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.
Keep dreaming...I'm trying to be realistic...sure it would be nice to do away with the income tax but then where would the revenue come from?
....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.
......Good point. Especially since the salesmen telling you how wonderful it is have never started the car, heard it run or driven it...
Yes and the same goes for those that are putting it down..some opposing it can't understand or haven't even read the owners manual as to how it operates...Sooner or later we will have to change our tax system so I suggest you come up with an alternative if this doesn't work for you...your rustbucket is about to hit the crusher....
When I say "self impliment" I mean the economy and Republic will unravel to the point where it's not an issue, either we'll end up with a totalitarian strong man or we'll start over with very little Federal responsibility outside of common defense.
LOL!!!
Can't agree with that friend. Don't believe that will happen.
some opposing it can't understand or haven't even read the owners manual as to how it operatesActually the opposite is true. I've read the owners manual from beginning to end...Does "sticker shock" mean anything to you?
Builds character Ya know! ;-)
To answer your questions (and a few others):
No I do not believe our current tax system is fair; and no, I do not believe our current tax system is simple.
I believe the "power" lies with those who control the purse strings. I believe that the purse is the Federal budget. I believe that the purse is obscenely large regardless of the method of tax collection. So I guess I believe that the "power" lies with Congress, regardless of the method of collection.
I believe that the proposed FairTax makes some promises it cannot deliver. I believe it has several good aspects that are worthy of serious consideration; I believe it has others that are seriously flawed.
What do I suggest? well for starters I'd suggest getting realistic about the flaws of the FairTax. Then, maybe, we can talk about other possibilities.
The source often cited by the FairTax folks, Payne, suggests that it's really not all that big (in GDP terms.)
1. That wages in Jorgensen's model are net of taxes and
2. That Jorgenson did not model individual wage behavior as the economy grows over time.
That means, take home pay initally is constant, but over time it's not possible to tell whether individual wages grow at the same rate as aggregate wages.
Those of you out there who are interested can read it for yourselves here in posts 232 thru 235.
Gross sales have nothing to do with tax savings. Gross sales are only half of the equation. You can have all the sales in the world and have equal expenses and have NO income.And under the sales tax you'd still owe 23% of your gross sales in taxes even when you have "NO income".
Do you figure your tax liability on your sales or your income?Your sales ARE your (gross) income. Under the sales tax you'd owe tax on your sales...The income tax is on "taxable income".
Actually the opposite is true. I've read the owners manual from beginning to end...Does "sticker shock" mean anything to you?
Well maybe you have read it, but if you are still trying to tax a tax you don't understand it correctly....Sticker shock is what I get now everytime I have to work with the current tax system..seeing how much I am paying for unneeded and unwanted extras on a rustbucket that gets poor gas mileage that has a dragging brake and something else breaks on it every year...way past time to trade the rustbucket in, let the crusher finish it off and start with something new with simplified controls and instruction manual. How many pages of instructions in your rustbucket manual? Do you know all its quirks?
No I do not believe our current tax system is fair; and no, I do not believe our current tax system is simple.
Do you want to change it?
I believe the "power" lies with those who control the purse strings. I believe that the purse is the Federal budget. I believe that the purse is obscenely large regardless of the method of tax collection. So I guess I believe that the "power" lies with Congress, regardless of the method of collection.
Do you see any power in the ability of people to stop spending with aNRST in order to get the govt to cut back on spending>
I believe that the proposed FairTax makes some promises it cannot deliver. I believe it has several good aspects that are worthy of serious consideration; I believe it has others that are seriously flawed.
What are the "serious flaws"?
What do I suggest? well for starters I'd suggest getting realistic about the flaws of the FairTax. Then, maybe, we can talk about other possibilities.
Your perceived flaws apparently disagree with others thus the discussions.
Oh, yeah. The question is: just how big is the planning industry? "I don't know, but it's really big!" does little to inspire confidence in your assessment and even less to help figure out whether it makes a big enough difference to chance a wholesale upheaval of the economy. The source often cited by the FairTax folks, Payne, suggests that it's really not all that big (in GDP terms.)
Cost of tax planning under the current system is a small part of its "flaws". Far larger problems are the fact that it raised product prices for exports and not imports...a NRST would help our exports and allow taxes to be collected from imports...Pretty substantial benefit if you ask me. Personal Privacy is another. Simplicity and fairness count for a lot in my book, as a tax system must be fair to be effective.I'd like to be able to decide how I should save or spend my money without government influence and social engineering. Keep the government out of my bedroom and my financial decisions...
Ridiculous scam?!?! It's PAR for the course in business today!
Any business must prove it has a product or service that benefits society. A business existing to buy food simply to consume it would never stay in business because it would not benefit anybody and is a ridiculous premise.
NOT! Bank costs don't contribute squat to mortgage interest rates, the cost and availability of money does. Most banks don't even hold them anymore, they're packaged and resold in blocks to investors.
Banks have a vested interest for mortgage interest rates because they make a profit from the rates! Banks have overhead as any other business. The reduction of compliance costs will be passed onto the consumer.
why do I have to pick up the slack?". I.e. why does the onus for supplying the government with revenue fall entirely upon the citizenry (apparently, through my reading of the thread)? You think they'll be able to sell that part to the libs???
A certain amount of money is needed to run the government. Citizens have always provided money to run the government. If citizens fail to provide any money then there will be no United States.
No, they aren't. This is supposed to be a Republic, not a direct democracy...
Wrong again. We live in a Democratic Republic. That means the people elect those they want to oversee the daily management of our country. The people can exert a tremendous amount of pressure on their elected officials to support an issue if they so desire. The grassroots movement giving the women the right to vote and resulting in the 19th Amendment is proof. Unfortunately you don't offer an alternative. I'm not putting words in your mouth. You did state in your previous post you don't trust politicians.
I am not against the idea of a flat tax, but just try to get one through to law. It won't happen. Look, even a simple cut in taxes is viewed as opressing the "working man" (Really only those who work marginally and would receive less of a handout via the IRS in the form of credits & the EIC).
I think the flat tax is a great idea. It has far less of a chance of passsage, though. It will never happen in our lifetimes.
What I originally posted to you was a comment relating to your claim that Jorgenson eas saying that wages must fall when I said:
"You fall prey to what others have done in claiming that the economist Jorgenson has claimed wages must fall. He did not despite all the opponents' claims that he did so. That's not what his study showed and you even agreed with that assessment with ancient_geezer in earlier postings. Are you now wishing to take back what you said to him? Sort of like putting the Genie back in the bottle isn't it?"
I made no comment at all regarding the wages in the initial base case of the model which is where the economist ASSUMED they would fall. My comment related to your statement that Jorgenson was saying wages would fall ... which clearly he did not say and which you agreed with ancient_geezer that he did not say. The pertinent post numbers you gave were actually #234 and #235. Using #232 as you attempt is merely you "wriggle" effort. Why not just admit your error and move on?
If you think the first U. S. income tax was 1913, take a peek at this 1864 income tax form and instructions - THAT was our first income tax.
http://www.salestax.org/library/1863form24.html
The 1913 income tax (form and instructions here):
http://www.salestax.org/library/1913form1040.html
was actually our THIRD income tax. The second was a corporate income tax in 1909 ... but you'll have to did out the forms yourself.
Why not just admit your error and move on?You are asking someone to admit an error and move on?!? That's too funny.
Perhaps you should jump in there and do the "open kimono" bit, too - eh?
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