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To: lewislynn

My main point is that I'm reading in the bill itself, and comparing it to the FairTax rhetoric, the FairTax rhetoric implies that all workers receive 100% of their pay, or their gross pay, but the HR25 bill appears to define wage and salaries as "services" under which appear to be taxed 23% just as any good or service.

Furthermore, under the existing FICA (Social Security) regulations, wages are withheld at a defined rate on the basis that each employee is legally a federal employee (i.e. anyone with a social security number is accepting a government benefit and is subject to an excise on pay). The HR25 bill maintains social security, and says nothing about repealing it, but it does mention handing over regulatory power of observation and audit to the SSA in place of IRS.

How can the Fairtax theories work if workers only maintain their net pay instead of receiving gross pay to offset the burden of a 23% tax on all goods purchased? The prebate will help, of course, but I don't see it being honest marketing if workers don't receive a true 100% gross pay?


12 posted on 08/27/2005 4:45:17 PM PDT by Shamino (Income Tax is "neutral"? You must be joking! Or incredibly stupid!)
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To: Shamino
How can the Fairtax theories work if workers only maintain their net pay instead of receiving gross pay to offset the burden of a 23% tax on all goods purchased? The prebate will help, of course, but I don't see it being honest marketing if workers don't receive a true 100% gross pay?
You're questions are legitimate and deserve honest answers that I and others have learned you probab;y aren't going to get from the Fairtax marketing center. One FR member, robfromga, recently contacted the original economist that made the 20% price reduction claim. He confirms that you cannot have 100% paychecks AND 20% lower prices. The Fairtax has been misrepresenting his study for years. You can see his response to robfromga by clicking on the link in post #13

BTW as to Social Security. You've read the bill so you know where it says that the rate for the year after the first year would be a combined rate...look at the section under "Trust Fund Revenue" and you'll see where HR25 authorizes Social Security Bureaucrats to "determine the rate" every year without a vote from congress...

14 posted on 08/27/2005 7:14:28 PM PDT by lewislynn (Status quo today is the result of eliminating the previous status quo. Be careful what you wish for)
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To: Shamino
but the HR25 bill appears to define wage and salaries as "services" under which appear to be taxed 23% just as any good or service
You included the portion of the bill that answers this question; "the term service shall not include any service performed by an employee for which the employee is paid wages or a salary by an employer in the regular course of the employer's trade or business"
16 posted on 08/28/2005 6:31:48 PM PDT by woodbeez
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