Three card monte.
Posted on 11/02/2005 10:09:04 AM PST by Eaglewatcher
-1- An Open Letter to the President, the Congress, and the American people Concerning Reform of the Federal Tax Code
Dear Mr. President, Members of Congress, and Fellow Americans,
We, the undersigned business and university economists, welcome and applaud the ongoing initiative to reform the federal tax code. We urge the President and the Congress to work together in good faith to pass and sign into federal law H.R. 25 and S. 25, which together call for:
• Eliminating all federal income taxes for individuals and corporations,
• Eliminating all federal payroll withholding taxes,
• Abolishing estate and capital gains taxes, and • Repealing the 16th Amendment
We are not calling for elimination of federal taxation, which would be irresponsible and undesirable. Nor does our endorsement call for reduced federal spending. The tax reform plan we endorse is revenue neutral, collecting as much federal tax revenue as the current income tax code, including payroll withholding taxes.
We are calling for elimination of federal income taxes and federal payroll withholding taxes.
We endorse replacing these costly, oppressively complex, and economically inefficient taxes with a progressive national retail sales tax, such as the tax plan offered by H.R. 25 and S. 25 – which is also known as the FairTax Plan. The FairTax Plan has been introduced in the 109th Congress and had 54 co-sponsors in the 108th Congress.
If passed and signed into law, the FairTax Plan would:
• Enable workers and retirees to receive 100% of their paychecks and pension benefits,
• Replace all federal income and payroll taxes with a simple, progressive, visible, efficiently collected national retail sales tax, which would be levied on the final sale of newly produced goods and services,
• Rebate to all households each month the federal sales tax they pay on basic necessities, up to an independently determined level of spending (a.k.a., the poverty level, as determined by the Department of Health and Human Services), which removes the burden of federal taxation on the poor and makes the FairTax Plan as progressive as the current tax code,
• Collect the national sales tax at the retail cash register, just as 45 states already do,
• Set a federal sales tax rate that is revenue neutral, thereby raising the same amount of tax revenue as now raised by federal income taxes plus payroll withholding taxes,
• Continue Social Security and Medicare benefits as provided by law; only the means of tax collection changes,
• Eliminate all filing of individual federal tax returns,
• Eliminate the IRS and all audits of individual taxpayers; only audits of retailers would be needed, greatly reducing the cost of enforcing the federal tax code,
An Open Letter to the President, the Congress, and the American people -2- • Allow states the option of collecting the national retail sales tax, in return for a fee, along with their state and local sales taxes,
• Collect federal sales tax from every retail consumer in the country, whether citizen or undocumented alien, which will enlarge the federal tax base,
• Collect federal sales tax on all consumption spending on new final goods and services, whether the dollars used to finance the spending are generated legally, illegally, or in the huge “underground economy,”
• Dramatically reduce federal tax compliance costs paid by businesses, which are now embedded and hidden in retail prices, placing U.S. businesses at a disadvantage in world markets,
• Bring greater accountability and visibility to federal tax collection,
• Attract foreign equity investment to the United States, as well as encourage U.S. firms to locate new capital projects in the United States that might otherwise go abroad, and
• Not tax spending for education, since H.R. 25 and S. 25 define expenditure on education to be investment, not consumption, which will make education about half as expensive for American families as it is now.
The current U.S. income tax code is widely regarded by just about everyone as unfair, complex, wasteful, confusing, and costly. Businesses and other organizations spend more than six billion hours each year complying with the federal tax code. Estimated compliance costs conservatively top $225 billion annually – costs that are ultimately embedded in retail prices paid by consumers.
The Internal Revenue Code cannot simply be “fixed,” which is amply demonstrated by more than 35 years of attempted tax code reform, each round resulting in yet more complexity and unrelenting, page-after-page, mind-numbing verbiage (now exceeding 54,000 pages containing more than 2.8 million words). Our nation’s current income tax alters business decisions in ways that limit growth in productivity. The federal income tax also alters saving and investment decisions of households, which dramatically reduces the economy’s potential for growth and job creation.
Payroll withholding taxes are regressive, hitting hardest those least able to pay. Simply stated, the complexity and frequently changing rules of the federal income tax code make our country less competitive in the global economy and rob the nation of its full potential for growth and job creation.
In summary, the economic benefits of the FairTax Plan are compelling. The FairTax Plan eliminates the tax bias against work, saving, and investment, which would lead to higher rates of economic growth, faster growth in productivity, more jobs, lower interest rates, and a higher standard of living for the American people.
An Open Letter to the President, the Congress, and the American people -3- The America proposed by the FairTax Plan would feature:
• no federal income taxes,
• no payroll taxes,
• no self-employment taxes,
• no capital gains taxes,
• no gift or estate taxes,
• no alternative minimum taxes,
• no corporate taxes,
• no payroll withholding,
• no taxes on Social Security benefits or pension benefits,
• no personal tax forms,
• no personal or business income tax record keeping, and
• no personal income tax filing whatsoever.
No Internal Revenue Service; no April 15th; all gone, forever.
We believe that many Americans will favor the FairTax Plan proposed by H.R. 25 and S. 25, although some may say, “it simply can’t be done.” Many said the same thing to the grassroots progressives who won women the right to vote, to those who made collective bargaining a reality for union members, and to the Freedom Riders who made civil rights a reality in America.
We urge Congress not to abandon the FairTax Plan simply because it will be difficult to face the objections of entrenched special interest groups – groups who now benefit from the complexity and tax preferences of the status quo. The comparative advantage and benefits offered by the FairTax Plan to the vast majority of Americans is simply too high a cost to pay.
Therefore, we the undersigned professional and university economists, endorse a progressive national retail sales tax plan, as provided by the FairTax Plan. We urge Congress to make H.R. 25 and S. 25 federal law, and then to work swiftly to repeal the 16th Amendment. Respectfully,
Donald L. Alexander Professor of Economics Western Michigan University
Wayne Angell Angell Economics
Jim Araji Professor of Agricultural Economics University of Idaho
Ray Ball Graduate School of Business University of Chicago
Roger J. Beck Professor Emeritus Southern Illinois University, Carbondale
John J. Bethune Kennedy Chair of Free Enterprise Barton College
David M. Brasington Louisiana State University
Jack A. Chambless Professor of Economics Valencia College
Christopher K. Coombs Louisiana State University
William J. Corcoran, Ph.D. University of Nebraska at Omaha
Eleanor D. Craig Economics Department University of Delaware
-4- An Open Letter to the President, the Congress, and the American people
Susan Dadres, Ph.D. Department of Economics Southern Methodist University
Henry Demmert Santa Clara University
Arthur De Vany Professor Emeritus Economics and Mathematical Behavioral Sciences University of California, Irvine
Pradeep Dubey Leading Professor Center for Game Theory Dept. of Economics SUNY at Stony Brook
Demissew Diro Ejara William Paterson University of New Jersey
Patricia J. Euzent Department of Economics University of Central Florida
John A. Flanders Professor of Business and Economics Central Methodist University
Richard H. Fosberg, Ph.D. William Paterson University
Gary L. French, Ph.D. Senior Vice President Nathan Associates Inc.
Professor James Frew Economics Department Willamette University
K. K. Fung University of Memphis
Satya J. Gabriel, Ph.D. Professor of Economics and Finance Mount Holyoke College
Dave Garthoff Summit College The University of Akron
Ronald D. Gilbert Associate Professor of Economics Texas Tech University
Philip E. Graves Department of Economics University of Colorado
Bettina Bien Greaves, Retired Foundation for Economic Education
John Greenhut, Ph.D. Associate Professor Finance & Business Economics School of Global Management and Leadership Arizona State University
Darrin V. Gulla Dept. of Economics University of Georgia
Jon Halvorson Assistant Professor of Economics Indiana University of Pennsylvania
Reza G. Hamzaee, Ph.D. Professor of Economics & Applied Decision Sciences Department of Economics Missouri Western State College
James M. Hvidding Professor of Economics Kutztown University
F. Jerry Ingram, Ph.D. Professor of Economics and Finance The University of Louisiana-Monroe
Drew Johnson Fellow Davenport Institute for Public Policy Pepperdine University
Steven J. Jordan Visiting Assistant Professor Virginia Tech Department of Economics
Richard E. Just University of Maryland
Dr. Michael S. Kaylen Associate Professor University of Missouri
David L. Kendall Professor of Economics and Finance University of Virginia's College at Wise
Peter M. Kerr Professor of Economics Southeast Missouri State University
Miles Spencer Kimball Professor of Economics University of Michigan
James V. Koch Department of Economics Old Dominion University
Laurence J. Kotlikoff Professor of Economics Boston University
Edward J. López Assistant Professor University of North Texas
Franklin Lopez Tulane University
Salvador Lopez University of West Georgia
Yuri N. Maltsev, Ph.D. Professor of Economics Carthage College
Glenn MacDonald John M. Olin Distinguished Professor of Economics and Strategy Washington University in St. Louis
Dr. John Merrifield, Professor of Economics University of Texas-San Antonio
An Open Letter to the President, the Congress, and the American people -5- Dr. Matt Metzgar Mount Union College
Carlisle Moody Department of Economics College of William and Mary
Andrew P. Morriss Galen J. Roush Professor of Business Law & Regulation Case Western Reserve University School of Law
Timothy Perri Department of Economics Appalachian State University Mark J. Perry School of Management and Department of Economics University of Michigan-Flint
Timothy Peterson Assistant Professor Economics and Management Department Gustavus Adolphus College
Ben Pierce Central Missouri State University
Michael K. Pippenger, Ph.D. Associate Professor of Economics University of Alaska
Robert Piron Professor of Economics Oberlin College
Mattias Polborn Department of Economics University of Illinois
Joseph S. Pomykala, Ph.D. Department of Economics Towson University
Barry Popkin University of North Carolina-Chapel Hill
Steven W. Rick Lecturer, University of Wisconsin Senior Economist, Credit Union National Association
Michael Rizzo Assistant Professor of Economics Centre College
Paul H. Rubin Samuel Candler Dobbs Professor of Economics & Law Department of Economics Emory Univeristy
John Ruggiero University of Dayton
Michael K. Salemi Bowman and Gordon Gray Professor of Economics University of North Carolina at Chapel Hill
Dr. Carole E. Scott Richards College of Business State University of West Georgia
Carlos Seiglie Dept. of Economics Rutgers University
John Semmens Economist Phoenix College, Arizona
Alan C. Shapiro Ivadelle and Theodore Johnson Professor of Banking and Finance Marshall School of Business University of Southern California
Dr. Stephen Shmanske Professor of Economics California State University, Hayward
James F. Smith University of North Carolina- Chapel Hill
Vernon L. Smith Economist W. James Smith Dean of Liberal Arts and Sciences and Professor of Economics University of Colorado at Denver
John C. Soper Boler School of Business John Carroll University
Roger Spencer Professor of Economics Trinity University
Daniel A. Sumner, Director, University of California Agricultural Issues Center and the Frank H. Buck, Jr., Chair Professor, Department of Agricultural and Resource Economics, University of California, Davis
Curtis R. Taylor Professor of Economics and Business Duke University
Robert Vigil Analysis Group, Inc.
John H. Wicks, Ph.D. Professor Emeritus Department of Economics University of Montana
F. Scott Wilson, Ph.D. Canisius College
Mokhlis Y. Zaki Professor of Economics Emeritus Northern Michigan University
An Open Letter to the President, the Congress, and the American people -6-
THis is right. Today's 20,000 spent includes taxes and tax costs. An nrst's 20,000 spent will include taxes too. Prices aren't going up as a rule. Today's 20k buys the same as an nrst's post-tax 20k.The poverty level changes with prices. If prices go down after the FairTax, so does the poverty level (it does change all the time, you know) and, thus, so does the amount of the Family Consumption Allowance. I person still can't purchase goods and services at the poverty level without paying net FairTax as is claimed.
Three card monte.
So far all you do is criticize. Have yet to see you support your point of view.
You don't like quotes?
The answer is, "We don't!"
'Pod, before I shuffle off this mortal coil, I desperately hope that we are able to drive a stake through the heart of the class warfare card that has been played with stunning success over the past 150 years in America.
That is why I am a FReeper and why I strongly support replacing the income tax with a National Retail Sales Tax and abolishing the IRS!
After nrst prices will be right about where they are today. Your assertion about the rebate is wrong.
I haven't had a lot of time to think about this, but if what some of the others are saying is true (that your tax rates go up if you spend more), I will have a hard time supporting it. Why not a flat rate (and the same rate) for everybody?
After nrst prices will be right about where they are today.Inclusive or exclusive of the FairTax?
Your assertion about the rebate is wrong.Which assertion, specifically.
Do you have a problem with that?
The Fair Tax RATE is set by the legislation at a tax exclusive rate of roughly 30%. IOW, everybody does pay at the same rate.
The AMOUNT of tax a consumer pays, then, is based on the tax exclusive retail amount paid for the item (and whether new or used -- used items are not taxed) or service.
Example: Let us stipulate that Wal*Mart sells 26" color TV sets manufactured by several different companies. Let us further stipulate that there are low, medium and high quality TV sets, and that, for the sake of this discussion, the tax exclusive prices for 26" color TV sets will vary FRom $300.00 (all figures in round numbers) for the lower, $600.00 for the medium and $1,000.00 for a high quality set.
So, your Fair Tax on those sets would be $90.00, $180.00 and $300.00, respectively. You can readily see that by choosing the lower priced set, you would not pay as much Fair Tax than if you opted for the higher quality set.
Now, there are at least three important points to be made here:
1. Economic studies have shown that the "tax cost of government" under the current progressive income tax is roughly equal to the Fair Tax, give or take a point or two, so final tax inclusive retail prices will not increase by the amount of the Fair Tax. IOW, an item that now costs $100.00 (and that you purchase with AFTER TAX DOLLARS) will cost roughly $100.00 after the Fair Tax is imposed at the check out counter.
2. The Fair Tax puts the American taxpayer in control of his/her taxe burden. IOW, the individual consumer sets the AMOUNT of taxes he or she pays by choosing whether to purchase a low, medium or high quality TV set (or a used TV set FRom a pawn shop, for example). FRugal people who are interested in keeping their tax burden down can purchse lower cost goods and used goods and minimize their tax burden.
3. Everybody pays at the same rate on purchases of new goods or services, irrespective of income, unlike the progressive income tax. Why shouldn't all men and women be created equal in respect of the tax rate they pay?
Inclusive.
Inclusive.So the poverty level would go down and the FCA amount would go down. And a person could still not buy goods and services equal to the poverty level without paying net FairTax.
I think this statement is just plain false. It would not "heap" taxes on anyone! With this plan, the taxes are applied equally to every consumer, regardless of his or her economic status. There could not be anything more fair!
Because we have become so accustomed to progressive taxation, concluding that it's the "fair" way to tax, a tax which is applied equally to all income levels only comparatively burdens the middle class more! Your statement is like complaining that a weaker recruit who has had part of his load carried by the stronger men on the squad has had a disproportionate amount of work "heaped" on him when he is suddenly required to carry his fair share.
If the blessings of this country benefit the rich and poor, then both should pay an equal proportion for those blessings. That's fair.
Thanks for answering my question. 'Pod.
First time I've heard a maroon cackle - but NO you weren't quoting me at all. Your posts #62 and #64 show your ignorance of how the lib looney "entertainer" spells her name.
Perhaps now you do.
No, it's you I'm correcting as your two posts generating a reference to Barbra clearly show you don't know how to spell her name. Stop trying to duck the truth and admit your ignoprance.
Why do you say such? Tax included prices will be about the same. Today's tax included poverty level will be about the same as an nrst tax included poverty level. That's why the necessities-tax rebate is 23% of the tax included price. Ahem, that's why they call it tax inclusive.
Wages would also go down,
Real wages remain constant. And you knew that. That's why you purposely omitted "real" from your post.
The compliance costs under the FairTax IS 0 (as is zero, zip, nada, nothing, zilch) since there is no compliance, not tax forms, etc.
Most people grasp that rather quickly but it seems you have difficulty realizing it.
In your posts #62 and #64 you were quoting no one but youresle - and misspelling her name to boot.
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