Posted on 09/02/2007 6:42:46 AM PDT by Man50D
When Republican Mike Huckabee met supporters at Knights Stadium last week, more than two dozen showed up wearing the uniform of a group trying to flex its muscle in the presidential primaries.
Dressed in white shirts with "Fair Tax" logos, they're part of a growing movement in South Carolina and around the country pushing for drastic overhaul of the nation's tax laws.
Their group, Americans for Fair Taxation, would abolish the federal income tax and Internal Revenue Service and repeal the 16th Amendment that authorizes them. They would replace it all with a 23 percent national sales tax.
Thousands of Fair Tax supporters rallied in May outside the Republican presidential debate in Columbia. A month later, more than 100 waved signs as would-be candidate Fred Thompson arrived there for a speech.
"We really think that the winner of the South Carolina presidential primary will be a Fair Tax supporter," said John Steinberger, a Charleston teacher and the group's state director.
A handful of wealthy Houston businessmen started the group more than a decade ago. The idea was popularized in a 2005 book co-authored by Neal Boortz, whose syndicated radio show airs on WBT.
Congressional proponents include Charlotte Republican Rep. Sue Myrick. She's among 63 co-sponsors of a House bill that would enact those changes.
Supporters argue that by closing loopholes and taxing what people spend, not what they earn, the sales tax would be more fair. They acknowledge that a sales tax is regressive, falling most heavily on the poor who spend a greater share of income. They say the government would make payments to the poor to help them pay the new tax.
Critics say the change is unrealistic and unworkable, and would create an accounting nightmare that would fall heavily on state governments ill-prepared to handle it.
"
(Excerpt) Read more at charlotte.com ...
Do you mean the Earned Income Tax Credit?
"The prebate is not a handout."
I understand. When I said handout I was referring to welfare, food stamps, WIC, medicaid, and other goodies. I was saying that those currently on government handouts would also get the prebate, even though those handouts are paying the Fair Tax, not the individual receiving the prebate.
"because most people don't realize they exist!"
Look. All you have to do is tell the poor that prices will remain the same under the Fair Tax. That's true, isn't it? Their income (whatever source it is from) remains the same. Ergo, they don't need any prebate. What's so hard about that?
How is it a lie ? At least provide a reason for such a statement .
I understand that's how the prebate is being sold, yes. And it sounds so ... noble.
But why are we suddenly developing this philosophy? Everyone from Bill Gates to the beggar on the street pays 23% in hidden taxes on everything they buy today. (To remind you, that's the 23% that we're going to remove and make visible with the Fair Tax. Some on this forum think hidden taxes and tax costs are as high as 32%.)
Seriously. Why is there no call for a prebate today under the existing income tax system?
The Fair Tax seems bulletproof to me. The only issue that concerns me is what the States would do with their tax systems .
That is the major sticking point with the Fair Tax, as the States will not want to abolish their sales and income taxes .
My bad. I meant simpler to understand.
"The simple is answer can be found in post #13."
That's "an" answer, sure. But that can't be "the" answer.
We're going to turn the tax system of this country on its head, a tax system that's been in place almost 100 years and -- oh, by the way -- since we're doing that we've decided that now is a good time to come up with the philosophy that "nobody, not even Bill Gates, should have to pay taxes on the basics of life"?WHAT? Why now all of a sudden?
Well gosh, while we're at it, maybe it's also a good time to introduce the philosophy of "why should the poor have to pay the same amount for the basics of life"? A loaf of bread for the poor should be 3 cents and for Bill Gates $300. He can afford it. Why should the poor be subsidizing the cost of food for Bill Gates?
And another thing while we're at it. Just what is so wrong with, "From each according to their abilities, to each according to their needs"? Gosh, that sounds so fair.
(shudder)
Correct. Have you "earned" your gross or your net?
Similar to the article the other day that stated, "Imagine paying the same price for something but having your entire paycheck to buy it."
Another lie. It's either/or, not both.
Stick with me for one minute. Consider the illegal immigrant who works for cash, files no 1040, and pays no income taxes. What if we could wave a magic wand and force him to pay income taxes?
Well, if he wanted to "take home" the same amount as before, he'd have to raise his price for services, right? (Which is why people hire illegals -- they're cheap).
So, who really pays his income taxes? The people who hire him! You and I in the form of higher costs!
Nationwide, we all pay a higher price for goods and services because they contain the hidden taxes of everyone who supplies them. And that includes your salary. Your income taxes you file and pay are hidden and contained in the price of the product/service your company sells. Your employer collects these hidden taxes and forwards them to the federal government (your withholding).
I have always maintained that prices of goods and services would have room to drop between 10 and 15%. Some on this board have forgotten that they agreed with me on that point.
If foreign producers have a 17% competitive advantage, it seems to me that that the consumer benefits. You want to level the playing field by raising one side not lowering the other. Consumers would pay more, 30% more, for all imported goods. And just about everything I buy is imported.
"You are not considering interest rates will decline when The Fair Tax is enacted."
And here you told me the Fair Tax is simple -- simpler than a flat tax. You expect me to believe interest rates will decline because all the domestic banks will all decide to pass on all the savings they all get.
Sure they will. Just like all the domestic manufacturers will all pass on all the savings they all get too, in spite of the fact that their overseas competitors are raising their prices 30%.
Even hear the business phrase, "Leaving money on the table"? Do you know what that means?
I recall a federal gun law that required the states to do a background check. I believe the law was challenged by the states on constitutional grounds -- something about the federal government not having the power to require the states to do their job for them. The same reason ICE cannot force states to arrest illegals or force California to arrest medical marijuana users.
What if the states refuse to collect the Fair Tax? Or demand a higher fee? Plus, who looks for cheaters -- anyone?
Under the scenario of "the employee takes home his gross pay", I've seen the figure of 9% used and agreed upon. 15% is pushing it.
But what about the scenario of "the employee takes home the same amount as today". Wouldn't there be 23% with which to reduce prices? That's what I was referring to.
Under this scenario, take home pay remains the same and prices remain the same.
No one has ever explained to me how employers would be able to void all employment contracts and pay everyone less. I don't believe it will happen. I believe everyone will see and increase of between 25 and 35% in take home pay. More than enough to cover the FairTax.
Thank you for the link. Very interesting!
Of course the wealthier you are, the less you are tied to place. With technological advances in communications, overnight delivery, air travel, and electronic transfers, why would the wealthy choose to do the bulk of their spending in the US?
Any travel they would have to do to the US for business reasons would be a business expense and thus tax free.
Why would anyone think that the wealthy who would stash money, and business that would locate at an offshore address to avoid US taxes, wouldn't move themselves offshore to avoid taxes?
If the basics are such a special class, why should we pay for them at all?
The estimates for the 22% “embedded taxes” are based on Dale Jorgenson’s research. He included employee’s income and payroll taxes in the estimate.
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