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The People Must Demand The Fair Tax
GOPUSA ^ | August 28, 2007 | By Doug Patton

Posted on 08/28/2007 4:39:18 PM PDT by Bigun

The People Must Demand The Fair Tax
By Doug Patton
August 28, 2007

Last year, during the United States Senate race in Nebraska, Republican challenger Pete Ricketts suggested that every option must be considered when looking at ways to reform our federal tax system. Among the list of alternatives Ricketts said should be on the table was a national sales tax known simply as the "Fair Tax."

The Democrat incumbent, U.S. Sen. Ben Nelson, launched an attack on his opponent that was, at best, distorted and condescending, at worst, irrational demagoguery. One would have thought that Ricketts had suggested stealing all the assets of the poor and handing them over to Warren Buffet and Bill Gates.

Recently, the panel of pundits on ABC's "This Week with George Stephanopoulos," discussing the apparent rise in popularity of former Arkansas Governor Mike Huckabee's presidential campaign message, scoffed at Huckabee's unabashed promotion of the Fair Tax.

George Will, the token "conservative" on the panel, brushed it aside with the disbelief of an elitist who cannot understand the burden of the average worker who would love to take home his or her entire paycheck, as the Fair Tax would allow him or her to do. Will opined that Huckabee's second place showing in the Iowa straw poll was even more amazing given the fact that "he supported a national sales tax of thirty percent, which means that if you buy a one million dollar house, you'll be writing a check to the government for three hundred thousand dollars." Of course, the others on the panel readily agreed.

The elites of this country, who buy those million-dollar homes, are not enamored with the Fair Tax. They would be if they took the time to understand its appeal.

The Fair Tax would replace all federal income taxes. No more federal withholding. No more Social Security withholding. No more Medicare withholding. No more stealing from the paychecks of American workers before they even see it and then pretending to give them a refund, without interest, at the end of the year. No more saving receipts for tax deductions. No more IRS audits. No more April 15th.

Instead, the Fair Tax would put us in control. All consumer items would be taxed. Business purchases would not. By allowing us to make the determination about what we buy and when we buy it, the ability of our legislators to manipulate our behavior is eliminated. That is why the elites don't like it. They can't control the public's spending habits under such a system.

The current federal tax system is broken. It cannot be fixed. Since the inception of the federal income tax with the passage of the 16th Amendment in 1913, federal corruption and control have turned it into a Frankenstein monster that torments the people and serves the special interests. A tax on a person's income is a tax on production, and as Ronald Reagan once said, "Whatever you tax, you get less of."

Because the poor are forced to spend a disproportionate percentage of their resources to cover the tax on necessities, the Fair Tax hits them the hardest. That issue can be addressed by simply issuing a "prebate" check each month to every household in the country. Unlike disingenuous tax credits, deductions, exemptions and other loopholes in the current income tax code, a prebate check is a clean, honest method of covering the sales tax on food, clothing and shelter - up to the poverty level.

Of course, removing the income tax on corporations will reduce the cost of everything we buy, since corporations don't pay taxes. They simply pass them along to consumers. The Fair Tax plan calculates that removing the corporate income tax will result in a reduction in the cost of virtually every consumer item on the market. In fact, it will just about offset the tax on those products. Imagine paying the same price for something but having your entire paycheck to buy it.

And then there are the billions of dollars that flow untaxed through our economy today: drug dealers, prostitutes, pornographers, foreign tourists. Imagine how much revenue could be raised simply by taxing the things those people consume.

There would be no more audits, no more justifying deductions, and April 15th would become just another spring day. But only if the people stand up to the elites and demand it.


TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Government
KEYWORDS: fairness; fairtax; freedom; reform; tax; taxes
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To: Turret Gunner A20
"But I'll try again READ THE FAIR TAX PROPOSAL and try to understand it."

I did. Nowhere does it say (as the author does) that we will pay the same price for something but have our entire paycheck to buy it.

Do you think the author read the Fair Tax proposal? Do you agree with the author's statement?

What have I said that you don't agree with? Where am I wrong? What makes you feel the need to tell me to read it?

Seriously. Correct my errors. THEN AND ONLY THEN can you tell me to read the Fair Tax proposal.

141 posted on 08/29/2007 7:23:36 AM PDT by robertpaulsen
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To: Man50D
The Fair Tax rate will be applied to amount of dollars spent. People with higher incomes spend a greater amount of dollars than those with lower incomes therefore the amount of dollars collected by a consumption tax will be greater. Your premise is flawed.

Rich people spend a proportionately lesser percentage of their income on consumables than poor people do. A Millionaire (annual income) would have a tough time spending a hundred thousand a year on food (10%) where a poor person may easily spend 10 to 20 percent of their income on food. In fact I know a number of wealthy families who eat very well but it is generally fresh and cheap. Poor people may very well spend more on food than wealthy people.

142 posted on 08/29/2007 7:26:50 AM PDT by LeGrande (Muslims, Jews and Christians all believe in the same God of Abraham.)
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To: Hostage
Kotlikoff’s estimate was 23.82%! A difference of 0.82%!
That's the inclusive rate. One of the problems with inclusive sale tax rates is that differences in the percentage don't reflect the true difference in revenue generated by the rate. Going from 23% to 23.82% is only an increase of 3.5% in the rate but increases the revenue generated by 4.9%. That's a very significant number, especially when discussing something as large as the U.S. Budget.

The exclusive rate reflects the true increase - it goes from 29.87% to 31.34% in Kotlikoff's study.
143 posted on 08/29/2007 7:28:15 AM PDT by Your Nightmare
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To: robertpaulsen

Are you really that ignorant?

Don’t you know there are two parts of Social Security withholding, one for the employee and a matching part by the employer?

When a wage earner gets paid does he see his employer’s matching FICA contribution withheld on the paystub? No.

If the employer does not withhold the employee’s FICA contribution, and all other payroll and income taxes, does the employee not see the entire gross income?

And what of the employer’s matching contribution?

You don’t understand the basics of taxation and yet you post like you know something. Just another hot air know-nothing know-it-all.

And you are adding wrong because it is not just the employer’s payroll and tax savings that are used to reduce costs, it is also the employer’s suppliers and contractors that pass on their savings as well. Business to business transactions are not subject to the NRST. And the cost reductions up and down the entire supply chain, 10-30% from each supplier and contractor add up to reduce costs. You forgot those suppliers and contractors because of your simpleton model. You don’t have the data on the supply chain and you haven’t done an analysis because you have no data. Yet you argue without facts and data. What bravado!

Simple example:
Supplier A —> 18% cost reduction —> Supplier B —> 14% cost reduction

Contractor 1 —> 12% cost reduction —> Supplier B —>11% cost reduction

etc.

——> Retailer

and so on. The analysis of federal embedded taxes and cost savings involves modeling the supply chain across broad retail product categories. Your simpleton model gets an F.

But of course you did not mention these things. You are so busy acting like a know-it-all that you failed to learn anything to know.


144 posted on 08/29/2007 7:28:17 AM PDT by Hostage (Fred Thompson will be President.)
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To: lewislynn

Yeah, you were caught omitting factual details. Why did you not mention Kotlikoff’s estimate?

Go ahead and change the subject. Show everyone how you evade answering directly.


145 posted on 08/29/2007 7:30:19 AM PDT by Hostage (Fred Thompson will be President.)
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To: robertpaulsen; Bigun; Man50D; All
Letters to the Editor, today's WSJ:

Be Fair to FairTax -- Throw the Red Herrings Back in the Water

It is apparently getting so difficult to defend the current income tax system that its guardians must use smear tactics to slow down its best replacement. Bruce Bartlett ("FairTax, Flawed Tax," editorial page, Aug. 25) is the latest status quo defender to use fiction to slander the FairTax plan.

The FairTax was developed many years ago, totally independently of any other proposal, group or movement. It is a product of more than $20 million of advanced economic research, as well as detailed conversations with citizens as to their preferences defining the best possible national tax system. Many groups and individuals have agitated to replace the deeply flawed income tax system, including, apparently, the Church of Scientology. As a founder of Americans For Fair Taxation, I can state categorically, however, that Scientology played no role in the founding, research or crafting of the legislation giving expression to the FairTax.

Mr. Bartlett is equally wrong about many other aspects of the FairTax. We are disappointed but hardly surprised by such distortions about it coming from the very economist who once opined that the income tax system just needed a little "tweaking."

Leo Linbeck

Chairman and CEO

Americans for Fair Taxation

Houston

My guess is that few readers made it with an open mind past Mr. Bartlett attributing the FairTax's origins to the Church of Scientology. That organization may have a similar proposal or a proposal with a similar name, but I know for certain that the mainstream FairTax proposal found at www.fairtax.org has no connection to it.

I know this because the two principal founders of the FairTax movement, Leo Linbeck and Bob McNair of Houston, are friends of mine who served on my board at the Dallas Fed. I was there as they began to develop their proposal in the mid-1990s. I watched them pitch their fledgling idea to their friends and business associates, and I watched them urge prominent economists to do independent research on their proposal. I even accompanied them to San Francisco to pitch it to Milton and Rose Friedman. (I still remember Rose's homemade cookies.)

We should give the FairTax a fair chance. In fact, I posted a blog with that title a few weeks ago. See www.bob-mcteer-blog.com. A fair chance means a thorough evaluation and discussion of its merits without the distraction of a red herring.

Bob McTeer

Distinguished Fellow

National Center for Policy Analysis

Former President of the Dallas Fed

Frisco, Texas

The FairTax would replace the federal corporate and individual income tax, payroll taxes and the estate and gift tax with a 23% national retail sales tax on all goods and services. Each household would be provided with a monthly prebate equal to the sales tax rate times the federal poverty level plus a small extra amount in the case of a married couple to prevent a marriage penalty.

The FairTax bill (H.R. 25) was developed by economists, business people and tax lawyers who understood that the current tax system is dysfunctional. Specifying the criteria by which successful reform should be evaluated, they engineered the tax around the notion that reform should minimize the adverse growth effects of the tax system, be neutral between debt and equity, consumption and savings, and among industries, should reduce compliance burdens that waste more than a quarter trillion dollars today, respect civil liberties instead of requiring Americans to reveal virtually every aspect of their lives to government, eliminate favoritism shown imports and remove the penalty on exports, enhance the competitiveness of the U.S. as a investment destination and a location for headquartering businesses, eliminate the bias against upward mobility, and increase transparency and comprehension of the tax system.

Mr. Bartlett questions economic claims that under the FairTax proposal the gross domestic product will rise 10.5%. In fact, Arduin, Laffer & Moore Econometrics estimates GDP gains up to 24.4% greater than under the current system by the 10th year. Michael Boskin, former chairman of the Council of Economic Advisers, estimates long-term gain to GDP from a consumption-based tax reform would be about 10%. Laurence Kotlikoff estimated a 7% to 14% increase in GDP. Many others find high single digit to low double digit gains. Lowering marginal rates and eliminating double and triple taxation of savings will increase the well-being of the American people by a trillion dollars per year and perhaps much more.

The FairTax would untax existing homes that represent three-quarters of all homes bought and sold. And by allowing mortgage interest payments to be paid with both pre-income and pre-payroll tax dollars, the tax is the equivalent of allowing mortgage interest to be deductible against payroll taxes today. Interest rates will drop by 25% for the same reason municipal bond rates are lower than taxable bond rates. Interest would not be taxable to the recipient. And of course there is the benefit of having the only developed economy in the world with a zero rate of tax on income.

Dan R. Mastromarco

David R. Burton

Alexandria, Va.

(Messrs. Mastromarco and Burton are principals in the Argus Group, a law and government relations firm.

146 posted on 08/29/2007 7:31:14 AM PDT by groanup (Limited government is the answer. What's the question?)
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To: lucysmom
Article I, Section 8, Clause 1 of the U.S. Constitution gives Congress the power "to lay and collect Taxes, Duties, Imposts and Excises ...", which was how federal revenue was raised prior to the 16th amendment.

I would imagine Congress getting real creative in this area to supplement the Fair Tax once the 16th is repealed.

147 posted on 08/29/2007 7:32:33 AM PDT by robertpaulsen
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To: Your Nightmare

Trying to confuse the issue? Try again because you failed.

Most have learned the concepts of inclusive and exclusive and it does not change the fact that the dollars are the same.

Inclusive versus exclusive is the only deception card you have left to play. That card will be taken away from you in time. Stay tuned.


148 posted on 08/29/2007 7:37:08 AM PDT by Hostage (Fred Thompson will be President.)
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To: Hostage
Show everyone how you evade answering directly.

Speaking of evading - how much did your wife pay in federal gas taxes. You've shared her gross income, taxable income, and the tax she paid with us, why not what she paid in federal gas taxes?

Would I be correct in assuming that you don't answer because you don't know? Would admitting that you don't know impune your claim that the FairTax makes the total tax burden visible?

149 posted on 08/29/2007 7:40:53 AM PDT by lucysmom
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To: robertpaulsen
I would imagine Congress getting real creative in this area to supplement the Fair Tax once the 16th is repealed.

It doesn't take much imagination does it? I wonder why FairTax supporters deny the possibilities.

150 posted on 08/29/2007 7:46:14 AM PDT by lucysmom
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To: Hostage
The poster said there were studies that show there would be more money going to Washington. I said the only study I saw was from the Fairtax that said the 23% rate wasn't quite enought to be revenue neutral...And that is exactly what it says.

It's not my job to present factual details about the Fairtax. A better question is why didn't a Fairtaxer correct the poster about the studies...

Kotlikoff’s estimate was 23.82%! A difference of 0.82%!
That's the same kind of "it's less than one percent" "it's for the children" BS we would hear when the rate get's incrementally ratcheted up. The truth is, adding 0.82% is a 3.5% tax increase ...

Were you saying something about omitting factual information?

151 posted on 08/29/2007 7:49:45 AM PDT by lewislynn (What does the global warming movement and the Fairtax movement have in common? Disinformation)
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To: LeGrande
Thanks for not jumping to conclusions. Because you don’t see the revenues does not mean they are not there.

The authors of the FairTax bill have worked with OTA and the Joint Tax Committee for years. They know the accountants and actuaries personally and they know the details of revenue estimation. They know the details of revenue estimation so well that they advise the revenue committees on methodology. For example, they were successful in writing law that requires Congress to use dynamic scoring versus static scoring methodology.

It is wise to study their findings before jumping to any conclusions.

That’s not to say there isn’t a political fight going on. There are many vested interests in keeping the Income tax. The Washington DC K Street lobbyists would experience severe cutbacks if the Income tax was abolished. Almost all corruption in Washington can be traced back to special tax favors with the Income tax code. It will be enormously more difficult to bribe and control members of Congress and their staffs under the FairTax and that is what scares them about the FairTax.

Lots of special interests want to confuse people like you so that you think negatively about the FairTax.

My advice for now is to watch and learn, don’t believe everything you hear, watch who tries to hide, omit or twist facts. Then you will see who are the real truthtellers over time.

152 posted on 08/29/2007 7:54:44 AM PDT by Hostage (Fred Thompson will be President.)
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To: lewislynn

The poster is right. There are studies ongoing that show revenues would increase because alot of government spending today is the government paying itself.

Just because the results are not yet published does not mean these studies don’t exist.

Look you were caught doing what you always do which is to cut and paste certain facts that you omit details from and then you try to insinuate some negativity about the FairTax.

People catch on to you and realize you’re just another detractor with some sort of axe to grind about the FairTax. Your credibility is nonexistant yet you cut and paste edited facts to try and establish it. It hasn’t worked and it won’t work.

I know there are alot of government employees with idle hands that sit in from of computers posting on blogs. People can see that. Anyone that would defend the current Income tax MUST have a stake in it in some way.


153 posted on 08/29/2007 8:00:50 AM PDT by Hostage (Fred Thompson will be President.)
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To: Hostage
Trying to confuse the issue?
I'm trying to confuse the issue?!? The inclusive rate confuses the issue. I was clarifying the issue. (But I guess that's why you didn't address the substance of my post. More confusion is better for the FairTax.)
154 posted on 08/29/2007 8:02:43 AM PDT by Your Nightmare
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To: lucysmom

Get help. You have a sickness you need to attend to.

If you want to believe the posted federal gas tax of 18.4 cents per gallon is hidden, then suit yourself. It’s a total absurdity and shows you are not worth reading or responding to.


155 posted on 08/29/2007 8:03:36 AM PDT by Hostage (Fred Thompson will be President.)
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To: lewislynn
That's the same kind of "it's less than one percent" "it's for the children" BS we would hear when the rate get's incrementally ratcheted up. The truth is, adding 0.82% is a 3.5% tax increase ...
Check #143. It's a 4.9% tax increase.
156 posted on 08/29/2007 8:04:47 AM PDT by Your Nightmare
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To: Hostage
"If the employer does not withhold the employee’s FICA contribution, and all other payroll and income taxes, does the employee not see the entire gross income?"

Hey! You're the one who said, "You think the builder cannot return the employee’s FICA contribution to the employer and retain the employer’s FICA contribution to lower costs?"

NOW you're saying the employee keeps his portion of FICA and the employer retains only his part. Would you please make up you mind?

In this new scenario, yes, the employee takes home his gross paycheck.

But now the employer only has his portion of FICA to reduce costs (6.2%) plus his portion of Medicare (1.45%) plus compliance costs of 1-2%. Maybe a total of 9%. AND we have to assume that the builder will pass on all of that 9% to the buyer instead of keeping all or some of it as additional profit.

"You don’t understand the basics of taxation and yet you post like you know something."

Remember, YOU were the one who said the employer kept the employee portion of FICA.

"And you are adding wrong because it is not just the employer’s payroll and tax savings that are used to reduce costs, it is also the employer’s suppliers and contractors that pass on their savings as well."

A house consists of labor and materials. Before any taxes are added by anyone, the builder saves around 9% on his labor as I outlined above. The builder also saves around 9% of his purchased materials because his suppliers also saved 9% on their labor.

All in all, the home builder is able to reduce the total price of his house by 9% (9% on labor and 9% on materials). Then he adds the 30% Fair Tax. For a whopping 18% increase.

And stop with the name calling, a$$hole. You have no cause to call me ignorant. Do it again and we're done on this thread.

157 posted on 08/29/2007 8:05:38 AM PDT by robertpaulsen
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To: lewislynn
Isn’t it amazing how those who espouse freedom, and choice and all of the platitudes of the founders suddenly deny your right to disagree, and make a special effort to impugn your character every chance they get when it comes too the (un)fairtax ???
158 posted on 08/29/2007 8:06:22 AM PDT by xcamel (FDT/2008 -- talk about it >> irc://irc.freenode.net/fredthompson)
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To: Your Nightmare

That’s the only card of deception left to you.

So when Truth In Taxes legislation is passed and tax information is posted for embedded taxes of products and services, should the embedded taxes be posted at the lower inclusive rate or the higher exlusive rate or both?

Embedded taxes are presently an average 23% inclusive and 29.9% exclusive.

The NRST is presently etimated at an average 23% inclusive and 29.9% exclusive.

The FairTax’ NRST replaces the federal embedded taxes.

Your rant about exclusive versus inclusive is a red herring diatribe. As the populace becomes aware of embedded taxes in products and services via Truth in Taxes legislation, your argument will fail miseraby and you will disappear. Additionally people will be angry for the deception you attempted to foist on them.


159 posted on 08/29/2007 8:10:53 AM PDT by Hostage (Fred Thompson will be President.)
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To: xcamel

You are the one that attacks FairTax supporters and attempts to impugn them. And you started it first before I called you on it.

Got anything of substance to offer other than snide comments?


160 posted on 08/29/2007 8:14:32 AM PDT by Hostage (Fred Thompson will be President.)
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