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, lets 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, youll be receiving 100 percent of every paycheck, with no withholding of federal income taxes, Social security taxes, or Medicare taxes and youll 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, youll 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 elsewill 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 elsewill 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 maketo 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 editionwhen 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 Heres 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 samewhich 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.
Let me get this straight, you are posting some nonsensical diatribe from this guy making money off the complexity of the current system (you can take the "2005-2006 Real Estate & Investment Federal Tax Update" online course for only $59.90!) as some indicator that the Flat Tax is complex? This guy would be out of business if the Flat Tax were implemented. He would say anything to keep us from switching.
Vern Hoven Tax Seminars
The bad news is that the accounting records necessary to fill in the postcard are still required,OMG! Businesses would have to do accounting!!!! THE HORROR!!!!
in some cases more burdensome than under present law.Complete and total BS.
Thought you'd like to know ;-)Thanks for the clarification!
For me, it's not about satisfaction about being right, it's about taking the steam out of the FairTax locomotive before it runs the economy into the ground. It's a long, slow slog, but we're making progress. It's especially hard when so many have invested so much emotion into a dangerous pipe dream like the FairTax. Here's my original post on the topic:
Can the NRST Really Reduce Consumer Prices by 20% to 30%?
Income tax has about as much to do with communism as lake trout have in common with bottled water.
Oh, and you're a liar.
I guess your eye skipped over number two.
What are your thoughts on Hamilton's words of wisdom in Federalist #21?
Wow. The defenders of the IRS are getting strident.
Someone must have upped their budget and staffing.
Now that HAS it's appeal!
I'm for the power of the purse: the Boycott. How does this make your point if you want to keep the current tax and withhold system?
If the farmer takes $1 out of his business as personal income, it's taxed. If the business makes $1 of profit beyond what he takes out as personal income, it's taxed.
Of course you have overlooked the fact that Congress defines what is allowed in business deduction to even get to the point of determining what is defined to be income to be taxed. The realm of creative tax preparation and loopholes, that are so profitable to the tax preparation and consultant business, lay in the supporting regulatory environment that goes with defining what is and is not allowed as business expense in the eyes of Congress and the IRS.
Indeed Vern Hoven is quite correct, and why the current system is the complex mess it is today.
It isn't the number of tax brackets or size of the final report card that makes for the complexity of an income tax system. It is the rules governing the separation of business expense from taxable income where the opportunity lay for an ever expanding tax code which the Flat Tax can do nothing to change.
The first implementations the income tax system were little more than what is claimed for the Flat Tax, the devil as always lay in the details, the ever expanding number of details to compensate for the creative accounting of those who thrive in the income tax preparation industry.
Theinherent problem with any income tax is always separating what Congress considers to be business expense from income to be taxed. The definition of business expense is not at the option of business, it is the neverending quest of the lobbiest interacting with the Congress critter setting the agenda of such definition and consequent growing plethora of regulation that goes with it.
The form a tax due is written on has little to do with what it takes to get there or establish the varacity and accuracy of what goes onto that form to which government holds the taxpayer accountable through audit and other intrusive measures employed by tax system administrators.
The elimination of K-Street - the buildings full of lawyers and "associations" that spend millions of dollars on politicians to buy favors that are easily doled out through tweaks in the tax code. Want to sell your hot water heaters? Get congress to allow tax credits for it.
Wouldn't it be better to eliminate all of that crap? NO tax lobbyists, just a progressive consumption tax.
You see why we can't take you seriously?
Fed 21 says that the government will live within what they are able to collext through taxes, and thus they are constrained somewhat by the will of the people in this regard.
The FairTax bill says we'll collect $X and adjust it upward each year automatically to support our predetermined spending level and we'll adjust the taxation rate to make it collect this amount of money.
There is no similarity between the two positions. Even a FairTaxer should be able to see that.
Yeah, it obviously bothered you and Rob a lot more than it did YN. So sorry my acccusation against another poster hurt your feelings.
Please provide us a list of all these special protections that the K street lobbyists have put in place for hot water heaters, etc.
Not really, it just showed again what an arrogant jerk you are. And intellectually bankrupt too when you have to make incorrect assumptions about other posters to try and rally your position.
(s)
BTW, when you were posting under the influence last night you messed up your tagline.
"Please provide us a list of all these special protections that the K street lobbyists have put in place for hot water heaters, etc.":
http://www.globaltowne.com/
Such a nice guy. BTW, how's the life insurance business?
Do you think the FairTax will get rid of special tax breaks for things the pols think are in their best interests-- like Energy Efficiency?
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