Posted on 08/02/2005 12:22:49 PM PDT by phil_will1
FairTax would free markets, individuals from income tax.
In “The FairTax Book,” Rep. John Linder (R-Ga.) and libertarian talk radio host Neal Boortz offer a witty and straightforward explanation of the political and economic consequences of making April 15 “just another day.” Published by Regan Books, it hits bookstores this week. And if tax reform is not a “hot” topic now, then give this book a month on the New York Times bestseller list for things to change.
The FairTax is a bold idea to replace the income tax with a national sales tax. What’s so bold about it? Not only would the FairTax get the IRS off the nation’s back, but it would unshackle the economy to grow free of an achievement-punishing income tax.
The FairTax is a 23 percent sales tax designed to be revenue-neutral, meaning the tax would generate the same amount of revenue as the old system. Why 23 percent? Because once the cost of the income tax was phased out, prices on consumer goods would drop by that amount.
The Free Market Project is pleased to present the following excerpts from “The FairTax Book.” by Neal Boortz and John Linder. All rights reserved. No part of this book may be used or reproduced without written permission from HarperCollins Publishers, 10 East 53rd Street, New York, NY, 10022.
"Why not stick with the flat tax? Unlike this national sales tax it actually has a long, successful track record in numerous countries."
Another point about that assertion: I am not aware of any countries that have BOTH a long AND a successful history with a flat tax. The USA has a long history, but when one considers the monster that its originally flat tax has morphed into over its 90 year history, as well as the degree to which the economy is negatively impacted, one could hardly use the term "successful" with respect to its experience.
You could point to some of the eastern European countries which have instituted a flat tax, but that experience is relatively recent.
Therefore, it is more accurate to say that there are countries that have had a successful experience with a flat tax (so far) and those that have had a long experience with one, but I am at a loss to identify a country which has had both a long and successful experience.
Even if that weren't the case, what right does the federal government have to compel you to disclose every detail of your financial life once a year?
It was interesting to note that you mentioned taxing the illegals. Ironically, while many of them (and their employers) now escape taxes by working off the books, the fair tax would subject them to full taxation on all new items purchased while denying them the monthly rebate since they can not qualify for valid social security numbers. This would have the unintended consequence of eliminating much of their competitive advantage in the labor market.
From a Florida supporter:
"After work today I went down to Booksamillion in Leesburg to pick up a couple copies of the book and they were sold out! I gave the clerk a big smile and a thumbs up. Had to stop at Barnes and Noble in Ocala on the way home to get my copies and the shelf was nearly empty. The clerk at the checkout told me they were flying out the door. Then she started crabbing about the IRS...something about she owed more money. I gave her the address to the website so she could inform herself. I'm sure she'll be checking it out."
And one in NC:
"For the record, I went to Books-A-Million here in Wilmington, NC and after picking up my copy, there were only 2 left!! They had a display right up front featuring the book and almost all the copies were gone by 1pm!!
Boortz was amazing all day on his show, and I even tuned into Hannity later (who normally I don't listen to) and was very impressed."
Hong Kong
Sales tax:
23 (inclusive tax rate) /(of) 77 (amount taxable/before tax) = 29.87% (exclusive) tax rate ON 77.
Income tax:
23 (tax paid) /(of) 77 ( amount after tax/already taxed/not taxable) =0tax rate = No comparison....
Tax paid / remainder of already taxed = 0 tax rate.
Taxes coming from your income can't also exclude your income just as employer payroll taxes aren't from your income...If they were it would erase all doubt about the Fairtax's 100% paycheck scam.
-keeps withholding in place (for the individual - what about the businessman using NRST?)
-keeps the 7.65% employee payroll tax in place (that is Social Security, not a Federal tax)
-keeps the 7.65% employer "contribution" payroll tax in place (hidden in higher prices and/or lower wages) (that is Social Security, not a Federal tax)
-keeps business income taxes, which are invisible in higher prices - ie the flat tax keeps a significant portion of taxes hidden (not sure what you mean here)
-keeps - indeed REQUIRES the 16th amendment to be in place (good luck changing that - not going to happen, ever)
-keeps US goods less competitive by forcing taxes and tax costs into prices of US made goods (that is what the NRST does - but it makes goods very expensive psychologically)
-keeps the government's ability to audit individuals and take away their freedom for innocent mistakes (the government is always going to retain that right, insidious as it may be)
So my business does 200,000 in sales but I spend 100,000 in inventory, I can't deduct the 100,000 I have to spend to make the 200,000? LOL, no thank you.Sorry, but you'll also owe $46,000 in taxes out of your "$100,000" gross profit.
"Sorry, but you'll also owe $46,000 in taxes out of your '$100,000' gross profit."
You need to catch up on the thread, Louie. He wasn't referring to the FairTax. Even if he were, the FairTax isn't levied on business profits.
Wow, that's two major errors on one post. Certainly not unusual for the SQLs, but it may be a record - for this thread, anyway.
YN: The employer portion of the payroll tax is 7.65% exclusive. The amount being taxed does not include (it excludes) the tax.
Did you mean to say this?
mark
-keeps withholding in place (for the individual - what about the businessman using NRST?) Businessmen using an NRST? Not sure what you mean. Businesses don't pay the NRST. Retailers will collect and remit it, but that is trivial compared to the income and payroll taxes that are being replaced.
-keeps the 7.65% employee payroll tax in place (that is Social Security, not a Federal tax) Social Securty IS a federal tax - which is eliminated by the FairTax.
-keeps the 7.65% employer "contribution" payroll tax in place (hidden in higher prices and/or lower wages) (that is Social Security, not a Federal tax) Again, Social Security is most certainly a federal tax - which is eliminated by the FairTax.
-keeps business income taxes, which are invisible in higher prices - ie the flat tax keeps a significant portion of taxes hidden (not sure what you mean here) When taxes (such as corporate income and payroll) are levied at each step of the supply chain (not to mention the enormous compliance costs of those taxes), they have to be built into the pricing mechanism. IOW, at each stage producers charge enough to recoup their costs and make a profit. In this way, tax costs get "imbedded" into the prices of consumer goods. Because of this, Americans have no idea what their real tax burden is, because so much of it is hidden in this manner from them.
-keeps - indeed REQUIRES the 16th amendment to be in place (good luck changing that - not going to happen, ever) That is what many said about the Berlin Wall, among other things.
-keeps US goods less competitive by forcing taxes and tax costs into prices of US made goods (that is what the NRST does - but it makes goods very expensive psychologically) No, it doesn't. It is highly visible, does not apply to our exports, and does apply to imports. This will serve to make US produced goods more competitive both here in the USA and in foreign markets.
-keeps the government's ability to audit individuals and take away their freedom for innocent mistakes (the government is always going to retain that right, insidious as it may be) With an NRST, there is nothing to audit on the individual level. When is the last time you, as an individual, got selected for a state sales tax audit?
agreed. why would they? exclusive doesn't make sense when you're trying to express total tax burdens.
...just like nobody expressed a sales tax in inclusive terms until the NRST fans came along.
Sales tax has never represented the total tax burden until the introduction of the NRST.
It doesn't make sense to compare total tax burdens in different units. Nor does it make sense to express total tax burden in exclusive terms. Hence, inclusive terms are used.
I understand that rate method can easily be used by detractors to badmouth the nrst for just the reason you state - traditionally, sales taxes have been expressed in exclusive terms. But never before has the total tax burden been sales taxes. Total tax burden is incomprehensible in exclusive terms.
The inclusive income tax rate of 33% means 33% of my total income goes to tax.
The 33% inclusive income tax rate is the same as a 50% exclusive rate because the tax is 50% of your income not including tax paid.
The inclusive nrst rate of 23% means 23% of my total spending goes to tax.
The 23% inclusive rate nrst rate is the same as ~30% exclusive rate becasue the tax is ~30% of what you spend not including tax paid.
It's far easier to figure the amount of sales tax mentally using exclusive terms.
It's far easier to figure total sales tax burden using inclusive terms.
I use both methods. Exclusive to mentally figure the amount of tax due on an item .... inclusive to represent my total tax burden.
Nevertheless, if you want to claim that one, I'll give you two insults to none for anyone else on this thread - so far.Uh, "SQL" is meant, and is taken by me, as an insult. Do you want to go and re-score the thread?
A flat tax was instituted in the 1980s. It's since morphed into the monster it was designed to replace. The Fair Tax abolishes the IRS (and gets their abuses out of our lives) and replaces more than a million pages of tax code with 130 pages.
(for the individual - what about the businessman using NRST?)
THere is no withholding from anything under the nrst. No withholding for individuals. No withholding from business. Quick FAQ. Kick around in there for a few minutes. ====================================================
The flat tax keeps the 7.65% employee AND employer payroll tax in place
(that is Social Security, not a Federal tax).
Call it what you like - I believe most would indeed call it a federal income based tax. Irrespective of it's name, it is eliminated under the nrst. =====================================================
The flat tax keeps business income taxes, which are invisible in higher prices - ie the flat tax keeps a significant portion of taxes hidden
(not sure what you mean here)
Business taxes are paid with funds from business operations. That means business has to collect them from somewhere. The only possible places to get money is from sales revenues. Hence any cost paid by business is collected from individual consumers in prices. A business may be forced to do some extreme things like cut wages or fire people to have enough to pay costs - but the only way for long term survival is to collect thru sales. =================================================
The flat tax keeps - indeed REQUIRES the 16th amendment to be in place
(good luck changing that - not going to happen, ever)
Why not? You gave no reason. When HR 25 is passed, there will be no reason for it. Further, everyone will vote out anyone preventing its immediate repeal. Pols love nothing if not staying in office. ======================================
The flat tax keeps US goods less competitive by forcing taxes and tax costs into prices of US made goods
(that is what the NRST does - but it makes goods very expensive psychologically)
No, the nrst eliminates taxes being built into goods. Indeed it is one of the bigger advantages to the nrst. Our goods will leave our shores without the costs of our tax system (appx 20% of total price now). Domestic prices will remain essentially the same. The hidden tax costs amount to essentially the same as the nrst. So the end result is that the tax burden that is currently hidden in prices simply becomes visible. I think that it's good that we become aware/concerned/irritated about how much our gov't spends. ===============================================
The flat tax keeps the government's ability to audit individuals and take away their freedom for innocent mistakes
(the government is always going to retain that right, insidious as it may be)
Why? You gave no reasons. If HR 25 passes, it will be business that are being watched, not individuals' incomes.
23/77=0?
More lewis math?
Well said , but let me add for simplicity ...
the cheap goods from china will have to compete with the real cost of domestic production.
People always slam wal wart , then consumers for buying cheap imports.
They say .... Americans should be able to produce a product that can compete with the imports cost.
Well I'll tell you ... we do.
But once you add the hidden cost of taxes to the cost of production and distribution, the domestic products soar in cost.
Take out the hidden costs added to our domestic items and level the field . It's time to stop subsidizing china.
Ummm, exactly how does it do that? Most of the taxes 'built into goods' are payroll taxes. Unless employees take a pay cut to reduce the costs of the goods, the eliminated taxes will go into the pockets of workers and not go towards the reduction of price. The way the nrst is set up is highly inflationary.
When a shopper goes to the store he sees 2 products of similar quality( we will suppose) , but the cost of one product contains the added cost of boondoggle pork social policy and one of them doesn't.
I believe he/she will buy the cheaper one.
Now lets remove that cost from the one product and have everyone pay the cost of the boondoggle social policy when they check out , no matter what country the product comes from.
The result ... domestic products get a fair shake against imports. More domestic production, more jobs , more sales, more robust economy for everyone.
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