A Fair Question about Fair Tax

I've read the book. It's not a very good way to get informed about the FairTax. If you want the pie-in-the-sky marketing BS, it's great. Otherwise, it not a very objective overview.

I thought you weren't going to buy the book? You didn't want to give Boortz any of your money. Or did you just do it the cheap way and let somebody else buy it and read their copy. Or did your buddies on K-Street give you a copy?

Does the hotel front desk person question if my hotel stay is a business expense or am I on my honor?

You pay the tax on the room since your are 'consuming' it as opposed to sub-letting that room to another 'consumer'.

"They simultaneously claim your paycheck will go up by the amount of income tax that you no longer have to pay"

INDIVIDUAL income taxes wittheld from paychecks.

"... and that prices will come down by the 'hidden taxes' (i.e. producers' income taxes) that will be eliminated.

CORPORATE income taxes that businesses no longer have to pay.

"There are many illogical claims of the so-called 'Fair Tax' proponents, but there is one."

No, there is zero. There is no double counting at all if you understand some basics about how the tax system works today. Do you have any other examples of the "many illogical claims"?

Is that the best you can do?

Bogus.

You are totally mistaken about the origin of the inclusive tax rate (even the geezer's cut-n-paste shows where the rates come from). But even so, so what? I didn't make any point about the FAIRTAX 29.87% exclusive tax rate other than it's too damn high.

I am well aware of what Congress gives from income taxes collected for it to operate on. However, discounting penalities paid, judgements levyed and collected, the cost of compliying, the increased prices on everything, the loss of business investment and opportunity, and a myriad of other things add up.

Their effect on the economy and how much money, other than that from their opportionment of income taxes, is disproportionate by any meassure.

How many more times am I going to have to restate this? This isn't rocket science.

Show me where this card is referred to in the bill, please.

Take that up with your state. The feds can't do anything about that.

Are you SURE it's a Trillion?????? That seems like 1/3 to half the budget......

I have been assured by every single FairTax person before that goods and services purchased for business use would not incur this tax. Including by ancient_geezer.

If this is the case, then this could be a huge additional expense on businesses.

"Boortz books claims 26% embedded cost for most service businesses."

Many service businesses are comprised of self employed individuals who have to pay a little over 15% self employment tax. I think that accounts for the bulk of that estimate.

Boortz is an opportunist looking to cash in on a book....the big obstacle to their plan is the poor people and he and Linder just say ---"Well, them Po' folks then won't have to pay a damn thang, then." Boortz will blow in any direction the conservative tide takes him. Why, he's even gonna DONATE the proceeds to his wife's charitable organization...Guess who makes out on that deal with the CURRENT tax laws??????????

Yes. There's nothing new in the book.

Except the same old lies.

I've had it with you guys. Tell me, why would they be lying? They have nothing to gain personally from the Fair Tax, versus you guys who apparently think you have everything to lose. Who is more likely to lie?

balrog666 is nothing but lies.

They don't mention a card, they state in HR 25, Section 102

`(1) BUSINESS AND EXPORT PURPOSES- No tax shall be imposed under section 101 on any taxable property or service purchased for--

`(A) a business purpose in a trade or business, or

...

`(b) Business Purposes- For purposes of this section, the term `purchased for a business purpose in a trade or business' means purchased by a person engaged in a trade or business and used in that trade or business--

`(1) for resale,

`(2) to produce, provide, render, or sell taxable property or services, or

`(3) in furtherance of other bona fide business purposes.

Items (2) and (3) would seem to exclude business related expenses from the Fair Tax, as I have been told. I was also told previously by ancient_geezer I think that there would be a card to show to retail locations to bypass the tax for business purposes.

see 316, I think you are mistaken.

Be aware, RobFromGa, that the poster we know as Nightie is a virulent opponent doing nothing but attacking the FairTax and/or supporters at everry opportunity. He is not really supportive of any real tax plan and, when pressed about it, will turn to a theoretical idea of a VAT or (usually) a flat tax that doesn't exist so that he may continue his bob and weave games.

The items he presents are carefully selected (and selectively presented) while he continually whines when those spporting the FairTax post links and other information that are biased FOR the FairTax. The difference is one of honesty since the supporters make no bones about supporting the FairTax, while Nightie pretends to be the only knowledgeable source of FairTax data (and it is all anti-FairTax); even the snippets he extracts from FairTax sources are cleverly selected and posted often to illustrate the opposite of the actual case.

Just read his material with a discerning eye. You will note that is typically from a source having some bias either against the FairTax or favoring the status quo (the Treasury "running the numbers" is an illustration of a group clearly having a bias toward the status quo since the IRS as part of Treasury represents an $11 billion chunk of the Treasury political turf).

For these reasons, Nightie - and several others not too hard to spot - are referred to as "SQL" (Status Quo Lover) guys not because they necessarily are for the present system, but because all their actions and efforts do is attack the FairTax having the effect of helping protect the status quo (intentionally or not).

As to Nightie's post #61 he points you to, it has been, verbatim, posted by him several times on these threads - and refuted just as many times. If you'd like, more detailed refutations could be posted, but for now I'll post only this one from an earlier thread:

"Hello, Nightie. Why do you continually post the same stuff that has been refuted before? Do you think you have a new, unknowledgeable audience that you can fool with such nonsense?

Your statement about nominal wages remaining the same and prices rising (or the converse scenario) is quite wrong. The FairTax will be greatly economically beneficial to this country. The President and members of Congress have received information hugely contrary to yours with this letter from 75 well-recognized economists:

"An Open Letter to the President, the Congress, and the American people
Concerning Reform of the Federal Tax Code
Dear Mr. President, Members of Congress, and Fellow Americans,
We, the undersigned business and university economists, welcome and applaud the ongoing
initiative to reform the federal tax code. We urge the President and the Congress to work
together in good faith to pass and sign into federal law H.R. 25 and S. 25, which together call
for:
• Eliminating all federal income taxes for individuals and corporations,
• Eliminating all federal payroll withholding taxes,
• Abolishing estate and capital gains taxes, and
• Repealing the 16th Amendment
We are not calling for elimination of federal taxation, which would be irresponsible and
undesirable. Nor does our endorsement call for reduced federal spending. The tax reform plan
we endorse is revenue neutral, collecting as much federal tax revenue as the current income tax
code, including payroll withholding taxes.
We are calling for elimination of federal income taxes and federal payroll withholding taxes.
We endorse replacing these costly, oppressively complex, and economically inefficient taxes
with a progressive national retail sales tax, such as the tax plan offered by H.R. 25 and S. 25 –
which is also known as the FairTax Plan. The FairTax Plan has been introduced in the 109th
Congress and had 54 co-sponsors in the 108th Congress.
If passed and signed into law, the FairTax Plan would:
• Enable workers and retirees to receive 100% of their paychecks and pension benefits,
• Replace all federal income and payroll taxes with a simple, progressive, visible,
efficiently collected national retail sales tax, which would be levied on the final sale of
newly produced goods and services,
• Rebate to all households each month the federal sales tax they pay on basic necessities,
up to an independently determined level of spending (a.k.a., the poverty level, as
determined by the Department of Health and Human Services), which removes the
burden of federal taxation on the poor and makes the FairTax Plan as progressive as the
current tax code,
• Collect the national sales tax at the retail cash register, just as 45 states already do,
• Set a federal sales tax rate that is revenue neutral, thereby raising the same amount of tax
revenue as now raised by federal income taxes plus payroll withholding taxes,
• Continue Social Security and Medicare benefits as provided by law; only the means of
tax collection changes,
• Eliminate all filing of individual federal tax returns,
• Eliminate the IRS and all audits of individual taxpayers; only audits of retailers would be
needed, greatly reducing the cost of enforcing the federal tax code,
• Allow states the option of collecting the national retail sales tax, in return for a fee, along
with their state and local sales taxes,
• Collect federal sales tax from every retail consumer in the country, whether citizen or
undocumented alien, which will enlarge the federal tax base,
• Collect federal sales tax on all consumption spending on new final goods and services,
whether the dollars used to finance the spending are generated legally, illegally, or in the
huge “underground economy,”
• Dramatically reduce federal tax compliance costs paid by businesses, which are now
embedded and hidden in retail prices, placing U.S. businesses at a disadvantage in world
markets,
• Bring greater accountability and visibility to federal tax collection,
• Attract foreign equity investment to the United States, as well as encourage U.S. firms to
locate new capital projects in the United States that might otherwise go abroad, and
• Not tax spending for education, since H.R. 25 and S. 25 define expenditure on education
to be investment, not consumption, which will make education about half as expensive
for American families as it is now.
The current U.S. income tax code is widely regarded by just about everyone as unfair,
complex, wasteful, confusing, and costly. Businesses and other organizations spend more than
six billion hours each year complying with the federal tax code. Estimated compliance costs
conservatively top $225 billion annually – costs that are ultimately embedded in retail prices paid by consumers.
The Internal Revenue Code cannot simply be “fixed,” which is amply demonstrated by more
than 35 years of attempted tax code reform, each round resulting in yet more complexity and
unrelenting, page-after-page, mind-numbing verbiage (now exceeding 54,000 pages containing
more than 2.8 million words).
Our nation’s current income tax alters business decisions in ways that limit growth in
productivity. The federal income tax also alters saving and investment decisions of households,
which dramatically reduces the economy’s potential for growth and job creation.
Payroll withholding taxes are regressive, hitting hardest those least able to pay. Simply
stated, the complexity and frequently changing rules of the federal income tax code make our
country less competitive in the global economy and rob the nation of its full potential for growth
and job creation.
In summary, the economic benefits of the FairTax Plan are compelling. The FairTax Plan
eliminates the tax bias against work, saving, and investment, which would lead to higher rates of
economic growth, faster growth in productivity, more jobs, lower interest rates, and a higher
standard of living for the American people.
The America proposed by the FairTax Plan would feature:
• no federal income taxes,
• no payroll taxes,
• no self-employment taxes,
• no capital gains taxes,
• no gift or estate taxes,
• no alternative minimum taxes,
• no corporate taxes,
• no payroll withholding,
• no taxes on Social Security benefits or pension benefits,
• no personal tax forms,
• no personal or business income tax record keeping, and
• no personal income tax filing whatsoever.
No Internal Revenue Service; no April 15th; all gone, forever.
We believe that many Americans will favor the FairTax Plan proposed by H.R. 25 and S. 25,
although some may say, “it simply can’t be done.” Many said the same thing to the grassroots
progressives who won women the right to vote, to those who made collective bargaining a reality for union members, and to the Freedom Riders who made civil rights a reality in America.
We urge Congress not to abandon the FairTax Plan simply because it will be difficult to face
the objections of entrenched special interest groups – groups who now benefit from the
complexity and tax preferences of the status quo. The comparative advantage and benefits
offered by the FairTax Plan to the vast majority of Americans is simply too high a cost to pay.
Therefore, we the undersigned professional and university economists, endorse a progressive
national retail sales tax plan, as provided by the FairTax Plan. We urge Congress to make H.R.
25 and S. 25 federal law, and then to work swiftly to repeal the 16th Amendment.
Respectfully,

Donald L. Alexander
Professor of Economics
Western Michigan University

Wayne Angell
Angell Economics

Jim Araji
Professor of Agricultural
Economics
University of Idaho

Ray Ball
Graduate School of Business
University of Chicago

Roger J. Beck
Professor Emeritus
Southern Illinois University,
Carbondale

John J. Bethune
Kennedy Chair of Free
Enterprise
Barton College

David M. Brasington
Louisiana State University

Christopher K. Coombs
Louisiana State University

William J. Corcoran, Ph.D.
University of Nebraska at
Omaha

Eleanor D. Craig
Economics Department
University of Delaware

Susan Dadres, Ph.D.
Department of Economics
Southern Methodist University

Henry Demmert
Santa Clara University

Arthur De Vany
Professor Emeritus
Economics and Mathematical
Behavioral Sciences
University of California, Irvine

Pradeep Dubey
Leading Professor
Center for Game Theory
Dept. of Economics
SUNY at Stony Brook

Demissew Diro Ejara
William Paterson University of
New Jersey

Patricia J. Euzent
Department of Economics
University of Central Florida

John A. Flanders
Professor of Business and
Economics
Central Methodist University

Richard H. Fosberg, Ph.D.
William Paterson University

Gary L. French, Ph.D.
Senior Vice President
Nathan Associates Inc.

Professor James Frew
Economics Department
Willamette University

K. K. Fung
University of Memphis

Satya J. Gabriel, Ph.D.
Professor of Economics and
Finance
Mount Holyoke College

Dave Garthoff
Summit College
The University of Akron

Ronald D. Gilbert
Associate Professor of
Economics
Texas Tech University

Philip E. Graves
Department of Economics
University of Colorado

Bettina Bien Greaves, Retired
Foundation for Economic
Education

John Greenhut, Ph.D.
Associate Professor
Finance & Business Economics
School of Global Management
and Leadership
Arizona State University

Darrin V. Gulla
Dept. of Economics
University of Georgia

Jon Halvorson
Assistant Professor of
Economics
Indiana University of
Pennsylvania

Reza G. Hamzaee, Ph.D.
Professor of Economics &
Applied Decision Sciences
Department of Economics
Missouri Western State College

James M. Hvidding
Professor of Economics
Kutztown University

F. Jerry Ingram, Ph.D.
Professor of Economics and
Finance
The University of Louisiana-
Monroe

Steven J. Jordan
Visiting Assistant Professor
Virginia Tech
Department of Economics

Richard E. Just
University of Maryland

Dr. Michael S. Kaylen
Associate Professor
University of Missouri

David L. Kendall
Professor of Economics and
Finance
University of Virginia's College
at Wise

Peter M. Kerr
Professor of Economics
Southeast Missouri State
University

Miles Spencer Kimball
Professor of Economics
University of Michigan

James V. Koch
Department of Economics
Old Dominion University

Laurence J. Kotlikoff
Professor of Economics
Boston University

Edward J. López
Assistant Professor
University of North Texas

Salvador Lopez
University of West Georgia

Yuri N. Maltsev, Ph.D.
Professor of Economics
Carthage College

Glenn MacDonald
John M. Olin Distinguished
Professor of Economics and
Strategy
Washington University in St.
Louis

Dr. John Merrifield,
Professor of Economics
University of Texas-San
Antonio

Dr. Matt Metzgar
Mount Union College
Carlisle Moody
Department of Economics
College of William and Mary

Ronald D. Gilbert
Associate Professor of
Economics
Texas Tech University

Andrew P. Morriss
Galen J. Roush Professor of
Business Law & Regulation
Case Western Reserve
University School of Law

Timothy Perri
Department of Economics
Appalachian State University

Mark J. Perry
School of Management and
Department of Economics
University of Michigan-Flint

Timothy Peterson
Assistant Professor
Economics and Management
Department

Gustavus Adolphus College
Ben Pierce
Central Missouri State
University

Michael K. Pippenger, Ph.D.
Associate Professor of
Economics
University of Alaska

Robert Piron
Professor of Economics
Oberlin College

Mattias Polborn
Department of Economics
University of Illinois

Joseph S. Pomykala, Ph.D.
Department of Economics
Towson University

Barry Popkin
University of North Carolina-
Chapel Hill

Steven W. Rick
Lecturer, University of
Wisconsin
Senior Economist, Credit Union
National Association

Paul H. Rubin
Samuel Candler Dobbs
Professor of Economics & Law
Department of Economics
Emory Univeristy

John Ruggiero
University of Dayton

Michael K. Salemi
Bowman and Gordon Gray
Professor of Economics
University of North Carolina at
Chapel Hill

Dr. Carole E. Scott
Richards College of Business
State University of West
Georgia

Carlos Seiglie
Dept. of Economics
Rutgers University

Alan C. Shapiro
Ivadelle and Theodore Johnson
Professor of Banking and
Finance
Marshall School of Business
University of Southern
California

Dr. Stephen Shmanske
Professor of Economics
California State University,
Hayward

James F. Smith
University of North Carolina-
Chapel Hill

Vernon L. Smith
Economist
W. James Smith
Dean of Liberal Arts and
Sciences and Professor of
Economics
University of Colorado at
Denver

John C. Soper
Boler School of Business
John Carroll University

Roger Spencer
Professor of Economics
Trinity University

Daniel A. Sumner, Director,
University of California
Agricultural Issues Center
and the Frank H. Buck, Jr.,
Chair Professor,
Department of Agricultural and
Resource Economics,
University of California, Davis

Curtis R. Taylor
Professor of Economics and
Business
Duke University

Robert Vigil
Analysis Group, Inc.

John H. Wicks, Ph.D.
Professor Emeritus
Department of Economics
University of Montana

F. Scott Wilson, Ph.D.
Canisius College

Mokhlis Y. Zaki
Professor of Economics
Emeritus
Northern Michigan University"

They seem to be decidedly in opposition to your selective out of context cut and pastes - each of which has been refuted before.

As has been shown many times before, Nightie, your SQL (Status Quo Lover) defense of income taxes is going the way of the DoDo bird - where it clearly belongs. You and your kind are decidedly in the minority and now have to resort to the sort of trickery displayed by these same items you've posted many times before.

You've even had it demonstrated conclusively to you that the FairTax DOES do a better job of collecting tax revenues from the illegal income crowd - MUCH BETTER and not the explanation you gave of "... it's a wash ...". So you're wasting your efforts. Your beloved Nightmare Flat Tax is just an undefined income tax (a type of which we already have and which is about to rightfully go into the dustbin of history)."

I don't get why we don't just put duties or tariffs or whatever on imports. We import a lot of cheap shite. And wouldn't that basically be a consumption tax paid by foreigners? Works for me! Why not cut into THEIR bottom line for a change? Why invent a new scheme?

Duties and tariffs can be countered or contested in the world trade courts. The fair tax does the same thing only much better. Currently the costs of tax is built into the product. When you pay your income tax, that money actually came from the end consumer. It got built into the price of the product.

Under the current system, the import product competes price wise with the domestic product which has the tax built in. Only, when the import product is sold, the tax portion of the price heads out of the country. The import product can either be priced lower or the profit to the producer is higher. Either way, domestic goods and services are subject to unfair price pressure.

Under the fair tax, the tax portion of the sale stays in the US. The import now nets the same total as the domestic product, only the import has the added expense of transportation and the taxes in the originating country. And what can they do to respond? Even if they implemented the same policy in their country, the trade imbalance still kills them. The net result is jobs moving back into the US as a result of the tax system. Really, the Teamsters and United Auto Workers should be out front leading the parade for the fair tax.

Show me where this card is referred to in the bill, please.

`(d) SELLER RELIEVED OF LIABILITY IN CERTAIN CASES- In the case of any taxable property or service which is sold untaxed pursuant to section 102(a), the seller shall be relieved of the duty to collect and remit the tax imposed under section 101 on such purchase if the seller--

`(1) received in good faith, and retains on file for the period set forth in section 509, a copy of a registration certificate from the purchaser, and

`(2) did not, at the time of sale, have reasonable cause to believe that the buyer was not registered pursuant to section 502.

[snip]

`SEC. 504. REGISTRATION CERTIFICATES.

`The sales tax administering authority shall issue certificates of registration to registered sellers and such other certificates as are necessary or may prove useful in the administration of the taxes imposed by this subtitle.