Ping.
If it sounds too good to be true . . . .
People ought to pay taxes commensurate with "what they actually take out of the common pot, not what they leave in."
--Thomas Hobbes, Leviathan, it is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income.
"[T]he Equity of Imposition, consisteth rather in the Equality of that which is consumed, than of the riches of the persons that consume the same. For what reason is there, that he which laboureth much, and sparing the fruits of his labor, consumeth little, should be more charged, than he that living idlely, getteth little, and spendeth all he gets; seeing the one hath no more protection from the Common-wealth, than the other? "
---Thomas Hobbes, Leviathan (1651)
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John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.
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:
I've said it before that what we need is a flat tax. The Fair Tax agenda is too controversial and a bigger step than most are probably willing to take.
Let's get a nice flat tax rate picked out and apply it. No complicated forms, no deductions. Exempt people below the poverty line for the first 5 years after the introduction of the flat tax. After that, no more breaks for those below the poverty line. By then, they probably won't need the break because the economy should get a real healthy boost and prices on goods might even drop.
We do away with corporate taxes and the estate tax, and 90% of the IRS.
The politcians, lawyers and their masters-in-black-robes will all be against the Fair Tax law!
Why?
Because it will force THEM to finally have to pay taxes themselves since the tax will be on purchases and not on "income".
Why would they complain there? See TAX SHELTER - Foundation - Trust Funds - etc. especially those in the Kennedy/Kerry/ and BUSH money range. None of them "earn" more than what looks minimally acceptable to the public and then "donate a portion of their petty cash to the slush fund that goes right back to them anyway in pork.
With the tax shelters, their fortunes are not "theirs" but belong to some phantom entity that won't be taxed. This corporation though is what spends the money for all the parties, the yacths, and whatever to the tune of millions/year all tax free to these politicians/lawyers.
The fair tax simply taxes money as it leaves the bank - immediately upon transfer to another entity.
They do not want to have to start paying taxes like us PEONES.
It's a VAT!
(Duck and cover for incoming!)
When the most powerful Nation in the world goes something like the flat tax, what will be the total ramifications in the world marketplace? My guess, it would be HUGE and lead to a worldwide reform. I'd be interested in hearing more about the flat tax from this angle. How would the heavily socialist nations cope? Could they cope?
LOL, this article confirms everything I have been saying about the 'fair tax' for 6 years and has been denied by fairy taxers!
The painful truth
Toward the end of The FairTax Book, there's a handy little box summarizing what the authors say will happen if we make the switch to a sales tax. Here are the first three points:
From our checks.
Consumption tax we would be expected to pay on life's basic necessities.
This sounds pretty good. Of course, we know that it isn't nearly as big a gift as it seems because we'll have to pay some of it back in taxes when we buy things at the store, right? Er, apparently not. Boortz and Linder write:
We'll explain this bit about "embedded taxes" in a moment. But first, let's consider what Boortz and Linder appear to be saying. Prices at the store are the same. Your boss stops taking all that money out of your paycheck. Uncle Sam is sending you money instead. And, oh yeah, the government is still up and running.
This just can't happen. "It is practically and logically impossible for the government be collecting the same amount of money as before and have everyone suddenly be better off," says Daniel Shaviro, a tax law professor at New York University.
Part of the problem is the way Boortz and Linder are using the idea of embedded taxes. In an eight-year-old study paid for by AFFT, Harvard economist Dale Jorgenson noted that because the taxes paid by everyone in the chain of production are embedded in the cost of goods, prices could decline an average of 20 percent if all those taxes were scrapped. The FairTax Book devotes an entire chapter to this idea.
What The FairTax Book fails to mention is that prices can only fall this sharply if companies cut wages. I asked Jorgenson about this, and he agreed. Say your salary is $100,000 a year today, but you take home $80,000 after taxes.
Your company is still paying that extra $20,000. In a FairTax world, it will save that money, and be able to lower its prices accordingly, only if it can reduce your salary to $80,000. In other words, your take-home pay is the same as before. Sure, you'd get to "keep 100 percent of your paycheck," as Boortz and Linder repeatedly write, but it would be a smaller paycheck. That's kind of a big thing to leave out.
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
Wouldn't it be great to pay no Federal Taxes as long as you buy no Foreign goods if the Federal Government got all it's money for operating expenses from import Tariffs as spelled out in the Constitution?
I oppose a National Sales Tax because it would be just as Un-Constitutional as the National Income Tax is now.
I like parts of the fair tax and parts of the flat tax.
However there is one group that the fair tax ruins.
These are the people that have saved their money, bought stocks,mutual funds,Roth IRA's, have paid taxes on that money and appreciation all along and then will have to pay 23+% on anything they buy with that money.
Double taxation.
And that is a large percentage of the population.
Another point, I think a 23+% tax on a car or home will present a 'sticker shock' that will kill retail sales, esp. in the short run.
It would certainly drive up the price of used items since they would be tax free. ( supply and demand)
To get any major reform on taxes passed, it's going to take a major marketing campaign. People don't like the current tax system, but they prefer the devil they know to anything they don't know.