Winners and Losers under the 'FairTax'

hripka | September 28, 2005 | self

[KarlInOhio]

Huh? Non-taxed deferred, but taxed before saving?

This makes no sense.

Non-tax deferred = Roth IRA and savings/investments outside of retirement accounts. You pay the tax, save what's left and pay again when you spend it.

[Always Right]

Are You Sure? Are you sure that it wasn't that supposed 1/2 that employers pay? Are you sure?

Yes, I am 100 percent absolutely positive. The only way you can get anywhere close to a 23 percent embedded tax is if you include all individual income taxes. Dr. Jorgenson has admited this is the case.

[Polybius]

3. Savers. Thrift and frugality will now be rewarded.

This is not true. The resulting increase in the money supply will decrease the value of savings at transition by the tax rate. That is, if you have $20,000 in savings, it will by 23% less after the creation of the so-called "Fair Tax".

You also have to consider age.

I have recently entered my 50's and, for my entire working life, I have followed the frugal "Millionaire Next Door" lifestyle while getting socked with income taxes.

Now, after I retire in the next 10 to 15 years, the Fair Tax Plan then taxes the spending of my savings.

So, in the end, I get %$#&ed during the years I earned and saved my money and then I get %$#&ed again during the years I spend my savings.

If the Fair Tax gets passed, I want an "Already Paid My Taxes on This Money" clause.

[GOPJ]

why would the value of assets like homes fall? Why would people be more inclined to rent than they would today?

Some people think in the short term. They'll look at payments rather than total indebtedness. The price of a home would go up 23+% and for the "payment" types, it would discourage home ownership, but I like your answer better ancient-geezer, so I'm going to assume home owership would be neutral or go up. Thanks for the info.

[TexasTransplant]

Ain't no friggin way that you can figure "ALL" Income Tax into the cost of a Product, #1 as I mentioned, some people have TWO jobs therefore their "Income" would not be associated to "one" product but more importantly and much more dramatically would be people who work under the table.

So Income that is not captured under the current system would be captured under the Fair Tax system, and spread more evenly, the argument that these folks that DON"T PAY INCOME TAX TODAY are somehow already paying Tax because the are paying an embedded Tax, I urge you to try that defense with the IRS (Which would be GONE with the Fair Tax by the way) and see how far it gets you.

TT

[TexasTransplant]

>>>"Yes, I am 100 percent absolutely positive. The only way you can get anywhere close to a 23 percent embedded tax is if you include all individual income taxes. Dr. Jorgenson has admited this is the case"<<<

Can you send me something that would support this?

Can I deduct from your posts that:
#1 You don't believe there is a 23% embedded Tax now?
#2 You think that Punishing Achievement and Hard Work is how to Grow Your Country, increase your personal wealth and how to be FAIR to the down trodden lazy Welfare recipients?

TT

[lewislynn]

Are You Sure? Are you sure that it wasn't that supposed 1/2 that employers pay? Are you sure?

Oh gee, now that you mention it maybe (in the Fairtax world)7.65% could be 23% of the price...< /sarcasm >

Your Income Tax (Everyones Income Differs) cannot be added into the cost of a Product,people have more than one job, some are 2 Income Families

You're wandering off the Fairtax reservation with that talk...But let's test your theory.

If I work for Halliburton by day, McDonalds by night and my wife works for Dr.Moan can our income tax (actually our wage) be added to each of those company's costs?...I thought so.

[ancient_geezer]

Thing that gets me, it's not rocket science. The intention of the FairTax act is to implement a revenue neutral tax reform policy. The thing being changed is the mode of taxation not the overall rate at which we tax the economy.

The factors that change are those associated with individual freedom from government intrusions into household finances, and inefficient mechanisms of taxing businesses as well as individuals.

Any change that maintains the same revenue stream to government that exists at the time of implementation but does it with less impact on the economy is a positive not a negative to the household's standard of living as well as benefit to personal liberty and that is how we must evaluate any tax reform measure.

What is the overall benefit to the citizen and economy of the U.S.?

For my part, the FairTax legislation comes out head and shoulders above anything else in the political pipeline.

[TexasTransplant]

I (as my kids and their kids) are already paying for your Medicare and your Social Security, your Viagra and for your little frickin scooter too!

Stick it (And get used to hearing about it) you earned what you earned, but I'm sorry your Generation is starting to make a Louisiana Politician look like a Tibetan Monk. You folks will complain about anything. AARP KISS MY ASS

Bunch of Commies is what I think ya are.

TT

[TexasTransplant]

I really think you should read post 209

[Always Right]

As far as %1, I don't know about 23 percent, but if you include the $1.3 Trillion individuals pay in federal income taxes and the $0.6 Trillion businesses pay, you have about 20%.

As far as #2 goes, whether you punish someone for spending or punish them for earning doesn't make a huge difference as far as what is 'fair'. Our economy is doing pretty well now, but in my opinion, the best way to maximize growth is to reduce spending and cut taxes. That said, if there is one area that the fair tax will shine it is in import/export. Most of the other claims by fairtaxers are wrong and/or gross exagerations.

[Always Right]

Polybius made a legitimate point and your post was completely uncalled for. He wasn't asking for welfare, he was making a point to the unfairness of the fairtax to retirees who have saved money and have already paid taxes on it once.

[lewislynn]

Bunch of Commies is what I think ya are.

A bunch of mindless twits is what I think "ya are"

[Sprite518]

The problem here is that you do not accept Dr. J's assertion of the 22% embedded taxes. You have yet to back yet to state your case.

Then you go around saying that the embedded taxes are part of the employees salary. Once again that is WRONG..... If that was the case, then an employer does not have to wait for a different tax system to adjust an employee's salary in the current market? LOL!

Look embedded cost are the taxes between the manufacture, distributors, and marketers. Dr J says that 22%..

[Sprite518]

OK lewislynn.... LOL!

[TexasTransplant]

>>>"As far as #2 goes, whether you punish someone for spending or punish them for earning doesn't make a huge difference as far as what is 'fair'. Our economy is doing pretty well now, but in my opinion, the best way to maximize growth is to reduce spending and cut taxes. That said, if there is one area that the fair tax will shine it is in import/export. Most of the other claims by fairtaxers are wrong and/or gross exagerations"<<<

FairTax will take away MUCH power from the Government, we will loose the IRS, we will not be TAXED MORE for one thing than another and to me that is FReedom. I will no longer have to answer to the IRS, I will not be worried about working 70 - 80 hours a week for NOTHING because the More you Make the More they TAKE! The only way they will take more is if I spend more, but I won't care because I will have More to spend, because it is MINE until I SPEND it, unlike with the Income Tax, where what is mine is what they allow me to keep (paycheck after taxes - end of the year annual Taxes). Understand?

This is SIMPLE don't let it make you suspicious, Make your Representatives KEEP IT SIMPLE!

It should be law tomorrow!

But...
If we have to keep an Income Tax, lets make Tax Payment Day (instead of April 15th) changed to the day of the Election of those that have the Power to Tax us, every voter must pay their Taxes before they can Vote, if you had a year that was such that you didn't have to pay Taxes you don't get to Vote, if you are on Welfare you don't get to Vote, if you got busted for selling Drugs you don't get to Vote, if you got a Free Frickin Scooter and Viagra on the Taxpayers Dime, You Don't Deserve to get to Vote. (jus a lil dig at AARP Leeches)

[TexasTransplant]

Can you site a source other than "LEECHES "R" US"

We are your Spawn

TT

[Sprite518]

Oh here is another post aimed just for you on the same Boortz page you posted...

OTHER CRITIQUES OF THE FAIR TAX TO BE ADDRESSED

On Nealz Nuze you see a box which says "Keep the FairTax Momentum Going, Click here for the latest FairTax news and info." Tomorrow the above item regarding embedded taxes and your paycheck will be moved to that site. In coming days we will address some of the other widely-circulated critiques of the FairTax. Items to be addressed include:

The 30% argument. FairTax detractors will tell you that the actual amount of the retail sales tax will be 30%, not 23%. The FairTax rate is quoted as an embedded rate because it replaces the income tax, which is quoted as an embedded tax, and the embedded taxes that are already present in the cost of everything we buy. It's rather odd, don't you think, that these detractors don't insist on quoting the income tax as an exclusive rate. If they did the 25% tax rate would be 33%, and the 35% income tax rate would be well over 50%. Bottom line, you spend $100 and 23% of that $100, or $23, goes to the feds.

Adding the FairTax to the cost of goods. Detractors will tell you that with a 23% national retail sales tax a car that once cost $30,000 will now cost nearly $39,000, or that a home that once cost $300,000 will now cost $90,000 more. This critique both misstates the amount of the FairTax and the way it will show up in the price of retail goods. It's a critique that Georgia Congressman John Lewis includes in letters to his constituents who have written about the FairTax. People who criticize the FairTax in this manner either: (a) are intentionally trying to mislead people about the FairTax; or, (b) just lack the capacity to understand it. The truth is that the price of consumer goods will not rise under the Fair Tax. Remember the zero-sum game?

Double-Taxing those who have already worked and saved for their retirement. This one is so easy; I just don't know why some people are having trouble grasping it. Retirees who have are living off their savings are still paying taxes. They're paying the embedded taxes present in everything they buy. Those embedded taxes will simply be replaced with the embedded FairTax. Virtually an even swap. Retirees will not be paying any more in taxes than they're paying now.

We'll address these matters in more detail in the coming days.




Hey how about showing up this Weekend for the Boortz event? If you KNOW IT ALL, then you should have no problem making your case. For some reason I have a funny feeling you will come up with some EXCUSE on why you cannot go...

[TexasTransplant]

>>>"Polybius made a legitimate point and your post was completely uncalled for. He wasn't asking for welfare, he was making a point to the unfairness of the fairtax to retirees who have saved money and have already paid taxes on it once"<<<

How do you Wrap Your Mind around a Concept that it is OK to TAX people for what other People WANT (at the Point of a Gun, Check it out IRS Agents are ARMED) I don't care if he paid Tax "Once" on his Money, he is asking for MORE of Mine and by any comparison whether it be percentage, gross amount, annual, daily I don't care how you figure it, he wants something for nothing and If I have to pay I will pay IF I can insure that no LEECHES of the future are spawned now.

In the Future (Polybius this is not in reference to you, I am sure you are Very successful) We need to quit punishing performance and achievement and we need to Stop Rewarding FAILURE (as in Welfare) If the Government can't control themselves I believe that the FairTax is a way to reign them in. (They cannot take Money from you at the point of a Gun (No IRS) and they would be severely crippled in their Social Engineering Endeavors and every one would win except for those that need to be Published or Recognized to get their Doctorates)

(Had to throw that in cause my buddy is trying to get published to get his DR, he is a Drunk DUNCE, and we have had a couple, actually more like a case... but he is about 10 times smarter than I am soooo he takes my advice... always) Sorry I am gone for the night! TT

[TexasTransplant]

OK how about the rest of my post? Any comment about it?

Allow me to re-post it;

"I (as my kids and their kids) are already paying for your Medicare and your Social Security, your Viagra and for your little frickin scooter too!"

"Stick it (And get used to hearing about it) you earned what you earned, but I'm sorry your Generation is starting to make a Louisiana Politician look like a Tibetan Monk. You folks will complain about anything. AARP KISS MY ASS"

(Your Comments are deeply dear to me/us, as I/we are the producers, performers, Taxpayers that allow you to continue to live the Life at which you have become accustomed to, no matter what it costs those of us that will continue to pay for it (your lil scooter and Viagra etc) for many years after you Die)

PS Hillary LOVES YOU, (the self righteous entitled 1/7th of our Economy)
TT