Posted on 04/20/2005 1:25:07 PM PDT by CHARLITE
I know you're tempted not to read this article.
I know this because there is nothing (except maybe an all-night marathon of Al Gore documentaries) more mind-numbingly boring than reading an article about taxes.
Since my column on taxes is not competing as an alternative to "The Internet, Al Gore, & You," I must instead resort to begging each of you to indulge me for a brief moment of your time.
I always thought that only grumpy old men cared about taxes. I vividly remember many days during my childhood, watching my Dad—normally as cool as a cucumber—emerge red-faced from his office, grumbling under his breath about what the IRS could do with his Standardized Form 1040.
Like most members of Generation X, my only concern was how to go about obtaining my next pair of Air Jordan's, so I always chalked dear old Dad's anger up to being crotchety and old.
Then I graduated from college, got my first real job, and was rudely given a preview to what my first prostate exam will feel like twenty-five years from now, courtesy of the IRS.
Now each April I find myself resisting the urge to sit on the front porch and complain about taxes (in between yelling at the neighbors to "keep their dadgum dogs off my lawn and telling their kids to turn the music down.")
Tax time always leaves me feeling kind of violated, like I've just finished an annual one—night stand with the government, where they take my money, give me nothing in return, and then I wake up in the morning not respecting myself.
But this year, Georgia Congressman John Linder wants to change that.
Congressman Linder has introduced H.R 25, nicknamed "The Fair Tax Proposal," which would "repeal all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes, and gift taxes - and replace it with a revenue-neutral personal consumption tax," according to his website.
It was initially called the "Snowball's Chance In Hell Act," but lawmakers felt that might be considered a little too negative.
In a nutshell, this bill would replace the current tax system with a 23% national sales tax, which would give taxpayers more control over how much they paid in taxes. If you spend more, you pay more.
According to Americans For Fair Taxation (http://fairtax.org), included in the bill is a rebate payment that would go to every American household to replace the sales tax paid on necessities. Those in poverty, the bill's proponents say, would effectively not pay any tax under the new system. They also estimate that prices for goods would fall some 20-30% because the cost of producing goods would no longer be taxed.
Under the bill, a person making a gross annual salary of $40,000 a year would bring home—get this—$40,000 a year. Linder's bill would also eliminate the Legalized Crime Division of the federal government (you might know them as the Internal Revenue Service).
Linder has dubbed the bill "The Fair Tax Proposal."
I, on the other hand, would join millions of crotchety old men everywhere in dubbing it "The Greatest Piece of Legislation Ever."
People from every political persuasion would win with the Fair Tax.
Conservatives and libertarians should be ecstatic because the Fair Tax would pry their money from the cold, dead hands of the federal government.
Conservatives could use the spare change to buy more military—style assault weapons. And libertarians, think about how much medical marijuana you could buy with all that extra loot!
If liberals were capable of happiness, they too could rejoice because the "rich" in this country would finally be forced to pay "their fair share." Just think about how much the executives at Halliburton would end up paying in taxes as they consume and plunder the Earth's resources!
Unfortunately, liberal happiness would be short-lived, once it was explained to them that abortions are not considered necessities and therefore, not immune from taxation.
Honestly, I'd like to believe passing the Fair Tax is possible.
I'd even go on the road with Congressman Linder to lobby for the Fair Tax Proposal—that is, if I could keep from laughing at the impossibility of it all.
(I laugh to keep from crying.)
Of course, I also still believe in the Tooth Fairy, Santa Claus, and private retirement accounts for Social Security.
But while we're being delusional, I've given some thought as to what lengths I would go to get this bill passed in Congress, only to realize there’s not much I wouldn't do.
In the spirit of Compassionate Conservatism, I would offer help to displaced members of the IRS, by passing out maps to the nearest unemployment office.
I could be Ted Kennedy's designated driver.
I'd even play “Spin the Bottle” with Nancy Pelosi, knowing full well that a French kiss from San Fran Nan could be waiting for me at the end of every spin (it’s a disgusting thought I know, but French is the only way liberals do it these days.)
In the insanity brought on by having too much of my own money, I might even check the little box on next year's tax return to donate $3 to the political party of my choice.
These are just hints of the insanity the Fair Tax Proposal could cause.
Taxpayers of the world, unite! Join my army of angry, old, overtaxed men in contacting members of Congress to urge them to pass H.R. 25, The Fair Tax Proposal.
Just don't take it personally when your call or e-mail to Washington is met with bouts of hysterical laughter.
Thank you for indulging me in passing along Congressman Linder's gallant crusade for financial justice, and my personal attempt to unite with crotchety old men across the country.
I promise my next article will not be about the benefits of AARP or the terrific Early Bird Special at Golden Corral.
About the Writer: Matthew Holmes is a North Carolina based columnist. His articles have been featured in the North Carolina Conservative, ChronWatch.Com, World Net Daily.Com, News Max.Com, Opinion Editorials.Com, and other media outlets. He can be reached at blade729@msn.com
you must be one of those trust fund babiesDamn, you found me out. I could own all of you!
HR25 is a progressive tax, wealth will be taxed...and right now it isn'tWealth has been taxed. That's the point.
The truly wealthy are not taxed under our current system.Sure they are.
Remember Teresa?--15%15%? I thought the wealthy weren't taxed.
Ok, we will leave state taxes out and replace them with the "corporate" (cost of doing business) taxes that are passed on to you when you buy goods and services. They will go away with the fair tax and they are being paid by proxy to the federal government. You do pay federal taxes on gas, so those still make you paying taxes to the same entity also.
"A switch to a sales tax is a tax on current wealth."
That criticism could be levelled at all consumption taxes, not just the FairTax. Therefore, it is interesting to see the point brought up by someone who claims that he favors a consumption tax.
"A switch to a sales tax is a tax on current wealth."
A switch to a consumption tax would also greatly expand the economy and significantly increase the value of equities. Guess who would benefit the most from that?
"You really need to understand real values. Today, if I get a $10,000 gift and pay no income taxes on it, I can buy $10,000 worth of stuff. It's real value is $10,000. With the FairTax, if I get a $10,000 gift, I can only buy $7,700 worth of stuff. It's real value is $7,700."
Of course, you ignore the fact that if that $7,700 worth of "stuff" were produced in the USA, it would have cost approximately $10,000 under the current tax system.
"That's significantly less than the 23% FairTax rate."
As you know the EFFECTIVE rate of the FairTax only approaches (but never quite reaches) 23% only for relatively high consumption levels. In fact, those consuming exactly at the poverty level will have a 0% effective rate - and that doesn't count the benefit of seeing pre-tax prices of US produced goods decline. In effect, there is an INCREASE in purchasing power up to the poverty level.
Two polls - Vote now!!
http://gogov.com/frpoll.htm
http://www.gopusa.com/
That criticism could be levelled at all consumption taxes, not just the FairTax. Therefore, it is interesting to see the point brought up by someone who claims that he favors a consumption tax.Explain to me how $100,000 in a bank right now would be taxed under a flat tax.
"Explain to me how $100,000 in a bank right now would be taxed under a flat tax."
You are right. I guess a flat tax isn't a consumption tax after all, is it?
Of course, you ignore the fact that if that $7,700 worth of "stuff" were produced in the USA, it would have cost approximately $10,000 under the current tax system.And you ignore the fact that the only way prices can drop like that is if wages are reduced. And since wages can't be reduced across the board, price almost certainly won't be going down.
As you know the EFFECTIVE rate of the FairTax only approaches (but never quite reaches) 23% only for relatively high consumption levels.They would have to be very poor to approach an 5.4% effective rate under the FairTax.
In fact, those consuming exactly at the poverty level will have a 0% effective rateThat's not true. People consuming exactly at the poverty level will have a higher than 0% effective rate. It's closer to 4%.
that doesn't count the benefit of seeing pre-tax prices of US produced goods decline.But they won't. Are you still singing that tune?
You are right. I guess a flat tax isn't a consumption tax after all, is it?Yes it is but it doesn't double tax money people have in the bank at transition. Don't you think that's a benefit of the flat tax?
BINGO!
You had to make 130,000 to wind up with that 100,000 in the bank. Under NRST the playing field is leveled for those still trying to create wealth. As Rush said on his show yesterday: "An income tax is a tax on the creation of wealth."
Under NRST you have to make 100,000 to have 100,000 in the bank. You spend it when you want, OR, you save it and never, ever, ever pay any taxes on it.
You had to make 130,000 to wind up with that 100,000 in the bank. Under NRST the playing field is leveled for those still trying to create wealth.But it is worth $100,000 of goods and services.
Under NRST you have to make 100,000 to have 100,000 in the bank. You spend it when you want, OR, you save it and never, ever, ever pay any taxes on it.But to get $100,000 worth of goods and services under the FairTax I would have to have/make $130,000. The real value is the same.
It doesn't matter if you spend it or leave it in the bank it's still only worth $77,000.
Technically it's not even worth $77,000 when you consider the gross payment tax taxes 30% on any other taxes, fees, excises etc. that might be included in a gross payment.
Agreed. But you miss one major point. If I am creating wealth I am not spending 100% of my income on goods and services. I am only spending a portion of that income. The portion that I save to create wealth compounds tax free (faster) and the portion that I spend generates the tax revenue at my convenience (over and above the poverty level).
As it is now I am penalized for creating the income that creates wealth and I am penalized for creating wealth from the remainder of that income that I have not spent. Even if I utilize the government's frickin' benevolence at letting me put only a statutory amount of money away tax deferred I still must pay taxes on it when I take it out. And don't give me that "your taxes will be lower when you retire" nonsense. If I am successful in creating wealth I should have a lot of income when I retire.
See my post #55.
And if it's not in a retirement plan, then will you admit that it is a double tax?
It doesn't change the fact that the wealth you created would be worth 23% less than it's face value...
You can run but you can't hide.
As it is now I am penalized for creating the income that creates wealth and I am penalized for creating wealth from the remainder of that income that I have not spent. Even if I utilize the government's frickin' benevolence at letting me put only a statutory amount of money away tax deferred I still must pay taxes on it when I take it out. And don't give me that "your taxes will be lower when you retire" nonsense. If I am successful in creating wealth I should have a lot of income when I retire.But the wealth is worth less because you will be taxed when you spend it. You will get a higher real return under a consumption tax (any consumption tax including a flat tax), but it's not as great as you think.
Are you stubborn as a mule? If I don't spend it it is not worth 23% less. It is worth 100% of its value as a base to build wealth off of. Wealth is built upon assets that compound or grow but a portion of one's income has to be the catalyst to germinate the growth. If I am creating wealth I am not spending a portion of my income.
You can run but you can't hide.
You can be snide but you are still wrong. I wish you had some breeding.
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