Fair Tax Solution for Ford, Delphi & American Manufacturing

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.

"If you do junk the current tax structure to something far more simple, you risk throwing over a million folks out of work. The point I raised is whether it benefits the economy to throw over a million out of work to save the jobs of a couple of hundred thousand."

Well, now we know that you find the government teat sucking parasite to be more valuable to our economy than the productive private sector. Glad we cleared that up.

In that case, let's just continue to dilute the tax code to ensure that the tax industry expands and provides more parasitical jobs.

Imagine that the dialogs on these threads between the most prominent FairTax opponents and the most prominent FairTax supporters was taking place on a stage in front of an auditorium audience. I'd absolutely cherish seeing lewislynn, Your Nightmare and RobFromGa go head to head against ancient-geezer, Principled and phil_will1 in a live, in-the-flesh debate before a man-in-the-street audience.

I'll bring the popcorn, you bring the tape recorder.

I see you are very famliar with Nightmare and his ways.

My "way" is to post the opinions of a number of respected economists. Pigdog's way is to try and marginalize anything negative about the FairTax. Your way seems to be to accept whatever he says at face value. Did you even read his silly reply?

You are just another cultish Fairie. You've bought the lie so hard you have to deny the truth when it's put right in front of your face.

Does he have an alternative ever or is he just a SQL??

Uh, the Flat Tax. That's the third time I've mentioned it to you in the last few posts. How is that not an alternative? Right, you've got to marginalize decent. If we don't love the FairTax we must love the status quo.

Nice.

Point of note for you, mb, Nightie will flip-flop on whatever his "preferred" tax play might be between Flat and VAT depending upon which better suits his arguments du jour.

Usually, he proclaims he enjoys a non-specific (so he can't be pinned down) version of the Flat tax, but most of us now know that he really supports the Nightmare Flat (or Nightmare VAT) - which of course does not exist in the real world.

You'll no doubt spot the techinque.

According to you ANARCHY would be better than the FairTax.

And, Nightie, have you given up your crusades on the Nightmare Tax??? Hard to believe that you're getting dangerously close to choosing a PARTICULAR tax play (of course, those of us who know your techniques know that isn't so at all).

Fair enough;

Will the Flat tax reduce compliance costs if so how much??

Will Your version of the Flat Tax stil keep the most Regressive tax of all the payroll Tax???

What is the Rate of your Flat Tax on individual Income?

On Corporate Income??

On Investment Income, Capital Gains Income, and Retirement Income??

What write offs or exemptions do you keep and what do you do away with??

IS there a flat exemption of $xx,000 dollars ?

Is their a deduction for local taxes or mortgage interest in your tax plan?? What is the affect on the Housing market? Do you have a study on that or just an intuitive answer - either is fine.

How does your Flat Tax affect the Senior with Savings Pre or Post tax Savings??

How does your Flat Tax encourage Economic growth and American Manufacturing?

You see I like a Flat Tax too. I just like it on Consumption at the Retail Level. Flat Income Tax is my number 2 choice but I don't believe it has the same Econoimc potential as the Fair Tax.

We may agree to disagree, but I would like to hear your answers if you have time?

" I suspect that in reality sales between individuals would not be taxed but sales by businesses specializing in used items would be taxed."

I'm not positive, but I would bet that the business specializing in this type of venture would either 1) pay the NRST on all of the items the need to run their business, since they would be the final consumer or 2) register as a business, become exempt from NRST on their purchases, then be responsible for the NRST on the service they provide. In other words, they either pay the NRST on the new goods they purchase or they charge their customers for the service and then collect the appropriate tax.

Let's make the crowd all economists.

An audience of economists would be great. Let's throw in a couple hundred CEO's and CFOs from Global corporations.

75 economists endorsed the FairTax. And this...

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"

Sorry I did not see your post on Flat until after i sent post to pigdog.

Please see my post asking for you to flesh out your version of the Flat Income tax.

And if you like the Flat tax what do you think it solves that is wrong with the current system.

" I suspect that in reality sales between individuals would not be taxed but sales by businesses specializing in used items would be taxed."

I think the company would have to charge sales tax on the difference between what they paid for the used item and what they sold it for. Otherwise it would be easy to legally get around the tax. Example: if you were going to refinish a table, the business could "buy" it from you, refinish it, and then "sell" it back to you at a higher price and avoid the tax for the refinishing service. What about a used car with new tires? Does the business charge sales tax on the tires?

Like any tax system, the "simple" FairTax gets more complicated once you start looking at the details.

"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."

You know, I've look long and hard for this "survey" and can't seem to find any record of it. I think this is B.S.

Plz allow me to interpret Nightie's "stuff" to same you time.

He LOVES to use the term "logical fallacy" BTW which is a "superflous redundancy" (and he doubtless doesn't even know what it means) and when he says Flat Tax he really means Nightmare Tax which is an esoteric tax concept known only to him (so he can make any sort of claim he wishes vis-a-vis the FairTax).

He's a slippery one but not as good at the Out-Of_context quotation game as Looey (though as you've seen; he tries).

$100 worth of product drops to $90. And with the Fair Tax added in it goes to $117. However to pay for the $117 worth of product, the Family is bringing home $129. They are $12 ahead.

So let's re-balance the equation with the more likely numbers:

$100 worth of product drops to $95. And with the Fair Tax added in it goes to $123.50. However to pay for the $123.50 worth of product, the Family is bringing home $118. They are $5.50 (or nearly 5%) behind.

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