a bill has enough votes to pass, those voting for it (who are in the majority) are unlikely to vote for amendments that compromise the its intent.
One of the goals of the FairTax is simplicity. If you accept simplicity as a goal of the tax system, then you support the FairTax. If you don't accept that goal, then you may not vote for it.
"No, first, what you're suggesting as a device to prevent the NRST is an underhanded action. Thus, yes, you impute evil motives to me, as you suggest that I would do evil to defeat the NRST."
The terms "underhanded" and "evil" are ones which you interjected into the thread, not me. Your attempts to spin this as a "good vs evil" confrontation are very weak.
Give it up.
Hopefully ya'll will stick with your time-tested tactics, and begin referring to any Senator or Representative who asks a question about the Bill or who doesn't immediately sign on as "Senator Squirrel" and loudly question their motives on the cable news shows.
It is a great way to get these people on board. You could even give them cute nicknames and lump them all into a big group of nefarious legislators who are obviously both stupid and cunningly evil at the same time.
"Are you that uninformed with how things work? These bills will get massively reformed if they ever get close to being passed. In order to get Senator X to support it, they add this. In order to get Senator Y's support, they add that. Dems and RINO GOP add amendment A, ect. The current bill is a no go on many grounds. Even if the Presidential Panel should somehow recommend a sales tax, it will look nothing like what is being proposed."
Amendments, like the bills they are attached to, have to have majority support to get enacted. How are you going to get majority support for an amendment that is opposed by the bill's sponsor who will control many of the votes in his chamber?
Is it possible? Sure, anything can happen. Is it likely? Not hardly. If it does happen, then Congressman Linder would pull the bill, rather than pass a bastardized version. This isn't the crisis you are painting it as - not nearly.
"I don't believe it actually attacks the real problems we face regarding funding the federal government. I believe it's a distraction from the real problems."
That statement is not credible. You have posted how many anti-FairTax posts on how many threads because you think the FairTax is a "distraction"? If it is, it has certainly distracted you from more important things for some time now.
You may want to rethink that statement.
If you still believe in the FairTax principle of 20-25 immediate increase in takehome pay, combined with all prices on average staying the same after the FairTax is added, then you are misrepresenting the Plan. Since it has been explained to you why this is impossible in words that a sixth grader could understand, your continued misrepresentation of the Plan cannot be attributed to stupidity, and must be instead attributed to dishonesty.
It seems to be a common problem for a small number of you. At least some FairTax people want to actually discuss the plan, while you continue to insist that Santa Claus and the Tooth Fairy are both alive and kicking.
"It is a great way to get these people on board. You could even give them cute nicknames and lump them all into a big group of nefarious legislators who are obviously both stupid and cunningly evil at the same time."
I think if you will check the thread more carefully, you will find that it wasn't a FairTax supporter who tried to position this difference of opinion as a "good vs evil" confrontation.
Some of us think that it is important that propaganda be analyzed and evaluated rather than being taken hook, line and sinker. I personally don't think FairTax ever had a chance for many reasons, but when the book came out this brought it to the attention of the general public so it was the right time to study it for me.
In looking at the plan and how it was being represented as a money for nothing scheme for all wage earners, it became obvious that there were big problems with the way the Plan is described.
There have been many people who have made these same points in the past, I have discovered. Most of them realized that it is not possible to actually change the mind of a FairTax fanatic, but at least they were exposing the flaws for those not already programmed.
If I looked at this whole three weeks as an exercise in trying to change the minds of FairTax supporters, then it is an impossible mission. There have been a number convinced, but the die-hards won't even accept the obvious facts.
But there are many lurkers on FR and hopefully they at least see that the Plan is being described wrong by the main proponents. So, at least in my case, I spent the time I did to bring up and investigate this Plan because I felt someone had to do it, and as a small business owner I understand how the present system affects me in great detail.
Dear phil_will1,
I'm not attempting anything, just observing.
If you think the tactics that you suggested I'd employ are morally acceptable, then that's disappointing.
sitetest
Thanks for your comments. I am aware of the normal process but I think that due to the time and effort that has been spent to hammer out the details of this bill to make it actually work as intended, there will be nothng of consequence, if anything at all, that will change from what it is now. It will either sink or swim.
If any negotiating is done I expect it to be of the nature, "OK, I will vote for this but when my bill about ???? comes up I expect your support on that."
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