The People Must Demand The Fair Tax

GOPUSA ^ | August 28, 2007 | By Doug Patton

[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.

[robertpaulsen]

Compliance costs all the way through the production chain make up the rest — it’s a bitch to fill out those government forms. Trillions can be saved. Trust me. Who are you going to believe, me or common sense?

[gondramB]

>>There is plenty of data and evidence that revenues have increased since Bush took office. How you can say otherwise is still a mystery despite your attempts.<<

Bracket creep causes continuous increase in revenues for a fixed rate structure.

Revenues are recovering now but have not made up the large losses from the tax cuts.

The proof of the pudding is in the debt. See how the Bush43 line is become more flat - we aren't losing ground but we still are not gaining ground or making up for losses in the first 5 years.

I don't have anything against tax cuts. I don't like taxes and I do like tax cuts. But tax cuts the way the current President has done them,. without cutting spending just means we are borrowing money to feed the government. Its like living on credit cards - it doesn't help anything. Well that's not true, deficit spending does stimulate the economy but we are over doing it.

[gondramB]

>>Compliance costs all the way through the production chain make up the rest — it’s a bitch to fill out those government forms. Trillions can be saved. Trust me. Who are you going to believe, me or common sense?<<

Well, actually you are a pretty common sense guy...at least most of the time... :)

Do we have a good estimate of compliance costs and a comparison with projected compliance costs under a flat tax/sale tax?

[Hostage]

If the GDP is 16 trillion and there is 32% embedded taxes then shouldn’t the government already have revenues of $5 trillion dollars?

Take a clue: Consumption is only one of four components of GDP.

I will not do your homework for you. Let's see what you come up with. I'm ready to be dazzled but please no doctored charts!

[gondramB]

You know, you are actually, I believe, counter-productive to your cause. As such, I’m gonna stop arguing with you.

[Hostage]

Well at least you are starting to allocate factors more rationally.

But you are oversimplifying.

One note to bear in mind is that Clinton took the longterm (30yr) debt and refinanced it to 5yr debt at a lower interest rate. The result was a windfall in revenue savings but it also was a reckless move that GWB had to correct. By bringing back the 30yr treasury bond, GWB allowed a hit to revenues but lowered the risk to the country.

These facts and many others are needed to explain charts. When discussing tax cuts and revenues, often an ignorance of these types of facts lead to an incorrect conclusion. It happens frequently.

So be careful when using charts.

The primary reason that tax cuts work is that it puts money back into the private sector where it is used for growth and spending. Growth and spending are primary drivers for revenue collections.

[Hostage]

You should actually stop arguing until you have objective facts and inferences which you don’t presently have.

You needed the challenge whether you think so or not.

The fact is when you post errors about GDP and tax cuts and such, others especially youngsters may get the wrong idea about economic theory from glancing over your posts. My comments serve to alert to errors. If you take it personally that is your problem.

[groanup]

The only conclusion I can reach is that you're not telling me the truth about the Fair Tax.

What kind of mind continually draws such conclusions? And what is it about the figures that I am lying about? Figures don't lie. Is that why I have seen none from you SQLs?

[groanup]

That’s not an example. That’s two screen names.

[lewislynn]

Oh I see I got to you.

Don't flatter yourself. You're a laughing stock of the Fairtax movement.

[lewislynn]

Employing social psychology to convince and encourage is not ‘scary’ nor demeanng.

It is in the context you describe...In fact it borders lunacy.

[Hostage]

Ha!....yeah I got to you....Hehehehe.

You’re not up to a challenge there Einstein.

Now let’s see you cut & paste again and tell folks that they haven’t read through your hallucinations.

[lewislynn]

You’re not up to a challenge there Einstein.

Challenge? What callenge? were you saying something about delusional?

[lucysmom]

Weren’t federal taxes raised in 1982 and 1983 (following the 1981 tax cut)? IIRC, Some tax deductions were also eliminated during the Reagan years.

Second, assuming the economy always grows over time, we would expect tax revenue to also increase over time.

Currently, 17 cents of every dollar collected in taxes is merely used to make interest payments. In other words, we are paying through the nose to just tred water.

[robertpaulsen]

Why is the prebate necessary if prices remain the same and people have the same amount of money to spend?

[xcamel]

Oh, it’s plenty enough of an example for any non-self-deluded freeper that cares to do a posting search

[xcamel]

You can’t even quote me correctly, and ignoring the meat of the statement doesn’t count.

[Squat]

I really prefer the “National Sales Tax” 3% period no more and food (dairy, grains, fruits & veggies) and Dr. prescribed medicines are not taxed. Booze, soda etc are taxed.

Everyone pays their fair share. With a fair tax, there are too many loop holes and the wrong house could meddle with the rates.

[lucysmom]

Tax revenues are climbing twice as fast as the administration predicted in February, so fast that the budget deficit could actually decline this year.

Yippee! What an accomplishment. The budget deficit declines and the debt continues to grow.

[lewislynn]

Sounds alot like ‘tax cuts increase goverment revenues’, doesn’t it? Yet it is a fact.

Funny your other face didn't mention tax cuts/increased revenue as the reason for Kotlikoff seeing the need for a 4.9% (revenue neutral) Fairtax rate increase.

Hostage:

Recently, Kotlikoff estimated the necessary NRST rate for 2007 based on increases in government spending and consumption. The results were to increase the NRST from 23% to 23.82%.