Posted on 01/31/2005 7:12:16 AM PST by bmweezer
FRANCE!
Some of the reasons I believe the FairTax is better than the Flat Tax:
1 - Under our current system, as well as under the Flat Tax, the taxes are levied at the production level, and increases the costs of our goods before they go to market. This happens throughout the entire production tree resulting in American made products having a cost burden of all the corporate, income, and SS taxes paid through production. This effectively puts a tax on our exports, and although it is not treated as an export tarrif (which are expressly forbidden by the Constitution) it accomplishes the same thing, and makes our own exports less competitive than if we taxed at the point of consumption rather than during production.
In fact, taxing income is WORSE than taxing exports, because it not only accomplishes the same effective tarrif for exports, it effectivly puts that tarrif on ALL American made goods, even if sold domestically. Other countries (China being a big one) are able to insert their products in American markets without being burdened by Federal taxes. That is the exact oposite of protectionism. Both the current system and the Flat Tax are effectively protectionist measures for everyone else at America's expense. The FairTax shifts the point of collection from production to consumption. This allows our products to be exported without the burden of federal taxation (consistent with the Constitutional prohibition on export tarrifs). ALSO, it taxes imported goods at the same rate as domesticly produced goods.
2 - Because the FairTax is collected at the retail level instead of the production level, non-retail business will experience an immediate gain by eliminating their federal tax burden, which should have the effect of lowering costs throughout the entire economy.
3 - Forbes tried to sell America on the FlatTax in 2000 and arguably failed. The FairTax, is much more salable. It has been my experience that everyone, without exception, with whom I have discussed the FairTax face to face, were initially sceptical and offered objections, but were quickly and easily won over and persuaded to be stongly in favor of the FairTax... Even several liberal democrats. That is simply not going to happen with the FlatTax.
4 - The FairTax broadens the tax base relative to the Flat Tax. The FairTax would collect tax from foreign (legal or otherwise) visitor's consumption, who are imune from taxation now. Criminals and others who do not report thier income would be taxed on their consumption. This dynamic would shift some of the Federal tax burden off of American's an onto those who are benefitting from being here but not taxed under our current system or the FlatTax.
5 - The FlatTax leaves the system in place that began as a simple system, open to further manipulations that resulted in the mess we have now. The FairTax repeals large amounts of code, and seeks to repeal the 16th ammendment, making it once again, unconstitutional to have a Marxist income tax.
I have no problem with sharing correct information, but the original posting should, in my humble opinion, have started from a correct statement of the Fair Tax proposal rather than with many factually incorrect points that the poster then argued against.
And with the NRST, the entirety of the cost of compliance with the tax code, and paying the taxes disappears and American companies regain competitiveness as their expenses drop, productivity rises, and market share increases.
It is a great plan.
My comments on this article have centered on the fear mongering passed by the author.
As for the 23% number, this is confirmed by multiple respected economists with independent studies. From the same paper I linked to you:Dr. Jorgenson has since realized the 23% rate is a fairy tale.For example, Dale Jorgenson (Harvard) has found that the FairTax plan is revenue neutral at 22.9 percent.
Efficient Taxation Of Income by Dale W. Jorgensen and Kun-Young Yun, November 15, 2002
Since taxes distort resource allocation, a critical requirement for a fair comparison among alternative tax reform proposals is that all proposals must raise the same amount of revenue. It is well known that the ST and AFT [Americans for Fair Taxation] sales tax proposals fail to achieve revenue neutrality and tax rates must be increased substantially above the levels proposed by the authors of the plans.
Cheater.
The NRST would be the only federal tax so your pay check would have no federal withholdings. State tax withholdings and state tax laws would remain unchanged.
"I may be wrong, but I am dead set against any sales tax as it is the easiest way for the government to confiscate property against our will."
Can you explain to me how a sales tax is easier for government use to confiscate property than the current income tax? It seems to me that with a sales tax I would have the choice to purchase or not to purchase.
The poster wouldn't have made it through law school.
That happens now. The number of federal taxes paid at the state level and transferred to the feds is almost uncountable.
No, it's worse. We are back to the Articles of Confederation where the states had to voluntarily send in their tax remittances to the central government.
The infamous Harvard study showed businesses would like to relocate their HQ back to the US under the FairTax.What "infamous" Harvard study shows "businesses would like to relocate their HQ back to the US under the FairTax." Got a name or a link?
Thank you.....that makes sense.
Don't worry....I get nailed on everything else!
I agree. I find it sad that we have lived with a progressive tax for so long that anything less progressive is deemed regressive. Its rather like how congress can call a spending increse a spending cut if the increase is less than they wanted.
Sheesh.
How does a sales tax make it easier for the Feds to confiscate your property? Currently, they can quickly and easily place tax liens on your property for failure to pay your income taxes. With the NRST there is no tax return for the feds to pry over looking for mistakes.
You say that as if it were a bad thing, I say if gives more pull from the States and the citizens toward Federal Government that way.
What prevents the government from passing a sales tax today? What prevents getting both? Part of HR 25 is the disbanding of the IRS, in fact HR25 is the best defense to getting both forms of taxation.
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