Posted on 02/11/2006 8:54:52 AM PST by Eaglewatcher
Recent letters have expressed concern that the poor or middle class might be harmed by adoption of the FairTax (www.FairTax.org) based on a deep misunderstanding of both the FairTax and the current system. We cannot assess the effects of the FairTax without comparing it to the reality of our current income and payroll tax system.
One cannot buy a loaf of bread without paying the income taxes of the baker. The price of that loaf of bread contains the cost of the flour, and the income of the baker, but it also contains the taxes the baker pays. After all, the baker does not have a money tree from which to pluck dollars to pay his taxes, he must get those funds from his customers, like any other business.
Further, the price of that loaf of bread contains the taxes of the miller, the farmer, the trucker and the grocer and those of all their employees. Those income and payroll taxes cascade through the production process and eventually make up more of the cost of that loaf of bread than the profits of any of those who worked to produce that bread.
Those many layers of taxes on productive work make up the embedded tax component of the price of bread or any other goods or services we buy. On average, that embedded tax component is 22.4 percent of the price of everything we buy, from a loaf of bread to brain surgery. So, the true tax burden on the working poor is 28.4 percent, (their FICA tax of 7.65 plus plus 22.4 percent of their remaining take-home pay, which goes to pay the embedded taxes hidden in the price of everything they buy).
Even if the poor paid the entire 23 percent FairTax, they would be better off than now, but they don't. The FairTax provides a rebate of all tax paid on spending up to the federal poverty line to everybody. This cancels out all taxes for those living at or below the poverty line, $25,660 a year for a married couple and two children.
For the same family earning twice the poverty line ($51,320), half their taxes are rebated, yielding an effective rate of 11.5 percent. And even at triple the poverty level, $76,980, their effective rate is only 15.3 percent, still far better than the 28.4 percent the poorest of the poor pay now.
So, who loses? The idle rich, illegal aliens, criminals, "off-book" workers and others who escape the current system through evasion or legal loopholes. Tax lawyers and lobbyists who make their livings from the complexity of the current system will also come up short. Foreign goods sold in the U.S. will no longer get a free ride while production of American-made goods and services bear the whole tax burden.
But those of us who work for a living, or who get by on a fixed income, will be far better off.
Tabor, of Chesapeake, is co-state director for FairTax.org in Virginia.
For me, what I have seen in close study of the bill over years, it is sufficient to do the job I expect. And that is all I need.The problem is that, after your close study of the bill over years, your understanding of the bill and it's economic effects have frequently been wrong on fundamental issues (e.g., price levels, Social Security, evasion/avoidance, revenue neutrality, etc.). Once you've been shown your errors - usually after a long, arduous, contentious education - your believe that the FairTax is "sufficient to do the job" never wanes in the slightest.
Don't like freedom, eh, Robbie.
Rather have your beloved income tax no doubt. You also don't realize that no one ever said we'd pay the same amount of tax as at present - that's merely your dream.
In addition, the prebate is not an entitlement but a refund of tax paid.
Senator Edward "Ted" Kennedy and all the trust-fund kiddies in his clan.
And, of course, the Devil has made plenty of work his chubby, idle fingers.
First of all Rightie, it's no an entitlement ... and it's not $500 billion. Guess you missed he thread where that was shown.
That's because there's no real likelihood of it happening with the increase in the economy and the addition of many millions of those in the illegal economy onto the tax rolls.
The rate will most likely go down, not up. But then your've always liked to present things exactly bassackwards.
"In fact with the sales tax base expanding with the inclusions of millions and millions of additional taxpayers (the illegal economy) who presently make no real contribution to tax revenues, the percentage needed for SS/MC is more likely to go DOWN rather than up. But I realize that's beyond you."
In addition to what was mentioned in that quote we have, of course, the expanding economy to help expand the purchasing and earning power of most or perhaps all taxpayers.
The expenditures from those entitlements is still controlled from the Omnibus Act I mentioned. go look it up.
There's neve been any convincing Squirrel evidence to show that prices will rise due to the FairTax. Plenty of Squirrel chatter and BS, but no real evidence.
In fact, we'll probably see prices drop somewhat I'd think. The CPI may very well go down. Your stating otherwise at the top of your voice isn't convincing since you don't even understand hidden taxes and their effects.
OF COURSE you not buying. You're too ignorant of he economic facts to do so. You're merely trying/hoping to keep all us invested in any income-based tax that you can come up with.
That won't fly as there are far, far too many drawbacks as most people now know. Pretending you're trying to do anything but preserve the SQ via an income-based tax is not something many will believe you on if they're read very many of you past posts on these many past threads. Despite your protestations to the contrary you DON'T agree with very many of the things you pretend to. You aren't even honest and you love to accuse the FairTax and supporters of that very technique to hide your own dishonesy.
Well said!!!
And you all are ignorant of the economic facts and operation of the FairTax.
But that's YOUR problem. You're spouting nonsense in this latest post merely because geez reall pulled your chain. Good for him!
In addition to what was mentioned in that quote we have, of course, the expanding economy to help expand the purchasing and earning power of most or perhaps all taxpayers.We were talking about expenditures, not revenues. The "expanding economy" affecting revenues.
The expenditures from those entitlements is still controlled from the Omnibus Act I mentioned. go look it up.The Social Security Act is the base law in regards Social Security spending. Other laws can effect spending also, but most will amend or modify the text of the Social Security Act. I don't know what the Omnibus Reconciliation Act of 1981 does because I can't find the text of the act. But it doesn't matter.
But that's YOUR problem. You're spouting nonsense in this latest post merely because geez reall pulled your chain. Good for him!Actually, I didn't read the whole thing, I just skimmed it like I do most of his posts. They are mostly a waste of bandwidth. Did it say something about me?
The problem is that, after your close study of the bill over years, your understanding of the bill and it's economic effects have frequently been wrong on fundamental issues (e.g., price levels, Social Security, evasion/avoidance, revenue neutrality, etc.). Once you've been shown your errors - usually after a long, arduous, contentious education - your believe that the FairTax is "sufficient to do the job" never wanes in the slightest.
This tells me that your support of the FairTax is not a rational conclusion after close study of the bill but rather but some emotional attachment to this tax plan.
And of course, Your Nightmare is always the highest arbiter of reality, and the ultimate judge in all things economic and the minds of men. ROTFLM(_|_)!!!
“No one should be judge in his own case. ”
-- Publilius Syrus (~100 BC)
And of course, Your Nightmare is always the highest arbiter of reality, and the ultimate judge in all things economic and the minds of men. ROTFLM(_|_)!!!Let's just say my record is a lot better than your's! LOL! I didn't spend ~8 years defending an obvious falsehood.
Not at all; I just observe that you are incorrect in your presumption and that as the economy benefits from the FairTax effects, the CPI will very likely be stable or decrease, not inclrease.
And since you haven't been able to read the Omnibus Act why is it you have the temerity to presume it has no effect?? Your extreme arrogance is showing, Nightie. You guys are merely fixated on predicting only one-way detrimental things about the FairTax. It never seems to occur to you that there is just as well an upside that is probably more likely.
You're dreaming again, Nightie ... here's nothing worth saying about you personally - just your views.
Certainly not - instead you spent the time attacking it relentlessly!!
Let's just say my record is a lot better than your's! LOL! I didn't spend ~8 years defending an obvious falsehood.
“No one should be judge in his own case. ”
-- Publilius Syrus (~100 BC)
Not at all; I just observe that you are incorrect in your presumption and that as the economy benefits from the FairTax effects, the CPI will very likely be stable or decrease, not inclrease.If the CPI is lower, SS payments are still 30% higher because of the FairTax. Geez.
And since you haven't been able to read the Omnibus Act why is it you have the temerity to presume it has no effect??I didn't say it had no effect, I trying to explain that it probably amended the Social Security Act - just like the FairTax bill would. The FairTax specifically states "Subparagraph (D) of section 215(i)(1) of the Social Security Act (42 U.S.C. 415(i)(1)) (relating to cost-of-living increases in Social Security benefits) is amended to read as follows." The "42 U.S.C. 415(i)(1)" refers to the U.S. Code (you know, the codification of the laws of the United States), specifically the codification of the laws dealing with "Cost-of-living increases in benefits." If the Omnibus Reconciliation Act of 1981 had modified the laws regarding this point, it almost certainly amended the Social Security Act.
Certainly not - instead you spent the time attacking it relentlessly!!The funny thing is, I was right the whole time.
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