Posted on 06/14/2006 5:24:36 PM PDT by pigdog
If there's one thing we know about here in Muleshoe, it's "fairness". Folks around here are pretty much about the fairest that you'll ever find (at least in far-West Texas).
When Fred and Frieda got to chewing the fat with me down at the new Civic Center (it usta' be the feed store, but we've upgraded), they kept asking me "What's so fair about a tax on income?". Now that's a real toughie once you think about it and I tried to get an answer from several congressmen so I could really write an informed editorial about it.
The more I contacted the politicians, the more form letter replies I got thanking me for my opinion (and heck, I hadn't even given one; I was just asking THEM the question). I finally figured out it was too tough a question to throw at congress since they don't really know anything about taxes, let alone fairness.
One of the congressmen, though, was nice enough to point me to a man with a Masters of Laws (LLM) in Taxation who had written an article on that very subject for the national tax professionals' publication, Tax Notes.
It took a lot of arm-twisting and promising of a two-week paid vacation to Muleshoe, but I finally got the author of the article (and Tax Notes, too) to agree to let us publish the information in the Muleshoe Messinger. My thanks to all involved (especially Millie, who'll have to put her cow out to pasture if the author does come for the vacation).
So, here 'tis folks - a national newspaper scoop. Find out just exactly "What's so fair about a tax on income?"
From our Special Guest Columnist ...
(reprinted with permission)
(Excerpt) Read more at freerepublic.com ...
Be sure to read both Part 1 AND Part 2 ...
Still as pertinent as ever even though the numbers are from an earlier set of data; the principles still apply.
It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four .'' If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.
Fair Tax ping!
Thanks for re-posting Dan's article.
If anyone would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all federal income, SS/Medicare payroll, and gift/estate taxes outright replacing them with with a national retail sales tax administered by the states.
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
See you are still sitting on that whoopi cushion.
Some never learn to get off the pot it seems.
Can't read, eh. It was about the Income Tax ... but I thought you knew that!!! (nice likeness of you there, though)
One of the authors of the FairTax bill tells it like it is ...Well he sure contradicts everything you guys are selling about employer paid FICA for price reductions and not going to the "100% paycheck"
.Dan R. Mastromarco and David R. Burton respond to a recent viewpoint claiming that a national retail sales tax would be detrimental to the real estate industry.
[26] If the $47,129 of our family's income was all wage income, then that couple would have paid $3,605 in employee payroll taxes on those wages. Note also that their wages were also about $3,605 lower because of the employer payroll tax. As noted earlier, economists generally believe that the employer share of the payroll tax is borne by the employee in the form of lower wages. After the standard deduction, the couple would pay income taxes of $6,433, most of which would be in the 15 percent rate bracket, but some of which would be in the 28 percent rate bracket. /5/ Hence, using a standard deduction, the couple would have paid $10,038 of taxes on $47,129, leaving our family $37,091 after taxes. Of that disposable income, 4.3 percent is $1,595....---
[28] Under the AFT Fair Tax plan, their disposable income will increase to $50,734 because of the repeal of all payroll and income taxes.
You've stubbed you toe again since the $50,734 does not include the ER portion - only the EE portion. The $47,129 was their takehome pay.
Your own post even noted that it would have been $3,605 higher with the ER portion - which it didn't have.
Try something else - this didn't work (either).
Fart-tax supporters:
BTW: still posting 17 year-old tripe eh?
You act like the insanely high rate is the Fair Tax's fault. It's just a reflection of what we are really paying now.
That's the whole point- make the cost of government transparent, and move huge hordes of taxpayers into the 'pissed off and ripped off' column. Maybe then government spending will decrease.
Your reading of thie is exactl right, the wage income was $47,129. And the employer is paying $3,605 employer half of FICA on top of that, for a total wage cost to the employer of $50,734.
The takehome pay would be the 47,129 less $3,605 employee half FICA less $6,433 withheld income tax for a total annual "take-home paycheck" of $37,091 just like you posted.
You are right that if gross salaries were raised to include the Employer half of FICA as part of the "100% paycheck" promise as the author states, then there would be almost no cost savings to business due to the enactment of the FairTax, so prices would go up by almost the full amount of the 30% tax.
Pigdog, as usual, is incorrect.
Congrats on being the first to try to take this discussion to the dogs.
I guess that's all you really have anyway so I don't expect more from you and your ilk.
You are right that if gross salaries were raised to include the Employer half of FICA as part of the "100% paycheck" promise as the author states, then there would be almost no cost savings to business due to the enactment of the FairTax, so prices would go up by almost the full amount of the 30% tax.And the author of the link I posted stating that the employee would get the employer half after "all payroll taxes" were removed, is also the author of the Fairtax, as pigdog was so proud to point out.
Hardly "tripe". I can see you haven't read it.
If anything it's more true now that at that time.
"Your reading of thie is exactl right, the wage income was $47,129. "
Sort of like kissing your sister (yuk! in this case!).
Wage income here means the amount they have taken home. That's clear since the example clearly says that the family's $47,129 income they "would have paid $3,605 on those wages" (i.e, on the $47K) in payroll taxes. The past tense means that it had already been paid.
The notation about the ER portion merely means that they would theoretically have $47,129 + the $3.605 ER portion which is still argued by economists (but the $3,605 EE portion would still have been paid based upon their gross of $50,734).
It is merely YOUR misinterpretation.
Also I don't whine via Private Mail to you and complain about what I'm called - especially since your aversion to being called a salesman or peddler is something that you yourself told us on these threads (and none of my "FairTax friends" as you state in that FReepmail). Since you exposed this information yourself it seems to be reasonable to comment on it.
It's like Harry Truman once said - "If you can't stand the heat, get out of the kitchen". And stop trying to determine what others post by trying to use the Administrative Moderator as a benefactor on your side of the debate to try to win the debate.
But you're welcome to say that since it fits the scale and tenor of the many incorrect things you've posted over many years.
pigdog is still wrong. (again)
Employer and employee half of FICA is 7.65% and it is calculated on gross wages. 7.65% of $47,129 is voila $3,605. So, your interpretation is wrong.
If the gross wages were $50,734 as you claim, then the FICA would be 7.65% of that amount would be $3,881 (not $3,605).
pigdog is once again wrong.
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