Fair Tax To Be Discussed

Fair Tax Grassroots Team

[Jay777]

I recieved this email. I won't be able to attend, but thought I'd let it be known to others interested.

Please attend and support the FairTax!! If you will be able to make this event - you need to RSVP to the person at Heritage below. In addition, we would like to know you will be attending. Please email us at info@fairtax.org and put in the subject line - HERITAGE EVENT.

Thank you! FairTax Grassroots Team 1-800-FAIRTAX

The Heritage Foundation Cordially Invites You To a Luncheon Seminar

*** 2360 Rayburn House Office Building***

Reforming the Tax Code: Flat Tax vs. Sales Tax

Featuring

For the Sales Tax: David Burton President, The Argus Group

For the Flat Tax: Daniel J. Mitchell McKenna Senior Fellow in Political Economy, The Heritage Foundation

Moderated by John Berthoud President, National Taxpayers Union

President Bush is appointing a Tax Reform Advisory Panel to help the Treasury Department develop options for fundamental tax reform. This has re-ignited the debate over how best to reform the current tax system. The two most prominent options are both the flat tax and a national sales tax that eliminate loopholes and tax economic activity only one time. While the flat tax and sales tax share basic characteristics, they rely on different collection mechanisms. The flat tax is imposed as income is earned and the sales tax is imposed as income is spent.

So which system is better? Please join us as David Burton of The Argus Group and Dan Mitchell of The Heritage Foundation discuss the advantages of both the flat tax and a national sales tax. This second seminar is part of an ongoing series of events designed to promote tax reform and provide some common- sense guidance as policymakers begin to explore how to create a better tax code.

Friday, January 14, 2005 12:00 noon-1:45 p.m. Lunch will be provided

RSVP to Mimi Kelley at (202) 608-6067 Or, email: mimi.kelley@heritage.org

Room 2360, Rayburn House Office Building The Rayburn House Office Building is located at: Independence Ave. & S. Capitol Street, S.W. | Washington, DC 20515 | 202-608-6067

You received this e-mail because you joined our list through our online registration, e-mail newsletter, petition, direct mail effort or phone bank. If you do NOT wish to receive e-mail updates about the FairTax, please pardon our e-mail (and accept our apology). You may reply to this message with the word 'remove' and your original registration e-mail address (john.stephenson@rs.af.mil) in the subject line to be removed from our e-mail list.

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

[Dead Dog]

I'm not sure how SS recipients would be getting screwed.

Say I'm an oldster and I want to buy a new fishin' boat for the ole Lady. Right now, I pay income tax on my SS payment and retirement (if any). When I buy the boat, I pay the income tax of everyone who ever touched the boat in production, and the cost of collecting that tax. That increase the cost of the boat 20% buy most counts.

The Fair tax would cut ALL taxes from my SS and retirement payments, AND reduce the cost of the boat 20%. Plus, it provides an indexed rebate of about $1000K a month for all married couples as a refund on essential items. ie, a certain amount of monthly expenditures (rent, food, ect) are not taxed. If the boat is used, then there is no NRST applied to it anyway.

Bottom line is, as an oldster, I'd save more than enough cash for a six pack and some frozen herring.

Not to mention some other points:

NRST taxes ALL participants in the free market, including illegals, hookers, and narc pushers. Those people are as of now untaxed. NRST is simply an access fee to maintain the free market.

Imported goods now have an unfair advantage in that they don't carry that 20% additional cost due to US taxation. Under the NRST, they would bear an equal tax burden ant the market place. That gives a 20% cost advantage to goods produced by US workers.

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.

[socialismisinsidious]

there are 48 Q&As on there--too much to post all--maybe you can check them out later via www.fairtax.org

here is #22:
What will happen to charitable giving? Charitable contributions depend on one factor more than any other: The health of the economy (not tax benefits). As a wide range of economists agree on the economic expansion the FairTax delivers, charitable contributions benefit also.
For all of the money that pours into churches every Sunday and into a broad range of charities every day, only the 30 percent who itemize get any tax benefit. The other 70 percent have given and keep giving with no tax benefit whatsoever.
The FairTax allows people to make charitable contributions out of pre-tax dollars. Thus those generally less affluent taxpayers who do not itemize see their cost of charitable giving go down under the FairTax.
Finally, the wealthy make decisions on charitable giving based on the cause. Once they have determined the cause is worthy, their contribution is structured to maximize the gift and minimize the tax. But the intention to give comes first; taxes simply determine the structure – rarely the amount – of the gift.

[EternalVigilance]

Very cogent post.

Well said!

[EternalVigilance]

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.

[socialismisinsidious]

thanks but can't take the credit...got it from fairtax.org Q&A page

[jimthewiz]

Most people I know give to charities for tax reasons.

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).

[OHelix]

"A flat tax on all income is the most fair. A large national sales tax (value-added as some refer to it) is unfair to many groups for whom it would represent MORE DOUBLE TAXATION -- as we are being screwed on SS payments now."

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.

[EternalVigilance]

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.

[MarcoPolo]

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.

[Jay777]

So you think it is flawless?

[OHelix]

"This is a very big deal."

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.

[OHelix]

"So you think it is flawless?"

Of course not. But I am genuinely impressed at how close it comes.

[EagleUSA]

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.
=====
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.

[Dead Dog]

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.

[ctdonath2]

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.

[lewislynn]

The Fair tax would cut ALL taxes from my SS and retirement payments, AND reduce the cost of the boat 20%.

How does the 30% fairtax reduce the cost of anything?

[ancient_geezer]

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.

[Dead Dog]

From what I've read, Fair Tax is 25%, but either way 20% of the cost of products (that is domestically produced) at the point of retail is cost associated with the collection of Income tax.

Think about it, when you buy a car you are paying the income tax for the corporation, the dealer, the income tax of all employees, the salary of their tax accountants (both corporate and the employees hire), the Tax accountant/lawyers salary, and accountants and lawyers income tax.

Without dropping the employees income from Gross to Net, you still get a 20% reduction in the cost of goods. Mainly from the removal of corporate income tax, which is a double tax anyway.

Imported goods do not have these costs built in, putting them at a 20% cost advantage. Hence the reverse Tariff.

[OHelix]

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.

[Dead Dog]

Fastest way to get support for any tax reform is to end witholding.