Posted on 02/06/2023 1:27:31 PM PST by Taxman
In my over 30 years of working with volunteers who advocate replacing the income/payroll tax system with a national retail sales tax, one thing that I have noticed is that our volunteers have always been driven by the desire to help our great nation and future generations. None of these advocates are looking to make money or obtain other types of gain for themselves. In fact, most of us have paid our own expenses associated with the effort with no expectation of being reimbursed.
Advocates for the national sales tax come from every religion, every line of work, every economic level. They all recognize that the FAIRtax is vastly superior to the income tax in every measurable way and can’t understand why the people in DC don’t embrace it. After all, they’re supposed to be doing what’s best for us as individuals and for the country as a whole.
Retired Senator Russell Long, who was the head of the Senate Finance Committee for many years, told me that he understood the arguments for the FAIRtax and agreed that it had many advantages over the current income tax. Then with a twinkle in his eye, he said, “Coming to D.C. and telling us that we should replace the current tax system with the FAIRtax just because it is logical and good for the American people and thinking that we will immediately grasp this and do it, well that makes as much sense as going to a monastery to meet girls.”
THE 30% LIE
Now that the FAIRtax is going to be voted on in the House, the establishment is really scared. They are screaming about how bad the FAIRtax is for the American people, and the media is making sure that those screams are being heard throughout the country. They’re focusing on one tiny sliver of the whole story—that everyone is going to have to pay a massive 30% sales tax on everything they buy.
None of these hit pieces include any of the following facts about the FAIRtax:
• We get to keep our whole paycheck and pay taxes only when we make retail purchases of new goods and services.
• We don’t pay taxes on our retirement income because the FAIRtax is only paid when retail goods and services are consumed.
• We can save and invest completely tax free—an unlimited IRA.
• If they mention the prebate at all, it’s portrayed as a massive new entitlement or even a Universal Basic Income plan. They don’t point out that it’s actually a tax refund that makes spending up to the poverty level totally tax free. This means that lower and middle-class taxpayers won’t pay anywhere near 30% of their income in taxes.
• The FAIRtax rate is a 23% tax inclusive rate and at 30% tax exclusive rate because that is the rate needed to replace the revenue generated by the income, estate, gift and payroll taxes it replaces and provide the prebate.
• Tax inclusive means that the amount you pay includes the tax. For example, $100 would be $77 for the product and $23 for the tax.
• Tax exclusive means that the amount is additional to the amount. If you pay $100 then the tax is $30 which is 23% of $130.
• The FAIRtax shows everyone the true cost of government on every retail receipt.
• We are already paying a disguised consumption tax. The only money we can use to purchase goods and services is from our net paycheck—the amount left over after federal taxes are taken out. This means that almost all of us have to earn $1.20 to $1.80 to net $1.00 that we can spend.
• The FAIRtax will bring financial stability to Social Security and Medicare by extending the tax base from just those working for a paycheck to everyone whose spending exceeds the poverty level.
• Even if we pay the same amount of federal taxes because of our spending habits, isn’t it better that we are in control?
• We have no forms to file and no IRS!
THE IMPACT ON LOWER INCOME FAMILIES
Another common myth is that the FAIRtax harms lower income people.
This is easy to disprove.
Present Income Tax
Today, if a family of four earns $3,333 per month or $40,000 annually, each check they receive is reduced by federal taxes. The payroll tax rate is 7.65% or $255 per month ($3,060 annually). In addition, according to the Nerdwallet.com calculator, they will owe an estimated $1,410 in income taxes and this reduces their paycheck by $117 each month. This means that they will owe a total of $4,470 or $372 in federal taxes withheld from their paycheck each month giving them a net check of $2,961.
However, this family, if they file complicated forms, will receive the earned income tax credit. According to the IRS EITC Assistant, this family will be eligible to receive $3,274 in the earned income tax credit which reduces their federal taxes to $1,196 or $99 per month and this increases their paycheck from $2,961 to $3,232 dollars per month.
This means that the family has $37,784. Their effective tax rate is 3%.
Of course, obtaining the earned income tax credit is not simple and often requires low-income people to use a paid tax preparer, like H&R Block.
FAIRtax
Under the FAIRtax, there is no withholding. There are no forms to file and no tax preparers to pay. The family receives the entire $40,000 or $3,333 per month.
A fundamental principle of the FAIRtax is that the family is not taxed on the amount of spending up to the poverty level published by the U.S. Department of Health and Human Services each year. The 2023 poverty level for a family of four is $39,440 per year which is $3,287 per month. When the family makes purchases of new retail goods and services, they will be charged the FAIRtax. The FAIRtax provides the money to pay the FAIRtax, for up to $3,287 per month, by transferring to the family’s bank account a $756 prebate on the first of each month.
$756 is the amount of FAIRtax the family will pay on $3,287 per month of spending on new retail goods and services.
So, at the first of the month, the family has $756 plus their monthly income of $3,333 or $4,089 in their bank account. When the family purchases new goods and services each month, the $756 of FAIRtax that is owed on $3,287 per month of purchases is paid from the family’s bank account. The family has not paid any FAIRtax with their own money but uses the $756 prebate they received in their bank account.
However, if the family spends more than $3,287 per month on new goods and services, they, they will have to pay the 30% tax exclusive rate on the excess amount. If the family spends their entire income of $3,333 per month, they will pay the FAIRtax on only $46 per month, $3,333 minus $3,287. That means they will pay just $13.80 per month or $165 a year out of their own pocket.
The family has $39,835 of net spendable income contrasted with $37,784 under the present system.
This is not a 30% tax rate but a .0041% tax rate on their $40,000 of income contrasted with the 3% tax rate they pay now.
So which is better, paying $1,196 in federal taxes under the income tax, or paying $165 a year under the FAIRtax? Since the FAIRtax is only charged on new retail goods and services, if the family spent $5,000 per year on payments for a used car, they would not pay the FAIRtax on that amount and not have to spend $94.50 per month, or $1,134 (one-eight of the $9,071 prebate). The prebate is their money and they can use it however they choose.
In that case, under the FAIRtax the family making $40,000 has an additional $2,164 ($1,030 less in taxes that would have been paid under the present system plus $1,134 of unused prebate) to spend for their family each year than under the present income tax. Here is a comparison.
CONCLUSION
We now have the opportunity to force all Members of the House to either vote for the present income/payroll tax system or the FAIRtax.
They either support the corrupt income tax and the IRS or they want to get rid of it. It can’t be any simpler than that.
They either believe in being transparent and showing Americans the true cost of their government or they don’t. They either support the largest transfer of power from government to the people, the FAIRtax, or they don’t. If they think that the FAIRtax needs to be changed, then they can propose the change. Don’t condemn the entire bill because it has a “flaw” that can be easily addressed. And don’t think for a minute that there aren’t any flaws in the income tax.
As Martin Luther King, Jr. said, In the End, we will remember not the words of our enemies, but the silence of our friends.
Please stand with us and demand that your representative support a much fairer, much simpler and much more efficient way to fund the government—the FAIRtax! The FAIRtax doesn’t pick winners and losers. Because it taxes spending, not earnings, the FAIRtax lets everyone save for their retirement tax free.
The FAIRtax collects the revenue that the federal government needs to operate but does it in a way that has the least impact on our individual freedom and the least impact on our economic prosperity.
There are no tax returns to file and no records to keep. We pay our federal taxes when we make retail purchases of new goods and services, and there is no need for the IRS. If you sell a used couch or used jet ski online, there is no FAIRtax due on that transaction.
The FAIRtax will allow us to TAKE BACK CONTROL. The income/payroll tax system is broken and no longer working—we can’t repair it but we can replace it with the FAIRTAX!
Join us and TAKE BACK CONTROL OF OUR COUNTRY AND OUR LIVES—NOT WITH BULLETS BUT WITH THE ELIMINATION OF ONE OF THE BIGGEST THREATS TO OUR LIBERTY AND ECONOMIC PROSPERITY—THE INCOME/PAYROLL TAX.
We all should remember Edmund Burke’s warning that applies to our efforts to TAKE BACK CONTROL, “Nobody made a greater mistake than he who did nothing because he could do only a little.”
We should also remember this quote from George Orwell's 1984, which, if we do nothing, may foretell your and your children's future:
“If you want a picture of the future, imagine a boot stamping on a human face—forever.”
WHAT CAN EACH OF US DO?
We can write letters and make calls to our elected representatives and attend Zoom town hall meetings demanding that if they really want to allow Americans to “TAKE BACK CONTROL”, the first step is to eliminate the income/payroll tax system and enact the FAIRTAX! TAKE BACK CONTROL! Help us PASS THE FAIRTAX!
The IRS will be gone and we will pay our taxes when we make purchases.
WE and not the Ruling Class and their minions in D.C. will decide how much federal tax we pay!
WE will know how much tax we and everyone else are really paying because taxes will no longer be hidden from us. It will be clearly shown on every retail receipt.
If you have friends who don’t know about the FAIRtax, send them to FAIRtax.org. Have them watch the white boards under “How It Works” and, if they agree, ask them to please join us.
Then contact your Members of Congress and the President and demand that Congress pass -the FAIRtax—the only fair tax.
Is it hopeless? When confronted with a seemingly impossible problem, remember the statement attributed to the author George Bernard Shaw who wrote, You see things; and you say “Why?” But I dream things that never were; and I say “Why not?”
Isn’t it time for us to ask, “Why not?” HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
Please go to https://fairtax.org/1040 to invest in AFFT and in your and your family’s future.
The us tax code is a purely punitive instrument.
They have admitted it.
It why they will never pass such a tax reform. Ever.
Somebody HAS to!
Thank you!
Not to mention the concept of FReedom!
You are most welcome!
If enough of us get behind the FAIRtax, we can replace the income tax and abolish the IRS!
Let us come together and do that!
Please read and study the legislation, H.R. 25.
And then quote to me the part that says the government will be tracking where you buy your stuff!
The idea is to eliminate government intrusion into how you earn your living and spend, save and invest!
The Fairtax would be my second choice.
"THE LIES AND UNTRUTHS IN THE ATTACKS ON THE FAIRTAX"
Regarding the FAIRtax, beware of federal government “remedies” for crises created by the untrusted federal government.
To begin with, patriots are reminded that Thomas Jefferson had noted that all federal revenues of the constitutionally limited power federal government were (originally?) based only on tariffs that wealthy people paid for their imported, foreign-made goods (my wording).
“The rich alone use imported articles, and on these alone the whole taxes of the General Government are levied [emphasis added]. … Our revenues liberated by the discharge of the public debt, and its surplus applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings.” —Thomas Jefferson to Thaddeus Kosciusko, 1811.
Next, regardless what FDR's state sovereignty-ignoring activist justices wanted everybody to think about the scope of Congress's Commerce Clause powers (1.8.3), not only had the 19th century Supreme Court emphasized the already reasonably clear meaning of that clause, that Congress does not have the express constitutional power to regulate INTRAstate commerce, but neither does Congress have the express constitutional power to regulate intrastate commerce by means of taxing intrastate commerce (my wording)!
"Article I, Section 8, Clause 3: To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;"
”State inspection laws, health laws, and laws for regulating the internal commerce of a State, and those which respect turnpike roads, ferries, &c. are not within the power granted to Congress [emphases added].” —Gibbons v. Ogden, 1824.
"Congress is not empowered to tax for those purposes which are within the exclusive province of the States." —Justice John Marshall, Gibbons v. Ogden, 1824.
“If the tax be not proposed for the common defence, or general welfare, but for other objects, wholly extraneous, (as for instance, for propagating Mahometanism among the Turks, or giving aids and subsidies to a foreign nation, to build palaces for its kings, or erect monuments to its heroes,) it would be wholly indefensible upon constitutional principles [emphases added].” — Justice Joseph Story, Commentaries on the Constitution 2 (1833).
"From the accepted doctrine that the United States is a government of delegated powers, it follows that those not expressly granted, or reasonably to be implied from such as are conferred, are reserved to the states, or to the people. To forestall any suggestion to the contrary, the Tenth Amendment was adopted. The same proposition, otherwise stated, is that powers not granted are prohibited [emphasis added]." —United States v. Butler, 1936.
Regarding the Trojan Horse 16th Amendment (16A), proposed to the states by Congress which the states ratified in 1913, some people argue the following about that amendment. They say that when the states ratified that amendment they surrendered to the federal government most of the unique, 10th Amendment-protected powers to serve the people that Justice Joseph Story had clarified belong uniquely to the states. The congressional record also shows that Rep. John Bingham, a constitutional lawmaker, had basically said the same thing.
"They form a portion of that immense mass of legislation, which embrace every thing in the territory of a state not surrendered to the general government. Inspection laws, quarantine laws, and health laws, as well as laws for regulating the internal commerce of a state, and others, which respect roads, fences, &c. are component parts of state legislation, resulting from the residuary powers of state sovereignty. No direct power over these is given to congress, and consequently they remain subject to state legislation [emphasis added], though they may be controlled by congress, when they interfere with their acknowledged powers." —Justice Joseph Story, Article I, Section 10, Clause 2, 1833.
”Simply this, that the care of the property, the liberty, and the life of the citizen, under the solemn sanction of an oath imposed by your Constitution, is in the States and not in the federal government [emphases added]. I have sought to effect no change in that respect in the Constitution of the country.” —John Bingham, Congressional. Globe. 1866, page 1292 (see top half of third column)
"16th Amendment: The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
“3. The Constitution was written to be understood by the voters; its words and phrases were used in their normal and ordinary as distinguished from technical meaning; where the intention is clear, there is no room for construction and no excuse for interpolation or addition.” —United States v. Sprague, 1931.
H O W E V E R...
Compare Justice Joseph Story's mention of 10th Amendment healthcare in 1833 (above) with the excerpt form Supreme Court case of Linder v. United States, 1925 (below), Linder decided about 12 years after 16A was ratified. Those before and after 16A ratification clarifications of state power healthcare are clear indications that the states had not surrendered their unique healthcare powers, for example, to the feds, regardless of 16A imo.
“Direct control of medical practice in the states is obviously beyond the power of Congress [emphasis added].” –Linder v. United States, 1925.
As far as I'm concerned, rich people and corporations can not only pay for all unconstitutional, unaccountable spending of the big, bad federal government, but they can have the job of policing against unconstitutional federal spending.
The inevitable remedy for ongoing, corrupt post-17th Amendment ratification political party treason (imo)...
All MAGA patriots need to wake up their RINO federal and state lawmakers by making the following clear to them.
If they don’t publicly support either a resolution, or a Constitutional Convention, to effectively "secede" ALL the states from the unconstitutionally big federal government by amending the Constitution to repeal the 16th and 17th (popular voting for federal senators) Amendments (16&17A), doing so before the primary elections in 2024, that YOU will primary them.
If the proposed amendment was limited strictly to repealing 16&17A, relatively little or ideally no discussion would be needed before ratification of the amendment imo.
With 16&17A out of the way, my hope is that Trump 47 becomes the FIRST president of a truly constitutionally limited power federal government.
In the meanwhile, I'm not holding my breath for significant MAGA legislation to appear in the first 100 days of new term for what may still prove to be another RINO-controlled House.
Trump will hopefully do another round of primarying RINOs for 2024 elections.
Valpal1 posted a reply to me (#7)). If his reply is accurate then I stand corrected. Although even if Valpal1 is right, it means the sales tax is a weird combination of sales tax and income tax. Yeah, the tax might be applied only at point of sale, but the tax bracket is determined by income.
But if Valpal1's not correct on how the sales tax rate is determined, then look at the text I quoted from the article in post # 4 (the post you were replying to). How would the government know when my spending would be enough to put me into a higher tax bracket?
A national sales tax means if you can afford lobster, you pay a higher tax than the guy buying bologna. If you can buy a top-of-the-line vehicle, you’re going to be paying a higher tax than the guy picking himself up a cheap used Ford Focus.This kind of lunacy/stupidity is what hurts any chance of getting THE "Fairtax".
It is not "a higher tax" The tax rate is the same for lobster, bologna or Ford Focus.
I'm all too familiar with the Fairtax plan.
If you buy something for $77.00 the tax is $23.00. That's a 30% (not 23%) tax ON the purchase.
The fairtax is not written for the consumer. It's written for the business.
A business would be required to remit "23% of the gross payments" received.
A business would have to charge a 30% tax on a $77.00 sale.
The sales pitch is riddled with deception, lies and half truths.
Taxman knows this
Let the name calling begin.
Under the FairTax there are no tax brackets. The progressiveness is achieved through the prebate mechanism.
Every legal resident with a SSN is eligible to receive a rebate equal to the amount of taxes paid up to the poverty level of spending.
Check out this FAQ for an explanation of how it works.
A true fair tax I could support, particularly if it coincided with replacing the existing income tax. But this tax proposal looks like it's the same progressive tax rate system a lot of of FReepers hate. And instead of later paying the IRS what you we and making a case for why we owe them less (the existing tax system), this proposal says we have to make a case to the IRS for them to give us the money (the prebate). I'd rather me have the money and tell them why I'm keeping all but what's due them, instead of them have them having the money and me begging them to give me what's due. Possession is 9/10ths of the law.
“A true fair tax I could support, particularly if it coincided with replacing the existing income tax.”
Which is exactly what the FairTax does. Part of the legislation deals with repealing large chunks of the current tax code, getting rid of the personal income tax, the corporate income tax, payroll taxes, estate taxes, etc. It also gets rid of the IRS. In addition to that it starts the ball rolling for the repeal of the 16th amendment.
“Sounds to me like it’s tax brackets without calling them tax brackets.”
There are no tax brackets, there is one flat rate for everyone. The prebate refunds taxes paid up to the poverty level of spending, reducing your effective tax rate. The chart I linked simply shows examples of different effective tax rates at different spending levels.
“this proposal says we have to make a case to the IRS for them to give us the money (the prebate).”
There is no case to be made. Everyone, from the richest to the poorest, qualifies for the same amount as long as they are a legal resident with a valid SSN. All you have to do is register yourself and any dependents.
Scenario...
Three guys rent a house together. For purposes of the probate, is this three single member qualified families at the same address or one single member family? Will this raise red flags with the tax authorities for multiple families at a given address?
With the fair tax those questions never get asked...
“SEC. 302. Qualified family.
Yeah, thanks. I’ve read it.
“Three guys rent a house together. For purposes of the probate, is this three single member qualified families at the same address or one single member family? Will this raise red flags with the tax authorities for multiple families at a given address?”
The location/address doesn’t matter. Each SSN is eligible for the prebate. In this scenario, each would register separately and get their own check. If two were dependents of the other they would register that way and on check would be sent to the primary for all three.
“With the fair tax those questions never get asked...”
Those questions are asked and answered regularly.
Rd later.
not with the fair tax ... which is a national sales tax ...
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