FAIR TAX BOOK- 2nd Ed. Revisions

self | May 5. 2006 | RobFromGa

[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.

[RobFromGa]

I called out these passages specifically in my letter to Linder/Boortz last year. This letter is posted here:

JORGENSON EXPLODES FAIRTAX MYTH (FR Exclusive)

[RobFromGa]

the second edition acknowledges our concerns with the way the FairTax was being mis-represented.

[RobFromGa]

ping

[balrog666]

Better late than never. I wonder what the Kool-Aid drinkers will make of this.

[Always Right]

I thought pigdog said he debunked all this.

[RobFromGa]

sorry always right, I meant to ping you but I mistyped the spelling on your handle.

[Beagle8U]

"In the second edition, they say our purchasing power will be about the same."

5 dollars is "about" the same as 5 million, hard to prove lier's wrong...lol

The Fairy tax is a joke on anyone stupid enough to vote for it.

If someone makes 200k or more, AND owns a business where they can write everything off, its a good deal.

Homeless persons would make out pretty good also, everyone else takes it in the ash.

[RobFromGa]

If someone makes 200k or more, AND owns a business where they can write everything off, its a good deal.

Only if the resultant effect on the consuption economy doesn't destroy the business, that is my concern.

[RobFromGa]

I wonder what the Kool-Aid drinkers will make of this.

They'll say that Boortz is an idiot, probably.

[Beagle8U]

"Only if the resultant effect on the consuption economy doesn't destroy the business, that is my concern."

My point is that business owners can scam the system, as can the very , very, poor with the prebate.

[xcamel]

Ping-a-ling!

TANSTAAFT!

(There ain't no such thing as a FairTax)

Double digit taxation for single digit IQ's

*pinglist*

If H.R. 25 was enacted into law tomorrow, and a future Congress followed its language to the letter, would that future Congress have authority to calculate a tax from corporate income as upheld in FLINT v. STONE TRACY CO., 220 U.S. 107 (1911)? The answer is, YES! Our socialists in Congress would still be able to lay and collect a tax calculated from income just as is now calculated under the Income Tax! This is what the FairTax Con Artists don`t tell you.

Freepmail me to get on or off.

[Beagle8U]

Where are the fairy taxers?

They must be taking a day off?

[xcamel]

Formulating a grand "group think" and talking points to deny ever backing all the thinks the book changed.

[Dimples]

It seems there is a bit of a shift in the meaning of "embedded taxes" used in this revision of the book. Before this edition, "embedded taxes" referred to that portion of product price owing to income taxation. Now it seems to refer to formerly withheld tax ... even though it's still embedded in price.

The statement

“The prices of consumer goods and services remain essentially the same, with the removal of the embedded taxes compensating for the added consumption tax.”

is still a bit of a stretch considering that actual prices will rise by approximately the amount of the new tax ... that, however, is offset (for wage earners) by the elimination of withholding. The tax is still embedded in the price, as are the formerly withheld wages.

At any rate, the revision does indeed seem to back away from some of the more egregious falsehoods.

Now if we could get an honest appraisal of the "revenue neutral" tax rate ...

[xcamel]

Rob - did you catch my post on Costa Rica moving to the flat tax?

see: http://www.freerepublic.com/focus/f-news/1627193/posts

[groanup]

Attention, attention!!! Rob has been nominated for a Pulitzer Prize for investigative journalism.

C'mon Rob. That horse doesn't even have a hide anymore.

[Shimmer128]

So what do you all suggest??
This is the first objections I've heard, not a Freeper for very long.

[lewislynn]

Good job Rob you deserve all the credit.

Truth and facts will always prevail...

[groanup]

I don't know where you stand on the fair tax. You'll notice the above ping in the first few posts by Rob. He pinged his handful of allies who, for whatever reason, think that the abortion of a tax code that we have now is better than the fair tax. As you will see shortly, there are many more Freepers who are in favor of the fair tax.

www.fairtax.org

[lewislynn]

Now if we could get an honest appraisal of the "revenue neutral" tax rate ...

An honest appraisal (or any honesty) from the Fairtax crowd? HA!