Posted on 09/16/2005 5:15:32 PM PDT by Man50D
Dear Editor, I've just read a new best-seller, which I highly recommend to you and your readers: "The Fair Tax Book, Saying Goodbye to the Income Tax and the IRS."
The co-authors are "reformed lawyer" and syndicated talk show host Neal Boortz, and Congressman John Linder, R-Ga.
Linder is also the principal author/sponsor of The Fair Tax Bill (H.R. 25), currently before Congress.
In the interest of brevity (the book is only 180 pages, by the way), I'll quote from the back of the dust jacket.
"What the Fair Tax will do for America: eliminate the income tax and the dreaded IRS; jump start the U.S. economy; bring businesses and jobs back to the United States; and recapture billions of untaxed dollars currently lost to criminal and offshore businesses.
"What the Fair Tax will do for you: allow you to keep 100 percent of your hard-earned paycheck; let you choose to save all the money you want .... and pay taxes only when you spend it; eliminate countless taxes you don't even know you're paying; lower interest rates; and make April 15th just another beautiful spring day."
The authors provide ample citations from the works of various economic think-tanks to back each of those assertions.
The Fair Tax would replace all current federal, income-based taxes with one universal, federal "consumption tax," on both goods and services, at the retail level only. There would be no exemptions whatsoever. The proposed, "revenue neutral," initial tax rate would be 23 percent. Predictions are that the resulting economic boom would make it possible to lower that rate in short order.
As described so far, the Fair Tax would be so regressive as not to stand a snowball's chance in hell of passage. Here's the solution.
At the first of every month, every head-of-household, irrespective of income/net worth, would receive a federal "pre-bate" check equal to the taxes due on his or her appropriate "poverty level spending" for the coming month. To quote the authors, "'Poverty level spending' is, by definition, that spending necessary for a household of a given size to pay for its necessities. It is adjusted every year by the Department of Health and Human Services."
For example, if the Fair Tax were currently in effect, every family of four would receive a monthly pre-bate of $491.82 to cover the 23 percent tax on its first $2,138.22 spent -- its "poverty level spending." All spending above that level (that month) would have a net federal tax cost of 23 cents on the dollar -- be it for sneakers or a yacht.
The federal sales tax would be collected by the states' sales tax offices. Moreover, don't forget that everyone's "take-home-pay" would be their full, gross earnings under the Fair Tax.
It is a most interesting, concise and thought-provoking read that can be knocked out in two or three sittings. Suggested full retail is $24.95. There is at least one copy available at the Camden County Public Library.
I hope that you and your readers will both enjoy the book and come to support the bill.
Your numbers here are only correct if the estimate of compliance costs is accurate. There are many other estimates that are higher that the one you chose.
Oh, but they are. they are both smptoms and signs of a sick, out of control tax system that muist be revamped to bring some economic efficienty back into the US economy. they are both non-productive lossses to the economy.
Perhaps you think otherwise?
What sort of "lost growth" do you envision under the FairTax?
And do you think it would be more or less than under the income tax system?
Who'd a thunkit!
"Tax disincentive costs: the loss of production because of the discouraging effect of taxes on investment and labor. In recent years, a number of economists have made calculations of this "excess burden" for a wide variety of taxes. In a 1985 article in the American Economic Review, Michigan State economist Charles Ballard and his colleagues estimate that for each additional dollar in taxes collected the economy loses 33.2 cents of production."This is really interesting. The study he quotes, General Equilibrium Computations of the Marginal Welfare Costs of Taxes in the United States by Charles L. Ballard; John B. Shoven; and John Whalley, lists the marginal excess burden for all taxes at $0.332 per dollar raised. They list the marginal excess burden of "consumer sales taxes" at $0.388 per dollar raised. They show sales taxes as having a 16% higher economic burden than all the current taxes!
What sort of "lost growth" do you envision under the FairTax? And do you think it would be more or less than under the income tax system?See #285. Payne's source seems to think it would be higher!
Nope - that means nothing unless we can determine exactly all of the particulars of what they were including as "consumer sales taxes" ... and we've learned long ago not to take your offered interpretations at face value.
In fact, is Ballard still living? This was a 1985 article and I thought I read he had expired some time ago (not certain, though).
Also I didn't ask anything about Payne's source (or Payne). I asked for your expert personal input and you haven't given it.
I find it curious that any time numbers come up you run to the other side of the pool and claim that any numbers we want to discuss are irrelevant, unknown, likely to be different tomorrow, or otherwise unknowable.
Ok, fine. I've got a used car to sell you. I can't tell you the price because that depends on a lot of factors that we can't know and will probably change anyway. It's a REALLY good car ... trust me. Don't try and do that Blue Book thing with me because the value of THIS car exceeds all expectations of anyone who might have studied the value of used cars in the past. THIS on is truly special.
So how about you sign this-here contract obligating you to pay whatever cost might show up later, and you can drive it away today? OK??
Is it nice and shiny? It doesn't even have to work as long as it is nice and new and shiny.
Never said they wouldn't. I have consistently demonstrated, however, that those costs are FAR less than you represent ... maybe 2%.
Any compliance, intangible, or even payroll costs (if applicable - which I doubt with the possible exception of the ER portion) would be in addition.
There you go again, a moment ago, you claimed that these costs INCLUDED compliance and other intangibles ... now you say these are additional ... which is it? and what does your favorite model include?
Of course it's nice and shiny. See here, I've got this great study that shows it's shinier than any other car out there, AND it gets such great gas mileage, that each time you fill up the tank you'll get money BACK! (we call it a "prebate") That way even poor people can have a nice shiny used car!
is it a really neat study with all kinds of cool numbers and formulas and things? can I make up a spreadsheet that shows I can go from Atlanta to Los Angeles on a half a tank of gas? this car sounds too good to be true but if you just tell me I can trust you I will.
AND it gets such great gas mileage, that each time you fill up the tank you'll get money BACK! (we call it a "prebate") That way even poor people can have a nice shiny used car!Get money back?...Sorry, but the other salesman selling this same car told me I can drive off with this car AND more money than I came here with...Who do I believe?
I do not know how much is spent on tax planning, but it is a huge industry, just google tax planning, tax attorney or tax accountants....While you are at it, how about answering my previous questions? Oh a one more, what do you suggest?
...Do you believe our current system is fair and simple? Does the power lie with the people or Congress?....
In your shoes, I'd choose to believe both of them half of the time, when they were telling me what I wanted to hear. The rest of the time I'd ignore them.
Who do I believe?
I believe you will keep on driving that old out of date rustbucket instead of taking a chance on something new and forward thinking....Why I don't know unless maybe the old rustbucket functions well enough to put food on your table and you are afraid you will fail with a new vehicle...sad when most others see the new vehicle as an opportunity to excell and not just survive...
Read the bill, you will need to get an exemption for your purchases, and will be subject to audit.
And who audits? The X million guys who just had the sign over their offices changed from "IRS enforcement" to "NRST audit dept"...
While we're at it, what about real estate? What sort of protection does anybody outside of California have from rate increases which might arise in a declining real estate market? If I buy a used house, is it not taxed?What rate increases are you talking about?. Is a used house different from a used car?
Property tax rate increases, the ones Californians are essentially immune to because the assesment only changes to new value when the property changes hands.
In general, my dislike of an NRST is primarily from the standpoint of it not starving out the politicians fast enough.
I'll probably be more inclined to agree with it after the economic collapse that hovers over us at the moment (I'm a "Gloom and Doomer" to some). Note the tagline, it's what we need to get back to at some point...
So what is your idea, keep things as they are?
Return to non-fiat money system and elimination of anything not Constitutionally authorized to the Federal Government (and we can phase out the programs to keep the caterwauling down some)...
this discussion is not about the car, it is about the car salesman in case you didn't get it. I would expect the car salesman selling the shiny new car to make fun of our current car, even as he made up stuff about the car he was selling us.
And I have never argued that removal of compliance costs alone would allow for the price drops we are discussing here!
What I have argued, and will continue to argue, is that when virtually all of the needless costs imposed on the economy by the communist inspired progressive income tax are removed by the implementation of the Fairtax prices of U. S. manufactured goods and services will, on average, drop by AT LEAST the amount of the tax and probably more!
Those studies do talk about costs needlessly imposed on the economy by the income tax system and are HIGHLY relevant to the discussion despite your protestations to the contrary!
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