Posted on 08/15/2005 5:55:06 AM PDT by OESY
A major domestic battle looms this fall, when tax reform-- a centerpiece of the president's bold domestic agenda-- will finally be on the table. The President's Advisory Panel on Federal Tax Reform is expected to release its findings by the end of September. After the political shellacking the White House took on Social Security, the administration will be strongly tempted to take a conciliatory path that supports only superficial reforms, essentially preserving the status quo of our hideous income tax code.
Such a course would have perilous consequences, economically and politically. In fact, the administration has an opportunity here to boldly retake the initiative, to recover lost political support and thrust an already decent economy into high gear and, at the same time, make America better able to meet intensifying competition from China, India and others. How? By junking the entire federal income tax code and starting over with a flat tax. A growing number of countries are doing this -- and so should we.
The current system is beyond redemption, a beast whose complexity, confusion and outright unfairness have corrupted our economy and society. Americans waste more than $200 billion and over six billion hours each year filling out tax forms. They engage in all kinds of useless economic activity intended to take advantage of the code's complicated maze of deductions and to reduce taxes -- from deducting donations of old socks to making unwanted investments. The waste of brainpower -- at a time of increasing global competition -- is incalculable.
The code corrupts our system of government by encouraging the crassest political conduct and by creating a massive, intrusive federal bureaucracy. One-sixth of the private-sector employees in Washington are employed by the lobbying industry. One-half of their efforts are directed at wrangling changes in the tax code....
(Excerpt) Read more at online.wsj.com ...
AMEN!
See below:
Here is an excert from remarks made by The John M. Olin Distinguished Professor of Economics at George Mason University, Dr. Walter E. Williams, in March of this year to a standing-room-only crowd of students, faculty, and guests at Hillsdale College's Constructive Alternatives Seminar:
"...Keep in mind that a working definition of slavery is that you work but do not have any rights to the fruit of your labor. Taxation and regulation constitute confiscation of some or all of the freedom to own and use property. This confiscation has reached unprecedented proportions. In 1902 expenditures at all levels of government totaled $1.7 billion, and the average taxpayer payed only $60 per year in taxes. In fact, from 1787 to 1920, federal expenditures never exceeded 4 percent of the Gross National Product (GNP), except in wartime. Today federal expenditures alone are $1.8 trillion - almost 30% of GNP - and state and local governments spend over a trillion more. The average taxpayer now pays more than $8,000 a year, working from January 1 to May 8 to pay federal, state, and local taxes. In addation to the out-of-pocket cost, Americans spend 5.4 billion hours each year complying with the federal tax code-roughly the equivalent of 3 million people working full time. If it were employed in productive activity, the labor now devoted to tax compliance would be worth $232 billion annually. The federal cost of hiring 93,000 IRS employees is $6 billion. If these Americans weren't fooling around with the tax code, they could produce the entire annual output of the aircraft, trucking, auto, and food processing industries combined..." Emphasis added
"A family of four would pay no federal income tax on its first $46,165 of income. Exemptions for a family of six-mom, dad, four kids-would be $65,930." Well, why not? Do we want an even higher percentage of the population not paying income taxes? And what about the $5,043.65 FICA tax the family of six is paying? Why does he not take that into account? Are we just supposed to ignore that?
Under the Fair Tax, the family of six would pay $7762.50 Fair Tax after taking the rebate into consideration, or 11.77%. That's if they spend every cent on taxable goods and services. If they invested, gave to charity, or paid tuition just 10% they would pay $6246.11, just 9.47%. But it's really up to them, isn't it? Source: http://www.pafairtax.org/calc.php
Not true and you know it, Nightie. The normal method that will be used under the FairTax is the use of the resale certification and that is specified in the bill.I don't know how it would work. I assume Linder does. What he describes would conform to the language of the bill, IMO.
The mechanism mentioned by Linder is there for use in certain exception cases where it's use would be helpful, but not as the typical method.That's not what Linder said. You are putting words in people's mouths again.
I dunno. We're still going to buy what we want to buy.
If we had to write a check at the end of the year, it might give us more pause.
But I agree with you in essence that our tax system is medieval.
Income is not reported under the FairTax`SEC. 903. WAGES TO BE REPORTED TO SOCIAL SECURITY ADMINISTRATION.
`(a) IN GENERAL- Employers shall submit such information to the Social Security Administration as is required by the Social Security Administration to calculate Social Security benefits under title II of the Social Security Act, including wages paid, in a form prescribed by the Secretary. A copy of the employer submission to the Social Security Administration relating to each employee shall be provided to each employee by the employer.
`(b) WAGES- For purposes of this section, the term `wages' means all cash remuneration for employment (including tips to an employee by third parties provided that the employer or employee maintains records documenting such tips) including self-employment income; except that such term shall not include--
`(1) any insurance benefits received (including death benefits);
`(2) pension or annuity benefits received;
`(3) tips received by an employee over $5,000 per year; and
`(4) benefits received under a government entitlement program (including Social Security benefits and unemployment compensation benefits).
`(c) SELF-EMPLOYMENT INCOME- For purposes of subsection (b), the term `self-employment income' means gross payments received for taxable property or services....
The more I read about both the flat and consumption tax.... the more I think I like the current method. You know... I understand the current one pretty good. I do a good job of minimizing my tax burden. If we could just tweak the current one a little .... like .... 1) eliminate the tax on mandatory IRA distributions (I manage the estates of mine and my wife's parents) ..... it's bad enough that you have to take a distribution, but then forcing the tax is unfair. 2) Eliminate capital gains taxes on anybody over 65. And ... 3) create an annual tax credit for anybody who pays off their home (wife and I paid ours off this year)...... this encourages people to be fiscally sound and to avoid the "cashout some of your equity" trap.
`(c) SELF-EMPLOYMENT INCOME- For purposes of subsection (b), the term `self-employment income' means gross payments received for taxable property or services....
Good catch, depends what is is.
The poster in #161 answered your rather odd question.
What's your point, Looey ... self-employment income and income in general are different things. Self-employment income is just about the equivalent of wages which is one of the reasons it is taxed that way.
It's even actually a two line report...
The poster in #161 answered your rather odd question.What's your answer?
It's even actually a two line report...Says who?
There are no "tax exempt cards" for individuals but merely resale registrations which are certifications that what you're buying is for resale. If you buy under false pretenses, of course, that's fraud.
And there's no provision for exempting anyone (boo hooing or not) on the basis of "hardship" of any sort. The prebate handles that pretty well.
You might spend a bit of time learning what the FairTax is all about as you seem to misunderstand it. There is not 23% (or 29.87%) added onto existing prices since existing prices have in them embedded tax costs that amount to something like 20%-25% of the cost of the thing. With the advent of the FairTax, those price increases drop away and the FairTax then returns prices back up to about where they were (but you've already paid the tax).
You've also received your net pay which is now equal to your gross pay due to elimination of income and payroll taxes. You also would (optional) receive the prebate.
There's a lot of good information available here:
http://www.fairtax.org/research.html
Both the flat tax and the "fair tax" will require "some" bureaucracy to implement. But in both cases that bureaucracy will be tiny. Most of the work for the sales tax can be handled by the already-existing state bureaucracies that handle state sales tax---all that is necessary is that they forward a percentage of the tax already collected (along with some small fraction that goes into the state coffers as "funding for the mandate").
The sales tax and the VAT couldn't be more different. The VAT is THE original "stealth tax", and is completely hidden from the final consumer, so he or she is never aware of the REAL TAX BITE. The sales tax/fair tax is right there on the bottom line of every cash register receipt, as an incentive for every taxpayer to keep his or her Congresscritters noses to the grindstone to keep that "line item" as small as possible.
Uh, if you're already doing it for the state, the "adder" for doing it for the feds will be zero. It'll just be programmed into your cash register.
Point me to some legislation to actually implement this. I don't think people will accept it. Sure, the feds would love to "track taxpayer money" and love databases, but I think the people will squawk so loudly that such a concept will never be implemented.
I can assure you that I'll damned sure be squawking if this idea is ever put forth in either branch of the Congress.
"And advocates of the 'Fair' tax will never tell you that the 16th Amendment will still be in place, and there has to be some type of agency to collect the revenues."
Sure we will. However, we will also tell you that FairTaxers are the main ones behind the repeal the 16th bill that is in congress now.
If you think that repealing the 16th is important, the FairTax is the only game in town, because it is the only major tax reform proposal which would survive a repeal of the 16th.
"....there has to be some type of agency to collect the revenues."
Very true, but that revenue does not have to be collected via a 60,000+ page monstrosity that even the experts don't understand and one that makes every American reveal every detail of their financial lives annually.
Duh,
Not every small businessperson has a cash register and personally I don't really enjoy added accounting, vouchering, form filling and all the other cr*p that goes along with filing sales tax returns.
Have you ever filed state sales tax ? Do you have any idea the headaches that it can cause for certain small businesses ? You are very cavalier in your attitude which infers to me that you haven't got a clue what it's like to deal with the headaches that come with being the state's tax collector not to mention that if I screw up, even a little, I am the one who is responsible since I am the one who collected (or was supposed to) collect the tax.
You can pretend being a tax collector is fun and games. I have to do it everyday and I don't want to have to do it for anyobdy else, even if they do pay a little for the service. I have a business that I worked long and hard to build. I have to keep up with what goes on in my field or I am out of business. I don't have the time or inclination to be a tax collector, that isn't the reason I went into business in the first place.
WHERE precisely did I say that??
"I have to do it everyday and I don't want to have to do it for anyobdy else, even if they do pay a little for the service. I have a business that I worked long and hard to build. I have to keep up with what goes on in my field or I am out of business.
Uh, you just said you ALREADY have to do it, so the incremental adder to your "misery" is small. Add to that the fact that you no longer have to fill out INCOME TAX FORMS, which is probably MORE time consuming that the work you ALREADY do for sales tax.
So your TOTAL time involved with taxes will go DOWN, probably significantly.
"I don't have the time or inclination to be a tax collector, that isn't the reason I went into business in the first place."
But you have already said that you ALREADY DO THAT, so the argument doesn't wash.
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