Posted on 09/15/2005 7:03:21 AM PDT by groanup
Please delete if a dupe
ping
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Ouch. Boortz is finally admitting what I've been saying all along. Gross pay under the so-called Fair tax is likely to go down. (The employer will base his decision on what to do on what the Federal Reserve does with the money supply.)
I wonder how Fair Tax proponents will react to this startling confession.
If I'm losing the amount that used to be withheld, which would take care of my tax liability normally, then get the same take-home, but with a big sales tax that I now have to pay, my effective pay has been slashed big time. In essence, you're still paying both taxes (and no chance for any refund on the lost 'withholding').
The fair tax will never fly because it is a massive tax cut on high wage earners, speculators, and investors, which, to be revenue neutral, means it must be a massive tax increase on wage earners.
If you forego taxing interest, dividends, and capital gains, the money must be made up for somewhere, and the only somewhere is the full consumption of wages by low-end and middle workers, since high end wage earners rarely consume anything close to all of what they earn.
Hmmm...
If we assume that the "average American" spends his entire paycheck on goods and services and also assume that "the fair tax" will increase the cost of what he buys by 22%, then the "average American" will need a pay-raise of 22% just to stay even.
How likely is THAT??
From a macro-economics stand point, I must disagree with you. Unless the "high end wage earners" are stuffing dollars under their mattress, they like the low-end earners, are consuming every penny they get. All money is spent one way or another. It can be spent at retail, or it can be invested (i.e. passed to some third party) and then spent. One way or another, it is all spent.
Does anyone think corporations will not keep the money for themselves?
FYI
I'm a big FT supporter but I think Boortz is dancing with a hyena here.Boortz is a laughing hyena...he's laughing at all you fools who bought into this phoney scam...How many books did you buy? How much money have you given the phoney cause? How many people have you ridiculed when they tried to tell you the truth?
Dear Ditto,
Some high wage earners spend it all, some don't.
The real issue is folks with very large incomes, most of which are produced via investment portfolios.
These folks are currently taxed, albeit at low rates, on their dividend income and capital gains, and at ordinary rates for interest income.
But, lots of these folks don't spend anywhere near what they actually receive in currently-taxable income. They pay their taxes and re-invest a lot of the dough.
These folks will see their overall tax burden fall dramatically.
sitetest
Putting money into money accounts, bonds, stocks, REIT's, hedge funds, mutual funds, options, futures contracts, swaps, foreign exchange contracts, etc. is not "consumption" by any stretch of the imagination, since all these items are cash or cash equivalents. Nor do these activities produce spending of themselves.
Since a single living in an apartment has fewer deductions and therefore more tax withheld than a married person with a big mortgage, will it be up to the employer to decide who gets his pay cut more? (Sorry Joe, your pay cut is 30% while John's is only 10%. But if you get married I'll give you a 10% raise) What if I'm paying estimated taxes anyway, so I take the maximum number of withholding deductions at my main job? Does that mean I'll end up with a bigger gross after the sales tax than if I set up my taxes to get a big tax refund in April? Or is it more likely that the employers will just give the entire gross to the employees? Especially consider than many employees are under legal contracts for specific wages and there is nothing in the FairTax about voiding those contracts.
I'm glad that Boortz has finally admitted that you can't get both your current gross pay and have net prices including the sales tax stay the same. I've had some people get nasty with me here when I said the employer's embedded tax is only around 9% and there was no way that could jump to 23% based on just inefficiencies in tax collection.
Personally I would prefer a sales tax to the current income tax system. I just never believed that it would be painless and that my net purchasing power would be higher after the tax than before it.
or he will readjust your pay figures so that your entire paycheck will be equal to what you used to call "take home pay" before the FairTaxExcept what you used to call "take home pay" was called that not because you got to take it home but because taxes were paid...
After the Fairtax, your employer rips you off for your withholding, then the Fairtax rips you off when you spend what's left.
Gee, that doesn't sound anything like all the Fairtax promises I've been hearing, or what "the book" says.
BWAHAHAHAHAHA...what a bunch of fools...
After being called a Liar and a Marxists 100 times in the last week by the fair taxers, Boortz comes clean with the truth.
I think it only stands to reason. I don't see it as an "ouch" at all, but simply making sense. Take-home pay stays the same. That's fine with me.
The Fair Tax has an obvious long term benefit: The cumulative costs of current taxation to our economy are monumental. Elimination of that, if the Fair Tax accomplishes nothing else, will produce a long term benefit to the economy. I think that's very clear.
Fair Tax is good. The status quo is bad.
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