Walter Williams: NRST a Joke!

25 Jun 2004

[Zon]

In any case, fixing a symptom rather than the disease is not a "solution".

It is the best route to exposing the cancer for all to see. Then the cure is via natural outrage demanding reduced government spending. What is your solution to get the mass of people outraged to demand reduced government spending? What are you doing?

[Your Nightmare]

And these non-profits would still be able to purchase supplies and other items without paying taxes on the purchase. The NRST would apply to RETAIL SALES to the CONSUMER.

Non-profits pay the tax. Only businesses are exempt. Even the local, state, and federal governments pay the tax. (Yup, the feds tax themselves even though they get the money. The funny thing is - they are counting the money they give themselves as revenue! Only in Washington ... or Enron.)

[k2blader]

What does the UN have to do with a possible NRST?

[SoDak]

I can't speak for the plan of which you're speaking, but I support a value-added tax as a funding mechanism for federal government. No rebates, no nothing.

[Phantom Lord]

A VAT is about the worst tax scheme that could be implemented. A major reason for Europes poor economic performace is the VAT.

[RipSawyer]

In theory all kinds of benefits would come from replacing the income tax with a sales tax but how long would it be before the politicians started looking for a way to kill the goose?

One thing that occurred to me is that it would encourage money making efforts and discourage spending because money would be taxed only when it is spent, if you build your own workshop you pay taxes only on the materials as opposed to having it built and paying taxes on the entire price. This might not have as big an effect as I imagine but it is something to consider. If most people react as I would it might make the gross national product look smaller which would give the demagogues something to demagogue.

I am not sure exactly how the effects of this would play out but I believe that one reason that income taxes were much lower a few generations back is that people were far more likely then to grow their own food, build their own house etc., it is not easy to tax someone on their imputed earnings, even though it has been attempted. Any change which encouraged people to be more self reliant would, in my opinion, reduce the power of government to tax.

If nothing else, we might at least see a horde of IRS vampires put out of work, that is one increase in unemployment that would certainly gladden my heart!

[SoDak]

I don't remember saying anything about supporting UN taxes. I support dropping out of the UN.

[SoDak]

I guess I mean a consumption tax. Although the many different terms have me now questioning what the h*ll I'm even thinking of.

[Phantom Lord]

A VAT taxes raw supplies from the moment they are taken from the ground through every step of production onto the final product. So as a quick example, a company cuts down a tree, it now has an added value from when it was a tree and that added value is taxed. The company then turns it into raw lumber. That added value is taxed. The raw lumber is turned into finished lumber and the added value is taxed. And on and on and on through every step of production.

[SoDak]

The consumption tax is what I support. I can only speak to where our state government is right now with a consumption tax. Our state government is the leanest in the country, taxest are lowest in the country, and the main reason for that is the fact that we run state government on sales tax alone. There are very, very few exemptions from sales tax in SD, so everyone pays. Raising taxes even a penny on a dollar is political suicide. Dems in this state have been trying to get an income tax for 50 years, but voters keep defeating it. Dems know that it's near impossible to frivolously raise taxes when every single wallet will feel the hit. Dems HATE sales tax.

[n-tres-ted]

On the point that the GDP might look smaller...

Actually the economic studies underpinning the Fair Tax Act show growth of GDP would increase very significantly. With that growth and the broader tax base (all consumers except those at or below the poverty line), we would have a sound approach to financing social security and medicare.

[meadsjn]

Williams is correct that spending needs to be cut drastically.

As far as the method of taxation, he is being extremely hypocritical, since he could probably retire and live tax-free off the savings he has accumulated as a tenured tax-paid government employee.

You can bet that retirees will be the most outspoken opponents of the NRST. They didn't mind building up big government and running up the national debt for the youngsters to pay off, but they don't want to pay any part of the taxes to fund it.

[k2blader]

You can bet that retirees will be the most outspoken opponents of the NRST. They didn't mind building up big government and running up the national debt for the youngsters to pay off, but they don't want to pay any part of the taxes to fund it.

Rings true.

Retirement has become an entitlement. I think any retired person who isn't living only on his own savings (and SS does *not* count as one's own savings--SS is money forcibly taken from working taxpayers) shouldn't be retired in the first place.

[Zon]

That is powerful...

I can only speak to where our state government is right now with a consumption tax. Our state government is the leanest in the country, taxest are lowest in the country, and the main reason for that is the fact that we run state government on sales tax alone. There are very, very few exemptions from sales tax in SD, so everyone pays. Raising taxes even a penny on a dollar is political suicide. Dems in this state have been trying to get an income tax for 50 years, but voters keep defeating it.

[balrog666]

Ping!

[DustyMoment]

In my case, you're preachin' to the choir!

[ancient_geezer]

At a rate of 30-50%??? You're d@mn right I do.

Then you'll be glad you won't be paying 30-50% isn't it.

All legal residents will receive a FCA equivalent to the FairTax paid on essential goods and services. The FCA will be paid in advance, in equal installments each month. 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.

Every year, the Department of Health and Human Services [HHS] determine the "poverty level" for each family size.

The 2001 "FairTax" Family Consumption Allowance Figures
Family Size	HHS Poverty Level	Annual FCA	Monthly FCA
One	$8,590	$1,976	$165
Two	$17,180	$3,951	$329
Three	$20,200	$4,646	$387
Four	$23,220	$5,341	$445
Five	$26,240	$6,035	$503
Six	$29,260	$6,730	$561
Seven	$32,280	$7,424	$619
Eight	$35,300	$8,119	$677

1) Federal Register: February 16, 2001, Pages 10695-10697).

[ The monthly FCA for each adult is .23 * (HSS poverty level for a single person)/12 to assure no marriage penalty due to the manner in which the poverty level is dependant on family size. The monthly FCA for each child is .23 * (the incremental increase of HSS poverty level for a family with one child over no child) ] A. Geezer

A family of four, for example, could spend $23,220 per year free of tax because they will have received over the course of the year rebates totaling $5,341. $5,341 is the amount of sales tax paid on $23,220 in expenditures. A family spending double the "poverty level" or $46,440 per year will effectively pay tax on only half of their spending and, therefore, have an effective tax rate of 11 ½ percent or half the FairTax rate.

The beauty of the FairTax is that you can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, you can get your effective tax rate below 9%.

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

H.R.25 "The FairTax Act

[ancient_geezer]

As far as the method of taxation, he is being extremely hypocritical, since he could probably retire and live tax-free off the savings he has accumulated as a tenured tax-paid government employee.

You can bet that retirees will be the most outspoken opponents of the NRST.

And 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?"

Point is, to remove perception of the tax burdens of the individual, is to remove the goad which assures accountability of government to the electorate. Federal tax rates are high and government grows ever larger because a majority of the electorate do not perceive proportionately the burden their demand for largesse imposes on the minority of citizens.

Liberty and freedom have a price, responsibility. If the perception of that price is avoided there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.

[Tailback]

That's not exactly what he said. He said that there are forms of taxation that are better than others but that the real problem is spending. I didn't hear him say a single thing about which tax was better.

[PoorMuttly]

Walter Williams for president.

I've said it before, and think it bears repeating.