The Fraudulent Tax

The Mises Institute ^ | October 9th, 2006 | Laurence M. Vance

[Always Right]

Keep in mind that Nightie was the one initiating the bit about "Jckass Number Two" - not me.

His use was an analogy to Congress. Your use was a personal attack. I know the difference will be lost on you because you will just act ignorant and never admit you were wrong.

[xcamel]

As opposed to you being banned for yours?

[Always Right]

Read the paper yourself and see if you can't understand why you're wrong (again).

Interesting paper. It says that because individual taxpayers will gain, the fairtax assumes that states and local government will increase taxes to make up for the governments additional tax burdon. Excerpt from the paper:

But what they apparently missed is that this loss to these governments is exactly offset by a gain to their taxpayers. Were state and local governments to maintain their real income tax collections – the assumption made here – by increasing their tax rates appropriately, their taxpayers’ real tax burdens would remain unchanged and there would be no need for the federal government to compensate state and local governments for having to pay the FairTax on their purchases.

So any gain by the taxpayer is just taxed away by state and local governments. Great plan! What the fairtaxers are doing is hiding their real rate by assuming additional taxes will be raised by higher state and local government rates.

[lewislynn]

Everything I know about the effects of the Bush tax cuts, etc. leads me to believe that revenue neutrality can be achieved at a lower rate than 23%.

Everyone else is of the mind that the Bush tax cuts INCREASED revenue. Simple logic would suggest a higher, not lower rate for "revenue neutrality"....Maybe that's why pigdog didn't reply to your query.

[socialismisinsidious]

Is the AMT a tax or not? Can it be found on your pay stub? A part of me can't wait for more people to get whacked with the AMT then maybe people will realize how stealth and evil it really is.

The very problem with the Income tax and the 60K page joke of a tax code is that it is not straightforward, it is convoluted and re-definable; in other words to follow the US tax code one has to do exactly what you are accusing me of..nitpick and redefine.

[Always Right]

Is the AMT a tax or not? Can it be found on your pay stub?

AMT is used to calculate federal income tax, so yes it is withheld and paid from your pay stub.

[socialismisinsidious]

Wrong. It is not withheld and is not paid from the pay stub. I guess Mr Always Right hasn't met Mr AMT yet, but don't worry chances are you will.

AMT: In General "The alternative minimum tax affects a small but growing percentage of taxpayers. When it applies, the cost can be substantial. What's worse, this tax is so complicated that it's often difficult to predict when it will apply. Also, it's often necessary to do AMT calculations even in years when the AMT doesn't apply." From Tax Guide for Investors.

How the Tax Works: "The best way to understand the AMT is to view it as a separate tax system. It has its own set of rates and its own rules for deductions, which usually are less generous than the regular rules. Because of these confusing rules, the only ways you can tell if you owe the tax are by filling out the forms (essentially doing your taxes a second time) or by being audited by the Internal Revenue Service. If it turns out you should have paid the AMT but didn't, you will owe the back taxes plus any interest or penalty that the IRS decides to dole out." From smartmoney.com

[socialismisinsidious]

http://www.freerepublic.com/focus/f-news/1718433/posts

article that I just posted re: the AMT.

[Dimples]

For what it's worth, in 2004 the Federal Government collected $1,150 Billion in Personal, corporate, excise, duty and "rest of world" taxes. It also collected $802 Billion in Social Insurance taxes, for a total of $1,952 Billion in Federal Tax Receipts (NIPA Data).

Of that $1,952 Billion, over half of the $802 Billion Social Insurance Taxes were taken directly from employee paychecks, and thus annotated on the paystub (it's over half because the self employed pay both halves of the tax and, as such have direct "paystub" accounting of the amount ... but let's just use half:) $401 Billion of "payroll taxes" on the paystub.

Of the rest, $732 Billion was paid through withholding (check Tax Stats for 2004) and thus was also accounted on paystubs.

That brings us to $401 + $732 = $1,133 Billion of Federal Taxes shown directly on paystubs, or $1,133/$1,952 = 58%.

That indeed represents a majority of Federal Taxes accounted directly on paystubs.

Oh, and for what it's worth, the AMT, in 2004, amounted to a whopping $13 Billion of the $1,952 or 0.67% of Federal Taxes.

You sure are making a lot of noise about a rather insignificant amount.

[Always Right]

Wrong. It is not withheld and is not paid from the pay stub. I guess Mr Always Right hasn't met Mr AMT yet, but don't worry chances are you will.

Why do you have to be so inflamatory? I have paid AMT before you had any idea what they were. It is a stupid concept that should be eliminated. However, they are still simply part of the income tax which can be paid by withholdings from your paycheck. There is nothing wrong with what I say. AMT is not a separate tax as you want to imply, it is part of the income tax, so your point makes no sense.

[Dimples]

Ya know, in thinking about this just a bit more, it's pretty clear that since the employee's amount of Social Insurance tax is on the paycheck, and since an equal amount is paid by the employer, the employee ACTUALLY has reflected in his paycheck the FULL amount of Social Insurance taxes ... she just has to count her portion twice. That would raise the amount of tax reflected on the paystub to $1,534 Billion of the $1,952 Billion collected ... or nearly 79%.

Now THAT'S a CLEAR majority!

[Your Nightmare]

Ya know, in thinking about this just a bit more, it's pretty clear that since the employee's amount of Social Insurance tax is on the paycheck, and since an equal amount is paid by the employer, the employee ACTUALLY has reflected in his paycheck the FULL amount of Social Insurance taxes ... she just has to count her portion twice.

I get a statement every year from the SSA stating how much in total I've given and how much my employer has given to Social Security. But, some how, this is a hidden tax to the FairTaxers...

[lucysmom]

Seems it is the FairTax scheme that hides SS taxes by lumping them together with other federal taxes.

[socialismisinsidious]

The point is: federal taxes are not as obvious or as transparent as you make them out to be and that is purposeful. Look are your math and tell me that the average Joe really bothers to figure those numbers.....and the IRS/bureaucrappers want to keep it that way b/c withholding allows them to take stealthily. Read about the history of withholding and tell me that it was done out of the goodness of their hearts. sure. If everyone got a bill at the end of the year from the IRS (as use to happen) then people would scream about the amount of their taxes, but take a little at a time and people hardly notice. smart, hardly obvious. purposeful

As far as the amount being insignificant; my AMT whack was hardly that.

[RobFromGa]

If everyone got a bill at the end of the year from the IRS (as use to happen) then people would scream about the amount of their taxes

And the FairTax would spread the bill out into even more and smaller amounts than we have currently with the income tax, even harder to add up. What is your point?

[Always Right]

And plus there is that approx. $500 prebate check that throws a wrench into just how much sales tax people are paying. I can tell you to the penny how much I have paid in federal income tax the last 5 years. I have no idea what so ever how much sales tax I have paid.

[lewislynn]

or did you know that Congress may decide to freeze spending at the 2006 level which would be right at 23%

So these are the talking points du juor, the Fairtax is now spending neutral? Would this be the rhetoric of Congressmen trying to get re-elected or the new Congress that hasn't been elected yet?

- or perhaps they'll surprise everyone and cut spending further

Cut spending further?

pigdog/Fairtax delirium never ends

[lewislynn]

And the FairTax would spread the bill out into even more and smaller amounts than we have currently with the income tax, even harder to add up. What is your point?

And don't forget "prices about the same as now" AND "100% paychecks".

[socialismisinsidious]

The point is that ALL people should feel taxes b/c when they don't they become apathetic and the people no longer care what the bureaucrappers are up to. A sales tax is felt by each and every person in this country who buys something. A sales tax is the most visible of taxes; info. right there on the receipt to add up. No hidden corporate taxes, no stealth withholding, no employer taxes effecting income. Tell me you know what you pay in corporate taxes/can calculate that number. Unless you believe that corporations actually pay taxes. Tell me that people understand the 60K page tax code and that it is easily understood.

A Republic requires responsibility from the people as well as the legislators and when only half of the populace is actually paying taxes and the other half is getting handouts(as we have now)then apathy sets in and so does socialism. Real good for the Republic./s

btw: I noticed that you didn't ping your list to the AMT article...are you a tax ping list or not? Maybe some on your list support the AMT? You and your gang are not just a anti-fairtax bunch but have become a pro IRS/income tax bunch. Since you are going to claim that you are not pro IRS/income tax then my question is: where are the articles about tax reform that you do support?

[RobFromGa]

I don't have a "tax ping list" and if I did it would be up to me to decide when I wanted to use it for any particular article.

There is no "me and my gang" and there are plenty of articles that get posted on income tax cuts, and the effects of same, as well as death tax repeal, which I do support and post to. I also favor entitlement reform and provatization as one of our must urgent tasks, and hope that we are able to make some progress in this area in the next Congress.