ANOTHER UNINFORMED FAIRTAX CRITIC

Nelz Nuze ^ | May 6, 2009 | Neal Boortz

[Turret Gunner A20]

... and this time it's none other than Dave Ramsey. The FairTax is a bold proposal. It is only natural that people are going to try to criticize it. Is it too much to ask for these people to do at least a modicum of research so that they at least appear to know what they're talking about?

This time the culprit is Dave Ramsey. I like the guy, and I like his approach. His sermons on living debt free are right on, and no doubt he's helped millions of people to improve their financial. OK .. mighty fine. But now he's taken it upon himself to opine that the FairTax simply isn't, in his words, "fair."

Let's take this quote from Ramsey's article: "People would only pay taxes on items they buy, except for food, basic clothing and other kinds of necessities." Most of the FairTax supporters know that this is just flat-out wrong. The explanation is incomplete.

If Ramsey really was informed on the FairTax he would know that you pay taxes only on items that you buy at the retail level, and that food, basic clothing and other kinds of necessities are included. Ramsey would also know about the prebate. He would know that every household in this country --- that is, every legal household --- would get a credit or check from the Treasury Department every single month equal to the FairTax they would be expected to pay on the basic necessities of life during the following month. This FairTax prebate is so essential to the FairTax plan that to ignore it, or to be unaware of it entirely, is worse than careless.

Ramsey also writes of the FairTax "This means it's more of a burden on poor people, because they would pay a higher percentage of their overall income."

Sorry, wrong. The poor, poor pitiful poor would pay virtually nothing - zero percent of their income - to the federal government. [ALERT! Brilliant thought follows!] To pay any taxes at all to the feds the poor would have to spend above the poverty level. If they're doing that ... they're not poor. Pretty easy, isn't it?

I wonder why Dave Ramsey doesn't get it? Is there a chance he just shot from the hip here without doing any real research? The FairTax deserves better than this flippant, uninformed treatment.

Dave Ramsey could be a good proponent of the FairTax. He's very bright, and he would recognize the beauty of this plan if he just would take the time to actually study it. Knowing what you're talking about .... Is that too much to ask?

Weird, this audio clip on YouTube seems to show Ramsey supporting the FairTax. Huh. Maybe he's lost changed his mind since that was recorded.

[Las Vegas Ron]

Why not make necessities tax exempt?

When money is offered to help peoples in any form it will become another vote buying/manipulation scheme

[CSM]

You pay a lot more in taxes than what you see. Everything you purchase is heavily taxed at all levels of manufacture, distribution and sale. Remove the embedded taxation and the free market will drive the prices down to the mfg costs plus profit.

Of course, that assumes that we have a free market......

[Man50D]

Great under this plan we will have more people rushing towards their mail boxes for their government checks at the first of the month!

You obviously haven't seen the prebate amounts to be paid. Fair Tax FAQ #3. One example: A family of four will receive a monthly prebate check for $537. This is far too little to pay the bills. At least one member of that household will still have to work to pay the bills.

[so_real]

1. Prebate is socialist ... ? Then ... the whole concept of the "poverty line" is socialist. The prebate is a mechanism to manage poverty line support. Do away with the poverty line, and the prebate follows along with it. Personally, I think allowing the government (under threat of law) to borrow my money all year long and hope for a rebate in the end is "communistic".

I'm reading the book (http://www.amazon.com/FairTax-Answering-Critics-Neal-Boortz/dp/0061540463/ref=sr_1_1?ie=UTF8&s=books&qid=1241638912&sr=8-1 and I must say, so far it sounds pretty good to me.

[taxcontrol]

Personally, I would rather direct apportionment by state and let the state determine what best way to meet their tax burden as per the founders original intent.

[xcamel]

Exactly, and the more they stammer and bawl like post modern ‘barney franks’ the more apparent the fallacy becomes.

[Man50D]

I don’t like the prebate part of the plan. It makes the tax rate go too high, makes it more difficult and expensive to administer, hurts privacy, and keeps the poor from paying their fair share.

The Fair Tax was written to be revenue neutral. The rate is far lower than the over all tax burden we pay today. See post #29. I don't know how you define "fair share" since it is a vague term but only a very tiny percentage will not pay any tax after the prebate.

[xcamel]

He’s educated enought to call a joke a joke.

[xcamel]

revenue neutral == unlimited taxation, and unlimited spending.

like a bandaid for an amputation.

[Man50D]

So if the fair tax is implemented, and you spend any of your savings, it will be taxed again with the "fair tax."

It's already taxed ever time you make a purchase! Corporations have taxes levied on their income. That becomes a cost they pass onto the consumer by including it in the price. The Fair Tax will remove the embedded taxes by eliminating the corporate income tax and will lower the overall tax burden compared to the income tax code. Additionally purchasing power will increase since federal income taxes will no longer be deducted.

[xcamel]

Hmm.. it only took you one post to blow your credibility with the name calling... very good.

[CSM]

“He’s educated enought to call a joke a joke.”

Not true at all. I listen to Dave daily and he is very supportive of the FairTax proposal. He still needs to learn more about it, so that he doesn’t make mistaken statements, however he loves the concept.

He is also pushing for term limits......

[xcamel]

I’ve listened to dave for a couple of years now, never once heard him mention it in a positive way.

[Man50D]

Why not make necessities tax exempt?

Exemptions and loopholes have bloated the income tax code and distort the economy thanks to lobbyists working on behalf of their big business clients. Eliminating exemptions and loopholes considerably reduces lobbyists power. It is also a disadvantage to the poor since most exempt items are unprepared food, clothing, housing, and medical care purchased mostly by the wealthy. Exempting these goods, as many state sales taxes do, actually gives the wealthy a disproportionate benefit.

[Las Vegas Ron]

Exempting these goods, as many state sales taxes do, actually gives the wealthy a disproportionate benefit.

So in other words, the "prebates" are just another redistribution of wealth scheme and will be used to buy votes and manipulate people.

I am not against a consumption tax per se, it's the monies that will be distributed to help "certain" peoples I am against.

[editor-surveyor]

"Fairtax is a joke, and financially educated people know it."

And there lies the danger. The vast majority of people voluntarily choose to be financially ignorant.

How can we elect informed representatives, if we are not ourselves well enough educated on the base principles to gauge their understanding?

The Flat Tax would shift the burden of taxes almost completely to the working class, and leave a vast amount of increase in wealth, that is available to only the select few, beyond the grasp of the taxman.

[Filo]

Haven’t old people already bought all the crap they need? I’m only approaching 40 and I can’t get rid of all the junk I’ve accumulated so far. :)

ROFL. I can empathize. . .

[Filo]

That is not a fault of the fairtax proposal.

Understood, but I have no intention of supporting an "out of the frying pan, into the fire" solution.

If it doesn't actually fix anything important then what good is the Fairtax anyway?

Changing how the government steals without addressing how much it steals is rearranging the deck chairs on the Titanic.

[so_real]

That's the kicker ... according to studies out of M.I.T. and Harvard, you are already paying a 22-23% federal tax on everything you buy. Industry hides its taxes in product costs passed on to end consumers (Wikipedia Summary). That's me and you. Eliminating the hidden taxes would reduce product costs 23%. Then, as you watch the government collect that same 23% unhidden while in the check-out line (and get a little perturbed about it), suddenly it becomes possible for election candidates to run on the platform of making government more efficient and reducing the tax burden.

[Filo]

I think though that the benefit of no income tax on your tax deferred savings and your capital gains would balance things out for most people.

I disagree. My savings are already fully taxed - the principle, not the interest.

Why should I have to pay 30% in additional taxes for the privilege of using my money?