Posted on 04/10/2008 8:23:51 AM PDT by Turret Gunner A20
OK ... STAND BY FOR ME TO GO BALLISTIC ABOUT FAIRTAX OPPONENTS
Twenty two million dollars. For those of you who do better with numbers than letters, that would be $22,000,000.00. That's the amount of money spent to come up with the original FairTax plan. This money was spent on research by economists and other financial groups; on focus groups across the country; and on comprehensive studies of alternative ways of raising revenue for the operation of government and the consequences of those various methods.
Twenty-two million bucks, and day after day we have to suffer the uninformed and frankly unintelligent slings and arrows launched by people who left their rational reasoning skills far behind as they started their life's journey, or who are so deeply steeped in their petty jealousies and wealth envy, nurtured, no doubt, by their own feelings of personal failure, that they couldn't form a cohesive and rational thought about the FairTax if their very lives depended on it.
I present for you here two letters to the editor that appeared in the Atlanta Journal-Constitution on Wednesday, April 9th. Following each letter I'll deliver the appropriate verbal thrashing and try to set the record straight.
Want a nation of masters and serfs?
Regarding the letter "Learn facts about FairTax, please" (@issue, April 3): While studying the FairTax, I discovered that its core is a consummate cut of any obligatory federal taxes. That leaves the wealthiest in our country with no federal taxes to compensate the U.S. for the gifts showered upon them or to keep the wealth gap at a sane level. FairTax supporters are looking toward a state of chaos if they succeed. Our present plutocracy will become much worse, a country of masters and serfs.
WILLIAM L. FELL
Athens
Well my, my my. What do we have here? Does it look to you like Mr. Fell (a very prolific letter writer, by the way) may be suffering a bit from wealth envy? How do you like his assertion that the wealthy in this country (however he might define that) had "gifts showered upon them." This is part of the tired old leftist, anti-capitalist saw that the wealthy in our country did no real work to earn their wealth, it was just handed them; or "showered upon them," as Mr. Fell says, or, as Dick Gephardt liked to say, they "won life's lottery." In any event, these leftists are loathe to admit that the wealthy actually worked their tails off for the wealth they enjoyed. Those destined for wealth were working 60 and 80 hour weeks while those destined to remain in the middle class were looking at the clock just waiting for quitting time to come around.
What upsets Mr. Fell so much about the wealthy? Well .. he has two choices here. First, he can work hard, make correct choices, delay gratification and become wealthy. Second .. he can make poor choices, work his 40 hours a week and go home and completely fail to plan for his financial future .. and remain right where he is right now. But .. .if he chooses the latter, he certainly won't be willing to take the blame for his plebian economic status. He'll give himself a pass by trying to convince himself, and others, that those nasty rich people just had wealth "showered upon them." Other than the fact that they got a shower of riches while he got the proverbial golden shower ... he's just as good as they are.
Yeah, right.
Fell thinks that under the FairTax the "wealthiest in our country" will pay no taxes to the federal government. Let's give him a break. There's always the possibility he was educated in government schools. Besides, his left-leaning outlook has poisoned him to the concept of achievement.
First of all, what Mr. Fell may not realize is that the "wealthiest in our country" are quite possibly not paying income taxes under the present system. And why not? Because they're already wealthy. They don't need to work any more. They let their investments work for them. Let's take the case of Warren Buffet. Several months ago Buffet, with great fanfare, announced to the world that his secretary paid a higher tax rate than he does. Well, duh. His secretary pays income taxes. Warren Buffet pays capital gains taxes. Capital gains taxes are maxed out right now at 15%, and that would be lower than the rate his secretary pays on her salary. Funny how the leftist media didn't bother to point out that little fact when they were touting Buffets thoughts on comparative tax rates.
So what happens to these evil rich people --- the ones who had these gifts "showered upon them" after passage of the FairTax. Well, right now if Mr. Gotrocks takes $4 million out of a savings account, or if he sells something he doesn't need anymore, and uses that $4 million to buy himself a fancy new yacht for his Naples, Florida waterfront home ... he pays nothing to the federal government. He may be socked with a hefty state sales tax ... but for the feds, nunca.
After the FairTax, however, there would be a 23% national retail sales tax embedded into the price of that yacht. My government school math tells me that Mr. Gotrocks would actually be paying about $920,000 to the feds. This, to the brilliant and envious Mr. Fell, constitutes "no federal taxes."
The FairTax is the only tax reform plan out there that COMPLETELY untaxes the poor at the federal level. This isn't enough for Mr. Fell .. he has to make sure that the rich get soaked. After all ... it's not as if they worked for that money, right Mr. Fell?
Now .. onward and upward to the second letter:
Older workers would suffer
Although I didn't write the original letter "FairTax wouldn't be fair to many retirees" (@issue, March 29), I disagree with the rebuttal "Learn facts about FairTax, please": The main problem with a substitute "fair" sales tax is not that it may discriminate against those with a low income, notwithstanding complicated formulas to compensate them that the rebuttal writer claims will be in place, but that older workers, and particularly retirees, have already paid hefty federal and state income taxes on their savings. Their investments in Roth IRAs, CDs and similar savings would be heavily taxed again when they cash them for everyday living.
ROBERT KRIETE
Lawrenceville
We'll be a little more gentle with Mr. Kriete because he seems to be expressing an earnest concern about the FairTax, a concern not based on wealth envy as was Mr. Fell's.
Kriete is concerned that people who have already paid federal taxes on the money they sacked away in their savings accounts, IRAs and CDs will have to pay a tax again when they take that money out and spend it during their golden years.
I've encountered that particular question dozens of times, and it is fully covered in "FairTax, The Truth: Answering the Critics." The point, Mr. Kriete, is that when these people take that money out of their savings or retirement accounts and spend it at the retail level they're going to pay taxes one way or the other. Under the present Income tax scheme they're going to pay the (average) 22% embedded tax that exists in every product or service purchased at the retail level. With the FairTax comes the end of all business and corporate income and payroll taxes and the end of this 22% tax embedded in our goods and services. Then along comes the FairTax to replace the embedded tax. So, Mr. Kriete, you see that a $700 riding lawn mower or a $16,000 Harley is going to cost pretty much the same after the FairTax as before. In one case you're paying the embedded taxes brought on by today's tax structure, in the other case you're paying the FairTax. Six of one, half a dozen of the other.
Now, Mr. Kreite, before you go .. .here's another point to consider. Not only will retirees be paying essentially the same for whatever they buy after the FairTax as before, the FairTax will also bring them their monthly prebate checks. Let's say that your retirement household numbers two. Under the FairTax you will receive a check or credit to some bank account every month equal to the FairTax you will be paying that month to purchase the basic necessities of life. Nobody --- not you, not the evil rich guy down the street, not Mr. Fell, not The Talkmaster .. .nobody who is a legal resident of this country will have to pay the FairTax on the basic necessities of life. That prebate check to you, Mr. Kreite, will be several hundred dollars a month. You'll pay no taxes on investment income. You'll pay no taxes on the interest you earn on your savings accounts. There will be no tax on your estate when you die. You will pay no capital gains taxes if you sell some stock to take a nice vacation. You will only pay the FairTax. That's it as far as federal taxes go .... PLUS ... you get that prebate check every month and the price of all the stuff you want to buy remains essentially the same. Do you still think it is such a bad deal? There's hope for you, Mr. Kreite. For Mr. Fell ... not so much.
“Twenty two million dollars. That’s the amount of money spent to come up with the original FairTax plan.”
So it doesn’t matter if someone is for or against the plan based on its merits? It should be supported due to its research costs?
I’m sure glad they spent some money on focus groups to determine what the best tax policy would be. Very Clintonesque.
Boortz is such an oddity... a libertarian who supports multinational interventionist war and the Patriot Act. The FairTax is an interesting idea and certainly better than our current psuedo-Marxist model, but it’s not the long term answer IMHO.
I think IMHO I could create a Fair Tax Plan in just a few words.
Cut all taxes by 50%, have only a flat one tier rate, say 10%, households earning under $50,000.00 a year pay NO taxes Federal or state.
Oh yeah, and if it isn’t in the US Constitution don’t do it.
The prebate thing is the deal killer.
In 20 years, that will look like our current tax code - and, all the fairtax will have accomplished, is adding a federal sales tax to everything.
Under the present Income tax scheme they're going to pay the (average) 22% embedded tax that exists in every product or service purchased at the retail level. With the FairTax comes the end of all business and corporate income and payroll taxes and the end of this 22% tax embedded in our goods and services. Then along comes the FairTax to replace the embedded tax.Fine, the 23% Fairtax replaces the 22% embedded tax. What your numbskull boss and other Fairtax supporters parroting the "22% embedded tax" line continually (purposely) ignore is the personal income and payroll tax the Fairtax also replaces...
How does the 23% Fairtax replace 22% embedded taxes, 15.3% payroll taxes, 15+% personal income taxes AND a government check in the mail every month?...
Which one is the lie?
I honestly don’t know much about the Fair Tax, but the rude, condescending tone of this writer has done nothing to make me want to learn more. Why does he think insulting people will win them to his cause? Clearly, he’s just interested in scoring points with those already on his side.
Yeah, I guess if they’d only spent $21 million it would be OK to attack the plan. I do generally like Neal but this is over the top.
I don’t know enough about the Fair Tax yet to know whether it’s the answer or not — although from some things I’ve read, it sounds like it would have its own batch of “exceptions” and other intricacies, and I don’t want that. I want something simple and direct, a one-liner tax code or at least something that will fit on a single page. I would even be willing to pay slightly MORE taxes just to be rid of the aggravating, time-consuming hassle that is the current tax code.
However, I’m not sure what this author’s point is in emphasizing the research expense. So? What does that prove? There have been quite a few misguided, unnecessary studies that have cost far more. I’m not saying that this is necessarily misguided or unnecessary, but the expense is irrelevant. Besides, 22 mil is a relative drop in the bucket. To put it into perspective, it’s four days worth of gasoline for the troops in Iraq.
Just think of how many hundreds of millions have been spent researching global warming. I guess we better not question any of those studies, either, given the amount invested.
wah!wah!wah!
crybaby!
just because you chose to spend 22million buckeroos on your agenda doesn’t entitle it to a free pass.
it is a flawed plan based upon ignorance and hatred of the IRS and little more. it is smoke and mirrors and favors the super rich and places a more heavy burden upon the middle class.
not to mantion the damper it would place uypon huge segments of the economy.
and the tactics of it’s adherents with regard to their opposition are Clintonian at best, fascist at worst.
The base for the nrst is larger than the base for the payroll tax and income tax. A lower rate with a larger base can generate the same revenues. No lie there - you just don't get the whole thing about consumption base being larger.
Boortz is an idiot - but you're wrong on this and Boortz is right [maybe the only time.]
One of the many places boortz fails is in his apparent ignorance of what everyone believes; people will keep their full gross paycheck. If people keep their gross, then prices won't fall 22% until all costs are wrung out of the system - not just taxes per se. If, as we all expect, employees keep their gross, prices will fall only in the amount of business tax costs [appx 10% of retail].
Hence nominal prices will rise, but so will purchasing power - by equivalent amounts in the aggregate.
But until the rest of economic costs are wrung out [maybe 3 yrs? 5? 10?], there will be a negative for those who don't earn income.
Nonetheless, this nrst is by far the best alternative - by FAR. I just wish boortz would go away.
boo-friggin-hoo
Neal Putz on another FT tirade. Go figure
My opinion exactly.
Furthermore, it should not be my problem. I should be able to fill out my W4 when I first hire in, and there is no reason I should ever have to re-visit the issue. The table should be simple enough that the employer merely deducts the correct amount, its his problem to get it right, not mine.
The idea that ordinary working people should have to deal with this is silly. The whole April 15th madness is just that, madness. Eliminate the intricacies, and make it the employer's problem to get it right. Working people are not businesses and should not be taxed as if they were. The tax table should be simplicity itself. If your wife works, or doesn't work, it shouldn't affect what is taken from your check. If you have a side business, fine, get an accountant, but your wage earnings from your day job would have no bearing on your tax from your side job.
I want simple.
The biggest problem with the Fair Tax is that the politicians and bureaucrats are too heavily invested in the current power structure to allow it.
It will take some time for prices to come down because of the costs of on-hand inventories. I expect that some retailers will take advantage of “Price inertia” and try to keep prices at the level their customers are accustomed to but there will surely be aggressive retailers that will immediately mark down and promote heavily to generate cash flow and build their customer base. Eventually, overall retail prices will have to come down.
As opposed to the current system that is straight out of Karl Marx’s book The Communist Manifesto & is such a cluster f*ck that the IRS has admitted under oath before Congress repeatedly that it does not know what the tax code says or allows but if they think that John Q.Citizen ain’t paying what the IRS arbitrarily decides they owe it’s off to prison they go.
Farting around with the current system will not fix anything ! Is the “Fair Tax “ perfect ? Name a perfect way for the government to take your money to piss down assorted rat holes or to buy votes.
If insist on showing your ignorance, at least get your fcts straight. For one thing, IO didn't spend a dime developing the FairTax Bill.
And, how about proving what some of the drivel you puke, for once???
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