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CALCULATE YOUR PERSONAL FAIR TAX RATE COMPARED TO YOUR 2004 INCOME TAX-FICA TAXES
FairTax web sites ^

Posted on 04/18/2005 9:30:29 AM PDT by witchypooy

IT'S YOUR PAYCHECK - KEEP IT ALL FAIRTAX CALCULATOR HR25/S25

Now that April 15 is past, it's time to tally up the tax score. Go to the FairTax calculator, http://www.pafairtax.org/calc.php and using 2004 figures, figure out (anonymously) what you would have spent in 2004 in taxes if we had the FairTax, the simple, honest, and progressive national retail sales tax, instead of our current complex income tax/FICA tax system.

TOTAL INCOME TAX + TOTAL FICA = TOTAL FAIRTAX : For your household, please remember to make an honest and accurate comparison. FairTax will fund social security and medicare with 1/3 of all sales taxes collected, thus eliminating FICA withholding from your pay also. Therefore, to be an honest comparison, you MUST take your total 2004 income tax paid PLUS your total FICA withholding for the year for social security and medicare, and add them together. This becomes the accurate figure for current income/fica you would compare to the projected FairTax shown on the calculator. You can get the total FICA withheld for the year off your last pay stub, or just figure 7.65% of your yearly gross wages. If you are self-employed you will figure 15.3% for FICA.

We are only dealing with the 7.65% FICA you pay yourself here. Remember, your employer also pays 7.65% for you under today's system. In Business bookkeeping terms, this is actually YOUR money that your employer must spend for your benefit, and really should also be added to your overall Income Tax/FICA costs today. Under FairTax your employer will NOT be paying FICA on your behalf. This business expense is eliminated. This FairTax advantage means more money for businesses to use to either lower prices, or raise wages.

The rebate of taxes paid up to the poverty level of spending for your household, that will be provided to ALL Americans under FairTax, is calculated and shown in the FairTax calculator formula. The HHS poverty lever table is also there, for all situations. This rebate essentially gives every American tax free spending on the necessities of life.

noirs@pafairtax.org


TOPICS: Business/Economy; Constitution/Conservatism; Government; News/Current Events
KEYWORDS: april15; cnim; fairtax; fica; hr25; incometax; nrst; socialsecurity; taxcodereform; taxes; taxreform
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1 posted on 04/18/2005 9:30:36 AM PDT by witchypooy
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To: witchypooy

"Activism/Chapters - Activism, protests, news and business of Free Republic Chapters. Freep this poll should be placed in vanity. General news stories about activism should be place in news. After action reports from Freeps are allowed here."


2 posted on 04/18/2005 9:35:19 AM PDT by TomServo ("Speak to me, fudge wall")
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To: witchypooy

A "progressive national retail sales tax"?

How could it be progressive? Rich people will pay more for goods than poor people? How would that be set up?


3 posted on 04/18/2005 10:02:13 AM PDT by johnmilken
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To: witchypooy
They should have asked how much per month you are paying into Social Security. Then shows how much tax. The trouble it that most folks ignore Social Security and will see the high figure.

Better for them to compare to the existing tax system sans social security.

4 posted on 04/18/2005 10:04:02 AM PDT by sr4402
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To: witchypooy
I reply to this before. I don't need to take your stupid fairtax table. You obviously forgot the millions of retired people who will not get the break of no form of withholding. Therefore, once quoted, that a 23% increase in a fair tax system would not help the "out of work" and the retired. I'm so tired of this crap I could scream.
5 posted on 04/18/2005 10:05:48 AM PDT by Logical me (Oh, well!!!)
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To: witchypooy

Interesting . . .


6 posted on 04/18/2005 10:08:32 AM PDT by cvq3842
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To: Logical me
And you idiots keep forgetting the subsistance level check you'd be getting to compensate.

I'm tired of paying for your f*cking Viagra. You want it? Go pay for it your damn self.

7 posted on 04/18/2005 10:11:11 AM PDT by Dead Corpse (Sooner or later, you have to stand your ground. Whether anyone else does or not. - Michael Badnarik)
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To: witchypooy
I'm still steamed. Where do we get these brain dead politicians. Contact all your Senators and explain that the retired and quite often "out of work" will be hurt. Also forgot to mention that hundreds of thousands of workers opp ed out of SS and built their own retirement. I could go on but I think that is enough to start a momentum to kill this stupid approach to correcting the income tax. Any better thinkers out there? We need you badly.
8 posted on 04/18/2005 10:14:31 AM PDT by Logical me (Oh, well!!!)
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To: Dead Corpse
"And you idiots keep forgetting the subsistance level check you'd be getting to compensate." And when do we get this. After we are totally broke and starving, then we get this compensation. What a joke. As to your Viagra remark, that is another stupid thing the Medicare passed. Not this problem. Get a life.
9 posted on 04/18/2005 10:19:04 AM PDT by Logical me (Oh, well!!!)
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To: Terabitten

ping for later


10 posted on 04/18/2005 10:22:24 AM PDT by Terabitten (I have a duty as an AMERICAN, not a Republican. We can never put Party above Nation.)
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To: Logical me
Actually, if you'd EDUCATE your self on exactly what the Fair Tax plan is, you'd know you'd get the check monthly.

And yes, out of control spending on the part of Congress is exactly how we ended up with the AARP's Medicaid/Medicare package.

Get a clue.

11 posted on 04/18/2005 10:27:51 AM PDT by Dead Corpse (Sooner or later, you have to stand your ground. Whether anyone else does or not. - Michael Badnarik)
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To: Logical me

.....I'm so tired of this crap I could scream....

I suggest you take some of the time you retired and out of work types have on your hands and take a closer look at it before passing judgement...It seems to me you are looking at it from only one small aspect and not the whole effect it will have including our ability to continue paying SS that was underfunded and also take the brakes off our economy from the mountain of compliance costs and imbedded taxes in our products and srvices. It does a lot more than end withholding..it puts the tax rate right out there for everyone to see what they are paying for govt. It might stop Congress from bankrupting the US....imagine if there is not enough money to fund you Social Security without the NRST then how would you feel? I'm sick and tired of the underground economy and illegals getting a free ride, and I think this NRST will go a long way to getting them to pay part of their way. It broadens the tax base allowing each of us to pay less. Please take a look at the links I previously posted to you and respond with your comments, not screams......

http://www.fairtaxvolunteer.org/smart/faq-main.html


12 posted on 04/18/2005 11:05:17 AM PDT by rolling_stone
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To: Darth Reagan

ping


13 posted on 04/18/2005 11:11:33 AM PDT by marblehead17 (I love it when a plan comes together.)
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To: Logical me
Perhaps you should scream! 'Cause you sure as hell ain't thinkin'. I am so sick of you greedy geezers I could blow chunks! Go play golf-as long as you don't drive to the course. Go gamble-as so many of you do. Times are tough for the elderly? Ya, and Michael Moore looks good in pink!!

My heart pumps peanut-butter for all you old farts. Try reading the actual bill submitted by Linder...

14 posted on 04/18/2005 11:21:31 AM PDT by donozark (ATTENTION MICHAEL MOORE:Please go to the courtesy desk. The forklift you requested is ready!)
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To: johnmilken
How could it be progressive? Rich people will pay more for goods than poor people?

Have you considered the fact that "Rich People" spend more money and will therefore pay more taxes than "Poor People?"

15 posted on 04/18/2005 11:23:07 AM PDT by Ditto ( No trees were killed in sending this message, but billions of electrons were inconvenienced.)
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To: witchypooy; Taxman; Principled; EternalVigilance; rwrcpa1; phil_will1; kevkrom; n-tres-ted; Zon; ...
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(HR25) & Saxby Chambliss Senate(S25), offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright, and provide a IRS free replacement in the form of a retail sales tax:

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:


16 posted on 04/18/2005 11:26:21 AM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: witchypooy; Petronski

Now go back and cacluate what you'll pay when we have both an NRST and an Income Tax.


17 posted on 04/18/2005 11:26:57 AM PDT by Wolfie
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To: Wolfie
Now go back and cacluate what you'll pay when we have both an NRST and an Income Tax.

In effect, that's what we have now. Personal income and payroll taxes reduce your earnings, and business income and payroll taxes inflate prices.

18 posted on 04/18/2005 11:30:44 AM PDT by Principled
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To: johnmilken

How could it be progressive?

By rebating the amount of NRST on the HHS povertylevel of expenditures for households.

19 posted on 04/18/2005 11:32:03 AM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: Logical me
I reply to this before. I don't need to take your stupid fairtax table. You obviously forgot the millions of retired people who will not get the break of no form of withholding. Therefore, once quoted, that a 23% increase in a fair tax system would not help the "out of work" and the retired. I'm so tired of this crap I could scream.

That's the GAG! You're paying it already! Business/Corporate income tax costs are passed on to their customers.

20 posted on 04/18/2005 11:35:21 AM PDT by xrp (Executing assigned posting duties flawlessly -- ZERO mistakes)
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To: ancient_geezer

I would like to see some language to protect retailers from the costs of collecting the taxes. Since so many sales are electronic these days, I really don't feel highly inclined to pay the fees on the portions that are going to the government.. My state already sticks me with that, and I'm sick of it.


21 posted on 04/18/2005 11:53:16 AM PDT by kingu (What is union scale wage for staging a protest anyway?)
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To: Logical me
And when do we get this. After we are totally broke and starving, then we get this compensation.

Starting the very first day the law goes into effect, no qualification except a valid SSN and being 18 years or older.

And if you don't want it, don't register.

22 posted on 04/18/2005 12:23:29 PM PDT by dread78645 (Sarcasm tags are for wusses.)
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To: witchypooy

23 posted on 04/18/2005 12:33:46 PM PDT by Rakkasan1 (The MRS wanted to go to an expensive place to eat so I took her to the gas station.)
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To: kingu

I would like to see some language to protect retailers from the costs of collecting the taxes.

 

H.R.25

Fair Tax Act of 2005 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.25:


 

`SEC. 204. ADMINISTRATION CREDIT.

`(a) In General- Every person filing a timely monthly report (with regard to extensions) in compliance with section 501 shall be entitled to a taxpayer administrative credit equal to the greater of--

`(1) $200, or

`(2) one-quarter of 1 percent of the tax remitted.

`(b) Limitation- The credit allowed under this section shall not exceed 20 percent of the tax due to be remitted prior to the application of any credit or credits permitted by section 201.


24 posted on 04/18/2005 12:56:38 PM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: ancient_geezer; kingu

That wouldn't even cover the extra cost for processing credit card transactions. Not even close. The retailer is paying ~2% to process the transaction and you are giving them 0.25%. Nice.


25 posted on 04/18/2005 1:01:41 PM PDT by Your Nightmare
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To: Your Nightmare; kingu
Businesses receive nothing for compliance today. Under Hr25

`(a) In General- Every person filing a timely monthly report (with regard to extensions) in compliance with section 501 shall be entitled to a taxpayer administrative credit equal to the greater of--

`(1) $200, or

`(2) one-quarter of 1 percent of the tax remitted.

`(b) Limitation- The credit allowed under this section shall not exceed 20 percent of the tax due to be remitted prior to the application of any credit or credits permitted by section 201.

a small business that $200 limit to 20% of the tax remittence due, is a greater than the claimed tax compliance cost you suggest that business is paying today of ~2%.

26 posted on 04/18/2005 1:14:36 PM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: ancient_geezer
a small business that $200 limit to 20% of the tax remittence due, is a greater than the claimed tax compliance cost you suggest that business is paying today of ~2%.
It would have to be a real small business. For $200 to be 20% of tax due the business's net sales would only be $3000 a month. That's not most businesses. Most retail businesses are going to get hit hard with compliance costs. And these are out-of-pocket costs, not some made-up costs.
27 posted on 04/18/2005 1:24:09 PM PDT by Your Nightmare
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To: Logical me
You obviously forgot the millions of retired people who will not get the break of no form of withholding

This tells me you haven't even checked into it. The rebate you get pays for your sales tax on necessities. You will be paying less for those necessities. Read before you scream.

28 posted on 04/18/2005 1:31:17 PM PDT by smokeyb
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To: Your Nightmare
Most retail businesses are going to get hit hard with compliance costs. Today $725 for each 100 dollars of income tax remitted is the Tax Foundation figure generally quoted for small businesses, IIRC. The NRST covers a tax remitted on retail sales revenues rather than the taxable income portion on which business income tax is remitted to the feds as well as state tax agencies. The compliance cost of the NRST amounts to filling out a form that is already filled out for state sales taxes in remitting the federal NRST right along with those state sales taxes. Seeing as no tax credit is provided under current law, and the Fair Tax provides such credit the difference is appropriate to the incremental reporting diffence of business accounting that already occurs in the course of a properly run business.
29 posted on 04/18/2005 1:39:16 PM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: ancient_geezer
Today $725 for each 100 dollars of income tax remitted is the Tax Foundation figure generally quoted for small businesses, IIRC.
Yeah, well that number is crap. Anybody can come up with any number they want.


The compliance cost of the NRST amounts to filling out a form that is already filled out for state sales taxes in remitting the federal NRST right along with those state sales taxes.
Actually, it amounts to filling out a form for every state you ship to. Currently, ship to 30 states, fill out one form (if you have offices in one state). With the FairTax, ship to 30 states, fill out 30 forms a month!


Seeing as no tax credit is provided under current law, and the Fair Tax provides such credit the difference is appropriate to the incremental reporting diffence of business accounting that already occurs in the course of a properly run business.
As I said, it doesn't even cover the increase in credit card processing.
30 posted on 04/18/2005 2:02:16 PM PDT by Your Nightmare
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To: smokeyb
This tells me you haven't even checked into it. The rebate you get pays for your sales tax on necessities. You will be paying less for those necessities.

What are my necessities and what do they cost me know?

31 posted on 04/18/2005 2:09:33 PM PDT by lewislynn (My other car is an XC90 T6 AWD....)
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To: dread78645
Starting the very first day the law goes into effect, no qualification except a valid SSN and being 18 years or older.

There hasn't been any tax remitted on the very first day. Where does the money come from?

If I'm 18 and live with my parents do I get a rebate "the very first day"?

32 posted on 04/18/2005 2:14:49 PM PDT by lewislynn (My other car is an XC90 T6 AWD....)
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To: Logical me
Pensions, dividends, interest, social security payments are all being taxed now. 401's, 403's, IRA's are taxed when you take the money out. Spending usually goes down when you are no longer working. Provided a "subsistence" level is credited, I think we will all be saving money with this approach. Any income you save will not be taxed until you spend it.
33 posted on 04/18/2005 2:22:12 PM PDT by Abby4116
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To: ancient_geezer
Hmm.. An additional tax of $800 for my business when I take into account the difference from credit card fees vs the $200 they offer in rebate. About .8% of the gross sales total.. I want this to work, and I want to keep my business at the same time. I hope the folks start concentrating on that.
34 posted on 04/18/2005 2:22:45 PM PDT by kingu (What is union scale wage for staging a protest anyway?)
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To: xrp
You're paying it already! Business/Corporate income tax costs are passed on to their customers.

So there are never any sales or reduced prices where you live?

35 posted on 04/18/2005 2:33:32 PM PDT by lewislynn (My other car is an XC90 T6 AWD....)
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To: lewislynn
There hasn't been any tax remitted on the very first day. Where does the money come from?

Receipts of the income tax withholding from the prior month.

If I'm 18 and live with my parents do I get a rebate "the very first day"?

If you share a common residence and your parents register for the FCA and include your SSN, then no; alternatively they can designate all family members 18 and older and the rebate will be divided evenly between those listed.

And if your parents don't want to register then you can for yourself. --but, then you already knew that.
Lewis, your continual whizzing on the carpet is a cry for help. Seek it.

36 posted on 04/18/2005 3:30:15 PM PDT by dread78645 (Sarcasm tags are for wusses.)
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To: Logical me
You obviously forgot the millions of retired people who will not get the break of no form of withholding.

So, if I'm hearing you right, because people were abused in the past, others must continue to be abused in the future, to make it "fair"?

The estimates I've seen seem to show that prices will remain relatively stable due to the fact that business taxes (passed along to the consumer) will be gone.

I'm close to retirement age, but I could live with the NRST and no income or SS taxes.

37 posted on 04/18/2005 3:46:57 PM PDT by JimRed ("Hey, hey, Teddy K., how many girls did you drown today?")
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To: Logical me
You obviously forgot the millions of retired people who will not get the break of no form of withholding.

So, if I'm hearing you right, because people were abused in the past, others must continue to be abused in the future, to make it "fair"?

The estimates I've seen seem to show that prices will remain relatively stable due to the fact that business taxes (passed along to the consumer) will be gone.

I'm close to retirement age, but I could live with the NRST and no income or SS taxes.

38 posted on 04/18/2005 3:47:44 PM PDT by JimRed ("Hey, hey, Teddy K., how many girls did you drown today?")
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To: JimRed

Sorry- thought it didn't go through!


39 posted on 04/18/2005 3:48:41 PM PDT by JimRed ("Hey, hey, Teddy K., how many girls did you drown today?")
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To: dread78645
Where does the money come from?
Receipts of the income tax withholding from the prior month.

Is that a guess or are you privy to information no one else has?

I wasn't aware money from withholding was just extra money laying around waiting to be sent to every houshold in the nation.

alternatively they can designate all family members 18 and older and the rebate will be divided evenly between those listed.

So if you're 18, with a job, living at home you wouldn't get your income tax refund if you had one coming to you?...Your dad could give you half of the "family consumption allowance" rebate instead?

but, then you already knew that. Lewis, your continual whizzing on the carpet is a cry for help. Seek it.

Whizzing on the carpet? or YOUR carpet?

Sorry to ruin your little half truth. Do you have a problem disclosing the facts?...Are you afraid of disclosing the truth?...

40 posted on 04/18/2005 4:07:07 PM PDT by lewislynn (My other car is an XC90 T6 AWD....)
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To: lewislynn
What are my necessities and what do they cost me know?

I don't KNOW, it depends, are you in an institution, on welfare, or self supporting?

41 posted on 04/18/2005 4:28:25 PM PDT by rolling_stone
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To: ancient_geezer
The NRST, unfair tax idea is a loser from the start!! I'm for a flat tax, period! Forbes had it right and the Pubbies and RATs seem to ignore his great ideas re flat taxes. Russia now has a flat tax and their gummint is raking in the money. If everyone paid a flat tax of 17% on all income from whatever source, with rebates for those under the $25K low income limit, tax income for the Feds would increase and we would be better off than we are now by far. Better yet, the hated IRS would be eliminated.

A NRST would create yet another big gummint agency to keep track of the millions of retailers out there that would have to collect the tax and make sure they submit them to the feds--a practically impossible task full of potential mischief and big-time fraud. We want smaller gummint, not larger!

42 posted on 04/18/2005 4:49:25 PM PDT by Paulus Invictus (The Flat tax is the answer!)
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To: rolling_stone
I don't KNOW, it depends, are you in an institution, on welfare, or self supporting?

Do any of those make me more, or less qualified, for the rebate on my "necessities"?

43 posted on 04/18/2005 4:50:21 PM PDT by lewislynn (My other car is an XC90 T6 AWD....)
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To: witchypooy

Forget the income tax rate only. What will be the comparison of sales tax rates? Will the cost of living, tax included, go up or down?


44 posted on 04/18/2005 4:55:15 PM PDT by ex-snook (Exporting jobs and the money to buy America is lose-lose..)
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To: Paulus Invictus

A NRST would create yet another big gummint agency to keep track of the millions of retailers out there that would have to collect the tax and make sure they submit them to the feds

Hardly, seeing as that agency already exists, and we will be abolishing the federal presense in the tax game as far are business is concerned. Dropping from federal and state agencies in everyones business to just your state tax authority administrating taxes in retail business is a big step forward in my eyes.

 

House Ways & Means archives 106th Congress:

Statement of Billy Hamilton, Deputy Comptroller,
Office of the Texas Comptroller of Public Accounts,
on behalf of Honorable Carole Keeton Rylander,
Texas State Comptroller of Public Accounts

Testimony Before the House Committee on Ways and Means

Hearing on Fundamental Tax Reform

April 11, 2000

My name is Billy Hamilton, and I am the Deputy Comptroller for the State of Texas. Carole Keeton Rylander, the Texas Comptroller of Public Accounts, was delighted to receive an invitation to testify before this committee regarding the Fundamental Tax Reform measures under consideration today. Unfortunately, Comptroller Rylander's schedule did not permit her attendance, and she has asked me to testify here on her behalf.

My comments today are directed only to the feasibility of state administration of the Fair Tax proposed by H.R. 2525. I do not intend to comment on the economics or any other aspects of the proposal.

The Texas Comptroller's office has administered a sales and use tax since the 1960's, and I have been involved with administration of the tax since 1982. Last year, the Texas Comptroller collected $13 billion in sales tax revenue from more than 600,000 businesses. I offer my own experience with sales tax administration, as well as the size of Texas' sales tax program, as the basis of my qualification to speak to you about the administerability of H.R. 2525.

As you know, H.R. 2525 would permit states to collect and administer the Fair Tax on behalf of the federal government. In my opinion, Texas would be well-equipped to administer the Fair Tax based on our experience in administering our own sales tax. Even though the base, rate and other characteristics of the Fair Tax are significantly different from the Texas sales tax, it would be feasible for our office to collect the Fair Tax by expanding and enhancing the systems we currently have in place. For example, we would:

· Expand our current system for registering Texas retailers to include registration of sellers under the Fair Tax (615,000 businesses are currently registered as sellers in Texas; under the Fair Tax, 1.5 million Texas businesses would have to be registered);

· Expand our taxpayer assistance efforts to respond to a larger volume of telephone, letter and e-mail inquiries from sellers who collect the Fair Tax and individuals who pay it;

· Expand our Revenue Processing Division to process more returns and tax payments on a more frequent basis and to remit tax collections to the federal government on an almost-daily basis;

· Expand our current audit team and train all auditors to examine businesses for both the Fair Tax and the Texas sales tax; and

· Expand our information technology systems to collect and maintain the computerized records critical to effective administration of a consumption tax like the Fair Tax.

The expansion of our systems to administer the Fair Tax, in the manner I've just described, would be sizable. Under the Fair Tax, we would serve approximately 900,000 more filers than we do currently. We estimate that serving that many additional taxpayers would require 1,100 to 1,600 more full-time employees. The Texas Comptroller currently employs about 2,700 people on a full-time basis.

In spite of this large expansion, the compensation for collecting the Fair Tax that would be provided to states under H.R. 2525 would likely cover our projected costs. As a first approximation, we estimate that the cost to the Texas Comptroller's office for collecting the Fair Tax at full implementation would be $100 to $150 million per year. I emphasize, however, that there would be significant costs to begin collection, including the cost of facilities to house the additional processing facilities, the capital costs of information technology and revenue processing equipment, and the costs of notifying, registering and educating taxpayers on the new tax.

In closing, I believe that if the Fair Tax is to become a reality, the U.S. government would be well-served to make use of the existing expertise of the states. Many states have administered consumption taxes since the 1930s and have developed particular capabilities in this area. We also have extensive experience in dealing with the affected businesses. As long as the administrative fee paid to the state is adequate in relation to the costs of collection, I see no reason that the State of Texas could not effectively administer the Fair Tax.


45 posted on 04/18/2005 6:08:10 PM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: ex-snook

Will the cost of living, tax included, go up or down?

Cost of living goes down, from increased productivity and lower overhead costs on business from the repeal of federal income/payroll taxes.

 

The Economic and Civil Liberties Case for a National Sales Tax, May 11 '95
Stephen Moore
Director
Fiscal Policy Studies
Cato Institute

Economic Impact of a National Sales Tax

In 1993 the Cato Institute commissioned a study by economist Lawrence Kotlikoff of Boston University to examine the economic impact of replacing federal income taxes with a national sales tax.(20) The sales would apply to all consumption purchases-- including services. Only real estate and securities would be exempted. The purpose of the Kotlikoff study was to determine a) What would be the impact of the sales tax on economic variables such as savings, wages, and output? and b) What is the necessary sales tax rate to completely replace on a revenue neutral basis the federal personal income, corporate income, and estate tax?

Kotlikoff discovered that to completely replace federal income taxes would require an

The reason the rate can be lowered is that the study finds a very positive economic feedback from the tax change. Specifically, the Kotlikoff study finds that after ten years, a national sales tax would:

1) More than double the national savings rate.
2) Increase the capital stock by 8 percent above the level attained under the current tax system.
3) Raise income and output by 6 percent more than would be achieved under the current tax system. That would increase national output by almost $400 billion per year.
4) Lift the real wage rate by 3 percent.
5) Reduce interest rates by 8 percent.

Kotlikoff concludes the study by issuing the following endorsement for a sales tax: "A shift to a national sales tax has the potential for dramatically improving incentives to save. The distortion to save is so great under our current system of income taxation, that it appears we could switch to consumption taxation...and end up with much higher rates of saving and capital accumulation and a higher level of per capita income."

That's not counting the fact that a National Retail Sales Tax would remove the IRS as a factor in the daily lives of americans. It would assure the proportional participation of all voters in the tax burden so Congress Critters would have a much more difficult time in playing rich vs. poor games by hiding taxes behind inflation as it does today.

46 posted on 04/18/2005 6:13:54 PM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: donozark

ROTFLMAO! One of the funniest posts of the year!


47 posted on 04/18/2005 6:22:14 PM PDT by NewLand (Faith in The Lord trumps all!)
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To: lewislynn
What are my necessities and what do they cost me know?

What do you spend your standard deduction on now and what do they cost you?

48 posted on 04/18/2005 7:04:22 PM PDT by smokeyb
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To: ancient_geezer
initial sales tax rate of 17.4 percent.
That's replacing the income tax alone with no demogrant. Kotlikoff stated in 2000 that the FairTax rate would have to be 30% inclusive.


Lift the real wage rate by 3 percent
Real wages in Kotlikoff's paper only increase to 3 percent after 10 years. Initially they drop, which, BTW, means PRICES DON'T DROP WITHOUT WAGES DROPPING!!!


Reduce interest rates by 8 percent.
In Kotlikoff's paper, interest rates only drop this amount after 10 years. Initially they rise.
49 posted on 04/18/2005 7:21:22 PM PDT by Your Nightmare
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To: smokeyb
What do you spend your standard deduction on now and what do they cost you?
I thought you already knew. I asked you first.

What is the per child fairtax tax credit?

Even if I did take the standard deduction it would have been $9,700. What would my "poverty level" rebate for my necessities be?

50 posted on 04/18/2005 8:03:51 PM PDT by lewislynn (My other car is an XC90 T6 AWD....)
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