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 Greenspans 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.
It does not assume pretax wages going down at all.
It does assume a 22% price drop.
My example cahnges the price drop to 10% and it is dtill good for the Senior couple.
75 Economists was the line. Open Letter in support of the Fair Tax. That is significant.
The rest of us here are just armchair econoimists at best.
I certainly see no credential here that rise to that level for those opposed.
I am sorry maybe 2 or 3 economists but not 75.
(Gale, Bartlett rebutted at rebuttal section of www.fairtax.org)
It does not assume pretax wages going down at all. It does assume a 22% price drop.Which can't happen without a drop in pretax wages.
My example cahnges the price drop to 10% and it is dtill good for the Senior couple.10% is still optimistic and even then this extreme example only shows the couple breaking even.
Is there a debate in the economic community. - YES
75 Economists signed a letter in favor.
How does that stack up in your mind?
Why would so many be in favor of such a system?
I assume you prefer the Flat Tax is that Correct.
Do you like the Stev Forbes plan at 17% with a $40,000 exemption and keeping the 7.65% payroll tax on top of that??
Or do you like the VAT better??
75 Economists was the line. Open Letter in support of the Fair Tax. That is significant.Sorry, getting 75 economists out of the thousands in the U.S. to sign a letter is not very impressive. Your buddy Jorgenson once got over 2,500 economists to sign a letter "that global climate change carries with it significant environmental, economic, social, and geopolitical risks, and that preventive steps are justified." Does that make it true?
I assume you prefer the Flat Tax is that Correct. Do you like the Stev Forbes plan at 17% with a $40,000 exemption and keeping the 7.65% payroll tax on top of that??I favor a flat tax but don't support any particular plan - but S.1099 is the best I've seen so far.
Or do you like the VAT better??A VAT would be better than the FairTax.
"Let's take a look what information you can find if you wander off FairTax.org: "
Surely ... and most of it complete nonsense as has been shown before many times, Nightie. I don't know why you have the temerity to post this trash again after it has been repeatedly hammered. Must go with Looey's philosophy of telling the lie enough times and it becomes true>
IAE:
Well, Nightie your #238 on this thread (of which you seem so proud) is just the same old rehash you're done previously. Perhaps you have re-arranged the order of some of the snippets, but that can easily be sorted out in my response to your original opost of this nonsense which was ---
And the basis for your statement is???
i would like to hear your thoughts on my prevoius post on Falt and VAt.
and please answer this question for me.
Under the current system compliance costs are estimated anywhere form 250 billion annually to 400 billion annually.
Would you consider this an unproductive expenditure best spent somewhere else in the Economy?
What might your alternative tax system be??
Actually, they don't have to Nightie, since it isn't available to them through the democratic (or any other process) - but it is available wo us in the US if we just don't let fools like you distract us.
To my knowledge merrillbender has never made the pretense of liking the income tax is someone could just explain "one more thing" to him as you have done in your attacks on the FairTax.
experience, and an ability to read tax tables.
Surely ... and most of it complete nonsense as has been shown before many timesNo it hasn't. Your rebuttal is a joke. It ranks up there with FairTax.org's "rebuttals."
Do you have a link to a thorough article regarding Exxon's profits? I'd like to see their revenues as well as the hard profit number.
Thanks Pigdog,
I see you are very famliar with Nightmare and his ways.
Does he have an alternative ever or is he just a SQL??
Under the current system compliance costs are estimated anywhere form 250 billion annually to 400 billion annually. Would you consider this an unproductive expenditure best spent somewhere else in the Economy?This is a logical fallacy. You ask a question about an assertion as if it's true. I doubt the validity of your assertion. We do not expend $250-400 billion complying with the current system.
What might your alternative tax system be??The Flat Tax. It's a consumption tax without the critical problems of the FairTax.
Do you have a link to a thorough article regarding Exxon's profits? I'd like to see their revenues as well as the hard profit number.http://www.msnbc.msn.com/id/11098458/
Sorry, Nightie, you're wrong (again).
Uh-huh ... and how many Squirrel economists have signed a leter praising the benefits of the income tax system???
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