Posted on 05/05/2006 1:35:32 PM PDT by RobFromGa
In my letter to Rep. Linder and Mr. Boortz of August 24, 2005, I pointed out a number of what I called “serious misrepresentations” of the Fair Tax plan contained in “The FairTax Book”. I specifically named many of these by page #.
Now that the revised second issue is out, let’s see what they did to these passages in the book:
First edition page 55, you go on to explain that these embedded taxes are “in addition to the money taken out of your check in income and payroll taxes.”
Second edition- this line was eliminated. This means that they are acknowledging that the 22% embedded taxes INCLUDE the income and payroll taxes which was one of my points all along.
First edition page 59, “Once the FairTax takes effect, you’ll be receiving 100 percent of every paycheck, with no withholding of federal income taxes, Social security taxes, or Medicare taxes and you’ll be paying just about the same price for T-shirts and other consumer goods and services that you were paying before the FairTax.”
Second edition- “Once the FairTax takes effect, you’ll be in complete control of your paycheck as nothing will be withheld and your purchasing power for t-shirts and all other goods and services will be almost exactly what it was before the FairTax.”
This means that they are acknowledging that “purchasing power” will remain the same, not a big increase in purchasing power as they previously asserted with their larger paychecks/same prices verbiage. They eliminated the “100% of paycheck” wording.
First edition page 83: “Remember that the poor, along with everyone else—will no longer have Social Security taxes or Medicare taxes removed from their paychecks. Whatever they earn, they get on payday. For most of those we categorize as poor, this would mean an immediate 25 to 30 percent increase in their take-home pay.”
Second edition- “Remember that the poor, along with everyone else—will no longer have Social Security taxes or Medicare taxes removed from their paychecks. Whatever they earn, they get on payday. If employers leave this money in paychecks instead of taking it out of price, most of those we categorize as poor, this would mean an immediate 25 to 30 percent increase in their take-home pay.”
Of course, this acknowledges that the employer has a choice to make—to pay the worker his current paycheck and not reduce prices (meaning prices with FairTax added go up 30%) or to cut paychecks to present takehome levels. They cannot both give workers more takehome pay and reduce prices. The Free Lunch described in the first edition is eliminated.
First edition, page 84, you make it clear though that even though the workers will keep all of their paychecks for a big raise, you still believe that because of “the disappearance of the embedded taxes, the total price paid for consumer goods will remain very nearly the same”.
Second edition—“when you factor in the combined lower prices/higher takehome pay caused by the disappearance of the embedded taxes” prices will remain about the same.
This again acknowledges that they money currently deducted as taxes can either be used to increase take-home pay or reduce prices but not both at the same time. If they were being more honest here, they would have referred to purchasing power remaining the same rather than prices, but they are trying to put the best possible spin on this major admission.
First edition page 111, you tie it all together with a Quick Review in which you erroneously assert that “Here’s what happens when we pass and implement the FairTax plan:
“We start collecting 100 percent of our earnings on our paycheck.
“We all get virtual raises, since payroll taxes are no longer siphoned from our checks.
“The prices of consumer goods and services remain essentially the same, with the removal of the embedded taxes compensating for the added consumption tax.”
Second edition:
“We start controlling our earnings in every paycheck” (whatever that means)
“100% earnings” line is eliminated from the second edition. "virtual raises" is likewise eliminated.
“Our purchasing power for buying consumer goods and services remains essentially the same, with the removal of the embedded taxes compensating for the added consumption tax.”
This is a MAJOR difference in the Quick Review! In the first edition, they promised larger paychecks and prices remianign the same—which means a major increase in purchasing power. Of course this was a ridiculous promise. In the second edition, they say our purchasing power will be about the same.
They still left a lot of wrong and misleading verbiage throughout the book, but they addressed most of the concerns that I sent to them and removed those claims in the second book.
No you don't. Not even close.How can you say that? Of course he does. Don't you? Don't you look at you pay stub or your tax return?
Minus the prebate feature, antis exactly like yourself would just be whining about how "unfair" the tax was to the poor.So they increased it 20+% just to make it fair and so I wouldn't complain about how unfair it is to be so low for EVERYONE?FairTax designers made every effort to make the tax base as broad as possible, specifically to keep the needed rate down. FairTax designers made every effort to make the tax base as broad as possible, specifically to keep the needed rate down.
A broad tax base with a low teaser rate generating a "revenue neutral" income is a scam used only to make it easier to incrementally raise rates later....' It's only a 1/4% for the children',
'It's only 1/4% for the library
It's only a 1/4% for the fire department
It's only a 1/4% for the police
It's only a 1/4% for the roads
It's only a 1/4% for the drainage
It's only a 1/4% for the sewer
It's only a 1/4% for the parks
It's only a 1/4% for the military
It's only a 1/4% for the WOT
It's only a 1/4% for Homeland Security
It's only a 1/4% for the Border Patrol
It's only a 1/4% for the etc., etc., etc...
Trying to explain the hidden nature of a large portion of our current system to you would be like trying to explain the wonders of chastity to Bill Clinton...it just wouldn't have any effect.
I paid whatever percentage the state and locality I was in collects.In other words you have no idea how much you paid in state and local sales taxes. I tried last year to keep track, I couldn't do it. Too many little slips of paper and I never knew if my wife bought a latte at Starbucks and didn't keep the receipt.
Look, the fact that YOU are clueless doesn't mean I don't know how much I paid in taxes last year. I really, really DO know EXACTLY how much I paid in FIT and FICA (EE and ER). And I know approximately how much CIT I indirectly paid (and it wasn't very much.)
Your hyperbole is yet another indication that you are out of your depth in a discussion of the economics of taxation.
Trying to explain the hidden nature of a large portion of our current system to you would be like trying to explain the wonders of chastity to Bill Clinton...it just wouldn't have any effect.So did you pay any personal income taxes or payroll taxes last year? [Do you think you might answer just this one question? It's hard to have a dialog with your constant dodges.]
Neither plausable, or feasible. The economy would crash instantly.
Not according to the sources that RobFromGa is quoting, in fact that source, Jorgenson, claims as much as a 10-13% increase in real GDP with replacing federal income taxes with retail sales taxes in just the first year, with sustained growth well above what is achievable with current income/payroll tax law going forward.
What you are neglecting to perceive is that the economy is no more burdened with federal tax than it is today under the income tax syste and the the advantages to the economy arises from increased production efficiencies, lower production costs, and increased investment and savings driving further gains going forward. Of significant mention is the the opening up of additional potential for exports by making our own products more competitive in foreign markets while assuring that foreign goods do not receive favorable tax treatment over domestic production as happens in today's economy under the income/payroll tax system.
But he would know how much he paid in the new federal sales tax he's pushing because, er, uh, hmm...
In other words, you have no idea how much state sales tax you paid.
...your assumption that I live in CA is faulty
Then perhaps you should remove the California State Flag from your FR Homepage.
I thought it was most interesting that they started out in the First Edition saying that every wage earner was going to get a 20-25% increase in take home pay, and prices would stay the same, meaning that people could all afford to buy 20-25% more stuff.
Then in the Second Edition they say that people will have the same purchasing power as now and won't be able to buy any more stuff than presently.
And none of the FairTax proponents think that this admission that had to be drug out of Linder/Boortz might be a sign that the amount of thought and analysis that went into this whole plan might be insufficient.
I mean if you can get wages, prices and purchasing power right, how are you going to have a chance of estimating the economic impact on the huge US economy?
You would think that for once the FairTaxers would be honest that this is at the very least a major change in how the FairTax is being sold? But I guess not.
Perhaps you would like to point out the precise "Jorgenson quote" in the '96 tesitmony to which which you suggest is being used.So do you have any studies that show a producer price drop under the FairTax without a nominal wage decrease? [Kotlikoff's show's real wages as level the first year.]
Thanks for sharing that. The truth is the truth. You are part of the ash heap of history. Or, as Ronald Reagan would say, "you are not valid". And there you go again. Put your lame support for the current income tax into context. Let eveyone on this board know that you support the current income tax. Let everyone know. Let eveyone know.
We will all be at the tip of our expectancies. Please let everyone know. Will you? Please let everyone know that you are in favor of the current income tax code as it is written, as it is stifling the creative blood of every human in this country. You are nothing more than a K-Street lawyer. The most vile human of all time, the most evil wariour of the elite class. You have no empathy for those of us who actually PAY these taxes. You obviously have a lot to gain from us.
Please give us a reason why I am wrong and a reason why we should take you seriously.
Jorgenson also assumed that everyone would get a big pay cut, which ain't gonna happen. All the analysis you are relying on needs to be thrown out because the inputs are faulty.
I'm honest in the fact that reducing the size of federal government is important. Repealing the 16th amendment is important. Paying taxes equally and not progressively is important.
I'm no here to beat my chest about "what I found wrong" in the book. Sure there are flaws in any idea. It's about the bigger picture here, not nitpicking the details.
I could give a RIP about how it's being "sold". The facts will come out, just as this thread has illustrated. The big picture is what's important. Give the people the power, reduce the government and tax equally no matter how much you make.
But he would know how much he paid in the new federal sales tax he's pushing because, er, uh, hmm...Listen, the FairTax is a fair tax because it's the FairTaxsm and a fair tax would be visible so the FairTax must be visible.
You all have nothing more in your arsenal except to try to ascribe evil motives to anyone who doesn't buy into your stupid, ill-thought plan. You used to sound reasonable sometimes groanup but now you are just as bad as pigdog in your over-the-top accusations.
Since their state and locality would also have to pay FairTax, they too would need to raise their "prices" (state and local taxes). That would likely mean an increase in their property taxes as well.
The IRS is nosy enough. I'm certainly not going to discuss my taxes with you, of all people.
Get your tiny self out of my finances. Get your tiny self out of my life.
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