Farm Bureau says FairTax Bill a Priority

BUSINESS WIRE ^ | Feb. 2, 2004 | staff

[ancient_geezer]

Farm Bureau says FairTax Bill a Priority

HONOLULU--(BUSINESS WIRE)--Feb. 2, 2004--At its national convention, the American Farm Bureau Federation moved to make replacing the income and payroll tax systems a priority, FairTax announced today. On the last day of the convention the AFBF board named the FairTax legislation (HR 25/S 1493), a national retail sales tax, as a priority issue for education and dissemination to its five million members.

The Americans For Fair Taxation (www.fairtax.org) legislation replaces, rather than "reforms," the current complex income tax/payroll deduction structure with a revenue-neutral retail consumption tax called the FairTax. During the American Farm Bureau Federation annual convention, FairTax Executive Director Tom Wright and National Farm Bureau Liaison John Collet campaigned for farmer and rancher support of this tax change, which is already gaining support on Capitol Hill. The FairTax group has spent the last year working with more than 30 state farm bureau organizations in a coordinated, nationwide effort to raise farm bureau leadership awareness of the bill's details, laying the groundwork for this vote.

"Internationally, income and payroll taxes and the cost of compliance burden our farm exports, making them less competitive on the world market," Wright told farmers in a speech sponsored by The Heartland Institute's Budget & Tax News. "Domestically, the current system targets our working poor for abuse, while burdening them with regressive Social Security taxes. The FairTax improves export competitiveness across the board -- not just for agriculture -- while relieving the burden on our working poor and creating much needed jobs."

According to Mr. Wright, the FairTax proposal is designed to be "revenue neutral," raising the same amount of revenue as do personal and corporate income taxes, payroll and Social Security taxes, and gift and estate taxes, while replacing all these with a system some 90 percent smaller, less intrusive, and less expensive. A dedicated income stream from this broad-based sales tax would replace the narrow, regressive payroll tax currently used to fund Social Security and Medicare.

"The FairTax has been in our policy book for years," stated AFBF President Bob Stallman. "It does address many of our policy issues on federal tax reform, including estate taxes, capital gains, alternative minimum, and more. With this vote of the board, we'll be taking a good look at how the FairTax proposal compares to our current tax system and our desire for needed reforms."

These national retail sales tax measures already have been unveiled in the House and Senate this session, one by Rep. John Linder (R-GA) and Rep. Colin Peterson (D-MN) and the other by Senator Saxby Chambliss (R-GA) and Senator Zell Miller (D-GA). House Majority leader Tom DeLay is a co-sponsor. The sweeping measure would take farm and ranch producers "out of the tax system entirely," as long as their operations are not involved in retail sales, said Tom Wright.

"With the FairTax, farmers are out of the tax business entirely," continued Wright. "No record keeping, no filing, no complex planning, no audits, no alternative minimum tax, no self-employment taxes, nothing. The only place the tax is charged is 'under the bright lights of the retail counter' to the person who's going to wear the gloves or drive the car. There are no hidden taxes cascading through the system. Producers will make business decisions based solely on what is best for their farm and family, not tax consequences."

What is the FairTax?

The FairTax is a non-partisan proposal (HR 25/S 1493) that will abolish all federal income taxes, including payroll, self-employment, alternative minimum, income, capital gains, corporate and death taxes, and replaces them all with one simple, visible, federal sales tax. It will dramatically change the basis for taxation by eliminating the root of the problem: taxing income. The FairTax will tax us only on what we choose to spend, not on what we earn. It will not raise any more or less revenue; it is designed to be revenue neutral. The FairTax is a fair, efficient, and intelligent solution to the frustration and inequity of our current tax system, which particularly burdens our poor and fixed-income retirees. The FairTax proposal includes specific protections for these Americans, including ending the narrow, regressive Social Security tax, ending income taxes, and beginning a rebate to zero all federal taxes for all Americans (with a legal Social Security number) up to the poverty level.

What is FairTax.org?

FairTax.org is a non-profit, non-partisan, grassroots organization dedicated to replacing the current tax. The organization has hundreds of thousands of members and volunteers nationwide. Its plan supports sound economic research, education of citizens and community leaders, and grassroots mobilization efforts. For more information visit the Web page: www.fairtax.org

[ancient_geezer]

Yet another organization onboard for a National Retail Sales Tax.

[ancient_geezer]

A Taxreform bump for you all.

If you would like to be added to this ping list let me know.

John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a pure consumption tax:

H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
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.

S.1493
Sponsor: Sen Chambliss, Saxby [GA] (introduced 7/30/2003)
Title: 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 sales tax to be administered primarily by the States.

Refer: http://www.fairtax.org & http://www.salestax.org

So Ron Paul's amendment has a chance at enactment & ratification:

H.J.RES.15
Sponsor: Rep Paul, Ron [TX-14] (introduced 1/28/2003)
Title: Proposing an amendment to the Constitution of the United States relative to abolishing personal income, estate, and gift taxes and prohibiting the United States Government from engaging in business in competition with its citizens.

(But lets modified it to prohibit all income, payroll, gift estate taxes as HR25 calls for, or we will see European VAT style hidden taxes along with payroll excises to take over in the place of the of the current individual income tax(i.e. personal income tax) that Ron Paul amendment prohibits.)

[Principled]

I would like to know how many pols have been defeated for failing to recognize HR 25 as a winning issue.

I don't know of a single instance in which a candidate who supports the Fair Tax didn't win.

Bob Barr could tell us about it though, eh?

[ancient_geezer]

It's going to be an interesting election season watching folks running with the NRST as an issue. We know of the 43 co-sponsors of the bill who are up for re-election to the the House. Indeed there are several new faces coming up in the primaries as well.

This election will have a story to tell, one way or another, that is for sure.

[Libertarianize the GOP]

ping

[Bigun]

This election will have a story to tell, one way or another, that is for sure.

That is particularly true here in Texas where our state Republican party platform states:

"Federal Tax Reform - The Internal Revenue Service is unacceptable to U. S. taxpayers! The Party urges that the IRS be abolished and the Sixteenth Amendment to the U.S. Constitution be repealed. We further urge that the personal income tax, inheritance (death) tax, gift tax, capital gains, corporate income tax, and payroll tax be eliminated. We recommend the implementation of a national retail sales tax, with the provision that a two-thirds majority of the U.S. House and U.S. Senate is required to raise the rate. Such reforms will encourage investment and economic growth. Lastly, such a sales tax plan must ensure that no one in America pays taxes of any kind on the necessities of life, ensuring opportunity and quality of life for low- and fixed-income Americans."

[EternalVigilance]

Dr. Bill Lester, who is running for the new district 11 congressional district here in TX, supports the FairTax.

Partially because of this one issue, he gained the endorsement of the Texas Farm Bureau this week.

Not only did he win their endorsement, but he won it overwhelmingly. When the local county organizations met together to decide who to endorse, Bill won with almost 80% of the vote.

The state guys told me that that margin was unprecedented for a non-incumbent running for an open seat. And our opponent is a pretty formidable FOKR (friend of Karl Rove).

The FairTax is a political winner.

[EternalVigilance]

I worked for over 6 years to make that same plank a reality in the Iowa GOP platform.

One of these days...

[EternalVigilance]

Just so no one misunderstands, that plank is a reality NOW in the Iowa platform...I meant one of these days we are going to make it a reality nationally.

[Principled]

Fundamental tax reform is a must.

The best option is HR 25, the Fair Tax.

bttt

[farmfriend]

Rights, farms, environment ping.
Let me know if you wish to be added or removed from this list.
I don't get offended if you want to be removed.

[Bigun]

The FairTax is a political winner.

You know E. V. I personally think someone could run successful campaign on that issue alone!

[EternalVigilance]

I have no doubt about it.

Herman Cain just might.

I've been waiting ten years for someone to win a Senate seat on its strengths.

This is the perfect issue for conservatives, because it gives us an opportunity to reach out beyond our normal base and constituency, and to get them excited.

[Paul C. Jesup]

These national retail sales tax measures already have been unveiled in the House and Senate this session, one by Rep. John Linder (R-GA) and Rep. Colin Peterson (D-MN) and the other by Senator Saxby Chambliss (R-GA) and Senator Zell Miller (D-GA).

Well, both Senators I voted for in Georgia support this. I am still annoyed about Senator Saxby Chambliss supporting Bush's amenesty plan, but this is a good trade off.

[SierraWasp]

They never answered the key question! What RATE are they proposing? Anything over 10% exceeds the church requirement of tithe to run all domestic and foreign missions and welfare!!!

[ancient_geezer]

They never answered the key question! What RATE are they proposing?

Sure they have, right here:

"(www.fairtax.org) legislation replaces"

and here:

"FairTax legislation (HR 25/S 1493), a national retail sales tax"

which means you can also go over to THOMAS -- U.S. Congress on the Internet and look it up, the revenue neutral figure required by law, 23% of total payment for retail products.

---

 

Your other choice is to continue to pay the income & payroll taxes as it is today:

The Individual Income Tax return(1040) that captures everyone's attention each April, is merely a partial VAT accounting sheet the government cons individuals, held at ransom, into filling out. Its misdirection puts blinders on the eyes of the electorate, and totally distorts their perceptions as to the real impact of taxation in their lives.

Every man woman and child in the nation, pays federal taxes through what amounts to a VAT.

DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation

The full impact of the federal tax system(taxes in gross wage/salaries & other compensation + business income/payroll taxes) added onto the base(taxfree) price of retail consumption goods and services is 36% for federal taxes alone.

All wages and the taxes on them are paid for out of sales receipts to business,(i.e. consumption expenditure).

• Total fed taxes as reflected through gross family income is 23.5% (taxfoundation)
• Total state taxes reflected through gross family income is about 10.2% (taxfoundation)
• The current net personal savings/investment rate is about 1.2%.(BEA personal income)

family consumption expenditure is gross income less taxes and savings.

Federal tax revenues collected as % of family consumption expenditure = fed/(1-state-fed-savings) =

23.5/(1-.235-0.102-0.012) = 36.09%

If we add in the cost of federal tax compliance, planning, litigation & enforcement, the percentage that truely represents the burden on the family due to the Federal income/payroll tax system, product prices are increased by more than 55% over taxfree prices.

Where Have All the Dollars Gone?
How the government robs Peter to pay him back.
By economist James L. Payne, Reason Magazine February '94

When the overhead costs are added together, (24 percent compliance costs, 33 percent disincentive costs, and 8 percent other costs), they total 65 percent of tax revenue.

Current total Federal tax revenues are about $1900billion, more than $1,000 billion additional dollars are added on onto consumption prices due to the business costs of complying with the federal income/payroll tax laws.

(Payne '97, Pilla '95, AGCCA 2000, Williams 2000)

The percent total current federal burden (taxes + compliance costs) of consumption dollars = 36*(1900+1000)/1900 = 54.95% economic burden added on to base retail(i.e. taxfree) prices.

Too bad that citizens don't get a receipt detailing those "hidden sales taxes" buried in their consumption purchases. If they ever did, some of those 70% of the public clamoring for more from government, thinking someone else foots the bill, might be tempted to change their mind.

[ancient_geezer]

Anything over 10% exceeds the church requirement of tithe to run all domestic and foreign missions and welfare!!!

Government isn't anybody's church or haven't you figured that out yet? If you want a lower tax, start working on repealing government programs:

 

23%........... Effective total federal tax rate with respect to consumption expenditure

14.91% ..... rate if Social Security and Medicare were eliminated
14% .......... rate if Nat'l Endowment for the Arts were eliminated
11.9%........ rate if Dept. of Education were eliminated
10% .......... rate if welfare were eliminated
9.8%.......... rate if foreign aid were eliminated
etc.

So lets look at what the maximum it would take to fund those functions clearly authorized under Article I Section 8 of the Constitution, in current dollars:

http://w3.access.gpo.gov/usbudget/fy2001/guide02.html#Spending

• $334 Billion --- Defense & Military related expenditure
• $ 31 Billion ---- Administration of Justice
• $ 16 Billion ---- General Government
• $199 Billion ---- Interest on the Debt
  =========================
  $580 Billion ---- Total

Institute an across the board, Flat rate, single stage National Retail Sales Tax, which taxes all imports and domestic products with the same rate.

Replacing present all current federal tax law with a retail sales tax would be 23% on new goods and services paid and receipted at the retail register. No hidden tax, no exceptions, exemptions everyone participates.

Such a tax acts in a natural manner to encourage the elimination of excess government functions through visibility of burden among all constituencies of the electorate.

The total federal government budget would move from $2,000 billions towards something less than $580 billions calculated.

The across the board federal tax rate on new goods and services would decline towards less than 6.7%.

As tax rate on sales decreases the economic burden on retail items, the sales volumes and growth in the economy would be tremendous allowing even further reductions in tax rates below that less than 6.7% theoretic level.

That is what I perceive as the ultimate achievements possible under a National Retail Sales Tax structured in the manner of the revenue bill H.R.25. Simple common sense applied to the principal of TANSTAAFEL,( no free lunch, everyone participates in paying there way in proportion to the benefit the extract from their consumption.) encourages the natural change in attitudes required of the electorate as regards the burden of government largess in their lives.

Thomas Hobbes from 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

Hmmmmmm....... It's do able, with time and effort, once the blinders are removed from the electorate.

[SierraWasp]

"Government isn't anybody's church or haven't you figured that out yet?"

It is to Hitlery!!!
It is to John "Hairy" Kerry!!!
It is to George Soros!!!
It was to Walter Moandale!!!
It was to Lyndon Bane Johnson!!!
It was to Jimma "Peanut" Carter!!!
It was to Franklin and Eleanor Roosevelt!!!
It was to Pol Pot, Chairman Mao and Ho Chi Min!!!
It was to Stalin, Hitler and is to Castro and his brother Che!!!
It is to Willie & Jerry Brown and Angela Davis, oh, and was to Gray Davis!!!

Of course Bill Clinton told us... "The era of big government is over," right? He took his show bible to church and took the rest of us to the cleaners!!!

[ancient_geezer]

So do something to bring "Big Government" to end.

One step at a time friend.

First step, make sure everyone perceives the burden that government imposes for it's "benefits". The rest will follow.

[c-b 1]

Simply put, the FairTax replaces the way we're currently taxed - based on our annual income - with a tax on goods and services. The FairTax is a voluntary “consumption" tax: the more you buy, the more you pay in taxes, the less you buy, the less you pay in taxes.

This is voluntary? Just like the income tax is voluntary. I have to have a car to make any money, so I volunteer to pay 36% of the cost of the car, the state mandates I have insurance, a 36% increase in the cost of my premium is voluntary, the car breaks down, 36% of the 70.00 per hour I pay to get the car repaired is voluntary, I get sick and have to go to the Hospital, 36% of the hospital bill is voluntary? This is a case of "if you are going to lie, tell a real whopper."

Anyone who thinks all the hidden fees (taxes) we are now paying are going away if this passes is on drugs. I want to see the IRS, and the income tax go away as much as anyone, but I can't see this as the answer. The first thing we all need to remember is that the government has a spending problem, not a collection problem, until we force the tax, and spenders to get spending under control, we will continue "voluntarily" donating a large portion of our income to the government. This is Bill has no provision to bring any spending under control, it is a continuation of the un-ending river of money that funnds those addicted to spending as much of someone else's money as they can get their greedy hands on.

This looks like jumping from the frying pan into the fire.

[ancient_geezer]

This is voluntary? Just like the income tax is voluntary.

Since I didn't write the article, I refuse to be held to the claims of "voluntary". No tax is voluntary when you meet the conditions of having to paying it. A tax on alcoholic beverages is only voluntary for those who refuse to drink.

OTOH, the NRST

1) does not require, individual filing of reports of your family financial condition.

2) provides you first option on how you chose to allocate your income,
    (you get your full gross check before government gets any chance at a cut at it.)

3) Is not collected on used products, older homes, used cars, antiques etc.

4) Is not collected on purchases for legitimate business use, or inclusion into other
    products.

5) Is not collected on purchases of investment assets, even though it is charged
    against fees, commissions related to them.

6) Is collected on retail sale of products, thus is not levied on anything you grow,
   produce or othewise create of your own resources.

7) provides an allowence equal to the that would tax paid on purchases up to the
    poverty level ofexpenditure for every legal resident of the United States.

With the above built in characteristics. It is quite possible for a frugal person to manage to not be burdened by nor liable to the NRST, thus within that narrow sense it can be said to be Voluntary.

so I volunteer to pay 36% of the cost of the car, the state mandates I have insurance, a 36% increase in the cost of my premium is voluntary, the car breaks down, 36% of the 70.00 per hour I pay to get the car repaired is voluntary, I get sick and have to go to the Hospital, 36% of the hospital bill is voluntary?

On average that's what you pay now(not counting compliance costs) under just the federal income/payroll tax system. Main difference being it is grabbed both out of you gross income, and embedded into the price of products you buy at any level of the business chain.

Under the NRST is a substantially lower figure and only applicable to retail sales of new products. 29.86% added to taxfree consumption expenditure As an add on to price like the customer perceives a state sales tax, or 23% of the total payment (as income is), and the retailer sees with respect to his tax included sales receipts on which he remits the tax. Whichever way you wish to look at it for comparative purposes.

Within a fairly wide range, a person should be able to easily control the tax rate they actually pay:

Under HR25 (FairTax) once can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, it is not difficult to get an effective tax rate well below 9%.

For example we can examine the tax burden that a family of four will have at various annual expenditure levels.

 

The actual rate is with respect to gross income being somewhat less depending upon on ones mixture of savings/investment and used purchases.

[ancient_geezer]

Anyone who thinks all the hidden fees (taxes) we are now paying are going away if this passes is on drugs.

That is a very debatable point:

I researched the effect of repealing all income and payroll taxes laid on business on the theory that we as individual consumers end up paying those taxes at the retail counter.

The following article covers the mechanism on how the current Federal tax system propagates and is embedded into consumption expenditure.

DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation

The 24% in the article considers only those factors actually paid to government out of imposititions on business in complying with the income, payroll, excise & tariff tax laws.

I refer you to the section of the following article about the Income/Payroll tax system and its impact on our economy "A. Hidden Upstream Taxes. " paragraph 39.

"[39] Dr. Dale Jorgenson, Chairman of Harvard University's Economics Department, believes that the price of goods and services are inflated by about 20 percent or more by upstream taxes consumers ultimately bear. In a recent paper Dr. Jorgenson estimated the built-in taxes contained in the price of goods and services. /22/ In the chart above, he quantified the hidden component of tax, estimating that producer prices would fall on repeal of upstream taxes an average of about 22 percent."

Looking at the accompanying chart, the range of values from industry to industry appears to be about 12-25%.

Economists Gary and Aldonna Robbins of the Texas-based Institute for Public Policy examined the case of dry cleaning a shirt, with a particular eye toward uncovering the hidden costs of taxes in price.

The Robbin's attributed over 33.6% of "consumer prices" to be due to federal taxation passed on to the customer.

The Federal Tax System
http://www.cbo.gov/showdoc.cfm?index=2125&sequence=0&from=1#pt1

From the Table 1 we may extract the proportionate contributions of each sector of taxes as they contribute to consumer price for the year 2000.

• Total revenues collected by Feds in '00 = $1945billion ( 33.6% of consumer price)

Those tax components which will not change prices as a consequence of enactment of HR2525

• Individual Income Tax(Labor) = 945billions,
• Employer half of Social Insurance = 653/2 = 326.5billions,
• Excises = $68billion
• Customs Duties = $19Billion
• Miscellaneous = $40Billion

============================

• Total constant price factors = $1358.5 billion
• Remainder federal tax components affecting price = (1945-1358.5) = $586.5

Adjust for a conservative $600billion(1995 figure, AGCA '00, Payne '95, PillaBartlettNorquist '95 ) interest & cost of compliance effects.

• Total tax related factors affecting consumption price = (600 + 586.5) = $1186.5billions

Estimated change in consumption prices as consequence of enactment of a National Retail Sales Tax, repealing all business income and payroll taxes:

33.6*(1186.5/1945) = 20.5% in consumption prices

Which compares well with the Jorgenson empirical study of 22% fall in producer prices.

The two sources are in reasonable agreement, and I see 20-23% a reasonable value to expect prices to fall not only for customers here in the United States, but in our exports as well making them far more competitive on international markets.

[ancient_geezer]

The first thing we all need to remember is that the government has a spending problem, not a collection problem,

That is always true, however the NRST is a tax plan designed mainly around the concept of freeing the family from the intrusive reporting burdens laid by income taxes, not a cureall.

until we force the tax, and spenders to get spending under control, we will continue "voluntarily" donating a large portion of our income to the government. This is Bill has no provision to bring any spending under control,

Quite the contrary, even though it is a revenue bill and thus cannot address spending and profligate programs directly, it does provide the means by which every voter participates and is exposed to the costs of big government in a very personal way. No one gets out of having to cough up that NRST at the retail cash register. Not Bill Gates, and not that mother buying diapers at the market.

Unlike the income tax both perceive having paid the cost of government excess everyday.

Under the income tax many not only do not participate in a payment to the system, they actually perceive returns from it whether as what the often like to a forced savings from excess withholding to outright Earned Income Credit added onto their paycheck.

In the words of Walter Williams, World Net Daily, 10-25-2000

So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?

What would you expect to happen, when those voters at those mid to lower income brackets see more perceived bennies coming down the pike.

Right now the bottom 60% perceive little to no "Individual Income Tax" burden,(in many cases even a handout) and 70% of the voting public clamors for more from government looking for the top 40% of income earners/producers to foot the bill. That perception continues to grow ever stronger by eliminating even more participants from the Federal Individual Income Tax rolls as proposed in the tax reduction proposals through changes in personal exemption limits and other mechanisms such as the EITC.

Under an NRST, everyone participates at the cash register, from Bill Gates, right down to the bum on the street. That alone should operate in shifting the balance of opinion from the 70% gimme more & don't care crowd down to a level of dissatisfaction that can encourage changes in government leading to pressure to remove excessive programs and uneeded departments and bureaus.

[E.G.C.]

BTTT!!!!!!

[phil_will1]

"Bob Barr could tell us about it though, eh?"

Actually, Bob Barr did support the FairTax. As the old southern expression goes, "he may be dumb, but he ain't stupid." LOL He did maintain in his campaign, however, that he would be a more effective spokesman for it than John Linder. Linder effectively negated that argument in the debates by asking him a few basic questions about how the proposal would work. Of course, Barr didn't have a clue.

Barr criticized Linder for only having 8 co-sponsors on the bill at that time, which was because Linder, in an effort to attract bi-partisan support, had a 2x2 requirement, meaning that a Republican wanting to sign onto the bill had to recruit a Democrat to go on at the same time. Linder has since dropped that and the House bill now has app. 43 co-sponsors, including Tom Delay.

[phil_will1]

"The FairTax is a political winner."

I would modify your statement slightly to say that its a political winner in those areas where voters have been educated relative to its benefits. Areas such as Georgia and Texas have been exposed to the proposal over time and a certain (small) proportion of the electorate understand its merits. In areas such as these, its a winner. The good news is that there are more and more areas such as this each year.

[phil_will1]

I would also add that the problems that we are facing in our economy make the FairTax an extremely timely issue. For example, the Democrats are railing about the "jobless recovery", among other things, but if you ask them what they would actually do about the problem, they either don't have an answer, or they decry our trade agreements, such as NAFTA.

If we were to pass the FairTax, it would have a MAJOR beneficial impact on these economic issues
(1) Budget deficit
(2) Trade deficit
(3) Jobs/Wages
We just need to educate more Americans so that they understand the connection.

Tom Delay, BTW, has been talking about doubling the size of the US economy over the next 15 years as a national goal. To do that, we have to average 4.8% GDP growth over that period. To do that, he says that we need more than tax cuts, we need Fundamental Tax Reform (FTR).

[EternalVigilance]

True. My other statements here have I think highlighted what you say as being the case.

It's a great issue, but like all issues it must be used with discretion.

[EternalVigilance]

Of course, Barr didn't have a clue.

Heh...

[EternalVigilance]

Buy a used car, avoid the tax. It's simple.

It would be possible to live in this country and legally avoid most tax if you really wanted to under the FairTax.

That's one of the beauties of it. We would be rewarding thrift instead of profligacy.

[lewislynn]

They never answered the key question! What RATE are they proposing?

They'll tell you 23% but it's "23% of the gross payment" including itself. It taxes everything (fee's, taxes, excises, etc.) imposed before it. Their 23% tax would increase prices by 30%

Don't believe me?

$100.00 + 8% state sales tax = $108.00

$108.00 + 23% federal (gross payment tax)= $140.40

$140.40 (gross payment) minus 23% = $108.00

The federal (23%) tax on your $100.00 item would be $32.00...pretty good trick huh.

[lewislynn]

Yet another organization onboard for a National Retail Sales Tax.

Any organization dependent on taxes would be for more taxes.

I missed the part where they said they could forego their taxpayer subsidies if the "fairtax" was enacted.

[Principled]

IIRC Barr also supported the other tax reform measures to the same extent... IMO negating his "support" for the Fair Tax.

Perhaps one could say Barr supported tax reform, but I don't think he could be called a supporter of the Fair Tax along the lines of a cosponsor. JMHO.

Regardless, I am waiting for AFFT or someone to come out with statistics with respect to HR 25 supporters vs non-supporters. I'd be interested in seeing what effect it has had.

[ancient_geezer]

They American Farm Bureau Fondation happens to be a private foundation Lewey, not a government program. The AFBF is a farmer's lobby.

A sales tax does not look at income or deductions, therefore no contribution deductions on which to hang non-profit corporation status and subsequent government interference & control.

However, I fully agree with you that subsidies such as those that go to agriculture ought to end.

That is not the function of a revenue bill however it is separate issue, and the NRST as a tax does not should it be everything to everyone. Once the blinders are off folk eyes as to the costs that subsidies induce, it is up to the electorate to push for the end of them.

It is sufficient that the NRST does away with the income & payroll tax system we have and in that, as a collateral effect, does away with such implicit subsidies and control as come from non-profit corporate etc status.

You want to kill more than that, it's up to you to push for it. All the NRST can do is make it a little easier for folks to get disgusted enough at the cost of government in each of their lives to join with you in the effort.

[Principled]

They'll tell you 23% but it's "23% of the gross payment" including itself.

Well, not quite. The way you say it is intended to convey that tax itself would be taxed. That's wrong and would be stupid.

The 23% is figured exactly the way the income tax is figured. So what's the real issue?

Someone who earns $100,000 and pays $35,000 in income tax is paying 35% income tax. The 35,000 in tax is included in the amount used to figure the rate. This is the same way the 23% retail sales tax is calculated.

If you pay 100 for something, 23 of that will be tax.

I may not agree with everything in the bill, but it is clear that the rate is 23% - figured just like income tax.

If you don't like the bill, find a real reason to reject it.

[ancient_geezer]

I am waiting for AFFT or someone to come out with statistics with respect to HR 25 supporters vs non-supporters. I'd be interested in seeing what effect it has had.

I've already ask AFFT just that question.

Unfortunately no-one there has collected a comprehensive list of Congress Critters and wanabes supporting the NRST. It should be something someone should look into for an election year.

That is why I have started a list and will be more than happy to add names to it as long as people pass them on to me & the State/district they are running in. Hyperlinks to news stories and campaign websites are nice too ;O)

[Principled]

The rate they propose is 23% tax inclusive.

THe rate is figured the same way income tax is figured... NOT the way you figure local sales tax.

The tax is not 23% of the price of the item, like local sales tax would be. THe tax is an amount equal to what 23% of the total you pay, including the tax, would be.

Many number-challenged (pc, eh) people find it easier to thing of the rate in the same way they think of local sales taxes. In this case, the rate would be just under 30%.

I use the 23% figure to compare to income tax rates.

THere is no question that we are over-taxed - you'll find no argument from me there. But in order for a new tax system to be proposed, it has to be "revenue neutral", which has a fancy definition and basically means the new system has to be able to pay for the same things the old system paid for for the first year

If we want to implement a system that would lead to lower taxation (IMO the Fair Tax), we'd have to clear the "revenue neutral" hurdle first.

[WhiteGuy]

NRST BUMP!!!!!!!!!!

[SierraWasp]

Well... I suppose that even if it went on for 2 or 3 years, the burden on business of being an unpaid taxcollector and the burden on individuals/self-employed's of the added screwing by their CPA for fees, or doing it themselves with software would be a good start.

Plus, you're right! The empitus for reduction, due to the realization, once witholding was gone would be fantastic!!! Reagan tried very hard to remove CA witholding, but had to give up. He knew the process being too automatic, would not disturb, or motivate anyone because they become numb and ignorant!!!

Tell me... Would the tax actually be on the seller, or the buyer? Would it tempt leftist to shift it to a Eurpoean VAT tax? They adore the old country's Socialism and reject the superior culture that used to be known as "American!" This sales tax would also eliminate much "Socialist Engineering" and "Government Penetration" into our everyday lives!!!

It's gonna be an up-hill battle as Reagan found out. Leftist will hate it and succeed in "dissing" it, as the general public fears and hates CHANGE!!! They act like the people coming out of slavery to the U.S.S.R. into the scary world of less oppression and freedom... sad!!!

Me thinks lewislynn would be one of these... for sure!!! (He drives a Volvo, ya know... grin!!!)

[Principled]

Under HR 25, business is paid to collect and remit the tax. They are paid 1/4 of 1% or $200 per month, whichever is greater (IIRC).

The retailer is liable for the tax on items sold. Individuals have no responsibility to keep receipts or anything draconian like we have now. THe retailer must remit 23% of gross receipts (which is just under 30% of receipts net of tax). Check out HR 25 FAQ and general nrst info here...click on SALES TAX in the black bar near the top of page.

You can read synopsis, FAQ, the bill itself. Enjoy.

[n-tres-ted]

Wonderful work you're doing, Oh Ancient One!! I saw the news alert of the great progress Linder achieved in speaking to so many Farm Bureau chapters around the country. This is very important to the FTA, and another indication our time is coming in 2005. First things first: we must re-elect our great president, GWB.

[farmfriend]

The left, and I'm not sure about the right either, will never go for a visible tax. Using a sales tax would cause people to quit buying, or buy less, in order to avoid taxes. I have seen ideas where only new products are taxed. I like that idea better.

If the people actually knew what they pay in taxes, the left would find a lot less support for their added, and existing for that matter, programs. I have met people that not only don't know how much they pay but don't realize that it is our taxes that pay for programs. Remember the study that showed over 50% of people believed government had it's own source of money. Only 30% new it was taxes that pay for programs. Very telling survey.

[Principled]

... Would it tempt leftist to shift it to a Eurpoean VAT tax? They adore the old country's Socialism and reject the superior culture that used to be known as "American!" This sales tax would also eliminate much "Socialist Engineering" and "Government Penetration" into our everyday lives!!!

Good question. HR 25 is designed specifically to end the practice of embedding tax costs in goods and services. To that end, the bill spcifically identifies the thing that prevents a VAT from forming... that any item will be taxed once and only once.

Business to business purchases are not taxed - similar to the way you see business exempt from state sales tax today. Hence when you buy bread (for example) it will not have the tax costs of the farmer, miller, baker, trucker, whilesaler, etc in it. It will only include the 23% (or 30%, however you think of it) tax at the counter - and the 23% will be on the receipt, identified as FEDERAL SALES TAX, so everyone will see and feel the burden of gov't reglarly.

A VAT has, as its primary component, the characteristic of adding tax costs at every stage of production. The nrst is the polar opposite of a VAT.

BTW the flat income tax is defined as a VAT (a "subtraction method" VAT to be precise.)

I see our current graduated income tax as a VAT also, as it has the obvious effect of adding tax along every stage of production.

So, hell, we already HAVE a VAT IMO.

Also, there is nothing currently that prevents us from having an income tax AND a sales tax. But if we passed HR 25, withholding would end, all laws relating to income tax would be repealed and erased, and the taxation of income would become illegal (and there is an amendment, HJR45 IIRC, that would actually make the taxation of income unconsitutional), and the IRS would be defunded over a 5 yr period - to catch those delinuent at changover.

So implementing the nrst actually protects us from having both taxes at once... and they'll get both if they can... just look at internet taxes...

[Principled]

I have seen ideas where only new products are taxed.

HR 25 taxes only "new" goods and services. In this context, "new" means "never been taxed before".

[ancient_geezer]

the burden on business of being an unpaid taxcollector and the burden on individuals/self-employed's of the added screwing by their CPA for fees, or doing it themselves with software would be a good start.

Unlike income, payroll and excise taxes today, HR25 explicitly requires the seller to collect the retail sales tax with receipt for it from the purchaser. It works the same as any state or local sales tax does now. Collected a point of sale, remitted by the seller who is liable for it's payment.

Any legitimate retail business is required to collect and remit the tax, and is paid to do so, just as the states that elect to administer the NRST are compensated as well. The legislation was designed specifically to avoid unpaid mandates from the national government.

Everyone should read the legislation and what its authors (a group of small businessmen in Houston) say about it before spouting off misinformation and guess of what you think it is.

H.R.25 the legislation submitted to Congress
SPONSOR: Rep Linder, John (introduced 01/7/2003)
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.

Organisation that originated it & and another advocating it: http://www.fairtax.org & http://www.salestax.org

 

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It's gonna be an up-hill battle as Reagan found out. Leftist will hate it and succeed in "dissing" it, as the general public fears and hates CHANGE!!! They act like the people coming out of slavery to the U.S.S.R. into the scary world of less oppression and freedom... sad!!!

True, and why it is necessary to make sure we pull a few more leftists out of the Senate & House and specifically elect persons that will support the change to a pure retail tax. Don't you think?

[Principled]

If the people actually knew what they pay in taxes, the left would find a lot less support for their added, and existing for that matter, programs.

So would the right. Heh heh heh. That's the idea.

[phil_will1]

"Using a sales tax would cause people to quit buying, or buy less, in order to avoid taxes."

Say you were going to buy a $25K new car before the FairTax. After the FairTax is enacted, that same car, after-tax is still app. $25K plus you keep your entire paycheck. Are you saying that you are less likely to buy the new car because now the portion that you are paying in taxes is visible? That seems illogical to me.

"I have seen ideas where only new products are taxed. I like that idea better."

That is exactly how the FairTax works. New goods and services purchased for consumption (business inputs are not taxed)are taxed.

[ancient_geezer]

Using a sales tax would cause people to quit buying, or buy less, in order to avoid taxes.

No more so than under the current tax, which assures you don't have the money to buy things in the first place.

In fact, with the projected fall in prices due to compitition, on repeal of the business side of of all income and payroll taxes and consequent reductions in compliance costs, Consumer prices will fall anywhere from 20-25% and even more overtime. Essentially that means the total (tax + shelfprice) will be about the same amount that you pay for products today. On top of that, you receive your full gross paycheck instead of a taxed takehome pay + a family consumption allowence each month to boot.

There will be more than enough to assure not only the same level of consumption but an expanding economy to boot. The most conservative estimates I have seen project at least a 15%

I have seen ideas where only new products are taxed. I like that idea better.

That is not just an idea, that is what is implemented in the Fair Tax legislation.

[ApesForEvolution]

Thanks for the post a_g.

[Principled]

I am waiting for AFFT or someone to come out with statistics with respect to HR 25 supporters vs non-supporters. I'd be interested in seeing what effect it has had.

I've already ask AFFT just that question.

Unfortunately no-one there has collected a comprehensive list of Congress Critters and wanabes supporting the NRST. It should be something someone should look into for an election year.

Why haven't they done so? I'm sure they have priorities - but this seems to be pretty high on the list - illustrating the popularity of the proposal with real data on reelections. This info could have the effect of bringing pols on board before they hear from the electorate. It could have the effect of having pols start educating voters on the proposal rather than voters educating pols.

IMO it would move things along a good bit faster if pols spoke about it to the people rather than visa versa. JMHO.

Next time you talk to them, ask them what's up with that!