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
Of course there is a yoke. We do not own the fruits of our labor. The government owns the fruits or our labor and feasts off the first fruits, before we’ve tithed, taken care of our families or saved a penny for retirement. That is a yoke. We are slaves; able to keep only that portion that our master allows us to keep.
“The first of the first fruits of your ground you shall bring to the House of the Lord your God.” —Exodus 34:26
I am not able to bring the first of the first fruits to the House of the Lord because of the immoral, Marxist income tax. I resent it and I will fight it with every fiber of my being.
Yes. When you make the statement as follows:
No one with serious questions regarding the FT seriously advocates "maintaining" the income tax,
You are de facto advocating for the abolishment of the IRS and the income tax, are you not? And are you not positing that none of your anti comrades are in favor of maintaining the income tax?
"Bug off" is not a sufficient answer to the question.
Amen.
You-don't-get-to-ask-me-any-more-questions.
Is that clear enough for you?
I really think I'm gonna cry.
So please tell us just what it is that they SAID that you disagree with?
It ignores what has been successful in many other countries around the world in the last 50 years (some longer), It ignores the socioeconomic impact of "radical change", It ignores history, and the governments abysmal record of turning "populism" into unmitigated disasters, and generally, "what does not solve the problem, is not a solution"
It ignores what has been successful in many other countries around the world in the last 50 years (some longer), It ignores the socioeconomic impact of "radical change", It ignores history, and the governments abysmal record of turning "populism" into unmitigated disasters, and generally, "what does not solve the problem, is not a solution".
You have said all of these things dozens of times. When are YOU going to show some shred of evidence or authoritative analyses substantiating your prophecies of doom?? You haven't yet.
A presidential panel, many economists, many state sales tax departments, political scientists, and sociologists, have come out opposed to the FT ....
You said this before; I asked for some links; you posted a list of sites as proof; but, only one that damned the Fair Tax was a ,no doubt, overpriced tax lawyer, protecting his bread and butter.
Want to try again?
/waits for the usual assault
Still trying to pick another fight I see. Good luck.
Yeah, I guess he does have a Constitutional right to be wrong.
And the moderator was already informed of your brandy-new "who wants to pick a fight" post on the new thread... You are being watched... closely.
Res Ipsa Loquitur.
So now you have taken to whining to the Moderator -- how admirable. But, it might behoove you to quote me accurately -- which you certainly did not do, if the above quote is what you cried about.
Please try to get it right the next time.
You:
“You will take note that the same old same old is coming from the same old same old — uh — people.”
Followed by groanup:
“Yes. And how do they find these threads so quickly? The only way is to troll FR by keyword, poster or topic. Who has the time to spend all day and night doing that? Paid disruptors?”
FRiendly as a fuzzy kitten, eh?
groanup: Then we agree on that pointHELLO!-------
groanup again, after responding to the answer he didn't like:
Do you advocate maintaining the existence of the IRS and the income tax or not?
Are you taunting him here or what? Is taunting him with the same stupid irrelevant question really on topic here?
The only reason you want an answer is so you can use it against him. Unfortunately for you you didn't get the answer you want, so you continue to ask the same irrelevant, stupid question over and over and over...The same irrelevant, stupid question you people have been hounding him for months to answer. So he answers the question and not 30 minutes later you asked the same irrelevant, off topic, stupid question again that you even responded to.
Whether he works for the IRS, or does taxes for Democrats, or invented Turbo Tax is irrelevant to the passage of the Fairtax. You people try to make it an issue because frankly, obviously that's all you have...
Apparently, as evidenced by all this "answer the question, answer the question" nonsense the Fairtax can't stand on it's own merits.
Those quotes surely DO speak for themselves!
Now tell us what part(s) of them you specifically disagree with.
#213 applies to you, too.
You are doing whatever may be left of your credibility great harm here.
So you are now admitting that your purpose is not to debate the issue at hand but rather to disrupt any thread dealing with the FairTax by any means necessary.
It's about time!
Thank you!
Most FT’s, especially a certain few, seem to have a jihad going to trash a thread when real debate breaks out and they’re getting their butts kicked, which by the way, happens quite often.
No one has said that it does but what has been quoted from it on this thread lays out some basic principles of taxation which I will repost here to refresh your memory.
“The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person, so that the tax payer is not put in the power of the tax gatherer.”
Adam Smith, The Wealth of Nations
Now which of those basic principles do you disagree with?
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