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.
"I don't know if I'm supposed to be impressed or afraid...."
Neither. Nothing said about the FairTax would impress you because your mind is closed. The only thing that you fear is having to defend your beloved Marxist progressive income tax in a public forum where your qualifications and motives will be exposed.
The idea that a wage drop is required for a 10% price drop in the supply chain is false.Yea taxes is the only reason why company's outsource labor or make purcases from the "supply chain" offshore. < /sarcasm >
A year ago or less, you would have been lambasted by Fairtax supporters for suggesting only 10% price drops...now for some reason it's OK.
Though Jorgensen has either changed or fine tuned his 22 to 25% drop to include a wage or salary drop.No he didn't. He's standing by his exact words.
Others at least at Fair Tax including Dr. Walby have not.You don't say?...based on what?
Whoa! I just overheard Sheperd Smith on Brit Hume's Special Report cite a new economic report just out which said that the national savings rate is now in negative territory - first time since the great depression.
It should be interesting to see how the SQLs spin this one.
The National Retail Federation (lobbying for retailers group) paid for a purposely negative study many years ago to look at an retail sales tax (there was no FairTax at the time) so the "study" that came out (still only available if you will pay for it) was - surprise - negative as could be.Sounds like the retailers don't like the FairTax. Hmm...
It was also well-refuted on the FairTax website - but you know that.I have never seen anything well refuted on the FairTax website - so, no, I didn't know that.
So you like S 1099? Isn't that the Shelby bill?
Let's do a better analysis but let's be realistic and keep the standard of living the same (e.g., the same amount of spendable income since including the prebate would be increasing the purchasing power) so that we can see the real effect.
Income tax FairTax Spendable $24,644 $25,944
... this yields a 5.3% INCREASE for the FairTax single person recipient (which as noted is a biased interpretation due to your 5% price increase figure). This same increase holds true if you take a single-person S/S income of 1/2 the two-person income.
The same example but with the 10% price increase due to income tax as put forth by merrillbender:
Income Tax FairTax Spendable $23,350 $25,944
... this yields an 11.3% benefit for the FairTax single person and about the same if you use the single person income as above. The upshot of this is that even with your (attempted) heavily biased analysis, the FairTax works out better for the taxpayeer. In fact it is even much better that that since under the FairTax also proivides the prebate and the portion spent for M/C from the S/S payment is not taxable increasing the FairTax benefit even further. Tha point is, if anything, the example on the FairTax website understates the benefit. Your example is meaningless.
Are you saying there are no single retirees? (better tell my Uncle!) And, yes, I've lowered the price reduction potential ... and backed up the number with prior posts to this thread; I even gave the result using the full 10% claimed by merrilbender and the retiree STILL loses.
In addition you assume the one person family will have the same income as the two-person family in the example - not true ...
Let's see, did my Uncle's income decline when his wife died? No. It stayed the same. In what universe does family size determine income?
The point of all this, since it obviously has escaped you, it that the examples used by FairTax proponents ingore those segments of the population that will be net losers under the FairTax. We should consider more situations than those offered by the FairTax advocates to fully grasp its impacts.
... as well as an "anything but the FairTax" supporters for many years.
Note: RipSawyer doesn't love the FairTax and he isn't an SQL.>>>>>>>>>>
The prospect of the fair tax is like a radiant smile from a beautiful woman, I am afraid of getting my heart broken 8 0 ) But then when I consider the ugly witch I am dating now (the current tax system) how could I end up any worse off? I need to go back and study this some more, I really don't know all that I should know.
Your Spendable Income Tax income of $24,644 it AFTER taxes. Your Spendable FairTax income of $25,944 is BEFORE taxes.
After you pay FairTax from your $25,944 you're left with $19,976 of after-tax purchasing power.
That yields a net DECREASE in real purchasing power of nearly 19% !!! Even the 10% decrease is more than a net 14% loss.
You should proofread before you post.
No Dimp - what I am saying is that you intentionally biased the example given in the FirTax site and that, moreover you were incorrect in doing so (and I explained the errors you made whether you wish to acknowledge them or not).
I know of no provision is S/S that allows full benefits to the survivor after a spouse dies, do you??? Reagardless of that even your 5% price reduction at the full benefit level (income for two going to a single indiidual) still favored the FairTax by 5.3% as I showed in the example. If your uncle is still receiving full benefits for 2, perhaps he should let S/S know that he's now single. After all, you and I are picking up the tab for him.
You may like that ... I don't.
The point of all this, since it obviously has escaped YOU in that the FairTax benefits even the highly biased example you presented making you clearly wrong. Why don't you just admit it and move on? The FairTax offers far more benefits for most people that any of you Squirrels would ever admit.
No, just "national retail federation" doesn't like the fairtax. You know why? If you ask them, they'll tell you... they're afraid that people may choose to save some of the money that they're now spending.
Ask national small business united, us chambers of commerce, or some other retail group and you'll get quite a different answer.
Funny, you don't assert that he believes taxes aren't a problem. He knows they are. So do you.
"The prospect of the fair tax is like a radiant smile from a beautiful woman, I am afraid of getting my heart broken 8 0 ) But then when I consider the ugly witch I am dating now (the current tax system) how could I end up any worse off? I need to go back and study this some more, I really don't know all that I should know."
LOL!! Great analogy, you have a way with words. You are smart to be skeptical, but there is a difference between cynical and skeptical.
If you recognize the "ugly witch I am dating now", then you are WAY ahead of the SQLs.
"The distributional analyses I've read show the upper and lower classes doing well under a NRST. That's leaves the middle class. Generationally, the young generation does better at the expense of older generations. Winners and losers."
In reality, this is no different than the current socialist argument against tax cuts. Are you against tax cuts? Generally, the socialists state that the only way to make money is at the expense of someone losing money. Do yo believe the same as the socialists? I might have misunderstood your statements.......
In addition you haven't responded to the fact that you have intentionally biased the example both by using a full S/S 2-person benefit for one person and by using a 5% price increase when the true increase is undoubtedly more than that. There has never been a rational analysis that I'm aware of showing anything as low as 5% of taxes embedded in prices. Nor are your claims to the contrary sufficient to sway anyone. If you'd agree to, say, a more reasonable 15% in embedded taxes then I'll play your silly little biased geme with you. Even then, that may be low but claiming only 5% is beyond the pale.
Moreover the biased example you've chosen is for someone about 275% of the poverty level - so he's relatively comfortable and hardly representative. Any lowering of the embedded tax rate he pays benefits him greatly while cutting the recipient quantity to 1 rather than 2 also helps him dramatically when compared to the FairTax example given on their website. Perhaps you should have taken an example of a single guy on S/S and nontaxable pension at an income rate of $50,000 or $100,000. That might be too obvious a loaded example for you to pass off in your mind though and is probably why you chose as you did.
In addition since your example is relatively well-to-do he is probably not going to be consuming all the money but saving a good bit of it. After all, your example claims almost no taxes anyway at 5% so why not savea goodly amount?
Yup. Surviving spouse was the primary (and only) wage earning recipient of the pair.
And my example is no more biased that the FairTax example.
And you didn't get it right in any event.
Lynn and his Marxist buddies think that the current tax system is better than anything else out there.So far it is the only thing out there. Are you afraid to post your drivel about me directly to me?
Facts and logic mean nothing to them.Facts, logic and even basic intelligence mean everything to me...You have yet to show any.
You can be the first to prove my tag line wrong... Unless you're afraid to try.
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