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-
No. That's stupid. Nobody thinks that. Nowhere will you find anyone saying such. Plain lie. You're way overboard on this one.I know it's stupid but how else could a business "embed" their income taxes? [BTW, you're way overboard with the "way overboard" bit.]
I will say it. You are lying.I'm lying when I'm giving my personal opinion of what FairTaxers seem to think? LOL! You guys are silly.
Whether you define it as "cost of production" is immaterial with respect to the requirement that the expense be paid.Whether it is an expense that must be paid is immaterial to the market price of a product.
Lying??? Stoopid??? Take your pick Nightie. One or the other since your claim is not true.
Ah, but it is not at all immaterial as the example on hidden taxes clearly shows. Those taxes are embedded into the price of the product as it gets passed from one business to another. It is certainly not "immaterial" to the sales price of the product and as you surely know many businesses sell the same item for different prices. Trying to pretend that the costs of income taxes do not become part of the selling price is abject foolishness. Most people have sufficient common sense to realize that.
Preetending that all firms have to follow the same pricing structure and practice of a single leading firm is simply untrue. They may in some cases be required to be close to the "leaders" pricing structure, but in many cases they are not at all close but follow their own practices - otherwise Apple would sell their computers at prices just like those of the many sellers of Intel-based (or AMD-based) systems. There are more ways to set your company out from its competitors other than just price alone and in doing so you'd better cover the income tax costs that have been embedded in product costs.
You merely can't afford to admit the existence of the hidden taxes since it destroys the tenuously-help positions of you Status Quo Lovers.
Whether you define it as "cost of production" is immaterial with respect to the requirement that the expense be paid.Simply put, there is no tax expense on or of production....You can produce untill hell freezes over and never pay a tax.
Lying??? Stoopid??? Take your pick Nightie. One or the other since your claim is not true.I would stay out of this, squeally, considering you've been caught lying, big-time, in this very thread.
Oh come on. Piggy does not lie, he just creates new defintion for terms. It all depends on how you define 'is'.
Oh come on. Piggy does not lie, he just creates new defintion for terms. It all depends on how you define 'is'.Right, I forgot who I was dealing with. For pigdog, when reality doesn't suit his objectives, he does his best (worst, actually) to change reality even though it's futile.
That's just because Ancient_Geezer hasn't posted for a while and Phil has been lying low. There is some good competition there.
SImple, if you've ever been in a position to assess the impact of taxes on a business. You simply increase the price, if possible, to cover anticipated expenses. The result is reaching your profit goal. If you have a business that never pays income taxes, they never have a profit. That business doesn't last. Even if they have no profit in some quarter, they do have payroll tax expense and compliance costs.
If you can't cover costs, you go out of business. You continue to ignore payroll taxes and compliance costs. Are they real to you? Why else omit them from a discussion of tax costs in prices?
'Course, if you've never been involved in the real world, you are ignorant of it.
The market sets a market price. My price may or may not be that price.
The reason? My expenses may be different than others' expenses... like I might have lower or higher TAX COSTS.
Keep it up, Forrest.
Even if they have no profit in some quarter, they do have payroll tax expense and compliance costs.Not if you sub-contract out, or haven't you heard of outsourcing?
The market sets a market price. My price may or may not be that price.And why, exactly, would someone buy from you if your price was higher than the market price? Answer: they wouldn't. So you would lower your price until it matched the market price.
I admitted not that I lied (because I didn't) but that I made an error. That's far more than either you or your Squirrel nut-cases have ever done.
I've noticed that your "personal opinions" are quite frequently wrapped around, into, and throughout with lies. And you've never admitted a single one.
So, thanks for your advice ... but stick it in your ear.
SImple, if you've ever been in a position to assess the impact of taxes on a business. You simply increase the price, if possible, to cover anticipated expenses. The result is reaching your profit goal.So you jack up your price to achieve whatever profit you want. Didn't you just accuse me of lying for saying I thought FairTaxers believed this exact thing? If you could "simply increase the price," wouldn't you do that whether you were paying income taxes or not?
If you can't cover costs, you go out of business.How is it possible you wouldn't cover costs? Can't you "simply increase the price" of your products?
You continue to ignore payroll taxes and compliance costs.I'm not ignoring them, they just aren't what we are talking about.
I admitted not that I lied (because I didn't) but that I made an error.WHAT! An "error"?!? I didn't think you allowed people to make errors. It's either right or an outright lie with you, isn't it? No, this wasn't an error - you don't make errors. It was a lie. Yup, most definitely a lie.
That's far more than either you or your Squirrel nut-cases have ever done.BS. Total BS. When I've made errors, I have admitted them.
We polish the Polish furniture."No Wonder English is so Difficult to Learn!
He could lead if he would get the lead out.
A farm can produce produce.
The dump was so full it had to refuse refuse.
The soldier decided to desert in the desert.
The present is a good time to present the present.
At the Army base, a bass was painted on the head of a bass drum.
The dove dove into the bushes.
I did not object to the object.
The insurance for the invalid was invalid.
The bandage was wound around the wound.
There was a row among the oarsmen about how to row.
They were too close to the door to close it.
The buck does funny things when the does are present.
They sent a sewer down to stitch the tear in the sewer line.
To help with planting, the farmer taught his sow to sow.
The wind was too strong to wind the sail.
After a number of Novocain injections, my jaw got number.
I shed a tear when I saw the tear in my clothes.
I had to subject the subject to a series of tests.
How can I intimate this to my most intimate friend?
I spent last evening, evening out a pile of dirt. "
But don't give up despite your stumbling, ineffectual efforts - just keep on practicing (preferably in private as the noise hurts everyone else's ears).
I guess since you're the source, that must be something like outhousing, eh?
The problem with a national sales tax is that you cannot trust Congress to eliminate the income tax first.
What Congress will do (with its insatiable appetite to steal our money) is promise to eliminate the income tax, impose a national sales tax (weeee, more money!!), and then find one million reasons for not eliminating the income tax.
You cannot trust politicians when they are trying to get your money. I say No to the national sales tax, and Yes to a flat income tax rate at 16%. Screw 'em.
DA740
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