Posted on 08/21/2005 1:01:15 PM PDT by sportutegrl
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 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.
(Excerpt) Read more at opinionjournal.com ...
I won't support any plan that has any deductions or exceptions.
I prefer the flat tax over the so called "Fair Tax" too. Even though they are economically equivalent going forward, a sales tax reduces the purchasing power of existing savings by the tax rate at the time of transition.
As any economist can tell you, a single rate income tax and a single rate sales tax are "economically equivalent". They affect the economy in the same way.
Each tax is a transaction tax on consumption. It doesn't really matter if the law says the producer or consumer pays the transaction tax. The end result is a wedge between producer and consumer.
Why are you complaining against the phone tax? It is needed in our ongoing war against Spain to free Cuba and the Phillipines from the king of Spain's tyrannical rule. Have you already forgotten the Maine?
Each phone call you make brings us one step closer to ultimate victory over our Iberian foe.< /sarcasm>
You're all hitting on the beauty of the Fair Tax. All Federal taxes show up on the receipt every time you spend money. It wouldn't take long for the average person to become very aware of the cost of government.
Now, just think what effect that would have on government spending?
But all my retirement is in Roth IRA's
A few years back I refinanced my home and since it had appreciated, I was able to eliminate the mortgage insurance and the escrow account. Now I pay my $5000 property taxes straight up by check once a year. Wow. Since then I have joined the Coatesville Taxpayers Alliance and am fighting the out of control school property taxes.
You're baiting me, aren't you? Good job!
That's ok. I freely admit I'm no Fair Tax guru. I can direct you to the Fair Tax FAQ where this is addressed.
I confess I don't totally understand that explanation. Seems kinda fishy. And, I've heard two callers to Neal Boortz's radio show raise the same question. And both times he hemmed and hawed and made some lame excuses and pretty much swept it under the rug.
I could be that you have found a hole in the Fair Tax plan.
Okay, this is Forbes Flat Tax Proposal. I prefer it to the sales tax, "fair tax".
Why would you want to maintain the income tax system with SS/medicare payroll taxes right along with it?
Better to get rid of the whole complex, burdensome mess and go to a pure consumption tax system as envisioned by the founders of the nation rather than income taxes levied on citizens under the thumb of an ever growing federal bureaucracy.
The first income tax was flat as well, with a low rate to boot. Didn't stay that way and has grown into the 60,000 page monster we deal with today.
Complexity, thy name is income tax.
Patrick Henry, Virginia Ratifying Convention June 12, 1788:
- "the oppression arising from taxation, is not from the amount but, from the mode -- a thorough acquaintance with the condition of the people, is necessary to a just distribution of taxes. The whole wisdom of the science of Government, with respect to taxation, consists in selecting the mode of collection which will best accommodate to the convenience of the people."
"A hand from Washington will be stretched out and placed upon every man's business; the eye of the federal inspector will be in every man's counting house....The law will of necessity have inquisical features, it will provide penalties, it will create complicated machinery. Under it men will be hauled into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of federal inspectors, spies, and detectives will descend upon the state."
-- Virginian House Speaker Richard E. Byrd, 1910, predicting the consequences of an income tax.
The confiscatory and unfair IRS must go.
Isn't going to happen under a flat tax proposal.
Any income tax levied on the citizen requires the means to audit and enforce it. That does not go away with a flat tax at all. In fact, with the decrease in information filed from which to validate a tax return (e.g. postcard tax return) IRS intrusion into individual finances must increase rather than decrease.
An analysis of the Forbes et.al. flat tax, from the perspective one who stands to make a buck on its enactment:
Flat Tax as Seen by a Tax Preparer
by Vern HovenSeems tax preparers are looking forward to an upcycle in their business with the flat tax.
If you would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
I just like this more and more all the time. Let me get this straight, If I don't spend I don't get taxed? If I save I save more because I have more income to save?
Yep! And you can save as much as you want, in any vehicle you choose, with UNTAXED funds. You pay NO federal taxes whatever until you make a RETAIL purchase.
First by taxing wage and retirement income of the individual directly, and second through taxing wages and corporate income through businesses which is financed by consumer sales revenues.
In both cases the individual gets hit both comeing and going. First when earned through taxes on individual income, and hit again through the consumer purchases they make.
Under the current federal tax system and Flat Fax, The Roth IRA gets hit with wage taxes going into it, limiting the amount of and growth of capital one may put into investment and consequently the total gain one may achieve, and again through the federal taxes embedded in one's retail purchases from money withdrawn under Roth system rules.
Under the retail sale tax system implemented by the FairTax legislation, all individual and business income/payroll taxes are repealed thus are no longer a factor in price regarding the purchase of goods or service with money withdrawn from Roth IRAs or any other investment including regular IRSs & 401ks. No money withdrawn from any investment (normal savings, regular investment accounts, bond, IRA, Roth IRAs etc) is taxed under a retail sales tax unless it is actually spent for consumption.
Furthermore all legal residents receive a sales tax rebate for taxes on the HHS poverty level of expenditure (set as 3 times the price of a healthy diet in 1969 updated for CPI including sales and excise taxes) that, coupled with indexing of SS/Medicare benefits for CPI including sales and excise taxes, assures that very few will be impacted by the portion of NRST that does not benefit from the lower producer pricing consequent to repeal of the business income and payroll tax system that makes up the embedded tax costs associated with business income and payroll taxes..
In short, few will find that there is any tax penalty on Roth or any returns from prior investments under a retail only tax system structured in the manner that the FairTax legislation is implemented.
If I don't spend I don't get taxed? If I save I save more because I have more income to save?
Mostly on the nose, though one should add that even if you do spend, keeping expenditure to HHS povertylevel for households, the taxes as fully recovered in the FCA sales tax rebate for a legal residents.
Furthermore expenditure on education is considered investment under the FairTax thus not taxed, and used goods and resold residential is not taxed as the bill expressly excludes taxation of any item more than once under the FairTax legislation.
The range of what one may do in growing one's assets and capacity to earn without tax consequence is quite broad.
I love it!!!!
The Fair Tax sounds good, but I have a question. Since the government doesn't know if a citizen is legal in this age of false documentation, how will they know if a resident is really legal?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.