Posted on 05/11/2007 5:30:56 AM PDT by Dick Bachert
I have a little scenario I would like to paint for those of you out there who just insist on finding something wrong with the FairTax. Admittedly, the FairTax isn't perfect. No tax plan is. How, after all, can you come up with a perfect way for a government to take its operating funds from its subjects? If you know an easier and more equitable way to do it, by all means, let me know!
I'm going to ask you to crank up your imagination for a moment here ... and by "you," I mean those of you who think that this FairTax thing is a bad idea and you're not prepared to come on board.
I want you to imagine a scenario. Don't worry about whether or not this scenario is possible .. Just accept it as I present it, and then consider the alternative picture I'm going to also present. Simple as that.
Let's imagine that the FairTax is the law. We've been operating under the FairTax since the day you drew your first paycheck. It's all you know. Here is your imaginarily "reality."
On every payday you get your complete paycheck. There are no deductions. If you earn $2,000 per week, you get a check for $4,000 every two weeks. You never have to save receipts or create any records pertaining to federal taxes. You can invest money without paying any taxes on it. You don't have to pay taxes on the money you earn through your investment portfolio. You pay no taxes on any money you put in your savings account. When you die you get to leave your entire estate, everything you own, to whomever you wish. The federal government will take no taxes from your estate. Your death is not a taxable event. When you go to the store to buy an item, and the price tag says $19.99, you will had a $20 bill to the cashier and get one penny back. The price tag is the price. There are four people in your household. You, your spouse and two rug rats. At the beginning of every month you get a check or a credit to your checking or charge card account in the amount of $506.00 to compensate you for the federal sales taxes that are included in the price of everything you buy; right up to the poverty level.
All in all .. not such a bad deal. You keep all of the money you earn and you get five hundred bucks a month from the feds. Plus .. you only pay taxes when you spend money.
Now .. .here comes some politician who has a grand scheme for a new tax system. He wants to explain it to you. Here's his great idea ..... give him a listen and tell us what you think.
The plan is simple. First the federal sales tax is going to be removed from the price of everything you buy. This will mean that everything will cost 23% less than it does now. But ... he's going to levy an income tax on every single individual and business who plays any role at all in bringing those products to the marketplace. These people and companies are all going to pass the cost of these taxes down the economic line to the final consumer of the products they manufacture. These taxes will end up embedded into the prices of products in our retail marketplace, bringing those prices right up to the current level. So .. no loss, no gain.
Next your political benefactor is going to take away your $500 per month prebate from the government. In its place he's going to tax every penny you earn. It doesn't matter where the money comes from. Your salary, your investment income, winnings at the track ... whatever you earn and however you earn it, it's going to be taxed.
Wait! He's not through. He's also going to tax your wages for Social Security and Medicare. He's going to try to soften the blow by telling you that your employer is going to match the taxes he takes out of your paycheck, but you're employer has made it clear that this money is all going to come out of the money he has budgeted to hire you. You'll probably lose out on your next raise while the boss his accounting in order.
There are some more nifty ideas in your congressman's tax reform plan. When you die your family is going to have to file a complicated estate tax return. A huge amount of the wealth you have managed to build during your life is going to be sent to the government. Your survivors may well have to sell the family business in order to come up with the money to pay for these death taxes.
One more thing .. you're going to have to keep records of all of your financial transactions. Every year you're going to have to spend no less than about 30 hours or spend hundreds of dollars to hire someone to fill out tax forms for you. If mistakes are made you will be hit with a huge penalty and interest. Oh .. and the government is going to have access to all of your financial records to make sure that you are paying everything you "owe."
The question, of course, is why does this politician want to change the tax system in this way? Power, that's why. They want to be able to enact little changes to the tax code that will benefit certain constituents ... which constituents will then benefit the politicians -- with money or with votes. Under the FairTax system these politicians have no power to favor one group of voters over another for the benefit of votes. The new system would give them that power.
Your choice, my friends. If we had the FairTax now ... would you be willing to make the switch?
************
This line of attack has already been debunked.
Really?!?
You mean I haven't paid any income taxes all these years and that the Fair Tax will not tax what I buy?
Any time you take your ‘savings’ (if indeed you really have any) out to purchase something, there are already embedded taxes in the product you are buying. All the FairTax does is bring it out into the open.
WTF does that have to do with the $150,000 in Federal income taxes I paid this past year in order to be allowed to keep the AFTER-TAX dollars I then put in savings?
You seem to be surprised that anybody actually has any savings. If that is the case and you live paycheck to paycheck, then then you do not really have a dog in the fight of the Fair Tax double taxation.
You’re not going to convince anyone that your savings have already ‘paid its tax’.
Are you an adult or a child whose only source of income is the untaxed allowance that Mommy gives you?
In this past year, the price that Uncle Sam extracted from me to allow me to keep the dollars that I earned and later used to live, have fun and put away in my non-retirement portfolios was $151,000 (one hundred fifty one thousand) in Federal income taxes.
Yes, Junior, my savings have been taxed.
The interest on your savings is presently taxed. And every purchase you presently make has a federal tax in it. The only person you’re fooling with this angle is yourself.
So, let's take $1 million of my savings and, to keep it simple, put in in a 5% CD. That is a taxable income of $50,000.
What is the income tax on $50,000?
Is it worth figuring out?
But, to save that tax, you want to impose a 23% tax if I spent that $1 million of post tax dollars that has already been taxed at the top tax rate.
That comes out to an additional $230,000 tax on money that has already been taxed under the top income tax rate.
When you are not living paycheck to paycheck without any savings or living off the untaxed allowance that Mommy gives you, get back to us to discuss the tax rate that the money that we savers put into our portfolios is taxed at.
Hey, if it says so on the fairtax website, it must be true. Of course we have no idea where it is on the fairtax website. Whatever the fairtax organization pays Hostage, it is too much. At least pigdog could cut and paste facts and provide links to go along with the insults.
Apparently you have a reading and comprehension problem as does your cell mate Always Wrong.
About 680 large retailers will account for about 80% of the NRST.
About 3000 retailers will account for about 95% of the NRST.
There is no debate that the FairTax is easier to enforce. Every doctor has a billing service that charges a sales tax or B&O tax or whatever form of tax to the State. The NRST will be passed on to the State which in turn will forward on the NRST to the Treasury. It is easy for State computers to check that the NRST is included just as it is now easy for them to check for sales, B&O or other state imposed tax.
But under your Income tax system, the doctors/dentists and all other professionals and business people have to submit a separate form of tax reporting whereas under the FairTax they submit only to the State as they do now.
You have nowhere to go on this line of attack. Not even Congress will debate this one. There is no question about whether the FairTax will be easier to enforce, it will be considerably easier.
I doubt many know the difference between budget deficit and total debt or how much of the budget goes to pay interest on the debt. I doubt they care as long as they get a tax cut.
You ain't gonna know what government is costing unless spending matches revenue and the FairTax does not one single thing to address that.
I am betting he is the latest in the line of paid for shills from the fairtax organization, who are paid to post here. I have asked him several times and he ignores the question.
Why should I give you the time of day? You have already been discredited. The relevant links have been posted on other threads by posters that do their due diligence as I do.
But due diligence is a strange concept to you. Therefore, find the info yourself, it will do you good to start actually working to find facts.
What's wrong with this picture?
The FairTax promises to maintain spending at current levels, while also promising that we'll all have more money to spend and lowering our overall tax rates.
There is no question about whether the FairTax will...
You have a career ahead in the Global Warming industry once your FairTax job is eliminated.
Do you work in any way for the FairTax organization?
We comprehend it. We just think it is complete BS. You can't even provide a link or show the report to show how it was determined.
Hook, line, and sinker!
You’ve hit on the biggest weakness of the FairTax. Try convincing the Boomers that the money they’ve saved, after a lifetime of having their income taxed, will now be taxed AGAIN as they spend it in retirement.
Insult,
Obfuscate,
Sidestep,
Twist Facts,
Fail to answer,
Ignore,
Use unsubstantiated data,
Feel free to continue..
ball, chain, and headstone too.
Fact:a piece of information about circumstances that exist or events that have occurred.
Fantasy: An unrealistic or improbable supposition.
Clearly you don't know the difference between fact and fantasy.
I’m still waiting to find out how eliminating gift and estate taxes lower prices.
So you think when the “Boomers” spend their savings they will not pay any federal tax now?
You might have missed the simple question in #289. Do you work for the FairTax organization in any way?
What kind of thinking is that?
Back to school for a class in logic, assuming there's something to work with.
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