Posted on 08/27/2007 7:53:49 AM PDT by Turret Gunner A20
This is what The Wall Street Journal had to say about the FairTax.
http://www.opinionjournal.com/extra/?id=110010523
And boy did they get it very, very wrong.
Evidently the FairTax is making some people nervous. The attacks are increasing, and there's a striking similarity in the fabrications being offered by columnists and pundits from coast to coast.
The heaviest, and possibly the strangest, attack over the weekend came from Wall Street Journal columnist Bruce Bartlett. Bartlett's column was titled "Fair Tax, Flawed Tax," and by Sunday morning it had generated hundreds of emails. When I finally read Bartlett's column I was completely stunned. I've referred to his commentary dozens of times in the last few years on the show, so for him to be so far off – so bizarrely wrong – about the FairTax was stunning.
OK ... by now you've probably read the column, so let's deal first with what I feel to be Bartlett's libelous assertion that the FairTax was " ...originally devised by the Church of Scientology in the early 1990s as a way to get rid of the Internal Revenue Service,"
Where in the hell did that come from?
This assertion – that the FairTax was developed by the Church of Scientology – is flat-out false. I suspect that Bartlett allowed someone else to do his research for him on this issue; someone with an agenda. Perhaps he blindly accepted some information from a Washington insider, perhaps a K Street denizen who fears the loss of power and income should the FairTax become law.
What Bartlett did was very simple, and astonishingly careless. He mistook a group called Citizens for an Alternative Tax System (CATS) for the people who developed the FairTax.
Now CATS did have a plan for a national retail sales tax, but it was in no way connected with Americans for Fair Taxation (AFFT) and the FairTax.
http://www.fairtax.org/site/PageServer
I was familiar with the CATS program. I had them on my radio repeatedly. As I've told you, I've been interested in this idea of replacing the income tax with the sales tax for some time.
The CATS idea was simply to do away with income taxes and replace them with a 17% sales tax. Payroll taxes would stay with you, as would many other federal tax levies. As you can see, this is substantially different from the program offered by the FairTax.
I'm going to lead you to several articles here. The first link will take you a document detailing the history of CATS.
http://www.fairtax.org/site/PageServer
If you read this carefully you will see absolutely no reference to the FairTax. There is no reference to Congressman John Linder or H.R. 25, the FairTax Act. All of the references are to CATS and their own idea of a national retail sales tax.
Moving right along here, next you have a list of articles detailing the connection between CATS and Scientology.
http://www.google.com/search?hl=en&q=%22Citizens+for+an+Alternative+Tax+System%22%2BScientology&btnG=Google+Search
That's right. It was CATS, not Americans for Fair Taxation with the strong connection to Scientology. In fact, here's another link setting for Scientology front groups.
http://www.google.com/search?hl=en&q=%22Citizens+for+an+Alternative+Tax+System%22%2BScientology&btnG=Google+Search
Scroll down the list a bit and you'll see CATS! You will not see AFFT or the FairTax mentioned.
The people responsible for creating AFFT and the Fair Tax are Houston Businessmen Leo Linbek and Robert McNair. Neither one of these people are Scientologists.
These men and their associates raised over $20 million for a study on finding an alternative to the federal income tax. That research was conducted by a coalition of market and academic experts from places such as MIT and Harvard, none of whom were associated in any way with Scientology. From that research came the FairTax.
Just an interesting historical note: When the research for a new tax system was commissioned with the $20 million raised by Linbeck, McNair and their associates, they made a commitment to accept whatever findings the research developed, strongly suspecting that their efforts were going to lead to the endorsement of some sort of a flat tax. The market and academic researchers came forth with an idea for a national retail sales tax instead, and the FairTax was born.
Bruce Bartlett owes Leo Linbeck, Robert McNair and the hundreds of thousands of FairTax volunteers across an America an apology. I suspect that apology will be forthcoming before too many days pass.
There were many other inaccuracies in Bartlett's column. As you know Congressman Linder and I, with the help of a brilliant analyst named Rob Woodall, are busy writing another FairTax book that will address virtually every meaningful criticism you may have heard or read. In Reader's Digest form, here are some quick response to other charges by Bartlett:
Bartlett jumps right into the middle of this nonsense over what the real tax rate is; 23 percent or 30 percent. He correctly points out that we don't quote the FairTax rate the way conventional sales taxes are quoted. The reason is simple; the FairTax will replace the embedded taxes and already exist in every item or service we purchase; and secondly, the FairTax will replace the income tax. Both the embedded taxes in the prices of what we buy now and the income taxes we pay now are inclusive taxes. We're replacing inclusive taxes with inclusive taxes.
It's so very simple: When you see a lamp on the shelf marked $100, you will pay $100 for that lamp when you get to the checkout. You will receive a receipt which shows that $23 of the $100 you have paid represents the FairTax. You do the math for yourself, but every time I work it out it comes to 23%
Bartlett also joins other critics in another blatant falsehood about the FairTax. Here's a sentence from his column: "If a product costs $1 at retail, the FairTax adds 30%, for a total of $1.30. Since the 30-cent tax is 23% of $1.30, FairTax supporters say the rate is 23% rather than 30%." In another paragraph Bartlett also says "Imagine paying 30 percent to the federal government on top of the purchase price of your next house."
Wrong, wrong, wrong. If a product costs $1 at retail .... It costs $1, with the FairTax already included. This is so easy to understand, you almost get the idea that people are intentionally trying to confuse the facts here. That $1 item Bartlett is referring to costs $1 at retail today! But instead of including the FairTax in that price, all of the embedded taxes from every business and individual involved in bringing that item to the marketplace are included. You remove one, you add the other. And that bit about 30 percent to the federal government on top of the purchase price of your new home?
Another lie. The embedded taxes are so high on the price of a new home today that when they are removed and the FairTax added, that home could be a percent or two cheaper! Come on, Bruce. This really isn't that hard. Let's try to spell this out plainly for everyone:
In another astonishing falsehood Bartlett says that the cost of providing the prebate to every household in America is not factored into the FairTax rate. He says it would cost at least $600 billion the first year. Again, Bartlett is just flat wrong. The cost of the rebate most certainly was included in the 23 percent rate. Congressman Linder tells me that if the rebate had not been included the FairTax rate could have been lowered to 18 percent.
The fact is that the rebate is projected to cost 5 percent, and that 5 percent is most certainly included in the rate.
Bartlett makes another huge mistake(?) regarding the prebate. He says that the FairTax sends monthly checks to every household based on income. Then he speaks of the "complexity and intrusiveness of tracking every American's monthly income .." Wrong ... completely and absolutely wrong. As anyone who has read the book knows, the prebate is not based on income, it's based on family size. There is no need to track anyone's monthly income. The only thing the government needs is a valid Social Security number and the number of people in the household.
Then, of course, Bartlett gets into the question of whether or not you can fund the federal government at present levels with a 23 percent inclusive sales tax rate. He cites numerous sources that say the tax rate would have to be much higher than 23 percent.
Know this ... in every case where some individual or organization has come forward to say that the tax rate would have to be higher than 23 percent, they have first changed the terms of the FairTax. That is, they have created exemptions. For instance, they assume that congress would never agree to tax food and medicines, therefore the tax would have to be XX percent, or that congress wouldn't tax transportation and housing, therefore the tax would have to be XX percent. Again .. the fact that the taxes are already there in the form of embedded taxes – embedded taxes to be replaced by the fair tax – is ignored.
Instead of me arguing about the sufficiency of the 23 percent rate, perhaps you would like to read it for yourself. Here's a link to a study by several economists titled "Taxing Sales under the FairTax: What Rate Works?"
http://people.bu.edu/kotlikof/Taxing%20Sales%20under%20the%20FairTax,%20What%20Rate%20Works,%20October%206,%202006.pdf
Don't take my word for it. I'm just a second-tier talk show host. See what several renowned economists have to say in a 34-page report.
Let's face it. The FairTax is a ripe target. It is easy to demagogue.
"Candidate Smith wants to add 30 percent to the price of everything you buy."
"Candidate Jones wants to add 23 percent to the price of your new home"
Can you imagine some uninformed voter (remember, most voters are government educated) hearing something like that? You just know how they're going to vote, don't you?
Is it possible that some of these irresponsible attacks are being mounted right now to prevent a new candidate, Fred Thompson, for instance, from running on this issue? Is a shot being fired across some political bows?
http://boortz.com/nuze/200708/08272007.html - fairtax
He only cuts and pastes, and if he reads what he cuts and pastes he never gets to a point of understanding what is written.
Let him rant on, he’s good advertising for why the Income tax is a fraud because his arguments that attempt to shoot holes in the FairTax are full of holes themselves or they can be turned around to apply with more weight to the Income tax.
That person that is thinks they are paid $60,000 is really being paid more than that.So this person's 100% paycheck would be more than $60,000? How does that reduce prices?
The amount of the price decrease depends on the depth of the supply chain in manufacturing and services. Price lowering estimates presently run in a two sigma band of 11% t0 36%.LOL! Apparently you have or you have done research yourself. Use any percentage you like, show what happens after X levels...Or show the research...for once. (Oh wait, I forgot, it's a secret that's being filtered out)--------
You have no data, you’ve done no research, you have only hot air. Who needs that?
Price lowering estimates presently run in a two sigma band of 11% t0 36%Wow, what a coincidence...As if by magic, 23% fits right in the middle.
I’ve given this problem some thought, and it seems easy to fix. What would have to be done is that on the date of the changeover, say January 1, 2010, or whatever, if you had $100,000 in savings, stocks, etc., and the tax rate was pegged at 23% exclusive, you would be issued $23,000 worth of Fair Tax Vouchers, which could be used only to pay FT on future purchases.Simple enough...But where would the money come from?...Higher rates?
Wrong.Apparently you read the book and understand it.Taxes are taxes, not wages or profits.
Read the book if you don't understand it.
So the taxes taken out of your check aren't (from) wages and taxes paid by businesses aren't (from) profits...Where exactly does Boortz say taxes come from?...What page is that on?
I suppose so. But if you don’t do it you can’t maintain parity between income-tax-era and fairtax-era earnings, so it’s not like an extra burden, it’s the rate everyone should have anticipated in the first place.
Where would you shop?You don't have Shell stations, Chevron stations, Macy's, Sears, Penneys, Target? Only Walmart and discount gas?
And don’t forget too, that many dollars that are now saved are pretax dollars anyway, and so would not need to be compensated with FT vouchers.
But how can you not see when he sells his $10K worth of drugs he fails to submit the $2300 worth of fairtax. The criminal is avoiding $2300 worth of taxes. It works out the same under either tax scheme.Except under the Fairtax the drug dealer would get who knows how many "prebate" checks every month.
You have bitten into Filo’s flawed assertion that the FairTax is flawed.
The FairTax replaces all embedded federal hidden taxes. Goods and services manufactured or produced after FairTax enactment will no longer need to carry the federal embedded taxes, therefore the cost of those goods and services will fall and the price will be brought back by imposing the NRST (the National Retail Sales tax of the FairTax legislation).
To repeat; the FairTax is a replacement tax, it is not a tax on a tax.
See Post #257 of this thread for brief comments on how existing inventories would not be subject to the NRST.
http://www.freerepublic.com/focus/f-news/1887196/posts?page=257#257
Sounds more like a trade off than a gain.You're forgetting that under the fairtax the "prebate" would further lower their tax burden...
The results have not yet been published and preliminary reports indicate the NRST is substantially lower on certain product categories. But the results are not yet public.Hypocrite.This is why I respond the way I do, lots of detractors saying stuff without backup, i.e. blowing hot air into what should be a frank discussion.
How you can say what you said without having the data, without having done the analysis, without knowing the results is a sign of someone that adds nothing to the discussion and aims to detract.
That’s ridiculous! Ever if the government had to pay the fair tax it would not need more revenue because it would be receiving all the money back!They still have to collect it to pay themselves the increase.
Because you make no sense. Individuals pay the FairTax at the point-of-sale for anything they purchase. There is no submitting anything.What is there, some government agent there to grab it out of the "individual's" hand?
No it’s not hypocritical because there are indeed results. The FairTax movement has obtained data and they have performed analysis. The methods are under peer review because the estimates involve complex modeling.
You can try all you want to slam the FairTax but it won’t do you any good. The fact is the FairTax is moving forward, gathering data, assessing results, and will continue to do so.
Whereas you have nothing going forward other than an ‘attitude’.
I can guarantee you that the results from the FairTax cosponsors will be published well before you have anything published. In fact I think you are incapable of publishing in respected journals, you do not exhibit the aptitude for doing so.
And don’t forget too, that many dollars that are now saved are pretax dollars anyway, and so would not need to be compensated with FT vouchers.Can't answer where the money for vouchers would come from can you.
I suppose so. But if you don’t do it you can’t maintain parity between income-tax-era and fairtax-era earnings, so it’s not like an extra burden,Hmmm. If I told you what my gross earnings are can you tell me what tax bracket I'm in?...I didn't think so.
it’s the rate everyone should have anticipated in the first place.Not me. Who are you to say what anyone should anticipate?
Were you saying something about “hot air”...Look in a mirror.
Read the Bill,I read it...You're still $2,000 short.
Good to see my comments got to you because the facts are that there are embedded taxes in products and services and there is ongoing data collection and analysis to quantify those taxes.
But you believe that the FairTax movement is just sitting on its hands. Of course that would be expected from someone that can’t stand the fact the FairTax will be the method of federal taxation in America.
Babble on, you have nothing to offer except cut & paste, misinterpretations and an ‘attitude’. You will never publish anything, you’re not in a league to do so. I do hope you try though because it would be an education for you. But incorrigibles like you think you have nothing to learn because you already know it all, which is funny because any casual observer can see you know little.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.