Posted on 08/02/2004 11:16:09 PM PDT by JohnHuang2
WASHINGTON – Is it real or is it an election year scheme to win votes?
That's the question many in this town are asking about House Speaker Dennis Hastert's proposal to eliminate the income tax and abolish the Internal Revenue Service in a second Bush administration.
In his upcoming book, "Speaker: Lessons from Forty Years in Coaching and Politics," Hastert says the bold move – sure to be immensely popular with voters – will be the centerpiece of President Bush's domestic agenda in a second term.
Hastert, for his part, says he will push for replacing the nation's current tax system with a national sales tax or a value added tax.
"People ask me if I'm really calling for the elimination of the IRS, and I say I think that's a great thing to do for future generations of Americans," he writes in "Speaker," set for release tomorrow.
House Majority Leader Tom DeLay, R-Texas, offered a preview of the House GOP leadership's post-election tax agenda in a March speech in which he said the Republicans are determined to repeal the federal income tax.
Long an advocate of a national sales tax, a confident DeLay told a conference of tax lobbyists that House Republicans will have hearings and push the issue in 2005 and 2006.
He said that replacing the income tax, payroll and other related federal taxes would provide more money for people to use, and he endorsed a proposal from Rep. John Linder, R-Ga., for a national sales tax.
Yet, even as Republican leaders in the GOP-led House, Senate and Bush White House have praised the concept of tax simplification over the last 3 1/2 years, the U.S. tax code has been expanded by over 10,000 pages as the Bush tax cuts and other changes – part of a total of 227 changes to the code – were implemented.
"Pushing reform legislation will be difficult," admits Hastert. "Change of any sort seldom comes easy. But these changes are critical to our economic vitality and our economic security abroad."
Americans for Fair Taxation has been pushing the plan for years. Recently, the group has been pushing H.R. 25 as the vehicle.
"The current federal income tax system is broken. Patching up the existing code is pointless. It's time for a fresh approach, a fair approach. It's time for the FairTax," says the group's website. "From its humble beginnings, the income tax has grown like a cancer by taxing our hard work and discouraging savings and investment."
H.R. 25 would eliminate the federal income tax and replace it with a 23 percent consumption tax paid by the end user. That means business-to-business purchases for the production of goods and services would not be taxed. The organization estimates consumer prices will drop by an estimated 20-30 percent as a result of the change.
The group's website describes how the bill's rebate function works. It assures that those living in poverty would not pay any tax.
"Under the FairTax, no American will pay taxes on necessities. The rebate will be equivalent to the tax paid on essential goods and services. The rebate will be mailed before the tax is actually paid [and] will be paid in equal installments at the beginning of the month. The size of the monthly rebate will be determined by the federal poverty level for a particular household size."
The bill's Senate version is S.1493, sponsored by Sen. Saxby Chambliss, R-Ga., was introduced last year.
"If you own property, stock, or, say, one hundred acres of farmland and tax time is approaching, you don't want to make a mistake, so you're almost obliged to go to a certified public accountant, tax preparer, or tax attorney to help you file a correct return. That costs a lot of money," writes Hastert. "Now multiply the amount you have to pay by the total number of people who are in the same boat. You can't. No one can because precise numbers don't exist. But we can stipulate that we're talking about a huge amount. Now consider that a flat tax, national sales tax, or VAT would not only eliminate the need to do this, it could also eliminate the Internal Revenue Service (IRS) itself and make the process of paying taxes much easier."
Would a campaign promise to eliminate the IRS be taken seriously? If the Bush administration were really planning such a dramatic move in a second term, why would campaign officials not be making more of it? Could Bush really deliver on a promise so bold?
These were some of the questions being asked around the Capitol today. Nevertheless, the leak from Hastert is sure to sell books.
"By adopting a VAT, sales tax, or some other alternative, we could begin to change productivity," Hastert continued. "If you can do that, you can change gross national product and start growing the economy. You could double the economy over the next fifteen years. All of a sudden, the problem of what future generations owe in Social Security and Medicare won't be so daunting anymore. The answer is to grow the economy, and the key to doing that is making sure we have a tax system that attracts capital and builds incentives to keep it here instead of forcing it out to other nations."
The rates are separated in the legislation. The general revenue rate is expressly set separate from will what ever the Congress decides to set, the Senate does not filibuster and the President signs on to. With ever voter in the nation watching which way that rate goes.The rate in the legislation assumes the other two rates. Do the math without the OASDI and Medicare taxes. Besides, the rate may be set, but because AFT wanted to "market" (re: lie) this plan and used the tax inclusive sales tax rate, the rate can stay the same and the general revenue taxes paid can go up because the other two taxes can raise the gross payment. So we've got the SSA raising the amount of general revenue taxes we pay. Good job, AFT! Way to go!
Seeing as their contract for renting space from me has ended, no longer needing the space that I temporarily provided for them, there are no checks.That's too bad. You should become an economist. I hear the AFT pays them good money.
So we've got the SSA raising the amount of general revenue taxes we pay.
General revenue tax rate is set expressly at 14.91% it can only be changed in full view of the voters.
.
H.R.25Fair Tax Act of 2003 (Introduced in House) `Sec 102(b)(4) GENERAL REVENUE RATE- The general revenue rate shall be 14.91 percent. |
The economy expands and spend more, of course the government receives more revenue, alternatively spend less and save more, government gets less revenue. The amount of tax you pay is up to your own choices.
- "The income tax in effect makes us vassals to the government – the politicians decide how much income we can keep. No mere “reform” of this slave tax, such as flattening the rate, can correct its fundamental denial of control over our own money. Only the abolition of the income tax itself will restore the basic American principle that our income is both our own money and our own private business - not the government's."
- "Replacing the income tax with a national sales tax would rejuvenate independence and responsibility in our citizens. True economic liberty and moral revival go hand in hand."
- "A national sales tax would also put the American citizen back in control of national fiscal policy. The best way to curtail government spending is to cut taxes, because they can’t spend what they don’t get. But with a sales tax, we could deny funds to a spendthrift government – and give ourselves a tax cut – whenever we make the private choice to alter our spending and saving habits."
"Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. "
"It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess.
They prescribe their own limit, which cannot be exceeded without defeating the end proposed - that is, an extension of the revenue."
Good job, AFT! Way to go!
Precisely!
That's too bad.
Not at all, I need the workspace for other things now.
You should become an economist.
Nah, I retired long ago.
I hear the AFT pays them good money.
I would certainly hope so, the worker is worthy of his hire. Hiring the best in a profession does not come cheap.
That's what I've been saying for years.
He's one of the "economists" that signed a letter of encouragement for us to adopt the Kyoto treaty...He's never found a tax on the little people he didn't like, especially on energy, carbon taxes, energy credits etc.
General revenue tax rate is set expressly at 14.91% it can only be changed in full view of the voters.
Ah, Geezer. When the going gets tough, just do an irrelevant cut & pastie. You're nothing if not predictable.
Don't you get it? If you used tax exclusive rates it wouldn't matter but y'all just had to use the tax inclusive rates. With the inclusive rates, if the gross payment goes up (as it would if the SSA rates go up) the general revenue tax paid goes up even though the rate stays the same.
Example:
General Revenue Rate Combined OASDI & Medicare Rates Total Rate
Gross Payment on $1000 item Amount going to General Revenue
(14.91% x $1,298.70)
General Revenue Rate Combined OASDI & Medicare Rates Total Rate
Gross Payment on $1000 item Amount going to General Revenue
(14.91% x $1,333.33)
So we have a 2.66% percent increase in the general revenue tax paid (otherwise known as a tax increase) for a $1,000 item without an increase in the general revenue rate. All done by faceless bureaucrats at the SSA. All without a vote by Congress or the signature of the President. None of our representatives could be held accountable. And the AFT clowns are nowhere to be found (I'm sure off somewhere smoking a cigar and congratulating themselves).
Of course, none of this would be a problem if you used the tax exclusive rates. The general revenue rate would have no relation to the OASDI and Medicare rates. (Do ya think that's one reason why the states have used tax exclusive sales tax rates all these years? They've been combining state and local rates all this time without any problems. And, geez, people haven't been complaining that they can't compare their state sales taxes to their state income taxes. Funny...)
But then, selling the public on the FairTax is much more important than our representatives being held accountable for tax increases. /sarcasm
All rates as legislated General Revenue Rate 14.91% of total payment Combined OASDI & Medicare Rates 8.09% of total payment Total Rate 23.00% of total payment
Gross Payments for products $1,298.70 Amount going to General Revenue
(14.91% x $1,289.70)$193.63
Spending full resources released by repeal of the SS/Medicare burden for a total of $1,298.70.
|
||||||||||
So we have a 0% percent increase in the general revenue tax paid .
From the American Farm Bureau's analysis using 2001 data:
Tax base Total revenue required Rate required (1867/6229) Inclusive rate Now without OASDI or hospital insurance:
Tax base Total revenue required Rate required (1174/6229) Inclusive rate
So that's 15.86%, not 14.91%. Stop misleading people.
And you know that's not how the 23% or the 14.91% was calculated.
Actually the percentages were based on pre-2000 data, before the Bush adminstration tax cuts. And the HR25 general rate is indeed 14.91% at a time when revenue neutrality requirements of the Budget Enforcement Act were in effect. A law that has since expired and is no longer a factor in setting rates.
They were both calculated using a static amount of consumption (exclusive of tax).
The were both calculated using adjusted personal consumption figures that included business income and payroll taxes, the effect of which amounts to 20-25% of consumption expenditure and cost of compliance associated with those business burdens.
As far as static analysis goes, it is a dead issue with the current congress and expiration of the Budget Enforcement act.
The economy is not static, a change in tax rates allow a change in consumer behavior and expansion of the economy. It is totally unrealistic to assume that people will not by more increasing their standard of living when they have more dollars available from which the may do that. That is why now the congressional rule is to score budgets and taxes using dynamic measures that minimize tax rates rather than overstate them as static anaylysis does.
So that's 15.86%, not 14.91%. Stop misleading people.
H.R.25Fair Tax Act of 2003 (Introduced in House) `Sec 102(b)(4) GENERAL REVENUE RATE- The general revenue rate shall be 14.91 percent. |
So show me your dynamic calculations that derived the 14.91%.
BTTT for the elimination of the IRS and the fraudulent, intrusive, communist system (code) for taxing Americans...
So show me your dynamic calculations that derived the 14.91%.
The bill llanguage has set the rate explicitly.
H.R.25Fair Tax Act of 2003 (Introduced in House) `Sec 102(b)(4) GENERAL REVENUE RATE- The general revenue rate shall be 14.91 percent. |
You want a lower or higher rate, lobby the House Ways and Means committee.
Does the bill repeal Social Security and Medicare?
If I invested $7700.00 and cashed out $10,000 I earned 23% interest....
If I invested the $10,000 and cashed out $11,000, once again following their logic, I earned 9% interest.
It's just dumb. And the fact that they won't admit it makes me distrust them even more. What I demonstrated in #147 (and you've been posting for years) shows that using the inclusive rate for sales taxes is fundamentally flawed.
I've been posting it (and constantly, consistently, predictably, called among other things, a liar ), but -*you've*- illustrated it beautifully in #147.
Not only did you illustrate that, but you've also illustrated how the tax "of the gross payment" taxes other taxes...including medicare and SS...
Good job!
*You've?*... I'm confused are you me or am I you?
BTW. I've always wondered, if they have a problem being honest about something as basic as the rate, what else are they lying about?
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