MONEY finds flaw in 'FairTax' bestseller [FairTax myth busted by major magazine]

CNN ^ | 9/7/2005

[Your Nightmare]

A bestseller advocating radical tax reform contains a critical flaw that misleads readers, according to a report in the October issue of MONEY Magazine.

...

While consumers would pay a federal sales tax on purchased items, the authors argue that prices at the store would stay the same. The reason: everyone involved in the process of production would no longer be paying taxes, so they could charge less for their goods and labor.

If true, that would mean a dramatic increase in Americans' purchasing power.

But, according to the MONEY report, the book fails to make clear that, in order for pre-tax prices to fall so sharply, companies would also have to cut wages they pay.

"Sure, you'd get to 'keep 100 percent of your paycheck,' as Boortz and Linder repeatedly write, but it would be a smaller paycheck," MONEY senior editor Pat Regnier writes. "That's kind of a big thing to leave out."

[pigdog]

A 23% tax inclusive rate would be 29.87% tax exclusive.

The prices of houses will be set by market action, not your pronoundements. It might be higher or might be lower - just as at present, it varies.

Obviously, if you spend the money you have invested, it is no longer invested. What's your point with such a DUH! comment??? If you leave it invested it isn't taxed unlike at present ... and some people DO enjoy seeing their investments grow. Apparently you're not one of those.

[pigdog]

Sorry, Looey - no deception. There are those who believe the ER (employer's) portion of withholding would go to the employee and some who think not. That's what called a difference of opinion, not a deception.

Deception is what you do with your continued "misstatements of fact" and Looey 'rithmetic.

[pigdog]

Son Of Bob??? How'd you know my mom's name???

You were pinged since you were the one who made the original error and I thought you'd like to be aware of it. Of course, you probably can't keep all of those straight any more ...

[pigdog]

Oh, and BTW Rongie, "the FairTaxers" assumed no such thing - that's a Squirrel assumption to fit in with the Status Quo they so love.

[SALChamps03]

Not this shit again. There is no connection between wages and taxes paid by the employee. There just isn't. The company is already paying the wages. It is the taxes paid by the company that make the price go up. remove the taxes paid by the company, and the price goes down. Then the added sales tax makes the price return to where it was. Sheesh.

[pigdog]

"The level of price drop can only happen if wages are cut (which can't happen)."

That's a bit vague. Do you mean that wages cuts "can't happen" or price drops "can't happen"? Or both? Or something else entirely since of course there are other possibilities which you never mention.

[pointsal]

The question is "net" paycheck...

I'm tired of worthless bureaucrats and crooked, dumb politicians wasting my hard-earned money!

[SALChamps03]

The Fair Tax has never claimed to be a tax cut. It eliminates the IRS. It eliminates the cost of compliance. It eliminates hours and dollars spent filing paperwork. It is a more fair and open way to collect taxes. It doesn't punish productive citizens.

[pigdog]

No true ... just ask old guys like ancient_geezer. They will do just fine since the price level declining will help them all as will the prebate and untaxed investments.

[SALChamps03]

You will be paid $1000.

[pigdog]

You haven't considered the business income tax costs that are presently embedded into prices as increased prices caused solely by the tax system.

With the removal of these tax costs (which include not only business taxes but also compliance costs) prices will drop a good noticeably. Your claim of "not anywhere near 20%" is merely that - a claim which is backed by no facts. Time will tell as more information becomes available.

[pigdog]

What sort of "black market", specifically, do you envision?? How exactly would it work? What would be gained by the differect parties?


Have you compared the size of such a "black market" to the illegal economy (drug dealerss, illegal aliens, etc.) presently which evades taxes and makes no contribution to tax revenues when they will be taxed under the FairTax. Do your think any "black market" under the FairTax would be larger that this existing illegal economy (which is the equivalent of the "black market" right now)? On what do you base your information?

[mikegi]

Total price = ((Price * 1.30) * 1.07 (State and local sales tax)

So, the NST is included in the price before state/local taxes??? What a ripper. Also, are State income taxes abolished by the NST?

This whole thing is a sham and rates will rise enormously from the initial 30% rate. The only way to stop this is to stop government spending. Anything else is just rearranging deck chairs on the Titanic.

[ancient_geezer]

So, the NST is included in the price before state/local taxes??? What a ripper. Also, are State income taxes abolished by the NST?

Ahmm, you have heard of the Constitution have you not?

State and local taxes will be levied in any manner the state mandate. The NRST is levied in accord with the authority of Congress under article 1 Section 8 clause 1 of the Constitution.

In the particular case the FairTax legislation is levied and collect with respect to the base market price of taxable properties and services. What states and local government do to levy retail sales taxes is not within the authority of Congress to order.

This whole thing is a sham and rates will rise enormously from the initial 30% rate.

Yep the United States is a dictatorship in which the electorate has no say over what their representatives do. Congress Critters are just biting at the bit to raise tax rates on every last voter in their constituencies and Americans are lining up in great lines to pay em.

 

Federalist #21:

"Imposts, excises, and, in general, all duties upon articles of consumption, 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 at his own option, and can be regulated by an attention to his 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 cannot be exceeded without defeating the end proposed - that is, an extension of the revenue."

When applied to this object, the saying is as just as it is witty that, "in political arithmetic, two and two do not always make four."

If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds.

This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.

 

The only way to stop this is to stop government spending. Anything else is just rearranging deck chairs on the Titanic.

Now how do you propose to do that. Congress Critters have to enact your cuts? 92+ years of history says it isn't going to happen with any income tax system in which half the electorate perceive nil participation in paying taxes.

Bush touts relief as tax day looms

Another 3.9 million Americans will have their income tax liability completely eliminated, officials said.

That's 3.9 million Americans more added to the spending constituency of 70% of the public clamoring for more from government, figuring someone else foots the bill.

"It's like me in the restaurant: What do I care about extravagance if you're footing the bill?"
Walter Williams

 

Per-Capita Taxes

 

100years of history under the income tax makes it clear that we will not get there (smaller government) from here (the income tax)

 

The Honorable James DeMint (R-SC)
United States House of Representatives
APRIL 5, 2001

• "There has been a shift in the relationship between individuals and government, he argues, such that fewer and fewer are paying taxes at the same time that more and more are receiving increasingly generous benefits. If it becomes the case that most voters do not bear a financial burden for this largess, then there will be little to restrain--and significant political incentives to encourage--the continued growth of government.

 

"As a matter of fact, what the income tax does — and this is the debate that I think we always try to get into in order to let you and him fight, see — and the people of this country are led down a path where the actual control of their resources, which in the end is the control over their will, is handed off to the government."

. . .

"The government then manipulates that will in order to destroy the freedom of our electoral system through the income tax structure, and we call the resulting slavery a free system."

"In point of fact, it is not as the founders understood, and the only way to restore real freedom is to give people back control over the income that they earn so that they won‘t, at the voting booth and in other phony issues, be subject to that manipulation."

- KEYES TRANSCRIPT (01/28/02)

[pigdog]

Nonsense, Rongie - you most certainly ARE defending the Status Quo. Every chance you get you attack the FairTax and supporters even if you have to lie to do it (which you frequently do).

You have NEVER ONCE presented any sort of alternate tax system to contrast with the FairTax ... and I certainly don't think you're about to start - what is it - 6 or 8 years later.

You may kid yourself but you're not kidding many other people who've been on these threads a while.

[pigdog]

Hardly! In a system such as the FairTax, changing the rate affects everyone and any attempt to do so would be strongly resisted. A similar reason applies to trying to introduce exceptions - everyone else must pick up the difference and there's no hiding place as with the present convoluted nonsense.

I'm afraid you're too ingrained to the income tax and its faults - everything's not like that at all.

[pigdog]

It says that some maroons who get bashed never stop whining even when they are grossly in error.

[pigdog]

Or vice-versa - but it's good to know you're "full-blooded" ... always suspected as much from your posts; now you've confirmed it.

[pigdog]

Gibberish - which is referred to as Looey-'rithmetic. Almost completely wihout merit.

[pigdog]

Garbage, Looey - completely garbage ... and that's been pointed out to you by probably 20 different posters on many more threads and even by the information in the FairTax website.

Yet, like "Ol' Man River" you just keep rollin' alomng with your lies. What do you think you gain (except making a fool of yourself)?