Posted on 09/12/2007 2:53:37 PM PDT by Man50D
1. Supported by Alan Greenspan and 75 other Economists and Economic Professors. They all support a consumption tax as better for America than an income tax.
2. Removes the most regressive tax on the poor and middle class- the payroll tax. Provides a broader based tax for Social Security and Medicare. The Fair Tax also replaces the personal and business income tax, AMT(Alternative Minimum Tax), death tax, capital gains tax and investment taxes.
3. Removes business income and payroll taxes resulting in a drop in prices by 10 to 15%. Saves an estimated $250 to $400 Billion annually in unproductive tax compliance costs.
4. Eliminates the cumbersome IRS Tax code and replaces it with a National Sales tax of 30%(income tax equivalent of 23%). With price drop consumers pay about the same. Under the arcahic Income and payroll tax a middle class family had to earn a gross pay of $148 to bring $100 Home. Under the Fair Tax you bring $148 dollars home and with a minimum 10% price drop that same $100 of Goods costs you $90. Add the Sales Tax your new total is $117. You net $31 extra.
5. Fights outsourcing; increases Manufacturing and business growth back in America. Boosts Economic Growth an estimated 6 to 10% in the first year. Increased job growth.
6. Reduces the trade deficit because exports will not pay the sales tax and be 10 to 15% cheaper for sale overseas. Leveling playing field with low wage countries. (Unions should support)
7. US shores will be the most competitive corporate tax -free zone not the Bahamas. Corporate headquarters and many other businesses can return to US soil and be more competitive. Investment capital will flow and American Based business and jobs will grow.
8. Average working families take home 100% of their paychecks, no Federal income tax or payroll deductions. Average family of 4 making $50,000/yr takes home $5,000 to $7500 more.
9. Families have more Spendable income for Health Insurance, Childcare, College tuition, and Private retirement Savings accounts. It’s their choice for their family. “Ownership”
10. Fair Tax package is revenue neutral and Progressive with a Prebate of Sales tax up to the Poverty line of spending. Family of 4 gets $492/m. Couple receives $367/m. No receipts no complicated filing for refunds. A refillable monthly debit card to cover Sales tax on all purchases up to the poverty line of Spending - Family of 4 HHS sets in 2005 at $25,660- Prebate is $492/m
So there you are. Some of my reasons, enumerated and laid out for all the world to see. C'mon SQLs. I must be lying somewhere in there. Hell, I'll even admit I despise the friggin' income tax and I LOVE the idea of a consumption tax. For me it's either/or.
Go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; and may posterity forget that ye were our countrymen. S. Adams.
With the income tax you are still feeding the crocodile hoping that he eats you last.
What do you suppose it was that allowed all that borrowing to take place all of a sudden in the twentieth century?Oh wait, don't tell me, that evil Marxist income tax and the Fairtax will be the savior to end all government borrowing....grow up.
Here are some reasons I think a NRST is far and away a better choice than what we have now.Who asked? I'm not reading beyond that line because I couldn't care less what "you think". Convince me you're some kind of an expert on taxes (or anything else for that matter) then I'll listen to what "YOU THINK". I'm not sure you even understand where your bread is buttered.
3. Removes business income and payroll taxes resulting in a drop in prices by 10 to 15%. Saves an estimated $250 to $400 Billion annually in unproductive tax compliance costs.
4. Eliminates the cumbersome IRS Tax code and replaces it with a National Sales tax of 30%(income tax equivalent of 23%). With price drop consumers pay about the same. Under the arcahic Income and payroll tax a middle class family had to earn a gross pay of $148 to bring $100 Home. Under the Fair Tax you bring $148 dollars home and with a minimum 10% price drop that same $100 of Goods costs you $90. Add the Sales Tax your new total is $117. You net $31 extra.
This is one of those areas that I have an issue, the "hopes and dreams" piece. What guarantee do we have that prices will indeed drop at all. I know that it is assumed that business will use the reduction in accounting costs for tax prep, along with the removed tax itself, but for many medium to large business the cost is not always detailed out as an individual item, but included in total accounting expenditures including payroll, Receivable/payables etc. Without a hard basis, many business will just leave the status quo. There is also the fact that seeing as people have more income, they may not even bother trying to adjust costs down. Maybe some industries will and some won't so the "stay competitive" argument is subject to those whims.
Next
10. Fair Tax package is revenue neutral and Progressive with a Prebate of Sales tax up to the Poverty line of spending. Family of 4 gets $492/m. Couple receives $367/m. No receipts no complicated filing for refunds. A refillable monthly debit card to cover Sales tax on all purchases up to the poverty line of Spending - Family of 4 HHS sets in 2005 at $25,660- Prebate is $492/m
A few points
1. The current system is progressive and that tends to be an issue as well. There is also another issue tied to that, but I get back to that.
2. The logistics of the prebate, be it a debit card or whatever, sounds like a new bureaucracy in the making. How is this prebate to be distributed. I have seen the debit card idea, as well as a direct deposit. This also means that incomes will have to be tracked monthly. What mechanism does that, what system makes that go smoothly and who reports that, the employer, the individual or both. What about cash and contract workers whose income varies month to month, how is that reported and credited as a prebate? I foresee some serious issues in that. The sheer logistical costs eats many of the advantages getting rid of the IRS was supposed to provide.
3. Big ticket items and financing. Forget buying used for a second, because at some point people will want new cars and homes. If they didn't or were buying used because of this tax, well we would tank the economy anyways. But I'll keep it simple. A family buys a new home for 100,000. That is the properties value, be it before or after the assumed price drops of above. Mortgage companies loan money on the properties value only. There will be a 30,000 tax bill on top of a down payment that will now be part of the upfront costs that are not financed. I know there is a prebate plus the added take home pay, but even with that the time to save for a new home will now increase by a good margin. Same for new cars. This for many people could be a deal breaker in selling the Fair Tax because it is very upfront.
One last thing I was going to pass by but will go ahead and put forth. When I look at the numbers and the economist that have looked at this, I see how it could work, all things being equal. It does appear to be advantageous in its bare bone facts. But the real world of our social and political lives the mitigating factors have to come into play. The "hopes and dreams" piece I mention, the one where prices should drop is iffy for starters.
There is also the resentment factor that stems from what I call the "cheap bastard" issue.
Take two families with 75,000 in income. Leave off the exact prebates and stuff to keep this simple. Lets just say that 30K is part of the "needs expenditures" that are covered and not taxed, prebated or whatever. Now we have two very different lifestyles here with some money to spend. Family one is frugal, not spending on eating out, mom makes their cloths, no new toys, old cars etc. They pay next to nothing in taxes really, after prebates and such. Family two lives a more normal lifestyle in 21st century America. Ipods, Laptops, good clothes and such. They end up with a tax burden, one much larger than the family down the street.
Now I know your answer already, they had a choice. But did they really? Is the choice to live like paupers in the most affluent society in the world in order to reduce your tax burden. Throw off the trappings of success?. The Fair Tax is extremely fair to the first family, but I bet you the second family really doesn't think so. They get stuck with the tax burden, one that should be spread equally among all responsible citizens who enjoy the benefits of living here, whether they choose to live like hermits or moviestars.
Many, especially in the middle and upper middle classes will get this pretty quick. The Fair Tax has been pretty low on the radar screen up until recently so the con forces are a couple of steps behind the pro forces, but they will catch up. This weakness, along with others, will be exposed. Now if there are good answers to these real variables, I have not seen them directly addresses. I have seen them talked around and figures thrown around them, but nothing addressing the worst case scenarios or the social ramifications.
That is where I get my "not quite thought out enough" feeling from. There are several others, but these will do for now.
I will continue to look at the info the next few days, looking for that answer or two I have yet to find.
This is one of those areas that I have an issue, the "hopes and dreams" piece.Just ask yourself this simple question. How much did the Bush tax cuts reduce prices?
Exactly.
To be honest, I foresee a rise in prices within 3 or 4 years after the Fair Tax, to match the increased incomes.
But I will still further review.
Increased profits due to decreased compliance expense will lead to lower prices simply because when the competition lowers their prices to gain a larger share of customers, they would be forced to follow suit to stay in business.
Free markets are the key to lower prices, not which tax system is in place. Only by reducing the costs of business will prices fall. Compliance expenses are substantial, but do not represent taxes. Feel free to correct me if you feel I am wrong, however...JFK
Read this thread:
http://www.freerepublic.com/forum/a387234a60d28.htm
and you’ll see they’ve been abusing freepeers for at least 8 years now...
Free markets work well on regulating prices to some degree, but what if in a given market this doesn’t happen
Corporate profits are pretty soild now in many key industries, yet we don’t see slash an burn cuts in any industry to under cut the competition past a few dollars. Gasoline is a prime example. What has kept Chevron from saying “hey we have the extra cash, lets under cut everyone by 25 cents per gallon”
I think relying on these price drops, which could happen, as a selling point could backfire. There maybe some initial price drops, but people are used to paying X number of dollars for an item, so there may not be as much impetus to reduce prices as you think.
And I don’t see the 20-30% drop I have seen discussed, the goes below profit margin in some industries, with or without compliance costs.
It is all based on assumptions, that’s where I have an issue. Can I correct you if you are wrong, no, and neither can you correct me, because we don’t know the answer, it is all hypothetical numbers on a spreed sheet.
Claim: Supported by Alan Greenspan and 75 other Economists and Economic Professors. They all support a consumption tax as better for America than an income tax.
Without links to the exact statements, and the caveat of knowing who was part of the $22 million of paid research project, it's only a claim. "Economists" are wrong far more often that right
Claim: Removes the most regressive tax on the poor and middle class- the payroll tax. Provides a broader based tax for Social Security and Medicare. The Fair Tax also replaces the personal and business income tax, AMT(Alternative Minimum Tax), death tax, capital gains tax and investment taxes.
Initiates the single largest tax increase in history on the poor, disabled, children, elderly, and those currently paying little or no taxes.
Claim: Removes business income and payroll taxes resulting in a drop in prices by 10 to 15%. Saves an estimated $250 to $400 Billion annually in unproductive tax compliance costs.
Complete speculation. No reductions would be seen for at least 3-5 years (7 years on prior federal tax records) as the old system is "unspun". Also causes unemployment as old recordkeeping jobs disappear, Lastly, the mixed metaphor of the statement above equates and fails to separate the 15% embedded SS taxes to Income taxes, and ignores all state payroll taxes.
Claim: Eliminates the cumbersome IRS Tax code and replaces it with a National Sales tax of 30%(income tax equivalent of 23%). With price drop consumers pay about the same. Under the archaic Income and payroll tax a middle class family had to earn a gross pay of $148 to bring $100 Home. Under the Fair Tax you bring $148 dollars home and with a minimum 10% price drop that same $100 of Goods costs you $90. Add the Sales Tax your new total is $117. You net $31 extra.
Again, complete speculation. Never been tried, No real world datum. The multi-trillion dollar US economy is not an experiment to be tinkered with in a laboratory. Real world applications of NRST-similar programs have resulted in onerous VAT's in western Europe, whereas Flat Tax systems in eastern Europe have resulted in booming economies and very high compliance rates.
Claim: Fights outsourcing; increases Manufacturing and business growth back in America. Boosts Economic Growth an estimated 6 to 10% in the first year. Increased job growth.
Estimate Shmestimate. One would need to get though the first 5 claims unscathed, and survive the resulting 35% downturn in the economy, survive political overreaction, and a good chance of armed insurrection.
Claim: Reduces the trade deficit because exports will not pay the sales tax and be 10 to 15% cheaper for sale overseas. Leveling playing field with low wage countries. (Unions should support)
As long as foreign sources continue to provide nearly unlimited labor at "slave rates" compared to the US, no tax based solution will have any impact. It would be like using a missile to land a plane instead of the built in landing gear.
Claim: US shores will be the most competitive corporate tax -free zone not the Bahamas. Corporate headquarters and many other businesses can return to US soil and be more competitive. Investment capital will flow and American Based business and jobs will grow.
An extension of the prior claim, which didn't fly, so we'll move on.
Claim: Average working families take home 100% of their paychecks, no Federal income tax or payroll deductions. Average family of 4 making $50,000/yr takes home $5,000 to $7500 more.
No one gets "100% of their paychecks" anywhere, any place, any time. This has been dealt with and admitted as "false" by both bortz and linder themselves.
Claim: Families have more Spendable income for Health Insurance, Childcare, College tuition, and Private retirement Savings accounts. It’s their choice for their family. “Ownership”
Again, you can't get to this point without all of the above claims "working out perfectly" in all cases, and across all economic strata, so this one is dead on arrival too.
Claim: Fair Tax package is revenue neutral and Progressive with a Prebate of Sales tax up to the Poverty line of spending. Family of 4 gets $492/m. Couple receives $367/m. No receipts no complicated filing for refunds. A refillable monthly debit card to cover Sales tax on all purchases up to the poverty line of Spending - Family of 4 HHS sets in 2005 at $25,660- Prebate is $492/m
This one kills me - and in the words of Neil Boortz (and his cadre) "As long as any government SPENDS an unfair share of GDP, no manner of tax collection is fair." This makes the "fairtax" a grand plain for failure on it's face.
Statement: So there you are. Some of my reasons, enumerated and laid out for all the world to see. C'mon SQLs. I must be lying somewhere in there. Hell, I'll even admit I despise the friggin' income tax and I LOVE the idea of a consumption tax. For me it's either/or.
So... what we have here is someone who claims to "LOVE" a "grand plan for a complete economic disaster" on an unprecedented scale. Good for you.
Quote: Go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; and may posterity forget that ye were our countrymen. S. Adams.
Failing to find any relevance in this, other than some sick personal agenda to profit in the planned economic apocalypse.
Another odd statement: With the income tax you are still feeding the crocodile hoping that he eats you last.
"You don't have to outrun the crocodile... only the other people around you."
Why on earth didn't you use this post days ago and save yourself a lot of humiliation?
Anyway, each and every statement you make sounds like opinion and is not backed up with evidence. Please do so.
I have to run but I’ll start with cost reductions. Even SQL’s admit to a 9% reduction in prices. So even the opposition says yes prices will fall.
Why don't you use your "considerable mental prowess" for something worthwhile -- like the ASPCA.
It is still an assumption.
Increased profits due to decreased compliance expense will lead to lower prices simply because when the competition lowers their prices to gain a larger share of customers, they would be forced to follow suit to stay in business.You contradicted yourself but I didn't know increased profits led to lower prices...Free markets are the key to lower prices, not which tax system is in place.
Anyway, each and every statement you make sounds like opinion and is not backed up with evidence."Sounds like opinion and Not backed up with evidence" is an interesting accusation/observation coming from someone who touts the superiority of a system with no history of success or failure let alone ever existing.
Even SQL’s admit to a 9% reduction in prices. So even the opposition says yes prices will fall.Not including the tax.
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