Their position is becoming crystal clear to me now.
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?
After several years of FairTax threads, there is a lot of truth in that simple statement you made. I think you might've hit the nail squarely on the head.
FairTaxers like many true believers in a cause, are incapable of seeing the truth and are completely resistant to any viewpoint that is outside of their preconceived understanding. They are totally illogical when it comes to discussing the subject of their adoration, just like cult members.
another FairTax ad hominem
Yes yes yes those unedjoomecated FairTaxers! They are the world’s plague!
Yes they be cultish and illogical just like the 64 sponsors of the FairTax in Congress.
Of course. We FairTaxers are the plague, are we not?
Not really, you overestimate yourself. To be a plague you’d have to be effective. I would characterize you more as a nusiance akin to a small swarm of buzzing gnats. Splat!
It was YOU I was trying to educate.
What, pray tell, is wrong with being average? Most of us fall within the average range, you know.
And I have even offered a solution to them:
If the Fair Tax takes effect, have all prior after-tax savings put into special accounts that can be accessed with special Debit Cards and all purchases with that already-taxed money will be exempt from the Fair Tax when you purchase an item.
Simple solution, right?
Yet, the reaction I get from them is that nobody has savings or that it really doesn't matter because prices will drop and...yadda, yadda, yadda.
They refuse to even address the issue.
Well, screw 'em. Until they start addressing this very real issue they will get nowhere with their Fair Tax.
The reason that your idea will not work is because if they exempted all that money, the FairTax rate on the rest would have to be even higher to make up for the loss of revenue.
John Linder has admitted that one of the beauties of the FairTax is that it is a “tax on accumulated wealth” so it isn’t likely that they will turn around and exempt accumulated wealth is it?
Think about the opposite situation, someone who is a big debtor and owes $75,000 in credit card bills, two car loans for a total of $50,000 and a $500,000 mortgage balance and a home equity line of credit. Every single one of those items would now be paid off in the “new dollars” so all debtors would right off the bat owe about 15-25% less “work hours” to pay off their debts.
Does this seem possible without the whole thing being a big free lunch scheme?
Their position is becoming crystal clear to me now.
Look, friend, just the fact that any time the NRST rate is quoted, it specifies "inclusive", not just 23%, is a rather large hint, don't you think?
If the real price that the buyer ends up paying is really $123 on a raw price of $100, you would just have said, "It's $123." That's all you have to say. The end, no further. Yet there is this political type two step around the question. 
It’s not BS. Once again you show you have not done your due diligence and you jump to conclusions without checking facts or performing calculations.I love the "It's on the FairTax website" defense. Too bad they're not interested in the truth.
It’s on the FairTax website.
The upper 10 % pay the majority of the taxes in this country.You believe you misquoted the IRS. Maybe you would like to link to the stat on the IRS site.
What, pray tell, is wrong with being average? Most of us fall within the average range, you know.Statistics show that the average American is average.
I guess elimination of the estate tax is compensation for double taxation in old age - of course that doesn't help the average retiree much.
Except in Hostage's world and in Lake Wobegon, where we're all above average.
If you go into a store to purchase an item and it has a price tag on it of $100, when you go to the register to check out it will ring up for $100. Not $123. Not $130. But $100.
You believe you misquoted the IRS. Maybe you would like to link to the stat on the IRS site.
I will make one change to the above post. Lets limit it to income taxes.
A majority of income taxes are paid by the top 5% of wage earners. They pay 53.25%. Change it to the top 10% and they pay 64.89%.
If you go into a store to purchase an item and it has a price tag on it of $100, when you go to the register to check out it will ring up for $100. Not $123. Not $130. But $100.There is absolutely no requirement in the bill for prices to be listed tax inclusively. None. The only requirement is that the tax inclusive price - in addition to the tax exclusive price - appear on the receipt.
A majority of income taxes are paid by the top 5% of wage earners. They pay 53.25%. Change it to the top 10% and they pay 64.89%.You statistics are worthless without telling us what share of income those percentiles made. (They're old stats, too.) This is a typical trick to make federal taxes in general, and income taxes specifically, appear much more progressive than they are. In 2001 (the year of your stats), the top 10% of earners made 43.11% of all the income and paid 64.89% of income taxes. And this ignores the more regressive taxes like payroll taxes.
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