Biker,
I assume that you are doing okay for yourself due not only to good planning but also to hard work. The hard work portion of that equation likely means that the feds take a hefty bite from your income and impedes your ability to build a nest egg as fast as you'd like.
I may be off base, and Goddess is much better qualified to judge the generalities that I am about to present than I am. Please bear with me as she sees if my thinking has merit. If it does, she would be better able to answer specific questions (she is brilliant and qualified, I'm not). I think that you will come to the same conclusion that we have come to -- The FairTax has to pass.
Thanks for the time and consideration.
CG, please correct me if I am wrong on my thinking here. . .
The way that I look at BNYC's situation is that the proper way to look at the impact to his buying ability is to compare what happens to him if we continue the present system with all of it's built in impediments to building wealth to what his position will be if the current impediments are removed and he is unfettered in his attempts to build (hopefully) a real fortune.
I assume that there will be some inequity that he will suffer, but even if I knew his specifics, I doubt that I could quantify what the impact would be.
However, since the FairTax totally removes Federal withholding for the Income Tax and FICA he will have more cash to work with than if the present mess continues.
Also, the Gift Tax, Capital Gains Tax, Inheritance and Estate taxes all go away, he will be able to retain a greater portion of them to pass on to his children AND regain control over his wealth that will no longer be subject to bureaucratic rules and confiscatory rates.
I can't help but think that the FairTax would leave him better off overall. One thing is certain. Passage of the FairTax restores his liberty and that of his children to control their own destiny and build wealth tax free.
To me, that's worth paying for if necessary.
That would be a legacy to leave behind.
Very well said Badray.....
I agree in entirety. The Fair Tax is the only proposal which severs the right of the government to confiscate private property in the form of paycheck withholding and / or lien and levy of personalty and realty. It unshackles this and future generations and would allow us to leave a legacy of increased liberty to our children. You have correctly observed that WE owe that to the previous generations who fought and died to preserve liberty.
The concept of which you speak is known in economic circles as "opportunity cost." It is far more difficult to quantify and project than nominal dollar costs. The opportunity cost associated with losing dollars today to FICA and Medicare taxation (a full 15.3%, not the 7.65% gobbermint would have you believe) is significant. Whereas you can take a stab at projecting the nest egg you could build if you had those dollars to work with, it does require some assumptions specific to the individual. Sounds as if Biker is a good manager and that the dollars would definitely be better in his hands that the gobbermints gruby mitts. I would use the most favorable assumptions in his instance.
It is far more difficult, but potentially far more important, to estimate the opportunity cost associated with inhospitable business environment created by the US tax code, but it is something that should be considered. (Title 26 of the US Code, available at: http://www.gpoaccess.gov/uscode/index.html Just looked up that web address....find that they are only current through year 2000. This will do you little good with respect to our tax law. I confess I usually use a commercial database to do my research.)
Economists far more degreed and pedigreed than I am have estimated that we would see approximately a 13% growth in GDP as a result of the removal of the Title 26 millstone and the concurrent imposition of a sales tax. That's the ball to watch.....investments would perform quite well in that environment and IMHO would far offset any nominal dollar tax that was later imposed when the proceeds of the investment accounts were spent.
Badray, you speak so highly of me that you set me up for the fall..../blushing/....I am not worthy of your high praise, but I thank you for the kind words nonetheless.