Posted on 01/28/2006 1:15:41 PM PST by Eaglewatcher
Supporters of a Legislative package commonly called the FairTax, point out that no other tax reform and replacement idea comes close to providing the economic benefits for American working families and the growth of American Manufacturing like the Fair Tax HR 25/ S25. Major U.S. Manufacturers like Ford Motor and Delphi Corporation are facing difficult challenges and are planning or proposing major changes in order to compete in the global marketplace and to compete within the American marketplace.
Talk Radio has been a buzz on the plan by Ford to cut 30,000 jobs and close several facilities. For months, cities with Delphi Parts plants have be stewing over negotiations and plans that want to cut wages and possibly close facilities. Though part of the solution is to be more efficient and certainly to produce what the customer wants to buy, the other part of the debate is unfair trade practices and unfair labor wages in these competing countries.
Radio Talk Show host Neal Boortz is one talk show host that has discussed the solution for American Manufacturing repeatedly. He has also written a New York Times best selling book, “The FairTax Book” in conjunction with Congressman John Linder of Georgia. The book lays out the problems with our archaic income and payroll tax system and than reviews the benefits of the Legislative Replacement package sponsored by Congressman Linder and based on the 10 years of work and research conducted by Americans for Fair Taxation.
On Television, CNN's Lou Dobbs and Bill O'Reilly show their outrage on how American Manufacturing Jobs are leaving American Shores but provide no comprehensive solutions in their form of “sound bite journalism”. They and many other Americans misunderstand and dismiss the serious grassroots support and supporting research for a solution that will truly help the "little guy" and restore good paying American Jobs. (The Fair Tax HR 25/ S25. www.fairtax.org)
The solution for Ford, Delphi and American Manufacturing in general is not trade barriers or tariffs but is fair trade. But how do you get Fair Trade when competing countries do not pay a Fair Wage. American Workers do not need to compete globally by lowering their wages to such Draconian levels. Fair Tax supporters point out that the solution for better paying American manufacturing jobs at home is to have the lowest taxes on American Manufacturing companies.
American Manufacturing goes where it costs them the least to do business. Even with the higher costs of fuel to ship those goods from overseas, the low wage is what helps some countries compete and it is the Lower business taxes that helps other countries compete.
In Europe, Ireland has had the strongest economic growth and best employment numbers because they have the lowest taxes on business (Corporate tax 12 %). The Solution for America is Lower Taxes on American Manufacturing not Lower Wages on American Workers. The incentive for business to stay in America and not outsource is lower taxes on Corporate earnings with less tax compliance costs.
Ultimately, It is the consumer that pays the business tax in the end on all products and services. Business taxes like business costs for manufacturing are just worked into the price. The Consumer pays the tax not the business.
What if the United States had the lowest Corporate tax in the World? Would not business flock here to manufacture? What if instead of the Bahamas being the Offshore tax haven for business or Corporate headquarters that for Tax purposes those businesses made New York, or California, or Chicago their Corporate home and their preferred place to manufacture from and ship around the World?
There is such a tax plan in Congress waiting in the wings to rev up our Economy, by providing the right incentive for American Manufacturing to stay in America, for Good paying manufacturing jobs not to be outsourced, for American Families to have more take home pay, to make U.S. Soil a Tax free zone for business that can export products around the world Tax-Free. This is how we save American jobs and this is how we compete against substandard wages paid by our global competitors.
The Legislative Package in Congress has been around for several years; it is well researched and has sound economic data to back it up. It is commonly called the FairTax and has over 45 Co-Sponsors in the House and Senate. The bills are HR25 and S25. According to the Fair Tax Scorecard 155 Legislators are leaning in favor. Last Spring 75 Economists sent an open letter to Congress and the President in favor of the Fair Tax. They were joined by Alan Greenspan’s testimony in favor of a consumption tax as a replacement for an Income tax.
From an American worker stand point, the key point is that the Fair Tax helps save American jobs and promotes American Manufacturing that stays on U.S. Soil. It allows American workers to take home an average 30% larger paycheck each and every week by eliminating any federal withholding for income tax or payroll tax from an American workers paycheck. American workers take home 100% of their paycheck!!
American Manufacturers have the incentive to stay in the US and not outsource because they pay no Corporate tax. New American Manufacturing is created because Capital investment in the US is tax-free. Building new plants in the US will cost them less because of lower taxes. The Exports they send overseas pay no tax and are cheaper for sale in the global marketplace. This allows American Manufacturing to compete globally because of lower taxes and not lower wages like Delphi is trying to accomplish.
The Fair Tax is a revenue neutral replacement of the individual and corporate Income tax; payroll tax, capital gains tax, the Alternative Minimum Tax (AMT) and the Death Tax (Estate Tax). It is replaced with a National Sales Tax on retail purchases of all new products and services and supports the funding of the National Budget including Social Security and Medicare.
According to the Legislation, the national sales tax will be included in the price tag you see on a product and will be broken out as a separate line item on your receipt so that Americans know how much they are being taxed and how much they are sending to Uncle Sam with every purchase.
American Families do not have to wait until April 15th to get a refund of their own money. Middle Income Families will take home an average 15% more because of no Income tax withholding and an additional 7.65% because of no payroll tax withholding. Under the Fair Tax, the tax collected replaces the income that funds the national budget and replaces the payroll taxes that fund Social Security and Medicare.
The Fair Tax Legislative package is much more than just a national sales tax it is a package that also has a Prebate (rebate) system that truly untaxes the poor and treats everyone equally and fairly. No forms to keep, no receipts to log in or file. Everyone gets the same prebate check based on family size and valid Social Security cards for each family member.
Maid or Millionaire; the simple way to be sure no one pays a national sales tax on the essentials is not complicated exemptions but to simply send each household a monthly check (debit card) to cover the national sales tax on all spending up to the poverty line for that Family size.
Health and Human Services calculates the poverty line for a married couple with 2 children at $25,660 for the year 2005. The Fair Tax assumes every family of 4 will spend at least that much and sends them a prebate to cover the national sales tax on every dollar up to $25,660. The Inclusive tax rate is 23% or $5,902. The Fair Tax sends each month $492 (5902/12). If that family makes less than $25,660, they still receive the monthly check for $492.
It is a fact, if you make more you spend more. Under the Fair Tax if you spend more you pay more. With the Prebate, the Fair Tax is progressive in that the net tax rate for those American families at the poverty line is a true ZERO; for those at twice the poverty line the net rate is about 11.5%; at 4 times poverty that family is about 17.2%; and the wealthy at 10 times the poverty line and higher, average between a 20 to 23% net federal tax rate.
The Fair Tax truly untaxes the working poor by eliminating the payroll tax of 7.65% and allowing the working poor to take home 100% of their paycheck and receive an additional $5,902/ year to cover the National Sales tax on essentials like clothing, food, housing, or daycare. (Family of 4)
Trillions of Offshore dollars that wealthy individuals and wealthy Corporations hold offshore because of America's current tax laws will return to US shores under the Fair Tax. This capital will find a tax free zone in America and want to invest in American Manufacturing and business that will not only sell to Americans at home but to the entire world. American Exports will not have the 23% national sales tax on them for export. These exportable products will also drop in price because we have removed a major cost element from the supply chain. With no business income or payroll taxes, the cost of those products will go down. With no IRS you reduce the compliance costs dramatically for complying with the IRS rules and regulations. This savings throughout the supply chain will also be reflected in a lower price at home and for export.
It depends on the economist and it depends on the economic model but the estimated price drop on products and services is between 10 and 25% on average. Something you bought for $100 under the income tax will drop to somewhere between $75 and $90 dollars. When you add in the National Sales Tax the final price will be between $97.50 and $117.00. (30% exclusive tax rate equals 23% inclusive or income tax equivalent rate)
Under the Income tax a lower middle income tax family had to earn $129 in order to take home $100. This is based on a 15% income tax withholding and a 7.65% payroll tax withholding.
Under the Fair Tax you take home more money and you have more money to spend even after buying the same items and paying the Fair Tax. You take home $129 and spend $117 with the Fair Tax to buy the same $100 worth of goods you bought with $100 in take home pay under the archaic Income and payroll tax system. You are $12 ahead and on top of that will receive the monthly Prebate check.
Under the Fair Tax Legislative package you lower taxes on business; you give them the incentive to produce and manufacture here within the US and not in China or India, or Mexico.
The way to compete in the 21st Century is not to cut our wages in half. The way to compete in the world is to provide the incentive for business to do business inside the US.
The Fair Tax Legislative package does so much in so many ways. Our American Economy will boom when American manufacturing is growing in the US. The Fair Tax is the best vehicle to do that.
When the Lobbyists and their paid economists come out against it beware. With out the convoluted tax code, Lobbyists, Congressmen, congressional aides and "K" Street will lose a lot of their power and influence. If they come out against it than it must be good for average American families.
Every Politician that came out in support of this idea last election cycle won. This is a winning issue for politicians and when average American people are presented all the facts of the Fair Tax 80 to 90% love it. Get the Facts at www.fairtax.org
If Average American workers can get people like Lou Dobbs and Bill O'Reilly to truly study all the facts that support the Fair Tax, perhaps we can get them to join the over 75 economists that wrote a letter to Congress last Spring in support of the idea. The Fair Tax is the most comprehensive solution to aid American Workers, American Families, American Manufacturing and the American Economy.
*yawn*
Glad you noted it. Frankly, it was more than I thought you would be capable of.
Sorry. No converts here.
You're not sorry. You don't want to be converted. I doubt pd was trying to convert you as I'm pretty certain he has your number -- knows your true color. I mean, it's not like you try to hide it -- you pretty much wear it on your sleeve.
Your posts have demonstrated that you have no desire to educate yourself on the FairTax nor be converted. In fact your intentions are to work against the FairTax and the economic freedom it moves Americans toward, IMO.
They don't "collect" money. They get a market price for their goods and services. If it covers their costs, they make a profit and pay taxes - if it doesn't cover their cost (like GM & Ford) they lose money and don't pay taxes. GM & Ford's prices had absolutely nothing to do with their taxes and very little to do with their costs.>>>>>>>>>>>>>
This is so full of holes that it indicates that either you have some ax to grind or you are totally ignorant of business.
I'm not forecasting anything, I am simply saying that it is in the range of possibilities. I certainly wouldn't trust anything put out by the FairTax support group, they are known to misrepresent their plan re: wages and prices-- the two fundamental building blocks of the whole economy.
So, I consider the FairTax plan akin to going to Vegas and betting the whole shooting match on a spin of the wheel. If we were destitute as a country, rather than the greatest economy the world has ever seen, I could understand the need to play Russian Roulette. As someone who saved for ten years so I could build my own business, I am not in a frame of mind to gamble the whole thing away.
And I don't believe the bit about getting the yoke of the IRS off our backs either-- there will be another similar entity (maybe worse) to police and enforce this tax collection as well. Records will still need to be kept, and audits prepared for, just with a new set of rules.
This is a complete lie. The FairTax does not address any such structural demographic problems. Go ahead and enlighten us on exactly how the FairTax solves the demographic problems facing our entitlements.
Only an absolute fool would say there isn't!!!
It is amazing that anyone so foolish can even operate a keyboard!
I agree with your comments in post 118 to me.
I have no affinity for the present system, but changing the point at which the tax is put on the product, without cuts in both taxes and spending, isn't going to solve anything. If you pull out $5000 in hidden taxes, and add on a $5000 sales tax, you really haven't improved anything. If you cut out employee and employer portions of Medicare and social security, and put it into sales tax, you might be able to shift more of the tax burden to the 'rich', but other than that, you are still pulling the same amount of money out of the economy.
So when folks say you can solve all of industry's problems by shifting the tax structure, I call BS.
See my post 74. If GM and Ford go away, neither the need for the supply chain nor the distribution chain will go away. Cars will still be made and sold in the US. Some suppliers will make the transition, some will go away and be replaced.
On the supply side, while the American 2 increase the percentage of foreign content, the Japanese (and now the Koreans) are increasing their percentage of domestic content.
On the distribution side, the American 2 need to chop their dealer networks no matter what the tax structure is. Ford made a run at doing that, but wasn't able to make it stick.
"If you pull out $5000 in hidden taxes, and add on a $5000 sales tax, you really haven't improved anything."
Except that you have now made the cost of government visible to every voter in this country. I can't think of a better way to get people on board with spending reductions than to make them see the burden they carry with every purchase.
Who can't compete in the world market? Caterpillar does. Boeing does. Ford does. (It's the US market where Ford can't compete. They do quite well internationally.)
That wasn't your claim. If that is your claim, you are comparing apples to oranges. To compare the entire industry involved in the tax system, to only two entities of the auto industry, is not a fair comparison.
OK, the story deals with Delphi and Ford rather than GM and Ford. But GM spun off Delphi to try to put some distance between the two before Delphi went bankrupt. So I considered it fair to generalize to GM from Delphi. If you want to just deal with the two from the posted article, (and leave out the many profitable auto industry manufacturers in the US as well as non-automotive manufacturers who are successfully exporting), we can. Delphi was crippled by the GM bosses, not by tax policy. Ford does quite well in the international arena; their domestic problems are a result of poor management decisions over a number of years, not tax policy.
This is so full of holes that it indicates that either you have some ax to grind or you are totally ignorant of business.Maybe you would like to explain how GM lost $4.8 billion last quarter if the market price wasn't below their cost.
First YN repeats the tired old mantra that costs and prices exist in two separate economic universes and have nothing to do with each other. Production costs could go up substantially and "the market" would be oblivious to it and producers would still produce the same amounts at the same prices.Increases in production costs don't change what the buyer is willing to pay for a product. The product has a certain monetary value to the buyer and that's what they are willing to pay. If the producer can't make it for less than that, tough - the buyer couldn't care less.
They would become unprofitable but, what the heck, investors would never notice, so capital flows wouldn't be affected. Unprofitable companies would have no more trouble attracting capital than profitable ones.Companies that can't make a product for less than the market price lose money. If they do it for too long they go out of business. Companies go out of business every day. If they could adjust their prices to cover their cost, how would any company ever go out of business?
Just for the record, YN claims that he really supports tax reform, just not the FairTax. However, if you check his posts out, they are overwhelmingly on FairTax threads. You won't find a single thread where he explains the Nightmare tax and how it would work.That's because you Fairies hijack any other tax reform thread. You guys are an obsessed cult. Check out the threads on other tax reform plans and you'll see I'm trying to answer people's questions and address the issues. And then the Fairies show up...
Use an updated and conservative economic model of a 10% price dropLOL! yea use another updated phoney, madeup model. Where is an example of that updated and conservative economic model?
Also, The Fairtax (HR25) calls for Social Security bureaucrats to calculate the rate (after the first teaser year) to collect (both halves of FICA) 15.3% of the Social Security wage and self-employment income base but you Fairtaxers say 100% paycheck doesn't include the employer half so you can use it for the price reductions...My economic model calls that a tax increase...A hidden tax increase.
The problem for you is, the CBO attributes the employer half as part of individual income. Though there are no guarantees of trading price drops for cost savings, employers having to pay their employee's the other half (7.65%) would be another huge blow to your "economic model of a 10% price drop".
Than discuss American job growth and American Manufacturing growing in Amerca because we are the preferred Tax free zone in the world.As long as you aren't an investor.
Tehresa Heinz Kerry had a 12% tax rate on her and her husbands millions in the 2004 campaign. I think the Fair tax takes away the loopholes and the wealthy will pay more of their fair share on investment income to support not only the federal budget but for the first time investment wealth will now support Social Security and Medicare.Will the wealthy investors also get more benefits for their extra tax?..Oh, BTW, the elderly will pay more on their invesment income too...even if their investment was made with after tax income....That's why Kotlikoff likes it.47 posted on 01/27/2006 7:42:22 AM PST by merrillbender (Those That Know the Facts, love the Fair Tax.)
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"That's because you Fairies hijack any other tax reform thread."
So you SQLs can come on any FairTax thread and start hurling insults but FairTax supporters aren't allowed on other threads? When did you make that rule up?
"You guys are an obsessed cult."
Since the Nightmare Tax only has one proponent, that term certainly isn't applicable to its supporters.
"Check out the threads on other tax reform plans and you'll see I'm trying to answer people's questions and address the issues."
So how many converts have you won to your approach to tax reform over the years?
"And then the Fairies show up..."
I can only imagine how discouraging it must be for you to have attacked the FairTax and its supporters relentlessly over the past few years and for it to continue to grow and add supporters.
"So when folks say you can solve all of industry's problems by shifting the tax structure, I call BS."
And when folks say that the only change the FairTax would create in the tax system is changing the collection point, I respond likewise.
"Who can't compete in the world market? Caterpillar does. Boeing does. Ford does. (It's the US market where Ford can't compete. They do quite well internationally.)"
Are you aware that we have a huge and growing trade deficit that appears headed toward $1 trillion per year by 2010? Your post above makes it seem as if you are completely unaware of that fact.
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