Posted on 01/13/2005 7:35:00 AM PST by Jay777
Very cogent post.
Well said!
Yes, very well said.
I would add that the current structure also distorts patterns of giving negatively.
Examples abound of these kinds of distortions throughout the economy.
That will all end when we implement the FairTax.
People will give based on the perceived worth of the charity, instead of being influenced by the income tax social engineers.
You do realize that when they take a deduction for donations to charity, their tax is only reduced by a percentage equal to their tax rate, don't you?
e.g. If they donate $100, they may save $25-$30.
That is not really a smart reason to donate to charity. Maybe under the Fair Tax Plan they could donate $70-$75. They would end up with the same money either way and eliminate the middleman (IRS).
First, please let me point out that the FairTax is a National RETAIL Sales Tax, and not the same as a value added tax.
Secondly, you are correct in that after-tax income that has been saved will end up being taxed again when it is spent. Additionally, the IRS agents, and the many people involved in the tax industry will be looking for other work. (SOMEONE is going to feel some pain no matter which plan you go with - and others will have a marked benefit.)
However, the most important issue to me is how our current system effectively benefits other countries' industries at our own industries' expense.
The Federal government originally was to be funded largely by import tarrifs. This had the effect of making foreign nations "pay" for the priviledge of selling their goods in our markets. What we have is the exact opposite. We charge our own manufacturers corporate tax, payroll tax, et al, while Chinese and other manufacturers who are outside the jurisdiction of our tax system, produce their goods and sell them in our markets without sharing that tax burden.
This dynamic is effectively the same as if we put a tarrif on American Companies' products when they made them, whether they were to be sold domestically or exported elsewhere, while allowing other countries to trade here tarrif free.
Our current tax system is handicapping our own industries in terms of both competing with cheap imports, and competing globally with other nations. It is the opposite of protectionism. It is protecting EVERYONE ELSE at our own expense. We have been duped for a long time on this issue, and we need to make sure we fix it right.
The FairTax allows AMERICAN INDUSTRY to produce products without their costs being bloated with the current tax system. This will allow them to compete for shelf space here at home as well as abroad. Further, when foreign imports DO have shelf space here, they will have an equal share of the tax burden added to their price as domestic goods.
All the other arguments about which tax system is better seem trivial compared to the dynamic it will have on removing the unfair handicap that American industries have been burdened with for the last several decades... bringing many to their end.
Hammer that issue, my friend.
It is at the root of our hideous trade imbalance, artificially suppressed wage levels here in our country, and the loss of our manufacturing base.
This is a very big deal.
Unless they totally remove the income tax and cut all frivolous federal spending, true tax reform will never happen. Unfortunately, I don't really see that happening. The feds are more interested in wasting money on unconstitutional social programs than they are on actually doing right by the American taxpayer.
So you think it is flawless?
It's bigger than most people realize. If people more eloquent than I could explain to the average person that Daddy lost his job largely because our tax policy for the last few decades has continuously undermined America's ability to compete with other nations, even on our own soil... then no other plan would have popular support... and there would be popular pressure to pass and implement it.
Of course not. But I am genuinely impressed at how close it comes.
Flat Tax is a good idea, but like property tax, it is a direct tax on personal wealth. I hate that. NRST allows 100% savings, in noninvasive, and would be collected at the till just like state sales tax.
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Certainly agreed -- you hit on the key point, the invasiveness, and the issue of taxes on personal wealth. Both of these elements need to be killed and kept killed. I know the Marxists are just seething at the idea of not being able control our personal wealth, so we need some solid action in this area to protect the wealth of individuals. If Washington keeps screwing around with SS, you will have to live to 100 to get $50.00 a month!!! Ridiculous, but that is the way it is going.
I am an oldster too, but have yet to see an SS buck -- not real sure I ever will. Something needs to be done -- and I certainly agree the system needs a MAJOR OVERHAUL and protection from the Marxist liberals.
I love how the Marxist/Liberals/DNC have their panties in a twist over something as minute as privatizing small portions of the SS. What, imo, they really hate is the ability of people to roll their accounts over to their kin.
Marx was big on the idea of starting each generation off at ground zero. Keeps everyone poor and dependent.
I don't think they libies truely understand what Bush is doing to them with his "Ownership Society". I think they are too used to their own stupid and meaningless platitudes to see the threat it represents to them. It sure aint the "New (Raw) Deal".
Implementing the NRST and Personal Savings Accounts are like putting a nuke in their butter factory.
Income tax was originally very simple - back-of-a-postcard simple. It was then made complicated by endless "reasonable" modifications. Flat or NRS tax will fail for the same reason: sure it will be simple at first, but there will soon be exemptions, increases, and loopholes all in the name of "reasonable" special cases.
Originally there was NO income tax. The country got by just fine. The feds were Constitutionally prohibited from direct taxation; the feds levied tarrifs or charged the states, and the states figured out how to get the money.
Replace the tax code? Absolutely. Make it SIMPLE.
More importantly, STOP SPENDING SO FRIGGIN' MUCH TAX MONEY. Bickering over how to get the money pales in comparison to why it's being collected in the first place.
How does the 30% fairtax reduce the cost of anything?
More importantly, STOP SPENDING SO FRIGGIN' MUCH TAX MONEY. Bickering over how to get the money pales in comparison to why it's being collected in the first place.
First step to not "SPENDING SO FRIGGIN' MUCH TAX MONEY" is to make sure every voter perceives and participates in paying that bill.
Walter Williams nails it there:
"It's like me in the restaurant: What do I care about extravagance if you're footing the bill?"
Time to make sure everyone participates in the tax system up front an personal like. NRST accomplishes that everytime the voter pays for the goodies and reminded with that tax amount line on the bill just who to blame as government keeps growing and chomping away big bites out of everything we do.
I was just re-reading you concern about charitable giving and the FairTax. Because the money is not taxed until you spend it, ALL gifts are effectively tax deductible. For instance, anything I give a church I will not pay tax on. I will not pay tax when I give money to FreeRepublic. I will not be taxed on money I give to my nephew. I will not be taxed on money I give to the guy who hangs out on the street hoping begging for beer money. There is now no real need for a "tax-exempt entity" like a not-for-profit organisation, because, any gift to them is not taxed. ALL CASH GIFTS ARE NON-TAXED UNDER THE NRST.
Fastest way to get support for any tax reform is to end witholding.
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