Just how fair is the 'FairTax'?

Money.cnn ^ | 9/7/05 | Pat Regnier

[Man50D]

NEW YORK (Money magazine) - If you don't care much for talk radio, or you don't live in the South, the name Neal Boortz might not ring a bell.

But pay attention: Around 4 million people nationwide catch his radio show. It's No. 1 in Boortz's home market of Atlanta and ranks first or second in numerous smaller cities in red states.

His 180-page polemic for radical tax reform, The FairTax Book, made its debut at No. 1 on the New York Times' bestseller list in August.

When Boortz came to Jacksonville for a book signing at a downtown hotel on a sticky, sweltering Thursday night last month, close to 1,000 people turned out for a chance to meet him -- and to bask in his rage at the Internal Revenue Service.

"How many of you want the federal government out of your paycheck?" asks Boortz from the hotel's ballroom stage. Wooo-hooo! roars the crowd. Boortz's wife Donna, standing at the back of the room, looks on in amazement.

"This is for taxes," she says. "This is not sex and violence we're talking about."

No kidding. Everybody likes a tax cut, but fundamental tax reform is one of those issues that's generally as boring as it is important. Who wants to waste an evening thinking about marginal rates? But the plan Boortz is selling is disarmingly simple: Just eliminate most federal taxes -- income tax, Social Security tax, corporate tax, what's left of the estate tax -- and replace them with a big, fat national sales tax.

[woodbeez]

You would be "ripped off" by your employer only if you assume no price reduction on goods and services.

You make the exact same amount of money and your employer reduces his price by the money saved on his gross employee costs (not net take home pay) and his income tax costs(assuming no other savings). If you believe in the power of capitalism, his prices drop by that amount. His bottom line and your take home pay remain exactly the same

I'm sure no one will be upset when they learn their hourly rate is being reduced...

If now, under the current income tax system, you got an increase in your hourly wage but saw your withholdings increase by more than you earned from the hourly wage increase, is that a pay raise or a pay cut? How does that fit into your equation?

[Buckeye Battle Cry]

"...something so ignorant".

Well, aren't you the presumptuous one.

I'm a tax lawyer with 17 years of experience (includiong training IRS agents from Chicago, Baltimore and Philly).

"Ignorant" is something I am not when it comes to the Internal Revenue Code.

I accept your apology.

[Buckeye Battle Cry]

Oh, and by the way, if you implement the "fair tax" and somehow believe that Dems won't turn it into a VAT as soon as they regain controll of Congress, I've got some land off of the coast of Tennessee I'd love to sell you my naieve little friend.

[Buckeye Battle Cry]

Well, at least you didn't call me ignorant and insinuate that I had the maturity level of a grade schooler.

I appreciate your being respectful in your disagreeing with me (unlike others on this thread).

[Buckeye Battle Cry]

Sonny - the Fair tax is the foundation upon which the Dems will launch the VAT process as soon as they takeover control of Congress. And, that day will come. When I do not know. But, it will come.

[ancient_geezer]

I'm a tax lawyer with 17 years of experience (includiong training IRS agents from Chicago, Baltimore and Philly).

"Ignorant" is something I am not when it comes to the Internal Revenue Code.

I see, that makes you an expert on VATs and Retail Sales Taxes some how? Seeing that neither in implemented under the current Internal Revenue Code.

Ignorance, as a measure of lack of knowlege, is as Ignorance does.

Oh, and by the way, if you implement the "fair tax" and somehow believe that Dems won't turn it into a VAT as soon as they regain controll of Congress

Ahhh! I really hate to be the one to inform you but for all practical purposes, our corporate tax is but one step from a VAT.

http://www.taxfoundation.org/foundationmessage03-00.html

"Under the WTO definition of the term, a sales tax is an indirect tax, as is an European-style VAT. The economic equivalence of an European-style VAT and a subtraction-method VAT is well-established. A subtraction-method VAT is essentially identical to a business income tax except that all purchases of plant and equipment may be expensed, rather than depreciated as under current U.S. law."

 

Collection of Value Added Tax

Issue: What Is the Best Way to Collect a Value Added Tax?

A value-added tax (VAT) generally is a tax imposed and collected on the value added at every stage in the production and distribution process of a good or service. Although a VAT may be computed in any of several ways, the amount of value added generally can be thought of as the difference between the value of sales and purchases of a business.

Several administrative systems could be used for a VAT: the credit-invoice method, the subtraction method, and the addition method. The credit-invoice method has been the system of choice in nearly all countries that have adopted a VAT. A subtraction-method VAT is also known as a business-transfer tax. The addition method is a mirror image of the subtraction method and will not be discussed here.

Credit-Invoice Method VAT. Under the credit-invoice method, a tax is imposed on the seller for all of its sales. The tax is calculated by applying the tax rate to the sales price of the good or service, and the amount of tax generally is disclosed on the sales invoice. A business credit is provided for all VAT taxpayers on all purchases of taxable goods and services (that is, on inputs) used in the seller's business. The ultimate nonbusiness consumer does not receive a credit for his or her purchases. The VAT credit for inputs prevents the imposition of multiple layers of tax on the total final purchase price. As a result, the net tax paid at a particular stage of production or distribution is based on the value added by that taxpayer at that stage of production or distribution. In theory, the total amount of tax paid with respect to a good or service from all levels of production and distribution should equal the sales price of the good or service to the ultimate consumer multiplied by the VAT rate.

To receive an input credit, a business purchaser generally is required to have an invoice from a seller containing the name of the purchaser and the amount of tax collected. At the end of a reporting period, a taxpayer may calculate its tax liability by subtracting the cumulative amount of tax stated on its purchase invoices from the cumulative amount of tax stated on its sales invoices.

Subtraction-Method VAT. Under the subtraction method, value added is measured as the difference between a business's taxable sales and its purchases of taxable goods and services from other businesses. At the end of the reporting period, a rate of tax is applied to this difference in order to determine the tax liability. The subtraction method is similar to the credit-invoice method in that both methods measure value added by comparing sales to purchases that have borne the tax.

The subtraction method differs from the credit-invoice method principally in that the tax rate is applied to a net amount of value added (sales less purchases) rather than to gross sales with credits for tax on gross purchases. A business's tax liability under the credit-invoice method relies on the business's sales records and purchase invoices, while the tax liability under the subtraction method may rely on records that the taxpayer maintains for income tax or financial accounting purposes.

 

Seems to me you have missed the boat, Congress Critters are busily figuring out how to change the current corporate income tax, (which as all the necessary infra-structure elements for a VAT in place) into a WTO style VAT right under your nose by pretending the essential modification is somehow different from a VAT.

Committee on Ways and Means, Subcommittee on Select Revenue Measures, 5-9-02 Testimony

 

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OTOH, Of the 45 states in the United States, having retail sales taxes, not one has managed to convert their retail sales tax system into a VAT inspite of Democrat legislatures in place in many of them over the decades that states have used retail sales taxes.

What you have missed is that no retail sales tax has ever been "turned into" a VAT. The VAT is a modification of European turnover taxes levied on business to business sales by adding a credit feature to reduce the cascading effects of such taxes as products pass from business to business in the production and marketing chain. That the VAT was made a requirement of EU membership to facilitate trade through tax harmoniztion and removal European turnover taxes.

 

http://www.uq.edu.au/economics/johnquiggin/news/GST9806.html

"The VAT was introduced in France in 1954, to replace a system which relied a highly distortionary turnover tax on sales to supplement a rather ineffectual income tax system. The problem with a turnover tax is the 'cascade' effect arising from the fact that goods are taxed every time they change hands. The effective rate of tax on a good therefore depends on the length of the marketing chain from producer to final consumer. At even modest rates, cascade taxes are highly distorting. The VAT solves this problem elegantly, by allowing firms to credit the tax already paid on their inputs against the tax imposed on their sales. The net tax payable is therefore a fixed proportion of value-added. ..."

"Like the metric system, the VAT was adopted by other European countries, and the use of a VAT was made a condition of membership of the European Union. Once again, the English-speaking countries had less need to make the change, and were slower to do so. Their income tax systems were more effective, and their wholesale and retail sales taxes were less distorting than cascade taxes. ..."

 

Interestingly enough, retail sales taxes are treated separately in the EU, as a separate from of taxation entirely from the VAT and is allowed as a parallel system of taxation over and above the VAT altogether as the VAT is more akin to a corporate income tax. than it is to a Retail Sales Tax.

 

http://europa.eu.int/eur-lex/en/consleg/pdf/1967/en_1967L0227_do_001.pdf

FIRST COUNCIL DIRECTIVE
of 11 April 1967
on the harmonisation of legislation of Member States concerning
turnover taxes
(67/227/EEC)
THE COUNCIL OF THE EUROPEAN ECONOMIC COMMUNITY,

Having regard to the Treaty establishing the European Economic Community,and in particular Articles99 and 100 thereof;

Having regard to the proposal from the Commission;
Having regard to the Opinion of the European Parliament;
Having regard to the Opinion of the Economic and Social Committee;

Whereas the main objective of the Treaty is to establish,within the framework of an economic union,a common market within which there is healthy competition and whose characteristics are similar to those of a domestic market;

Whereas the attainment of this objective presupposes the prior application in Member States of legislation concerning turnover taxes such as will not distort conditions of competition or hinder the free movement of goods and services within the common market;

Whereas the legislation at present in force does not meet these requirements;

Whereas it is therefore in the interest of the commom market to achieve such harmonisation of legislation concerning turnover taxes as will eliminate, as far as possible, factors which may distort conditions of competition, whether at national or Community level,and make it possible subsequently to achieve the aim of abolishing the imposition of tax on importation and the remission of tax on exportation in trade between Member States;

Whereas, in the light of the studies made, it has become clear that such harmonisation must result in the abolition of cumulative multi-stage taxes and in the adoption by all Member States of a common system of value added tax;

Whereas a system of value added tax achieves the highest degree of simplicity and of neutrality when the tax is levied in as general a manner as possible and when its scope covers all stages of production and distribution and the provision of services;whereas it is therefore in the interest of the common market and of Member States to adopt a common system which shall also apply to the retail trade;

Whereas,however,the application of that tax to retail trade might in some Member States meet with practical and political difficulties; whereas,therefore,Member States should be permitted,subject to prior consultation,to apply the commom system only up to and including the wholesale trade stage,and to apply,as appropriate,a separate complementary tax at the retail trade stage,or at the preceding stage;

Whereas it is necessary to proceed by stages,since the harmonisation of turnover taxes will lead in Member States to substantial alterations in tax structure and will have appreciable consequences in the budgetary,economic and social fields;

*** SNIP ***

 

---

 

I accept your apology.

You will have my apology the moment you demonstrate a knowledge of the difference between a single stage retail sales tax from a VAT.

Some how I do not expect an apology from you.

I've got some land off of the coast of Tennessee I'd love to sell you my naieve little friend.

Don't need any as I have some great beachfront property down in Southwestern Colorado I'll be happy to sell you. In them mean time I suggest you start learning about what VATs really are before you have one sitting on your back, whether put in place by Democrats or Republicans in power.

Background on the issues, and why government, bottomline, is headed where it is where the tax system is concerned:

The International Components of Tax Reform
by Ernest S. Christian
IPI Policy Report #166a

The choice is VAT, EU style, that does not repeal individual income/payroll taxes, in fact just layers over the current federal tax system,

ECONOMY; A New Money Machine for the U.S.;
Bruce Bartlett, for NCPA

or Nation Retail Sales Tax that replaces all federal income/payroll taxes, and does not lay U.S. taxes on manufacturers in the first place, pick your poison. I prefer the retail sales tax I can see, over the VAT that is implemented out of sight and out of accountability to the electorate.

H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.

Refer for additional information:

• search: "national sales tax" OR "national retail sales tax" OR "fairtax"

[lewislynn]

His bottom line and your take home pay remain exactly the same

Presently, when someone uses the term "take home pay" it means after taxes have been deducted. The take home pay AMOUNT might "remain exactly the same" but the AMOUNT is BEFORE tax, not after tax. In addition to what your employer ripped you off for your new take home value would be reduced 23%...That's a double whammy!

As to reduced prices. Most all products are produced in foreign countries or the materials for their production are. THEIR prices (as in MOST prices) won't be changed by YOUR reduced wage. That's a loss to the consumer/employee.

If now, under the current income tax system, you got an increase in your hourly wage but saw your withholdings increase by more than you earned from the hourly wage increase, is that a pay raise or a pay cut? How does that fit into your equation?

Is the discussion income taxes or a hypothetical sales tax? "The current system" actually exists, the sales tax is hypothetical, wishful thinking, lies and conjecture. If you have a real life example, (not one you made up) of your what if, you can post it and we'll discuss it...

[Always Right]

Well, at least you didn't call me ignorant and insinuate that I had the maturity level of a grade schooler.

This is why most people on this forum stay away from fair tax threads. Unless you are drinking their kool-aid, the insults fly.

[woodbeez]

The take home pay AMOUNT might "remain exactly the same" but the AMOUNT is BEFORE tax, not after tax.

True, but you left out the last half of my equation: What about “You would be "ripped off" by your employer only if you assume no price reduction on goods and services”. Your response to that is:

Most all products are produced in foreign countries or the materials for their production are

Many products are produced in foreign countries but many foreign corporations make products here now. Toyota and Honda are two of the big ones. They are here because they save money. Eliminating the corporate/income/payroll tax burden would encourage more investment in our country. You also fail to mention the service economy. Most services performed in America are by American citizens. If you need a lawyer, I doubt you would go abroad to find one. And as to

Is the discussion income taxes or a hypothetical sales tax? "The current system" actually exists, the sales tax is hypothetical, wishful thinking, lies and conjecture. If you have a real life example, (not one you made up) of your what if, you can post it and we'll discuss it...

Increases in payroll and income tax withholdings have happened and will have to continue to currently fund promised benefits. It is not a hypothetical

[lewislynn]

products are produced in foreign countries but many foreign corporations make products here now. Toyota and Honda are two of the big ones. They are here because they save money.

HMMM.

You also fail to mention the service economy. Most services performed in America are by American citizens. If you need a lawyer, I doubt you would go abroad to find one.

I don't recall mentioning any industry but since you brought it up what part of a lawyer's service would be cut?...His/her gross Income?

BTW, my business (over 20yrs) happens to be a service business.

[Sonny M]

I do not want a VAT, I'll support a fairtax if we can constitituionalize a way to guarantee no more income tax and also give me a guarantee of no VAT....i.e. I'm for a fair tax, as its written and idealized... but as soon as its not, I'll fight against it every step of the way.

I want guarantees.

[ancient_geezer]

I want guarantees.

"The American Republic will endure until the politicians learn they can bribe the people with their own money."
Alexis d'Tocqueville, The American Democracy (1841)

Guaranteed.

Bush touts relief as tax day looms

Another 3.9 million Americans will have their income tax liability completely eliminated, officials said.

That's 3.9 million Americans more added to the spending constituency of 70% of the public clamoring for more from government, figuring someone else foots the bill.

[lewislynn]

Increases in payroll and income tax withholdings have happened and will have to continue to currently fund promised benefits.It is not a hypothetical

I guess you didn't hear about the Bush tax cuts.

How would a sales tax end funding "promised benefits"?

[woodbeez]

Is "HMMM" an argument for or against what I said?

I don't recall mentioning any industry but since you brought it up what part of a lawyer's service would be cut?...His/her gross Income?

When you say a "lawyer's service" I assume you mean his fee. To begin with, he would not have to pay SS taxes. That is almost 14% of his income. The percentage savings on income taxes paid would depend on how successful he is. He could cut his fee by that total and still get the same amount of money in his pocket(net income).

BTW, my business (over 20yrs) happens to be a service business

Just curious. Are you self-employed in a service industry, like the lawyer, or do you run a service business with employees. It doesn't change the equation but it would help me explain it better as it applies to you.

[woodbeez]

You called my scenario hypothetical. I was merely pointing out it wasn't. It has actually happened. Check out the "reform" of SS in the 80s.

I guess you didn't hear about the Bush tax cuts.

I hope he pushes to make those tax cuts permanent and continues cutting taxes. Any income tax reduction would reduce the NST %.

How would a sales tax end funding "promised benefits"?.

It wouldn't. Social Security (as it is) remains the same. I'm all for reforming that too.

[Buckeye Battle Cry]

Touch a nerve there?

You'll never live to see the Fair Tax. But, I admire your enthusiasm about it.

[ancient_geezer]

No nerve touched other than that which is always of concern where misinformation is spouted about as truth.

I may or may not live to see the FairTax legislation enacted, that says little.

I will not live to see a great many things happen that are certain to happen. Whether the FairTax act is among them remains to be seen.

Conditions are never just right. People who delay action until all factors are favorable do nothing.
--William Feather

"The only thing necessary for the triumph of evil is for good men to do nothing."
--Edmund Burke (1729-1797)

[pigdog]

There are clearly more than the two alternatives you offer as the be-all and end-all options you proffer (your "economists assume ..." nonsense). And any claims about prices declining are hardly based upon a single economist as you state. None of you SQLers have ever been willing to admit that the costs of cascading taxation embedded into prices will be removed when the FairTax becomes law. This will certainly work to reduce prices and I have no doubt that studies are ongoing on these effects.

There is certainly no reason why there is not AT LEAST a third assumption having wages increase and prices decrease - but this doesn't fit the SQL playbill of disinformation so you never mention it as a possibility. It is, however, clearly another option to the two you present and probably the most likely of all. And your "economists assume" only two outcomes statement is nonsense. That's YOUR statement.

And there is nothing that I have seen in "The FairTax Book" that states that both benefits occur simultaneously in any event - that again is merely your statement to try to persuade others that any FairTax supporter is lying. They certainly could both occur and whether at the same time or reasonably close to each other is difficult to say. Are you trying to persuade us that only one will occur exclusively of the other? On what do you base that assumption???

Well, Nightie your #64 on this thread (of which you seem so proud) is just the same old rehash you're done previously. Perhaps you have re-arranged the order of some of the snippets, but that can easily be sorted out in my response to your original opost of this nonsense which was ---

---

"The 11 cut-and-pastes you stitched together in your post (and aren’t YOU the guy continually criticizing ancient_geezer for HIS cut-and-pastes??) Fall into 2 categories - FUD (Fear, Uncertainty, and Doubt) and OOC (Out of Context quotation). The FUD Factor items are marked with a “*” and the OOC items with a “+”.

The 11 items are:
1 - Garner (Zodrow, Gravelle, Gale)*
2 - Koltikoff+
3 - Response to Gale by Mastromarco/Burton+
4 - Mastromarco/Burton real estate +
5 - CBO Price Level*
6 - Slemrod/Bakija; Taxing Ourselves*
7 - Gravelle & Esenwein; CRS Overview*
8 - Wilkins; National Retail Federation*
9 - Zodrow; Transitional Issues*
10 - Bull & Lindsey; Monetary Implications*
11 - Hall; Price Level*

Let’s take the OOC items first -
Item 2 (Koltikoff) - in a two paragraph discussion of whether or not the FairTax is regressive in theory, the author made certain assumptions to illustrate a point. You merely took these assumptions and presented them as though they were a fact - his belief - he was presenting. They were assumptions to illustrate a point, not fact he was presenting.

Item 3 (Response to Gale) - You conveniently left out the portion where the responders point out that prices would drop with the assumption of the FairTax, and that Gale, in fact, was contradicting himself. Here’s a link to the entire response midway on page 14 (through midway on page 15) where it says:
” J. Gail Perspective: Consumer Pricing: Up, Down and Sideways Simultaneously”. Gale completely overlooks the fact that prices would drop with the onset of the FairTax as the responders point out. After this price drop, prices would then be raised up again to some degree by the sales tax which is the meaning of their statement “... prices will increase by the amount of the sales tax but returns to labor and capital will be higher.”

Item 4 (Real Estate Foundation) - The footnote you posted from this response also suffers from the same flaw in reasoning as Item 3 just above. Price will first decrease with the advent of the FairTax causing the after tax increase in wages mentioned as well as the increase of prices back in an upward direction from their decrease to the lowered level mentioned above

So much for your out of context quotations. Next we take up the FUD Factor Items:

Item 1 (Garner) with points from (Zodrow, Gravelle, Gale) - As with almost all of the liberal FairTax opponents, the discussion presents what amounts to a description of a VAT structure (calling it a “consumption” tax) and comparing that to a flawed description of the FairTax (which includes a discussion of exemptions/exceptions “required”). In addition the discussion goes on to the SQL “leap of Faith” (as do you) that prices MUST increase with the advent of the FairTax ... while showing no such convincing (or even fairly convincing beyond just stating it) evidence of why this would happen. Garner is obviously not too familiar with the FairTax as he describes a decline in bond values and the idea of corporations “losing” their depreciation - which of course is nonsense under the FairTax. He also uses heavily from well-known SQL sources such as Zodrow, Gravelle, and Gale which in and of itself should merit serious concern.

Item 5 (CBO) - Hardly a benefactor of the Status Quo (yeah, right) but also makes the “Leap of Faith” as in Item 1 that prices must increase with the advent of the FairTax. They do, of course, but only after first declining by the removal of the income tax component leaving them more or less the same overall. Despite that lapse, the opinion is offered that the Fed will step in to raise prices (without any clear or convincing indication of why this might be so; merely the claim that it is so).

Item 6 (Slemrod/Bakija) - Here, from a long time SQL advocate (Slemrod) we see the similar liberal “Leap of Faith” that the sky would fall in the opinion (offered again without any backup) that corporate earnings would fall by 20%. A slightly different twist is given in that the Fed rather than raising prices would now, God-like, merely “monitor” prices to decide if any action need be taken to PREVENT A PRICE RISE (rather than causing it as in Item 5. Perhaps rather than calling these sorts of SQL ploys a “Leap of Faith” (which of course they are), they should be called the Chicken Little Syndrome.

Item 7 (Gravelle & Esenwein - CRS) - Once again we see the Chicken Little Syndrome in full operation where any price reduction due to the FairTax is completely ignored and sweeping statements reflecting a great lack of understanding of the FairTax are made by claiming that the tax “must be paid” in an example industry having a 1-2% profit margin which “now owing a tax equal to 20% of receipts” - all the while ignoring the fact that the business does not pay the sales tax (at all, let alone out of its “profit margin”), but that the customer of the business pays the tax. In addition, the CRS folk seem to not understand that the FairTax is border-adjustable as well as the old unwarranted assumption about lower wages being required (for some reason). There are a good number of other flaws in the paper itself other than the selected snippet posted. We also see the use of the old chestnut of anonymous “... economists who judge a consumption tax to be superior to an income tax may nevertheless be skeptical about the advisability of making the change because of these transition effects. You’d think that at least these “unnamed economists” would appreciate the credit (?) of being named.

Item 8 (Wilkins - National Retail Federation) - This is a study originally commissioned by the NRF from Coopers & Lybrand (who had, as I recall, Wilkins as the leader of the group doing the “investigation”). It is of the Chicken Little/Leap of Faith persuasion and is impossible to tell much about - aside from the lack of veracity - since, despite requests, it was never published so others could investigate its pronouncements. This link:
http://www.fairtaxvolunteer.org/smart/PwCRebuttal.pdf
has a refutation of the Wilkins/PwC/NRF “study”. A HIGHLY RECOMMENDED READ!!

Item 9 (Zodrow - Transitional Issues) - this is merely George once again “doing his thing”. He pretty much makes the usual Chicken Little observations, but is at least honest enough to mention that the “... opinion on this issue is certainly not unanimous.“ And goes on to cite the Jorgenson 25% or so price decline. Kudos, George, for inserting a bit of much needed honesty into the discussion. Makes the Leap of Faith about the Fed being magical and omniscient.

Item 10 (Bull & Lindsey - Monetary Influences) - Makes the Leap of Faith about the wage decline without even considering the removal of the cascaded income tax in prices. This may be one of the reasons that Lindsey is no longer a Presidential Advisor on the economy.

Item 11 (Hall - Price Level) - Why is it not surprising that someone largely thought of as an author of the Flat Tax be strongly in favor of that over the FairTax (which he nowhere demonstrates an understand of aside from the requisite Leap of Faith that wages will be lowered and prices raised (the Chicken Little Syndrome again) while ignoring any price reductions offered by the advent of the FairTax.

So, let me see now if I have this straight ... the FairTax supporters may not use the economic data which is presented in good detail on the Americans For Fair Taxation website (because you say so) while you are quite free to use all of the snippets you can gather up from the known SQL defenders (who seldom, if ever, admit to being so - just like you) even if they are only op/ed pieces with little or no economic detail? By George, I think I’ve got it!!! "

---

To be correct we should note that the study in #8 is now "available", but only if you wish to buy it - which I certainly do not since it's been heavily rebutted.

That "stuff" is no better now than then - but nice try to try to trick the unwary!

[pigdog]

You apparently haven't done much checking up on the Flat Tax and what it REALLY does! Most of the countries you seem so enamored of also have other taxes that complement their flat tax such as VATs and even personal and business income taxes as well in addition to their flat tax. Most of these countries are sad endorsements, indeed, for our country to go down the same path.

All flat taxes, BTW, still retain the payroll/withholding taxes that are often the highest taxes most people pay. Those don't go away.

In addition, all flat taxes are income-based taxes and, as such, have the wonderful characteristic of embedding, cascaded tax costs into the prices of everything we buy - adding nothing but non-productive price increases.

Moreover, no flat tax begins to address the obraining of more tax revenue from the illegal economy (illegal aliens, drug dealers, etc.) when they buy things at retail (as does the FairTax) nor does a flat tax system help our export busineses by lowering their prices in the form of border adjustable taxes.

Beyond that, such taxes cause a grave imbalance in tax burdens even beyond what we now have and yet they manage to retain almost all of the undesirable characeteristics of the present system ... including the hiding of taxation by various almost-invisible legislative means and offering a target-rich landscape for the Gucci Gulch crowd on K-Street.

Even Forbes admits his plan is not revenue neutral - which is one of the President's requirements.

[pigdog]

It's certainly good that you don't call names as you're always accusing the FairTax supporters of doing - otherwise I might think "fairy taxers" was not just a typo.

It's hard to understand why you keep posting and hyping this nonsense from the liberal reporter who hates Boortz AND the FairTax, who quotes only well-known virulent opponents such as William Gale of Brookings, etc. and never presents anyone in favor of the FairTax in anything but an unfavorable light - much as you SQLers attempt on these threads. The reporter even quotes a liberal tax law professor with an economic interpretation (that happens to be wrong) to attempt to bolster his weak piece.

The writer is as misinformed as are you as to what embedded taxes are ... he, like you or your hero Robbie, hasn't a clue. You all keep trying to pretend that anyone supporting the FairTax is nothing but badly misrepresenting the FairTax and its benefits. That's not true; it is you Squirrels that are doing that trying to all sorts of scenarios and "discoveries" that are not discoveries of anything at all but merely your own warped opinions and interpretations.

You have even misstated what the economist Jorgenson has said plus the representation that all of the FairTax is built upon his interpretations (as you interpret them). That's nothing but piffle and you know it.

You continually hold any FairTax supporter out to be a liar, dishonest, stupid, etc. and yet it is always your representation that the FairTaxers are doing the namecalling and denigration. BS!!

This reporter that now has you drooling and gurgling over HIS misstatements and misinterpreatations (and half-truths) is no more correct than your idol Robbie whatsis a few threads ago who in his overreaching vanity posts put out the same trashy interpretations.