Posted on 04/19/2007 1:55:56 AM PDT by Man50D
The following is an address I plan to deliver on the House floor this evening regarding Tax Day.
Madam Speaker, many things change from year to year. Tax Day, however, is an exception. Every year, millions of Americans send much of their hard-earned money back to the federal government. Because of the numerous complexities that have become the U.S. tax code, many virtually need an accountant, and others just send in a large check out of sheer frustration, hoping to figure out the right number later on.
What is fair about our current tax code? Absolutely nothing. Is there a better solution? You bet. One answer can be found in the form of the Fair Tax, and it is a solution that helps Americans keep more of the money they earn and creates a more equitable system of collection. In short, the Fair Tax eliminates our current broken tax system and replaces it with a national sales, or consumption, tax to be administered by the states. When a hard-working American receives his paycheck, he actually gets to take it all home. Gone, too, are the estate and capital gains taxes.
I applaud Congressman Linder of Georgia for continuing his strong push for his bill H.R. 25, the Fair Tax Act of 2007. With its enactment, the national sales tax rate would be set at 23 percent beginning in 2009, at which point Americans would no longer be afflicted by the current tax system. Gone would be personal and corporate income tax, the gift tax, taxes on social security and Medicare, and even the infamous alternative minimum tax, which is estimated to hit 19 million Americans in 2006, a figure that could easily double in the next few years if nothing is done. In the case of the Fair Tax, the only people that pay more are those that choose to spend more.
Currently, and in part due to the tax cuts passed under the Bush administration, there are many valuable deductions in our current tax code that are fair and serve a good purpose. On top of the overall savings provided by the Fair Tax to the consumer, it would also permit exemptions from the tax for property or services purchased for business, export, or investment purposes and for state government functions. Nonetheless, this pro-family legislation allocates a sales tax rebate for certain families, based on family size and income. Every family would receive a rebate of the sales tax on spending up to the federal poverty level, plus an extra amount to prevent any marriage penalty.
Another important aspect of this bill is the provision to let the individual states choose how to administer the collection of consumption tax and redirect that funding back to the U.S. Treasury. Many states already have a sales tax, and so the existing state tax authorities will essentially carry on as before without the need to create additional bureaucracies. This system will also be instrumental in eliminating the "tax gap" that exists under the current system. Instead of the Internal Revenue Service waiting on taxes owed, with billions uncollected every year, the Fair Tax is collected at the point of sale. Once the Fair Tax is in place in 2009, funding to the IRS would be eliminated after fiscal year 2011, with taxes directed through a Sales Tax Bureau. Gone would be the days of the IRS spending millions of tax dollars each year just to track down uncollected taxes - the IRS itself would be gone.
False. A recommendation to do something that is not going to happen is not the same thing as repeal. Show me how 38 states are going to ratify an Amendment to the Constitution and make the beginning of the FairTax contingent on this repeal and then this argument can be waved away. Until that happens it is a very valid argument against the FairTax.
And there are many other problems with the bill.
You claim visibility of taxation as a big plus. (I don't agree, I think that sales taxes are much more difficult to track than something that is shown in one line every year on a tax return but that is another argument).
But in a related vein,
What do you think the very visible welfare payment (to every man, woman and child in America) from the FedGov in the form of a prebate every stinking month is going to do to the pysche of the average person. Will it make them feel more or less dependent on government?
HOW? they won’t even know how much people make!
One way would be to pass an emergency income tax law. It will start as an Emergency measure when they find out that they are not collecting enough because too many transactions are going underground or switching to “for business use”. It would probably be implemented as a version of the Flat Tax, say 10% of everything over $100k.
Since there would be an Emergency, and people need their social security checks, and the government workers need their paychecks, this would be about the only politically possible way to make up the shortfall.
And make no mistake, there will be a fairly large reduction in the retail base caused by a 40-50% sales tax. This reduction in volume will trigger an even larger drop requiring even higher sales tax rates. It is a terrible negative feedback system.
Maybe, if you make less than this targeted amount you just have to file a postcard that says you are below the amount with no other details maybe, just to get the votes of the “less fortunate”. Employers will be the ones that have to enforce the reporting for all their “rich” employees.
The rich don’t need the money anyway. /s
This will be hunky-dory with most of the dependent electorate.
Wrong, please link to the provision in the bill where you think this happens. It isn't there.
There is the problem, it isn't one line! Withholding isn't one line, even the simplest 1040 isn't one line
The amount of total tax you owe each year is certainly shown on ONE LINE. On the regular 1040, it is line #63.
Right below your total income tax for the year on line #63, there is a line #64 where it totals all your withholding for the year. And below that on line #65 there is a total of all the estimated tax payments that you made through the year.
When you subtract what you have already paid from your total tax bill, you get the Amount due. But your total tax bill for the entire year is shown on Line #63.
compliance costs are billions of dollars per year
As a percentage of taxes collected (in the trillion plus range), compliance costs are very small amount. Most things that corporate accountants do are not done just for tax purposes, but to measure the financial health of the company for investors. The same for corporate income taxes. very low percentage of taxes collected. Don't want the rebate for tax on food, health care cost b/c it does something strange to your fragile psyche then don't take it
You didn't answer the question-- do you think having every American nam, woman and chilf receive a monthly check from the government whose amount is up the legislators will make Americans feel more or less dependent on government?
I understand.
Never said they did. Who do you think makes the laws that gives these handouts. Its not the poor. Its the fat cat congressmen and senators buying votes. You seem to want to forget all the other money that government hands out. Corporate bail outs, tax incentives, football stadiums just mention a few. I don’t remember saying I supported any of the programs that you mention. And there you go again with the class envy. I only see it like it is.
You throw a lot of numbers out with almost no supporting documentation.
Every man is entitled to his opinion. Now I knpow yours.
What number would you like to question first?
FairTax BUMP!
All of them. You are the one making the argument. Start citing legit sources. You can start at the beginning.
The only way REAL reform is gonna happen is for every American to burn their tax returns on April 15th and tell the IRS to go eff themselves.
Sorry, not going to play that game, I give my basic reasoning for every single number, and there is tons of backup and debate on every single number on the liked threads plus the dozens of other threads on the subject.
If you want to question a specific number and start at the beginning if you want, I will address your questions one at a time.
The basic idea is that there cannot be a FREE LUNCH, so there cannot be an immediate rise in purchasing power. Since workers pay is expected to go up, this means that of course prices will also go up. But not everyone is a worker. And that plus the fact that goverment needs to pay the 29.87% tax on every non-education related expenditure means that they haven’t calculated the required income correctly. The parity level of government tax income will need to be in excess of 20% higher than right now to stay even.
And the idea to put every man, woman and child on the Federal dole through the prebate will just foster an increase in the already too-high level of dependency on government handouts. You do recognize that the elected Representatives will still be able to monkey with the prebate to achieve their social engineering, and to buy votes from unproductive citizens at the expense of the productive, don’t you?
Or do you think the FairTax will remove the politics from politics?
You will never get rid of politics, but I think the FairTax would give us a ready way to judge how our representatives are doing their job, whether taxes are going up or down.
I wonder about how the transition from one to the other would take place. Would all stored inventory be considered used (already taxed)? I see a rough transition as goods cost more before the effect of lower labor rates kicks in.
I also note that services are subject to the NRST. If I repair someone’s computer or fix their car and get compensated for it, am I supposed to charge the tax?
I like the idea of getting rid of the gov’t wanting to know where all my money comes from, but as each one of is our own little business, does that not open us up to gov’t intrusion as we provide any goods or services to anyone else? I guess I could give it away for free and not be taxed.
Do divorced parents get half of the prebate for each child? There must be many unintended consequences that those lawyers in DC would need to foresee or leave up to the courts.
As to the artist selling a painting on consignment, he or the consignee would have to submit the tax, then split the remainder some way. Once it is sold one time though, it would be tax exempt thereafter. It would be easy to game the system by selling it at a low price and sharing the profits of a later sale for more, but I guess that could be made illegal. More inspectors!
My support for the NRST is based more on the morality, or lack thereof, of a tax on my income at the federal level. A state income tax doesn’t bother me as much.
One last question; The 16th amendment repealed the apportionment of taxes by population and made it by income. Since taxes would now be by spending, would there not still need to be an amendment?
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