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.
How much tax do you think GM and Ford are going to pay with the losses they are running.
It ain't the corporate income tax the gets them, its the employer's half of SS/Medicare taxes and cost associated with corporate tax planning, tax avoidence schemes, return preparation, filing and record keeping, and the audit and litigation costs that go with the current system that are there regardless of whether or not one penny of "income" tax is paid.
Profit or in the red, those costs do not go away and go along with all the other regulatory costs that are killing manufacturing in this country.
If anyone would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
Here is the big lie that we are supposed to be so afraid of:
Under the fair tax either A) Workers keep 100% of their paychecks and prices for goods and services go up by some amount or B)Workers keep the same paycheck they have now and prices - across the board - drop like a rock.
In both scenarios the income tax, payroll tax and all the attendant compliance and IRS gestapo-ism goes away.
THAT is the big lie we are supposed to assume will prevent the fair tax from ever becoming law. Read RFG's link. That's all it is. Yawn.
Your choice A) screws anyone who has already accumulated wealth since it causes the value of a dollar to drop
Your choice B) is incorrect, prices drop but the 30% tax added on top makes them about the same as now. There is no scenario with prices dropping like a rock inclusive of the FairTax. If there was, I would likely support this plan, but of course that is impossible because that would be a Free Lunch-- increased purchasing power for every wage earner with the stroke of a pen. It's a fairy tale.
Your answer: B) is misleading because prices will drop like a rock as you have conceded earlier in many posts, in fact, that is the entire point of your pen-palling with Jorgensen. The lower prices will be taxed, yes, but the final amount of the tax as proposed is 23% and could be lower.
In short, it amounts to a tax on a tax, on a tax, on a tax,... up to as many companies that are in the supply chain. Each of the above listed parts the auto manufacturer must buy has it's own supply chain that adds its tax cost into the price of its product. A radio manufacturer pays tax on a tax on a tax in its supply chain. The vinyl maker has its own tax on a tax on a tax it pays on its supply chain. The auto manufacturer has all of those cascading taxes embedded into it's end product price of a car. The tax on a tax doesn't stop there because the car dealer adds its tax and compliance cost into the selling price of the car.
All that tax on a tax on tax is a humongous ball and chain on efficiency, the economy and individual prosperity.
When a car dealer sells a $20,000 Ford $5,000 of that price is embedded/cascading tax cost. When Ford Motor Company closes its doors the United States federal government losses the $5,000 for each car Ford would have sold had it not gone out of business.
When the parts and supply chain are not made in the United States the federal government gets none of the supply chain embedded tax. Foreign governments get it.
How to turn around the trade deficit and create a large and solid mass of new jobs.
Rep. Bill Archer, Chairman, House Ways and Means Committee:
"A recent survey was done, in Europe and Japan, of the major corporations and I was astounded at the results. They were asked, 'If the US abolished its income tax and went to a sales tax, would that have any impact on your decisions?' Eighty percent of the corporations said they would build their factories in the United States of America. Twenty percent said they would move their international headquarters to the United States of America."
There exists tax competition among governments. It's not a matter of if consumption-based sales tax will gain dominance the world over, but when, and which country will lead the charge and which countries will play catch up.
The United States must take the lead.
That's the short list. For more information see fairtax.org or search: "national sales tax" OR "national retail sales tax"
there is more money in non-retirement accounts and home equity etc. than there is in taxable retirement accounts. under your scenario A) every one of those dollars would be devalued 15-20%.
That is why they call the FairTax a tax on accumulated wealth.
most of the taxes present in any product are income and payroll taxes.
You have proven repeatedly that you are not mentally equipped to understand this legislation and I have no intention of rehashing the same old discussion with you. The record is already there on the previous threads.
As a witness on theses threads for many years I can say without equivocation that it is you that either doesn't understand the FairTax legislation or, more probable, you willfully chose to deceive the reader. Concurrently, pigdog has proven his veracity by presenting the facts honestly. People make errors, the honest person acknowledges his or her errors and then corrects them in order to benefit by the process.
9/15/05 Neal clarifies embedded taxes and "keep 100% of your paycheck"
Boortz excerpt from link above: We write in The FairTax Book that the competitive pressures of the marketplace will force prices down when embedded taxes disappear from the cost of retail goods and services, and we cite 22% as the average amount of those embedded taxes. Does this 22% include the income and payroll taxes that are paid by employees? Yes, it does. So ... what does this mean to your paycheck after the FairTax becomes law?
When the FairTax is implemented, and when business and personal income and payroll taxes disappear, your employer is going to have to make a decision. He will either take some or the entire amount he had been withholding for federal income and payroll taxes and add it to your weekly check, or he will readjust your pay figures so that your entire paycheck will be equal to what you used to call "take home pay" before the FairTax. The employer may also decide to do a little of both. Either way, you can see that the amount of money you actually receive as pay – the amount you can put into your bank account – will not decrease, and may actually increase.
On a larger scale real wages will rise to the extent to which the nation's employers decide to return the embedded costs of their employee's income and payroll taxes to the employee. Likewise, the cost of the products or services produced by the employer will be reduced to the extent to which that employer retains all or a portion of those income and payroll taxes together with the other taxes on capital and labor eliminated by the FairTax. Once again, a zero-sum, revenue neutral game.
Now, let's elaborate on the "keep 100% of your paycheck" line that appears in The FairTax Book. It is certainly true that after the FairTax becomes law there will be no more withholding from your paycheck for any federal taxes. What you earn is what you get. This is not to say that your gross pay will equal what it was before the FairTax. This will depend on what your employer does when the embedded costs represented by the tax burden you have passed on to your employer disappear. One thing is certain: You will suffer no decrease in real or net earnings --- the amount of each paycheck you deposit into your bank account every other week.
Tell folks you are going to abolish SS & Medicare, and see how long your political party lasts.
Here's one more fact to take into account. There are probably more folks employed in the tax industry than there are in the domestic automobile industry. How much unemployment do you really want in the country?
The VAT (sales tax) has been a drain on the European economy for a generation. You can hide the tax as it is in the present system, layer it in a VAT, or put it all on the end as a sales tax. It doesn't really matter, the government is going to make sure its take doesn't go down.
If you want to boost export by not putting the tax on exported good, you just have to raise the tax on goods consumed domestically.
Don't you see how that is EXACTLY THE SAME THING?
Well, true.
But then you have to wonder why the snare-tax snake-oil salesmen are saying the the scam-tax(tm) will help the failing manufacturers.
Only to the "I've got mine so to hell with you" crowd of which you are undoubtedly a charter member.
The FairTax allows taxpayers to keep the (even according to the CBO) $250,000,000,000.00 (that's $250 billion with "B" and a hideously low estimate in truth) per year currently being wasted on compliance under the present system and that DOES NOT include the costs of operating the IRS which also goes away! I'd say, given that, those same taxpayers purchasing power is going increase mightily with the stroke of that pen!
If you want to boost export by not putting the tax on exported good, you just have to raise the tax on goods consumed domestically.
No doubt you fail to acknowledge your blind ignorance. To boost exports by not putting the tax on exported good remove the tax on exported goods. DUH!!! The only thing you suggested was raising taxes on goods consumed domestically. In other words, you only raised taxes.
If you're merely ignorant I suggest you put forth the effort to educate yourself on the FairTax. Having read the information there if you want further clarification many people on these threads enjoy helping people with honest intentions. If, on the other hand you have an agenda to uphold, perhaps maintain a vested interest in the status quo, then you mark yourself as an enemy of economic freedom. In that case you seek to waste their time which in turn detracts from them helping people with honest intentions.
You are in the later category, IMO. And not worth the effort wasted on you. Save for exposing your intent to thwart the movement toward economic freedom.
That is why they call the FairTax a tax on accumulated wealth.
That's a fine line, your "devaluation of a dollar". I'll bite. Let's say it is a devaluation of a dollar (which happens ALL the time under inflationary scenarios), why would I prefer to devalue my labor?
More of your lies!!! The "Free Lunch" notion is something you conjured up as a strawman to rail against.
Indeed the record is there on many different threads (and other than just your own vanity posts that you normally link to), and the record shows you're full of beans ... as well as dishonesty.
You have recently admitted you had opposed the FairTax all along while at first you made the pretense of only needing to have one or two shmall things explained to you when all along you were merely hiding your 100% opposition. That's a disgusting form of deceit - but right in line with the rest of your dishonesty.
Your misstatements are childishly inept since there has not been a "... myth which has been totally exposed as wrong even by Boortz himself ...". That's merely more of your own wishful thinking - and nonsense to boot. Groww up!!
Hey, dum-dum. You said we'd been all through those misleading selective excerpts of yours - and we have - so why do you bring them back up after claiming you won't?
Just can't keep from lying, I guess.
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