Beware the change based on a lie. That's 23% tax inclusive, 30%, and as I recall, for the first year of the tax only. 
Posted on 06/16/2004 2:43:47 AM PDT by SmithPatterson
Collins Calls for Bold Action to Reduce Tax Burden On American Workers
WASHINGTON, D.C. (June 15) - The day after the House Ways and Means Committee approved H.R. 4520, the American Jobs Creation Act of 2004, Georgia Congressman Mac Collins, a member of the Committee, called on Chairman Bill Thomas to hold hearings to discuss replacing the current tax system with a consumption-based sales tax.
The American Jobs Creation Act of 2004 would replace the current Foreign Sales Corporation-Extraterritorial Income (FSC-ETI) benefit structure with a variety of tax relief measures designed to create new jobs and promote economic growth.
"While much discussion has focused on the real need to address European sanctions against American products, last night's debate on H.R. 4520 highlighted the increasing complexity of the tax code and the need for the Committee to consider alternatives to the current tax system. As a result, I am writing to request that the Committee hold hearings to study and discuss the merits of repealing the current tax code and replacing it with a consumption-based sales tax as embodied in the Fair Tax Act (H.R. 25), " Collins said in a letter to House Ways and Means Committee Chairman Bill Thomas of California.
In the letter, Collins expressed concerns that the American Jobs Creation Act will replace FSC-ETI with "provisions that will further complicate an already overly-complex and burdensome tax code that prevents Americans from being able to freely compete in Europe and in markets around the world."
"More than any trade agreement, removing this tax burden would free the American worker to compete in the global marketplace; and, before approving any new trade agreements, the (House Ways and Means) Committee and the Congress should act to dramatically reduce, if not remove, the cost of this tax burden on American workers, farmers, and manufacturers. Such action would bring about the investment that would create jobs now," Collins said.
Collins went on to say, "I believe that we must act to ensure continued access to the European market for Americans in every industry. While the Committee is taking action to this end, it is also in the Committee's power to consider and pass legislation that will better enable American workers to compete not only in the European market but around the world as well. It is my hope that the Committee will soon schedule a hearing to discuss the merits of how H.R. 25 can help us reach this end."
The Fair Tax Act (H.R.25), introduced by Georgia Congressman John Linder, would eliminate all income taxes, all taxes on capital gains, all payroll taxes, the self-employment tax, and the gift and death taxes. In the place of these assorted burdens on the American taxpayer, the government would impose a 23 percent sales tax on all retail sales of new goods and services.
The bill would also eliminate the complexity of the current tax code and would dramatically reduce the cost of taxation that prevents American workers in all industries from being able to compete in markets around the world.
The Federal government will continue to be fully funded, including Social Security and Medicare.
The Fair Tax has more co-sponsors in the House of Representatives than any other proposed fundamental tax relief legislation in Congress. And, for the first time ever, the Fair Tax has been introduced in the Senate as S. 1493 by Senator Saxby Chambliss (R-Georgia) and cosponsored by Senator Zell Miller (D-Georgia).
Great!!
Beware the change based on a lie. That's 23% tax inclusive, 30%, and as I recall, for the first year of the tax only.
John Linder for President!!!
23% sales tax=less sales and more deficit=?% sales tax to elinate deficit. Another ploy to continue the excessive spending for another year or two. The kids in Washington just can't realize that the limit is here and now.
The best thing about a consumption tax is the simple fact that most people have no idea how much they pay in direct or indirect taxes. Unfortunately, I've got a feeling that's why we'll never have "real" tax reform like this.
The most evil plan ever devised for taxing people is the concept of withholding at the employer. It's perfect for hiding the true tax burdon, and some people are actually thankful to the government for the money they get back each year!
Mark
OK but here is why spending is raising. A very simple concept.
I have two fairly educated friends who are middle income folks with a nice house two late model SUVs in the garage and lack for nothing in the way of creature comforts. Yet they believe they pay no taxes because they get a refund.
Until the TAX that is enforced on us by the US government is out front and has to be PAID (Joe Six-pack actually writes a check) not deducted from your payroll check, spending sprees in Washington will never stop. Joe Six-pack has not a clue that HE is paying the tab.
Ya, Ain't it a hoot! I used to love listening to airheads (at tax time) brag about "...getting more $ than you are!" And actually believing that they were! I used to tell them, march you're young ass down to Wallyworld. Buy a $3. calculator and figure it out! As long as we have so many idiots in the country, I do not know if we will ever get meaningful tax reform...And I say that sadly, having been a member of National Taxpayers Union for years now. An org. whcih incidentally, has come out in favor of the FAIRTAX.
Are those the ones who get EITC or the ones who think the refund is money they get?
Refund.
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John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a pure consumption tax:
H.R.25, S.1493
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information: http://www.fairtax.org & http://www.salestax.org
They need to drastically cut spending before worrying about the mechanism used to plunder the fruits of the labor of those of us who work for a living rather than swill at the public trough.
Just how do you figure on achieving that under the income tax system?
Walter Williams, World Net Daily, 10-25-2000
According to the most recent U.S. Treasury Department figures, in 1997 the top 1 percent of income-earners (those with income of $250,000 and higher) paid 33 percent of all federal income taxes. The top 5 percent of income-earners ($108,000 and over) paid 52 percent, and the top 50 percent ($36,000 and over) paid 96 percent of income taxes. Guess what the bottom 50 percent of income earners paid?
If you're among those who pay little or no federal income taxes, what do you care about tax cuts? Moreover, if you think tax cuts pose a threat to government handout programs, you might be openly hostile and support Al Gore's silly "risky scheme" talk. So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?
How much did you pay in state sale taxes last year?
Actually, around tax time, I go ahead and edtimate the amount that I spend on sales taxes, since I'm going through my checking account (thank goodness for Quicken). I don't recall the exact amount (I'm at work right now), but the number is somewhat suprising.
What I'm getting at is that if you're paying low sales taxes, and the taxes you're paying are withheld before you see the first penny, unless you take the time to see exactly how much you're paying, you don't realize it.
BTW, here in Kansas City, we've got different tax rates for food and goods, versus food eaten at a restaurant. Again, I make estimates every year of my sales taxes paid.
Mark
23% sales tax=less sales and more deficit=?% sales tax to elinate deficit.
Perhaps you can tell us how there will be less sales when you have more money in your pocket to spend when there is no witholding, and base cost for products go down with the repeal of business income & payroll taxes?
I refer you to the section of the following article about the Income/Payroll tax system and its impact on our economy "A. Hidden Upstream Taxes. " paragraph 39.
"[39] Dr. Dale Jorgenson, Chairman of Harvard University's Economics Department, believes that the price of goods and services are inflated by about 20 percent or more by upstream taxes consumers ultimately bear. In a recent paper Dr. Jorgenson estimated the built-in taxes contained in the price of goods and services. /22/ In the chart above, he quantified the hidden component of tax, estimating that producer prices would fall on repeal of upstream taxes an average of about 22 percent."
Looking at the accompanying chart, the range of values from industry to industry appears to be about 12-25%.
Economists Gary and Aldonna Robbins of the Texas-based Institute for Public Policy examined the case of dry cleaning a shirt, with a particular eye toward uncovering the hidden costs of taxes in price.
The Robbin's attributed over 33.6% of "consumer prices" to be due to federal taxation passed on to the customer.
The Federal Tax System
http://www.cbo.gov/showdoc.cfm?index=2125&sequence=0&from=1#pt1
From the Table 1 we may extract the proportionate contributions of each sector of taxes as they contribute to consumer price for the year 2000.
Those tax components which will not change prices as a consequence of enactment of HR25
============================
Adjust for the approximate reduction of interest & cost of tax compliance (
Adjust for a conservative $800 billion cost of tax compliance, (The Flat Tax; Hall & Rabushka, '95,What the Income Tax Costs the American People: quoting James L. Payne estimates 65cents for each dollar of revenue collected).
Estimated change in consumption prices as consequence of enactment of a National Retail Sales Tax, repealing all business income and payroll taxes:
33.6*(1386.5/1945) = 23.9% reduction in consumption prices
Which more than verifies the Jorgenson empirical study of 22% fall in producer prices.
The two sources are in reasonable agreement, and I see 20-25% a reasonable value to expect retail prices to fall, not only for customers here in the United States, but in our exports as well making them far more competitive on international markets.
Just how do you figure on achieving that under a sales tax system.
Look at England. They just suck more money out with their VAT. It caused NO reduction in profligate government spending
At first thought, yeah you might think so. But on second thought, how many decades have we been trying to control spending? Can we control spending as long as we provide unlimited funds???
Let's limit the funds via marketplace competition - ie HR 25.
You oughta check this out for 3 minutes.
Glad you posted this article.
Damn shame that the Fair Tax was not even mentioned in the debate about solving the FSC problem, which it does, very nicely, by completely eliminating corporate income taxes.
As for you naysayers, think "FReedom." FReedom to work, earn, save and invest without the heavy & greedy hand of government having first dibs on your earnings.
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