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
Think about what you are saying. You are making the assumption that every dollar has an albatross of a 30% sales tax attached to it. I disagree. The only dollars that have such are those that are spent. The vast majority of wealth is not spent at the retail level. It is reinvested, saved, passed on to the next generation. Under the NRST it will be truly be passed on to the next generation.
You can be snide but you are still wrong. I wish you had some breeding.
That was uncalled for but expected.
Think about what you are saying. You are making the assumption that every dollar has an albatross of a 30% sales tax attached to it.If that's how you want to put it.
I disagree.What a shock.
The only dollars that have such are those that are spent. The vast majority of wealth is not spent at the retail level. It is reinvested, saved, passed on to the next generation.The only value in wealth is spending it. Other than that it might as well be Monopoly money.
Under the NRST it will be truly be passed on to the next generation.So? The next generation will not benefit from it unless they spend it.
Sure it is. Will you admit that we have much worse double taxation under current law?
But all this wealth I have created will continue to grow tax free until I decide to spend it. If it's not in a retirement plan now I get taxed on every component of income which saps the power of compounding earnings.
This from the King of uncalled for remarks. Get it?
My boss and some others started our company in 1954. He went through high tax rates all of his life and double taxation of dividends, since we are a corporation. We sold off a portion of the company in 1997 and had to pay 35% of that gain (a very large amount) to the government in corporate income taxes. He put a great deal of the proceeds of that sale into a Foundation, which we are distributing to causes helping children still today. Due to some bad tax advice we didn't save any income taxes by putting the money in that Foundation like we thought we were going to get to do. The IRS had closed a loophole the year before. When he died in 2000, we had to pay over $10,000,000 in estate taxes. That is money we should have been able to keep in the business, but the government sapped it right out of us. That is a real world example.
The bottom line is, some inheritances are not just passed to individuals in cash. Some are businesses like ours that will use the inheritance in business to business transactions that will never be taxed. And when we make a profit, the dividends paid out will not be taxed once at the corporate level and again at the individual level. I'm sure our owners will be more than happy to pay tax at 23% instead of paying once at 34% and again at 15%.
This is the main attraction of the fair tax to me. I want to continue to create wealth for many more years. I think ll and YN understand that. I don't know why they insist on ignoring that aspect.
Because they are against the Fair Tax whether they understand it or not.
Wrong answer, wages are not the only thing that affect prices. You have the price of doing business ("corporate taxes"), supplies, materials, utilities, transportation, etc. on top of wages. Prices can drop due to reductions in the cost of any/all these items. The fair tax would eliminate the corporate taxes, which would also reduce the cost of all the items due to their corporate taxes, which are embedded into their prices, being eliminated.
They would have to be very poor to approach an 5.4% effective rate under the FairTax....People consuming exactly at the poverty level will have a higher than 0% effective rate. It's closer to 4%.
Not true, the prebate would cover that. Also, if they were shrewed enough in their buying they could actually make money from the prebate by paying less sales taxes than they get in the prebate.
Wrong answer, wages are not the only thing that affect prices. You have the price of doing business ("corporate taxes"), supplies, materials, utilities, transportation, etc. on top of wages. Prices can drop due to reductions in the cost of any/all these items. The fair tax would eliminate the corporate taxes, which would also reduce the cost of all the items due to their corporate taxes, which are embedded into their prices, being eliminated.Corporate income taxes are not a "price of doing business." According to your logic, a company that lost money and therefore paid no taxes would have to raise their prices once they started turning a profit and paid corporate income taxes. Prices are set by the market equilibrium, not arbitrarily by the business.
Actually what I posted is exactly correct. The rebate is calculated by multiplying the poverty level times the inclusive FairTax rate. The FairTax at the poverty level is the poverty level times the exclusive rate.They would have to be very poor to approach an 5.4% effective rate under the FairTax....People consuming exactly at the poverty level will have a higher than 0% effective rate. It's closer to 4%.Not true, the prebate would cover that. Also, if they were shrewed enough in their buying they could actually make money from the prebate by paying less sales taxes than they get in the prebate.
You're not saying the poor shouldn't pay taxes, are you?
Also, if they were shrewed enough in their buying they could actually make money from the prebate by paying less sales taxes than they get in the prebate.If that's possible it would mean everyone else is paying more tax through an increased rate than what is actually needed to fund the government. Or does the money come from the magic government money tree?
If the "prebate" is such a good idea for some taxpayers why not increase it so even more people can profit from it?...Why not everyone?
The prebate is meant to cover the cost of "necessities" to a point (not for profit), which are determined by the individual (some people consider an automobile, gasoline, or utilities a necessity). However, like I said, it is possible to actually take in more from the prebate than you pay out, but it would take the right situations/variables to happen.
You may wonder why not define necessities and make them exempt from taxes, well that is where things would get stickey. One reason is given above, another reason is where do you draw the line? If you say that fruit, vegetables, etc. are exempt, then potato chip makers will lobby to make their items exempt or cheese puff makers, etc. The fair tax plan was to tax every new item and services, provide a prebate and let the idividual decide what is a necessity.
How does this ?FairTax? treat Roth IRAs which have already paid tax? I paid a BIG chunk of money in income taxes to convert to a Roth after 1998. Now I am supposed to roll over and pay an additional 23-30% sales tax when I spend it??
Thanks for the ping!
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