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.
The Fairtax crowd won't admit that prices are going to go up 20% when the FairTax is added. Because prices of goods can't go down if employees get to keep all the savings.
Once they agree that prices are going to skyrocket, then we can discuss the serious flaws with this massive inflation and it's effect on people living on fixed incomes and with after-tax savings. But they won't admit that, so the debate cannot be taken to the next step.
You are not getting off the hook. Will your respond to this post? Even if your response is a lie?
So you don't think that a store owner will drop the price of a Diet Coke to increase his sales over his competitor?
The free market has no place in this?? Please explain why.
Talking to yourself again? I answered your question in #131 already and you even responded to my reply. Is your short-term memory failing?
Fine. What if your solution to the spasmotic income tax code. I'm sure that you have one.
see #124 for my solution.
You are nothing more than a K-Street lawyer. The most vile human of all time, the most evil wariour of the elite class.That's just an un-provoked, un-called for response from an obvious sick mind...
I read your link and I thank you for it.
Currently taxes are progressive on what your income is. The more you make the more you pay.
With the Fair tax it's about what you spend. Yes, I would agree that the more money you have to spend, the more you *can* spend in taxes. That does not make the TAX RATE PROGRESSIVE. It's an individual decision versus a decison that made for you.
It's based on what you spend, and not what you make that makes it progressive.
A Fair Question about Fair Tax
| OPEN LETTER TO BOORTZ/LINDER (FairTax) |
||
| Posted by RobFromGa On News/Activism 08/22/2005 9:53:28 PM EDT · 544 replies · 3,599+ views |
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| JORGENSON EXPLODES FAIRTAX MYTH (FR Exclusive) |
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| Posted by RobFromGa On News/Activism 08/25/2005 12:40:44 AM EDT · 703 replies · 9,857+ views |
||
most vile human of all time? that is over the top even for a FairTaxer. good night
So you don't think that a store owner will drop the price of a Diet Coke to increase his sales over his competitor?Let's do an experiment in game theory. Let's say you and I have convenience stores on opposite corners of an intersection. On a given day 100 Diet Cokes are bought by the people visiting our stores. These consumers are very cost conscience. For every penny cheaper than the other one of us sells a Diet Coke, they gain 5 customers and the other loses 5 customers. We both get the Diet Cokes for $0.80 wholesale and are both currently selling them for $1.00. We each currently are selling 50 Diet Cokes each and making $10 profit($0.20 x 50) each.
I asked a simple question with a simple answer and you pointed me to more of your propoganda. Sorry if I feel that way, but I can't help it.
In the time it took you to link all that, you should've been able to answer my question. At any rate, I'll read through it with an open mind.
Thanks for your reply.
Are you stating there can be no producer price drop holding gross wages to the employee constant?No, I'm asking do "you have any studies that show a producer price drop under the FairTax without a nominal wage decrease?" Do you?
One hardly needs a study to infer the qualitative effect of the most likely scenarios.Well, if the scenarios are so likely, some economist would have probably studied it. Do you know of any studies?
Most likely a combination of producer price decreases and income increases will be the result.What you are describing is a real wage increase. You are still pushing the manna from heaven scenario.
So tell me, what percentage of your spending dollar is the right amount?
A quick answer, I'll offset the cost of dropping the price of Diet Coke to the increase in another well selling product.
A quick answer, I'll offset the cost of dropping the price of Diet Coke to the increase in another well selling product.It doesn't work that way. Then I would drop the price of the product you are increasing do offset my more expensive Diet Coke. For illustration purposes, let's keep it simple and limited to Diet Cokes.
Whatever percentage that is absolutely necessary for my government to fulfill its constitutional duties, and not one penny more.
Exactly. That's how the free market works! Who sells items at the same price!?!!? It's not like that. Prices differ everywhere. Cost is made up in different items. Ever read the sale papers?
Ever purchased a $12 asprin at a hospital? What makes up the cost of that item?
Stores have to make a profit. If you drop the price of Diet Coke, it has to go somewhere else. So increase the price of peanut butter cups. So you may not sell as many Reese's Peanut Butter Cups as the next guy, but your margin on the cups is higher. If you sell half as many cups as you do diet cokes, it'a a wash.
It's a game of balance. In your last reply, it comes down to more than just prices.. but location and convenience... thus the name of the stores. Competetive commmerce, you have to love it!
There's nothing that happens because of the FairTax that isn't already happening in marketplace under the current system except that the consumer price level will be increased.
As always, competitors willing to make less money can reduce prices, but it's not the tax regime that dictates that capability.
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