FAIRTAX, FLAWED TAX?

Nealz Nuze/WSB Radio ^ | August 27, 2007 | Neal Boortz

[Phantom Lord]

almost certain chance of adulteration by the political establishment

Great, so until politicians are removed from the political process you can't support it.

In that case, you can't support any reform of any kind on taxation.

[Filo]

I am nearing 60 and close to retirement.

Congratulations! :)

Because of that, I will be in a lower income tax bracket, and benefit from a Georgia law that exempts much of my retirement income from state income tax.

Not all of us will have that advantage. California taxes retirees and I’m personally hoping to have enough saved that my retirement will be spent at a higher income level than I earned leading up to it. . . :)

However, I like the FairTax. If it is good for the country, I will support it.

I like it in concept, but not in implementation. Again, with the few tweaks I’ve mentioned I’d be a proponent.

Call me selfish, but I don’t want to pay my taxes twice and I don’t want the government to have the chance to add new taxes later. If the 16th isn’t repealed and replaced with an unimpeachable ban on future income taxes then we’ll be just like Europe with an income tax and a VAT within a decade or less. Count on it.

Think of it in another way. What more do you have to buy in your golden years. I may buy another car, perhaps two, but aside from food, utilities, I won’t be paying out bigtime on the FairTax. Also, my retirement, and accounts (IRA, 401K) will be tax free with no income tax.

Maybe yes and maybe no. But the point isn’t about you and your retirement it is about everyone in the system and what they are doing as well. Yes your 401K is pre-tax which means that you’ll be on par with that regardless of the tax system. Your IRA, however, was funded with taxed money. You’ve already been taxed on that with the expectation that you wouldn’t be re-taxed upon withdrawal. That won’t be the case if the Fair Tax passes. The same holds true of any investment accounts, savings accounts, bonds, cash in the mattress and the like. If you created the wealth with after-tax money before the Fair Tax was implemented then you’ll be taxed again when you spend it. That double taxation is a flaw that absolutely must be addressed.

[Phantom Lord]

And yet prices, in general, rise ALL THE TIME.

Absolutely false.

When adjusted for inflation, many things are much cheaper today than 10, 20, 30, 50 years ago.

And many things in actual dollars are cheaper.

[Phantom Lord]

Call me selfish, but I don’t want to pay my taxes twice and I don’t want the government to have the chance to add new taxes later.

You already do, and the government always has the chance to add new taxes later. You argument seems to be that unless the government and politicans, and what they do every day can be eliminated for all of the future, I can't support anything.

If the 16th isn’t repealed and replaced with an unimpeachable ban on future income taxes

Impossible. The 16th can be repealed. But a ban on a future income tax is impossible. All it would take is a constitutional amendment and bam, its back.

we’ll be just like Europe with an income tax and a VAT within a decade or less.

The NRST and a VAT are two wholly seperate and entirely different things. Worse than apples and oranges in comparrison.

You’ve already been taxed on that with the expectation that you wouldn’t be re-taxed upon withdrawal. That won’t be the case if the Fair Tax passes. The same holds true of any investment accounts, savings accounts, bonds, cash in the mattress and the like. If you created the wealth with after-tax money before the Fair Tax was implemented then you’ll be taxed again when you spend it. That double taxation is a flaw that absolutely must be addressed.

Already the case because of embedded taxes. So at the end of the day, there is no difference. One is replaced with the other.

[Always Right]

So, are you finally admitting that 23% of current product prices is an embedded tax, which you have denied for years?

When did I deny it. My biggest issue was the fairtax does not pass it to the consumer. As long as employees and business keep their portion of the taxes, costs will not go down significantly and prices will go up.

[lucysmom]

Then, by that logic, shut up -- other nincompoops on the board are sniping mouthing the same tripe you two use.

"Sniping" seems to be the FairTax slur de jour.

[Filo]

You already do, and the government always has the chance to add new taxes later. You argument seems to be that unless the government and politicans, and what they do every day can be eliminated for all of the future, I can't support anything.

First of all, you aren’t going to browbeat me with the “you already do” nonsense. I realize that my income is taxed and taxed again, but that is holistically different from the double-taxation I am talking about.

As an example, if I have $100,000 dollars in (already taxed) savings before the fair tax is implemented I can spend that on $100,000 of products. Once the Fair Tax is in place it will be worth, at best, $85,000 because a 23%/30% tax will have been added to the cost of everything sold without the prices coming down by that amount.

Who is going to reimburse me for that $15,000, or whatever the number ends up being, when all is said and done?

Impossible. The 16th can be repealed. But a ban on a future income tax is impossible. All it would take is a constitutional amendment and bam, its back.

Yes and no. If the Amendment that implements the Fair Tax is worded in such a way that it becomes void if any other tax is implemented then there is, at least, some transparency in the effort.

Either way, a pre- or simultaneous repeal is mandatory.

The NRST and a VAT are two wholly seperate and entirely different things. Worse than apples and oranges in comparrison.

I wasn’t making a comparison other than to show that having multiple abusive taxes in place is not out of the question.

I don’t trust our government enough to think they wouldn’t do this in a heartbeat if they could. All I want to do is make it as close to impossible as possible.

Already the case because of embedded taxes. So at the end of the day, there is no difference. One is replaced with the other.

Bullshit. The Fair Tax rate is far greater than the embedded tax rate. You need only look at the tax components being “eliminated” to figure this out.

Is the Fair Tax so inherently weak that its proponents must lie to generate support?

[Phantom Lord]

Bullshit. The Fair Tax rate is far greater than the embedded tax rate.

OK then, what is the amount of current embedded taxes?

[Your Nightmare]

Absolutely false. When adjusted for inflation, many things are much cheaper today than 10, 20, 30, 50 years ago.

ROTFLMAO!! That like saying "If you take out the increase in prices, prices haven't increased at all."

[Filo]

OK then, what is the amount of current embedded taxes?

Less than 23% inclusive, 30% exclusive. That's all I know and that's all I need to know for my argument to be valid.

At 23% inclusive, 30% exclusive the Fair Tax includes income tax, SSDI, FICA and a host of other taxes. As such it is, by definition, larger than the embedded taxes in merchandise.

[MrB]

Anyone who argues what the rate of the NRST should be is telling you to look at his left hand while his right hand pulls off the trick -

and the trick is, keeping the present intrusive and immoral tax on income.

[Phantom Lord]

ROTFLMAO!! That like saying "If you take out the increase in prices, prices haven't increased at all."

Well then, why bother with, consider, or even have inflation adjustments and calculations.

Just as with income. Income today is far higher than it was 50 years ago. And things in actual dollars cost more in some cases.

I also noticed you didn't respond to that aspect of the post. That many many things are cheaper in actual dollars than they were in the past.

What did a VCR cost 25 years ago? Today?

DVD player? Personal Computer?

Or how about a 42" 1080P plasma tv? A year ago one was $15,000. What does it cost today?

Hell, any HDTV for that matter. Flat panel LCD/Plasma or rear projection.

[Phantom Lord]

Less than 23% inclusive, 30% exclusive. That's all I know and that's all I need to know for my argument to be valid.

So your answer is, "I don't know, but its not what they say it is."

Damn, your a genius!

[PreciousLiberty]

“Don’t make the perfect the enemy of the good (and it’s only perfect in your head, anyway.)”

It’s not perfect, but it’s the only way I’ll accept Federal taxation as not violating the Fourth Amendment.

The IRS needs to go, and people need to be able to pay their taxes without onerous paperwork.

The Fair Tax plan neatly accomplishes both objectives, with only more upside as far as I can tell. Perhaps once people see the cost of government rolled into every purchase, they’ll be more interested in smaller government.

[Phantom Lord]

The Fair Tax plan neatly accomplishes both objectives, with only more upside as far as I can tell. Perhaps once people see the cost of government rolled into every purchase, they’ll be more interested in smaller government.

People have no idea how much they actually pay in taxes.

I have long said that the quickest and surest way to cause a tax revolt is to end withholding and make people write a check for what they owe every quarter, or on April 15th.

[untrained skeptic]

Out of the 18-23% embedded taxes, at most 8% can be removed without lowering wages and owners profits.

Why? How does the inclusion of current embedded taxes raise wages and businesses profits?

[untrained skeptic]

All I read by Boortz assumes that the vendor will be forced by “the market” to reduce his prices by the amount of income and other fed taxes; this is fantasy.

Gas prices never drop?

The price of electronics never drops?

Market competition doesn't exist?

What world are you living in?

[Your Nightmare]

Well then, why bother with, consider, or even have inflation adjustments and calculations.

Real prices have nothing to do with what we were discussing. We were discussing price competition and how prices (nominal) generally rise over time. It make absolutely no sense to bring real prices into a discussion about nominal price competition.

[Phantom Lord]

Real prices have nothing to do with what we were discussing. We were discussing price competition and how prices (nominal) generally rise over time.

And many a real price DROPS over time.

[Filo]

So your answer is, "I don't know, but its not what they say it is."

No, my answer is "I don't know but it's less than the Fair Tax number."

Is that so hard to understand?

That means, as I said above again and again and again and again and again, that I will be taxed extra on pre-Fair Tax savings.

Is that so hard to understand?

Damn, your a genius!

Actually, I am. Thank you for recognizing that fact.