Foes of IRS seek friends on campaign trail (Fair Tax backers stand out)

Charlotte Observer ^ | Aug. 31, 2007 | JIM MORRILL

[Man50D]

It was like posting to a FRED Thread. That type of behavior by supporters will only cause big losses for their cause.

Oh really? Then I wonder why my ping list keeps growing? Maybe you should tell that to the steadily increasing numbers of volunteers who are donating time and/or money to The Americans For Fair Taxation.

Does he think people will be buying a $21000+ economical car and paying close to $30,000 under a “F” Tax? Will the factory workers, sales people, transporters etc be thrown out of work? - the same for many other parts of the economy.

You are not considering some important points. The Fair Tax will not apply to used vehicles. Also the prebate will refund taxes on necessities, including transportation, up to the poverty level.

Mr BOORTZ and his pals will gheta reduction of tax under fair tax


Everyone will get a reduction but the wealthiest will receive less of a reduction as they have more disposable income and therefore are likely to spend more and therefore will pay more tax dollars than those with lower incomes.

Will the factory workers, sales people, transporters etc be thrown out of work? - the same for many other parts of the economy.

The Fair Tax will provide people with more purchasing power since abolishing federal taxes will go directly into people's paychecks. People tend to spend more money when their income increases. Consequently businesses will earn more profit.

[robertpaulsen]

"It is somewhat similar to a tax refund under the income tax."

Do you mean the Earned Income Tax Credit?

"The prebate is not a handout."

I understand. When I said handout I was referring to welfare, food stamps, WIC, medicaid, and other goodies. I was saying that those currently on government handouts would also get the prebate, even though those handouts are paying the Fair Tax, not the individual receiving the prebate.

"because most people don't realize they exist!"

Look. All you have to do is tell the poor that prices will remain the same under the Fair Tax. That's true, isn't it? Their income (whatever source it is from) remains the same. Ergo, they don't need any prebate. What's so hard about that?

[Neu Pragmatist]

How is it a lie ? At least provide a reason for such a statement .

[robertpaulsen]

"The prebate is necessary so nobody, not even Bill Gates, has to pay taxes on the basics of life."

I understand that's how the prebate is being sold, yes. And it sounds so ... noble.

But why are we suddenly developing this philosophy? Everyone from Bill Gates to the beggar on the street pays 23% in hidden taxes on everything they buy today. (To remind you, that's the 23% that we're going to remove and make visible with the Fair Tax. Some on this forum think hidden taxes and tax costs are as high as 32%.)

Seriously. Why is there no call for a prebate today under the existing income tax system?

[Neu Pragmatist]

The Fair Tax seems bulletproof to me. The only issue that concerns me is what the States would do with their tax systems .
That is the major sticking point with the Fair Tax, as the States will not want to abolish their sales and income taxes .

[Man50D]

If the car is an import, you'll add a $6300 Fair Tax to the $21,000 sticker price. To make matters worse, your bank will only finance what the car is worth -- $21,000 (less some down payment).

Your statement is very shortsighted. Exported goods are not subject to the FairTax, since they are not consumed in the U.S.; but imported goods sold in the U.S. are subject to the FairTax because these products are consumed domestically. Your are essentially complaining that American companies will have a level playing field with foreign companies when the Fair Tax eliminates the 17 percent competitive advantage, on average, for foreign producers.

You'll still need a down payment and you'll still need to come up with $6300.

You are not considering interest rates will decline when The Fair Tax is enacted. It will eliminate business taxes and the compliance costs under the income tax. Banks will pass those costs onto the consumer due to competition.

[Man50D]

The Fair Tax seems bulletproof to me. The only issue that concerns me is what the States would do with their tax systems . That is the major sticking point with the Fair Tax, as the States will not want to abolish their sales and income taxes .

That won't be required to abolish their taxes but they can choose to do so. Fair Tax FAQ #25 "No state is required to repeal its income tax or piggyback its sales tax on the federal tax. All states have the opportunity to collect the FairTax; states will find it beneficial to conform their sales tax to the federal tax. Most states will probably choose to conform. It makes the administrative costs of businesses in that state much lower. The state is paid a one-quarter of one percent fee by the federal government to collect the tax."

[robertpaulsen]

"It will get simpler with The Fair Tax because there will be no tax forms to fill out!"

My bad. I meant simpler to understand.

"The simple is answer can be found in post #13."

That's "an" answer, sure. But that can't be "the" answer.

We're going to turn the tax system of this country on its head, a tax system that's been in place almost 100 years and -- oh, by the way -- since we're doing that we've decided that now is a good time to come up with the philosophy that "nobody, not even Bill Gates, should have to pay taxes on the basics of life"?WHAT? Why now all of a sudden?

Well gosh, while we're at it, maybe it's also a good time to introduce the philosophy of "why should the poor have to pay the same amount for the basics of life"? A loaf of bread for the poor should be 3 cents and for Bill Gates $300. He can afford it. Why should the poor be subsidizing the cost of food for Bill Gates?

And another thing while we're at it. Just what is so wrong with, "From each according to their abilities, to each according to their needs"? Gosh, that sounds so fair.

[robertpaulsen]

"If “Fair Tax” supporters could put on a push like all America did for the “Immigration” sell out the Fair Tax would be enacted by years end."

(shudder)

[robertpaulsen]

"The only problem is Rep. Linder, Boortz, and these FairTaxers claim you currently pay 35% when you earn it and 22% when you spend it. It's a lie."

Correct. Have you "earned" your gross or your net?

Similar to the article the other day that stated, "Imagine paying the same price for something but having your entire paycheck to buy it."

Another lie. It's either/or, not both.

[robertpaulsen]

It's double counting. YOU are not paying income taxes. Gasp!

Stick with me for one minute. Consider the illegal immigrant who works for cash, files no 1040, and pays no income taxes. What if we could wave a magic wand and force him to pay income taxes?

Well, if he wanted to "take home" the same amount as before, he'd have to raise his price for services, right? (Which is why people hire illegals -- they're cheap).

So, who really pays his income taxes? The people who hire him! You and I in the form of higher costs!

Nationwide, we all pay a higher price for goods and services because they contain the hidden taxes of everyone who supplies them. And that includes your salary. Your income taxes you file and pay are hidden and contained in the price of the product/service your company sells. Your employer collects these hidden taxes and forwards them to the federal government (your withholding).

[groanup]

To remind you, that's the 23% that we're going to remove and make visible with the Fair Tax.

I have always maintained that prices of goods and services would have room to drop between 10 and 15%. Some on this board have forgotten that they agreed with me on that point.

[robertpaulsen]

"Your are essentially complaining that American companies will have a level playing field with foreign companies when the Fair Tax eliminates the 17 percent competitive advantage, on average, for foreign producers."

If foreign producers have a 17% competitive advantage, it seems to me that that the consumer benefits. You want to level the playing field by raising one side not lowering the other. Consumers would pay more, 30% more, for all imported goods. And just about everything I buy is imported.

"You are not considering interest rates will decline when The Fair Tax is enacted."

And here you told me the Fair Tax is simple -- simpler than a flat tax. You expect me to believe interest rates will decline because all the domestic banks will all decide to pass on all the savings they all get.

Sure they will. Just like all the domestic manufacturers will all pass on all the savings they all get too, in spite of the fact that their overseas competitors are raising their prices 30%.

Even hear the business phrase, "Leaving money on the table"? Do you know what that means?

[robertpaulsen]

"The state is paid a one-quarter of one percent fee by the federal government to collect the tax."

I recall a federal gun law that required the states to do a background check. I believe the law was challenged by the states on constitutional grounds -- something about the federal government not having the power to require the states to do their job for them. The same reason ICE cannot force states to arrest illegals or force California to arrest medical marijuana users.

What if the states refuse to collect the Fair Tax? Or demand a higher fee? Plus, who looks for cheaters -- anyone?

[robertpaulsen]

"I have always maintained that prices of goods and services would have room to drop between 10 and 15%. Some on this board have forgotten that they agreed with me on that point."

Under the scenario of "the employee takes home his gross pay", I've seen the figure of 9% used and agreed upon. 15% is pushing it.

But what about the scenario of "the employee takes home the same amount as today". Wouldn't there be 23% with which to reduce prices? That's what I was referring to.

Under this scenario, take home pay remains the same and prices remain the same.

[groanup]

Under this scenario, take home pay remains the same and prices remain the same.

No one has ever explained to me how employers would be able to void all employment contracts and pay everyone less. I don't believe it will happen. I believe everyone will see and increase of between 25 and 35% in take home pay. More than enough to cover the FairTax.

[lucysmom]

http://www.mises.org/story/1768

Thank you for the link. Very interesting!

[lucysmom]

Everyone will get a reduction but the wealthiest will receive less of a reduction as they have more disposable income and therefore are likely to spend more and therefore will pay more tax dollars than those with lower incomes.

Of course the wealthier you are, the less you are tied to place. With technological advances in communications, overnight delivery, air travel, and electronic transfers, why would the wealthy choose to do the bulk of their spending in the US?

Any travel they would have to do to the US for business reasons would be a business expense and thus tax free.

Why would anyone think that the wealthy who would stash money, and business that would locate at an offshore address to avoid US taxes, wouldn't move themselves offshore to avoid taxes?

[lucysmom]

...oh, by the way -- since we're doing that we've decided that now is a good time to come up with the philosophy that "nobody, not even Bill Gates, should have to pay taxes on the basics of life"?WHAT? Why now all of a sudden?

If the basics are such a special class, why should we pay for them at all?

[Your Nightmare]

The estimates for the 22% “embedded taxes” are based on Dale Jorgenson’s research. He included employee’s income and payroll taxes in the estimate.