Save America with the ‘Fair Tax Act’

The Courier ^ | August 31,2006 | Gordon Bishop

[Man50D]

Abolish the federal income tax!

No more taxes on savings and investments!

A "Fair Tax" can completely fund the federal government, Social Security and Medicare!

You control how much you spend!

So what are we waiting for?

You, the taxpayers of America burdened with an income tax that is costly, wasteful and sinking America into inevitable bankruptcy. All current forms of federal taxation would end! You would keep 100 percent of your paycheck. You control how you spend your paycheck. It's your money. You make the decisions as to how you want to spend your money.

The Fair Tax would create more jobs and give the USA a level playing field when selling overseas. United States Senator John Linder (R-Georgia) is sponsoring the "Fair Tax Act of 2005." If enacted by Congress, it would accomplish all of the above. Simple. Easy. And affordable.

It's the best way to downsize government without disrupting the economy.

To join the "Fair Tax" movement in America, just sign the "Economic Freedom & Fairness" Petition supporting forward-thinking solutions. Go to www.grassfire.net and liberate the working class of taxpayers. Grassfire is trying to give the working class the same kind of freedom America's founders gave to those who joined the American Revolution in 1776 with the "Declaration of Independence." We won the Revolutionary War, but have lost our country since the 16th Amendment (income tax) became "Law" in 1913.

[robertpaulsen]

"And any amount of wages (including fica) is part of the price of the product rather than just additional tax cost embedded."

You're parsing. Fica is taxes. Payroll withholding is taxes. Corporate taxes on profit is taxes.

Add all those together and you get "embedded taxes". On average, that amounts to about 22% of the purchase price, according to Boortz.

[robertpaulsen]

"That means my effective tax rate is 5.29%"

Less if you would have saved something, you spendthrift! And you're buying new, admit it.

If you were one of pigdog's specific average taxpayers, your effective rate would have been down to 1.06%, even lower if he needed to support some claim of his.

[robertpaulsen]

"That is simply not the case since the illegal guy pays nothing to the government in taxes ..."

I gave you a very simple example showing how the money the illegal guy pays his lawyer ends up going to the federal government. You can argue about the actual percentages and the actual amounts, fine. It's a crude example.

But he IS paying money to the federal government today, and it's much more than the embedded taxes of effective corporate profit. Boortz says it averages closer to 22%.

[Your Nightmare]

Are you saying that the drug buyer doesn't buy cars, clothes, haircuts, motel rooms, paper towels, mouthwash, furniture, etc?

Not with the money he's buying drugs with.

[lucysmom]

Are you saying that the drug buyer doesn't buy cars, clothes, haircuts, motel rooms, paper towels, mouthwash, furniture, etc?

Increasingly, the drug trade within the US is run by gangs in Mexico. Do you think profits stay within the US or are exported south of the border?

In recent years the number of narcotics “gardens” in US national parks and federal land has increased dramatically. And as a result, so has the number of guards, many of whom are experienced smallholders from rural villages in Mexico. In desperation, having seen their own livelihoods swept away by imports of subsidised agricultural goods from the US, they risk the dangerous journey north to find any work they can.

Willingly or otherwise, many have ended up working for the new power brokers in the US narcotics business – Mexican drug cartels who, little by little have come to dominate the clandestine industry...

http://www.sundayherald.com/57851

Illegal immigrants are entitled to certain means tested welfare benefits like food stamps. If the FairTax increases the cost of food, will the amount of the grant have to be increased to compensate?

[RobFromGa]

He'll use the prebate check to buy his drugs.

[lucysmom]

The amount of embedded tax that your cronies have stipulated to is 9% IAE; not 20 or 30 so you don't get to argue it both ways and doesn't apply here anyway.

It is the FairTaxers, themselves, that propose the higher rates (and lower rates). Perhaps its time for you guys to get your stories straight.

And in addition there is no saying that the lawyer is not "funning" Uncle and evading HIS taxes too, so pretending an honest lawyer is helping the illegal guy and is in turn being forthright about paying his own taxes is a contradiction especially since you've doubled the lawyers effective income tax rate artificially.

Even the drug dealer has a right to legal representation, in fact our law not only requires it, but also requires that representation be competent. That a lawyer represents a drug dealer does not make him a criminal as long as he abides by ethical constraints set by law.

[lucysmom]

Claiming there is some sizable amount of income tax paid by a consumer when a consumer purchases under the income tax is - as was shown just above - spurious.

Then so is the argument that corporations don't pay taxes, people do.

[pigdog]

"... You wish ..."

No, I don't! And the CBO figures clearly show that it IS bogus since I merely use the most recent CBO data for effective income tax rates for different income levels covering 120-130 million taxpayers ... what's your source???

Your ephemeral "lawyer" using your figures has an effective tax rate of $27,770/$90,000 or 30.9%. To even begin to approach those numbers he would need to have an income of more than $184,500 (a rate of 24.5%). Your figures place him at a tax rate of about 17.71%. You're welcome to show me otherwise with verifiable data. Until you do, I'll believe the CBO figures.

pd:

""There is no rationalizing that the illegal guy is paying the tax to the government since he'd be paying the lawyer's fee in any event, tax or not," "

rp:

"True. But there IS a tax. And the illegal guy IS paying it. Not directly as he would under the Fair Tax, but indirectly. He IS paying taxes today. "

Indeed there IS a tax and it's paid by the lawyer to Uncle (and you can be sure that Uncle sees it that way, too). The illegal guy is unaware of any tax and only sees that he pays the lawyer's fee - which is quite true. If the lawyer were sued for malpractice and lost all income due to that, what would the illegal guy's "contribution" be then??? The same as it is now - zero. It is the lawyer who is paying the tax, not the illegal guy - he pays the lawyer's fee.

I believe I told you that I had no intention of continuing this silliness of "see if you can combat every apocryphal example I can dream up" and that is certainly the case. I did offer in #917 to help you determine what your "baseball bat" example actually cost if you'd cooperate to obtain your FairTax effective rate but you apparently don't wish to and that's fine. I won't offer again.

You're welcome to offer any verifiable data you might have that shows illegal aliens send the bulk of their money home since that certainly does not seem intuitively correct to me. Probably very few of them pay income tax IAE. It costs a good bit for them to live in the US now and that will only become more expensive under the FairTax since they are not eligible for it. It certainly takes more than an illegal S/S number to be eligible. As it is they'll pay the full FairTax along with everyone else but will not be eligible for the prebate. If you think there won't be careful enough screening of the eligibility requirements, I think you're wrong. It's not a simple "buy a $50 fake ID" affair as you suppose but you're certainly welcome to your opinion.

[pigdog]

As I told you previously, Mr. Boortz neither authored the bills nor cosponsored them. He merely co-wrote a boot at the request of a publisher (he FairTax organization was not involved). He also is welcome to express his opinion however I don't agree with either the percentage you claim he gave OR his definition of "embedded taxes".

And, no, that's not parsing. The labor costs (payroll/fica) are gathered up into product costs which will for the most part remain in product costs when the FairTax becomes law. The embedded taxes will be done away with. Your colleagues have stipulated on these threads that these embedded taxes amount to 9% and not 22%. You've surely been on these threads enough to have known this.

[pigdog]

Not at all The consumers indeed do pay the taxes that the producers have in the product costs and there have been several examples showing his.

[pigdog]

"boot" = "book"

[robertpaulsen]

"The labor costs (payroll/fica) are gathered up into product costs which will for the most part remain in product costs when the FairTax becomes law"

I TOLD YOU I DON'T CARE!

This has got to be the tenth time I told you. Are you THAT dense?

I don't care if they stay or are removed. They're there! To the tune of 22% today. People buying a product today are paying that 22%.

I don't care what happens to them after the Fair Tax is implemented. Those costs COULD be removed -- you don't even know! How can you possibly tell me they will remain?

[RobFromGa]

Those costs COULD be removed -- you don't even know! How can you possibly tell me they will remain?

It one of the FairTax Economic Modeling Tools that they are issued during the initial programming.

[pigdog]

Certainly labor costs are in products today and are part of the price consumers pay.

When you pay these costs (and while Mr. Boortz claims they are "embedded taxes", I do not) the funds go to the business. And while you do pay for the costs it is certainly nothing like a tax payment of that percentage to Uncle from the consumer. Only the profits of the business subject to the income tax times the businesses tax rate represent the taxes paid to Uncle and that will certainly will be much less that your claimed 22% (or greater) figure.

Moreover these are not taxes paid directly by the consumer to the government, but are paid to the business to defray his costs (one of which is this business income tax).

It's actually fairly easy to see that probably most of these labor costs will remain since there are many union and other employee groups who will certainly demand that gross wages remain as they are. In addition, there are the effects of competition that will provide the same pressures - particularly with an expanding economy.

"... People buying a product today are paying that 22% ..."

Your point seems quite obscure since the labor costs (whatever the percentage) will clearly mostly remain in the costs of consumed items. And they will continue to be paid for by consumers in buying the things but the selling business will no longer pay income taxes - or even the employer portion of FICA.

[lewislynn]

While I like the benefit, I can't help but notice that the tax burden gets passed on to someone else, not unlike tax evasion that results in higher rates over all - except, its legal

That isn't true. The rate doesn't change, only the valuation of the property.

The property taxes are a small percentage (1 or 1.5%) of the assessed value...A smaller percentage than any other state that I know of. The property tax can only increase a small amount and in fact my property taxes decreased for a few years in the 90's during a brief downturn in values...also, the "assessed value" isn't even close to the actual value, it's usually WAY lower.

BTW, speaking of the tax burden getting passed to someone else because of evasion, do you think the opposite is true?...Do you think if say illegals all started paying taxes your tax burden would decrease as a result?...I don't.

[cowboyway]

No, you aren't being taxed twice. You are working for your take-home pay, your employer is sending the income tax and payroll taxes that you are having withheld and paying them for you. These costs are in the costs of the products that your employer sells, and they are being paid by the customers of that business.

So, all the taxes are really already being paid as a consumption tax, when you buy goods and services you pay the taxes embedded in the items. If you didn't make the purchase, the good or service would not be manufactured or performed, and the employer would need fewer employees.

You're contradicting yourself.

Which is it. Am I paying embedded taxes or not, or, in some strange twist of the universe, do only those that do not pay income taxes somehow pay embedded taxes, such as our heroic drug dealer, and those that pay imcome taxes do not pay embedded taxes on purchased goods.

The IncomeTax cult is like Islam, but without the suicide bombers.

[cowboyway]

(BUT, you no longer have to pay an income tax. That is true.)

BINGO! It ain't 'a wash'.

Under FairTax, those of us in the system will have more disposable income.

I think you finally see it, even though you stumbled upon it.

Even a blind hog will find an ear of corn every now and then.

[cowboyway]

Not with the money he's buying drugs with.

What about the money he ain't buying drugs with?

BTW, that is a pathetic reply.

[RobFromGa]

No I am not contradicting myself. You are trying to double count the embedded taxes in goods and services(which are somebody else's income and payroll taxes) and your own income and payroll taxes as both being paid by you.. You need to pick one way of looking at it or the other. To do what you are doing double counts all the taxes.