The real scandal is spending

Townhall ^ | 2-15-06 | Tim Chapman

[Gipper08]

Republican Study Committee Chairman Mike Pence today issued a statement about lobbying reform and fiscal sanity. Pence rightly points out that the real problem in Washington, DC is fiscal irresponsibility. Many other problems stem from that one.

From Pence's statement:

"The headlines announcing one scandal after another have grieved the heart of the American people and have eroded public confidence in our national government's commitment to governing of the highest moral caliber.

"The Bible says that 'Righteousness exalts a nation,' so the converse must also be true. So Congress is preparing to fight for ethics reform, not because such scandals hurt our party, but because they do hurt the nation.

"But as we reform our rules of ethics, we will do so with the understanding that these are but symptoms of the core problem.

"The real scandal in Washington D.C. is runaway federal spending. "Fiscal and moral integrity are inseparable issues.

"So it's not enough to change the way lobbyists spend their money, Mr. Speaker. We must change the way Congress spends the people's money.

"Only by marrying budget reform and ethics reform can we hope to restore the confidence of the American people in the fiscal and moral integrity of our national legislature."

[Huber]

LOL!

[ovrtaxt]

YOU'VE GOTTA BE KIDDING ME.

[Always Right]

YOU'VE GOTTA BE KIDDING ME.

Ummm, no the 'pre-bate' is redistribution any way you slice it. So you think the government collecting an extra $500 Billion and passing it out is not redistribution? You HAVE got to be kidding me.

[pigdog]

Hardly redistribution. It's a refund of sales tax money you've paid. And it was clearly shown hat the amount is nothing like your claims.

Since you apparently missed some of that, I'll point you to it if I can find it again so you'll learn a bit.

[Always Right]

Hardly redistribution. It's a refund of sales tax money you've paid.

There is no requirement that you pay a dime of sales tax. To millions it will be a free gift, not a repayment.

And it was clearly shown hat the amount is nothing like your claims.

$500 Billion is a very close ball park guess of how much prebate will be sent out. It will certainly be more than $400 Billion.

Since you apparently missed some of that, I'll point you to it if I can find it again so you'll learn a bit.

Spare me your fairyland mathematics.

[pigdog]

Actually it's arithmetic, not mathematics - and it's not "mine". But OK, you're right - I shouldn't waste my time since you'll ignore it just like all the other FairTax information that presents it in a good light.

You'd have found interesting, I'm sure.

You really think that "millions" will spend no money???? Interesting! Wonder how they'll live? How do you think?

Actually the amount involved is of no particular interest since it represents a refund of tax money rather than an entitlement disbusing it according to some appropriations bill.

[Always Right]

Actually it's arithmetic, not mathematics - and it's not "mine". But OK, you're right - I shouldn't waste my time since you'll ignore it just like all the other FairTax information that presents it in a good light.

Typical pigdog post. All attack, no substance. BTW, Fairtax doesn't tell anyone how much the prebate cost. That is a little secret they really don't want people to know. And it absolutely will cost more than $400 billion.

[pigdog]

If you're going to continue misleading people about what it "costs" I may yet have to go look up the other thread that showed your $400 B as the gross lie it is. Or perhaps that's just your ignorance coming to the surface.

Any "cost" is completely included in the revenue neutral tax rate IAE so your pretense is meaningless.

[Kellis91789]

Here is my post from a previous thread. The full discussion can be found starting there:

http://www.freerepublic.com/focus/f-news/1545287/posts?page=87#87

---

Is the Prebate really any more of a welfare program than the EITC and Child Credit ? Or even the income tax refund most people receive because they had too much withheld during the year ?

A conservative approach to seeing how much of the $500B would be to look at how much of the total consumption is done by people ABOVE and BELOW the poverty line. Since 13% is the latest figure for the number of people living below the poverty line, we should be able to make a rough calculation.

The last figure I can find shows 39M (13% of all Americans) including 13.5M children living below the poverty line. Each of those children is worth $1,000 Federal Income Tax Credit to some poor family. So that is $13.5B just in Child Tax Credits to poor families. In 2003, $39B in Credits was issued under the EITC program. That is according to this study (page 12) http://www.irs.gov/pub/irs-utl/irs_earned_income_tax_credit_initiative_final_report_to_congress_october_2005.pdf#search='total%20eitc%20issued%202005'

That is a total of "Tax Credit Welfare" of $52.5B.

The Prebate would give these 25.5M adults each $2,201 and each of 13.5M children $750. A total Prebate of $66.3B.

So absolute worst-case, that means $66.3B of welfare, while the other $433.7B is a refund to people that actually spent enough for it to be a legitimate refund of taxes paid.

So what is the "net new welfare" of the Prebate compared to the EITC and Child Tax Credit currently going to these same families ? It would be the $66.3B absolute maximum minus whatever the current cost of the EITC and Child Tax Credits which total $52.5B. A "net new welfare" of $13.8B.


That is based on assuming FairTax Prebates were issued and those poor people somehow paid zero FairTax, ie. they didn't deserve any of that $66.3B in Prebates.

In actuality, it seems like the "new welfare" aspect would be significantly less than $13.8B and not anything to be concerned over.

The $500B goes in and mostly goes back out to the people who paid it.

[pigdog]

A fine analysis Kellis91789 - TYVM.

[Kellis91789]

You mean where lines 28 - 33 of "Table two: National FairTax rate calculation, 2003" spell out the rates with rebate and then without rebate ?

19.3% of the Base Reduction Amount $1,746.1B (the poverty line spending that the FCA offsets) is $337B.

That doesn't seem very hidden to me.

http://www.fairtax.org/pdfs/Opportunties_tax_systems.pdf

[Always Right]

Calculating it using the difference between the tax rate (23.8% with rebate - 19.1% without rebate = 4.7%) and multiplying by the tax base ($8.740 Trillion), I calculate the prebate rate generates an additional $411 Billion revenues. I am not sure what they mean by 109 million rebate units. They must have figured 2.67 people per unit and figured and extrapolated the rebate on that family. I think we hashed it out more closer than that in our discussion.

Also noticed some glaring errors in Table 2 where they figured "Revenues to be Replaced". They had IRS 2004 numbers as:

Income....$927.7
Estate....$22.4
Payroll...$717.8
Total....$1,667.9 Billion

A quick visit to the IRS stats revealed several errors and omissions, like completely forgetting to add corporate taxes. Here are the IRS real numbers.

Income....$990.2
Corp......$230.6
Payroll...$717.2
Excise.....$24.1
Total.....$1962.1 Billion

The good ole Fairtax experts under calculated replacement taxes by $294 Billion, or about 18%. It is amazing how in 5 minutes time I can find such negligence in their calculations by their high paid experts.

[Always Right]

The 'excise' in my example should read 'estate'.

[Hank Rearden]

Five years into total control by the "limited government" party, and all we have is more Big Stupid Government and utterly out-of-control spending.

Thanks a lot, Republicans.

Now I'll stand by for the usual "We don't have a 100-seat Senate majority, so we're helpless and can't do anything!" lameass rationales.

[Always Right]

It would be the $66.3B absolute maximum minus whatever the current cost of the EITC and Child Tax Credits which total $52.5B.

The problem is you are comparing apples to oranges. The EITC and Child Care credits are mostly rebates of real taxes paid. If you are going to eliminate the amount of taxes in the FCA allowance that are rebate of paid taxes, you should do the same for the EITC and Child Care to get an apples to apples comparison on the amount of actual welfare.

[pigdog]

The numbers you're usin are gross collections AR and do not take refunds into acount, or as the dicument puts it:

"Summary of Collections Before Refunds by Type of Return, FY 2004"

[Always Right]

The numbers you're usin are gross collections AR and do not take refunds into acount, or as the dicument puts it:

That explains the difference in Income Tax, but it does not explain the wholesale ommission of the corporate tax. That's where the biggest error is.

[pigdog]

To my knowledge Table 2 does not mention corporate tax as a category. Perhaps you can show where that occurs ...

[Kellis91789]

Always Right,

First, you used the 'exclusive rates' of 19.1 and 23.8 when you should have used the 'inclusive rates' of 15.9 and 19.3. A difference of 3.4% on $8,740B is $297B. So my number was wrong, but yours was even further off.

Second, you should realize that the numbers you are using are "Gross Collections". From your IRS link:

[Summary of Collections Before Refunds by Type of Return, FY 2004]

Corporate Refund $46B
Individual Refunds $228B
Employement,Estate, Gift Refunds $4B
Total $278B in Refunds

Money that is refunded to the people is not part of the revenue to be replaced.

Your figure of $1,962.1 minus the $278B in refunds, leaves $1,684.1 in revenue to be replaced. So there is a $16B difference between the AFFT figure and yours -- less than 1% -- due probably to discrepancies between the tables they actually used and the IRS' summary figures you used. I find lots of IRS figures that don't add up in their stats tables.

[It is amazing how in 5 minutes time I can find such negligence in their calculations by their high paid experts.]

Perhaps if you had taken more than 5 minutes, you would have realized it was you being negligent and not their highly paid experts. Then again, it took me less than 2 minutes to realize your mistake, so I must be a frickin' genius, right ? ;-)

[pigdog]

Oops - guess you better reconsider changing your screennaame to something truthful, eh?