To: n-tres-ted
Apart from the prior discussion regarding economic equivalence; and, recognizing that tax reform must (at some point) be joined by governmental spending reform, there are a number of very attractive elements to the Fair Tax plan as outlined in HB25 and SB25.
First, federal revenue will be determined by spending on NEW goods and services. The underlying notion is that the sale of a new item with an inclusive tax (regardless of rate) then represents that total value to the economy.
Second, a large portion of those folks currently evading federal income taxes in a variety of ways get to, finally, pay at least a portion of their assigned share, assuming they buy goods and services. This group includes drug dealers, extortionists, con men of many stripes, and so on.
Third, the Fair Tax supports the benevolent greed of commercial enterprises. The plan, as proposed, will require all commercial entities to report closing book value inventory numbers on the date of conversion. This dollar amount is 'grandfathered' into the new system, and once sales pass that number, all further sales are subject to the Fair Tax. Further, it should be relatively quick to see net costs for new goods and services approximate current net costs, because the income tax implications of the current commercial economic model are removed.
Fourth, by taxing goods and services, removing the current withholding process, and applying only to new goods, I (and all of you) have greater control over not only income, but the timing of tax payments.
There are a couple of downsides...most notably, there may be requirement for Constitutional amendment to truly abolish the government's ability to tax income. And, second, there is not enough 'stomach' in Washington, right now, to make this all happen.
While I greatly admire and mostly support President Bush, as quickly as he caved on Social Security privatization, I can't expect that he'll take on this fight.
And, of course, the current lobby industry in Washington would be decimated by a plan such as this one (or the Flat Tax) as they would not be as able to push for favorable treatment of their paying constituents.
All in all, after looking at Forbes' Flat Tax Plan and Lindner's Fair Tax Plan, I believe the best bet for current and future generations is the Fair Tax, but either must be coupled with sane spending reform (line item veto, balanced budget amendment, review of current 'entitlement' programs in terms of their constitutionality, etc.).
Thanks for reading. And, while this is my first post, I've been a lurker around here for many months. I am impressed by the quality of the writing, and the great sense of humor in many of these threads.
41 posted on
12/16/2005 6:33:03 PM PST by
PubliusMM
(Just doin' my best to stay free and secure. God Bless our military personnel.)
To: PubliusMM
Your post is most certainly welcome and, for me, a shot in the arm for the fair tax. There are those who will take issue with your analysis but I find it very informed and thoughtful. Welcome to the debate.
When you get slammed by the anti FT's just remember, they have an agenda which includes making us all slaves to their scheme of tax, bribe, legislate and intimidate.
Welcome,
groanup
42 posted on
12/16/2005 8:17:16 PM PST by
groanup
(Shred for Ian)
To: PubliusMM
Oh, and welcome to Free Republic.
43 posted on
12/16/2005 8:19:34 PM PST by
groanup
(Shred for Ian)
To: PubliusMM
Further, it should be relatively quick to see net costs for new goods and services approximate current net costs, because the income tax implications of the current commercial economic model are removed.
Relatively speaking almost nothing is manufactured here anymore, and more and more "services" are being outsourced offshore...There would be little pretax reduction along with huge 30% after tax increases in prices on day one.
If a domestic manufacturer/business strips away "the income tax implications of the current commercial economic model" s/he would then have to deal with the 30% sales tax implications (price increases) at the other end...simply manufacturing something cheaper only to be heavily taxed at the other end is hardly a solution.
I have a service business. Here's what I know based on the law. From day one I would have to remit "23% of the gross payments" to the government and then I'd have to pay another 23% of what's left when I want to spend it on new stuff.(Silly me, I choose to not alter my lifestyle because you're too lazy to fill out a tax return)...
If I don't increase my prices the amount of the tax I'd come up short of income no matter how many drug dealers pay sales taxes.
49 posted on
12/18/2005 9:28:50 AM PST by
lewislynn
(Fairtax= lies, hope, wishful thinking and conjecture.)
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson