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.
It is not the consumer who has no such obligation and therefore is under no danger of any “... garnish wages or salary and file liens to collect amounts due under this subtitle ...”. The taxpayer mentioned is not the consumer and seem to not realize that.
It is certainly possible for a business (the small businessman in particular) to have “wages and salary” from his business selling to consumers but in that event it is the funds from the business what should have been paid in tax that are in question. If you’d study the bill more carefully I think you’d see this.
As for the tax contribution from the underground economy, there have been a number of detailed numerical examples on that matter and they show that under the present income tax system the actual amount that comes from those in the underground economy in the form of additions to the income tax is pathetically small rather than the 23% tax inclusive amount of the FairTax. This means that not only does the tax contribution from that segment increase greatly, but the number of taxpayers paying any significant tax amounts (23%) also greatly increases. This happens to be the case whether you like it or not.
Okay, then we may assume that a small businessman who does not pay himself a salary or wage is exempt?
How do you explain the part of the bill that says school books and clothes may not be seized?
The taxpayer mentioned is not the consumer and seem to not realize that.
Really, so then the end user does not incure the tax liability, and business pays the FairTax after all.
I don’t know why I argue with the FT kool aid drinkers...they will not admit that they are not debating tax reform or if Fair Tax is good for the country, but rather promoting it. The proof is that no part of it will be discussed or debated, you need to just support it blindly or drink the kool aid..... fact is that it will NEVER be inacted.
It is the end purchaser (the consumer) who is the actual tax payer but the wording in the bill uses the term “taxpayer” (all one work) to mean the merchant collecting and forwarding the tax. It comes from the purchaser however.
Your pallid attempt to play with words actually falls short. I suggest you read the bill more closely.
You can go back 5 years on the threads or even more and see a myriad of information - if you really wish to find out more.
If the merchant is the taxpayer "(all one work)", then doesn't that imply the the tax liability really falls on the merchant rather than the consumer?
Over 10 years of Fair Tax debate.....that’s why I can’t believe that there is no interest in further debate regarding altering, modifying, or changing the proposal to further identify possibilities for a consumption tax...not promotion of something that will never pass...I have read, studied, been hammered by the FT people etc... for a long time....
There’s no “implication” - it’s clear if you read the bill with some understanding.
It’s the liability to collect, report, and forward the money that falls on the merchant. The term “taxpayer” (the merchant) in the bill is not the same as “tax payer” (the consumer) in the consumption chain.
The FairTax is going to pass I believe. It’s getting more political support all the time.
Many problems with FT when you think through it. You want the government to pay out monthly checks? There goes the last freedom you have left! Democrats won’t support it because their precious illegal immigrants will be screwed. No prebate, plus they pay 23% + local sales taxes...Republicans will not like the huge step towards socialism....So where is the support going to come from? Not to mention the FT will have to go up substantially in its first 10 years to start to cover unfunded liabilities of the OASDI trust fund.
“The government” doesn’t pay out monthly checks. Much as with the SS presently, the prebate will be typically paid by wire transfer. Also, the prebate is not at all a “step toward socialism” (we’re already there in case you’ve not noticed). In fact it’s a step away from socialism and gives taxpayers far more political power than they presently have.
The FairTax is not a partisan political bill in any event and one of the original sponsors of the bill was Colin Peterson, a Democrat. And there are certainly some Democrats who recognize that the US cannot continue on its present course in having taxpayer-funded illegal immigration (among economic abnormalities).
What you refer to as “unfunded liabilities” (presumably the SS/MC entitlements) are in fact funded under the present bill defining the FairTax - which is still revenue neutral.
#1) There are $27 trillion in unfunded liabilities in the OASDI trust fund. In 2005, $722B was collected in “contributions”, while $540B was paid out. By 2018, the total going out will be over $1 Trillion, and for the first time in the history of SSA, the amount of “contrbutions” WILL NOT COVER the amounts going out. So WHERE do we get the money? The answer is lower benefits or higher taxes. It is just that simple. Therefore, we need tax reform that addresses this problem specifically, rather than a plan that declares itself “revenue nuetral”, so everything is the same....except for one thing...this problem doesn’t just go away, Fair Tax or not. What does FT propose to do about this problem? Nothing.
#2) The government, regardless of how it pays out the money, wire transfer, check, pony express, whatever, paying out monthly amounts to EVERY household in America (oh yeah, “qualified” household) is not a step towards socialism? Why would I want the government to have such an integral control of my monthly money? Once a year is bad enough, now we want monthly? Why would I want to give the government one dime more than it needs to operate on a minimal scale? ... and why would I want to pay for this disbursement of prebates?
#3) “We are already there in case I’ve not noticed”....now that’s a little resigned don’t you think. Oh well.
In the meantime, the FairTax allows for the entitlements to be funded while doing nothing but keeping the present system is a recipe for disaster as you note. With the FairTax, once the SS/MC laws are revamped the funding will be changed without any alteration in the FairTax so that the newly-reduced entitlements will take effect with no legislative delay beyond revamping the SS/MC laws - those are what govern these entitlements, not the FairTax. Also, the prebate does not go to "every household in Americs" at all.
Lower benefits or higher taxes....its that simple. So what does the FT rate have to be to cover the unfunded liabilities? Also, WHY would you want to PAY for prebate disbursements?
What, the prebate includes no adjustment for the differing costs of living in various areas of the country?
The FairTax law merely funds what is the current SS/MC requirement which - as I’ve said - I believe should both be eliminated. Until they are wither eliminated or greatly revamped the way the FT bill is written funds them and, in fact, the portion of the FairTax revenues that fund them is more likely to cause the FairTax to reduce somewhat with the present SS/MC payouts.
These amounts and the amount to cover the prebate is included within the 23% tax inclusive rate which is still revenue neutral.
“Revenue nuetral” is the phrase that FT supporters need to forget about. This is a shallow excuse for a shallow plan...one that ignores $27 trillion in debts. Also, why not answer my question asked at least 3 times now....WHY, WHY, WHY would I want to pay for prebate distributions....just because I like splurging and spending money I don’t have to spend? Do I like the control over the American public by having them beholdened to my prebate disbursements? WHY? WHY? WHY? would I want to pay for this?????
There is no way that that sort of favoritism can be all things to all people and I believe it’s better to offer the same prebate and let the taxpayers move if they think they’re in too expensive an area of the country for their income and consumption habits - or to change their habits.
Neither the government nor the other individual taxpayer owes those taxpayers you mention a living standard to which they’d like to become accustomed.
The FairTax is revenue neurtral so that it cannot be said to change the amount of tax revenue raised by the tax system so that we are not forced into unwise economic moves but have a chance to improve things economically over the next few years.
In fact because the FairTax will greatly boost the country's economy, we stand a better chance of having the wherewithal to "pay off" such a debt (if that's even a valid number) than under the present tax system which is dragging this country downward and greatly contributing to many of our economic ills.
This is a part of the deal that brings up lots of questions for me. If you pay no tax on anything secondhand, then won't this at least for 5 or so years harm our economy? If no one is buying new houses, cars, home appliances because they can get recent models at a much cheaper price then won't a lot of employees of construction firms, manufacturers and retail outlets be layed off and many existing small businesses go out of business?
Someone told me that construction companies would turn to their business to remodeling old homes, but if they built any new rooms or additions to a house wouldn't these have to have some kind of tax put on them? I realize that you will pay tax on any new materials added to the house, but when you buy a new house you aren't just paying for the materials that were put in the house, you are paying for the total value of the house and a new addition will increase the total value of a house.
Another thing that bothers me is the tax on services. If you have to pay tax on your doctor's visits, prescription medicine, and hospital operations then insurance companies will raise their premiums. You have to be living in lala land if you think doctors are going to suddenly lower their fees. The government will also have to pay the tax, so what they pay into medicare and medicaid will have to go up. If they exempt these things won't we lose a big chunk of money that has to be replaced somewhere else?
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