Posted on 07/28/2007 5:37:08 AM PDT by Man50D
Former Senator Fred Thompson came to Houston to attend a fundraiser as he considers throwing his hat into the ring for the 2008 presidential primaries. A small rally was held at the airport for his arrival, and FairTax supporters were out in some force.
FairTax.org is determined to put the FairTax on the national agenda during this election cycle, and to that end, supporters are asking each candidate and potential candidate "The Question": "If Congress passed the FairTax Act and you were President, would you sign the bill into law?" Despite an enormous amount of jostling from the crowd and media people, we were able to get his answer on videotape. Click here to watch the video.
To see where the other candidates stand on the FairTax, click here to go to the Presidential Candidates' Scorecard.
I support an nrst - that HR 25 is the leading proposal is just coincidence.
I do not desire credibility - saying such is another strawman.
You don't understand what you're posting. What you copied and pasted is not inconsistent with my claim.
What is your real reason for opposing the nrst? This isn't one of them. This nrst uses the same level of evasion as the income tax.
The previously withheld fed taxes don't have to go to the company - that was a simplifying assumption by the researcher. If previously withheld fed taxes do not go to the company for the purpose of lowering prices, the amounts previously withheld will go to wages [in a competitive market].
So "it's six of one, half dozen of another" from my POV. Would you rather have $85 to buy a $50 item or would you prefer $110 to buy a $60 item? The nominal price rises [50 to60] but so does cash in hand [85 to 110].
Oppose it if you don't like it - but it won't reduce your overall purchasing power. It is possible to create such a scenario, but very difficult.
You indicated "As for gains in purchasing power, I’d like to see some reasonable expectations." If you mean you'd like to have a reasonable idea of your nrst effective rate, there are places to check that. Google "FairTax calculator" IIRC. I figure it myself... I think the ones you find on line understate the effective rate by about 1/2 pct due to the way they handle the rebate. Again, I haven't been there in years, so I don't know if it's still there or fixed.
That said, I think that when everyone pays the same marginal rate, we will be united in opposition to any tax increase - which sure as hell isn't the way it is now. And, we will be united in support of any tax decrease. See tag line.
No, I know what the NRST effective rate would be - an absolute wash with what I pay right now.
So what it offers is nothing more than a bunch of promises that prices “may” go down after the tax is imposed, and for that I have to pay a massive penalty on every cent I have already saved.
Say I’ve saved $20,000 to buy a new car. Taxes and compliance amount to $1800 under the generous 9%. Under the fair tax, say all that comes off the price - meaning an $18,200 cost before taxes, and $23,660 after taxes.
I used to have enough for the car. Now I’m $3660 short. That “fair” tax has hit me with an 18.3% tax, just as if the government came along once more and said “I’ve changed the rules, now you owe me more of what you’ve already paid taxes on”.
The fact is it DOES reduce my purchasing power for everything I have saved, and is simply a wash for anything I buy in the future.
That, my friend, is a lousy deal.
Now, if you could change the setup so that we could receive a pre/rebate on taxes on already taxed savings, I could go along.
I do have some after tax savings, but the overall change in my position wrt purchasing power is positive. In fact, I haven't found anyone whose overall purchasing power would decline... a slight amendment... I haven't found any legal participant in today's income/payroll tax scheme who will have reduced purchasing power under the nrst. You would be the first, if indeed that is the case with you.
My purchasing power is but one component of what I evaluate when analyzing this reform. But it's a component a lot of posters are interested in obviously. It's secondary to me. My primary concerns are for my children, grandchildren, and the nation. Eliminating the income tax is quite attractive from that standpoint.
Then please explain it to me.
” In fact, I haven’t found anyone whose overall purchasing power would decline... a slight amendment... I haven’t found any legal participant in today’s income/payroll tax scheme who will have reduced purchasing power under the nrst. You would be the first, if indeed that is the case with you.”
I am a legal participant, be assured. :)
I’m also a penny-pincher, unlike 99+% of all Americans nowadays. Typically around 45-50% of my income is saved in one way, shape, or form.
The benefits I may or may not receive (again, the effective rate I would face would not really change under the fair tax) simply don’t compare to the costs of repeat taxation.
Now, I would accept a scheme in which I ended up somewhat worse off IF the country would benefit as a whole. However, the benefits of the fair tax are unproven, and rely on rosy projections just as the 2 parties have used to justify every tax/spend increase or cut. Those projections never pay out.....
Besides, I wonder how many proponents have ever considered the shock to the system the fair tax would cause. Imagine all shelf prices going up 30% in one day. Even if all those federal taxes were no longer taken out of your paycheck, do you think it wouldn’t potentially cause a serious disturbance to the economy? Imagine all consumer spending screeching to a slow crawl for a couple months as people try to figure the new system out.
Personally, I think a gradual change (controlled STRICTLY by law) would be a better way to go. Instead of a sudden change, imagine a 2% nrst instituted, along with a flat rollback of all taxes to a revenue-neutral amount. Then bump that to 4% the next year, along with a further rollback....
It would take longer, but the shock would be minimized.
Of course, it is worthwhile to note that in non-competitive businesses, the tax savings the company would see would never get passed on to the customer.... All this would mean to ExxonMobil would be significantly higher prices. We’d still pay the same amount (at least) for gasoline and energy.
You use the marginal nrst rate but use an effective income tax rate.I didn't use any rate for the nrst and I used the same rate you used for the flat tax...apparently, since you always bring it up as topic one, you just learned the difference and think no one else knows.
Just like everything, your comparisons are intended to deceive.You did just that.-----
It's either use effective rate for both or marginal rate for both. It's stoopid to mix the two. Nobody is that dumb.
The nrst is lower in both categories.The nrst doesn't exist...thers's no comparison for fantasy.
The flat tax is 17% plus 7.65% of wages plus hidden 7.65% of wages in pricesSo 100% paychecks includes the employer half?...there goes those price reductions. Actually it's 7.65% of wages and 7.65%on wages...one is inclusive the other is exclusive...I don't expect you to know why.
The nrst is 23% easily visible in prices. End.Actually it's 30% but what about those 30% increases in "any government wages salaries and benefits? and their purchases...where is that visible?...End.
THen there is that little border-adjustability issue.Wooo, I've been wringing my hands over that one.
It is amazing that on FRee Republic, there are posters who spend their time arguing in favor of the marxist income tax.I'll take into consideration that to a narrow minded person, arguing against one side qualifies as an argument for another side...
When the nrst passes Lewis, you will have no choice but to pay your taxes.I only buy used.
That means others won't.Yea we know, the ones that won't are the corporations and other businesses that are fleeing the country for lower wage workers.
In other words, we will save more and spend less. Sounds good - can't be a down side to that, right? As we're saving more and spending less, what happens to businesses we're spending less with? What happens to their vendors? What happens to their employees?Aside from the negatives of reducing spending, it's interesting when they go down the list of pros, they mention "encourage savngs". Then go farther down the list where they mention interest rates reduced 25%...Not one of them ever makes the connection that lower rates does NOT encourage savings no matter how much extra money you THINK you have...and 25% is HUGE.
Read The Fairtax book from Neal Boortz. The first step in the process is the repeal of the 16th amendment.
Read up on The FairTax. You’ll learn that the tax is only paid on NEW items. If you buy new items on sale, you pay the tax on the new item. The price that you see on the good that you’re buying INCLUDES the tax.
Please guys, read up on what The FairTax is about before you start talking about it. Purchase The FairTax book written by John Lender and Neal Boortz.
I've been on Fairtax threads for over 8 years. I don't need to read a book written by some unknown radio host. I've read (and posted) the Fairtax legislation more than I care to remember...Everything else is lies, wishful thinking, conjecture, speculation.
He is indeed a good man, but it is all about $$$, and he needs to raise a TON yesterday.
Except when a new item has been purchased for business purposes, then no tax is paid until or unless the item is resold for private use. If you buy a used, year old car from Hertz, or as a used car from a dealer, the new car tax is due and payable by you. I haven't thought this through, but am wondering how that would effect the price Hertz would be able to get for its used cars. Would the FairTax actually be a liability to certain industries and act like as back-door tax?
“HR 25 does not repeal all federal taxes.”
Only excise taxes (which account for app. 5% of government revenues) would remain in place. Income taxes at the individual and corporate levels, payroll taxes, capital gains taxes and estate taxes would all be eliminated.
“Personally, I think a gradual change (controlled STRICTLY by law) would be a better way to go. Instead of a sudden change, imagine a 2% nrst instituted, along with a flat rollback of all taxes to a revenue-neutral amount. Then bump that to 4% the next year, along with a further rollback....”
That would mean having both an income tax and a sales tax at the same time, which is the worst fear of many (both supporters and opponents).
I understand your concerns about such a sudden change. However, I would suggest that sticking with the status quo isn’t the low risk alternative that many assume it to be. We have a massive trade deficit, a crisis in Social Security and Medicare, higher and higher compliance costs and greater complexity each and every year. There is one futuristic think tank (The DaVinci Institute) which has forecast the collapse of the current system within 10 years based on a number of factors, not the least of which is the “exponential nature of complexity”. The researchers who came to this conclusion didn’t even know the FairTax existed.
I don’t know if the current system will collapse of its own massive weight within the next 10 years or not, just like I did not know that the tech bubble would burst starting in March of 00. What I do know is that there are a number of unsustainable trends that our tax system contributes to in varying degrees and sticking with the status quo is not the low risk option it may appear to be at first glance.
“H.R. 1040-Freedom Flat Tax. “To amend the Internal Revenue Code of 1986 to provide taxpayers a flat tax alternative to the current income tax system.”
Thanks for posting that summary of flat tax bills, man50. I am pretty sure that the house bill is the Burgess flat tax option. All it does is add an option to the current system, meaning that it does not get rid of a single page of the current mess that numbers 67,000 pages according to CCH. Also, because it is an option, guess who would elect it? Those who would save $$$. If the net effect of a tax reform proposal is to save some taxpayers money, it cannot be revenue neutral. If it isn’t revenue neutral, then it will never be politically viable in congress.
If the flat tax is such a great concept, why has the only flat tax proposal in the house (which is where tax bills are supposed to originate) morphed into a flat tax option? Why is it that few of the flat tax supporters support the only flat tax bill in the house? Why isn’t there a flat tax bill in the house that all the flat taxers can rally around?
Oh! Almost forgot. Since the Burgess bill does not get rid of a single page of the current indecipherable mess (and in fact adds more pages to define the flat tax option), it most assuredly would not get rid of the IRS.
Do you think those hidden taxes might become a larger share?
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