[JOHN W K]

The family consumption allowance is an entitlement, it is paid to people not contributing into the common treasury in addition to those who pay taxes, and its projected cost on an annual bases, including administrative costs, is $600 billion per year.

The family consumption allowance provides the tools to Ted Socialist Kennedy, and his disciples in Congress, to remain in power by promising to increase it during election time to buy millions of votes to remain in power, just as these socialists now do with the minimum wage, social security payments, aid to families with dependant children, Pell Grants, and you name it from the shopping list of government socialist programs created by Congress . . . the only difference with the Boortz Plan is, its family consumption allowance promises to extend the tentacles of socialism to every American household with a monthly government subsistence check, making the majority of American households dependent upon a monthly government check, while the 23 % consumption tax would bleed the productive members of society and give a $ 400 per month bonus to un-wed moms who stay at home, do not contribute into the common treasury and make babies to increase their government check size.

I asked: Why does Boortz promote a plan which paves the way to create the largest entitlement program in the history of America under its family consumption allowance . . . an entitlement which is estimated would cost $ 600 BILLION a year . . . the cost of which would make the projected price tag of Hilary Health Care look like chicken feed?

Regards

JWK

[Eaglewatcher]

Essentials of life up to the poverty level are not taxed. Since this would be cumbersome to administer on the sales side it is handle as a reimbursement or prebursement. This is not an entitlement it is the government returning monies that they are not entitled to.

[Philistone]

I'll repeat this again (and again and again as long as it takes). The arguments against a National Sales Tax are not simply economic, they are also political.

a)When the government starts cutting monthly pre-bate checks to Bill Gates or Phil Knight (and why shouldn't they apply?) et alia, you will see the maggots swarm from the woodwork demanding some kind of means testing (Form 1040 much?)

b) The numbers don't add up. The Fair Tax plan would leave government revenues about $400 B short (Go to the BLS web site and check on total consumer spending and take 23% - assume that Americans will spend all of the $900M that the IRS currently takes from individuals and that businesses pass along the $200B that the IRS collects from them - add the $600B cost of the pre-bates (which doesn't include the actual cost of administrating the printing and sending of 300 million checks per month) and you come up short by several hundreds of billions of dollars.

c)Five minutes and a calculator will show that the Fair Tax would shift the tax burden from the upper quintile to the second, third and fourth quintiles. Any politician who seriously proposed it would be dead in the water.

d) Anyone who has ever spent a day in Portland, OR understands what happens when you don't have a sales tax and your neighbor does. (That enormous sucking sound you hear is consumer products being purchased from Canada and Mexico...)

e) At least the European VAT system has the advantage of being somewhat self-policing. Businesses pay VAT to their suppliers and collect it from their clients (consumer or not) and remit the difference on a monthly or quarterly basis (depending on amount). This means that if ANY company in the supply chain charges VAT, ALL the businesses downstream must charge it or face the loss of the tax.

f) And most importantly, it matters very little HOW the government collects its taxes. What matters is how MUCH they collect (relative to other goverments), what they spend it on, and whether or not the citizen is getting value for his money.