Fair Tax, Foul Politics [NRO on FairTax]

Fair Tax, Foul Politics ^ | August 16, 2007 | NRO Editors

[lewislynn]

You like quotes?

Here are some from your Fairtax economist:

"....So what does taxing consumption have to do with achieving a generationally equitable fiscal policy? Again, essentially everything. The reason is that the current elderly as well as the baby boomers, who will shortly retire, have one primary economic activity left to accomplish - consumption. And under a consumption tax, they will pay a lot more in future taxes than they would under the current tax system. Although the elderly as a group would share in the burden of a consumption tax, the poor elderly - those living exclusively on Social Security benefits - would not because their benefits are indexed to the consumer price level and are thus guaranteed in real terms.

---------

Were the very staid and well established businessmen and women who advocate the Fair Tax to proclaim that their tax reform 1) levies a tax on the holdings of wealth, 2) provides a highly progressive tax rebate, and 3) implies an increase in Social Security benefits and, most likely, transfers to the poor, they would probably be viewed as members of a vast left-wing conspiracy. But this is precisely what they are recommending.

The fact that a consumption tax is, in part, a tax on wealth is well know to public finance economists, but not to the general public. The reason is that when a consumption tax is levied, it lowers the amount of actual consumption that can be purchased with a given amount of wealth since some of the wealth must be spent on the consumption taxes. Stated differently, the imposition of a consumption tax visits an immediate real capital loss on wealth holders because their assets no longer have as large a claim on current or future consumption...."

Kotlikoff Testimony Before the House Committee on Ways and Means Hearing on Fundamental Tax Reform

[lucysmom]

I would still like to know how much you will lower your prices if the FairTax is passed.

[lewislynn]

I would still like to know how much you will lower your prices if the FairTax is passed.

Principled:

I am willing to do a service for $50 after expenses [costs]. That means that after I pay all costs, I have $50 remaining or I won't do the job.

Since he's banking on everyone else lowering their prices 23% he'll only need $50 minus 23% = $38.50 to do the same job plus he gets the government check so his spending power is (somehow?) increased too.

[lucysmom]

Since he's banking on everyone else lowering their prices 23% he'll only need $50 minus 23% = $38.50 to do the same job plus he gets the government check so his spending power is (somehow?) increased too.

But then the 23% gets added back in sales tax when he takes his money to the grocery store or calls a plumber. Perhaps he's willing to live at poverty level the prebate subsidizes in exchange for "freedom".

[Bigun]

Looks like you are COMPLETELY blind by self interest and care nothing at all for either the long term welfare of the country or the FREEDOM of your children and grandchildren.

[Bigun]

Alan Keyes is just one of a long line who recognize what the income tax is doing to our country and he IS a very eloquent speaker.

[Bigun]

You may question the motives of Fairtax proponents all you wish but none of that brings into question a single word that was said by those folks I quoted. Not one single word!

[Bigun]

The Fairtax IS indeed a tax on accumulated wealth when and ONLY when the holder of that wealth makes the decision to spend. It also removes ALL the impediments imposed by the current system on those trying to accumulate wealth. A trade most will happily make I'll assure you.

I am myself one of those "baby boomers" and will happily pay whatever premium I must for long term good of this nation and, even more importantly, the FREEDOM of my children and grandchildren.

Further, I'll freely admit that it would do my old heart good to see those who have piles and piles of inherited wealth but little "income" start actually paying their fair share rather than paying lip service to the same.

[lewislynn]

But then the 23% gets added back in sales tax when he takes his money to the grocery store or calls a plumber.

(actually 30%)

I know it and you know it but in their minds everyone has already lowered their prices at least 23% (some say more). So because of the government checks he doesn't need anymore than his 23% reduced income. With the magic of increased purchasing power he may need even less and could reduce his income even more...Isn't that what life is all about in the magical world of the Fairtax?

[lewislynn]

and he IS a very eloquent speaker.

Well there you have it, everything he says must be true then .

[xcamel]

It's just much more fun to make you squirm and twist through all your delusions and platitudes.

The constitution isn't going anywhere, there are troubles in the country that are on the orders of magnitude larger than the tax code, (things that cause, or may cause people to die en masse) but you just keep tilting at your windmills...

[Bigun]

I WILL indeed keep tilting at them! Of that you can be sure!

[lewislynn]

As you have been shown/told hundreds of times by many posters on these threads you'll never be free or have a dime to your name as long as we have the Marxist income tax you SQL, IRS defending, Communist Manifesto loving, Marxist pig.

And as such it shall be so.

[lewislynn]

Oh yea and you can’t comprehend anything either...Marxist pig!

[xcamel]

I'm the guy in the burka...

[groanup]

There is nothing more basic to economics than how supply and demand determine price. It's no wonder FairTaxers reject this well established economic principle.

So GM makes a piece of c^^p automobile and can't raise the price of it. That's an example you use? FairTaxers don't understand supply and demand?

[lewislynn]

So GM makes a piece of c^^p automobile and can't raise the price of it. That's an example you use? FairTaxers don't understand supply and demand?

That's one opinion but apparently one Fairtaxer doesn't understand. Do you know what demand means? If there was a demand for crap cars, raising the price wouldn't be a problem, would it.

[xcamel]

last word

[higgmeister]

And I don’t write off a lot more than I pay, I pay a ton of taxes. If that makes me evil in your book, then what can I say?

Not at all!   You are a hero for weighting risk against your talents and creating success.

I have no idea what accounting changes a business will encounter, but I don't understand why you feel that you would have to submit essentially an expense report to the government of everything I spent on your business, maybe with receipts attached, when you don't do that now with municipal and GA Sales Tax.

The Fair Tax Web Page FAQ says all you have to do is answer how much was sold to consumers?

The FairTax reduces rather than increases the problem of tax evasion. The increased fairness, transparency, and legitimacy of the system induces more compliance. The roughly 90-percent reduction in filers enables tax administrators more narrowly and effectively to address noncompliance and increases the likelihood of tax evasion discovery. The relative simplicity of the FairTax promotes compliance. Businesses need answer only one question to determine the tax due: How much was sold to consumers? Finally, because tax rates decrease, tax evasion is less profitable; and because of the dramatic reduction in the number of tax filers, tax evaders are more easily monitored and caught under the FairTax system.

I would think all you need do is show sales receipts.

[higgmeister]

Rob's post 293 vehemently denied the Pro-IRS Status Quo position is to debate a necessarily higher Fair Tax Rate while also still having an Income Tax, yet he immediatrely did the same thing again in post 298.

I blockquoted and linked to both. I'm sorry you didn't grasp that.