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Posted on 09/07/2005 5:15:28 PM PDT by Man50D
NEW YORK (Money magazine) - If you don't care much for talk radio, or you don't live in the South, the name Neal Boortz might not ring a bell.
But pay attention: Around 4 million people nationwide catch his radio show. It's No. 1 in Boortz's home market of Atlanta and ranks first or second in numerous smaller cities in red states.
His 180-page polemic for radical tax reform, The FairTax Book, made its debut at No. 1 on the New York Times' bestseller list in August.
When Boortz came to Jacksonville for a book signing at a downtown hotel on a sticky, sweltering Thursday night last month, close to 1,000 people turned out for a chance to meet him -- and to bask in his rage at the Internal Revenue Service.
"How many of you want the federal government out of your paycheck?" asks Boortz from the hotel's ballroom stage. Wooo-hooo! roars the crowd. Boortz's wife Donna, standing at the back of the room, looks on in amazement.
"This is for taxes," she says. "This is not sex and violence we're talking about."
No kidding. Everybody likes a tax cut, but fundamental tax reform is one of those issues that's generally as boring as it is important. Who wants to waste an evening thinking about marginal rates? But the plan Boortz is selling is disarmingly simple: Just eliminate most federal taxes -- income tax, Social Security tax, corporate tax, what's left of the estate tax -- and replace them with a big, fat national sales tax.
(Excerpt) Read more at money.cnn.com ...
Ping.
If it sounds too good to be true . . . .
People ought to pay taxes commensurate with "what they actually take out of the common pot, not what they leave in."
--Thomas Hobbes, Leviathan, it is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income.
"[T]he Equity of Imposition, consisteth rather in the Equality of that which is consumed, than of the riches of the persons that consume the same. For what reason is there, that he which laboureth much, and sparing the fruits of his labor, consumeth little, should be more charged, than he that living idlely, getteth little, and spendeth all he gets; seeing the one hath no more protection from the Common-wealth, than the other? "
---Thomas Hobbes, Leviathan (1651)
If you would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
Beep. The circle takes the square. Read the book. Prices will drop, and everyone gets a prebate of all taxes spent on necessities.
Well he was doing fairly well until he got to the "You earn $80,000 cause your boss keeps $20,000 in taxes" part.
Wrong your boss feels you are worth $100,000 to him and that is what he pays you. He just has to take out the governments $20,000 before he hands you the rest.
If an hourly worker is working for $10 an hour and the Fair Tax passes do you really think a boss is going to walk up to a worker and say "Hey, the Fair Tax passed, I'm only going to pay you $7.50 and hour."
Thanks for the ping
I've said it before that what we need is a flat tax. The Fair Tax agenda is too controversial and a bigger step than most are probably willing to take.
Let's get a nice flat tax rate picked out and apply it. No complicated forms, no deductions. Exempt people below the poverty line for the first 5 years after the introduction of the flat tax. After that, no more breaks for those below the poverty line. By then, they probably won't need the break because the economy should get a real healthy boost and prices on goods might even drop.
We do away with corporate taxes and the estate tax, and 90% of the IRS.
The politcians, lawyers and their masters-in-black-robes will all be against the Fair Tax law!
Why?
Because it will force THEM to finally have to pay taxes themselves since the tax will be on purchases and not on "income".
Why would they complain there? See TAX SHELTER - Foundation - Trust Funds - etc. especially those in the Kennedy/Kerry/ and BUSH money range. None of them "earn" more than what looks minimally acceptable to the public and then "donate a portion of their petty cash to the slush fund that goes right back to them anyway in pork.
With the tax shelters, their fortunes are not "theirs" but belong to some phantom entity that won't be taxed. This corporation though is what spends the money for all the parties, the yacths, and whatever to the tune of millions/year all tax free to these politicians/lawyers.
The fair tax simply taxes money as it leaves the bank - immediately upon transfer to another entity.
They do not want to have to start paying taxes like us PEONES.
Another one who doesn't understand the first thing about fair tax but feels competant to pontificate.
Go to Fairtax.org and READ THE FAQ.
It's a VAT!
(Duck and cover for incoming!)
Not only what you stated that is correct but also..they absolutely WILL NOT consider or pass this. Why? Because the present tax system is a boondoggle for Lawyers. Matter of fact they will muck it all up some more by passing even more laws, rules and regs because its good for business. The more nobody understands it the better as it makes for longer and more expensive court cases.
The less money you make, the bigger percentage of your income you spend on sales taxable items.
You haven't spent much time looking into the actual implementation of the FairTax legislation have you?
Spend some time at the FairTax FAQ for a while before speculating and throwing out kneejerk nonsense.
FAQ items 3, and especially item 48 address the specifics of your complaint well.
Instead of opening the political and administrative rat's nest of excepting specific items or persons from paying the NRST at the cashregister, the Fair Tax Act(H.R.25) provides what amounts to a personal exemption in the form of a payment for that all legal residents will receive a payment called the Family Consumption Allowence(FCA) as a sales tax rebate equivalent to the FairTax paid at the HHS defined poverty level of expenditure. The FCA is paid in advance, in equal installments each month by check or electronic tranfer to bank account from the Social Security Administration.
The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate, and paid to all households regardless of income or actual expenditure. The HHS poverty llevel is a well-accepted, long-used poverty-level calculation based on the cost of a healthy diet comprising 1/3 of total family budget value. The povertylevel statistic is fixed in 1969 dollars updated annually for CPI.
When the most powerful Nation in the world goes something like the flat tax, what will be the total ramifications in the world marketplace? My guess, it would be HUGE and lead to a worldwide reform. I'd be interested in hearing more about the flat tax from this angle. How would the heavily socialist nations cope? Could they cope?
It's a VAT!
(Duck and cover for incoming!)
Is hiding under your desk a trained trait in grade school nowdays, you know to keep the teacher from hitting you with the erasers thrown at you when you say something so ignorant?
Since a single stage retail only sales tax is not a VAT,, as a VAT is implemented by taxing all business purchases and a retail sales tax does not, your calling it a VAT is just the least bit of kind'o' dumb.
Because it will force THEM to finally have to pay taxes themselves since the tax will be on purchases and not on "income".
You forget they won't have to pay taxes on capital gains and estate taxes so they may very well support the Fair Tax.
With the tax shelters, their fortunes are not "theirs" but belong to some phantom entity that won't be taxed. This corporation though is what spends the money for all the parties, the yacths, and whatever to the tune of millions/year all tax free to these politicians/lawyers. The fair tax simply taxes money as it leaves the bank - immediately upon transfer to another entity.
It is the consumer who drives the economy and ultimately decide which companies stay in business and which one's fold. Our current tax structure taxes money before it enters the wage earner's wallet. The Fair Tax taxes money as it leaves the consumer's wallet but can put more money in the bank if the wage earner chooses.
That's a no brainer. I said bigger percentage of income. Families who make less than $75,000 a year (well above the poverty line) spend a lot greater percentage of their income on sales taxable items than families who make over. You're talking about multiplying their sales tax by at least x5 for necessities while the rich beat the tax by cutting back on frivolous items thus negatively affecting the economy in the process.
I suggest you do more research at www.fairtax.org
I researched enough to see that Boortz is trying to sell a book to fools.
Actually you boss has no claim to that 20k, because you will still have to pay taxes on what you buy. He never got to keep it before, and he doesn't get to keep it under fairtax.
The writer's argument centers on a mistaken assumption about what percentage of a product's cost is labor and what percentage is fixed costs of production. He seems to feel 100% of the cost of an item is labor, yet we know that is not true.
If you produce widgets, you buy raw materials, and machines, and buy a building and power, with which to make them. Then you hire people to run the machines.
Every one of those items is taxed today. You pay tax on the machines (because they are embedded) you pay tax on the raw materials (because those taxes are embedded in the price) Same for the building, electricity, etc.
You also pay the employers half of fica for your employees. When you look at how this is done, its THIS portion, and ONLY this portion, of tax that is taken from the employers pocketbook. The rest is all taken from YOU (the employee).
Therefore, under FairTax, all the payroll withholding taxes, employee's half of fica are all passed thru to the employee.
And the employer's half of fica is pocketed by the employer and thereby reduces costs of the widgets sold. This half of fica is added to the other savings in raw material costs, reduced machinery costs, cheaper energy, etc, all the way up the line.
So you see the writer does not put forth a trutefull example, and clearly does not know much about the way business works.
Remember this: Busniess pays no taxes. All taxes that a company might owe are paid by the consumers. The corporate income taxes, the taxes on business property, the employer's half of fica, ALL OF IT is cranked into the price of that widget AND HIDDEN FROM YOU IN THE PRICE.
Under Fair tax, that's all gone, and you pay 23%.
When the most powerful Nation in the world goes something like the flat tax, what will be the total ramifications in the world marketplace? My guess, it would be HUGE and lead to a worldwide reform. I'd be interested in hearing more about the flat tax from this angle. How would the heavily socialist nations cope? Could they cope?
They are coping now with their flat wage taxes collected at source, coupled with VATs which are essentially a flat tax implementation on business. Nasty thing about flat taxes is they hit businesses which endup passing it on to consumers in higher prices, and employees in lower wages and the voter has no idea of the real level of tax he really ends up paying one way or another. That is how the EU manages to tax 50% of their GDP and totally stagnate their economies. Hide it behind the veil of a business, and a government can get away with economic homicide.
The Flat Tax; Chapter 3, by Robert Hall and Alvin Rabushka
| In our system, all income is classified as either business income or wages (including salaries and retirement benefits). The system is airtight. Taxes on both types of income are equal. The wage tax has features to make the overall system progressive. Both taxes have postcard forms. The low tax rate of 19 percent is enough to match the revenue of the federal tax system as it existed in 1993, the last full year of data available as we write. Here is the logic of our system, stripped to basics: We want to tax consumption. The public does one of two things with its income—spends it or invests it. We can measure consumption as income minus investment. A really simple tax would just have each firm pay tax on the total amount of income generated by the firm less that firm’s investment in plant and equipment. The value-added tax works just that way. But a value-added tax is unfair because it is not progressive. That’s why we break the tax in two. The firm pays tax on all the income generated at the firm except the income paid to its workers. The workers pay tax on what they earn, and the tax they pay is progressive. To measure the total amount of income generated at a business, the best approach is to take the total receipts of the firm over the year and subtract the payments the firm has made to its workers and suppliers. This approach guarantees a comprehensive tax base. The successful value-added taxes in Europe work this way. The base for the business tax is the following: Total revenue from sales of goods and services less purchases of inputs from other firms less wages, salaries, and pensions paid to workers less purchases of plant and equipment The other piece is the wage tax. Each family pays 19 percent of its wage, salary, and pension income over a family allowance (the allowance makes the system progressive). The base for the compensation tax is total wages, salaries, and retirement benefits less the total amount of family allowances. |
With FairTax our country can compete again in the world market place, especially for those items we make mostly via automated processes.
You don't have all that embedded tax built into a product, so its price when sold to Britain or Japan becomes competitive.
Yes, when the money from japan comes in, it will be taxed when spent.
Who cares if a socialist country can cope? Certainly not I.
Correction: We are talking about raising sales tax on ALL Retail goods.
Not just necessities like food. ALL goods.
Then we refund you an amount equivelent to all tax on necessities up to the poverty level. Everybody gets the refund. The same amount per person. Yup Even Bill Gates.
And the RICH? What the hell is the point of being rich if you can't have frivolous items? What ELSE are they going to spend it on? THE RICH WILL STILL SPEND. And they will pay taxes on what they spend. More taxes than they do now.
(Why would you defend the current system where the rich pay virtually nothing?)
Read #26
I agree wholeheartedly. I just finished reading "Flat Tax Revolution" by Steve Forbes. A bunch of countries in Eastern Europe, including Russia are moving to a flat tax and their government revenues are going through the roof.
Forbes proposes a 23% flat tax, with generous exemptions. Single: $13,200, Married: $26,400 ( 2 x single deduction), plus dedictions for children.
While the mortgage interest deduction goes away under the flat tax, so does the capital gains tax. The net effect though trends positive for nearly everyone.
And businesses pay the same rate with an added bonus. No depreciation tables. Whatever you buy you can deduct in full for that year. Incur losses due to expenditures or misfortune, and you can carry those losses forward to offset future profits.
The Flat Tax is something that can be enacted without forcing major changes to the constitution. Necessity may send us in this direction as Europe can rejuvinate itself if more countries get encouraged by the flat tax idea.
Bottom line, it is being tried in the field by several countries, they are prospering, and its going to catch on. Eventually we'll have to scrap what we have based on competitive necessity.
One of the problems I have with the fairtax is this: With the implimenting of a huge federal sales tax do we still pay the state sales tax? if so, our sales tax could be more like 40%. Also, I understand that we would only pay sales tax on items once, so a new car buyer would pay the tax, but the used car buyer wouldn't pay it at all. Who in their right mind would buy a new car?who would buy anything new that they could get used? And second, I could see the employer who normal hires someone for 10$ an hour cutting his pay scale for any new hires to 7.50$. I think this could be a problem. I think that most places will pay the least they have to and if there are people willing to work for 7.50 then they won't pay 10$.
OK, I spent spent some time reading the FAQ's and all I saw was kneejerk nonsense. There's no such thing as a "fair tax". The politician's main goal is to successfully legislate a new tax hike without causing a riot. That will never change. The whole idea of saving on taxes by spending less is an anti-free market pipedream that would ruin the manufacturing economy. I could go on but the whole idea is such a joke that it's not worth my time.
Do you plan to take a pay cut to $7.50, that would prevent you from having the same standard of living?
I wouldn't. Doubt anyone else will either.
If employers could find people to take $10 an hour jobs for $7.50 today, the going wage would be $7.50 now.
The same amount of taxes get collected under the FairTax legislaton, just from retail purchases instead of being extracted from you before you even see it under income & payroll taxes today.
Why do fairtax supporters say it is like a sales tax while also saying it will be a 23% tax rate? It isn't computed the say way sales tax is (if it was it would be 29.xx%) so why plant the false idea in peoples head it is like a 23% sales tax?
Oh, by forcing major changes on the constitution, you mean putting it back the way the founding fathers wrote it? With NO TAX ON INCOME at all? Pretty unsusual to see a freeper argue against original intent!
Necessity will surely not send us to do things the way Europe is doing them with their stagnating economys and burgening wellfare roles, and their VATs which are WAY more troublesome to keep track of than a NRST.
You simply have to give up on this notion that Europe is some how superior. DUmmies believe it, The French Believe it, but their system is fundamentally broken. So Broken the the voters have just decided the whole concept of the E.U. is broken and rejected it. Repeat into the mirror: The EU is not the way. The EU is Not the way.
Now that you read Forbes fairytale, go read about Fairtax and find out where he's dead wrong.
LOL, this article confirms everything I have been saying about the 'fair tax' for 6 years and has been denied by fairy taxers!
The painful truth
Toward the end of The FairTax Book, there's a handy little box summarizing what the authors say will happen if we make the switch to a sales tax. Here are the first three points:
From our checks.
Consumption tax we would be expected to pay on life's basic necessities.
This sounds pretty good. Of course, we know that it isn't nearly as big a gift as it seems because we'll have to pay some of it back in taxes when we buy things at the store, right? Er, apparently not. Boortz and Linder write:
We'll explain this bit about "embedded taxes" in a moment. But first, let's consider what Boortz and Linder appear to be saying. Prices at the store are the same. Your boss stops taking all that money out of your paycheck. Uncle Sam is sending you money instead. And, oh yeah, the government is still up and running.
This just can't happen. "It is practically and logically impossible for the government be collecting the same amount of money as before and have everyone suddenly be better off," says Daniel Shaviro, a tax law professor at New York University.
Part of the problem is the way Boortz and Linder are using the idea of embedded taxes. In an eight-year-old study paid for by AFFT, Harvard economist Dale Jorgenson noted that because the taxes paid by everyone in the chain of production are embedded in the cost of goods, prices could decline an average of 20 percent if all those taxes were scrapped. The FairTax Book devotes an entire chapter to this idea.
What The FairTax Book fails to mention is that prices can only fall this sharply if companies cut wages. I asked Jorgenson about this, and he agreed. Say your salary is $100,000 a year today, but you take home $80,000 after taxes.
Your company is still paying that extra $20,000. In a FairTax world, it will save that money, and be able to lower its prices accordingly, only if it can reduce your salary to $80,000. In other words, your take-home pay is the same as before. Sure, you'd get to "keep 100 percent of your paycheck," as Boortz and Linder repeatedly write, but it would be a smaller paycheck. That's kind of a big thing to leave out.
Its answered in the FAQ. All tax is quoted the same way.
I don't think he read the WHOLE article before posting.
Read #26.
Stop it with the $7.50 nonsense. Its bogus. Read #26, and visit Fairtax.org and read the faq.
The point the article was making is not that the boss has claims to the $20K, it is the boss would have to keep the $20K to reduce prices like the fair taxers claim. The article points out the deception the fair taxers use in promoting their tax plan.
Read post 42, LOL....
Have you read Boortz's book or the Fair Tax Bill? (HR.25)
Exactly. Fair taxers have not been able to comprehend this point, no matter how simply it is put to them. It is deny, deny, deny, twist, spin, flip. Out of the dozen plus fair tax pushers on this forum, only one of them has acknowledged this truth.
VATs scare the hell out of me, I think when this book was written and some of the folks involved with the fairtax group, probably considered that folks here don't want a VAT, so they went out of their way to make sure this would not be one (or even look remotely like one).
A flat income tax only taxes American income earners. The Fair Tax also taxes any foreign tourists. A flat tax keeps the IRS around. The Fair Tax abolishes the IRS. The Underground Economy evades the flat income tax. The Fair Tax captures the Underground Economy. The flat income tax still forcibly takes money before it reaches the income earner. The Fair Tax gives all income earners 100% of their earned income. The government gets its cut when you voluntarily go shopping.
Again, this is bogus. The boss does not need to get his price reduction out of the hide of the employee. He gets it out of cheaper materials, physical plant, energy, transportaion, etc.
As I pointed out, the Employer's share of fica is the only part of the payroll process that would NOT be passed on to the employee. That part (its fairly small) will go toward reduction in costs.
Add to that employers share of fica, all the other taxes corporations pay and you have (supprise!) 23% of the cost of a finished product, whether its a sewing needle or a new car.
The writer thinks hes found a flaw, but it is mostly just a flaw in his reasoning.
Go look at the list of economics professors that support Fair Tax. The least among them has better credentials than this smug writer.
The first step to pushing a fairtax, is to overcome the fact, that yes, it is very controversial, and its an idea that is very easy to be slandered and miseducated on.
One senator (Jim Demint, I think), early on in his campaign pushed it, and started dropping in the polls, he switched tracks, and started gaining.
Educate folks on the fairtax, and move incrementaly, at one time social security was the 3rd rail, now its safe to push it as more and more people learn about it.
It can't happen overnite but it can happen, but to deny its controversial is simply innaccurate, but then again, at one time Goldwaters ideas were very controversial......and we wound up with President Reagan....eventually.
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