Posted on 06/29/2007 5:17:36 PM PDT by Man50D
More than 8,000 people of every political persuasion recently came to the Carolina Coliseum to make a point.
They wanted America and every GOP presidential candidate at the debate to know that there is a better way to collect federal revenues for the common good.
It is called the FairTax, and it is an extensively researched proposal and legislation to replace the dysfunctional income tax system with a progressive national retail consumption tax.
The FairTax is gaining national attention and widespread grassroots support because, unlike every other tax debate over the past fifty years, it does not pit one income group or political view against another.
At the same time that all federal taxes on the poor are eliminated under the FairTax (through a universal rebate), capital gains taxes, corporate taxes, and inheritance taxes are eliminated as well as all payroll taxes and federal withholding. Elimination of federal withholding and payroll taxes means, of course, that every wage earner takes home their entire gross pay.
As well, the FairTax gives the middle class a tremendous tax improvement, reducing effective lifetime tax rates dramatically. Every income level can be benefited because the FairTax creates a far broader base for taxation consumption than the current ineffective, loophole-ridden, and costly system of taxation of earnings. The underground economy totaling trillions of dollars contributes to the federal government for the first time, and 12 to 20 million illegal immigrants become taxpayers as consumers.
There is a catch, however, and that is why so many people were inspired to travel to Columbia from all over the country for a Tuesday evening FairTax rally. The catch is that enactment of the FairTax eliminates Congresss ability to grant favors in the income tax system. Taking power away from Congress is, of course, a huge political challenge requiring overwhelming grassroots pressure and an abiding belief that public policy can be made to simply favor the public, despite the self-interest of Congress.
While the FairTax has the potential to unite a divided country against the self-dealing of Congress, the growing popularity of the FairTax has also inspired bipartisan distortions of the proposal by Washington, D.C.-based political operatives threatened by the very idea of a tax system free from congressional mischief.
Most commonly, the proposal is derided from the left as being unfair to the poor despite the fact that, unlike every other sales tax, the FairTax is not regressive and actually untaxes the poor entirely. From the right (and sometimes the left), D.C. operatives like to claim that the FairTax represents a tax increase on everyday goods, conveniently ignoring the fact that every respected economist who has studied the FairTax has concluded that retail prices will actually drop as huge embedded income tax costs are eliminated from the cost of producing everything from a loaf of bread to a gallon of gasoline.
FairTaxers, passionate in their desire to see the broken income tax system jettisoned, take such criticism in stride as the cost of advancing an issue that did not start in Washington, D.C. They are less understanding of why national media sources have been so ill-tuned to the growing national movement that has won 60 congressional co-sponsors and at least one fervent presidential candidate (Mike Huckabee).
In the last 11 months, FairTax rallies in Columbia, Atlanta, and Orlando have seen thousands of citizens, bedecked in FairTax shirts and hats and waving placards, wildly cheer advocates like talk show host Neal Boortz, Fox News pundit Sean Hannity, and ABC News reporter John Stossel. But more than celebrating their celebrity, FairTax supporters have welcomed these men as fellow citizens embarked on a democratic journey to force the public will on a largely unresponsive representative government.
Even if the fact that the current income tax system is killing the Made in America label, from textiles in South Carolina to automobiles in Michigan to steel in Pennsylvania, and is driving trillions of American dollars offshore, Congress will only be moved on this issue by direct grassroots advocacy that threatens the tenure of elected officials. In this, the FairTax grassroots army largely sees our campaign as a test of whether our Founding Fathers promise of a government of, by, and for the people can still be made to come true.
The irony that a nation first conceived in the midst of a tax protest should, hundreds of years later, have citizens struggling again to overturn a universally despised tax system primarily supported by tax lobbyists and elected representatives jealously guarding their own power to manipulate taxes has not been lost on the growing FairTax army. While sometimes indignant, increasingly this citizen army has simply adopted the attitude that the world is what we make it.
Our nation has wondered long enough about the complex and destructive patchwork quilt of political favors called the income tax system and asked why? It is high time, in Bobby Kennedys words, to instead ask why not? about a fairer, simpler, and more effective means of collecting federal taxes.
This is were the plan loses my interest. Any talk of charging different rates to different "classes" of people takes us right back to where we are now, punishing success while rewarding the lazy. As long as there's a redistributionist concept being presented, the tax scheme will NOT get my support.
Tax all at an equal rate - period.
No, I didn't miss the provisions for an article being "used" including autos, but remember, not everyone buys a "used" car. With the "FairTax" the single male uses their total annual "government" provided rebate plus more in just one auto purchase.
Another point, with the total tax liability tacked on to the end of "new" product pricing how does that effect the retail end? Does purchasing "used" discourage the purchase of buying new? How does that effect the auto industry, the housing industry, the boating industry? How does that effect the young couple saving to purchase their first $100,000.00 home when suddenly an additional $30K is added to the end cost? I guess they can wait another 3-5 years to save for the increased down payment required.
Nope, I don't see the "FairTax" being any better than our current "unfair" tax policies.
In other words, it is a handout to people who's earnings are below the poverty line. And how is that poverty line determined?
The difference is The Fair tax reimburses people before they pay the tax not after as our current oppressive tax code.
The current tax code is only oppressive to the 50% or so of us that actually pay income tax. Of course, the complexity of the code is also oppressive. My thought is to simplify - 10% tax on all earnings. No deductions, no credits - all earnings to all people earning. No earned income credit, no poverty-level deductions. Everybody pays the same rate.
The code could be written on 10 pages instead of tens of thousands. Payroll deductions would be exact - 10%.
All it takes is for one business to pass along his tax savings on to the customer. Other business' will have no choice but to follow suit, or lose business.
The customer will *know* they no longer have that burden, and they know that in the past business has passed that expense on to them; they'll demand it.
That's simply not true. I look only to our businesses. A twenty year history of growth and increased revenues. All we have to do is look at the decline of our operating cost and a steady increase in our profit margins. Did we pass our increased profits along to our clients in the way of lower pricing....absolutely not. Did our business suffer because we didn't pass along these operational saving? Again, NO. Business only increased. I mean, honestly, do you expect me to decrease my normal, industry accepted rates 23%-30% of $10K to $7K for a tax system that would actual increase my Net Tax Liability. After making standard deductions of operational expenses such as healthcare premiums, other benefits and other allowable expenses our tax liability is less than 12%. Why would we trade that for the "Fairtax" rate of a minimum of 23%?
What about all those hidden taxes added onto each stage of production with the current income tax code that result in much higher prices passed onto the consumer?1) Oil drilling company makes 10% profit, pays 25% tax that's 2.5% of their gross.
2)Pipe line company the same: 10% profit, pays 25% tax that's 2.5% of their gross.
3)Refinery the same: 10% profit, pays 25% tax that's 2.5% of their gross.
4) Distributor the same: 10% profit, pays 25% tax that's 2.5% of their gross.
5) Retail outlet the same: 10% profit, pays 25% tax that's 2.5% of their gross.
All 5 are in the 25% tax bracket, what is the total percentage the gas price can be reduced at the pump?
A 125%?
B) 12.5%?
C) 2.5%?
If you said "C" 2.5% you would be correct.
Taxes aren't "added on" at each stage and they don't compound because there is no tax due untill the product is sold. Then, the price it's sold for minus costs (IOW profits) determines the tax...It would be impossible to add the tax before you even know what price or volume your product sells for...
If every employer in the nation reduced their tax by 7.65% what total percentage could products be reduced?
Example: The employer half of FICA (7.65%) times every employee in the nation is still 7.65% of payroll.
I recently took over two of the family's multimillion dollar businesses due to the death of my Dad. At the age of 18 I'm trying to learn and absorb as much as I can on the tax side of operations.Wow! I'm sorry about your dad but he would be proud of having done a good job of raisng you...You're wise beyond your years...all the best to you.
Louie
All it takes is for one business to pass along his tax savings on to the customer. Other business' will have no choice but to follow suit, or lose businessRight that's why there are no Macy's, Pennies, Sears etc. stores only WalMarts. Or why there are no Chevron or Shell stations, only independents. Or why the only business that sells lumber and hardware is Home Depot or Lowes.
Agree and disagree. Let’s definitely shrink government. I don’t think the Fair Tax will do it. If consumers start limiting expenditures to more or less basics and revenue goes down, the politicians will simply raise the percentage from 23% (or the actual 30% posited by lewislynn) to ??????
Don’t be amazed. I’m not into recreational or comparative reading or hefting of the current tax code. Certainly, 133 pages is much lighter than 67000+ pages. On the other hand one page stating that all retail transactions will carry a 49% tax to be paid by the purchaser would be much lighter but not better, I think. What I did read of the FT proposed legislation is still mind numbing all by itself. Just you wait until the Federal bureaucracy gets hold of its svelte 133 pages and turns it into Rosie’s Novacaine City. I presume there’s a middle ground somewhere
——400 to 500 pages might be about right.
The fair tax math is figured the same way as the income tax it replaces.
Then they should not refer to is as “like a sales tax” and/or a “sales tax”
I am so happy to read this thread and see that some people are able to think for themselves and not to buy into the lies of the FairTax peddlers. So many errors, lies and ommissions all rolled into one bill can’t all be an accident.
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