Posted on 04/30/2008 1:33:29 PM PDT by redtetrahedron
As a 20 year business owner and life time investor I am very comfortable with my knowledge of such topics. As one who has worked with many small business owners I also know than many of them have a hard enough time graping the financial issues of their own business much less taxation on a national scale.
The "Fair Tax" looks really good on paper and many small business owners, myself included, have reason to hate the IRS so that clouds judgment as well.
I have read the book twice and came away mildly impressed but also knowledgeable that much of the “Fair Tax” is based on assumptions and theories that don't reflect the economic, corporate and social realities of 21st Century America. If and when the "Fair Tax" actually reaches a serious level of an open and honest national discussion free from the propaganda and salesmanship, those realities and the issues of its implementation will be it's downfall.
It is also apparent to me as well as many others that the almost “cult like”’ zeal many FT supporters have is due to the fact that they have found away to avoid paying taxes through buying used and living cheap. Indeed I am sure many are chomping at the bit to "stick it to the Fed" with their beloved "prebate" check, since I am sure they have run the numbers and found that the check is a few bucks more than what they spend each month on "necessities".
Like I told you before if you really want to know my objections to the FT they are listed in these pages, I don't care to repeat them again. Of course that is irrelevant because as a FT true believer anything that runs contrary to the “official” meme is taboo and worthy of scorn.
At least that part amuses me...
You may be comfortable in your own mind. Enjoy it there with your other favorite fantasies. Your comments show you have little if any understanding of principles.
Remember “Brain Rot”?, “Ask one hundred people”?, “Fairy Tax”?. These are not slurs of any one person with standing. They are the attributes of a shallow heckler with teenage juvenile intellect.
And you can link to your objections that “you don’t care to repeat”. I am certain each of your objections is baseless. Try and surprise me.
Oh, and I have never read the book. I read the legislation.
Since you obviously have not done your homework, just bought the bright shiny new toy based on some really slick advertising, I don't think a rational objection would get through to you, I will leave you to do your own further due diligence.
Keep fighting the good fight, the FT minions will be proud, just don't be too disappointed when and if the “Fair tax’ actually comes up for serious national discussion and runs into the real objections of those who know better. I don't think even the top tier of the "Fair Tax" sales force can beat a real onslaught...
Of course you may get lucky and not have to deal with that, since as of right now the "Fair Tax" has been a movement for 14 years and legislation for 9 or so and it is still has not caught on past a its active base of supporters and a few Congress folk looking to excite the same...
You are making assumptions without evidence, and making disparaging remarks at imaginary opponents.
And don’t tell me what to do or not do.
You cast the first insult with your ‘brain rot’ heckling. And you got what you asked for.
Tha FairTax has already been debated among economic policy makers in committees in Congress and it has won all debates. The opposition has folded on trying to punch holes in its design. What they have opted for is a war of propaganda and they would find in you a suitable ‘UI’.
The FairTax has made momumental progress in the past five years. It takes decades to transform a tax system. The Income tax took from 1861 to 1913, 52 years.
So if your objections are:
1. The FairTax hasn’t been subjected in a serious discussion?
Answer: False. The legislation has been seriously debated and scrutinized in Congressional offices, committees and subcommittees. It has passed all examinations and won all debates.
2. Slow progress in the form of legislation for 8 years?
Answer: False. Progress by any measure for a complete transformation of a national tax code is measured in decades. As I posted previously on this thread, state and national polls show a dramatic increase in support for the FairTax (up 39% in Michigan from the year before), grassroots support and members are up 140% in the last year and half, and the number of members of Congress that sponsor the legislation has increased from 54 to 75 in the last two years.
So far you are batting zero. There is only one legitimate criticism of the FairTax and you haven’t mentioned it. But the leaders in Congress of the FairTax legislation know this criticism and are actively working to fix it.
As far as the rest like it winning all debates, I don't think so, though it has made a good initial showing in a few committees, but still, 76 some odd supporters after almost a decade?
And there are more than just one objection to the “Fair Tax”, such as what it will do to the sale of new goods, the housing market, how will the new larger tax amounts will be handled by the credit community since it is not asset that can be held as collateral.
And those are just for starters...
There are also serious concerns about evasion and the evolution of a tax free black market, concerns about the creeping up of the rate, the theoretical concept of a 22% embedded tax and will the cost of good really go down, the creation of an entirely new bureaucracy to manage the prebate and the delivery of checks/funds to every household on a monthly/quarterly/whatever basis.
There is the societal issue I, as well as others, have raised about the inequity of the tax, the fact that those who desire to live a good life such as many enjoy now will be the ones who will have the burden of supporting the nation while cheap bastards who live like paupers despite making the same income pay nothing. Yes, it's a choice, but a bad one, one that will doom the FT among voters since they will be given the choice, live a lower life style or be stuck with the check by the cheap SOB down the street who enjoys the same military protection, highways and other benefits as you do for nothing. Yeah that will go over like a lead balloon in our consumer driven economy.
I have seen these objections addressed with circular arguments and theoretical rhetoric time and time again, but no one has the guts to say that they don't know exactly how some of these things will work out in reality, just that it is "hoped' that this that and the other will happen and it "should" all work out if all businesses and institutions will do the right thing. Sorry, I live in the real world.
The “Fair Tax” has yet to be taken seriously enough to see real opposition. It will enjoy a good ride for sometime since the tide against the current system grows daily, but in the end it will be at best a catalyst for discussions on real ideas about finally reforming the tax system in favor of something the is really fair to all citizens, and for that I am thankful to it and its supporters.
I suggest you revisit post #13 and see that there are facts that Fred Thompson voted on accasion in ways that would never be considered conservative.
Now I personally believe Fred Thompson is conservative but I would never cast disparaging remarks as you did, actually slurs, at the poster in #13 especially as he presented factual data in a cohesive way. The thing to do in such a case is to compare and contrast the many conservative votes Fred Thompson made and put the votes mentioned in post #13 in context.
I would also never carry over an observation on one issue to another issue as you did. That MAN50D believes Fred Thompson voted in non-conservative ways does not diminish the merits of a tax reform proposal.
freerepublic.com was once a forum that many highly accomplished and publicly known posters in anonymity used to gather around. Many of these fine posters have dispersed to other venues because of the childish heckling and substandard level of discourse that took root in the forums.
IOW ‘brain rot’ and other such are noninformative, distasteful, substandard and disruptive.
You added HOT AIR and nothing more. Apparently you are proud of that.
Now that you have raised objections to the FairTax proposal I will address those in the next post. I can already see you have drank the koolaid put out by the propagandists. I will show you where.
I had those objections after I read the book, the one you have not read yet, before I saw any articles that ran contrary to the FT meme.
And I will be magnanimous and give in on the "socialist" bit even though it was wrong, there is still the main statement by your peer that FDT did not have a vast majority of support on FR, which indeed he actually did, including the support of it's founder...
But again, details...
And I still find FR to be a forum of solid discourse on a wide variety of topics.
I can dance this dance all day but I can save you some trouble, I have read the defenses of the "Fair tax" on this very forum, indeed it was at the insistence of one of your more lucid peers that I gave the book, the one you have not read yet, a second read. I have yet to see my objections addressed outside the same tired circular rhetoric and propaganda, I highly doubt you would be any different.
The current tax code collects at multiple points throughout the supply chain causing prices to be higher at the retail end by about 20% - 22%. Retailers recoup the resultant higher overhead, the higher cost of goods sold and the higher cost of labor they utilize by raising prices. When you or I purchase a service or product from a retailer, we are paying to that retailer a price that includes a federal tax burden that was landed on the retailer by all those involved in bringing the item to market.
All the tax siphoning from materials, warehouses, transport, marketing and distributing get shunted to the retail end of the supply chain under the FairTax. The federal government will collect the FairTax through tax authorities at the endpoint of the supply chain, not in-between. This unleashes a huge efficiency.
There are also serious concerns about evasion and the evolution of a tax free black market, concerns about the creeping up of the rate, the theoretical concept of a 22% embedded tax and will the cost of good really go down, the creation of an entirely new bureaucracy to manage the prebate and the delivery of checks/funds to every household on a monthly/quarterly/whatever basis.
There are always concerns about tax evasion and the FairTax legislation contains tough enforcement provisions. You and others seem to think that law-abiding people will suddenly decide to become felons and risk all they have to skirt around new tax law. That's preposterous. Criminals will always exist, the FairTax or any tax code is not legislation to reform criminals. The FairTax does make it tougher for tax evaders. The FairTax will be tougher for them because there will be fewer points of collection as about 3,000 retailers currently handle more than 70% of retail sales. Those retailers are largely computerized thus relieving law enforcement and therby allowing them to chase down many of the petty evaders that get away with committing tax crime now.
Increase in tax evasion and 'black market' growth are but two scare tactics the propagandists put out. Tax evasion and black markets exist now. It is a stretch to believe a great many ***more people as a percentage*** will decide to participate in felonies. As always, the government will prosecute evaders and make a big show of it, leaving anyone with thoughts of committing a felony in fear.
As to a creeping rate, the rate can change yearly. I doubt that voters will allow more of their spending to go to federal sales taxes. That will be a hard sale for any Congress to achieve. This concern is non-legit because it presupposes that there is not now an upward creep under the current tax code. In fact there is rate creep under the current tax code and it is difficult to see, and this difficulty suits tax lobbyists just fine as they enjoy obfuscation of true tax rates; they abhor and shun any form or proposal for transparent tax rates. The FairTax is completely transparent; too bad for lobbyists on K Street.
As for the 'theoretical' percent of embedded taxes, that is no longer a theoretical figure but a field-verified range estimate from ongoing studies on supply chain federal tax burdens. The estimates range from 18% to 30% with the concentration between 20% and 22%.
As for costs going down, that depends on inflation and market performance. Those things being constant, of course a retailer will lower prices because everyone will expect them to do so and because their competitors will if they don't. I have held many discussions and seminars with business owners and principals and each say that if they see a drop in overhead, cost of goods sold, an elimination of capital gains, corporate profits and compliance costs, then of course they will drop prices because they realize they will have to add the replacement federal sales tax. Sales are largely a function of price and volume. Business owners tend to know their market better than any others and they know what price the market will bear. For them there is no question they will drop prices. For regulated entities such as utilities, they will drop their prices and rates because the public mandated tariff they operate under will direct them to do so.
As for creating an 'entirely new bureaucracy' to handle the Rebate, that is patently FALSE. The legislation clearly states that DHHS will estimate the poverty rate as they do now and the SSA will handle the Rebate. Those are not new bureacracies. Nor will they be burdened further with sending out more checks, the federal government is very good at printing checks and mailing them or wiring them to accounts. One need look no further than the current tax rebates to see that the government can manage FairTax Rebates very well.
There is the societal issue I, as well as others, have raised about the inequity of the tax, the fact that those who desire to live a good life such as many enjoy now will be the ones who will have the burden of supporting the nation while cheap bastards who live like paupers despite making the same income pay nothing. Yes, it's a choice, but a bad one, one that will doom the FT among voters since they will be given the choice, live a lower life style or be stuck with the check by the cheap SOB down the street who enjoys the same military protection, highways and other benefits as you do for nothing. Yeah that will go over like a lead balloon in our consumer driven economy.
Consumption is robust because there are things people must have and those necessities make up the vast percentage of retail sales. Pusrchases of new boats, cars, airplanes, expensive vacations, etc. are a minor percentage of gross national consumption. Annual consumption is much more steady, much less volatile than annual income, just ask anyone that has experience in tax collections for the State of California.
States that have sales taxes only with no income tax experience a sounder forecast in revenues.
Once again you resort to unsubstantiated hyperbole by saying the FairTax will be "doomed" by those choosing to save. It is all HOT AIR backed by nothing of merit. The facts say different. And you show your attitude of ill-will towards others with remarks such as "cheap bastards", "cheap SOB" which of course expose your true colors. It becomes more clear that you are programmed to put down others to cover up your own failings. Your comments show you to be severely lacking.
I have seen these objections addressed with circular arguments and theoretical rhetoric time and time again, but no one has the guts to say that they don't know exactly how some of these things will work out in reality, just that it is "hoped' that this that and the other will happen and it "should" all work out if all businesses and institutions will do the right thing. Sorry, I live in the real world.
Once again you come up short because you don't understand or won't understand so you resort to hand waving and lashing out. You did not list these objections that caused circular reasoning. As for your 'objections' above, there is nothing circular in my responses. You live in an angry world, not the real world.
The “Fair Tax” has yet to be taken seriously enough to see real opposition. It will enjoy a good ride for sometime since the tide against the current system grows daily, but in the end it will be at best a catalyst for discussions on real ideas about finally reforming the tax system in favor of something the is really fair to all citizens, and for that I am thankful to it and its supporters.
The FairTax has seen plenty of opposition to know that the merits of the system are sound and to know who the real enemy is. Socialists and tax lobbyists are the root of those that have taken their fear to the level of a propaganda war. And that is where the battle lies now.
You are not good at telling the truth. Your ‘objections’ were not entirely based on ‘reading the book’. They were based on falsehoods such as ‘vast new bureaucracies’ and ‘black markets’. I am certain that ‘the book’ did not propose ‘vast new bureacracies’ because I would expect ‘the book’ to conform to the legislation H.R. 25 and no where in the legislation is there any idea of ‘vast new bureacracies’. So your comment about not drinking the koolaid is simply running away from reality. No you do not live in the real world.
Yes your objections were based on things you picked up outside ‘the book’.
Do you really think people are so dumb they cannot see through you and your plethora of flaws and hyperbole? Because your comments certainly show you put yourself above others even though you do not have the reasoning, wisdom and character to base it on. “Brain Rot”, “Cheap SOBs”, “Cheap Bastards”, “Fairy Tax”, etc. This is your litany of drivel.
You are a very angry person.
Maybe you should read the book before assuming to know what I got out of it.
For example, anyone with at least some intelligence would realize that the whole “prebate” operation would create a new bureaucracy to dole out the funds. One of the first things I thought of even before reading the book was the idea of underground channels for goods that would avoid the tax as well, the so called “black market”. I did not need an outside source to point those facts out, they are obvious to a knowledgeable observer, though it is good to see many others realize these are but two of the issues facing the “Fair Tax”.
Read the book and get back with me. If nothing else it will at least make you a better informed salesperson ;-)...
State the page number in ‘the book’ where it proposes that a ‘whole new bureacracy’ would be created.
Show me that page number and I will verify it.
And I do not need to read ‘the book’. I know and participate with those in Congress that are architects and writers of the legislation. If anything the writer of ‘the book’ gets their information from people I work with, not the other way around.
Now give me the page number.
If you have the book, it should take you about 3 minutes to get the page number I requested.
Still around....and still watching all the FRinos wet themselves over the FRaudster, keeping the myth alive.
Next they'll tell us that Jean-Fraud McCain is REALLY a conservative too.
LOL, you know as well as I do there is not a specific “page number” that says any bureaucracy will be created, but it is implied throughout the book and other documentation as well. Something or someone has to manage the thing.
Indeed that is another problem with the “Fair Tax”, it is weak on details. However anyone with a moderate amount of intelligence that can read will deduce that some form of bureaucracy will have to administer this beast.
The “getting rid or the IRS” sounds great but all that is really happening is the task will change and be moved around either with in the current bureaucracy such as Social Security and DHHS or to an entirely new system. So let see where there are problems that any reasonable person would question.
First who administers the checks and verifies that recipient data? Certainly it is reasonable for me as a citizen to expect the number of children reported etc. to be audited to some degree.
Say the treasury is assigned the job of sending out checks. Like you said, they geared up for this “rebate” we are getting now, but you are now talking about checks to almost every household at least 4 times a year. While it can be done, it is not going to be free.
One of the things I mentioned about the “Fair Tax” was how much it is based on everyone doing the right thing and everything coming together just so. You made mention of people not being anymore prone to gaming the system under the “Fair Tax” as they are now. I disagree, because this tax has more areas for such issues to occur. Who is going to make sure every business and other entity that collect this tax is reporting correctly, either by malice or just bad accounting? Who is going to make sure businesses don’t use the loopholes that will exist (new verses used goods and the like). There will have to be some form of enforcement and audit control here as well. That is just not going to come from the sky.
One last point and I will move on to my example on one of the issues of the “Fair Tax”. There is built in to it a way to evade taxes that is legal and “fair”, just don’t buy anything new. Of course one would have to buy food and such, but a large part of what drives our economy is the purchase of so called “luxury goods” the extras the one does not need to survive. It is assumed that will go on as before due to the new pricing structures that are supposed to evolve as well as this so called “keeping all of your paycheck” (another misleading sales point BTW”). I don’t like little explored assumptions to be the basis of my tax policy nor a part of something that could fundamentally change the economy.
Now to one of my issues with the “Fair tax”.
Let us say the “Fair Tax” passes in 2010. In 2012, once the transition has been done for a while I, as a home builder, build a new house to sell. I am going to want to charge 200,000 dollars for it. That should then generate, at 23%, a 46,000 dollar tax. What line item does that fall under on the closing forms and where will that money come from?
Answer that and we will go from there with my example…
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.