Posted on 04/10/2011 8:04:24 AM PDT by phil_will1
One of the more intriguing new websites on the political blogoshere is POPVOX. POPVOX is an interactive site that enables individual citizens to weigh in on bills introduced into congress. You can vote for/against bills in the house or senate and you can also make a comment that will be displayed on the respective Bill Report page and forwarded to your respective representative/senator.
POPVOX also has a mapping facility which shows where support\opposition to a bill is coming from geographically. You can drill down to CD level all the way up to state and national.
HR 25 (The FairTax) made last week's POPVOX list of trending bills. As of the time of this writing, just under 1,500 votes had been cast for the bill on POPVOX, with 86% in support. Other FairTax related bills (S 13 and HJ Res 16) show even higher support percentages, albeit with much lower vote totals. HR 1040, by contrast, showed 74 votes being cast, 94% of which were in opposition. HR 1040 is the only flat tax bill in the house, where tax reform legislation is supposed to originate under our system of government.
“My thought is noncompliance will go up dramatically...”
I disagree and here’s why. It occurs to me that there are 3 “choke points” in the consumption economy that will be the revenue base of the FairTax.
1. Big box retailers - Here in GA, the big grocery store chains are Kroger’s and Publix. There are several more that are just below them in sales volume. Then you have the electronics superstores, Wal-Mart, Target, etc.
2. Auto dealers - while used cars are sometimes sold by individuals, news cars (the only ones taxed by the FairTax) are always sold through some type of dealer.
3. Real estate closing attorneys - New houses will still have to go through a formal closing process to change ownership.
I would hazard a guess that these three types of consumption account for 60 to 75% of the consumption economy. None of these three “choke points” will conspire to cheat on the sales tax. Why? Because the risk/reward ratio just does not make sense. It would be too easy to catch these guys. Can you imagine what would happen if one of the big-box retailers did not charge the sales tax to their customers? Or if the remittances to the state authority from one of those retailers stopped or went down significantly?
We could get a very high level of compliance with relatively few resources allocated to enforcement from that sector of the marketplace. We already know that there are enormous economies in compliance enforcement due to the fact that there are so many fewer points of collection/enforcement under the FairTax than under the current system - more than an 80% reduction in the number of filings. Then you have well over 50% of that greatly reduced number that will require very little oversight resources allocated to it.
On top of all that, you are talking about a greatly reduced and much, much simpler system to enforce. According to CCH, the current system (NOT just the IRC BTW) numbers in excess of 72,000 pages. The FairTax is less than 150 pages. Anyone who has been through a sales tax and an income tax audit will tell you that sales tax audits are trivial compared to income tax audits.
All in all, I think we can get a higher level of compliance with less resources allocated to enforcement under the FairTax than under the current system, or any modified form of income tax.
Of course, that is not good enough for some who raise this issue as a red herring. They insist on a perfect tax system where there will be zero problems with compliance. This is, of course, impractical and unreasonable and strongly suggests that they have some other agenda and that concerns over compliance are merely diversions to mask their vested interest in perpetuating a highly dysfunctional system that serves them personally even if it is hugely damaging to the economy of this nation.
“As to the Fairtax, it sounds great but is goofy. They have a massive ‘second tier’ of taxation.....”
Can you explain what you mean by a “second tier” of taxation?
“Online voting/polling is flawed IMHO unless there is a way to ensure one person/one vote. It’s also very hard to know if a person truly understands what they are voting for/against unless a series of questions is asked about the subject and replies are consistent”
The alternative is to employ Zogby, Rasmussen or someone like that to do scientific polling. No one is saying, for example, that the 86% support shown in this poll is representative of the public as a whole. It does suggest, however, that of those who feel strongly enough to vote one way or the other, the FairTax enjoys very strong support.
As far as the competence of the respondents, I agree that that is an issue. I particularly noted that the comments of those opposed show a lack of understanding of the proposal in many cases. I would say that at least half of the objections voiced in those opposing comments would go away if the respondents understood more about the proposal.
There are, of course, some misperceptions revealed among the supporting comments, also, but nowhere near as many.
We do not have flat tax.
But it is the most equitable. Fair Tax is beyond stupid and would hurt business...
Please explain yourself, with some real facts.
Thanks for the headzup, Phil.
FairTax ping!
This is a clever social networking site — I think we’ll be able to use it to great advantage.
I think you’re mixed up. It’s the income taxes that have multiple tiers of taxation. The formal definition of the flat income tax is “subtraction method VAT” in fact.
Flat tax has tax on my income [income and payroll] and taxes again when spent [via business taxes including income and payroll.] It is trivial to see more than one layer in even the generic flat tax situation. That second layer... it’s hidden in prices. That’s bad.
The nrst will help business.
The nrst will help businessNot if you're a (Fairtaxable) service business or even a retail business.
The 23% fairtax rate is a income tax on the business gross, not a sales tax on the consumer.
Tally up your gross taxable receipts (AKA gross income), remit 23% to the feds...
Not a business tax?...HA!
snicker... why do you want to keep the income tax lewislyn?
I haven’t done extensive analysis, but when I looked for a place on the 1040 form to enter income earned from extortion and smuggling, I didn’t find it. I also failed to find a way to deduct bribes and kickbacks for the under the radar business expense.
I called the IRS to inform them of their oversight, but they just seemed very confused and started asking pesky questions.
Having the true cost of government on every store receipt instead of hidden in the price of goods would just be horrible. The people might just notice that their taxes are just too damned high.
Flat tax retains the IRS. The Fair Tax eliminates the IRS.....That in itself cant be a really difficult decision to make.
You want to retain the IRS, and all tax reporting and headaches, have you lost your mind? The Fair Tax eliminates the IRS. Apply some logic to that.
Flat tax is still an income tax. Fair Tax is a tax on purchases. All the difference in the world.
It is every citizens duty to avoid paying as much tax as possible.
You are talking a gross receipts tax where the burden is on the business. Not so, the Fair Tax is a sales tax where the payment is on the consumer.
Amen!
Avoiding tax is legal and should be done whenever possible. Evading tax is illegal.
Not quite.
If you're a RETAIL business then you remit 23% of gross receipts to the state sales tax authority and earn 1/4% of receipts for your trouble. Remember only retail is taxed - not business to business - only retail.
It's pretty easy to calculate 23% of gross - I think even you could do it lewis - lumber isn't retail so you wouldn't have to worry 'bout it. Even if you did, you would have no additional compliance costs and most likely less. No payroll dept or employee "contributions". And you'd earn 1/4% on remittance.
apologies
define cigar
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