A Fair Question about Fair Tax

Stop misquoting/misusing what I said.

I said that I used the term to mean embedded tax and costs. That's what I mean it to be no matter if I express it as embedded taxes or embedded tax costs - I mean embedded tax costs. I have no idea what Boortz may have used it as - nor does that have any applicability to the example I gave. Why are you being so obtuse???

Your point is irrelevant to the example I gave.

But not nearly as great as you.

""It doesn't strengthen the argument of the national theft taxers to say that perhaps the national theft tax might increase tax cheating because of a greater awareness of the cost of government inherent in such a tax.
Those are your words, and a misrepresentation of what is being said, to boot ... in fact, quite the opposite.

I said that I used the term to mean embedded tax and costs

No that is not what you said. You said, "Balderdash, the claim has always been embedded tax costs - which are the embedded taxes and other costs involved with taxation." The claim has always been 'embedded taxes'. If you guys meant 'embedded costs' you should have been using that term for the last 7 years. Of course I COMPLETELY understand. You guys change your story and assumptions so much it has to be hard to keep track of all the misleading stuff you say.

From today's AJC:

Syndicated WSB-AM talker Neal Boortz and Rep. John Linder (R-Ga.) drew more than 1,000 people to the Cobb Civic Center Friday for a book signing and rally to support a retail sales tax.

For years, Boortz and Linder have both been talking about what they dub a "fair tax" to replace the income tax for years. Then they finally decided to do a book. Buddy Sean Hannity gave them a referral with Regan Books, which originally planned to print 10,000 to 15,000, Boortz said.

But when Boortz told folks on air to pre-order his book a few weeks back on Barnes & Noble's Web site, it shot to No. 1. Regan upped the printing to 150,000 copies. As of Friday afternoon, "The FairTax Book" was No. 4 on Amazon.com and Boortz said it stands a solid chance of debuting at the top of the New York Times non-fiction bestseller list.

"If it does, there will be a lot of politicians who will say, 'Let's support this!' ," said Boortz to his fans, who included attendees Vernon Jones, DeKalb County CEO, and Lt. Governor candidate Ralph Reed.

Marvin Carlisle, a 56-year-old Canton retiree waiting in line for a book, said he hopes "this movement will take root and grow." He was also amused by a huge "National Retail Sales Tax – Yes!" hot air balloon outside the building.

"Hot air balloons and hot air from politicians," he mused.

Dear pigdog,

"...somehow the Congress is going to re-establish all that in the next session???"

I never said "the next session of Congress."

I said "eventually."

" you SQL types"

Don't know what an "SQL type" is, unless you're talking about Server Query Language.

"And there would be considerable opposition to attempts to try to fill the bill with exemptions, etc. which would do exactly what has been done to the income tax."

As there were after President Reagan swept much of them from the tax code in 1986.

They crept back. And then some.

It's in the nature of funding a government that requires 20% of GDP.

"the FairTax bill will pass pretty much in its present form - including the call to repeal the 16th. "

You can call for the repeal of the 16th amendment all you want. Once you give the politicians the go-ahead on a national sales tax, WITHOUT FIRST repealing the 16th amendment, that's it. You'll never get the repeal.

It's like a guy shacking up with a young lady. Once she's giving him the milk for free, he may not be inclined to pay for the cow.

"Your efforts at the Chicken Little debate tecnnology are falling well short of being effective since there IS only one rate in the FairTax bill -"

For starters. There was only one rate for the income tax, at first, too. I think it was 1%. It changed. Congress changed it.

Let Congress institute a 30% sales tax, and Congress can then modify, change, alter, edit it any way Congress sees fit. They did it with the 1% income tax.

"Trying to redefine the government poverty rate is REALLY insane if that is what you believ can somehow be easily done."

Congress can change the basis of the "prebate" with a simple amendment slipped in by a future Dammocrap Congress to a future budget. Or do you believe that Republican ascendency is permanent? LOL. As well, not a few "Republicans" would be happy to change the basis, as well.

"a 23% tax inclusive rate (and not a 30% rate as you claim) there is no other rate so the rate in the bill is not nominal at all but actual."

I've never heard of a sales tax referred to by its inclusive rate. Please cite for me a single sales tax rate in the United States that is normally expressed as an inclusive rate. It's 30 cents on every dollar purchase. That's a sales tax of 30%.

"Nor is it a 'theft tax' - as I said you've confused the income tax in saying that."

If the 16th amendment isn't already repealed, it's a theft tax, pure and simple. WITH the 16th amendment repealed, it's probably just a stupid idea. But without, it represents fraud.

"The bill is far less open to political manipulation than you suppose. Taking the debating position that it hasn't passed therefore it'll be completely different is both immature and not effective on this forum."

Well, it certainly isn't immature to note how Congress works, but I didn't actually say it wouldn't initially pass in its proposed form. Nonetheless, it would be modified.

Anyone who thinks differently must think the income tax is still set at 1%.

" there is no other rate so the rate in the bill is not nominal at all but actual."

Do you understand the basic arithmetic in computing the effective tax rate of taxpayers with different consumption patterns and different numbers of family members? Do you understand the basic addition, subtraction, multiplication, and division that say that someone with, say, three persons in his household who spends $20,000 on taxable products and services will pay a far lower effective tax rate than someone with three persons in his household who spends $100,000 on taxable products and services?

If you can't acknowledge the difference in the effective tax rates, you only show your own ignorance and inability to present a coherent argument in favor of the national theft tax.

"That is easily done but it also convinces very few when you have such a Chicken Little attitude. It also changes nothing in the real world. My stating that it will not happen is AT LEAST as true as your stating that it will endlessly be changed - and most probably more so."

No, my position is that history is our guide to the future. I believe that politicians will continue to act like politicians. You seem to think that upon the implementation of the national theft tax, politicians will turn into angels. No, I don't think they will. Special interests will still lobby, politicians will still play to the masses. Plenty of stupid liberals will be persuaded that differential rates are the right thing to do (remember, the income tax started out as a flat tax), and exemptions are what are "fair," and that the rich should bear a greater burden, and so on and so forth.

You really think that the national theft tax will magically make all that go away? That really is as naive a thing as I've ever heard.

"I don't SUPPOSE the underground economy will contribute greatly to the tax revenues compared to the present. I KNOW it."

The underground economy could actually shrink. I doubt it. But it could. However, to get to the 30% national theft tax rate, the proponents of this bill are assuming that the underground economy will nearly dry up.

It won't. Since the overall tax burden will stay the same (if the national theft tax at least starts out as revenue neutral), there will be the same incentives to cheat as there are today. And evading or avoiding sales taxes just aren't that tough. At least not with current enforcement.

However, even if the underground economy is shrunk by half, you still won't get enough revenue with a 30% national theft tax rate. Maybe you'll need 35%. Or 40%. Or, when folks realize that the goose that lays the golden eggs is being killed by the national theft tax, the Congresscritters will declare an emergency (with Hitlery as president, oy vey!), and will reinstate the income tax. Then we can have the best of both worlds! LOL.

After all, we'll still have a fully-functional 16th amendment.

"In the examples you show - and your arithmetic is a bit fractious - all you're doing is illustrating that it is progressive."

Gee, in admitting the progressivity of the system, you're admitting that there are different effective tax rates. You do realize that the two things are the same thing, don't you? If you don't, you really have no business talking about this subject.

"And I doubt that you spend the entire amount for taxable items, but perhaps you ARE that foolish."

Well, I manage to do all right. ;-)

"Most people would find a way to save and/or invest some part of thet - unless they were dead set against doing anything but trying to trash the FairTax."

Regrettably, many people save little or nothing. They live paycheck to paycheck. The national savings rate currently approaches 0%. The national theft tax will likely bankrupt many of these individuals.

"It will be much more efficient at raising revenue with far less taxpayer pain and I look for the rate to rapidly drop, not increase, giving taxpayers the best opportunity in many decades to hammer on COngress to reduce spending."

This is a bald assertion. And backwards. Congress is not likely to reduce the rate, as long as we're running large deficits. Should we approach a balanced budget, Congress will just up spending.

"You haven't even supported your claim that massive off the books tax fraud will go on with the underground economy setting up 'tax-free' zones or businesses for other crooks."

Off the books businesses already exist. THAT'S the whole underground economy thing you guys think your national theft tax will fix. If you're unaware of them, then you have no business in this debate. Folks do this sort of thing to avoid income tax, now. It's called the underground economy. They're avoiding taxes that might amount to 20 cents on the dollar. Why will they stop cheating to pay a 30% national theft tax?

I'm merely saying that folks who cheat for 20 cents on the dollar will likely cheat for 30 cents on the dollar. You're saying that folks who break the law to save 20 cents on the dollar will miraculously become law-abiding citizens when they are forced to pay 30 cents on the dollar.

I know I won't convince you, but perhaps those who are lurking will see the folly of that assumption.

sitetest

"The DUmmies will automatically be against it..."

This reminds me of a quip I heard years ago. "You can tell a genius by this sign: all the dunces are in confederation against him"

Just hearing that 'Rats are against something automatically raises its stock, in my mind!

You really don't sound as though you've read much at all of the HR25 bill. Or perhaps it's just that MD has an extremely weak sales tax environment to operate in. If you can get by with the P.O. Box scams you outline there is certainly something inept there at best. You'd be nailed to the tree in several states before you got to your second P. O. Box.

You could kiss your NC furniture expeditions goodbye since ther'd be no advantage with the FairTax. Old folks - if they want to save MANY nickles under the FairTax - can certainly do so and quite easily since used goods are not taxed and many of the oldsteres I know buy used cars, used housesss etc. right now to save money. Those are untaxed with the FairTax.

And with the FairTax there was never a claim that sales tax would be collected on illegal income - there won't - but just that the illegal income when spent for taxable retail items will be taxed.

As for the claim that evasion and avoidance will skyrocket is certainly unsupported in that no one has any real concrete figures on those things - and you didn't even define what you meant. Non-compliance, though, IS defined and tracked by the IRS (but does not include avoidance, evasion, or illegal income) and they say that it is 20-25% of the tax revenue collected. It will certainly decline under the FairTax which has a much simpler, more transparent system of compliance.

Avoidance and evasion under the present system are very profitable to those who do it. Ducking the corporate tax rate of 25% plus the payroll tax rate of 15.3% makes an even more tempting target at over 40% than the 23% FairTax rate ... and that's only with a single employee.

Taxing the illegal economy will yield ,much more tax momney under the FairTax than at present which gives, bas9ically, little or none. Thaat's very beneficial to the rest of us since increased collections helds lower the overall tax burden on the rest of us.

The FairTax rate is not, and never has been, 38% so you may as well stop quoting that but since you think that the rate (whatever it may end up being) is high enough to be attractive for lawbreakers, perhaps you could tell us how this might be done since it is the taxpayers - the consumers - who pay the tax. The only way they would not be taxes is by collusion with a merchant - an agreement by both to break the law. While the taxpayer might save his 23% t.i. (29.87% t.e.) the merchant is taking the risk of breaking the law and paying the price therefore while gaining nothing other than his profit on the sale. Sounds like a very poor bargain for the merchant. If he's that foolish, I doubt he'll be around too long. But the consumer in this case is also exposing himself to legal rish since he's culpagle in conspiring to break the law also.

You obviously haven't read the bill requirements to "set up shop" to untax all your buddies - there ain't no free lunch or easy legal waaay to do that. We'll come and bring you cigarettes in the slammer if you do that. Chances of success are very slim and for less benefit than at present.

The FairTax rate based on revenue neutrality right now would be a bit under 20% based on the Bush tax cuts. Aand the state sales taxes are unlikely to be "added onto" the FairTax rate since most staaaates will undoubtedly elect to conform their sales taxes to the FairTax law. This makes their state rates drop dramatically down to 1/3 of the present rate - of perhaps less depending on the state. And not ALL purchases by consumers are taxed (as you state) - again you don't seem to have grasped the bill.

Most state sales tax folks are quite a bit sharper than apparently (based on what you say) those in MD. The tax dodges you outline wouldn't work, but be sure to try them so you can let us know of your experiences. And, no, compliance costs will not go up at all - they will decrease. A retailer only has to report two lines each month and send it with the money collected from the taxpayers - and he is well-paid to do that. Your "little old Avon lady" (in tennis shoes, perhaps??) will appreciate the extra money she'll earn by complying and it is certainly not an increased compliance cost, but just the opposite.

Below is a quote taken directly from Thumbnail sketch of the FairTax a document which, so far as I know, has ALWAYS been there. Here is what it says:

"The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes), ends corporate taxes and compliance costs hidden in the retail cost of goods and services..."

"The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes), ends corporate taxes and compliance costs hidden in the retail cost of goods and services..."

That is real nice, but it has little to nothing to do with what we were talking about.

I can easily point to 100's of quotes and they all say 'embedded tax' not 'embedded costs'. The latest claim by Neal Boortz is 22% embedded tax.

658 posted on 08/06/2005 4:03:59 PM CDT by Always Right

What was that again? Who keeps changing what they say?

What was that again? Who keeps changing what they say?

???? Sometimes I wonder if you can even read. Really, I have serious doubts.

Here's what I said in the original post on the matter - which you keep trying to morph into something it isn't:

"Balderdash, the claim has always been embedded tax costs - which are the embedded taxes and other costs involved with taxation. For short it may have sometimes have had "costs" left off but that has always been a part of the consideration - though some posters do talk about embedded taxes and mean only that. I normally mean both. "

I'm telling you what I normally mean when talking about it - not what anyone else means. Your efforts to change that are nonsense.

And I also said it was irrelevant to calculate the amount from the example with; and it is - but since you couldn't/wouldn't understand that I calculated it for you. There's no "change in story" at all and if you can't tell that you've got a real problem that has nothing to do with taxes and or tax costs - embedded or not. I clearly explained what I meant in whichever manner I used the term - and not what anyone else might mean.

Well it's apparent someone has a problem with the English language and I don't think it's me!

Dear pigdog,

The national theft tax proponents are counting on a dramatic reduction in tax evasion and avoidance to hit their numbers.

It is always remotely possible that the thing that has never happened will now happen.

But I ain't countin' on it.

Folks don't cheat on their income taxes because it's easy or risk free. Folks don't do off the book business because it's simple to avoid taxation.

Folks do it for the bucks. There's big bucks in tax evasion and avoidance.

There will continue to be big bucks in tax evasion once the 30% (minimum) national theft tax is put into place.

"...will decline since most people will realize that the benefits of such asre less than under the present system which has for many a 15.3% payroll plus a 25% income tax rate - a total of over 40%."

Nope, most folks don't pay near to 40% of their income in federal income and payroll taxes. Not even pretty well-off folks.

Here's a typical married man, single-income household, wife and two kids who is doing pretty well.

Official Salary: $120,000 annual
employer side payroll taxes: $6,885
employer paid health insurance: $9,600 annual ($800 per month)
Employee contrib to 401(K): $6,000 (5%)
Employer match to 401(K): $6,000 (5%)
Total compensation: $142,485 (includes health insurance employer side payroll tax, and employer match to 401(K)).

- He has a $2,800 per month mortgage (28% of salary, which is a standard lendable amount)

- He has a $500 car payment (hey, he IS making pretty decent money). He was smart, and he borrowed on the equity of his house to pay for the car, because it's tax deductible, and the rate is lower.

- He has professional and business expenses of $3,000 per year.

- He has unreimbursed travel expenses of $3,000 per year.

- He has car deduction of about $6,000 per year (he claims it about 65% for business).

- Other than the $12,000 to the 401(K) every year (10% - this guy is doing pretty good), he also puts aside $3,000 in regular savings every year (2.5% ON TOP of his 10% in the 401(K) - this is his emergency money).

- He lives in Maryland, and paid $4,343 in state income taxes.

His total payroll and federal income tax come to:

$20,188.63

That is 14.2% of his total compensation package of $142,485.

That's it. A little under 15%. Total.

Now, under the so-called "fair tax," if his employer still gives him the employer side of payroll tax (it would be better for him if he got that), and his employer still gives him the money for his health insurance (but which is no longer a tax-free benefit), and he still gets his 401(K) money, he'll have the same amount of income.

He will be saving $12,000 to his 401(K), we can assume that he'll still save the extra $3,000, and for good measure, we'll assume, at least initially, that he doesn't spend the employer side of payroll taxes. This reduce his "fair tax" burden because you don't pay tax on what you don't spend. Right?

Okay. Great. And, he gets a "prebate" of $5475 per year for a married family of four.

His consumption is $120,600 per year. His tax, then, is $27,738 per year. Subract out his "prebate," and he pays in federal sales tax:

$22,263 per year.

Or about 15.6% of his total compensation package.

My. He isn't saving money at all.

How droll.

Now, it's true that folks who don't own houses, who don't use the equity in their houses to take out tax-free debt, who don't have kids, who aren't married will likely benefit from the fair tax.

In other words, the folks who AREN'T currently acting responsibly, building up society through home ownership, responsible use of debt, and rearing up children.

Also, the lower the household income, the more the bias is toward the national sales tax. It is weighted heavily toward lower middle class and lower class folks. Eventually, as income goes down, the ability not to pay the payroll tax overwhelms the everything else. For very low income folks, a 30% national sales tax will do very well for them.

But the more you make, the more you will be punished.

However, in any event, when you add in things like employer-paid side of payroll taxes, when you add in things like tax-free fringe benefits like health insurance, etc., when you look at all the deductions a typical middle class family can accumulate (it ain't that hard), it is a fiction that most folks pay ANYWHERE NEAR 40% of their total compensation in federal income and payroll taxes.

sitetest

Who among FairTax supporters do you ever think ever said that it would "FIX" the underground economy?? I can tell you ... no one!!! Stop trying to put words and ideas out there that are just the opposite of reality.

What has been said is that the illegal economy will be much more heavily taxed that it is presently - and that's a correct and completely accurate statement. Pretending otherwise as you do is ridiculous. And I've got news for you - most of those folks cheating on their taxes presently aren't cheating for 20 cents on the dollar as you claim; their target figure is 40% or more since even a 25% tax rate combined with a 15.3% payroll rate gets you to the right starting area - and there are plenty in the illegal economy who get more than that. If you don't think so you haven't gotten friendly enough with some of the illegal aliens who run entire businesses without not only income tax but multiple defalcations of payroll taxes. 20% or even 29.87% would be peanuts - and as I've pointed out if enacted today the rate would be less than 25% tax exclusive.

The 1913 income tax - if that's what you refer to - was from 1 to 6 percent depending on income and not just a single rate and never was a "one percent income tax" or even "set at one percent" as you state. There have been links posted to it on these threads before. I certainly disagree with you about calling for the 16th repeal since there must first be an tax bill operating before repealing the income tax - anything else is beyond belief. It could no possible be done that way and a little thought should show you why.

With the FairTax operating and the people approving of it (which I believe they will), the 16th serves no function at all and it should be fairly easy to pass a constitutional amendment to rid us of it since it would be an anachronism like the Prohibition amendment. During the ratification process the FairTax will function very nicely as the tax revenue bill. There will be a lot of pressure on those who helped pass the FairTax bill originally to get the repeal out there to the states and I believe that will happen. "Fraud" would be NOT (as you claim) passing the FairTax without repealing the 16th but instead telling people that the 16th could somehow be repealed while still having the income tax in place --- that's fraud; it cannot happen and I think you must surely know that. With the FairTax in place there is no provision for income taxation nor any likelihood that it can be easily or quickly restarted.

You're off the mark about any easy, sly, unnoticed change of the prebate. It is the actual tax rate (23%) times the government-recognized poverty figures which are threaded throughout many, many different government programs. You cannot simply change the prebate without changing the actual tax rate - and that would be a major difficulty, indeed. No "simple amendment" can do that. You keep slipping in such nonsense terms.

I did not say that there was a 23% inclusive tax rate used by any state. Everyone knows very well that sales taxes normally use tax exclusive rates. What I said, however (which you took out of context) was that the rate in the bill was 23% as the actual rate - and that's tax inclusive. There is no "imputed" rate and the effective tax rates you refer to are simply that, overall effective rates for a particular taxpayer under a given set of circumstances. That has nothing to do with "imputed" rates.
And yes, certainly I understand the arithmetic involved quite well, thanks. Nor was I discussing effective tax rates in any way.

I would certainly not argue that politicians would not continue to be politicians, but I don't accept your premise that the past is a good guide to the future insofar as the FairTax is concerned. There has never been such a tax system as the tax law in any country so there is no "past" to judge from. Other countries have VATs, flat taxes and other sorts of income (and other types of taxes) but a true consumption tax such As the FairTax ... no, there is no "past". But then no other country had ever had a representative republic either so there was no "past" there either.

So there's no expectation that politician will not be politicians, but the is a realization - though apparently not on your part - that the FairTax is a fundamentally different for of tax bill and will operate in a fundamentally different way that does not succumb to the same political machinations as has the income tax. You are merely assuming it is and can be influenced in the same manner. I'm telling you is is different and will not be influenced the same way or to the same degree.

There is no assumption that the underground economy will shrink or dry up at all and none of the supporters I have contact believe that to any great degree. It might very well stay at the same economic level. What IS clear - and the very point you're missing - is that it is not the size or growth or lack of it that matters (that's a more common law enforcement matter rather than a tax matter), but that it produces much more in the way of tax revenue ... which the rest of us no longer have to provide.

And you WON'T have a fully-functional 16th either since it will no longer have an income tax on he books, or an IRS, or any income tax records. That's hardly "fully functional". It's actually fully discombobulated instead. And I never spoke of effective rates, but rather "imputed" rates which do not exist. There have always been effective tax rates as I said by saying it was a progressive tax.

This tax bill is certainly one that encourages savings and which will greatly boost economic activity as well. And once again you have dredged up something that was never there when you said the bit about running deficits. with increasing economic activity, those will quickly fade away. And I stand by my statement:

"It will be much more efficient at raising revenue with far less taxpayer pain and I look for the rate to rapidly drop, not increase, giving taxpayers the best opportunity in many decades to hammer on Congress to reduce spending."

My biggest single interest is looking forward to haranguing Congress about spending and having the ability to do something about it personally by determining my own consumption.

Dear pigdog,

You're a post behind. Look at the numbers in #675.

Although nominal rates may be 40% for income and payroll taxes combined, few folks actually pay anything close to 40% of actual total compensation in federal income and payroll taxes.

As for the underground economy, the naive people who endorse the national theft tax are counting on eliminating most all evasion of taxes from the underground economy.

Not gonna happen. Too much money at stake. They find clever ways now to avoid the income tax, they'll find clever ways then to avoid as much of the national theft tax as possible. The heavier the tax, the more folks will try to evade it.

A 5% sales tax draws a little evasion (and that little evasion is still a pretty good amount). A 35% - 38% sales tax (when you add in typical state sales taxes) is just too damned juicy not to evade for folks who are already evading income taxes.

To assume anything else is naive.

sitetest

You completely miss the point in that the FairTax does not "count" on any reduction in evasion/avoidance or even in the illegal economy. What they are counting on it that some goodly portion of these folks who now pay no income tax (and don't forget there is also 20-25% of present income tax revenue that is lost in non-compliance which is a different thing) will buy things at retail. When they do, they'll be taxed at the 23% tax inclusive rate.

As I have made clear in past posts, that's a huge amount of money which cannot now be obtained. I disagree with your observations about the number who (should) pay 40% or more but don't. There are great numbers of these people in the regular economy but especially in the illegal economy and these latter ones pay nary a cent presently.

The rate example you cite is both interesting and informative and illustrates some worthwhile points. Let's look at it.

You show total compensation of $142,485. And you list various other figures only one of which seems a good bit out of line on the high side - the mortgage - by perhaps $8,000 - $10,000. Let's ignore that for now and go on. Your example actually shows spending as I read it of $127,485 and you state a tax paid of $20,188 (I haven't checked that either) giving a rate of 14.2% based on total compensation shown above.

What you have forgotten is that embedded into the prices of everything you have spent for is an amount equal to about 20%-22%. Let's say 22. That amounts to a $28,047 oversight. This is the cost of embedded taxation costs presently. So instead of the $20,188 payment and 14.3% rate you THINK you had you actually had a $48.655 along with a 34.15% rate. That's a lot different - and remember we weren't even quibbling about the inflated moprtgage amount. I haven't bothered to check your FairTax figures thoroughly but they seem pretty close, I'd think, so you are actually paying more than twice the rate as under the FairTax parameters you specify. You should be all for the FairTax if you care about your own finances (and if these were yours).

Unfortunately it isn't "droll" at all, but sad and many - including you are not aware of what they actually pay. It's still there under such a pernicious system as the income tax (any income-based tax system). So don't be so ready to shout that nobody pays 40%; most pay more than that and some even do so without considering the embedded tax costs but do it right off the top. Just as ofter, perhaps, by joining the infamous underground economy.

Indeed, the more you make the more you will be punished, but you're being punished and aren't even aware of it.

pigdog wrote in reply to post 625

“First of all is the obvious fact that it is not the Linder/Boortz (or Boortz/Linder) bill - … It is also not Boortz's plan - he is merely a supporter as am I.”

Answer:

Wow! You are brilliant! But as I correctly wrote: The so called Fair Tax promoted by Rep. John Linder and Neal Boortz

pigdog wrote in reply to post 625

“Mr. K. seems to have little basis for his claims but at least he does not pretend to be doing anything but defending the status quo (though he may not be aware that the effect he has is actually doing so) ... which is very clear from his material.”

ANSWER

Is that so? Defending the status quo? Well, let’s see what I really promoted:

In order to accomplish the featured attractions of what Boortz and Linder claim their plan will do with reference to abolishing “all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes”, there is but one, and only one answer. The American voter must demand their elected public servants, their employees, to put the following wording into the federal Constitution:

The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, or any other lawfully realized money.

Keep in mind the Fair Tax proposal is a list of suggestions to future Congresses to not lay and collect “corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes“. It leaves the door wide open for a future Congress to re-establish such taxes in addition to a newly created across the board consumption tax.

Real change can only be guaranteed by a constitutional amendment which binds the hands of Congress. The ring leaders who promote the snake oil Fair Tax, flat tax, value added tax, etc, all have one thing in common . . . they leave the door open for Congress to tinker with taxation, manipulate it as is now done, and they do not promote permanent and real change by a constitutional amendment which expresses the will of the people. I suspect this tax reform crowd is either very stupid, or very slick___ government friendly slick!

As stated above, the overwhelming majority of Americans, including business owners, agree the IRS and “income taxation” must be ended. Hopefully the American people, as individual Americans and taxpayers, will get on the same page on this issue and advocate a direct and simple plan, the adoption of a constitutional amendment clearly stating:

The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, or any other lawfully realized money.

pigdog wrote in reply to post 625

“The posters takes off on a tear against the windmill by saying the FairTax would "... expand the number of tax gathers in the United States to include individual tradesmen and entrepreneurs, and, even ordinary working people engaged in self employment, forcing them to "register" with folks in government in order to pursue a livelihood ...". Apparently Mr. K. does not realize that these folk (actually even more in number) are forced to do this now - “

ANSWER

Telling fibs? What individual tradesmen, entrepreneur, or ordinary working person living in Florida and engaged in self employment is now required to collect a federal consumption tax in their business transactions, maintain the paper work for such a tax under penalty of perjury, and send that money off to the feds? As to the current system, which I surely do not support, it too allows deductions to have a professional take care of one’s income tax books. So, as it turns out, you are blowing hot air.

pigdog wrote in reply to post 625

“These current "gatherers" are more numerous that we will have under the FairTax, by far - and they send the money on to the feds right now.

ANSWER

As I correctly pointed out in my original post, your plan enlists a new breed of tax gather for the feds: individual tradesmen, entrepreneurs and ordinary working people engaged in self employment. You are telling more fibs!

pigdog wrote in reply to post 625

“And it DOES aput an end to the tax calculated from income in that it eliminates the income tax, payroll tax (along with several other taxes) and it also eliminates the IRS and requires the income tax records to be destroyed. All that and in addition it calls for the repeal of the 16th amendment. In view of all that the poster's claim to "... not put an end to Congress imposing a tax calculated from income ..." is farfetched, indeed. It clearly does“

. ANSWER

Telling more creative fibs? Calling to repeal the 16th Amendment is not the same as adopting a constitutional Amendment repealing the 16th amendment. In addition, there is no provision in H.R.25 which calls for the repeal of the 16th amendment with the following necessary provision:

…… and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, or any other lawfully realized money.

Without the above wording adopted into our Constitution your H.R.25 “repeal” of “corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes“ is nothing more that a list of suggestions to a future Congress which will not be bound by the H.R.25 Legislation and will be free to tinker with you proposal in any fashion it so wishes, and would, in all likely hood, slowly re-establish all the above taxes, and the American people would not only have your beloved consumption tax to deal with, but the return of various taxes calculated from income.

pigdog wrote in reply to post 625

Most of the FairTax supporters would quibble little with his proposed wording of the 16th amendment repeal - in fact, rather than tilting at FairTax windmills that do not exist, perhaps Mr. K. should get behind the repeal effort that is part of the FairTax effort and help move it along.

Well, when your crowd proposes legisltion that:The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, or any other lawfully realized money.

, I would probably be the first to join you.

As Thomas Jefferson has warned us "In matters of Power, let no more be heard of confidence in men, but bind him down from mischief by the chains of the Constitution"

But if such an amendment is adopted, there really wouldn’t be any need to go any further because, adopting the above suggested wording as an amendment to our Constitution will bring us back to our Founding Father's original tax plan, a plan which was carefully designed to provide more than sufficient power to raise a federal revenue from external taxation, and, an inland excise which would include taxing articles of consumption, not to mention the direct apportioned tax among the states to extinguish a federal defict!

This brings us to what Hamilton explained in the Federalist Papers with regard to taxes on articles of consumption, they:

”__ may be compared to a fluid, which will in time find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be by his own option, and can be regulated by an attention to his own resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions__ It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which can not be exceeded without defeating the end proposed, that is, an extension of the revenue__” see:No. 21 of the Federalist

Surely there is a clear enough distinction between such foods as caviar and chicken eggs, between wine and milk, between silk and cotton underwear, between a Chevy Nova and BMW to truthfully say one is a luxury and the other a necessity and allow all to pay their fair share by a judicious selection of objects proper for such taxation.

Keep in mind that it is possible to avoid the oppressive nature of taxes laid upon articles of consumption by a “judicious selection of articles proper for such impositions” which avoids taxing the necessities of life, tools or production and supplies necessary to conduct America’s businesses, and thus, would make the fair tax a more voluntary type of tax as Boortz claims his fair tax is.

As our founding fathers practiced, a consumption tax plan ought to be limited to articles of luxury, and each article ought to be individually selected by the reason and choice of Congress, and then the appropriate amount of tax determined for each specific item chosen, just as was done in the first revenue Act of our country

But what Congress, and friends of big government do not like about our Founding Father’s original tax plan is, it contains a number of important checks and balances to control the actions of Congress, and would, if returned to, forcefully encourage members of Congress to follow sound fiscal policies, including the closing down of unnecessary and unconstitutional federal government offices. And so, Congress, and the friends of big government, and those who live off big government, prefer to have the so called “Fair Fax reform” which is intentionally designed by its revenue neutral feature, to support big government and all the existing, and unconstitutional political plum jobs on Capitol Hill, many of which have six figure salaries!

For those who are unfamiliar with our Founding Fathers original tax plan, as they intended it to work, a plan which even includes a specific method to extinguish an annual deficit, in addition to taxing consumption, CLICK HERE and scroll down to :

American Constitutional Research Service Before the
Committee on Ways and Means
United States House of Representatives
June 1995

Mr. Chairman and Members of this Committee:

For some pro and con points of view concerning the fair tax see: RESPONSES TO FAIR TAX ARTICLE

“He has erected a multitude of new offices, and sent hither swarms of officers, to harass our people, and eat out their substance” ___Declaration of Independence

"The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation and foreign commerce. ... The powers reserved to the several States will extend to all the objects which in the ordinary course of affairs, concern the lives and liberties, and properties of the people, and the internal order, improvement and prosperity of the State."--- Federalist Paper No. 45

Dear pigdog,

"You completely miss the point in that the FairTax does not "count" on any reduction in evasion/avoidance or even in the illegal economy. What they are counting on it that some goodly portion of these folks who now pay no income tax (and don't forget there is also 20-25% of present income tax revenue that is lost in non-compliance which is a different thing) will buy things at retail. When they do, they'll be taxed at the 23% tax inclusive rate."

I heard you the first time.

And the second time. And the third time...

What I'm saying is that folks who go through the bother of avoiding income taxes will go through the bother of avoiding a high sale tax, to the degree that they can. Folks are clever. I can think of a few ways to do it myself, and have laid them out here.

Shutting down evasion of the national theft tax will be just as difficult as shutting down evasion of the income tax.

It's the AMOUNT that drives the motivation.

" What you have forgotten is that embedded into the prices of everything you have spent for is an amount equal to about 20%-22%."

Oh, this is pure bullsh!t. Absolutely no one has ever demonstrated this nonsense. In my own company, if we stripped out every possible penny of embedded tax and cost, it would amount to far less than 10%. And that's if I don't mind my nominal pay (company profit) going down, which sorta defeats the whole "you'll have your whole income, not what's left over after income taxes" mantra. If I'm unwilling to reduce my own income (which, again, is the company profit), then maybe we reduce costs by as much as 2%.

If my national theft tax compliance costs don't eat up the savings.

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