Posted on 04/22/2006 5:39:00 AM PDT by Eaglewatcher
EDMOND— How much of your time and money did you spend getting your taxes filed this year? Your time is worth something even if you use a software program to do your taxes. Your time is worth something gathering up all the information to give to your hired tax preparer.
Multiply that by the number of taxpayers and corporate taxpayers and you can plainly see how much a burden our current tax code is on the taxpayers of America. You can get mad, just like I do each middle of April, but the inevitable has to occur. Did you know that a portion of our tax money goes to pay the salary of some 113,000 IRS employees? What a large number of employees. Yet, it probably takes that many employees to administer the thousands of pages of tax code.
A 2001 press release from Sen. Chuck Grassley indicated that 51 percent of the hours IRS employees spent on the Internet were for personal usage; some 47 percent of the e-mails sent to the IRS were personal; that 25 percent of taxpayers calls to the IRS went unanswered; during the 2001 filing season, an Inspector General employee made contacts at walk-in assistance sites and seven times they were denied service, got incorrect answers 49 percent of the time and insufficient answers 24 percent of the time. Calling the toll-free assistance line found no one could be reached 37 percent of the time and did not receive the requested service 47 percent of the time. Finally, it was determined that in fiscal year 2000, the IRS spent $1.3 billion for contractors to the IRS. While that is an older release, it is clear taxpayers are not getting what they are paying for. The IRS is a failure by any measure.
All this caused me to seek a better method of delivering my money for the federal government to use. Obviously, the current method eats up too many resources that could be better used by our government. I found there has been a bill filed by Rep. John Linder as H.R. 25 (see his Web site http://linder.house.gov).
Here’s a brief overview of The Fair Tax Act: “1. Repeals all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes. 2. Imposes a revenue-neutral personal consumption tax on all new goods and services at the point of final purchase. Business-to-business transactions and used products, which have already been taxed, are not subject to the sales tax. 3. Rebates the sales tax on all spending up to the poverty level.
“Results of the FairTax: Dramatically reduce the costs of goods and services by 20 to 30 percent. Allows you to keep 100 percent of your paycheck, pension and Social Security payments. Gross Domestic Product will increase by almost 10.5 percent in the first year after enactment. Compliance costs would decrease by 90 percent. Real investment would initially increase by 76 percent relative to the investment that would be made under present law.
“While this increase would gradually decline, it remains 15 percent higher than under the existing tax structure. Exports would increase by 26 percent initially and would remain more than 13 percent above the level under the current tax system. Real wages will increase. Increases incentives to work by as much as 20 percent in many households, leading to higher economic growth and efficiency. Interest rates will fall 25 to 35 percent.” This is a much better choice than our current method. Any change has to be better than we have now. Since lobbyists have been partially responsible for the convoluted tax code we now have, getting this passed may be a challenge. It seems to me that taxation based on spending is more fair than any other method. If you don’t spend, you don’t pay.
Take a look at the Fair Tax Web site for answers to all your questions, http://www.fairtax.org/. I found many articles about how the tax would work in detail, and how this tax proposal handles families at or below the poverty level. It appears about every question or issue is addressed in the Fair Tax legislation. Being responsible to properly fill out several pages of forms just plain stinks.
In today’s world, we need and deserve a better method, a more efficient method. Gains in efficiency alone will be a great benefit. Eliminating paperwork, employees and delivering that money to the federal coffers more efficiently is an idea that is over due. We must eliminate the IRS as we know it today. We are too modern an economy and people to continue to be burdened by antiquated tax methods that favor some and not others. We need fairness in our taxation. The FairTax is that method.
A final point is made by Yahoo News: “Sen. Ron, D-Ore., did not prepare his real tax returns, but he was able to prepare a hypothetical tax return in 30 minutes based on his proposed simplified tax system. This last fact is truly revolutionary because no one can remember the last time a member of the tax-writing Senate Finance Committee actually completed their own tax return.” Need I say more?
Just as people marched over pending immigration law, if we marched over taxation, we can assure a change will occur. Our politicians need a loud roar from the taxed to change what is being done. When you have a method of taxation that makes you pay a penalty for paying too little or too much, you know something has to be done. Everyone should pay their fair share. But that share should not be wasted on bureaucracy and paperwork. Let your representatives in Washington know how you feel. If you don’t, we will be filling out the same pages of forms this time next year. Remember, it is up to us to see that they get it right.
(Bob O’Bar can be contacted at rto4nmm@sbcglobal.net.)
I thought that the idea of a post was to share the content of the article not to show that the article had appeared in the main stream press.
Do you wish to change your statement?
So, per your post #58, today's $100 item contains $23 in built-in taxes paid by corporations. (Per my pie chart, that represents 10% of government revenues). Currently, the government also receives personal income taxes and FICA contributions.
Under the Fair Tax, I will still pay $100 for the item, and it will contain $23 in Fair Tax and I no longer pay income taxes or FICA.
Under your plan, the government is going to come up way short. Unless we're going to sell 10X as many items.
Of course not. They'll simply say they made a mistake and raise the Fair Tax to 40%.
Now the congresscritters can add a layer here, tweak a loophole there, take what they want when they want it and most people don't even know/ don't directly feel it so they don't care.And the "congresscritters" just can't wait to stop themselves from doing it too.
BTW, the Fairtax claims 100% paychecks and prices about the same as now. So you think the same people who don't look at 1099's, W2's or their tax returns when they sign them would suddenly become aware of the tax printed on a receipt at the bottom of the bag before they throw it in the recycle bin?
And than you for your nonsense nonsense. You don't begin to comprehend what the FairTax does for most taxpayers and for the US economy ... and that's greatly benefit both.
Most individuals will have a lower tax burden under the FairTax and be completely free of the tax police state we have now where you're guilty untless you can proove your innocence.
The economy will be greatly boosted by attracting not only investments from off shore (and repartiating some previously US-based funds that walked away because of the tax system) but it will air US exporters lower their prices by removing the income tax component that is is all goods they presently sell.
And you're the one lacking credibility, robbert, since the 23% tax rate has been proven by several economists to be revenue neutral (in fact, due to Bush's recent tax cuts it will probably now be lower than 23% - something like 19%). Credibility? Yours is zero (if not less)!!!
In #73 you claimed that someone in Congress had introduced your "plan" of cutting 50% in spending. What is the bill number? And show us the statement where the President has pledged to sign it. Otherwise you remain merely a liar.
One of your more ignorant questions. You don't seem to realize that your pie chart includes a good deal of business income tax from non-corporate sources in what is labelled "Individual Income Taxes".
The upshot of that is that your pie chart is incorrect AND misleading. It also means your entire post makes no sense.
And weren't you the guy proclaiming earlier in the thread that government spending should be cut 50%??? Now you whine because you think they don't get enough money?
Which is it, fool???
IAE as I just told you your pie chart is wrong (as are you) and business income taxes are more than just corporate income taxes. You seem to not know the difference.
You're also wrong since under the FairTax the price would drop and you'd have much greater takehome pay plus the prebate meaning that your effective tax rate would be far less than 23%. No one would ever pay the full 23% as an effective tax rate - never. You will be much better off overall since your disposable personal income will be greater than at present under the income tax.
You've also been told several times that the FairTax has been determined by several independent economists to be revenue neutral so your so-called "ananlysis" is truly haywire.
No such raise is in the cards - and you'd know it if you'd paid attention, robert.
The more likely effect is a lowering of the rate due to the expansion of economic activity and the tax base. You'd know that, too, if you'd paid attention.
Sure do, Looey, because unlike you most people can read and comprehend!
My bad.
I saw cut spending to 10% and then quit reading.
So, what is the bill number?
Who sponsored it? How many consponsors?
What president said that he'd sign it into law? What are it's chances of passage.
I'm not saying that it isn't a worthy ideal, but it has to pass first. For it to pass, it has to have congressional support. We can't even get those tiny tax cuts made permanent. How do you expect to get a 50% reduction in spending?
Here is where you show how disingenuous you are.
The tax base is changing from income to consumption.
Not everyone has an income. Everyone consumes.
Tourists, pimps, prostitutes, drug dealers, the idle rich, and everyone else who isn't paying an income tax today will pay a consumption tax..
The biggest lie of them all.
First of all, you're going to exempt tens of millions of "taxpayers" with the monthly federal stipend. Plus, everyone is now part of the new welfare class and beholden to the federal government -- say goodby to privacy if you want your monthly "prebate" check. Think it will be a Katrina-type debit card?
Second, anyone breaking the law today and not paying income taxes will find a way not to pay the fair tax. Please. That's what they do.
One way (for anyone) is to simply incorporate their business -- the prostitute is now a "consultant", and the clothes, the car, the "home office", she buys are now untaxed business expenses. I see an explosive growth in Sub Chapter S corporations.
Third, a 30% Fair Tax coupled with a 3% State Income Tax, coupled with a 7% State Sales Tax, coupled with a 10% City Sales Tax invites cheating. Half the cost of a product is tax! Plus I still have to pay property taxes!
Forget about the prostitutes and drug dealers. You're going to bring back the barter system, especially in the sevice sector -- the dentist gets a new roof and the roofer gets some dental work. With the IRS gone (right?), who's going to check on these things?
Fourth, any money I currently have in savings is now worth 30% less. Thanks.
Fifth, who's going to buy new products? Expect a surge in tax-free "used" products, whether they're used or not.
Lastly, as a result of all the above, federal income will fall far below expected levels resulting in ... an even higher Fair Tax.
So prices will drop 23% (the embedded tax plus compliance costs, right?), my take-home pay will rise 30% (federal tax deductions plus my share of SS), plus I'll receive $500./month in a prebate check.
Have I got all that correct?
You are so full of it. Who is so stupid as to buy this nonsense you're trying to sell?
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