"It means we can be free from the IRS!"
Why does HR 25 under the definitions category of the bill maintain the concept of withholding by employers on the wages and salaries of Federal Employees? If they were going to be consistent with the concepts layed out by FairTax.org why would they not eliminate direct taxes on the wages and salaries of all employees federal or otherwise?
Furthermore, why does the bill shift the regulatory duties of the IRS to the social security administration for withholding? Was the intent not to eliminate an expensive, bloated and intrusive bureaucracy?
Why does it maintain a definition for wages and salaries but change the definition it once had under the Income Tax and change it to read that wages and salaries are now defined as "services?" Under this definition, would a 23% tax rate not be applied to all sources considered a service?
FairTax.org's marketing would suggest that under this bill all employees will earn 100% of their wage or salary. If the HR25 bill was intended to eliminate all payroll taxes, would that not include medicare and social security? Where in the bill does it remove social security withholding from wages and salaries?
Under Fairtax.org marketing, they claim this bill not only eliminates April 15 (which it does), but they also imply that this new bill lifts the burden of keeping records and receipts from individuals! Under the section on liabilities and penalties, why is it written that a "purchaser" is liable for remittance of the new sales tax?
Any guidence on these issues would be appreciated
Excerpts from HR25
>SEC. 2. DEFINITIONS AND SPECIAL RULES
(17) WAGES AND SALARY- The terms `wage' and `salary' mean all compensation paid for employment service including cash compensation,employee benefits, disability insurance, or wage replacement insurance payments, unemployment compensation insurance, workers' compensation insurance, and the fair market value of any other consideration paid by an employer to an employee in consideration for employment services rendered.
(14) Taxable property or service (A) GENERAL RULE- The term `taxable property or service' means-- (i) any property (including leaseholds of any term or rents with respect to such property) but excluding-- (I) intangible property, and (II) used property, and (ii) any service (including any financial intermediation services as determined by section 801). (B) SERVICE- For purposes of subparagraph (A), the term `service'
(i) shall include any service performed by an employee for which the employee is paid wages or a salary by a taxable employer, and
(ii) shall not include any service performed by an employee for which the employee is paid wages or a salary (I) by an employer in the regular course of the employer's trade or business,
SEC. 103. RULES RELATING TO COLLECTION AND REMITTANCE OF TAX. (a) LIABILITY FOR COLLECTION AND REMITTANCE OF THE TAX- Except as provided otherwise by this section, any tax imposed by this subtitle shall be collected and remitted by the seller of taxable property or services (including financial intermediation services).
(b) Tax To Be Remitted by Purchaser in Certain Circumstances-(1) IN GENERAL- In the case of taxable property or services purchased outside of the United States and imported into the United States for use >or consumption in the United States, the purchaser shall remit the tax imposed by section 101.
(2) CERTAIN WAGES OR SALARY- In the case of wages or salary paid by a taxable employer which are taxable services, the employer shall remit the tax imposed by section 101.
SEC. 903. WAGES TO BE REPORTED TO SOCIAL SECURITY ADMINISTRATION.
Keep in mind, the definition for the United States of America (aka USA,inc.) is the territories of the federal government which only include Federal Government properties, District of Columbia, Virgin Islands, Puerto Rico, Guam, etc...This does not include the soverign 50 states! Also, any US citizen by definition includes anyone who holds a contractual relationship with USA,inc. by means of a Social Security number, or those born within the legal US territories.
Curious
Excerpts from HR25
`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 minus the sum of--
`(1) gross payments made for taxable property or services (without regard to whether tax was paid pursuant to section 101 on such taxable property or services), and
`(2) wages paid by the self-employed person to employees of the self-employed person.
If Federal employees are still subject to an income tax, would they somehow be exempt from the sales taxes?
Under the inappropriately-named "fair tax," the old phrase of "Your papers, please" will soon become "Your receipt, please." And don't think the government won't start keeping tabs on what you purchase. Governments practically live to accumulate information on the citizenry.
Also note the tax is "23% of the gross payment" and YES service income is subject to the 30% tax.
A $100.00 item would have a $30.00 tax making the total ("gross payment") $130.00 ...
"23% of the $130 gross payment" is $30.00...And that's only the beginning.
I'm getting my info from HR25....and my understanding of the existing FICA, and Income Tax legislation...also from other sources I've read.
The legislation repeals FICA and funds SS/Medicare via the implemented retail sales tax.
The Social Security Act requires wage reporting for benefits accounting, thus HR25 provides for employers to report of employee wages to the SSA for that qualifying for Social Security Benefits.
And no, an SSN does not imply you are a government emplyee under the legislation. It means you may qualify as a legal resident to receive the FCA sales tax rebate mailed to you from the Social Security Administration.
"It means we can be free from the IRS!"
When taxpayers start having to write out quarterly or monthly checks, some form of 'tax reform' will be passed within the year.
The fact that this relatively simple precursor isn't even discussed shows me how unserious supposed 'tax reformers' are.
And if you can't eliminate withholding, other 'tax reforms' are just band-aids.