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)
Go lecture fairtaxer pigdog on name-calling. He is the king. I just respond in like kind.
You assume all states will want to maintain their own complex tax structure. They can choose to conform to the much simpler Fair Tax code and collect a fee from the federal governmentFrom my personal experience on the border of Iowa(progressive income tax) and Illinois(flat 3% income tax), retirees on the Iowa side flock to retire in Illinois, for a short move and less taxes(they also get a senior exemption on property taxes), or Florida for a long move and no state income tax and hurricanes.
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.
As a business owner, don't you want 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"?
If you are reimbursing your employees for those expenses, I doubt you would take their word for what they paid. I know the IRS wouldn't take their word. You already need all those receipts anyway. What is the difference?
If so, that's one of the very, very few things you "see".
"Looey befuddles all 75 major economists with his command of the FairTax minutiae - and blows them all to hell."
but the die-hards won't even accept the obvious factsCan you give me a brief review of "the obvious facts" so I know where you stand?
Go lecture fairtaxer pigdog on name-calling. He is the king. I just respond in like kind.As I said, both sides are guilty. If you respond to name calling, that is your fault
the main obvious fact is that workers cannot keep 100% of their current gross salaries and that prices remain the same (on average) when the FairTax is added.
Put another way, businesses (on average) will not be able to reduce their list prices by about 23% if they pay their workers their current gross pay, because they will not realize the savings on payroll and income taxes.
Of course I want the list, I said that. The difference is that FairTaxers are the ones saying I will save a lot in compliance costs, and I don't see it.
I also think that there is a difference between me having all the supporting paperwork in my office in the case of an audit, and having to give all this info to the new IRS-like organization up front.
How would you comply with a state sales tax audit?
Looey befuddles all 75 major economists with his command of the FairTax minutiae - and blows them all to hell."So the 100% paychecks and 20% price reductions rhetoric for years is now Fairtax minutiae huh?...You made yourself the fool by not clarifying it rather than being childish about it.
Actually you blew it all to hell by lying, I only exposed your lies just as robfromga did with the Fairtax lies about the Jorgenson study of paychecks and 20% price reductions...
Shame on you for your dishonesty.
States pay taxes right now,...., in the form of cascading embedded taxes on everything they buyJust like the underground economy pays taxes "right now".
I don't collect state sales tax, I only sell to businesses. Right now, a large number of companies are not involved with state sales tax in any way, shape or form.
Robbie didn't "expose lies". He was just busy seeking his own glorification.
Is your "significant other" berating you or is your underware just twisted up?
"New IRS-like organization" and "up-front"????
Where do you get such ideas?? Please post the exact language from the bill that specidies this. You've been asked to do this before, Robbie.
New IRS-like organization: a 30% retail sales tax is going to provide a major target for people to evade. One possible way to evade is by claiming purchases are for business use.
up-front: this is based on comments made by both Linder (in July 28, 2005 testimony to House Ways and Means Cmte) that for some retail transactions (he mentioned Wal-Mart) the tax will be collected and then a refund will need to be appied for. Most of the business expenses for my business fall into this second category, things like hotels, planes, car rentals, meals, office supplies, gas, and other automobile expenses.
If the new compliance organization is not "IRS-like" (and I am not necessarily using that term perjoratively since the IRS has a job to do as well), then in my opinion evasion will be very high.
How do you think that the system will handle these business expenses to keep them FairTax free?
Here's a link to the thread pigdog is referring to in case you are lurking and want to see what he is barking about:
| JORGENSON EXPLODES FAIRTAX MYTH (FR Exclusive)
Actually, I was busy trying to explore the FairTax Plan and determine where the Free Money was coming from. I found out that there wasn't any. It is the FairTaxers that are holding up Dr. Jorgenson as the scholarly source for their claims about the embedded taxes. He did the study which calculated that there are on average 23% embedded taxes in goods and services which would be removed by the passing of the FairTax. The FairTax movement relies on this 23% price reduction for their claims that selling prices will drop by on average 23%, so that when the 30% FairTax is added the prices will be the same on average as what we are paying now. If the expected 23% price reduction doesn't materialize, then the 30% FairTax added onto all final retail purchases would mean that things would cost up to 30% more than they do now. This would destroy the purchasing power of all currently held dollars, making the Plan unworkable. The FairTax crowd took that part of it-- the 23% price reduction by eliminating embedded taxes-- but ignored the rest of Jorgenson's model (and also ignored common sense). His model recognized that in order for businesses to reduce their costs 23%, the BUSINESS would have to reap the savings from the elimination of the payroll and income taxes-- NOT THE EMPLOYEE as the FairTaxers are claiming. This is fairly obvious and his testimony in 1996 seemed fairly clear but I decided to ask him directly to clarify his thinking. He clarified that he assumed that the employee would get his current TAKE-HOME PAY, not his current GROSS PAY-- so there was no windfall 20-25% take-home salary increase in his model. Your continued state of denial and your attempts to denigrate anyone trying to clarify the actual FairTax studies is just another sign of your dishonesty. I am not looking for glorification, just facts. And facts are few and far between for most fanatical FairTaxers. |
correction, Linder mentioned Home Depot not Wal-Mart in his example.
As they say...SPOT ON AND GOOD POST!
see #237
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