Posted on 01/06/2011 3:52:22 AM PST by phil_will1
Washington, DCOn Wednesday, January 5, 2011, Congressman Rob Woodall (GA-07) introduced H.R. 25, the FairTax. The FairTax legislation eliminates the current income tax paradigm and replaces it with a system of taxation based on consumption. The bill was introduced on Wednesday with 47 original co-sponsorsthe most original co-sponsors the bill has ever had for its initial introduction.
I committed to the Seventh District of Georgia that my efforts in Congress would focus on reclaiming freedom for the American people. It is for that reason that I am proud to make the FairTaxthe only bill that restores transparency and simplicity to our tax codemy very first action in Congress. I have said since its inception that the FairTax is not a tax bill; it is a freedom bill, Woodall said.
Woodall, who was sworn-in to Congress earlier in the day, played an integral role in crafting the original text of the FairTax as former Congressman John Linder's Chief of Staff when the bill was originally introduced in 1999.
"Our current tax system is a bloated, convoluted mess that gives government power over Americans' pockets. With 47 Members of Congress and counting signing their names to the FairTax, we are closer than ever before to voting on legislation that eliminates the frustrating mess that is the IRS."
Although the FairTax was introduced with 47 original co-sponsors, Woodall anticipates adding many more Members of Congress to the bill. Once the FairTax is introduced with the original co-sponsors, Members are able to sign on to the bill as co-sponsors throughout the 112th Congress.
"The number of signatures on the FairTax this time around is a testament to the will of the people. It is clear that Americans do not want to have their hard-earned money taken away and they want to reclaim the freedom to spend their money how they choose and when they choose.
The list of original co-sponsors is as follows:
1) Tom Price (GA)
2) Brian Bilbray (CA)
3 ) John Carter (TX)
4 ) Michael Conaway (TX)
5 ) John Duncan (TN)
6) Virginia Foxx (NC)
7) Steve King (IA)
8) Michael McCaul (TX)
9) Pete Olson (TX)
10 ) John Sullivan (OK)
11 ) Mac Thornberry (TX)
12) Phil Gingrey (GA)
13) Roscoe Bartlett (MD)
14) Don Young (AK)
15) Ander Crenshaw (FL)
16) Todd Akin (MO)
17) Lynn Westmoreland (GA)
18) Tom Graves (GA)
19) Gus Bilirakis (FL)
20) Ted Poe (TX)
21) Randy Neugebauer (TX)
22) Jeff Miller (FL)
23) Robert Wittman (VA)
24) Jack Kingston (GA)
25) Marlin Stutzman (IN)
26) Jeff Flake (AZ)
27) Billy Long (MO)
28) Cliff Stearns (FL)
29) Tim Walberg (MI)
30) Dennis Ross (FL)
31) Dan Boren (OK)
32) Mo Brooks (AL)
33) Darrell Issa (CA)
34) Richard Nugent (FL)
35) Tim Scott (SC)
36) Blake Farenthold (TX)
37) Jeff Duncan (SC)
38) Rob Bishop (UT)
39) Mike Pence (IN)
40) Sandy Adams (FL)
41) John Mica (FL)
42) Sue Wilkins Myrick (NC)
43) Dan Burton (IN)
44) John Culberson (TX)
45) James Lankford (OK)
46) Mike Pompeo (KS)
47) Gary Miller (CA)
###
-- Jennifer Drogus Communications Director Congressman-elect Rob Woodall
Seventh District of Georgia 202.225.4272 | jennifer.drogus@mail.house.gov
You had the question answered hundreds of times previously Lewis but are too thick sculled to “get it”!
The FairTax base is very much larger than the income tax base Lewis!
If you go back all the way to the beginning of the 20th century, government revenue as a percentage of GDP has ranged from mid 18% range to the high 19% regardless of whether the economy was boom or bust and tax rates were high or low. For general discussion it is just easier to round it off to 20%.
How that 20% is collected has varied. You have excise taxes, income taxes, taxes masquerading as fees, estate taxes, gift taxes, corporate taxes, on and on. The bottom line is that every one of those taxes get embedded in the price of goods and services and are ultimately paid by the consumer. The method of collection can vary across a broad spectrum, but the money that gets paid as taxes comes out of the pocket of the consumer.
So, the Fair Tax, in order to eliminate all the other forms of taxation needs to provide roughly 20% of GDP to the government as revenue to directly replace the current tax system. The perceived tax rate may vary based on any gimmicks involved in the particular system. If you are going to do rebates (a gimmick), then a rate higher than 20% is necessary. However, the net effect will still be 20% if the system is set up to be revenue neutral. Eliminate the rebate, and you don’t need as high a rate. Politicians like the gimmicks to sell a proposal, but in general they do not really effect the burden the system places on the individuals. In the end, taxes are paid by the consumers and they generally balance out based on your level of consumption, regardless of the gimmicks in the system.
The overal benefit of the Fair Tax is that the consumer will end up paying a net 20%. Under the current system, they are paying a net 20% plus another 10 - 18% on imported goods and services.
Implementation of the Fair Tax will not be as easy as some would have it. All of the current inventory, both finished goods and inventory in the production flow have the 20% tax burden embedded in them already. A transitional process will be required to deplete current inventory and move to inventory which does not have an embedded tax content. This will be complicated, but it is doable and the tax bonus from the sale of imported goods and services will be a usefull tool during the transitional period.
There are many more Fair Tax candidates who were elected to office in November than past elections. The growing angst with the federal income tax code and the IRS, particularly as it will be used with unconstitutional Obamacare, is becoming a perfect storm for passage of The Fair Tax.
“Implementation of the Fair Tax will not be as easy as some would have it. All of the current inventory, both finished goods and inventory in the production flow have the 20% tax burden embedded in them already. A transitional process will be required to deplete current inventory and move to inventory which does not have an embedded tax content.”
That is why there is a transitional credit included in the bill for holders of inventory as of the effective date of the FairTax’s implementation. If it were not for that credit, your point would be true.
“In the end, taxes are paid by the consumers and they generally balance out based on your level of consumption, regardless of the gimmicks in the system.”
I’m not sure I understand your point, but if you are suggesting that taxes “balance out” in proportion to consumption under the current system, then I would suggest otherwise. Because of all the “loopholes” under the current system, there are numerous examples of inequities. A friend of mine is a CPA who does some very high end tax returns. He told me that he sees cases all the time where a transaction can have entirely different tax consequences depending on the legal form of the entity involved.
I have often thought that if someone attempted to write a book describing the inefficiencies, inequities and illogical aspects of the Internal Revenue Code, it would be longer than War and Peace.
HIDDEN tax collection is certainly the problem.
Part of the beauty of the fair tax is that, with every purchase, you see how much the gov’t is taking from you.
And if they increase the rate, everyone sees it.
The whole point behind the complexity of the US Tax Code is so that the rules can be applied differently for different people and entities.
It is from this unequal applications that politicians derive their power.
You had the question answered hundreds of times previously Lewis but are too thick sculled to get it!Do you have a key on your keyboard with that one touch reply? You must.
The FairTax base is very much larger than the income tax base Lewis!You don't know a tax base from first base. Is the Fairtax revenue neutral or is that just another Fairtax lie?
You can't answer because it isn't possible with out lying.
ROFLMFAO!!!
That is REALLY funny coming from YOU Lewis!
The money to pay taxes always comes from the consumer. There is no other source for income, even investment and speculative income ultimately comes from the consumer. The path may be convoluted at times, but if you persist in tracing the source of income, it will always end up back at the consumer. If nothing is ultimately consumed, there is no source of income.
Under the current system, the consumer provides the funds to pay taxes for the entities (persons or business) down the revenue stream. The funds are paid as taxes in various forms along the revenue stream.
There are oportunities to transfer more to the government than necessary along that revenue stream. I am, of course, referring only to legal methods. It is similar to buying a car. Some people go into the dealership and pay sticker. Some people bargain. Some people use leases or business entities to alter the cost. The people paying sticker are doing so by choice or ignorance, but they do have alternatives available. So there are variations around the norm of what money is transferred to the government.
The second aspect of limiting how much is transferred to the government is in the area of alternative investment. A person or entity can choose to invest time or money into a direct effor to reduce payment to the government. Just as coupons can be used to lower the grocery bill, there are methods to reduce the tax transfer. Some people never use coupons while others invest hours collecting coupons and make good use of them. The hours invested have a value and they represent an alternative investment. Works out well for some people and more power to them. Essentially though, the entity is using an alternative form of investment. This creates a degree of variability however, the total financial picture must be examined including the alternative investment in computing the savings, not just the amount of tax avoided. This reduces the variability by quite a bit. For example, the CPA ends up transferring some of those tax funds to the government rather than the original entity. The money still comes from the end consumer though, it just took one more alternative stream on its way to the government.
So, yes, the consumer is the person actually providing the revenue to be transferred to the government. Also yes, there can be variability in the stream as that reveneue heads to the government. Even under the Fair Tax system, there will be variability. If you negotiate a lower price for something, you have in essence lowered your tax burden.
Simple arithmetic - If you need to provide 20% of GDP as revenue to the government but you are going to return 13% of what you collect in the form of rebates or exemptions, you will need to collect 23% on every transaction at the point of sale.
Simple enough?
Its a tax reform proposal which eliminates income taxes (both individual and state),Thanks for validating my tag line.
I’m very pleased to see this — Rep. Woodall promised to introduce the legislation when he announced his run to succeed Rep. Linder. Woodall worked for Linder since 1994 and has been a FairTax supporter FRom the original get-go in 1999.
He will be an excellent representative for Georgia and the FairTax.
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