More than 8,000 people of every political persuasion recently came to the Carolina Coliseum to make a point.
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 Congress’s 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 Kennedy’s words, to instead ask “why not?” about a fairer, simpler, and more effective means of collecting federal taxes.
How much do you think a retail business pays in income tax as a percentage of sales?
Its own income taxes or its income taxes plus the income taxes of its employees, and the income taxes figured into the prices of their suppliers?
Principled, I thought you should see this.
He ran away after I refuted cascading on the other thread.
When the companies down the line absorb that expense in the form of higher prices and then has to figure their own tax liability into their own prices, does that not mean the tax liability compounds at each stage in the supply chain?Do payroll taxes compound at each stage, how about labor costs? After all they're added to the price at each stage too. What makes income taxes or "tax costs" so magic that they're the only costs that cascade/compound? Where's the logic?
Because they’re applied at each level where a different company reports income. Most other costs aren’t. If they did, then no value would be added to the product. The refinery doesn’t have to redrill oil. The gas station doesn’t have to re-refine it. They’re all taxed on each individual company’s profits, however.
We'll see.
Principled, I thought you should see this.groanup, I thought you should see this.
Principled:
...."For example, using Rob's 9% number and 3 stages, the average price reduction would be appx 3.1% (or 3.09478917 if you want closer)".
There's an answer to averages you'd really have to work hard at to get.
He ran away after I refuted cascading on the other thread.Oh yea I saw that. His "cascading tax costs" was every one in the chain was adding three percent profit to their wholesale purchases and markup for resale. Then he called it "tax costs" as if it matters what you call it, unless you're trying to fool someone...or are a fool.
Excellent!
But, as we've said, the retail business's own income tax is only a small part of the embedded tax.
Okay. Payroll is what % of sales? Multiply that by 7.65%, what do you get?
Why would it? Please explain your logic further.
You seem to be saying that the company's only tax burden are those taxes it directly pays to the IRS.
Let's talk about the cash burden first. We can talk about the rest later.
Oh, and just so you don’t accuse me of “running away”, I have to go to work now and pay some more of that wonderful income tax.
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