FairTax points of interest.

Congressman Linder's website ^ | August, 7, 1006 | John Linder

[pigdog]

A couple of points:

The GAO (Congress's auditing branch) found that all of the exemptions, exclusions, and special favors in the current tax code drain federal receipts by $728 billion each year. That is almost as much as the nation spends on Medicare and Social Security combined and 60% more than the nation spends on national defense. The FairTax eliminates all deductions, credits, and carve-outs to ensure that everyone pays his or her fair share.

and:

The Department of Commerce reports in its most recent Economic Census that just 688 retailers (0.03%) in the U.S. make 48.6% of all the sales. Just 3.6% of retailers collectively make 85.7% of all U.S. sales. Fewer points of collection will mean higher compliance with the FairTax than with today's complex system.

[pigdog]

No one will be paying an effective FairTax rate of 23% (your mis-identified "30%" which is really 29.87% anyway). NO ONE - got that??? You just keep on with the continual stream of misinformation since as shown in #24 on this thread most people will be far, far better off under the FairTax than under the income tax.

Study that example. It's simple arithmetic which you could duplicate if you'd put forth the effort instead of blabbering about how everyone will go broke paying tax rates that are not possible. That's covered in #24, too.

[lucysmom]

So is that different from a tax increase? If $728 billion dollars is going to be coming out of someone's pocket that didn't used to be?

In the FairTax fantasy world, only the cheaters will pay more, because, you know, the guys that cheat now will not find a way to cheat the FairTax. Thus, all us good guys will pay less 'cause the cheaters are paying their fair share. Not only that, but the cheaters will be happy to pay because 30% is such a low, low rate and besides, they get that monthly prebate. Everyone will want to play, ...eh, I mean pay.

Now, let me tell you about this mighty fine, hardly used, bridge I have for sale...

[lucysmom]

I'm just guessing here but it doesn't seem to be too much of a stretch to figure that a tax on CONSUMPTION would be a good way to get a little more acurate share of what he ACTUALLY makes......ya think?

You really think the guy with the bling is going to pay retail plus 30% at the local WalMart?

[Your Nightmare]

In the FairTax fantasy world, only the cheaters will pay more, because, you know, the guys that cheat now will not find a way to cheat the FairTax.

I wonder what happens when you get a high sales tax? Hmm....

[lucysmom]

I wonder what happens when you get a high sales tax? Hmm....

Oh, you mean people would turn to the black market. Well not according to the FairTaxers because, you know, the guy at the cash register at Walmart isn't going to risk his job to give you a break and besides, with fewer people to keep an eye on, the government can watch more closely. (have I got that right? - now let me see that receipt for the cigarette you just put out?)

[TexasTransplant]

"Try to get "ONE" answer or anyone that will take any responsibility for any answer that they give you."

Is that not the most aggravating, inhumane, idiotic experience that a human can endure?

I'm all for a bounty and intervention for their children as well. (If Darwin was right, there is this special DNA that really needs to be removed from the pool as soon as possible)

My Clown was a piece of work from Hell.

TT

[StJacques]

"FT Rate = Revenue Required divided by Taxable Base"

Not wrong, but unclear. The "Taxable Base" in this instance is the activity of consumption, so the proper display of the rate equation is --

If calculated inclusively:

FT Rate = Revenue Required divided by Total National Sales

If calculated exclusively:

FT Rate = Revenue Required divided by Total Base Price of National Sales

And since it's "sales" that are involved with any discussion of the "tax base," you must make any arguments you wish to present about how the FairTax will alter the tax base in light of its impact on sales. You have presented no such arguments, just your statement that the base shrinks and, given that your mathematical reasoning is much more than merely flawed, and there is no better evidence of its flaws than your refusal to answer questions about it -- maybe you've noticed that I'm not afraid to answer questions Rob, does that tell you anything? do you think it says anything to the others reading this thread that you won't answer questions? -- which leaves everyone wondering just what line of reasoning you are following beyond what I can only describe as Drive-By Posting. Hit-and-run is not going to cut it here.

"Using conservative estimates, if the Revenue Required is understated by 15% (due to the higher cost of government having to pay FairTax on purchases and salaries)"

I remember we had this discussion and you refused to answer my question to you about calculating the actual costs of government purchases. Remember I put this up to you:

Actual Cost of Purchases after FairTax = Cost Paid - Return on Revenues Collected + Hidden Costs

And I explained the "Hidden Costs" to the government as the loss of capital interest on tax revenues due for the period businesses hold them before paying, which is less than 1% annually, since businesses will obviously pay early to beat the penalty. But you consistently refused to do the subtraction of "Return on Revenues Collected" in your math Rob. And you won't argue the point either because you know that your argument will fall apart if you do. So as far as your contention that this is a "conservative estimate" of a 15% increase in government costs of purchases after the FairTax, I say that is based on a refusal to do subtraction in leaving the "return on revenues collected" out of the equation. If you want to make an argument from mathematical reasoning Rob, you're going to have to prove you can count. And unless you show that you can do subtraction, then you have failed that test.

". . . and the Taxable Base is overstated by 20% (by evasion and changes in bahavior that would occur under a huge sales tax)"

There will clearly be "changes in behavior" that will occur under a sales tax, but they do not in any way overstate the taxable base, and your argument that it is overstated by 20% is not supported by any evidence you present, only by your word. The "changes in behavior" that will occur are that non-essential consumer goods will be less attractive to those who pay for them now as part of a pattern of conspicuous consumption, since the the FairTax taxes non-essential spending at a higher rate than essential spending, given the presence of the prebates, while spending on capital goods will be more attractive since businesses, and to a lesser extent even private individuals, will see the return on investment from capital goods purchases as offsetting the cost of the tax. The increase in capital spending means a growing tax base, unless you want to argue that "capital does not create its own interest," a contention I will be most happy to address.

"then the real FairTax number when calculated properly is 1.15/0.8 times 23% = 33%."

Well let's see here; you discussed the "Taxable Base" without ever identifying it as "National Sales" or discussing the FairTax's impact on sales; you overstated the cost of government purchases by continuing this argument you make in which "revenues collected" are not subtracted from the "costs paid"; you understate changes in the "Taxable Base" because you cannot distinguish between changes in the consumption of consumer and capital goods -- not that you gave any explanation at all for how that base would change or why -- which suggests you arguing that capital is not productive. So your final numbers are just flat out ludicrous.

Start with government purchases Rob.

Here's your challenge, I defy you to meet it.

Fill in the blank:

Actual Costs of Government Purchases After the Fair Tax = ___________________________________________________

[webboy45]

There's a lot of info on the fair tax and a lot of misinfo. But I'm only interested in two things. It would eliminate the dread of April 15 and it would apply the same tax on imports as on domestic goods. These two things alone sell me on the change.

[StJacques]

Shhhhhh webboy45! You're making sense. Someone might hear you.

[lewislynn]

Once you have gotten your necessities out of the way, you choose how much to spend and thereby choose how much tax you will pay

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

[lewislynn]

I don't know how many people you know that can get by without spending money.

Don't you know that for most people, spending their paychecks every month is an unnecessary luxury? < /sarcasm >

[TexasTransplant]

You are an IRS agent or worse, this has already been established many many posts ago...

I propose that you decide to join those of us on the other side of the audits and anal exams and retire from the IRS (or whatever) without the "no audit", don't mess with me clause you must all have.
Live with us regular people for the remainder of your life.

Otherwise, just find an enclave of like minded clowns and hope that the US populace is forgiving to fools such as you or does your retirement package include... till death do you part security (protection from all those that you have screwed).

Anyway your "opinion" has been pretty much noted, many times, I say "Screw YOU" right back at you. I pray that the hardship, pain and suffering that you have imposed on others is slammed back on you for the duration of your physical existence.

TT

[TexasTransplant]

I feel sorry for Lucy, but I'm sure you have heard that before.

TT

[TexasTransplant]

>>>>"Here's your challenge, I defy you to meet it.

Fill in the blank:

Actual Costs of Government Purchases After the Fair Tax ="<<<<<

Yo Saint answer that question with the current Tax structure, the Fair Tax would make it easier to answer because it removes power from politicians and therefore their ability to Spin on our dime.

I wish that every citizen of the USA could get audited this year, the "Fair Tax" would be the "Law of the Land" next year and we would have Politicians by the tenders from which position their hearts and minds would follow...

Then I wake up and realize that there are those like you that like Government interference and yes Government control.

People like you don't like Freedom or Individuals, you like conformity and Nanny Laws.

TT

[Uriah_lost]

Since I was included in your "to" list I have to wonder if you intended that as you seem to think consumption taxes make sense and I certainly am NOT among those that think the IRS deserves to exist..... just wondering.

[StJacques]

"Yo Saint answer that question with the current Tax structure, the Fair Tax would make it easier to answer because it removes power from politicians and therefore their ability to Spin on our dime."

Hmmmm . . . a political cost of the income tax. Clearly there is one, since the income tax creates a tax code that is ripe for lobbyists to come in and "purchase" legislation that provides their parent enterprises and controlling interests with exemptions, special schedules and the like at great political cost to our republic, but I'm not sure how I would quantify that with the language of accounting, because it is obviously a subjective cost. But just because it's subjective, doesn't mean that it's any less real, in fact, I could make a good argument that it is even more real than anything we can put in an accounting book because the system the income tax creates communicates the reality of a government for sale. They can "spin" to the contrary all they want, at the end of the day they still have to explain how the thousands of deductions and special schedules in the tax code got there and they're not going to succeed in telling me it "was in the public interest."

Public interest my %##@@*&!%%^%#@&%&&##!

[n-tres-ted]

Very useful points. Thanks a lot. 3.6% of retailers do 86.7% of sales. I presume that is sales of new products. That is great for effective enforcement.

[kentj]

What planet did you come from? where do you get your numbers - I know your speaking English but I don't understand a word you just said.

The fair tax plan is the greatest idea since the Constitution, it brings the special interests into check and returns the power to the people.

One question for you - what do you do for a living? It is possible that you are one of the few that the fairtax is bad for - perhaps you run a 501c3 or a foundation under the tax laws or maybe you suckle from the tax free tit of America - you might even work for the IRS but if your going to make these type of chicken little the sky is falling statements back it up with facts not bovine scatology.

[GeronL]

NOPE.

FairTax means the poorest 20 million or so will pay nothing and get a prebate and all their social security and medicare and prebate comes from the middle class.

Its also going to mean perpetually higher taxrate because the Dems will call for an annual increase in the prebate and twice as much in new taxes for them to spend.

It is the end of anything resembling conservatism

[Sprite518]

Oh yeah that is why I do not even respond to him at all. Our side is slowly winning. I love it... LOL!