Posted on 05/06/2009 11:57:23 AM PDT by Turret Gunner A20
... and this time it's none other than Dave Ramsey. The FairTax is a bold proposal. It is only natural that people are going to try to criticize it. Is it too much to ask for these people to do at least a modicum of research so that they at least appear to know what they're talking about?
This time the culprit is Dave Ramsey. I like the guy, and I like his approach. His sermons on living debt free are right on, and no doubt he's helped millions of people to improve their financial. OK .. mighty fine. But now he's taken it upon himself to opine that the FairTax simply isn't, in his words, "fair."
Let's take this quote from Ramsey's article: "People would only pay taxes on items they buy, except for food, basic clothing and other kinds of necessities." Most of the FairTax supporters know that this is just flat-out wrong. The explanation is incomplete.
If Ramsey really was informed on the FairTax he would know that you pay taxes only on items that you buy at the retail level, and that food, basic clothing and other kinds of necessities are included. Ramsey would also know about the prebate. He would know that every household in this country --- that is, every legal household --- would get a credit or check from the Treasury Department every single month equal to the FairTax they would be expected to pay on the basic necessities of life during the following month. This FairTax prebate is so essential to the FairTax plan that to ignore it, or to be unaware of it entirely, is worse than careless.
Ramsey also writes of the FairTax "This means it's more of a burden on poor people, because they would pay a higher percentage of their overall income."
Sorry, wrong. The poor, poor pitiful poor would pay virtually nothing - zero percent of their income - to the federal government. [ALERT! Brilliant thought follows!] To pay any taxes at all to the feds the poor would have to spend above the poverty level. If they're doing that ... they're not poor. Pretty easy, isn't it?
I wonder why Dave Ramsey doesn't get it? Is there a chance he just shot from the hip here without doing any real research? The FairTax deserves better than this flippant, uninformed treatment.
Dave Ramsey could be a good proponent of the FairTax. He's very bright, and he would recognize the beauty of this plan if he just would take the time to actually study it. Knowing what you're talking about .... Is that too much to ask?
Weird, this audio clip on YouTube seems to show Ramsey supporting the FairTax. Huh. Maybe he's lost changed his mind since that was recorded.
I’ve been waiting for a long time, for someone to explain to me just exactly how it is that rifling through one another’s pockets, bank accounts, savings, real estate holdings, equities and securities...etc etc does SO much for this country. If fact you can linearly draw a direct correlation between the number enslaved by this system and loss of Constitutional freedoms. We’re all adults. We can get the jobs done that require community participation without behaving like envious and obsessive children about who has what where.
Tax evasion would be much much lower than it is right now.
The FairTax will not stop criminals, no tax reform will stop tax evasion.
Bu the FairTax is EXTREMELY efficient in curbing abuses in evasion. Here’s why:
1. It takes two people to commit tax evasion under the FairTax. It takes a minimum of one under the Income tax. That means it will be easy to set up sting operations posing as a buyer or seller to catch someone in the act of not paying the NRST on a purchase transaction of a new retail product or service.
2. More than 70% of all retail transactions are handled by a few thousand corporations and their retail outlets. These transactions are computerized with audit trails. No CFO or accounting firm is going to risk going to prison over evading the FairTax NRST when their company or client revenues are so difficult to hide. But under the Income tax there are myriad ways of hiding profit and by setting up shell subsidiaries to hide debt or profit. OFten two sets of books exist, one for shareholders and one for the Treasury Department.
And even in the event that some nefarious group of corporate executives attempts to hide several data batches of revenue transactions, a sting operation can be conducted by purchasing products over a time of investigation and seeing if they show up in audited records.
All of this is made possible because the enforcement focuses on spending, not profit.
3. Because most (70%+) of the government retail sales tax revenue is generated by a few thousand corporations and their retail outlets, that means government enforcement can focus on the other 30%- of sales tax revenue generation. That means criminals will feel much more heat than they do now.
4. Most Americans are law abiding. They will not want to risk prison because they were trying to buy new products and services without paying the NRST. When they start to see news stories of government sting operations, law-abiding Americans will absolutely refuse to go along with NRST tax evaion. So tax evasion is NOT going to be higher, it will be lower because there wil be more agents available to monitor and prosecute tax evaders who now fall under the radar of tax enforcement.
Now you say that giving a person or kid $10 to wash a car, that it will require a tax to be paid. Yes that’s true, no different than it is now. Except that the person or kid will have to report the income and pay both sides of Social Security, as well as calculate tax on profit.
Perhaps the only downside of your example is that the person or kid doing the carwash for $10 will be easier to catch if they evade the NRST.
So you are standing by that article of lies you posted last year?
Is that what you are saying?
“As I’ve already said in this thread, anyone whose entire income is the prebate and anyone who is making less than 2x the prebate is paying less in taxes than they are being given.”
Examples Filo, give examples.
The rebate for a qualified adult will be $196 per month. You mention a person making less than 2x the rebate. In my arithmetic that’s less than $98 per month.
Are you talking about homeless panhandlers Filo?
Are you saying that the FairTax Rebate is a massive socialist wealth distribution system because homeless bums will be getting a rebate????????
Is that your argument for opposing the FairTax????
Are you eff’n retarded????
With the Fair Tax, you get:Fairtax fantasy or another Fairtax lie.
25.62% MORE spendable income.
$7,045.95 MORE purchasing power.
$7,304.68 LESS federal taxes.
Using your scenario on the Fairtax calculator YOU linked to:
under -"current"-the "true purchasing power" of $34,430 is 98% of the $35,430 "spendable income"
Under the phony Fairtax, even after injecting the $6,297 entitlement of someone elses money, the "true purchasing power" of $34,546 is only 75% of the grossly inflated handout of $46,297...
"Curently" by your own calculator, $40,000 gives me $34,546 "true purchasing power"
Under the phony Fairtax I have to have $46,297 (a 15% handout from the taxpayers) to gain $116 "true purchasing power"
Even after robbing their neighbor of over 6K their "true purchasing power" (Fairtax words not mine) only increased $116...where's the rest of the $6297 Einstein?
$98 is LESS THAN 2x the rebate of $196 a month, is it not?
Did you not say “ a person making LESS THAN 2x the rebate”?
Ok, so say its $196 x 2 - $1 = $391.
Who Filo can live off of $391 a month? Who?
A dependent or a bum Filo.
And a dependent will not be collecting a rebate. The head of their household will collect it.
So that leaves bums only.
In either case your argument is that the FairTax Rebate is a massive wealth distribution scheme because bums will collect a rebate check of $196 a month.
Amd how many bums are there do you estimate Filo?
How many?
Oh my, another perennial bashing heckler of the FairTax surfaces.
Don’t know where you got your $35,530 ‘spendable income’ from. It does not show up on the FairTax calculator unless you add back in the hidden taxes and local sales tax. But then you would have to set local sales tax to zero percent and that would change the FairTax column as well. But most states have local sales taxes so a 0% assumption would be unrealistic.
I don’t get a ‘true purchasing power’ under the ‘Current’ column of $34,430. Accounting for:
Local sales taxes at 5% applied to 47.6% of ‘Net Spendable’ ($843.57)
and
hidden taxes (embedded federal taxes of 20%) applied to ‘Net Spendable’ of $35,430 ($7,086) the ‘true purchasing power’ under the ‘Current’ column is ‘Spendable Income’ $35,430 - $843.57 - $7,086 = $27,500.42. That’s the way economists define present purchasing power, income and wealth used for purchasing and free of all tax effects.
If you think a hidden tax level of 20% is too high, then you can change it by clicking the ‘Assumptions’ tab to the right of the ‘Results’ tab and enter a different value. It may be that some retailers will in certain product and service categories only experience a 8% decline in costs whereas in other categories it could be as high as 36%. On average it is 20%. But in all cases of a decrease greater than 0% in the pre-tax price of goods and services the FairTax increases the purchasing power of this example. Even 1% increases purchasing power by $314.25.
The $116 difference has nothing to with what you are looking at. The $34,546 true purchasing power under the FairTax comes from subtracting the NRST at 23% from the ‘Net Spendable’ and also subtracting the local sales tax. It has nothing to do with ‘Current’ system ‘Net Spendable’ plus $116.
Why do you call the refund or rebate of $6,297 an entitlement of someone else’s money? Whose money would that be? Who is it coming from?
If it is wealth distribution it must be coming from wealth, correct? So tell us where what who this wealth is confiscated from.
Can you? Nah! You can’t! Because it is coming from the purchases this family of 4 made from their Net Spendable up to the poverty line.
The family of this example will spend $46,297 on retail of which $10,648.31 will be for the FairTax NRST, yet they only received $6,297 in family rebate. So they are not receiving more rebate than they pay out to the NRST. You can’t say they are receiving ‘an entitlement of someone else’s money’.
So if the FairTax Rebate is such a massive socialist wealth distribution scheme, tell us who is taking in more rebate than they pay in NRST. Who? What segment of the population?
Waiting....tick tick tick
“In reality there will be millions, and not just bums.”
Ok hotshot. Let’s see where you get ‘millions’ from. List your references and back up your claims.
I think you’re blowing out some smelly substance from your back-end. I’ll bet most people believe likewise except for your fellow useful idiots.
So show me I am wrong. I want to see you come up with a credible source that cites that millions of independent adult Americans have less that 2x the rebate or $392 a month to spend.
Waiting.....tick tick tick
Who Filo can live off of $391 a month? Who?Where is it written it's not an entitlement if you can't live off of it.
Every example given from your own Fairtax calculator shows more "spendable income" than gross income earned...What do you call that exactly? And where exactly does that extra "spendable income" come from? The Obama money tree?
How does a rebate increase your spendale gross without taking it from someone else? Answer that one Hostage.
Don’t know where you got your $35,530 ‘spendable income’ from. It does not show up on the FairTax calculator unless you add back in the hidden taxes and local sales tax.I only used the information you posted to do the calculator (family of 4, $40000 gross income, no deductions). Unlike you I didn't "assume" or skew any unknown information.
The family of this example will spend $46,297 on retail of which $10,648.31 will be for the FairTax NRST, yet they only received $6,297 in family rebate. So they are not receiving more rebate than they pay out to the NRST. You can’t say they are receiving ‘an entitlement of someone else’s money’.I don't have to, you just did by pointing out that they spent $6,297 more in one year than the $40,000 they earned. If it didn't come from another source (aka someone else) where did it come from?
it’s for the children... and better the evil rich pay an income tax on their ill-gotten earnings than raising the FairTax rate on working Americans...
I suggest that you red the material available at FairTax.org and in the fair tax bill before you post again and make a bigger fool of yourself than you just did.
“And where exactly does that extra “spendable income” come from?”
The extra income comes from the FairTax rebate! It is a refund of FairTax National Retail Sales Taxes (NRST) paid in spending up to the poverty line.
Where does it come from? Where did the Bush Tax rebates of last year come from? From tax revenues! Of course!
And so it is that a person’s FairTax rebate will also come from tax revenues! Eureka!
And most qualified persons and families will be paying much more in FairTax NRST than they take in from rebate checks.
As for your last question, it’s already answered in the above, it comes from tax revenues.
For example, using the example previously of a married couple, two children, employed and filing jointly, earning a gross of $40,000, no deductions, paying $1,510 in federal income tax and $3,060 in payroll taxes and receiving a FairTax family rebate of $6,297. This family will pay 23% NRST or $10,648.31 on their ‘Net Spendable’ of $46,297.
On a monthly basis, the federal government will take in 1/12th of the $10,648.31 in NRST or $887.36 yet only cut a rebate check to this family for 1/12th of $6,297 or $525.
For the one-time case calculation of the FIRST MONTH of FairTax operation, the federal government can either pay up front for the month ahead or pay at the end of the first month.
If the rebate is paid up front, then the federal government can run a short-term deficit of $525 to this family, short-term because the federal government will be repaid this deficit amount within two months after this family is paying the NRST.
If the federal government pays at the end of the month, then this family example has a ‘Net Spendable’ of about 1/12th of $40,000 per year or $3,333 for the first month only. Spending $3,333 on retail will generate 23% NRST revenue of $766.67 per month from which the government can rebate $525 for the next month of spending.
And the government revenues will grow because the tax base of spending is much larger than the tax base of wage earner income. And that’s not even accounting for what prominent economists have agreed that the GDP will be boosted by 10% under the FairTax!
See post #278.
Hmmmmmm. Further proof tht you are making a complete fool of yourself with your ignorance, which leads to lying AND judging others by yourself.
Do try to read and understanding the Fair Tax law, befoe you nail down your asininity any further.
Perhaps then you won't be so obnoxiously boring.
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