Posted on 01/14/2008 6:51:54 AM PST by K-oneTexas
COLUMN: The FairTax Promotes Economic Equality Submitted by on 01-13-08, 10:16 pm | Updated on 01-13-08, 10:35 pm |
by Thomas Davis
President John F. Kennedy once argued that our tax system “reduces the financial incentives for personal effort, investment and risk-taking.” Unfortunately, there has not been much improvement since JFK's presidency.
In fact, the tax code has become more complicated and burdensome. Since 1954, the number of words in the IRS regulations has increased by 939 percent. Just consider, how much time do you, or more likely your parents, spend preparing taxes? Or how much money do your parents spend having an accountant prepare your family's taxes? And how much time does a company spend making business decisions with respect to the tax code?
The answer is astounding: Economists estimate that we spend over $200 billion every year and about 5.8 billion hours complying with the tax code. American companies spend another $200-300 billion making business decisions based on tax implications. The average American spends twenty-seven hours preparing his or her income tax forms, and almost 45% of tax compliance costs are directly incurred by individuals.
While the current situation is complicated, the proposed solution is simple. It's called the FairTax. Some of the nation's most eminent economists and businesspeople have researched and developed a system applying a national sales tax of 23% on all goods and services at the retail level. In return, no more income tax. No more corporate income tax. No more payroll taxes, gift tax, alternative minimum tax, self-employment tax, capital gains tax…you get the picture. By the way, no more embedded tax in the goods and services you currently purchase, which averages around 22%.
Whether you realize it or not, the cost of corporate income taxes, payroll taxes and other taxes have been factored into the price of the goods and services you purchase. So when politicians try to tax what they deem to be greedy businesses by assessing higher corporate income taxes, those taxes are actually passed on to you, the consumer. By eliminating embedded taxes, the prices of what you buy after applying the 23% consumption tax would hardly change from current prices. The difference is that you bring home your entire paycheck and that tax is transparently assessed at the end, not through an onerous and bureaucratic system applied within a price tag.
And don't worry; this simplified system is revenue neutral. The government will collect as much money using the FairTax as it does under the current system, having no effect on current ability to fund government programs. Actually, economists expect economic growth to be around 10.5% for the first year, effectively increasing the government's revenue.
Under the FairTax, you would get your entire paycheck and would only pay tax on what you consume, encouraging Americans to do something we do not do well — save. In order to make the FairTax fair, all people would receive a prebate, or advanced rebate, that reimburses them for tax paid up to the poverty line. In other words, you only pay tax for living beyond your necessities.
Without a corporate tax, America will encourage companies to come back to the United States, providing new jobs for Americans. Without embedded taxes factored into the price of a product, American companies can export goods and sell them at prices lower than foreign products. While the benefits are numerous and the drawbacks are few, I encourage you to question the FairTax Act of 2007. Challenge it. Look for shortfalls. But don't forget to take the time to find credible answers. Read The FairTax Book by Neal Boortz and Congressman John Linder. Visit FairTax.org. Search the Web for scholarly criticism. You will see that the FairTax stands for innovation and equality. Do you?
Why stop at 12?
So Wall Mart is going to turn into a "speak easy" to keep the revenuers from getting in? Ford and GM will be selling cars at 3 am in some back alley? Amazon.com is going to switch to selling for cash out of the back of UPS trucks?
Just how does this blackmarket operate?
Also keep this in mind. If it weren't for the insanity of the income tax code, Enron, WorldCom and the other fast operators could have never hoodwinked the investment community the way they did with their Byzantine financial statements. Get rid of the IRS and get rid of the myth that corporations actually pay rather than collect taxes, and tax fraud will go way down.
How do you figure that? It's a 'pre-bate' not a 'rebate'.
And if the government is using your money up front now, I'd suggest you talk to a financial planner to explain to you why tax refunds from the IRS are not a wise savings plan. The smart people never file until April and they include a check for the amount due. They don't make interest free loans to the government.
So if I am at the 20K poverty line and don’t pay taxes now, why am I for this new tax that makes all my stuff more expensive? If I don’t pay tax anyway, why change?
common sense duck test. You could call it a pink bunny rabit but it would still be rebate. The “prebate” is just LBJ great society warmed over.
today 4000 dollars tommorow 14,000 dollars, it will be a election voter pork bribe.
How are you going to get rid of the IRS with a “prebate”, won’t the IRS be tapped enforce and collect the sales taxes?
If you are at the $20k level now, (assuming it's all earned income) you are infact paying 7.3% in Federal wage taxes (SS & Medicare) or $1400 per year. Your employer also pays an equal amount in your name.
The Fair Tax eliminates those Federal wage taxes and you will pay zero to the Federal government.
Now if you assume that elimination all federal taxes on business will not cause retail prices drop, you also must assume that we could place the entire tax federal burden on business and prices would not rise.
It's obvious that you haven't read the bill or much about it. The Feds don't collect. Each state does the collection and re mitts the Fed their share. Since all but a few states already have retail sales taxes in place, their is no massive new bureaucracy necessary. In essence, the Feds would collect (and audit) from 50 entities as opposed to 150 million now that make payments to the IRS monster.
That's just fine with me, but the problem for the congressional pork buyer is that he would have no idea who to bribe since none of us have to report our income to the IRS anymore. You, me and Bill Gates and all 300 million Americans would all get that 14,000.
That kind of screws the class warriors, doesn't it?
I have read the bill http://www.thomas.gov and it is painfully obvious you have not.
Where do you think those auditors will come from? Where do you think the tax courts will come from?
Are the Fairscammers even aware of the contractual job security for the currnet IRS employees? obviously not.
There will be a whole new NAME but the same people will be in DC collecting and tabulating and registering and examining registrations AND prosecuting etc. etc.
no it does not.
I will simply hire the lobbyist to increase the porkbate to cover my industry.
I will simply hire the lobbyist to exempt or reduce my tax exemption.
I will simply hire the lobbyist to end any tarrif examiniation for my products which I import.
I will lobby my pet legislators for legislation that defines transactions as where the contract has a forum selection clause rather than where my salesman and customer are located.
I will solicit votes based on “living prebate” promises because EVERYONE deserves a government funded SUV.
No, I haven’t read much about it, nor will most of the people who will vote on such a thing if it ever makes it that far. I honestly want to know, from an advocate of it (as you seem to be) , why I would want it as the average voter who wants tax reform.
I would not vote for it based so far on what I know of it. I may go read the bill, but so far I haven’t seen enough “pro” (on this thread or others) to think its worth my time to research.
Thanks for your answers though, I appreciate you taking the time to answer them.
That is laughable. Thanks for the chuckle of the day.
When are you going to stop with that same lie? We have all practically memorized it by now, and it has ceased to be even the slightest bit funny.
How about doing us a favor -- if you insist on lying to us, try to conjure up a new one for us to laugh at?
Who determines what an investment is? Are real estate, guns, business equipment, vehicles, etc. investments?
See post # 115.
Yep.
Stamp Act. Tea Act. Sugar Act.
Totally rrelevant.
BS. Is there rampant moonshining and cigarette smuggling? Sure, it goes on, but the vast majority of liquor and cigarette sales are through licensed premises, and the taxes are paid.
And even if the black market grows, it's still a a molehill next to the mountain that is the income-tax industry -- paper games, off-shore corporations, shady investments, workers paid under the table, all to avoid paying tax. Yes, under the Fair Tax, some folks will fail to collect taxes on the goods and services they sell. The same folks who aren't filing their W2s and 1099s today.
I wouldn't expect an explosive growth in dishwasher smuggling.
Ya THINK??
He hasn't yet.
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