Political Insider

By A Non-Kool-Aid Drinker

December 28, 2007 2:20 PM | Link to this

The FairTax does not hold water, as more and more analyses are showing. (Washington Post, Wall Street Journal, National Review, Los Angeles Times, Bruce Bartlett, Factcheck.org — these are just a few that have recently examined the FairTax and found it wanting).

Linder would not debate his challenger in the 2006 election on the FairTax. I somehow doubt that Chambliss will either. FairTax proponents never debate ths proposal — they just like preaching to those who have already drunken the Kool-Aid.

By georgiavalues

December 28, 2007 3:05 PM | Link to this

I support the FairTax and Saxby Chambliss. This Buckley fellow should get behind the FairTax.

By Another taxpayer

December 28, 2007 3:09 PM | Link to this

Fair! Evidence-Oriented! Debate! I guess we could all pray for a day when these new-age Republicans use all four of these words in one sentence. Wait a minute! How about “We will NEVER have a Fair, Evidence-Oriented, Debate!” as an appropriate GOP response to Mr. Buckley.

By Another taxpayer

December 28, 2007 3:26 PM | Link to this

Perhaps there is a way to make this fair tax thing work. But first I need to have a few questions answered.

1) Will the Fair tax eliminate property tax?

2) If property tax were eliminated, would we then have the Fairly Great Tax?

3) If we had the Fairly Great Tax, would it be fairly great enough to make US into the fairly greatest socialist republic of all time?

4) Would we need a Healthcare Tax to cover some of the things that the Fairly Great Tax won’t cover?

5) What about an Alternative Minimum Fairly Great Tax? I’ll bet there would be debate from Mr. Saxby Chambliss on that issue.

By Charles

December 28, 2007 3:37 PM | Link to this

The only ones who would be hurt by the Fair Tax would be those who are not participating in the present tax system. That would include drug dealers, so-called ‘Reverends’, con artists, etc. There would be no more hiding of income - legal or illegal.

It’s no wonder that those who want to keep an unfair system in place are mostly the dregs of our society - including the Democrats.

By Another taxpayer

December 28, 2007 3:53 PM | Link to this

Charles,

I’m not a Democrat however I would be interested in knowing how you would propose collecting this tax from the drug dealers, con artists, etc.

Also, would you please provide me with examples of legal hiding of income.

Thank You

By Bernie

December 28, 2007 3:57 PM | Link to this

To A Non-Kool-Aid Drinker:

A newspaper editorial is not an analysis—it is an opinion piece.

Make it your first priority to learn the difference in 2008.

By Bernie

December 28, 2007 4:02 PM | Link to this

To Another:

Tax avoidance is legal. Tax evasion is illegal. Make it your priority to know the difference in 2008.

Spend less time being cute, more time educating yourself. Present yourself as being knowledgeable and most folks will be unable to detect the difference.

See www.Fairtax.org for details.

By E-Bay Mac

December 28, 2007 4:15 PM | Link to this

Remember that name folks. Its ‘E-Bay Mac’ here, about to deliver you the best Black Market deals out there. We’ll be using my own personal Alternative Minimum Tax on your Very Fair Tax purchase. Nothing Nada Zilch. A big ZERO percent tax! For you only!

Step right up and get your Tax Free computer. Whats that sir? You need a printer too? Come on down!

Junior needs new shoes? You’ve come to the right place! Always FREE SHIPPING!

By Another taxpayer

December 28, 2007 4:27 PM | Link to this

Bernie,

Quit re-phrasing to suit your interests:

1) The transaction between the drug dealer and purchaser is not taxed,

2) Ditto for other illegal activities,

3) Hiding of income is illegal

By the way, you are so cute.

By A Non-Kool-Aid Drinker

December 28, 2007 4:30 PM | Link to this

Bernie — I guess you sure showed me. You want analysis:

William Gale, May 15, 2005 ed. Tax Notes

Bruce Bartlett, current ed., Tax Notes

President’s Tax Reform Commission, vol. 9 (2006)

Joint Committee on Taxation, (1998 and 200)

Also, under the FairTax, when the drug dealer sells his drugs, his customrs don’t pay the FairTax. When he buys his cadillac, the car dealer collects the FairTax and remits it to the government.

Under our current system, when the drug dealer sells his drugs, he doesn’t pay income tax. When he buys his cadillac, the cadillac dealer pays income tax (as does the salesman, the manufacturer, etc.) That’s what the so-called “embedded tax” is.

So, there’s NO new tax paid to the government by the underground economy under the FairTax. (Of course, if you had actually read some of these analyses, you would already know that.)

By Craig

December 28, 2007 4:39 PM | Link to this

Do you honestly think Saxby has any clue about the Fair Tax? He had no clue what it was until his Primary opponent in 2002 made it his main issue. Saxby only rides the coattails of people. He’ll only debate it when Boortz and Linder are allowed to back him up.

By Mark M

December 28, 2007 6:13 PM | Link to this

Alan Greenspan, T. Boone Pickens, Nobel economist Vernon L. Smith, and over 80 U.S. economists LOVE the national consumption tax and prebate (fairtax). I’ll let them do my talkin’.

By Craig also

December 28, 2007 11:59 PM | Link to this

At least a few people are beginning to understand what a disaster this would be for the middle class.

Ironic that the Libertarian candidate is smart enough to see through the hype, while the Libertarian-in-name-only talk show blowhard is one of the main advocates. Should be interesting to watch how Mr. Buckley’s candidacy develops.

By Jim Bennett

December 29, 2007 7:10 AM | Link to this

One must remember that Buckley’s comments - that are critical of the Fair Tax - come from one who would be put out of a job by the Fair Tax. Buckley, as an attorney, has transferrable skills and would do well under the Fair Tax, but his skills should not be transferred to the United States Senate until Senator Chambliss passes the Fair Tax. ~Jim Bennett Summit, NJ

By Dewey715

December 29, 2007 8:18 AM | Link to this

Debates are great, but with a Libertarian why waste the time. They say such far out comments because they’re not living in the real world.

By Dave Corsi

December 29, 2007 9:20 AM | Link to this

If Mr Buckley is a tax attorney and accountant who relies on “government studies” to support his views, he must not be much of a Libertarian. Furthermore it appears he owes his livelihood to the current “special interests” tax system and big government types who propagate it.

By JeD

December 29, 2007 11:29 AM | Link to this

“Women, Children, and Minorities Hardest Hit”, well it looks like opponents of the FairTax proposal want to add “poor and middle class”.

Certain presidential candidates keep claiming that they are among the most wealthy in the nation, not that their rubbing it in - it just feel that way to us poor middle class people, and that they should be taxed more, along with the vast majority of ueber wealthy who don’t want more taxes. Here’s the real deal, the top 1% of money makers in the USA don’t pay income tax - at all - or in very small amounts. That is why the Alternative Minimum Tax was created, to cath 20, yes just twenty - it is now set to catch 20 Million people, of these people who get all of their very expensive livelihoods taken care of by their corporations and other businesses while money piles up in their stock portfolios, they get no salary and so pay no income tax. Sure let’s raise normal type taxes on people who don’t actually pay them. That plan doesn’t work for me. Never mind the fact that every time taxes are cut on the wealthiest of us in the US everyone benefits from them spending more money in stores that need services and materials from the rest of us. Yes, trickle down economics is real and it really benefits you indirectly, whether you understand it or not, just like gravity. the FairTax would unleash this group in a way that our ecomomy hasn’t seen since federal income tax was created many deacades ago.

As for the poor and middle class being hit by FairTax, ONLY those who refuse to do the research would continue to say something so opposite to the truth. FairTax gives back to every USA citizen a monthly check equivalent to the amount of tax that would be paid on all items at the poverty level. Please read that again. Let it sink in and churn over about what that would mean to someone at the poverty level. It means 0% tax. If you are making twice the poverty level, it means that you pay 0$ tax on the first 1/2 of your spending for mandatory new items like food and rent, and regular tax on the second half, if you buy new. There is no tax on used items, cars, houses, second time sales means 0% tax. This also means that the very wealthy person buying the very expensive new item will pay the very biggest taxes.

That does not mean that prices will be much if any higher, because FairTax would eliminate all federal taxes. If it is a federal tax, it goes to zero. If it is a state or local tax, that is a separate issue. Here is a piece of info you must remember when looking at coporate taxes. Corporations don’t pay taxes, they consider taxes a side cost of producing their product or service and add them into the price they charge to YOU the consumer. You pay all of those behind the scenes taxes for the corporations. Therefore, raising taxes on corporations is equivalent to shooting a hole in your car tire. Your own foot doesn’t feel the pain, until you realize that now you have to walk. Once all of the federal corporate taxes go to zero, the competitive market place will only need one company to drop prices to reflect the missing backdoor taxes in order to cause all of the other companies to do so. Suddently, all prices on most products will be much lower, add the FairTax to the top - right in front of you where you can see it - and prices are just about where they used to be, except that you the consumer can now SEE the tax you are paying. And you pay it with non-taxed dollars, instead of using our current system of already taxed dollars to pay hidden taxed prices.

Lastly, let me deal with property taxes. Property tax is not a federal tax. It is a state or local tax, in most cases. Once the FairTax proposal is passed and people every where are seeing the benefits of it, “Why didn’t someone think of this sooner?”, then FairTax can be implemented at the state and local level. That would in fact eliminate proper tax. It would in fact remove the government’s ability to take your home away from you. There are many senior citizens in this country losing their ability to keep their houses because of property taxes and fixed incomes. How much more unAmerican a system is there than one that allows hard working people to pay for their own property, true property - land and a house, and then levy such high taxes that the state takes the house for back taxes, litterly running people out of town. Look around at the demographics of the Northeastern states. The average age is dropping like a rock. Conversely, the average age of towns in the South and Southwest is shooting upward. Passing FairTax at the state and local level would make selling your property after retirement age a personal choice, not a forced requirement. It would give more balance to many communities that could benefit from the wisdom many older people have to offer. Yes, they would benefit greatly from FairTax. We would all benefit greatly from passing the FairTax.

So, if you want to debate the FairTax, be sure you’ve actually read all of the research first. Stop wasting everyone’s time spouting opinions and questions that clearly show you haven’t read any of it. The FairTax plan is the greatest finanicial boon to the USA possible, at a time when we could sorely use it. And best of all, it forces the true cost of the federal government out into the open where we can all see it every day. How much support would a congress member get for proposing to raise the National Consumption Tax that everyone can see on every purchase? There is the real battle. That right there is enough reason to pass the FairTax.

Go do the research, get your questions answered with the truth, not your buddy’s opinions, or your own personal council. Get the facts. FairTax.org

By Jack

December 29, 2007 7:19 PM | Link to this

Looks like this isn’t the only thing Georgia Republicans need to worry about:

http://acropolisreview.com/2007/11/republican-congressional-delegation-on.html

By FAIRTAXBILL

December 29, 2007 11:52 PM | Link to this

Go Chambliss! Go FairTax! Both would be a great step forward for all Americans and the American economy. The opinion of a Chartered Financial Consultant in retirement!

By Another taxpayer

December 30, 2007 7:55 AM | Link to this

A tax is a tax — no matter the name given it. What if it were called the UnFair Tax? What would be your thoughts? This so-called “Fair Tax” is revenue neutral according to its supporters. So, it’s going to collect the same amount from the same group of people. Poverty level people will pay the same as before as long as they stay in poverty. Middle class people will be no better off. They may even be able to find a loophole to save a buck if they’re careful. They’ll just have to avoid buying anything new and learn how to avoid doctors, dentists, hospitals, drug stores, etc. I wonder if the “rich” people will set up thrift stores for the middle class so we can buy their used stuff tax free. Maybe they’ll even have some used medicine to share tax free. I can’t wait to buy one of their used multi-million dollar mansions tax free. How about a slightly used Bentley tax free. What about a used loan tax free. The possibilities are just staggering! To think that there is no market for Bill Clinton’s used underwear! It’ll be TAX-FREE!

By Craig

December 30, 2007 9:20 AM | Link to this

“Revenue neutral” is the key. Boortz wants it ‘cause he knows he will pay less. For him to do that, someone else has to pay more. Who do you suppose that will be? Drug dealers? Yeah right.

Sorry all you Kool-aid drinkers, but if you’re in the middle class, you WILL pay higher taxes under this plan. Thanks, but no thanks.

By Robert F. Liker

December 30, 2007 11:26 AM | Link to this

I respectfully suggest that you would do well to get correct facts and speak to Americans for Fair Taxation or visit www.FairTax.org so that you can understand what the Fair Tax is and what it does not do. I also suggest you not continue to write articles that are false, misleading and erroneous comments of the Fair Tax.

By Ken Hoagland

December 30, 2007 12:22 PM | Link to this

As the FairTax idea gains momentum, the “long knives” have come out by those with an investment in the income tax system. They are throwing the kitchen sink at the idea but those who know the research behind the FairTax see through these red herrings and are rallying in ever greater numbers.

Campiagns wanting to slow Huck; lobbyists like Bruce Bartlett wanting to save their lucrative roles in tax policy; academicians who have built entire careers on understanding and suggesting changes to the indecipherable tax code; “authors” who believe they have found a contrarian path to fame and, finally, Members of Congress who are addicted to the power of favors, punishments and citizen manipulation through the tax code, all have strong motivations to distort the idea. No matter to them that their narrow gain saddles the nation with a tax system defined by greed, hidden taxes, 67,500 pages of complexity and elements that are killing off the “Made in America” label.

Too late! The FairTax idea is powerfully resonating now because, while not perfect (what tax system is?), it is 1000 times better than the current system and corrects many national economy and taxpayer problems caused by the tax code.

Without listing everything wrong with the income tax system, consider this: It costs America $265 Billion a year to obey our income tax laws. Any creation of our own government that is so expensive and difficult to obey—and which introduces so many destructive problems—SHOULD invite citizen loathing and inspire new ideas for better ways to collect federal revenues.

The many distortions of this well-researched alternative are simply a measure of how much Washington has to lose in ending the income tax system. But are the 30,000-40,000 people profiting from the income tax system really a good reason to keep such a destructive, unfair and expensive monstrosity? No—and the American public is waking up to realize that in this country, especially, we public policy victims of this wound on our economy (and peace of mind) have the power to change things—despite the howls of indignation now coming from the political elite who have promised change for so long without ever meaning it.

By John Paul McDaniel

December 30, 2007 4:50 PM | Link to this

It is in IGNORANCE!! that one claims that the Fair Tax will drive up the cost of living……….for ANYONE!!!.

PLEASE CONSIDER THIS:

22% of the price of all that you buy currently is tax / tax compliance cost. When that cost goes away (under the Fair Tax) the price of your $1.00 item (purchased at Wal-Mart, for example) drops in price to 78 cents (without damaging the profit margin). The same will be true of all retail pricing.

You need to “do the math” correctly.

1.23 X 78 cents = 96 cents.

Seeeeeeeeeeeeeeee!!!! Even with the 23% Fair Tax added on, your originally $1.00 item is now 4 cents cheaper.

The “out-of-pocket” cost of living , under the Fair Tax , will be no more than it is now.

Under the Fair Tax there are NO LOSERS, only winners, the difference being that some win BIGGER!!!! than others due to their increased FRUGALITY.

Please EDUCATE!! yourself on the Fair Tax issue.

Best Regards, John Paul McDaniel

For the education you need………………………………………………………………………… Go to: www.fairtax.org

By Another taxpayer

December 30, 2007 4:50 PM | Link to this

I invite any and all elected officials to present their efforts to reduce the tax burden.

I could care less about whether you call a tax an income tax, property tax, ad valorem tax, gas tax, road tax, excise tax, death tax, tax on tax, fair tax, great tax or I ran out of names tax.

BIG DEAL.

Here’s an idea: Send Congress home for four years without pay or benefits and put all the money we will save into an interest bearing savings account. The wars, health care, etc., will be easily funded without touching the principal.

Here’s another one for you: I think we should tax all monies associated with campaigns at 50% — and that could be either inclusive or exclusive, I don’t care. Just tax all contributions, salaries to campaign workers, advertisements, PACs, etc. Now thats a spicy meat-a-ball!

By Another taxpayer

December 30, 2007 5:42 PM | Link to this

Some people like to play games with Math. So, let’s play a game:

Suppose I earn $30k/yr and I save my money to buy a house with a hefty down payment. Say I buy a $100k house with $20k down. So, I finance $80k for 40 years at a fixed rate of 6.25% with interest only for the first 10 years. I’m single, so my standard deduction would be $5150 and my standard exemption is $3300. Now, my income is taxed at 10% for the first $7550 and 15% for the rest. To make the math easy, let’s assume that I bought the house on December 31 so there is no interest to worry about deducting the first year. Oh yes, did I mention that the house is NEW. Now, let’s just skip ahead and do the Fair tax on the NEW house. That’s $23k. Of course with the Fair tax I get (what is that poverty level number for a single guy living in a cardboard box) lets say $16k. Now subtract $16k from $23k and I’m in the hole for $7k in consumption tax on the house without spending anything else for the year. So, my tax just for the house is 7/30 x 100 or 23% of my income that year. If I could have just found a good used house where I wanted to live. Wait a minute!! Light bulb!! I could be steered toward buying that used house in that place that I don’t want to live or work or play if the numbers work out right. That Herd mentality thing really does work. Get it — steered and herd. Of course those fair tax advocates already have answers to all the scenarios I could possibly come up with. So, why bother. Moooooooo.

By Another taxpayer

December 31, 2007 8:04 AM | Link to this

I have got to get into the market for used stuff just in case this fairly great tax thing catches on. I’ve already got some used land so all I need to do now is start covering it up with used stuff. Years ago they called these places eyesores — junkyards that is. Now they’ll be referred to as virtual cornucopias of used but tax-free merchandise and other assorted sundries. Why there’ll be stacks of used shingles, windows, doors, hub caps, electrical wiring (with only slightly degraded insulation), polybutylene pipe, and so on and so forth. Then there’ll be the all used up installers to get for no tax to install this used stuff. We’ll have the used electricians, used plumbers, used carpenters, used dentists, used doctors, and so on and so forth. Finally, I’ll need to put up a used sign detailing the tax savings one can obtain by using the used installers to install the used stuff from my used storage facility.

That’s all for now — I feel all used up.

By Anonymous

December 31, 2007 8:34 AM | Link to this

And the preaching continues… Faithful FairTax Followers(TM) insist that anybody who criticizes or disagrees with the FairTax can’t POSSIBLY understand it or has to lie about it, because it’s “just sooo perfect in every way!”

Legitimate criticism is not possible, you see. God has spoken, and his command is: The FairTax!

By Craig also

December 31, 2007 9:28 AM | Link to this

It’s like a cult. Boortz is the messianic high priest, leading them all to Nirvana. His book is the infallible truth. And if you dare to point out all the logical fallacies, you’re evil, or worse - shudder - a “liberal”.

By Paul Burgener

January 1, 2008 9:49 AM | Link to this

So you’re saying the “30 before/23 after” rate isn’t high enough? Give us a number and we’ll run with it. Lets get it done, whatever the number is, before the number reaches 100/50 percent. Better we start with an overly high rate, than let it wait another year! Anyone who slows down the FairTax process is anti-American economy.

By Paul Burgener

January 1, 2008 9:49 AM | Link to this

So you’re saying the “30 before/23 after” rate isn’t high enough? Give us a number and we’ll run with it. Lets get it done, whatever the number is, before the number reaches 100/50 percent. Better we start with an overly high rate, than let it wait another year! Anyone who slows down the FairTax process is anti-American economy.

By Dan Alston

January 1, 2008 12:36 PM | Link to this

I have read many good defenses of the Fair Tax and most of the critics seem to have been misinformed about one aspect or another or they are emphasizing an aspect that is good (no taxes on used) and taking it to what is to me an illogical extreme. Any great change will always have a lot of emotion on it and I leave that to others. Here is an aspect of the Fair Tax that I have not seen in print but it is tremendously important. All current government programs penalize Citizens for trying to improve their situations. They are means tested so that when (heaven forbid) a Citizen starts improving their situation, the assistance stops and an artificial barrier hits them just when they can’t afford it. Their benefits stop at the point that they would do the most good at helping them improve. The situation of someone not wanting to make more income because they jump a bracket, hit AMT, etc and just loose it all to taxes is one example. What happens to Social Security Benefits if you, (heaven forbid) continue being productive and earn more money, or welfare benefits that disappear if you try to improve your financial situation, every means tested government program that professes to be there to help the disadvantaged in actuality penalizes them for improving. The Fair Tax gives a prebate to every legal Citizen. The prebate is not rewarding you for something undesirable like being poor, it is rewarding you because you are doing the correct thing as far as being an American Citizen. If you want to stay poor there is no penalty. If you want to improve yourself, there is no penalty. IT IS UP TO THE INDIVIDUAL HOW THEY LIVE THEIR LIFE. The prebate increases every Citizens income (via the Social Security Administration I believe) by the amount of Sales tax that they would see on their income up to the poverty level. At the current government defined level that will cover the expenses for necessities of life. When a poor person improves their situation and they start making more money, the prebate remains. No penalty for improving. If they save the money, no tax either. The Citizen is in charge of their own finances. A basic freedom we gave away when we let the Income Tax occur. In addition, the poor will be paying less for their basics according to all the research. It is good research by respected economists who don’t have an agenda other than what is best for American Citizens. It is available at fairtax.org for you to read for yourself. With the imbeded cost because of current federal taxes on business offsetting the Fair Tax,the prices will stay about the same but a poor person has additional income by the amount of the prebate so more spending power, even in government defined poverty. When this artificial barrier to joining the middle class is removed more Citizens will be able to move up. We know what the retail spending in this country is. It will go up when people have more of their own money to spend. The facts are that a huge amount of the current spending is done with untaxed dollars. However the money was earned, crime, underground economy, foreign money, tax shelter spending of the ultra rich, the amount is staggering and will provide the funds to replace what was eliminated. The base supporting the government becomes everyone not just us schmucks that obey the law and work for a living. The Fair Tax improves the economic situation for law abiding Americans and they are the ones we should be concerned about.

By Anonymous

January 1, 2008 1:11 PM | Link to this

And the fact that it would shield a good 90% of the wealth of the very richest fragment of Americans is just a coincidence, I’m sure.

Yes, this switch to a regressive consumption tax is “in the best interests of the poor,” all right. Finally, their stock options and real estate holdings will be free of that horrible tax burden! Sheesh, how transparent can you get?

By Another taxpayer

January 1, 2008 6:11 PM | Link to this

Some people just cannot do math. Plain simple math. You don’t need to understand partial differential equations or even plain old grade school algebra. You do need to understand how you are currently taxed (for the Federal income tax) and how you will be taxed under the “Fair” Tax and what items will be taxed. Perhaps that is where these “Fair” Tax advocates are lacking. These are probably the same people you can see spending their entire paycheck on Lottery tickets. I suppose they either never learned about probability or they work in a fast food joint and don’t have to be concerned about where their next meal will come from.

By Kilborn

January 2, 2008 11:32 AM | Link to this

1) Will the Fair tax eliminate property tax?

No - property taxes are state and community based. FairTax only applies to Federal taxes.

The rest of the questions here were non-sensical.

By Joe S

January 2, 2008 12:36 PM | Link to this

The obvious reason why Mr. Buckley does not support the FairTax is his occupation and most likely, his biggest supporters/contributors to his campaign…..tax attorneys and accountants. These two professions would be hit hard by the implementation of the FairTax! He is just supporting what his special interest contributors want him to support. It’s the money talking! And this is exactly why the FairTax NEEDS to be implemented. It would remove the special interests from the equation and put more emphasis on the general constituency.

By Anonymous

January 2, 2008 1:25 PM | Link to this

Thanks for reminding us, Joe. I left out the OTHER most common reaction to criticisms of the sacred FairTax dogma: “Blame the messenger.”

After all, since legitimate criticism or disagreement is impossible, anyone who questions the sacred FairTax MUST be corrupt. Or insane. Or stupid. Right?

Chant along with Boortz, everyone: “FairTax, FairTax, two and two is twenty!”

By Another taxpayer

January 2, 2008 5:08 PM | Link to this

These supporters of the so-labeled “Fair” Tax are like a pack of zombies. Zombies are a new brand of smokes I just dreamed up — they come 20 to a pack. They’re really cheap because they contain nothing but hot air. All these supporters come back with the same boring lines — go to fairtax.org; you too can learn the way of the enlightened. Not a single one of these supporters offers anything real and tangible. How about sharing calculations from your own income and expenses that confirm your claims about this “Fair” Tax? Come on. Show us that you actually know how to add, subtract, multiply, divide, calculate percentages, figure out how much money your parents gave you for allowance, figure out how much your smokes cost for one year, sum up how much you spent on renting that bedroom from your parents…..

You know, if you collect those butts and smoke them, you won’t have to pay any taxes on your smokes. I might just start growing tobacco and giving the stuff away — the “Fair” tax on $0 is $0 x 0.23 = $0.

By Another taxpayer

January 2, 2008 6:01 PM | Link to this

I decided to do some more fact checking into the claims made by these so-called “Fair” Tax supporters.

To start with, I went by the grocery store and asked to talk to the owner. I asked him how much he would lower his prices if we changed over to the Fair Tax system. I waited for a good hour for him to answer me but he wouldn’t stop laughing. That was just rude of him to not let me in on the joke.

Anyway, I finally gave up on the grocer and went to lunch. While I was at the burger store, I asked the manager if I could get a 20% discount if we were paying the Fair Tax. She looked at me for a few minutes and finally said that I could get a 5% discount since I looked old enough to be a senior citizen. Otherwise, I would have to wait until Thursday and I could get a 50% discount because that’s when they have their 2-for-1 special. I thanked her and said I’d just settle for the 5% discount. I didn’t even think about asking about their used food until after I left. No, it’s not for me. My dogs could sure use some cheaper food if I have to start paying 23% extra for a bag of Giblets and Bits.

That’s all for now. Tomorrow I’m off to the trash dump. I need to find out if stuff going in and out are both considered used — and therefore not subject to the 23% tax.

By Ryan

January 3, 2008 10:53 AM | Link to this

Anonymous and Another,

You assert that the evil-rich will benefit the greatest from the FairTax while ignoring the fact that the highest earners are the biggest spenders and will (as under the current system) be paying the overwhelming majority of the tax burden. Earners who are at or below the poverty line in this country are not the ones who are going to be buying hi-def plasma TV’s, new sports cars, and large homes or at least they shouldn’t be. Imagine… a tax system that PROMOTES good spending habits and fiscal responsibility.

I found this humorous from Anonymous amusing: “..don’t need to understand partial differential equations or even plain old grade school algebra. You do need to understand how you are currently taxed…” I’m an double engineering major (still a student) at Tech. I’ve taken accounting. I have no clue how I am currently taxed (been working for years now and have done my own taxes a number of times). The IRS will even give you different answers on how much you should be paying should you ask. To say you understand (even only your own situation) completely would make you one of the best tax attorneys in the country. Again, enter the the Fair Tax.

I’m not operating under the delusion that this is a perfect system or a gift from god or any of that non-sense. I expect prices to rise or pay to be cut or some other balance factor… so that in a purely source vs. sink manner, it is revenue neutral. I could not even begin to predict the impact said system would have socioeconomically. I do trust that the Harvard study and associated research is the most credible study I’ve seen and in the end it endorses the Fair Tax. I expect black market goods to be more prominent, and yet realize that auditing 5% of business to secure 95% of taxes is much easier than auditing 100 million Americans.

In closing… the most intelligent arguments I been in are the product of both sides seeing merit in the other. I don’t think Anonymous and Another have the honesty to participate in such a manner.

By Ryan

January 3, 2008 11:08 AM | Link to this

Substitute “humorous” with “post” in that last one. Neither to I claim to be literate.

By Craig also

January 3, 2008 12:18 PM | Link to this

Ryan you seem like a smart guy - I don’t think that any opponent of the consumption tax talks about “evil” rich people. Please don’t just parrot Boortz.

Do the math yourself. If you spend most of what you make, multiply your income by 30%, and compare that amount with what you’re paying currently for income and FICA taxes. I’ve done that, and I will be worse off if this thing passes. Most of the people who so fervently post here for the consumption tax will be worse off.

And that brings me to your last comment about Anonymous and Another - when you’ve debated the consumption tax True Believers long enough, you soon learn that - unlike you - most of them haven’t really done any research. All they’ve done is listen to the pretty words from their Dear Leader. And anyone who is opposed to it is a liar, or dishonest, or a “liberal”, or hates rich people, or whatever.

Good luck with your studies.

By Anonymous

January 3, 2008 12:34 PM | Link to this

That’s because a consumption tax is inherently regressive, Craig—as any economist already knows. They just don’t mind because it comes close to an “efficient marketplace,” which apparently matters more to them than actual quality of life for our society.

And I appreciate the black-or-white thinking that often crops up in discussions with FairTaxers; in logic, it’s called the “False Dichotomy” fallacy. It usually takes the form of “Oh, and the current tax system is perfect, huh? I guess you’re thrilled with a 50,000 page tax code and special tricks and loopholes that let some folks pay nothing while you get screwed…”

As if there were only two alternatives—the FairTax or the current system, period. Pure silliness, like most of the FairTaxers’ hysterical claims and anti-government ravings.

I wouldn’t mind intelligent debate on a better tax system—but to have that, you have to shuffle the FairTax Fanatics(TM) offstage first.

By Another taxpayer

January 3, 2008 2:18 PM | Link to this

Dear Ryan,

Thank you for sharing a little bit about yourself. For that, I will reciprocate accordingly. I have an MS from Ga.Tech, Bachelors from Ga. Tech., a Bachelors from Southern Tech, and 20 years engineering experience. I have found over the years that credit cards — which I use like checking accounts — along with a program such as Quicken allow one to rather quickly sum up one’s categorized expenses, for example. It doesn’t require much effort after that to look at the so-called “What If” scenarios.

By Ryan

January 3, 2008 5:34 PM | Link to this

I am certainly no economist, so take my analysis with a grain of salt (and consideration) but on the widest system level, if the government is receiving the same amount of cash (using a sort of flux/conservation of mass/money principle) should not the same amount be available to the consumer/taxpayer? That is the point of a revenue neutral system, yes? The reason I evaluate it on those terms is that I’ve read so many differing views on the distribution and transfer of money (ie wage increase/decrease vs. price increase/decrease vs. tax rate etc) that it seems to make the most sense. Then on the private/consumer end you add the $500 bill/yr cost of compliance (I quote the FairTax book, not the Harvard study) and then we the consumers actually do benefit.

In that sense I think lopping off 30% of wages is presumptuous and asserting that quality of life will diminish as a result is VERY presumptuous. We know in the end what the amounts have to be and there will be some some combination of wage/price increase/decrease that will make the math work. I do not promote the Fair Tax because I think I’m going to get a fatter check or cheaper goods either. In fact neither of those are principles of fundamental tax reform as some of the “FairTax Fanatics(TM)” may believe.

The concept of a progress/regressive tax system, the role of government and such borders the philosophical and certainly not a realm for this thread. Personally I identify more with the Ayn Rand school of thought on such matters.

Another, the only reason for mentioning the education is to point out that I’ve taken (and struggled) with things like diff. equations, but nothing compares with my struggle with the IRS. Engineering helps little in matters of economics. Sorry to elicit a bitter response.

I’m in this purely for the simplicity, transparency and (in most cases but I don’t feel like arguing this one) fairness.

Lastly, the evil-rich references was in response to the tone of this thread not the parroting of some talk show host (not a Boortz fan by any means). Would anybody else care to argue why the wealthiest in this country should be burdened the least? I’m spent. Thanks for the dialogue.

By Another taxpayer

January 3, 2008 6:04 PM | Link to this

I’ll start by para-phrasing one of my professors from years past: The math is the easy part; It’s the assumptions that will get you.

There lies the underlying problem with most problems: You ultimately have to make assumptions in order to complete the analysis and those assumptions are at best educated guesses. For, if we had all the answers, we would not have to make the assumptions in the first place.

Take the current tax code and just ask yourself why it is what it is. Do you honestly think that it started out as a 50,000 page monstrosity? Do you think that anyone wants it to be so complex?

The alternative minimum tax portion was added to try to collect tax from a few wealthy individuals that had managed to find loopholes and avoid paying taxes. Now look at it. It just adds to the mess. Why?

Have you heard of the “Law of unintended consequences”, Murphy’s Law or the Parable of the Broken Window? The bottom line is that we try to do the “right” thing but we have our faults and we have others who try to do the “wrong” thing and we end up with what we have. Will the Fair Tax fix it? NO! Will it change things? YES. If implemented, it will initially create a ripple like the drop of water hitting the still surface of the pond. Then, there will be the backlash such as occurs when the ripples hit the walls of the pond. Afterwards, waves of new paperwork will tend to cancel each other out until an unsteady equilibrium is achieved — waiting for the next drop to fall.

By Another taxpayer

January 3, 2008 6:50 PM | Link to this

Anyway, I can’t convince myself that any given group of economists are any more right (or wrong) than any other group. What we have now is a huge mess but it is a huge mess with a semi-known output — you know the black box thing where you know the input and output and you may or may not care about all the gory details in the middle. Besides, if Greenspan, Bernanke, and a whole bunch of economists could not predict the real estate mess, I don’t have much faith in any other economist’s “Trust Me” claim.

Further, if you cut through the political smoke and mirrors, the tax shouldn’t even be the talking point. The first step in any proposal to change what we have should be to examine what we currently spend our money on versus what we need to spend it on, how efficiently we are spending the money, and ways to improve on what we have based on a thorough analysis.

By KISS

January 3, 2008 6:52 PM | Link to this

The first principle of engineering is “keep it simple, stupid”.

No matter how intelligent you believe yourself to be, if you create a ruleset, someone else will come along and teach any moron who wants to know, how to dance around the edges with impunity.

The fraudulently titled “Fair Tax” is an unnecessary step in the needed reform of federal interference in our economy. The people simply need to call an Article V Constitutional Convention.

Abolish the 16th amendment.

You remember, that’s the one that legalized the income tax way back in 1916, under Woodrow Wilson.It was passed by Congress in 1913, and then ratified by three-fourths of the states three years later. If I remember correctly, the original top marginal tax- rate was something like 2%. Think of that.

So, if the 16th amendment were repealed, I’m ready to deal on a consumption tax. But that’s the only way I’d go there.

By Another taxpayer

January 3, 2008 7:09 PM | Link to this

KISS, you got my vote. Let’s see. How do we get that un-ratification process started?

I’d love to see the politicians coming door to door when they want money for something. I can see it now:

Please Sir. May I have some more porridge, Sir?

By Bill Stewart

January 3, 2008 7:27 PM | Link to this

National Sales Tax is UNfair to retired people, like all those Boomers I’ve spent all my life having to pay taxes on the money I earn, so what I’ve got saved when I retire will have already been taxed once - and the National Sales Tax proponents want to tax it all again when I spend it. If the sales tax has any chance of being revenue-neutral, it’s because it’ll have 20-30 years of double-taxing us boomers if we ever get to retire. It’s extra-tough on those of us who live in overpriced housing markets like California and New York (and maybe Atlanta?) because nobody’s going to want to pay an extra 23% tax on our houses when we sell them - so that’ll trash the price of houses, and anybody whose house hasn’t appreciated by 30% since they bought it loses money (and if they made any profit, they’ll get taxed again when they spend it.)

There are lots of things wrong with the income tax, and a sales tax helps some things but breaks others, and there’s no way that the Federal government will be willing to take the political and economic shock of a flash-cut, so in reality we’d end up with a worst-of-both hybrid system that has both sales and income taxes.

(Think Congress has enough guts to do it, even if they did think a National Sales Tax was Fair? Not only has Bush been unwilling to acknowledge that borrowing huge quantities of money to fund the war while not cutting other spending has economic consequences, and not only have any fiscal conservatives left in the Republican Party not been successfully vocal while he’s done it, but after the Democrats got elected they haven’t had the guts to talk about the costs of his programs, and they haven’t traditionally been the party of fiscal responsibility when they’ve been in power either.)

By Brian Pearson

January 3, 2008 8:45 PM | Link to this

I would think this exchange was really funny if it weren’t so sad. Why don’t people who are so skeptical just get the straight poop on the FairTax instead of listening to windbags like Bartlett who’ve already been refuted several times?

By Overseas Employed

January 4, 2008 6:57 AM | Link to this

To All: I’ve fixed the tax problem. I work for a foreign company in a foreign country and pay NO income taxes at all. The ONLY taxes I pay is consumption taxes when I come home on vacation. If I had to pay upto the amount exampled by the FairTax I would still have plenty of my pay left and I don’t make that much. There are a lot of people coming over here to make money based on the tax exempt policy set forth by the IRS (Pub 56)and they reailize it’s better to stay over here and work because you keep all you make. For all of those nay-sayers, get a job overseas and try it for one year. You’ll see. I did.

By yaha

January 4, 2008 12:38 PM | Link to this

What people keep forgetting is the prebate. The Fair Tax is NOT regressive.

Every American would receive a check each month for the same amount, approximately $200, to offset the cost of the sales tax. Retirees, minorities, etc. would NOT be hurt.

Who WOULD be hurt: illegal immigrants, drug dealers (who love to go shopping and buy new goods and services as much as anybody else), our competitors overseas, and CHURCHES.

Yep! CHURCHES would now have to pay their fair share. Just think of that!

So this will definitely not hurt the poor; it will be a bonanza for the poor. But everybody will get the prebate, no matter how poor or rich you are, so long as you are an American citizen.

By Robert

January 4, 2008 2:56 PM | Link to this

It’s obvious to me that Anonymous and Another Taxpayer are washington lobbyists getting rich on the current income tax. They are just protecting thier in livelihood with this smokescreen of inaccurate and confusing comments.

By Robert

January 4, 2008 3:20 PM | Link to this

*By Craig also

Do the math yourself. If you spend most of what you make, multiply your income by 30%, and compare that amount with what you’re paying currently for income and FICA taxes.*

Craig, the FairTax rate is 23%.

By taxed2max

January 4, 2008 3:20 PM | Link to this

If someone has money in a savings account that they already paid income taxes on when earned (before fair tax ).They decide to buy a new washing machine, under the fair tax they would have to pay approx. 23% tax . Isn’t that like being double taxed ?

By Craig also

January 4, 2008 4:00 PM | Link to this

Yaha if your figures are right - that’s an annual outlay of over $720 billion - which would be a HUGE entitlement. Another reason not to support it.

And Robert, no, if you buy a product for a dollar, you will pay an additional 30 cents in tax. The supporters of this are scamming you by telling you that that works out to only 23% - but it’s a 30 cent tax on every dollar you spend.

By Robert

January 4, 2008 4:24 PM | Link to this

By Craig also

And Robert, no, if you buy a product for a dollar, you will pay an additional 30 cents in tax. The supporters of this are scamming you by telling you that that works out to only 23% - but it’s a 30 cent tax on every dollar you spend.

Craig you are correct that when figured in an exclusive manner it is 30 cents on every dollar spent. But earlier you said “Take your current income and multiply it by 30%”. That is an inclusive calculation, and in that case the correct rate is 23%.

You have to compare apples to apples, and that is the way the current income tax is calculated. It is important for people to understand the difference between an inclusive and exclusive calculation.

If you figure that you spend $1 at the store, including tax (the way income tax is already calculated) then 23 cents of that will be tax.

By Robert

January 4, 2008 4:38 PM | Link to this

taxed2max it is an unfortunate reality, but any conversion will always have ragged edges.

Do you think that seniors want to hurt thier children and grandchildren by holding them in a destructive tax system all because it will cause them a little difficulty?

By Another taxpayer

January 4, 2008 4:58 PM | Link to this

Robert,

If I were a Washington lobbyist, I’d be in Washington lobbying. Instead, I’m just an average middle class “joe” trying to keep a little bit of what I worked so hard for over the years. Unfortunately, during my peak earning years, misinformed people such as yourself elected the likes of Bill Clinton and forced me to pay more in taxes than many people made before taxes. Now, misinformed people such as yourself want to continue that proud tradition into my retirement years by implementing higher taxes through a consumption tax since my meager pension no longer provides you with the revenue stream you have grown so accustomed to.

You bore me with your ignorance.

By Robert

January 4, 2008 5:19 PM | Link to this

Another Taxpayer, you shouldn’t talk about ignorance when yours is so obvious.

First, I didn’t elect Clinton. I voted Perot that year. I hate higher taxes. Unfortunately both parties are tending toward tax/spend. That is why I’m a Libertarian. Libertarians believe in small gov and personal responsibility.

Second, I admit that if you are in retirement age, then the FairTax is not going to be as good for you as it is for the working person, due to the fact that you will be double taxed.

265$ billion is spent yearly preparing tax returns, and that is running business out of this country, and to other countries. Enacting the FairTax with put that money back in our pockets, as well as attract business back to our country, and pull billions of dollars of offshore money back home.

We have to get out of this bog called the income tax so that this country can be great again. Otherwise we will just sink, and disappear.

You must be childless, otherwise you would give a thought to upcoming generations, rather than just thinking of yourself.

By Dennis Madden

January 4, 2008 5:31 PM | Link to this

What a stroke of luck to not have MR. Buckley as my tax attorney. It is obvious he is more interested in scamming his clients to fill his coffers than to admit there is a better way. The Fair Tax has been studied by better brains than Mr. Buckley and proved by many studies including L.J. Kotlikoff of Boston U. it will fund the Fed Govt as is.

By Robert

January 4, 2008 6:06 PM | Link to this

As far as double taxing of senior, there is strong evidence that that will not happen anyway.

Once the embedded taxes have been removed from goods, market forces will force prices to drop appr 22%. Then add the 23% tax back in and prices are about the same. Not to mention that any purchase of used good is tax free.

Considering this, we are all (including seniors) better off with the FairTax.

By Another taxpayer

January 4, 2008 6:44 PM | Link to this

Robert,

You are the [boring] scam. At least that’s what my daughter tells me. Obviously, if you had read and understood my previous entry, you would have noticed that I did not state whom you voted for. Further, since you know nothing of me as evidenced by your false claims regarding my employment, my child, etc., my claim regarding your ignorance has a basis.

Where do you come up with these lines:

“As far as double taxing of senior, there is strong evidence that that will not happen anyway.”

“Considering this, we are all (including seniors) better off with the FairTax.”

“Second, I admit that if you are in retirement age, then the FairTax is not going to be as good for you as it is for the working person, due to the fact that you will be double taxed.”

“You must be childless, otherwise you would give a thought to upcoming generations, rather than just thinking of yourself.”

Robert, I am ignorant on many subjects. However, I find myself least ignorant of myself.

By Robert

January 4, 2008 8:56 PM | Link to this

Another taxpayer, I can only guess at who you are based on your comments in this venue. I read them all, and from the level of inaccuracy and misleading comments I had to conclude that you had something to gain. Then you mentioned that your concern was the double taxing of your savings. When that is your concern, and not the wellfair of younger people, I can only assume that you have no children.

I am sorry for any misstatements I have made.

However the statements I have made about the FairTax are accurate, and yours are not. And you call me a scam? What is that all about? You think I’m insincere about my belief in the FairTax? You think I’m trying to make money off the American people through the FairTax? How could someone do that? We know that Washington lobbyists make millions of dollars off of gaming the current income tax to the advantage of thier clients and detriment of the American people, but how can someone make money off of the FairTax. The only thing I have to gain from promoting the FairTax is the good of the American people, including you and your family.

By Brian Pearson

January 4, 2008 10:22 PM | Link to this

Taxes are not ‘higher’ under the FairTax. You have to understand that all embedded taxes in the current system, disappear. This is what makes the FairTax, revenue neutral.

The prebate is what makes the FairTax progressive, vs our current regressive withholding.

The tax base of the FairTax is much broader, because it includes the underground economy — the size of which is estimated to be between $1 trillion and $3 trillion. We may actually be able to have surpluses which can save SS and Medicare.

The economy would grow, too. And, the more it grows, the more people will save and spend, which leads to more going to the government as taxes.

Also, there currently are trillions of dollars now in sheltered, offshore accounts. What do you suppose would be the impact of that, since it would presumably end up in investments after it is repatriated?

The FairTax is far superior to the current broken down system, especially since more and more people are not paying taxes. Who is taking up the slack? We tax payers are doing that.

Our imports from countries with the VAT tax have an unfair advantage over our exports. Why? Because they can chop off their VAT tax, whereas we cannot get rid of our embedded taxes. With the FairTax, our goods will cost less, which would make the US more competitive.

The original reason for creating the FairTax began with a few businessmen who were griping about having to spend so much time in board meetings, talking about tax consequences of their decisions. Somebody said, “Do something about it!” So, they did. What we ended up with, is the most well-thought out, most studied tax system, ever. Mayb e this will interest you: Link:Letter to the President=

By Another taxpayer

January 5, 2008 9:03 AM | Link to this

Robert,

Why do you even want to guess who I am or what my agenda is. I gave a legitimate example of how something as American as purchasing a house will result in a significant increase in taxation. I’ve also done other calculations on my own expenses. Why don’t you provide some actual examples of “fair” tax calculations that you have done? Why don’t you quit claiming to know what is best for others? Let’s take a look at another of your statements:

Then you mentioned that your concern was the double taxing of your savings. When that is your concern, and not the wellfair of younger people, I can only assume that you have no children.

Again, I don’t have to look any farther than my own household to answer your concern. You see, my dependent child relies on my income for support. If I were taxed 23+% on consumption, then her braces, clothes, vacations, computer, etc., would have to be re-evaluated in light of the increased cost to feed our family, heat our house, maintaining a non-leaking roof over our heads, keep a good vehicle for trips to the doctor, etc…..

Do you get the picture yet? No.

Well, start by showing me some of you Math. Add up the yearly expenses for you or someone such as you, subtract your prebate, and tell me what you have left.

Are you convinced yet? No.

OK. Try this exercise. Tell me what incentive a business will have to pass on savings related to trying to dodge paying taxes in the first place. If so many corporations cared so much for so many people, don’t you think that a good place to show it would be in the salaries of the executives. Do you think there would be no takers for the jobs if multi-million dollar stock options were eliminated? Do you think manufacturing jobs and service sector jobs have been moved to China and India because there are no people here to take them? Do you think we need emphasis in the US on taxes (by whatever name) or on jobs? What do you do for a living? Could you live off of a $7/hr, $8/hr, $9/hr job? Do you know how many government workers (those are people that are paid with taxes) actually have household income and healthcare benefits that are higher than the people who are paying for their services? Are you beginning to see beyond this “Fair” tax scam? No. Well, don’t give up. After all, you represent our future.

By Another taxpayer

January 5, 2008 9:20 AM | Link to this

And Ken Lay said I’m Innocent. It wasn’t me that scammed all those people out of their money. It was all those greedy as*es that I hired.

And Creflo Dollar said I have a legitimate business use for that Bentley. Let us prey.

And all those CEOs that got canned as a result of the real estate problems and credit crunch say THANK YOU. No. I don’t think they said thank you.

And all those drug dealers are all talking about how they are going to be affected by the 23% tax. Bullets are going to be outrageous…….

By Bitter EX democrackkk

January 5, 2008 9:37 AM | Link to this

It should be noted that Allen Buckley is, as I remember, a CPA in Cobb County. I have YET to meet an accounting type who would embrace any significant IRS change or abolishment. I find this VERY offensive from accountants!

By AL

January 5, 2008 11:59 AM | Link to this

Another taxpayer, I am nowhere nearly as educated as you, but even i understand the Fair Tax. It appears that you are looking at certian aspects of the bill (HR 25) and not at the whole thing.

The Fair Tax is not perfect but it is far better than the current system. Please research this further, fairtax.org has all the information. The Boortz/Linder book explains the bill in simple terms. It can be read in almost one sitting.

You point out too many things here to go into here. For the hard numbers go to fairtax.org. There is a calculator at the website that will compare income tax to fair tax.

The fair tax was not developed by politicians. So there is no political agenda to it other than to change the way the Federal govt. is funded.

By Sedgwick

January 5, 2008 4:59 PM | Link to this

I have scanned the comment section of this article and whether it’s too late to post or not, it begs of one all the same.

Here’s my comment - it’s simple: For those of you against - have you even read the book? Most of those against provide hysterical/rabid claims (spewage) that this will hurt the poor - read the book and you too will become enlightened on how the FairTax will enrich the poor, grow the economy, bring back businesses that have fled because of current tax policies, etc., etc. - and yes, even “drug criminals” will be subjected to the consumption tax.

By Another taxpayer

January 5, 2008 6:08 PM | Link to this

Al,

I know nothing of your education so I cannot offer a comparison. I do know that anyone suggesting that I need to just visit fairtax.org, read, and become enlightened, is just being presumptuous. How do you suppose I knew to subtract my estimate at a poverty level prebate from the 23% tax on the house? How do you suppose I divined the fact that it had to be a NEW house? I will re-iterate that the “Fair” tax does me no good. In fact, it does me more harm than good. I will not be sucked into your claims of “Elysian fields” for they rely on far too many assumptions — assumptions as absurd as prohibition will work, everyone will be honest, businesses will return to the US once the tax burden is lifted….Can you really be so naive.

Now, back to my ignored request — show me your own calculations based on your income and expenses.

By Fed Up

January 5, 2008 6:11 PM | Link to this

I do like a few aspects of the fairtax, but its negatives outweigh its positives. If you really study the details of the “Fair”Tax, you’ll find that there’s not much really fair about it.

How is it “fair” that the seriously ill would be taxed at such a steep rate on their medicine and medical bills, when stock purchases aren’t taxed at all?

How is it “fair” that rent would be taxed at the 30% rate every month, yet if you buy a pre-existing home, you don’t pay any tax at all?

How is it “fair” that credit card payments and interest is taxed, yet mortgsge interest and principal payments are not?

Even the rates of the prebates as currently set up are unfair. How is it “fair” that a married couple with no kids would receive more than a single mother with two kids?

I’m no fan of the current tax system, but its far more fair than the so-called “fair”tax. I have studied the “fair”tax, and the more I learn about it, the more I realize that its obviously unfair.

The “fair”tax would impose a steep tax on medicine, credit card payments, and rent, while at the same time lowering the effective tax rate of millionaires to as low as one percent. How is that “fair”?

By Another taxpayer

January 5, 2008 6:33 PM | Link to this

Here’s a suggestion for you “fair” tax supporters. If you want to make positive changes, make a small (incremental) change, measure its effect and keep it if the change was positive (good) or toss it if the change was negative (bad). Write your elected officials and suggest they start with the alternative minimum tax legislation. It’s actually quite large but small relatively speaking. Next, request that they monitor the effect of eliminating the capital gains tax over the next several years. If it does not have the desired effect, then maybe they should introduce a capital gains tax with a prebate of sorts to allow, for example, no capital gains tax on the first $20k/yr. I’m in favor of change — change that truly benefits; change that does not introduce a tsunami throughout the US economy.

By Robert

January 5, 2008 6:37 PM | Link to this

Fed Up and Another Taxpayer, The FairTax is better than the income tax because with our current tax system there is 265$ billion per year spent on income tax law compliance. The compliance cost of the FairTax would be ZERO. This is one example of why the FairTax is better, but not the only one.

Have either of you read the FairTax Book by Neal Boortz? It’s doesn’t sound like it.

By Fed Up

January 5, 2008 6:48 PM | Link to this

Al said, “The fair tax was not developed by politicians. So there is no political agenda to it…”

You’re right Al, it was not created by politicians, it was basically created by two billionaires and a millionaire! And they do have an agenda, namely to shift as much of the tax burden off of themselves as possible.

Leo Linbeck Jr.is the main fellow behind the “fair”tax, he’s a Texas billionaire that inherited his wealth from his billionaire daddy Leo Linbeck Sr.

Billionaire Bob McNair’s fortune came from an energy company which he sold to Enron, and he had long business ties to Ken Lay and Jeff Skilling. (McNair has done a lot for the city of Houston though, and owns the NFL team there).

Jack Trotter is an attorney who had close ties to Jim Bath and Walter Mischer, two shady guys who were at the very center of the S & L collapse of the eighties, which we, the taxpayers, had to bail out (to the tune of $125 billion).

These three fellows put up $20 million (some of which they raised from other sources) to pay a team of economists to supposedly devise the “fair”tax. However, not an actual single research paper from the $20 million worth of research has ever been offered for academic review.

The fairtax.org website has a “research papers” section, but it only includes talking points, testimonials, and articles written by pro-“fair”tax commentators, no actual economic research at all.

I do not hate the three guys behind the “fair”tax because they are rich. I am just saying don’t think for a minute that they don’t have an agenda behind their creation of the “fair”tax - to shift the tax burden off of themselves, and that’s exactly what the “fair”tax would do.

By Another taxpayer

January 5, 2008 6:59 PM | Link to this

Tell me Robert. Tell me of all the fantastic things covered in the book that are not covered on the internet.

While you’re at it, show me those calculations using your income and your expenses.

Write you elected officials and ask them to get busy eliminating the AMT and replacing it with a progressive regressive consumption tax — call it the Alternative Consumption Tax. It kicks in when you’re net worth exceeds say $10 million. It starts at 23% and drops to 0% once you reach a certain consumption level. Clever Huh. Too bad all those economists didn’t come up with that one. Someone should write a book on that idea. I want my cut.

By Robert

January 5, 2008 7:27 PM | Link to this

Fed Up, the amount of the prebate is not determined by the FairTax. It is calculated by the Department of Health & Human Services. If you don’t like those numbers don’t blame the FairTax for them. As needed, those numbers can be changed.

By Fed Up

January 5, 2008 7:29 PM | Link to this

Robert said, “Fed Up and Another Taxpayer, The FairTax is better than the income tax because with our current tax system there is 265$ billion per year spent on income tax law compliance. The compliance cost of the FairTax would be ZERO.”

Wrong Robert. Under the “fair”tax, retailers would be paid by the government one quarter of one percent of the tax they would collect. Supposedly, the “fair”tax would be revenue-neutral, meaning that it would collect in taxes the asme amount that the IRS now takes in: roughly $2.2 trillion a year. A quarter of one percent of that would be $5.5 billion, which we, the taxpayers, would be paying. My current “tax compliance” cost is zero, I do my own taxes. (and no, I’m not a CPA or anyone who makes a living off of doing taxes)

Yes, I’ve read the book. Boortz glosses over the fairtax’s weaknesses, and leaves a lot out altogether. Something as serious as this deserves to be examined in full, not just by the rosiest predictions which only a few economists have made about it. Upon further study than Boortz’one-sided book, it became obvious that there are many flaws in the fairtax plan.

For instance there is no economic impetus for rents to go down. Most apartment complexes do not pay any recurring manufacturing costs with embedded taxes in them, and have a very small staff (hence not many employees’ taxes to pay). Their main operating expense is local property taxes, which would not go away under the “fair”tax (they most likely would actually increase, since all government expenses, local and federal, would be taxed as well).

The “fair”tax would add a 30% tax to rent, which is largely comprised of property taxes on the local level - this in effect is double taxation.

Clearly the details of the “fair”tax were either not thought out very well by its framers, or perhaps they just did not care how it would affect non-property owners.

I’m no fan of our current system, but the “fair”tax would hit the working class much harder. For instance, under the “fair”tax, a single fellow paying $700 in rent every month would have his rent increase by a greater amount ($210) than what his prebate would be ($196).

Sure, it all sounds great if you just read Boortz’ book and don’t think about it much beyond his claims. But do yourself, and America, a favor and really study it from both sides before you make up your mind.

By Robert

January 5, 2008 7:36 PM | Link to this

The income tax was inacted in 1916. Before that there was only sales tax. Corrupt politicians tricked the American public into passing the income tax by telling them that only the rich would be taxed.

If the income tax is so nessessary, then how did we survive 140 years without it?

This, for one was included in the book. Read it, and find out what else is in there.

By Fed Up

January 5, 2008 7:53 PM | Link to this

Robert said, “The income tax was inacted in 1916. Before that there was only sales tax.”

Robert, Robert, Robert…you need to study your history, bud. Income tax was first implemented in the USA in 1862, by Abraham Lincoln, and that era of it lasted for a decade, it was abolished in 1872. Lincoln didn’t tax the poor at all, and he taxed the wealthy at a rate almost twice as high as he taxed the middle class. US Income tax was briefly reinstated in 1894-95.

And when the income tax was reintroduced in the 20th century, it was in 1913, not 1916, as you mistakenly claim.

I’m not justifying the income tax, I’m just saying that the “fair”tax is not a fair alternative to it…at all.

By Another taxpayer

January 5, 2008 8:08 PM | Link to this

Robert, Robert, Robert.

Our ever evasive Robert. Are you on the payroll of someone with a “vested” interest in the introduction of this “fair” tax, Robert?

Using your logic for the income tax, the next logical question is why a “fair” tax. Isn’t it, Robert? Why not just pass around a plate at the town hall meetings or hold a marathon on TV with the counter in the background showing how many more dollars are needed? Let the politicians plead their case[s] to the public for every dollar to be spent. Wouldn’t that be even more cost effective and fair, Robert? If it’s good enough for GPBTV and Jerry Lewis, it’s good enough for me.

Where are those calculations using your income and your expenses, Robert? Are they included in the Appendix of Boortz’ book, Robert? Do you get an income from book sales? Are you reporting that income?

Did you know about the origins of the “fair” tax, Robert? Are you trying to find a buyer for your copy on EBay?

By Robert

January 5, 2008 8:53 PM | Link to this

Another taxpayer (whoever you happen to be, since you hide behind that label), your suggestion that I am being paid to promote the FairTax is just too stupid to even respond to.

Fed Up, If there was income tax before our current one then I stand corrected. As far as the date, as I understand it, this income tax was ratified in 1913, but didn’t take effect til 1916. But I won’t swear to those details.

By Craig also

January 5, 2008 9:18 PM | Link to this

Robert I highly suspect that you won’t be convinced, but there’s a good analysis of the consumption tax here. (Sorry I am not going to call it a “fair” tax, since it will shift most of the cost of government to middle class blokes like me - and probably you…)

http://www.nytimes.com/2008/01/06/us/politics/06economy.html?_r=1&oref=slogin

By Fed Up

January 5, 2008 9:49 PM | Link to this

“Fed Up, If there was income tax before our current one then I stand corrected. As far as the date, as I understand it, this income tax was ratified in 1913, but didn’t take effect til 1916. But I won’t swear to those details.”

Perhaps you got that misinformation from KISS, who claimed that further up this thread. He’s wrong, Congress passed the 16th amendment in 1909, and it was ratified by the last of the necessary three-quarters of states in Feb 1913. The government collected $71 million in income taxes that year.

But this is a very minor point, which really doesn’t have anything to do with the subject at hand.

I’m assuming that you (and other “fair”tax supporters) are for Huckabee? Even if he were to get elected president, the odds are very strong that Congress will still be a democratic majority. There is no way that the democrats would ever pass the “fair”tax…and would you really want “Tax Hike” Mike sitting in the Oval Office with democrats running Congress?

As governor of Arkansas, Huckabee raised taxes in his 10 years in office than Clinton did in his 12 years as the governor of Arkansas.

I don’t know about you, but I pay too much in taxes as it is. The “fair”tax wouldn’t change that (not being “revenue neutral”,with the wealthy and corporations paying little to no taxes, respectively). And taxes would be sure to rise with Huckabee in the White House with a democratic Congress.

By Robert

January 5, 2008 9:49 PM | Link to this

Craig also, your right. Didn’t convince me of anything. The article bashed the FairTax, but gave no evidence to support it’s claims.

Here’s an idea for you FairTax Bashers. The FairTax has been proven to be everything it is claimed to be, but if it turned out not to be, and it didn’t work, then it would be repealed, and we would go back to the income tax, just like what happened with prohibition. The only way to find out if I’m right, or you are, is to try it. Every bit of evidence I have seen tells me it will work.

By Another taxpayer

January 5, 2008 9:51 PM | Link to this

Hi Robert,

I’m Phil. Really, that’s my name. Now what else have you managed to divine from this new knowledge. Notice the lack of a question mark here.

Did I suggest someone would pay you for your “promotion”? All this time, I thought I understood what “?” means. Try responding to the questions — not any suggestions you may read into them. Why don’t you go to factcheck.org and see what they have to say about the “fair” tax? Do you think they have some “vested” interest in stopping the introduction of the “fair” tax? By the way evasive Robert, where are those calculations using your income and your expenses? Not that I really expect an answer from you or even really need to know what you think. You see, I’m just another taxpayer, Robert. You can call me Phil if you like.

By the way, Robert, do you have the hard copy of Boortz’ book or the paperback (with its corrections)?

By Craig also

January 5, 2008 9:59 PM | Link to this

Figured that, Robert. One more question and I’m going to leave it to Fed Up and Another, who are doing better than I am.

The plan is revenue neutral, right? Under the plan, poor people will pay less because of the massive new entitlement program they will get, right?

And rich people will pay a smaller percentage than they do now, since they save relatively more than they spend, in comparison to poor and middle class people. Right?

So if poor people are paying less, and rich people are paying less, who do you think will pick up the slack? Drug dealers are all of a sudden going to start obeying the law? Right…

Nah it will be the middle class, and baby boomers who have already been taxed on their income and now must pay taxes on their retirement savings.

Thanks, but I pay too much in taxes now. I don’t wish to pay more.

By Another taxpayer

January 5, 2008 10:13 PM | Link to this

Alas Craig also,

mere logic has not proven an effective counter to Robert’s, shall we call it, stubbornness.

By Brian Pearson

January 5, 2008 10:22 PM | Link to this

Well heck, it seems I made not one ripple in the water when I dived in, here. I’ve seen no questions, only repetitions of stuff seen on hit pieces.

The skeptics have obviously taken no action to inform themselves as the rest of us have, or they wouldn’t be making these snide remarks.

Have we tossed pearls before swine, or is there any hope at all?

By Robert

January 5, 2008 11:19 PM | Link to this

Craig also, Please put brain in gear before engaging the clutch!!!

When a drug dealer walks into a store, (unless he has a gun in his hand) he WILL pay his tax, as will illegal immigrants. Neither of these two groups currently pay any tax at all.

How many poor people do you know that spend $500,000 on a yaght? I don’t care home much he has in savings, the fact is he will pay more in taxes that anyone else. Currently the rich people can use tax loopholes to avoid most if not all tax. That is why the AMT was put in place.

The main point is that the $265 billion in compliance cost will be removed, or don’t you remember when I pointed that out earlier? The second point is that the FairTax has a much wider base than the current income tax. These two things are why the people will be better off with the FairTax, and at the same time be revenue neutral.

You call me stubort, when it’s you that refuses to see the facts!!!

By Craig also

January 5, 2008 11:35 PM | Link to this

Whatever, Robert. I promise you I won’t call you “stubort” anymore.

By Fed Up

January 5, 2008 11:41 PM | Link to this

Brian Pearson said:”Well heck, it seems I made not one ripple in the water when I dived in, here….”

I went back and read your post Brian, and found it lacking in any real substance. You clearly need to inform yourself of the facts better.

For starters, you said: “Taxes are not ‘higher’ under the FairTax. You have to understand that all embedded taxes in the current system, disappear. This is what makes the FairTax, revenue neutral.”

On to your second paragraph:

“The prebate is what makes the FairTax progressive, vs our current regressive withholding.”

Wrong. Our current system is progressive, not regressive. Those earning more are taxed at a higher rate than those earning less…that is what progressive means. And under the “fair”tax, what many renters would receive as their prebate wouldn’t even cover the monthly tax on their rent. Many elderly people are single and rent, and some are in debt due to medical bills…their prebate would not begin to cover the new taxes they’d have to pay under the “fair”tax.

Your third paragraph: “The tax base of the FairTax is much broader, because it includes the underground economy — the size of which is estimated to be between $1 trillion and $3 trillion. We may actually be able to have surpluses which can save SS and Medicare.”

Bush’s bipartisan Tax Advisory Panel found that the assumption that all taxpayers would be fully compliant with a national retail sales tax to be unreasonable…they estimated that there would be about the same level as tax evasion under the “fair”tax as there is now…15%. I think this is a very conservative estimation considering that cash businesses will have little incentive to report all of their sales (if they play by the rules the government pays them one quarter of one percent of the taxes they collect…if they don’t play by the rules, they can lower prices by 23%, and sell considerably more.) And just look at the rise of black markets in Russia, where they have a flat tax (which is over 10% lower than what the “fair”tax would be).

Your next paragraph: “The economy would grow, too. And, the more it grows, the more people will save and spend, which leads to more going to the government as taxes.”

How do people save and spend at the same time? They’re mutually exclusive terms….you can save up and then spend, but the spending thereby nullifies the saving up.

Your next paragraph: “Also, there currently are trillions of dollars now in sheltered, offshore accounts. What do you suppose would be the impact of that, since it would presumably end up in investments after it is repatriated?”

You’re not making any sense here. Are you talking about private citizen’s accounts? If you’re talking about accumulated wealth in offshore accounts, which I assume you are, that money is not subject to tax now, the “fair”tax doesn’t change that.

If a wealthy person wanted to buy something super-expensive, such as $10 million worth of jewelry, under “fair”tax they’d have to pay $300,000 tax on it. Yet, they could easily fly to Europe and buy $10 million in jewelry, and avoid the “fair”tax.

By Another taxpayer

January 6, 2008 7:33 AM | Link to this

Fed Up,

I think Brian is related to Robert. They’re an odd sequence of genetic brew that hear only what they want to hear, etc. (I’ve also referred to them as Zombies and I see no reason to alter that view.)

They are incapable of independent thought. They believe regurgitation to be their redeeming quality.

I have yet to see them provide “fair” tax calculations using their own income and expenses.

Robert still doesn’t understand the simplest scenario with the drug dealer.

Since they don’t respond to pure logic and fact, I have resorted to more drastic techniques that sometimes gets that grey matter properly stimulated. I hope I’m not being too hard on them.

Robert and Brian,

Robert, we all know how sales taxes are applied at the point of sale. Don’t you get it. Brian, you have to understand, yours is not the voice of reason (Did you get that — you have to understand — from your post?).

By Robert

January 6, 2008 12:55 PM | Link to this

Brian, we might as well forget it. These guys don’t seem to have a whole brain between them. I try things in the simplest terms, yet they still don’t have a clue.

Luckily there are a lot of other people that have the ability to see reason. The FairTax idea is catching on, and sooner or later will pass.

By Robert

January 6, 2008 1:06 PM | Link to this

Phil, my income is none of your business, and not relevant to this issue.

The basics of this idea are: Take home 100% of your paycheck, buy products/services that are reduced in cost due to removal of hidden taxes, add 30% to the cost of those reduced price goods/services, the taxes that we pay become very visible, the underground/illegal immigrants are brought into the tax system because they can’t avoid paying sales tax, the government (including SS and medicare) are fully funded due to the widened tax base.

These statements are FACT.

By Another taxpayer

January 6, 2008 4:25 PM | Link to this

Robert,

You keep making baseless claims about how the unfair tax will reduce our tax burden. Prove it with your data, Robert. How can your income not be relevant unless you have no income, Robert. Is that it, Robert? You have no income? Do you? You are scared to tell us aren’t you Robert. It’s because it will support my statements — not yours. You try to tell me that I will be better off — a lie, Robert. Now quit telling lies about me Robert. You naughty boy.

Factcheck.org has already proven you wrong, Robert. Didn’t you get the word? By the way Robert, did you sell the hardback with all the errors in it yet?

Meanwhile, go find yourself a drug dealer and tell him that you will be watching him and that he better pay his unfair tax.

By nevertaxme

January 6, 2008 11:43 PM | Link to this

According to Wikipedia “Texas has an economy that is the second largest in the nation and the 15th largest in the world based on GDP (PPP) figures. As the largest exporter of goods in the United States, Texas currently grosses more than 100 billion dollars a year in trade with other nations.”

Why is this important? Well considering Texas has no state tax, which means it relise GREATLY on a consumption tax. Now, is it the Fair Tax? No. Texas does really on high property taxes. What is my point? Texas has the 15th largest WORLD economy and uses a consumption tax for a large part of it’s taxes. Seems to show the lies that the Fair Tax, a consumption tax, would be a total failure. How come a bunch of red-necks can have the 15th largest economy in the world using a consumption tax system and yet it would be a total failure for the US Government?

By Brian Pearson

January 7, 2008 12:06 AM | Link to this

“Bush’s bipartisan Tax Advisory Panel found that…”

I’m a zombie? If you knew what you were talking about, you would know that Bush’s bipartisan Tax Advisory Panel didn’t look at the FairTax.

“Factcheck.org has already proven you wrong…”

Factcheck.org has been refuted on a number of points. You might go to FairTax.org to see other refutations, especially to Bartlett, who continues to make the same claims despite being refuted.

Come on, you can do better than that.

By Another taxpayer

January 7, 2008 8:42 AM | Link to this

nevertaxme,

The lie is that myself and millions of other middle class Americans will be better off under the unfair tax relative to the current plan. Start with a revenue neutral change in systems. That means (now I’ll type slowly so you can catch this) that the fed will get the same amount of tax revenue after the change that it got before the change. Are there any questions so far? Now, after the change, the very poorest people will have paid less (by getting more from the fed and that’s OK) and the richest will have paid less. These are facts. Does anyone deny them? The equation has to balance before and after the change so everyone else pays more. You can assume anything you want, extrapolate all you want, but it does not change the reality — I will end up paying more in taxes as will millions of other middle class people. I’ve done the math on my income and expenses, factcheck.org has checked the case that I described above, other economists have checked the numbers, yet you provide no personal data to support your claims. I have never claimed that the so-called “fair” tax would be a total failure — it would be a total failure, for example, if it failed to provide the revenue stream that the fed wants. Otherwise, it’s just another name for tax.

What is your “life” experience, nevertaxme? How many years have you worked? How many services have you paid for? How many houses have you bought and sold? Cars? How much money have you saved toward retirement in pre-tax versus after-tax accounts? How many children do you have? All of the answers to these questions help me to understand if you have the experience needed to begin to fully realize the impact of changes to our tax system. Beyond the issue of the negative impact on middle class tax payers is the one regarding the impact of any radical change. You cannot possibly know what would happen to our economy if you were to make such a radical change. If you want a glimpse at what radical change does just look at the impact of 911 on the economy. Did you read my posts? Did you understand any of them?

And yes Brian, you are still a zombie. Fairtax has been refuted by factcheck now go to factcheck and read for yourself. Factcheck even posted the letter from fairtax to show that they have nothing to hide. Come on you can do better than that. Do you have one of those hard back copies too? Go stake out a spot and look for a drug dealer and make sure he knows that you will be watching him to make sure he pays his taxes. I assume you can assume how successful that venture will be. Otherwise, Good luck in the after-life.

By Glenn

January 7, 2008 9:18 AM | Link to this

But Alas, where are the “professionals”—you know , the folks who are paid very well to know about these maters? You know, like the “professionals” who know about matters of going to war and getting the facts/truth out before such war begins. I am a simple buisness man and I struggle making time to be professional at my craft as well as time for my family and community. I work hard against greed and choose integrity as my highest ideal for which I strive. Therefore I will leave my comments on this issue to the “professionals” and not frustrate anyone with my opinions. I will vote for the candidate who chooses to have integrity with the American community—who chooses to surround him/herself with the same type people. We seem to have placed a higher value on intelligence over integrity. There are alot of “smart” buisness/political people who craftily stay ahead of the law book. Alot of what we do is “legal” yet still wrong. I am hopeful for a “Fair Tax” “Flat Tax” Uniform Tax, whatever, but I am more hopeful for leadership in this country that stands tall with integrity. The American people will continue to pay these “professionals” and continue to expect the best from them. Lets have a true debate on the Fair Tax but please, economists out there—state your credentials and speak up. If you don’t all we will have are less-than-informed, albeit sincere, opinions from people like me.

By AL

January 7, 2008 10:30 AM | Link to this

Here are some numbers to compare… INCOME TAX: Annual Pay($20/hr) = $41600.00 Subtract Taxes (7.65% Payroll, 15% Income) = $9422.40 Total take home pay $32177.60 Purchases w/o taxes(3/4 income)= $24133.20 Add in state Local sales taxes (9.5%) = $292.65 total purchases = $26425.85 Bottom line total remaining income for savings, etc.. = $5751.75 FAIR TAX: No income taxes so take home is $41600.00 Subtract the same purchases with embedded Corp. taxes removed (22%) and the Fed. Sales tax added (23%)= 23153.39 add in local/state sales taxes = 2199.57 Total purchases = $25352.96 Income minus purchases = $16247.04 Add prebate (family of 4)= $2348.00 Bottom line income for savings = $18595.04 HMMM Lets see $5751.75 to $18595.04 You can change the % and you will still come out ahead with the FairTax.

By AL

January 7, 2008 10:48 AM | Link to this

Just to break down the percentages of my previous post: Income Tax: Income to all taxes paid: 41% Income to Fed taxes (income taxes plus embedded taxes): 35% Income to State/Local taxes: 6% Fair Tax: Income to all taxes: 16% Income to Fed taxes (consumption tax minus prebate): 10% Income to State/Local taxes: 6% This is basic math, the fair tax calculator on the website is more encompassing. I think 16% is better than 41%.

By Nora Sue

January 7, 2008 10:51 AM | Link to this

Can I have some of your Kool-Aid Al?

By AL

January 7, 2008 10:52 AM | Link to this

Correction to my figures… The sales tax in the Income tax side should be $2292.65

By Robert

January 7, 2008 11:14 AM | Link to this

OK Phil, since you seem so incapable of understanding the big picture, then lets look at piece by piece, OK?

You keep harping on this drug dealer thing, to the point that I think we are not speaking the same language. So I ask you, do you deny that when a drug dealer/illegal immigrant/ criminal/anyone else walks into a store, and puts a $100 item on the counter, and they say “Thank you that will be $130”, unless they have a gun in thier hand, they will pay $130. Do you deny that? If so, what do YOU think will happen?

By GO BUCKS!

January 7, 2008 12:01 PM | Link to this

Lots of interesting biases being shown here. Bottom line is, we need a new system where the taxpayer can tell exactly how much he is paying and can figure it out for himself. If the government didn’t steal the taxes from everyone’s paycheck before they get it and everyone had to write a check every payday for their federal and state taxes, the citizens would be marching the in streets to protest the current system. The Fairtax also eliminates the IRS which is one of the monsters of our government. Next, the Fairtax eliminates lots of work for lawyers and accountants who make lots of money from interpreting the current system. The lawyers, accountants, and the media sources listed above are all coming out against it. That’s plenty of reasons for me to be FOR IT! READ THE BOOK AND WAKE UP AMERICA!

By Another taxpayer

January 7, 2008 12:18 PM | Link to this

Glenn,

You are correct. I will follow your advice.

Goodbye All

By Another taxpayer

January 7, 2008 12:20 PM | Link to this

Glenn,

You are correct. I will follow your advice.

Goodbye All

By common sense

January 7, 2008 5:33 PM | Link to this

To all the KOOL-AID Drinkers who believe everything they read about how the Fair Tax is bad, especially Bruce Bartlett’s ill-informed banter. How can someone like that get into a position they are in, and afforded credibility?? He’s an idiot and should be fired for his wreckless and obviously partisan B.S. He’s essentially too stupid to know the truth or he’s lying, either way, he’s incompetent to be where he’s at.

If you do the research yourself, you’ll see the Fair Tax is the only way this country will recover from the downward spiral we’re on.

To all of you who think that it would be bad for the middle class, you’re listening to those people who don’t want their current advantage taken away.

Every business has to account for income tax, if you remove that, you lower prices, period. If you need a business lesson, get to it.

Common Sense

By nevertaxme

January 7, 2008 11:55 PM | Link to this

Another taxpayer,

By Brian Pearson

January 8, 2008 9:23 PM | Link to this

This so-called “zombie” suggests to others that they look at the source, instead of relying solely on Factcheck.org. You might actually look at [FairTax.org] (http://tinyurl.com/32t34q)

By dculling

January 9, 2008 3:31 AM | Link to this

Geez there is a lot of anxiety about the FairTax in this thread that I think is completely unwarranted. I’ll try to address what I can.

First of all there are approximately 300 million US citizens of which only about 150 million currently have taxable income. I think it’s safe to assume that all 300 million buy things or have things bought for them so all will be paying directly or indirectly something under the FairTax. This is what is meant by the FairTax having an expanded base and how it’s possible that most income groups will pay much less in taxes.

As it is now there are plenty of citizens that pay little if any federal tax. For instance, those that are so wealthy they shelter their wealth in tax free investments like municipal bonds. These people certainly buy things with the interest from their tax free investments, usually very expensive things. Finally, under the FairTax, people like Ted Kennedy, the Hollywood elite and many others will pay the kind of taxes that they should.

Then there is the whole underground economy which is estimated to be 1 to 1.5 trillion. Many people participate in the underground economy to make a profit. Once they make a profit I think it’s safe to assume they too will buy things retail and thus pay taxes with the FairTax.

There was an example of a drug dealer buying a Cadillac. Currently the drug dealer pays no income taxes, but the car dealer does. Under the FairTax the drug dealer pays taxes when he buys the car and the car dealer pays taxes when he buys things from the profit he made off the sale of that car. This appears to be difficult for some to understand in this thread. (Wasn’t it Bruce Bartlett that made such a silly mistake?)

Another way the wealthy hide their wealth is in off shore accounts where their money does nothing for our economy except when they spend any of it here. It is estimated there is 10 trillion dollars of US citizens in such accounts. That’s a huge number so take a second to let that sink in.

Apparently the wealthy earn some kind of return from these accounts in Offshore Financial Centers that is taxed at a much lower rate or not at all. If the FairTax is passed, why would anyone want to keep their wealth offshore? America has the most stable and secure economy in the world.

With the FairTax America will become the tax free haven of the world. It is predicted that the world’s wealthy will chose to stash their wealth here instead of paying their own country’s taxes. Also many foreign businesses will relocate here for the same reason.

With all the trillions flooding our banks, what will that mean? Well it’s basic supply and demand. When the supply of money available for loans meets or exceeds the demand then interest rates have to fall, including credit cards.

With cheap money readily available, starting a small business, the American Dream, is much easier to accomplish and especially so combined with the elimination of most of the hassle of complying with the current tax code. Keep in mind, 80% of Americans derive their income from small businesses.

With readily and cheaply available credit, existing businesses will be able to expand, especially so for businesses selling goods overseas where our products will be permanently on sale with the average embedded tax removal discount of 22%.

With all this expansion there will be an increase in the demand for employees. With increased demand and relatively static population growth, the price for employees (wages) will surely rise; just basic supply and demand. Typically expanding businesses also invest in productivity enhancements so they can afford the higher wages and keep the consumer prices stable or possibly even lower to try and gain market share.

There was previously mentioned an example of buying a new $100,000 house. Interestingly new home construction involves some of the highest embedded taxes, according to the FairTax book, of approximately 25%. New home sales are highly competitive so that new $100,000 home that with the FairTax will be 130,000 will quickly drop in price 25% to about 97,500. Of course all used items, including homes, will not be taxed so they will have a 23% discount advantage on the market.

There was some concern earlier about rents for homes or apartments. If you live in some government manipulated supply and demand situation like the rent control in New York then you are probably screwed, unless those laws are changed. Rent control creates an artificially high demand and artificially low supply of housing. In that situation there will be no incentive to lower prices.

However, I assume most people rent now because they can’t afford a house. With the FairTax: New and used homes will cost the same or less. Interest rates for homes loans will be less. Saving for the down payment will be much easier since we get to keep our whole paychecks. Savings will be easier to grow because interest earned won’t be taxed. It will be easier to find high growth companies to invest your down payment savings in with, say, mutual funds so it can grow faster if you don’t mind taking a little risk.

So it appears home ownership should be easier to attain which means the demand for rentals should go down. Sure, rents will be subject to the FairTax, but consider that rental property owners tend to be in the highest income tax bracket now, much higher than 23%, and they will be able to keep all of it under the FairTax. With higher profits and lower demand, rent prices should go down, probably as much or more than the FairTax.

There is some concern in this thread that we might end up with both the FairTax and the income tax. There is a provision in the FairTax bill that requires the 16th amendment to be repealed within 5 years or the FairTax becomes unlawful.

There is also some concern is this thread about an increase in tax avoidance. As it is now the IRS estimates they only collect 75% of what is owed. With the FairTax only businesses will collect the tax and 80% of the tax will be collected by large businesses like Wal-Mart. Now why exactly would Wal-Mart want to take the risk in giving someone an illegal 23% tax free discount?

Health care is currently a big political issue. The Democrats plan to have the government subsidize it, decreasing the price for many which will increase the demand. They plan to increase taxes on the “evil rich” which in many cases happen to be health care providers. When you tax something you get less of it. So while increasing demand they will simultaneously also decrease supply which is a recipe for disaster and shows a complete ignorance of basic economic theory. Expect long lines and waiting periods and much higher total prices.

Health care, according to the FairTax book, has some of the highest embedded taxes estimated around 26%. So right off the bat there should be a 3% discount for health care with the FairTax. Once the obscene income tax rate for high earning health care providers is repealed you can expect the supply to increase to meet the demand. Thus health care prices will fall even more.

At this point I’d like to copy and paste a quote from “The FairTax Book” by Neal Boortz and John Linder:

“When Karl Marx wrote The Communist Manifesto in 1848, he included ten points—goals, if you will, that must be accomplished to bring about a true communist society. Number two on Marx’s list was the establishment of “a heavy progressive or graduated income tax.” Number three was the “abolition of all rights of inheritance.” It wasn’t many years after Marx set forth these ten points that the progressive income tax became the goal of much of the American political and intellectual class. Eventually, this second most important of Marx’s goals was accomplished—in the United States. (The death tax addressed Marx’s third goal, though not completely.)”

Do we really want a “true communist society?”

Interestingly the 10th point in “The Communist Manifesto” was free education for all children in public schools. It should be no surprise then that so few people in this country understand basic economics.

It is true that the people that will benefit the least from the FairTax are those that are now living off of investments made with after tax dollars. However, don’t most company sponsored retirement programs use pre-tax dollars? Anyway, those in this situation will probably have to reevaluate their portfolios and assume some risk to take advantage of the growth of companies that’s sure to occur after the FairTax passes. In this way they can counteract the disadvantage to them inherent in the plan.

While I respect anyone who has worked hard and saved all their lives so they can live comfortable in their retirement now, you did leave us this mess of the ever increasing entitlement programs. Please allow us to fix it.

I am convinced that the FairTax will create an economic boon of the likes this country hasn’t seen since the years after WWII…and potentially even better! I think this is absolutely necessary as part of any plan to meet our obligations in the ever increasing entitlement programs and to reduce government dependency in the future.

By Bitter EX democrackkk

January 9, 2008 6:39 AM | Link to this

Excellent commentary! The clueless masses, most of which dont pay their fair share, are very ‘ignorant’ when it comes to understanding the FAIRTAX!

When is RON PAUL going to endorse it?

By dculling

January 9, 2008 5:33 PM | Link to this

While Ron Paul doesn’t actually endorse the FairTax, he has said he would sign it in this video clip

I really appreciate Ron Paul’s zeal to cut the size of the federal government, but I think we have to keep fighting terrorism. A peaceful world is a prosperous world.

By Brian Pearson

January 11, 2008 9:58 PM | Link to this

dculling, excellent post! My only comment to that would be something I heard earlier having to do with rent. The argument was that more people would be buying houses. With a shift towards home ownership, there would be pressure on renters to lower prices. My own thinking is that, if this is correct, then there might be an initial bump in rent costs, followed by gradual softening as the market adjusts.