Posted on 10/19/2006 5:11:50 PM PDT by pigdog
As specified in Congressional bill H.R. 25/S. 25, the FairTax is a proposal to replace the federal personal income tax, corporate income tax, payroll (FICA) tax, capital gains, alternative minimum, self-employment, and estate and gifts taxes with a single-rate federal retail sales tax. The FairTax also provides a prebate to each household based on its demographic composition. The prebate is set to ensure that households pay no taxes net on spending up to the poverty level.
Bill Gale (2005) and the President’s Advisory Panel on Federal Tax Reform (2005) suggest that the effective (tax inclusive) tax rate needed to implement H.R. 25 is far higher than the proposed 23% rate. This study, which builds on Gale’s (2005) analysis, shows that a 23% rate is eminently feasible and suggests why Gale and the Tax Panel reached the opposite conclusion.
This paper begins by projecting the FairTax’s 2007 tax base net of its rebate. Next it calculates the tax rate needed to maintain the real levels of federal and state spending under the FairTax. It then determines if an effective rate of 23% would be sufficient to fund 2007 estimated spending or if not, the amount by which non-Social Security federal expenditures would need to be reduced. Finally, it shows that the FairTax imposes no additional real fiscal burdens on state and local government, notwithstanding the requirement that such governments pay the FairTax when they purchase goods and services.
(Excerpt) Read more at people.bu.edu ...
If nobody gives a fig about the FT, since a vast majority pays less under the present system ...
except politicians using the half-truths and buzzwords when addressing "the masses" just to get reelected.
How could a fast talking politician (doesn't describe Linder, that's for sure) hope to get elected? Sure sounds contradictory to me.
"As I said, a life basket of essential goods and services could be exempt from the tax altogether."
Then they need to go back to the drawing board and do that.
Until that happens it would never pass and its impossible to figure a rate that could work.
Note the $38 billion FairTax on mortgage interestAnd $46 billion ON personal interest (credit cards, car loans etc.)...so much for the 25% reduction in interest rates.
I always thought that was one of their most bizarre claims. It was never explained why interest rates would magically drop 25%. Some paid for economist said it would, therefore it was a fact.
No new activity is captured (and all the FairTax literature agrees.) The point and method of collection are merely changed.
The effect on the illegal consumer of legal goods is to raise the price of the illegal goods without any increase in income ... illegals don't get the benefit of receiving formerly withheld income and payroll taxes ...
As the relative cost of making taxed legal purchases rises, the incentive to move those transactions underground increases; that decreases the tax base and lowers overall tax revenue.
Not true. You will stiller have to have a government agency to enforce collection and remittance.
stiller? How did that happen?
Some paid for economist said it would, therefore it was a fact.Like all their claims. Do you remember when Jorgenson's name was mentioned in every other post as if his word was gospel? Now he's avoided like the plague. Kotlikoff is getting close to Jorgenson status. How many times have you heard that you'd be paying your mortgage tax free? And when did you ever hear anyone (but us) say that states and local governments would have to raise taxes to pay their Fairtax?
The interest rate reduction was supposedly because of the income tax component, IOW rates would drop to tax free bond levels. Actually there would no longer be tax free bonds. Rates in fact would INCREASE because those former bond holders would indeed have to pay a tax on their gain(s) when they spend them and there'd be nothing to write off.
Investors aren't as stupid about their money and taxes as Fairtaxers are.
"When the resident spokesperson for the Fairtax [sic] spews obvious lies, post after post after post any sane person would wonder, if it's such a great plan why the OBVIOUS lying ."
So that you don't just leave everyone in a quandary wondering who this mythical person might be - and what the many "OBVIOUS lies" might be, why don't you name this poster and post here the specifics of the "lies" with appropriate links???
That way you can "tell everyone the truth". I'm sure that would be appreciated by all.
No, no, no ...I did not mean to imply that. I meant it is unlikely that your effective tax rate will increase. It is possible, but unless you are at the EITC limit, your effective rate will likely decline. It turns out that for most, the EITC is substantially less than their prebate would be. Regardless of your income situation, you receive the same prebate. Your EITC is relative to your income (and, to a lesser degree than the prebate, family size). For most, their tax burden will decline. Even the bottom quintile tax payers pay about 6% effective tax today.
The similarity is in the principle, not the cut.
Here's why it's different: tax cuts stimulate economic activity because more money is left in the private sector to INCREASE consumption. No matter how you try to spin it, if the FairTax is made revenue neutral, the same amount of money is left in the private sector. It might be in different hands, but the aggregate amount is the same. There can be no stimulus.
The principle is NOT the same. It is well known that the FairTax will DECREASE consumption. Any economic benefit from the FairTax is attributed to eliminating the tax on investment making investment, and general income generation a preferred activity. People will choose to work more and to invest more rather than consume ... a VERY different stimulus.
I DO favor tax CUTS. I DO favor eliminating taxation of investment. I DO NOT favor the FairTax as a means of accomplishing that goal.
For all the "choices" you claim you would have, consider this: unless people CHOOSE to spend exactly what they spend today (or more) on TAXABLE items, the FairTax will be short of revenue. GUARANTEED that will result in two actions: increase in the debt (deficit spending) and an increase in the tax rate! The tax rate will increase if only to make SS/MC funding whole. That increase requires no Congressional intervention; it's an administrative action.
I am of the impression that you think the FT is a scam.
No, I don't think it's a scam; I think its a bad idea, based on flawed economics; misrepresented to a poorly informed constituency who largely are united by their hatred of the IRS.
But there is a huge difference between what happens today and what would happen under the fairtax here. Today when someone makes a legal transaction with funds derived from illegal activity he pays only those taxes and compliance cost that are embedded in the price of the product or service he is purchasing and is making that transaction with funds which are, up to that point, completely untaxed while someone who earns his income from legal activity is making that exact same transaction with funds from which income tax, social security tax and Medicare tax have all been removed before he gets the opportunity to make the transaction. That would NOT be the case with the fairtax as the source of ones earnings would then be irrelevant.
The difference is that the legal income from which the illegal activity is paid is now taxed before enter the illegal economy, but under the FairTax it will not be taxed.
I beg to differ. The fellow who paid for the illegal activity may well have paid all of the taxes on HIS income but the person to whom he pays this money certainly DOES NOT go find the IRS and pay his taxes!
No new activity is captured...
I beg to differ. See above.
(and all the FairTax literature agrees.)
I don't believe that to be correct either.
The point and method of collection are merely changed.
I don't that is so a minor thing as you are trying to portray it.
The effect on the illegal consumer of legal goods is to raise the price of the illegal goods without any increase in income ...
Did you mean for this to read:
The effect on the consumer of legal goods who earned his money through illegal activity is to raise the price of the illegal legal goods without any increase in income ...?
If so I wouldn't worry to much about that as he is paying with untaxed income and the prices are not going to be that much higher in any cas once all the hidden costs of the income tax system are wrung out.
illegals don't get the benefit of receiving formerly withheld income and payroll taxes ...
As they certainly should not since they have not PAID any of the taxes.
"I disagree. The length he goes through to try to cover up lies takes quite a bit of intelligence. He is actually fairly creative in some of his spin. I think he just feigns his acting ignorant routine when he is really caught in a lie. He is just stubborn and will not admit a mistake under any circumstance."
Hmmm!!! These seem to be baseless aspersions without a specific target yet you seem to think the poster you're responding to has someone in mind (and he hasn't named him). Do you perhaps compare notes on hated FairTax supporters to coordinate your personal attacks??
As with the other poster, are you too cowardly to be specific and name names and give specific examples?
But even over and above all that, can you relate to all of us how all of your joint venom and the hatred you spew to other posters has anything at all to do with debating the FairTax? Or is it that vilification is all you know?
Certainly it's true that the points you've tried to debate WRT the FairTax have all turned against you and made you look foolish, but you shouldn't stop trying. Perhaps you can find the "golden bee-bee" of the income tax lover crowd (hint: none of you yet have).
If "attack politics" is all you have, though, perhaps you should post on DU - which is more suited to that sort of thing.
"If the good Lord were a FairTaxer, He would ask 10% of what you spend, not what you profit. "
And if he were an Income Taxer, he'd be like that rich man who wished to enter Heaven) to who the Lord said:
"If thou wilt be perfect, go and sell that thou hast, and give to the poor, and thou shalt have treasure in heaven: and come and follow me" (Mat. 19:21). "
... since as he told those assembled:
""It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God." (Matthew 19:24)"
Surely the IRS would like the sentiment of "give it all up for the IRS" (but they'd probably add penalties and interest for non-filing, etc. as they are wont to do). You can easily see that he'd do better under the FairTax.
One is hard-pressed to find anything of substance there.
"Because the FairTax scheme relies on a consistent level of consumption"
Please give us the link(s) to the exact phrase(s) where you think you read this. Or is this something you just dreamed up especially for this post?
The following comes directly from The FairTax FAQ. I have underlined the portion which shows you to be in error on this point.
Tax criminals - don't make criminals out of honest taxpayers.
Today, the IRS will admit to 25 percent noncompliance with the code. FairTax.org will be generous and simply take the position that this is likely a conservative estimate of the underground economy. However, this does not take into account the criminal/drug/porn economy, which equally conservative estimates put at one trillion dollars of untaxed activity. The FairTax does tax this - criminals love to flash that cash at retail - while continuing to provide the federal penalties so effective in bringing such miscreants to justice. The substantial decrease in points of compliance - from every wage earner, investor, and retiree, down to only retailers - also allows enforcement to concentrate on following the money to criminal activity, rather than making potential criminals out of every taxpayer struggling to decipher the current code.
"Well, let's review this thread."
OK, let's ...
Always Right: Except the paper still fraudulantly [sic]insists that governments can raise money by taxing themselves. The report also states that state governments will have to raise their tax rates to make up for the additional revenues because of the taxes imposed on the states. Not a honest third party analysis, but an analysis by a paid for fairtax [sic] shill. ""My first post was in #5:
Is it that you truly believe that the highlighted phrases were not personal attacks - in this case on the authors of the paper who are well-respected economists - and that by making such attacks you attempt to derogate the economists, the paper, its contents, and those who post in favor of it????
If so, that means you think it's quite fine for you to launch such attacks - as you frequently do - but to have anyone respond is not allowed. Does that seem reasonable to you??? Do you believe that others should sit on their hands and allow you to make such unprovoked personal attacks???
"All rationale [sic] arguments with no personal attacks against any poster. I kept my arguments to factual discussions of what is in the report and undisclosed information about the author of the report. "
"Rational arguments ... really?? "Third party shill" to describe the paper's author is your idea of "rational"??? "Fraudulently insists" and "not an honest ... analysis" are your idea of "factual discussions of the report"??? And you allude to "undisclosed information about the author' so as to presumably let everyone know that he's lying and colluding somehow with someone to purposely present false and distorted information???
By making such statements you're only fooling yourself as most readers who study the paper will find it to be a very descriptive factual, well-reasoned, and mathematically significant piece of work. You merely attempt to "flip it off" by your usual personal attack mode. Won't work.
As for my post #10 which is a response to your post #5 and pointing up the faulty content of that post as I have just done above is probably even less of a personal attack on you that your #5 is on any FairTax supporter, but at least my #10 is directed to you and the content of your post #5 ... and not any sort of attack launched on any of your colleagues who oppose the FairTax (as your #5 was as pointed out above).
Furthermore your additional post (in livid color so all will notice) which says:
"You immediately attack my intelligence. You don't engage in any intelligent debate. You don't refute the points except to call them 'nonsense and utter gibberish'. You initiate your childish attacks, then you have the nerve to LIE about who originated the attacks on this thread. And then you cry and cry repeatedly about personal attacks on you. Your continual outright lying in every thread has no place in a forum which thrives on honest discussion. In my opinion, this forum would be a much better place without you. "
Let's parse that
"You immediately attack my intelligence." - Nope, only the content of your post #5 was "attacked" (which I believe is a misnomer IEA).
" You don't engage in any intelligent debate." - a purposeful misstatement of fact in an effort to denigrate your opponent (and also quite untrue as many could certainly tell you).
"You don't refute the points except to call them 'nonsense and utter gibberish'." - I certainly did call them nonsense and utter gibberish (which is commentary on your presentation, not your intelligence) and I also frequently refute your points on this and other threads ... and you take violent and frequently profane exception to that.
"You initiate your childish attacks, then you have the nerve to LIE about who originated the attacks on this thread." - Seems to me that #5 precedes #10 (and we're finding out about #10 right now).
"And then you cry and cry repeatedly about personal attacks on you." - quite possibly I have more personal and other attacks directed at me than any other single poster on these threads - and yet the Mods do nothing to inhibit such attacks so I have reason to point this out when it happens as not doing so certainly accomplishes nothing but merely emboldens others who think they have free license to do so since they are in no way penalized or inhibited from doing so.
" Your continual outright lying in every thread has no place in a forum which thrives on honest discussion" - absolutely false and a charge that you and others frequently make yet have never shown a single case of these "continual and outright lies" and this merely becomes yet another attack of yours with no demonstrable basis - and it is untrue to boot.
"In my opinion, this forum would be a much better place without you." - there's an obvious response to that which I'll not indulge in ... and I doubt the Mods is listening or would take any action in any event. So go ahead ... keep taking your best shots; but by all means don't ever attack me or other Fairtax supporters since you're so pure-hearted.
Looks like another FairTax thread is headed to the smokey backroom...
Good job, pigdog!
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