FairTax Summit in Florida

August 20th, 2004 | AFFT

[Remember_Salamis]

Hello!

With the recent national media attention on tax reform alternatives we believe we are quite close to the tipping point on fundamental tax replacement. Our website has taken thousands of hits. Our 800 number is ringing off the wall. There is no question the time for positive action is now. We are working with both Presidential candidates staff and expect to get a senior surrogate speaker from both Bush and Kerry. The American people demand a fair and simple federal income and Social Security tax system. Come to Florida and make your views known.

We intend to keep this fire alive.
So we are having a conference, in Florida, in September, when the press will be crawling all over the state due to the hotly contested presidential and senatorial elections. And we'd like you there with us.

2004 Tax Policy & Jobs National Leadership Conference
September 17 through 19, 2004
Orlando, Florida
An invitation to attend

Why? Grassroots leadership is the key to actually moving reform forward. This conference brings together the top national, regional, and state leaders in tax policy, job growth, and economic development. We will examine the current alternatives to educate the grassroots and Congress in tax systems that make our country's goods more competitive at home and abroad, and provide sufficient funding for the reform and assurance of our Social Security system, while ensuring economic opportunities and stability for, and the welfare of, low-, lower middle-, and fixed-income Americans.

Our current tax system exports American jobs rather than American products.

The current income tax system drives up the cost of American manufactured goods and agricultural commodities, to say nothing of its complex, intrusive, inefficient, special-interest-driven nature. Not only does the current system decrease our competitiveness overseas, it increases domestic prices for those who can least afford to pay. Funding Social Security reform is almost as daunting as reform itself. The Social Security system is supported by a narrow, regressive payroll tax, levied heavily on low- and lower middle-income Americans. While Social Security system reform is clearly necessary, this is not the purpose of this conference. Determining a responsible, long-term funding solution for Social Security reform is a purpose for this conference.

Result? Bring job creation and Social Security reform-friendly tax policy to the forefront of our national economic debate.

Who? The Tax Policy & Jobs Conference is sponsored by National Tax Research Committee.

When? September 17 through 19, 2004

Where? Gaylord Palms Resort & Visitors Center, Interstate 4 @ Osceola Parkway East (Exit 65), Kissimmee (Orlando), Florida, right across the freeway from Disney World

Data for attendees

• Registration is $100.
• This conference is a summit. It is intended for leaders who move federal and state income and payroll tax policy and these tax systems' effects on job creation/competitiveness in the United States.
• This event is educational, nonpartisan, and will offer all viewpoints on tax reform where supporters are willing to present in person.
• Due to the media attention focused on Florida from both the presidential and the Florida senate race, it will be held there to heighten interest in the policy of these issues.
• There will be individual speakers and panels to educate attendees during general sessions.
• There will be booths available where attendees will learn more between general sessions.
• Register on line at https://secure.fairtaxvolunteer.org/registration/.

Very best regards,
Tom


Thomas A. Wright
Executive Director
FairTax.org
tom@fairtax.org
www.fairtax.org
1-800-FAIRTAX




Contributions to Americans For Fair Taxation are not tax deductible because we lobby for you in Washington, D.C.

[tutstar]

bttt for later

[ancient_geezer]

And a good portion of that is in tax exempt investments.

Any proceeds of which get taxed when spent under the current tax system.

DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation

 

additionally 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 hidden costs of taxes as they propogate through consumer prices, The Robbin's attribute over 33.6% of prices to be a consequence federal taxation. Overall, providing an estimated 20-25% elasticity in consumer prices holding business net earningst and employee gross wages constant.

[Your Nightmare]

I was aware of that. If you can figure out how much of the middle quintile's income is social security, I will adjust the numbers.

BTW, I thought you said this wasn't a spending bill? I don't suppose you have acounted for this 30% increase in Social Security payment in the 29.87% NRST rate, have you?

[Remember_Salamis]

"If you can figure out how much of the middle quintile's income is social security, I will adjust the numbers."

-- Yup. Tack on 15.3%. An overwhelming majority of economists believe that the employer's share of payroll taxes are taken out of the employees paycheck. In fact, even liberals use this argument when opposing tax cuts, stating that the middle and lower classes actually pay more than many believe.

[ancient_geezer]

If you can figure out how much of the middle quintile's income is social security, I will adjust the numbers.

No real need for it, the level of the new index (NRST + CPI) will settle at levels comparable to the current CPI. HR25 does replace the current tax system after all.

But then, it would be even better with a 20-21% tax rate more comensurate with the Bush tax cuts,. yielding the protential for greater economic growth, more room for productivity increases to allow prices to fall actually lower than the nominal level of the NRST rate

I don't have a line on any studies focused on Social Security benefit distribution as a function of gross retiree income.

Just bits & pieces from problematic sources indicating a considerable portion of household income is SS.

Testimony of Christian Weller on Strengthening Social Security - Center for American Progress

"Social Security benefits were 80 percent of income for households in the bottom 40 percent of the income distribution in 2000."

 

BTW, I thought you said this wasn't a spending bill?

It is a revenue bill with transition factors as most tax reform bills do have. You expect transition to be totally ignored?

I don't suppose you have acounted for this 30% increase in Social Security payment in the 29.87% NRST rate, have you?

Certainly the Index is accounted for seeing as prices, on average, expected to decline 20-25% on implementation of HR25. I figure on a wash myself, with total expenditure(NRST + newPrice) of households to remain constant with current prices burdened with federal taxes that are replaced by the NRST.

[ancient_geezer]

in the 29.87% NRST rate,

 

H.R.25

Fair Tax Act of 2003 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.25:

---

 

`SEC. 101. IMPOSITION OF SALES TAX.

`(a) IN GENERAL- There is hereby imposed a tax on the use or consumption in the United States of taxable property or services.

`(b) Rate-

`(1) FOR 2005- In the calendar year 2005, the rate of tax is 23 percent of the gross payments for the taxable property or service.

`(2) FOR YEARS AFTER 2005- For years after the calendar year 2005, the rate of tax is the combined Federal tax rate percentage (as defined in paragraph (3) of the gross payments for the taxable property or service.

`(3) COMBINED FEDERAL TAX RATE PERCENTAGE- The combined Federal tax rate percentage is the sum of--

`(A) the general revenue rate (as defined in paragraph (4), and

`(B) the old-age, survivors and disability insurance rate, and

`(C) the hospital insurance rate.

`(4) GENERAL REVENUE RATE- The general revenue rate shall be 14.91 percent.

 

Remember, we are replacing the income/payroll tax, lets keep our measures consistent as we talk about that.

 

The Wrong Camera: The Denominator of the
Tax Incidence Equation.
Dan R. Mastromarco; LLM, Argus Group, Washington D.C.
Tax Analysts Document Number: Doc 1999-32575
Citations: (October 8, 1999)

---

B. Use a Consistent Size Screen to Portray It.

[118] When considering the rate of a national sales tax, or any tax for that matter, one must always decide which of two distinct means of portraying this rate -- the "tax-inclusive rate" or "tax- exclusive rate" -- best expresses the tax burden. Which one we employ changes absolutely nothing in terms of the taxes that are actually raised or paid by the taxpayer under the taxing regime examined, in the same way that measuring a journey in inches or meters does not change the distance. However, how the rate is presented changes how the relative tax burden is perceived by those who wish to compare the merits of competing tax proposals. Confusion results when we compare alternatives under different measuring scales.

[119] The sales tax is particularly susceptible to this confusion because state sales taxes are normally expressed on a tax- exclusive basis, while income, estate, and payroll taxes, as well as the Flat Tax and other VATs, are normally expressed on a tax- inclusive basis. If we were to express a sales tax rate as a percent of the product price as is done in the states, we would be unfairly overstating the burden of the tax when we compare it to what it is meant to replace at the national level. Or conversely, we would be greatly understating the relative burden of the federal income and payroll taxes for those who don't have time to learn the different measuring systems.

*** snip ***

[129] In making comparisons between alternative taxing systems it is important to ensure therefore that these comparisons are consistent, fair in terms of expectations, and are well explained. Fair comparisons eliminate and do not exacerbate confusion over a relatively critical point as the means of expressing the tax rate. The only means to do so is to ensure that a tax-inclusive rate is compared with a tax-inclusive rate.

Footnotes:

/56/ When calculating the tax-inclusive sales tax base, two algebraically equivalent methods may be used. The tax-exclusive rate may be converted into a tax-inclusive rate by dividing the tax- exclusive rate by one plus the tax-exclusive rate: ti = te / (1+ te). Conversely, a tax-inclusive rate may be converted into a tax- exclusive rate by dividing the tax-inclusive rate by one minus the tax-inclusive rate: te = ti / (1-ti). Alternatively, the tax- inclusive sales tax rate may be calculated by adding the repealed income tax revenue back into the tax base (consumers, after all, would have that money to spend), whereas one would not do so when calculating the tax-exclusive base (consumers would be spending that amount on tax and it would not be appropriation to include it in the calculation of a tax-exclusive base).

/57/ The maximum marginal payroll rate is 15.3 percent, but this rate applies regressively between $0 and $72,600 for 1999. When this rate attaches, it is possible for a tax to apply at a maximum marginal rate of 43.3 percent (28 percent individual income tax rate plus 15.3 percent payroll tax rate).

/58/ While it is beyond the scope of this article, it is important to understand that the Flat Tax rate of 17 percent assumes a substantial reduction in government revenues.

[lewislynn]

Tack on 15.3%. An overwhelming majority of economists believe that the employer's share of payroll taxes are taken out of the employees paycheck.

Everyone except the pinheads at AFFT know that...That's why the repeal of the payroll tax can't lower prices. They'll have to give it directly to the employee, then report that to SS...(Were you saying something about compliance costs?)

Tack on 15.3%

I think you meant subtract 15.3% the CBO rightfully includes the employer's 7.65% contribution as your income just as it is part of self-employment income.

[ancient_geezer]

They'll have to give it directly to the employee, then report that to SS...(Were you saying something about compliance costs?)

Hmmmm, you can certainly ask for a raise if you want. Course the employer will do what best increases his bottom line in sales as the compitition lowers their prices.

 

HELVERING v. DAVIS, 301 U.S. 619 (1937)

• Title VIII(Social Security Act), as we have said, lays two different types of tax, an 'income tax on employees,' and 'an excise tax on employers.' The income tax on employees is measured by wages paid during the calendar year. Section 801 [26 USC 3101]. The excise tax on the employer [26 USC 3111] is to be paid 'with respect to having individuals in his employ,' and, like the tax on employees, is measured by wages.
• . The proceeds of both taxes are to be paid into the Treasury like internal revenue taxes generally, and are not ear-marked in any way. Section 807(a)[26 USC 3501]. There are penalties for nonpayment. Section 807(c), [26 USC 7203].

CRS Report for Congress (98-422 EPW)

"Taking the Social Security trust funds "off budget" has not changed how Social Security funds are handled. They are treated the same way today as they were in 1937 when Social Security taxes were first levied

[Remember_Salamis]

There's more to price reduction than Payroll taxes:

CASCADED Corporate Taxes
Tax compliance

If you're willing to go on the record, right here, and say that you think payroll taxes will go back to the employee, theat's fantastic. Why?

Because that's EXACTLY what AFFT and Dr. Jorgensen say! They REPEATEDLY state CORPORATE TAXES and COMPLIANCE COSTS are responsible for the current inflated price of goods. Here's a snippet from "Thumbnail Sketch of the FairTax" from FairTax.org:

"All Americans take home their whole paychecks. Not only do more Americans have jobs, but they also take home 100 percent of their paychecks (except where state income taxes apply). No federal income taxes or payroll taxes are withheld from paychecks, pensions, or Social Security checks.
Retail prices no longer hide corporate taxes or their compliance costs, which drive up costs for those who can least afford to pay. Did you know that hidden income taxes and the cost of complying with them currently make up 20 to 30 percent of all retail prices? It's true. According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices - from 20 to 30 percent higher than they would otherwise be - for everything you buy. If competition does not allow prices to rise, corporations lower labor costs, again hurting those who can least afford to lose their jobs. Finally, if prices are as high as competition allows and labor costs are as low as practical, profits/dividends to shareholders are driven down, thereby hurting retirement savings for moms-and-pops and pension funds invested in Corporate America. With the FairTax, the sham of corporate taxation ends, competition drives prices down, more people in America have jobs, and retirement/pension funds see improved performance."

[Remember_Salamis]

If you take home $1,000 a month, here's what your check would look like if you included the Employer's share:

Pre-tax: $1,000

---

- SS/MED: $76.50
- Income: $250.00

---

32.6% Tax-rate

With Employer Share included:

Pre-tax: 1,076.50

---

- SS/MED: $153
- INCOME: $250

---

37.43% Tax-rate

The only reason we get this quirky math is because the Employer's share is exempt from income taxation. If it weren't, like it is with the self-employment tax, this person would in fact pay $153 in SS/MED, $269.12 in Income, equaling $422.12 in taxes and a 39.21% tax rate.

And what does this do? It inadvertantly DISCOURAGES entrepeneurialism. Why work for yourself when all it will do is make you pay 4.75% MORE MONEY to the government on top of risk you're already taking to work for yourself.

[lewislynn]

Most everything the corporations you refer to is made in other countries, how much lower can their, wages, taxes and compliance costs get?

Your revenue neutral tax shift directly to consumers blows your argument out of the water.

Corporate lapdog pinheads at AFFT and one AFFT paid economist have all the answers to our woes?...Right.

[lewislynn]

If you take home $1,000 a month, here's what your check would look like if you included the Employer's share:

Pre-tax: $1,000

Tax doesn't come out of take home...Get your story straight, take a tax class, take a math class or all the above, then get back to me with facts.

[Your Nightmare]

According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices - from 20 to 30 percent higher than they would otherwise be - for everything you buy.

I don't believe he ever said this.

[lewislynn]

Why work for yourself when all it will do is make you pay 4.75% MORE MONEY to the government on top of risk you're already taking to work for yourself

WRONG! once again.

You forgot to subtract 1/2 of your self-employment tax off of your income to make your adjustable gross

Just like employees, you don't pay income tax on 1/2 of your self employment tax.

See schedule SE and form 1040 line 28..or take that tax class and inform yourself with facts.

[ancient_geezer]

According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices - from 20 to 30 percent higher than they would otherwise be - for everything you buy.

Actually as we have discussed before, Jorgenson refered to producer prices, the inputs to business, indicating a decrease of 20% in first year of the tax advancing to 25% reduction in out years as regarding an NRST replacing only federal income taxes alone.

The NRST of that study, would also reduce the price of consumption (i.e. tax included prices) a little over 3% in the first year(i.e. 18.2% reduction in shelf prices by your own computations) going to 10% in the out years.

The repeal of payroll taxes would create the conditions for an even greater decline in payments consumption as far as I can see.

But then this was all discussed in that prior thread with you ad-infinitum:

[Your Nightmare]

There were a lot of your own calculations and assumptions made in those discussions (I'm surprised you would bring those threads up considering they show how bad you are at math). He never said consumer prices are 20-30 higher for everything we buy. I'll believe that's what he meant when he actually says it.

Besides, Dr. Jorgenson has since realized that the FairTax rate is way too low and "must be increased substantially above the levels proposed by the authors of the plan." So your "price of consumption" BS no longer applies.

We will see if the supporters of this bill are brave enough to invite the good doctor back for the next round of hearings so he can clear up these myths that have arisen from his statements. My guess is they won't, but my hope is they will.

[smokeyb]

If I'm paying taxes on the production of my computer and it's components I'm likely paying Chinese, not American taxes....How will that effect prices with a U.S. nst?

Mine was assembled here with a various parts made here. But then your Chinese-made computer had to be imported by an American company (taxes), Shipped to a distributer by truck and/or rail by an American company (taxes) Shipped by the distributer to retail outlets or to you direct by an American company (taxes), stocked and sold at the retail outlet by an American company (taxes).

And you wonder why companies go overseas to MANUFACTURE products ? TAXES !

If your computer was completely American-made, you have the raw materials being produced by numerous companies, fabricated into the essential parts by numerous companies, assembled, inspected, packaged and marketed buy the manufacturer. And who do you think pays those taxes ?

[smokeyb]

And a good portion of that is in tax exempt investments.

Which will be taxes under the current system. Do you think it will not be taxed NOW when those savings are drawn down ? So what is your point ? If it is that you think that the retired will pay less under the current system you are wrong. If they are under poverty level they will pay NO taxes.

[smokeyb]

Most, not all. Money saved/invested that isn't deferred would be taxed twice.

If the total of that savings in under the poverty level or you buy a house or used car, you won't.

You are being taxed more than twice now.

[Your Nightmare]

Do you think it will not be taxed NOW when those savings are drawn down ?

Well, no. I don't think people pay income tax on tax exempt investments.

I did the math. Look for yourself. You aren't one of those gullible people who think nobody would pay more with a NRST, are you?