Posted on 02/01/2008 12:06:25 PM PST by Man50D
There has been much misunderstanding-deliberately promoted by income tax system defenders recently-about the effects of the FairTax on different income segments of the taxpaying public. Let's clear the air a bit.
The greatest benefits of tax reductions under the FairTax, according to respected economists, accrue to low income taxpayers (an average 14% reduction) then to the middle class taxpayers(an average 7% reduction) and then even to the wealthy (an average 5% reduction).
How can this be and still raise enough revenues to replace all taxes now collected under the income tax system? It's because the taxpayers base is dramatically broadened under a consumption tax by bringing in illegal immigrants, as consumers, and the $1.5 trillion annual underground economy. In addition, the very wealthy pay the full 23% rate on spending, which is an increase over the typical 15% capital gains tax now paid on dividends and stock gains when redeemed (Warren Buffet's recent complaint). In a nutshell, the more you spend under the FairTax, the more taxes you pay. Remember, too, that all the gimmicks that those with tax lobbyists and tax lawyers are able to exploit in the current 67,500 pages of income tax regulations also disappear (along with the role of tax lobbyists as there are no exemptions, loopholes or deductions).
The President's Advisory Panel on Tax Reform declared that taxes would go up on the middle class under a consumption tax when they ignored the definitions in the actual pending FairTax legislation and created their own flawed consumption tax. They quietly loaded it with exemptions they felt more "realistic", ignored the distributional effects of eliminating highly regressive FICA taxes (you know, the ones that represent the highest tax payments by low and moderate income taxpayers) and refused to examine the $22 million of FairTax research. They then declared a consumption tax (which many writers have wrongly assumed was the FairTax) as requiring a higher rate and punitive to the middle class.
The FairTax monthly prebate actually wipes out all federal taxes on the poor and a diminishing amount of taxes are reimbursed the further one is from the poverty line.
There is great resistance to the FairTax within the circles of those who profit from the complexities of the income tax code. Last year 53% of all lobby expenditures in Washington, DC were paid to tax lobbyists. It's big business that includes not only lobbyists and tax related think tanks and tax reforms groups (entirely devoted to tweaking the income tax code) but academicians who have built careers on understanding the arcane details of the code.
Add to that the center of resistance to a simple, transparent system without gimmicks-the Congressional tax writing committees themselves. In truth, Congressional Members from both parties are addicted to using the tax code to reward friends and contributors, punish opponents and inept attempts to manipulate citizen behavior through the code. In other words, our tax writing process is driven by all the wrong reasons.
This is the single biggest reason that our tax code is so complex that it costs taxpayers $265 billion a year just to complete tax returns. It is so complex that the IRS can't answer taxpayer questions right more than six of ten times. It is so complex, the IRS comes up $350 billion short of owed taxes every year (raising the average taxpayer bill by about $2,000 annually).
On the merits, the FairTax takes politics out of the tax code and the tax code out of business decisions. It is the politics that are tough because passage requires overcoming powerful institutional players. To this end, Mike Huckabee and a host of other candidates have joined 72 Congressional co-sponsors and a growing army of citizens who believe that the public can still drive public policy ( a novel idea first suggested by the Founding Fathers). Otherwise, we are stuck with a system that makes debt more favorable than wealth, puts the "Made in America" label at a severe competitive disadvantage and punishes labor and investment. It's a system driven by politics, power and profit instead of economics or fairness. It's a lucrative gig for those in Washington and a destructive torture for everyone else.
Instead of borrowing money from the Chinese to pay out rebates to American taxpayers (as welcome as they will be) maybe we should think about what happens to the American economy when we make the USA the most desirable "tax haven" in the world. We have lost at least $12 trillion in American capital to offshore locations in recent years. Economists who have studied the FairTax agree that this wealth and a lot more in foreign investment will rush to our shores once the FairTax is enacted.
As FairTaxers say, "Dare to Be Fair". The FairTax won't be perfect and the transition will require adjustments but compared to the badly broken income tax system that so bedevils taxpayers and damages our economy, it's well worth it.
The FairTax research-as well as a recent article on how the FairTax helps the middle class by brilliant Boston University economics chair, Larry Kotlikoff, can be found at FairTax.org
If that’s the case, which I HIGHLY DOUBT, we can return to the income tax.
This has been a dalliance with Marxism that the country will not soon forget.
What other possible result could there be if we don't adopt the FairTax? We've tried income tax reform over and over again. It simply doesn't work.
You mean besides it doesn't exist and has never been tried
Is that your reason not to try? Is that it? We'd still be in the dark ages with attitudes such as that.
If your answer is there are 45 states that have sales taxes that work great, why doesn't the Fairtax even remotely resemble ONE of them?
Because the FairTax is a national tax. It has to replace such things as income taxes on gov't employees. It would be fine with me to simply add a percentage to the sale and forget it. How about you?
All the rest...
You and your comrades always like to say that but you can't name a single one other than Bruce Bartlett. Where are the names?
What's to be against yet? It's a non-starter that doesn't exist and would be a total waste of time at this point....Unless of course there's some money or other compensation in it for them.
What was in it for the 75 who signed the letter?
You choose to let economists guide your way...I'm not impressed by their profession or their predictions...You are, so be it.
Who else to expertly judge the merits of a method of taxation? It is an economic issue. Believe it or not we don't adhere to lewislynn's economic thinking.
What other possible result could there be if we don't adopt the FairTax?You don't know any other way therefore there is no other way?
Is that your reason not to try? Is that it? We'd still be in the dark ages with attitudes such as that.It's not like we're going to try to build a rocket that if it doesn't work there'd be no harm. What government policies brought us out of the dark ages?
Because the FairTax is a national tax. It has to replace such things as income taxes on gov't employees.HUH?
It would be fine with me to simply add a percentage to the sale and forget it. How about you?
How about me what? We've already established where I stand on the Fairtax...How many times do you have to keep asking the same stupid questions? Other than potentially using the answer against them, why does it even matter?...You support it, not everyone else does, get over it.You and your comrades always like to say that but you can't name a single one other than Bruce Bartlett. Where are the names?.....
What part of "It's a non-starter that doesn't exist and would be a total waste of time at this point" do you not understand?What was in it for the 75 who signed the letter?
I know that like you know they actually studied the legislation and not the rhetoric. I know that like you and they know there would be (yet to be defined) 100% paychecks and certain price reductions Believe it or not we don't adhere to lewislynn's economic thinking.
If you knew what it was you might, or you might and don't know it...I didn't know the Fairtax was the end all to all economic thinking...It truly is a cult if that's the case.
“Who doesn’t like the FT”
The NTU
Herritage Foundation
CATO institute
FreedomWorks
The New Economist
All emerging democratic economies
The National Retail Federation
Just to name a couple
Links, please.
What government policies brought us out of the dark ages?
Freedom. Something that started being eroded in 1865, took a big hit in 1913 and began a downward spiral in the 1930's.
We've already established where I stand on the Fairtax...How many times do you have to keep asking the same stupid questions?
If congress made changes to the FairTax, would you support it? If you would, what changes would you like to see? If not, your differrences with it are very basic. What are they?
So an idea that has the volunteer support of over half a million people, has a very large organization and has become a part of two presidential candidates' platforms has not taken hold?
Does that mean that you have wasted years of days spent on these threads trying to minimize the FT?
I know that like you know they actually studied the legislation and not the rhetoric. I know that like you and they know there would be (yet to be defined) 100% paychecks and certain price reductions
My turn, HUH?
I didn't know the Fairtax was the end all to all economic thinking...It truly is a cult if that's the case.
There is a lot you don't know. Such as: people are truly tired of you SQL's calling the FT a cult. It really is passe' to do that.
A couple of those are wrong. You won’t be able to prove anything until you post links to all of the list. Go ahead, we are waiting.
Really?
Refute them then.
I am not inclined to waste too many more keystrokes on you.
You spend hours here demonizing the FairTax. What is your alternative? What are you doing to get the IRS albatross off of our necks? What are you doing to rid Washington of the tax lobbyists and the reason for their existence?I don't demonize the Fairtax. I point out the idiocy of the Fairtax, it demonizes itself.
Did I say it was an albatross on my neck? Do I care there are lobbyists? Once again just because you can't think of a reason for lobbyists after the Fairtax you think they won't exist. If I were you I'd look in the new Excise Tax Bureau for an ideal place for lobbyists under the Fairtax. What else do you think it's for, to count money from the sale of tires and fishing gear?
What government policies brought us out of the dark ages?Freedom. Something that started being eroded in 1865, took a big hit in 1913 and began a downward spiral in the 1930's.
Oh brother, no wonder you fall for this crap. Since when is freedom a government policy?
In other words freedom is a government policy, we're now living in the dark ages compared to 1865...and 1913 and then it got worse after 1930...Brilliant reasoning there.
That's the kind of brilliant thinking I'm supposed to get behind to support the Fairtax? What a miserable life you must lead.
Just wondering, do you have any clients (left) that listen to this stuff from you?
If congress made changes to the FairTax, would you support it? If you would, what changes would you like to see? If not, your differrences with it are very basic. What are they?I don't lay awake at night wondering about what changes I would make to the Fairtax. It isn't going to happen, if there are any changes to it, it won't be "the Fairtax" anymore will it.
The fact you always have to make the argument/subject about the person rather then the Fairtax says all it needs to say about what you really know about the Fairtax. people are truly tired of you SQL's calling the FT a cult. It really is passe' to do that.
The hypocrisy in that statement also says a lot.
Just as I thought. You have nothing to back up your claims. Well, I tried.
I didn't take the time it would have required to go through all of the material on "All emerging democratic economies ", but, the total number of items listed for the other institutions named in the above list came to only 5,245,860.
I am sure you carefully purused each and every one of those items. Otherwise, I you would most assuredly have had the courtesy to reply to my request for links by citing those that you did actually read.
I now understand why you can't answer a question directly -- your mind is so crowded with information, it would just take too much of your time to sort through it all to find an answer to any question more complicated than your shoe size.
Thanks again.
http://www.heritage.org/Research/Taxes/bg1866.cfm
http://www.cato.org/pub_display.php?pub_id=8217
http://www.freedomworks.org/informed/key_template.php?issue_it=17
http://neweconomist.blogs.com/new_economist/flat_tax/index.html
http://www.allbusiness.com/retail-trade/food-stores/4485528-1.html
Countries with flat taxes: (recent)
Pausing for a brief countdown until the "none of that says anything" comments..
(thank you, Justice Holmes)
No, you practice true love toward it. LOL.
If it isn't generally accepted that the government is too tightly wound around everyone's neck, then what are we all doing on this board?
Once again just because you can't think of a reason for lobbyists after the Fairtax you think they won't exist.
You don't think that over 50% of lobbyists are there to garner tax favors?
I believe everyone has a right to petition the government. I don't believe the gov't has a right to rig a system where it favors certain citizens over others through an unfair tax code.
Oh brother, no wonder you fall for this crap. Since when is freedom a government policy?
You're right, it isn't. Just ask the citizens of N. Korea. YOU asked what government policies brought us out of the dark ages.
Just wondering, do you have any clients (left) that listen to this stuff from you?
What do my clients have to do with this? Is this a continuation of the discussion the mods spanked you about or is this a reasoned debate? Well, which is it?
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