HA! Yes, you've got that right, FRiend.
However, under the FairTax plan, no more FICA is deducted from these dolts paychecks. That should appeal to anyone.... even a stupid socialist.
Posted on 08/24/2005 8:27:44 PM PDT by Man50D
Imaginative director Terry Gilliam recently released his long-awaited epic The Brothers Grimm, starring Matt Damon and Heath Ledger. After well over a month, Neil Boortz and Representative John Linder’s The Fair Tax Book still resides in the top 10 on Amazon.com’s best-seller list.
It is difficult to tell whether the book or the movie is the bigger fairy tale.
Aug 23, 2005 -- 09:07:50 PM EST
The premise behind the “Fair” Tax is simple – shockingly so. The income tax should be disbanded (as should the IRS) and replaced with a 23% consumption tax on all retail purchases. The authors contend that this change will be revenue neutral, although they clearly intimate that they would prefer (maybe in the future) massive tax cuts of the “drown your government in a bathtub” variety.
Serious tax policy being dictated by a talk show host . . . sounds implausible, doesn’t it? Well, whether it is or not, there are a lot of people who are taking this very seriously. There’s a bill circling Congress in support of the “Fair Tax” with several notable supporters, including Dennis Hastert and Tom Delay. As this TPMCafe post details, letters to the editor are starting to appear in favor of the plan. And, as mentioned above, the book is a runaway Amazon bestseller, with hundreds of favorable reviews. During the last election, President Bush even voiced a willingness to consider the bill, before pulling back on his comments after a groundswell of opposition.
The popular support should not be surprising - it’s easy to criticize the IRS in order to make friends (and win votes). Boortz and Linder even have a valid point: the tax code does need to be reformed; at the very least, its too confusing and too easy to cheat. (For an excellent book on where we really should start reforming the tax code, check out David Cay Johnston’s Perfectly Legal.)
The fact that the plan is gaining momentum does not make it a legitimate option, however. There is plenty of room to question Boortz and Linder’s claims: the book is a ill-supported bromide that ignores unfavorable arguments and considers the necessary data optional, at best. And, even taking the proposal at face value, it is clear that the Fair Tax reflects the business interests that financed its creation and are pushing its adoption. It’s hardly surprising that the proposal is aggressively regressive and definitely not a change that will be beneficial to people who must spend a large portion of their income to live (read: middle and lower class Americans).
Given this, we here at The Warren Reports think it is important to get the word out about this plan. Over the next couple of weeks, we’re going to take a much closer look at Boortz and Linder’s Fair Tax Book, with at least three more posts planned: one on the impact the tax will have on Middle Class Americans (is it regressive?), one on our concerns with the empirical data and consistency of the argument in the book, and a final post on issues ignored in the book (e.g. transition costs). Our hope is that we can both point out the problems with the “Fair” Tax plan and stimulate a discussion on real tax reform – tax reform that benefits all Americans, not just the political donor class.
Now all you have to do is convince the bottom 50% of earners who pay no income tax that paying 17% or 23% additional sales tax is suddenly a good idea.
That was Fonzie - "Sit on it".
Its high the "poor" started paying their fair share!
". . .so I do not understand why the 'Forbe's formula' for tax reform is not looked at more seriously."
Perhaps one reason is that it is not, by Mr. Forbes own admission, revenue neutral. According to President Bush's criteria, that is a deal-killer in and of itself.
Secondly, Mr. Forbes backs the Burgess bill, which does not replace a single page of the current code (including the AMT), but instead adds a flat tax option to the 60,000 page mess we now have.
Third, it does not touch one of the biggest problems with our current system, which is the imbedding of the cost of our tax system into our goods, making them less competitive in the world wide market than would otherwise be the case.
That is enough for starters.
Final Results - Kudlow & Co.
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Flat Tax vs: FairTax POLL - August 25, 2005
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L I V E V O T E
This vote has closed. The final results are below.
Total Votes: 2952
'Flat taxers' want a 17% income tax for everyone.
'Fair taxers' want a 23% sales tax. Which do you prefer?
Flat Tax 26%
Fair Tax 74%
= = = = = = = = = = = = = = = = = = =
Like I said before, should be easy to explain to the people who are too stupid to understand the benefits of a privatized Social Security system.
You've got your work cut out for you.
Excellent results especially when you consider flat taxers were intially considerably ahead.
HA! Yes, you've got that right, FRiend.
However, under the FairTax plan, no more FICA is deducted from these dolts paychecks. That should appeal to anyone.... even a stupid socialist.
BTW, has the "national sales tax" proposition morphed into the "fair tax", or is it still around in some fashion? I generally disagree with the notion that there should be a poverty thershold below which taxes could/would be reimbursed or never collected in the first place. Not sure how that would work anyway. Anyhow, if EVERYONE pays their share, we will gain some allies in the fight against the exorbitant tax load we're presently under.
FGS
"BTW, has the 'national sales tax' proposition morphed into the 'fair tax', or is it still around in some fashion? I generally disagree with the notion that there should be a poverty thershold below which taxes could/would be reimbursed or never collected in the first place. Not sure how that would work anyway. Anyhow, if EVERYONE pays their share, we will gain some allies in the fight against the exorbitant tax load we're presently under."
There have been a couple of sales tax proposals, but the FairTax is the most thoroughly researched version and the one that is now gaining momentum. It has a rebate as a central component. The rebate is available to every legal resident and effectively ensures that no one who applies for it pays taxes on the necessities. It is the simplest and fairest way to ensure that the system isn't regressive, which would be the kiss of death politically. I think that you will find that, with everyone paying the same rate, you will get the downward pressure on the rate that you are looking for.
Texas has only a sales tax and there are certain items that are automatically exempted from sales tax, like foodstuffs, maybe pharmaceuticals, etc. Seems like a better approach than having a federal agency still in place to handle, AND encourage, exempt individuals. Anything else it just the same old income redistribution scheme with a different format, eh?
In any case, I'll need to do some boning up on it to really get a better understanding of how it's supposed to work.
FGS
"I could be wrong since I'm not up to speed on any national sales tax proposals, but it seems like a convoluted process to assure that no one pays sales tax on necessities."
That is one of the ingeneous aspects of the FairTax. Exempting specific items is a nightmare for the reasons that you mention. The FairTax gets around that by using a monthly rebate that every legal citizen is eligible to file for. It rebates the sales tax equivalent of poverty level puchases for a given size family. That way everyone pays at the checkout counter. Because the rebate is fixed for a given family size, the more you consume, the higher your effective tax rate is. However, savings and investment are no longer penalized, no one pays the tax on necessities, and hundreds of billions of $$$ are saved in compliance costs.
23% percent has been deemed revenue neutral, with a rebate check to cover basic necessities.
See, this is one of the problems I have with the "Fair Tax". Prices will fall by 22% and then the tax will raise prices by 23%? My back of the envelope calculation (0.78 x 1.23=0.9594) shows prices will drop by 4%, while the income tax is eliminated and the government collects the same amount of revenue. Does that about cover it?
It's got a bit of a perpetual motion machine feel to it.
>"It's got a bit of a perpetual motion machine feel to it."<
-I know what you mean. Karl from Ohio came up with these calcs:
http://www.freerepublic.com/focus/f-news/1470200/posts?page=173#173
Is that the same "market pressure" working in the oil market, where a barrel of oil is currently selling well above its cost of production?
My experience is that prices are generally a function of what the market will bear, and are not all that strongly correlated to the cost of production, even in industrial commodities.
Try this %. Your low-earners current pay payroll/withholding tax at a rate of 15.3% (in addition to whatever they pay in income tax ... say another 10 or 15% or more).
Now, how does the FairTax rate look at 23% (and these are both tax inclusive rates which are directly comparable)?
So, a $100 item is now $123? Or $129.87?
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