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)
Dear Sonny M,
"Then I'm on board, I'd prefer the "fair tax" be added via constitutional amendment if its possible.
I understand your position.
Unfortunately, that is NOT how this is being handled by the congressional sponsors of the NRST. It is their plan to put the NRST into effect BEFORE any repeal of the 16th amendment.
The NRST legislation, as written, would pass without any repeal of the 16th amendment. Then, we would all cross our fingers and hope that 2/3 of both Houses of Congress, and 3/4 of the states would then ratify a repeal amendment.
Don't let the NRSTers talk you into the idea that we couldn't repeal the 16th amendment first.
For all the bluster and bullsh!t that floats around here as an excuse for reasoning, you can see yourself that the Constitution has previously been amended with postponements of enforcement dates.
Yet, some of the NRSTers will continue to contend (falsely) that you must first pass the NRST before repealing the 16th amendment.
LOL. You know what that will get us.
sitetest
I thought YOU were the guy who was so expert that he'd digested all of the information on the FairTax website.
Now, it turns out that isn't true at all - and you won;t take my word for it - so re your opostss #70 & #72, see #78 where it CLEARLY states that. I guess you missed that when you "digested" the entire FairTax website, eh?
As for your #73, Robbie, what I think is that wage-earners will receive all their pay (which they do not now as perhaps you know) as stated by the 75 economists. That will certainly give them a "leg up" on climbing the economic ladder. It will also give them the control over their own economic livelihood for a change instead of having the money taken from them "up front" and they can decide by making decisions that suit them as to whether and when to pay taxes via consumption.
Do you choose to not believe that?
If you are going to give the wage earner his "full paycheck", you need to do the same for the business owner, ...
Isn't the elimination of the owner's taxes, regardless of the type of corporation, partnership, etc., worth considering? After all, it is the net, the after tax amount, that all business planning is based on. If gross is all that needs to be considered isn't that likely to affect business decisions, including pricing?
I think the absence of the income tax will have a much more dramatic influence on the economy than you do. I think the psychological freedom from the fear of the government is worth the whole effort. I do not see the pitfalls that are frequently mentioned to be any different than the present system and the pitfalls have a good chance of not happening at all under the FT.
In you 653 comments you mention the continuing need for accounting personnel for normal non-tax accounting purposes. I think you overlook or underestimate how much "normal" accounting is affected by having to correspond to tax accounting. Yet, the biggest change would be making business decisions without even thinking about the tax implications and that is also the biggest advantage.
Also, some, I don't remember if this is your case or not, seem to be defending their present business endeavors because they are benefiting from the present tax system and think they will be out of business if it is changed. To them I say:
To think you are taking advantage of the present tax system to make money is an illusion. You are basically saying that if you weren't doing what you are doing you would be paying that money to Uncle Sam instead of using it to make a living, so it is a zero sum game. Pay to the IRS, or pay it to yourself.
You are saying that if it weren't for the tax advantages it would not be worth doing. Maybe I will have another epiphany but for the life of me I can't see how they think that the elimination of that tax they are avoiding punishes them rather than benefits them. Maybe you can help explain that.
Drag $100 through an economics department, and you can prove anything.
“It is amazing how many people think that they can answer an argument by attributing bad motives to those who disagree with them. Using this kind of reasoning, you can believe or not believe anything about anything, without having to bother to deal with facts or logic.”
--Dr. Thomas Sowell
"... you can see yourself that the Constitution has previously been amended with postponements of enforcement dates ..."
Perhaps, s-test, as a convenience for readers you could post a definitive list of all the amendments with postponements of enforcement dates - along with the text of the amendment bill (they are typically quite short) so that the veracity of your statement can be viewed?
And regarding:
"For all the bluster and bullsh!t that floats around here ..."
... the phrase "it takes one to know one" comes to mind. You will never repeal the 16th with the income tax still in effect. There have been several efforts to try to stir up such an amendment during the almost 100 years the IT has been with us and none have gone anywhere - nor will they until the FairTax is providing a workable revenue system.
The FairTax eliminates the income tax (and its laws) along with the IRS (and defunds it) and requires the income tax records to be destroyed and, in addition, calls for the 16th repeal. The fact that this is a serious desire is apparent from the FairTax website. It will be very difficult if not impossible to bring back the IT once the FairTax is in effect and taxpayers begin to see all its benefits to both themselves and the nation.
I assume you exclude yourself from that. I think we all think we are being reasonable even when we disagree.
..you can see yourself that the Constitution has previously been amended with postponements of enforcement dates.
If you were a sponsor of this bill would you want to wait to implement its advantages, perhaps the biggest being eliminating the present system, until the years it would take for a Constitutional amendment? I think their motives are practical rather than nefarious. It seems to me that misinformation is more likely to be coming from those doggedly defending this present oppressive monstrosity.
Provided of course the place you move to has no sales taxes or doesn't decide to tax your U.S. income. Politicians are people and people can become greedy no matter where they reside.
"`(D) EDUCATION AND TRAINING- Education and training shall be treated as services used to produce, provide, render, or sell taxable property or services."
It's been that way in the bill for a long time.
If you think you could possibly repeal the income tax amendment while the income tax is the tax law of the land, then you are more naiive than I would have thought. No congressman is dumb enough to try that.
Actually 92+ years of evidence with nearly continuous resolutions introduced to repeal said 16th amendment with no action yet is rather overwhealming that Congress has zero reason to repeal 16th amendment as long an income tax is on the books.
Remove all taxes on income from the federal statutes, obsolete the income tax by providing a viable and constitutional alternative based on consumption purchases only, and Congress will have every political encouragement in the world to grab at the freebee of killing the income tax amendment for political gain.
Guaranteed any political party with the gumption to push the repeal of the 16th amendment while the iron is hot and in total view of the electorate is guaranteed the control of Congress and the Whitehouse for decades to come. But it ain't in the cards as long as the income tax is the source of revenue for federal government. A century of political wrangling under those terms has made that absolutely clear.
Firstly, it's not a "confiscatory rate" but a "revenue neutral" which means that overall the total tax intake will be about the same from either system.
If you think you are going to be able to spend the money you have saved without paying extra for the privelege, you're sadly mistaken since you'll actually be paying what amounts to a tax in the form of cascading embedded taxes that go to increase the price of everything you buy with each purchase. This is a hidden tax but it's there and denying it is not - as some are wont to do - doesn't eliminate it.
Yup, I think that most of the long-time FairTax supporters do also.
CHIEF always used to observe:
"Ignorance is temporary, but stupid is forever ...".
If the shoe fits for any case ...
Daer Mind-numbed Robot,
I'm excluding myself, and a fair number of the NRSTers, including you.
I see at least some NRSTers trying to actually address the real arguments at hand, without falling perpetually into bluster and bs.
However, when a few NRSTers say things like, you can't pass the NRST legislation conditioned on the ratification of a constitutional amendment, or you can't have a constitutional amendment that would provide a transition period, well, the assertions are made, no actual evidence is presented, just a lot of bluster and bullsh!t, and frankly, I think it hurts the debate.
We've pretty much seen, as an example, that the fellow whose study all the NRSTers previously cited never meant that folks were both going to get back their income and payroll taxes AND we were going to lower prices 22%.
Some NRSTers now see this is the case. That's great!
Now we can dicker, reasonably, over just how MUCH savings there might be in either case, either that employees get most or all of the tax savings, or the savings get passed through in lower prices. That's a reasonable discussion!
But there are still some NRSTers running around saying that folks are pretty much universally going to get their old, pre-NRST salaries, without any of the payroll taxes or income taxes taken out, AND prices are going to fall 22%.
No evidence is presented for this, and the fact that they so badly misinterpreted the fellow on whose study they relied for so many years is totally glossed over.
That's bluster and bullsh!t.
Frankly, the bs makes me much more leery of the whole idea than I otherwise would be.
"If you were a sponsor of this bill would you want to wait to implement its advantages, perhaps the biggest being eliminating the present system, until the years it would take for a Constitutional amendment?"
If I were a politician? No, of course not. If I were a politician, I'd secretly hope that the 16th amendment never got repealed, no matter how much I said publicly otherwise.
Politicians will never want to give up the ability to have an income tax, for all the reasons cited by NRSTers why the income tax is so flawed.
"I think their motives are practical rather than nefarious."
For the actual citizens who support the NRST, I agree 100%.
But I can't say that I believe that about the politicians.
"It seems to me that misinformation is more likely to be coming from those doggedly defending this present oppressive monstrosity."
No, sorry, Mind-numbed Robot.
It is NOT misinformation to point out that the NRST, as now before Congress, would be passed into law without the repeal of the 16th amendment.
It is NOT misinformation to point out that the 16th amendment COULD be repealed with a transition period (as I pointed out with the 18th amendment).
It is NOT misinformation to point out that the NRST legislation could be passed with a start date of or after the ratification of the repeal of the 16th amendment.
However, efforts to say otherwise are pure, unadulterated, blustering falsehoods.
I will not speculate on the motives of those who post such falsehoods. Perhaps they believe the falsehoods.
But they are quite plainly falsehoods.
sitetest
Nope Rongie, "... the researchers denial that they both can happen ..." is the fiction that the Squirrels are trying to promote. I know of no researchers who have made anything resembling a definitive statement like that - just youse guys (and I doubt you'd qualify as "researchers").
That all remains to be seen ...yet you state it as some sort of absolute fact.
Seems like a questionable method.
Dear ancient_geezer,
Your view is that the repeal of the income tax code would lead to repeal of the 16th amendment. I understand your argument but strongly disagree with it.
Frankly, I don't see why Congress would repeal the 16th amendment once the income tax is repealed.
They'll say, just as YOU are saying, "It isn't necessary. We ABOLISHED the income tax. We ABOLISHED the IRS. Amending the Constitution is hard! We can't get the other guys to go along with it! And we'll never get 3/4 of the states to ratify it!"
And, they may be right about that.
But they'll have less incentive than they have now. They'll use the same excuse you use now: It isn't necessary.
However, whether I'm right or your right, NRSTers who say there is no mechanism by which it could be done are spreading falsehoods. If I were an NRSTer, I would repudiate those posters, because they make my side look bad to folks trying to find an honest debate.
You could at least try to clean up the falsehoods being propogated in the name of the NRST.
sitetest
That has always been a bogus number with no backup or methodology behind it, Nightie.
It still is, so why do you bother to post it again?.
That would certainly make these threads an aweful lot shorter.
Dear Always Right,
I actually think it would work to the advantage of the NRSTers, as well.
sitetest
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.