Bush Pledges to Make Changes to Tax Code

My Way ^ | 11/04/04 | By TERENCE HUNT

[MNJohnnie]

WASHINGTON (AP) - Contending Americans have embraced his conservative agenda, President Bush pledged Thursday to aggressively pursue major changes in Social Security, the tax code and medical malpractice awards, working with Democrats if they are receptive and leaving them behind if they're not.

"I earned capital in the campaign, political capital, and now I intend to spend it," Bush said a day after a decisive victory that made him the first president in 68 years to win re-election and gain seats in both the House and Senate.

"I'll reach out to everyone who shares our goals," said Bush, who 24 hours earlier had promised to try to win over those who voted for his Democratic opponent.

[OKSooner]

Bookmark.

[FairOpinion]

Good point.

I think that rather than giving people full exemption, which would indeed be an incentive for fraud, they could keep track on the card of the purchases, and exempt the first 1,000 spent from taxes, then if they don't show the card, or show the card, it could be seen that they are spending over the allotted non-taxable allotment and they would have to pay the sales tax.

I don't like graduated sales tax, but taking your idea of the card modified as above could work well.

[ancient_geezer]

I was thinking about the poverty income thing. Instead of rebates, why couldn't the IRS or state DOR issue a card, a kind of ATM/Drivers' License type card, with the persons photo ID and Soc. Sec. #, to those who qualify. At the point-of-sale the customer gets his/her card scanned/swiped/whatever, and is exempted from paying the tax. The card would need to be 'renewed' periodically (to deter fraud if a poverty person finds a better job).

 

Nothing so complicated is required. Single rate at the cash register fixed payment each month to all households regardless of actual income or expenditure based only on household size.

No ID necessary for purchases. At the cash register everyone is treated precisely the same. The NRST is administered and collected exactly the same as state retail sales taxes are today, single rate, all new goods and services are taxed with no exception.

For the progressivity side, all legal residents will receive a demogrant called the Family Consumption Allowence(FCA) equivalent to the FairTax paid on essential goods and services. The FCA will be paid in advance, in equal installments each month. The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate paid to all households regardless of income or actual expenditure.

Every year, the Department of Health and Human Services [HHS] determine the "poverty level" for each family size.

The 2001 "FairTax" Family Consumption Allowance Figures
Family Size	HHS Poverty Level	Annual FCA	Monthly FCA
One	$8,590	$1,976	$165
Two	$17,180	$3,951	$329
Three	$20,200	$4,646	$387
Four	$23,220	$5,341	$445
Five	$26,240	$6,035	$503
Six	$29,260	$6,730	$561
Seven	$32,280	$7,424	$619
Eight	$35,300	$8,119	$677

1) Federal Register: February 16, 2001, Pages 10695-10697).

[ The monthly FCA for each adult is .23 * (HSS poverty level for a single person)/12 to assure no marriage penalty due to the manner in which the poverty level is dependant on family size. The monthly FCA for each child is .23 * (the incremental increase of HSS poverty level for a family with one child over no child) ] A. Geezer

A family of four, for example, could spend $24,980 per year free of tax because they will have received over the course of the year a demogrant totaling $5,745. $5,745 is the amount of sales tax paid on $24,980 in expenditures. That family spending double the "poverty level" or $49,960per year will effectively pay tax on only half of their spending and, therefore, have an effective tax rate of 11 ½ percent or half the FairTax rate.

The beauty of the FairTax is that you can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, you can get your effective tax rate below 9%.

To illustrate examine the tax burden that a family of four will have at various annual expenditure levels as compared to that same family under the current system:

 

H.R.25 "The FairTax Act

[FairOpinion]

"it would be viewed as fair, that it would be a fair system, that it wouldn't be complicated, that there's a -- kind of that loopholes wouldn't be there for special interests, that the code itself be viewed and deemed as a very fair way to encourage people to invest and save and achieve certain fiscal objectives in our country, as well. "

That sounds good to me:

http://www.fairtax.com

[ancient_geezer]

got yah on the pinger.

Now getting off, that may be another matter ;O)

[golas1964]

If a child/teenager, under 18, still living with their parent(s), had a job, would that child get their own FCA?

[golas1964]

...or would that childs' income need to be reported by the parents?

[ancient_geezer]

"it would be viewed as fair, that it would be a fair system, that it wouldn't be complicated, that there's a -- kind of that loopholes wouldn't be there for special interests, that the code itself be viewed and deemed as a very fair way to encourage people to invest and save and achieve certain fiscal objectives in our country, as well. "

Think maybe he's been talking to somebody? LOL.

 

H.R.25

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

[Fledermaus]

YEP...it's MY MONEY!

[ancient_geezer]

If a child/teenager, under 18, still living with their parent(s), had a job, would that child get their own FCA?

Person selected by the household would receive the payment for all members of the family in the household.

 

H.R.25

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

---

 

`SEC. 301. FAMILY CONSUMPTION ALLOWANCE.

`Each qualified family shall be eligible to receive a sales tax rebate each month. The sales tax rebate shall be in an amount equal to the product of--

• `(1) the rate of tax imposed by section 101, and
• `(2) the monthly poverty level.

`SEC. 302. QUALIFIED FAMILY.

`(a) GENERAL RULE- For purposes of this chapter, the term `qualified family' shall mean 1 or more family members sharing a common residence. All family members sharing a common residence shall be considered as part of 1 qualified family.

`(b) FAMILY SIZE DETERMINATION-

`(1) In general- To determine the size of a qualified family for purposes of this chapter, family members shall mean--

• `(A) an individual,
• `(B) the individual's spouse,
• `(C) all lineal ancestors and descendants of said individual (and such individual's spouse),
• `(D) all legally adopted children of such individual (and such individual's spouse), and
• `(E) all children under legal guardianship of such individual (or such individual's spouse).

`(2) IDENTIFICATION REQUIREMENTS- In order for a person to be counted as a member of the family for purposes of determining the size of the qualified family, such person must--

• `(A) have a bona fide Social Security number; and
• `(B) be a lawful resident of the United States.

`(c) CHILDREN LIVING AWAY FROM HOME-

`(1) Students living away from home- Any person who was a registered student during not fewer than 5 months in a calendar year while living away from the common residence of a qualified family but who receives over 50 percent of such person's support during a calendar year from members of the qualified family shall be included as part of the family unit whose members provided said support for purposes of this chapter.

`(2) Children of divorced or separated parents- If a child's parents are divorced or legally separated, a child for purposes of this chapter shall be treated as part of the qualified family of the custodial parent. In cases of joint custody, the custodial parent for purposes of this chapter shall be the parent that has custody of the child for more than one-half of the time during a given calendar year. A parent entitled to be treated as the custodial parent pursuant to this paragraph may release this claim to the other parent if said release is in writing.

`(d) Annual Registration- In order to receive the family consumption allowance provided by section 301, a qualified family must register with the sales tax administering authority in a form prescribed by the Secretary. The annual registration form shall provide--

• `(1) the name of each family member who shared the qualified family's residence on the family determination date,
• `(2) the Social Security number of each family member on the family determination date who shared the qualified family's residence on the family determination date,
• `(3) the family member or family members to whom the family consumption allowance should be paid,
• `(4) a certification that all listed family members are lawful residents of the United States,
• `(5) a certification that all family members sharing the common residence are listed,
• `(6) a certification that no family members were incarcerated on the family determination date (within the meaning of subsection (l)), and
• `(7) the address of the qualified family.

Said registration shall be signed by all members of the qualified family that have attained the age of 21 years as of the date of filing.

[ancient_geezer]

...or would that childs' income need to be reported by the parents?

Income is not a factor, thus not reported for anyone in the family. Just household size and SS#s and ages and where and to whom to send the check.

Neither income nor wealth are taxed nor the basis of qualifying for the FCA.

As a point of fact registering for the FCA is not mandatory. If you don't want the FCA, you are not required to file squat.

[golas1964]

OK, sounds good.

So you think Dubya, by using the word 'fair' a lot today, was hinting that he would propose a plan like 'Fairtax'?

[golas1964]

Hmmmm, would Barbra Striesand apply for an FCA or not?

[ancient_geezer]

He definitely has been briefed on the legislation, and knows it well.

You can't hardly run as a Pubbie for national office out of Texas without knowing about it ;O)

[ancient_geezer]

Hmmmm, would Barbra Striesand apply for an FCA or not?

Ask her. She take personal tax exemptions and deductions under the income tax?

[KMC1]

I like the Dennis Hastert idea - NO MORE IRS

[golas1964]

Well the Dems would definitely dig their heels on the 'one rate for everybody' idea.

Also, you'd have to make it next to impossible for Congress to tinker with it,
otherwise the tax bureaucracy snowball would start all over again.

[golas1964]

Good point, would you still need the IRS to administrate 'Fairtax'? (I'd think it could be downsized quite a bit)

[RipSawyer]

ping

[golas1964]

The good thing is once people start to pay-as-they-go, everyone will be converted to tax hawks instantly!