The FairTax Crowd Answers Jerry Bowyer

realclearmarkets.com ^ | January 11, 2008 | Louis R. Woodhill

[foxfield]

REGISTRATION WITH THE GOVERNMENT is for ANYONE selling ANYTHING.

Merchants who sell taxable goods and services are already registered under existing sales tax laws. In states that have sales taxes, most merchants are already registered.

If you sell in a tax exempt step you are STILL required to keep track of each transaction to prove you are tax exempt.

Keeping records of sales transactions is a normal part of bookkeeping for a business. Nothing new here.

you are confusing registering for the prebate with registering as a “vendor”.

No. I understand the difference.

The GOVERNMENT decides what is a family for the wealfare prebate. It is the GOVERNMENT that decides what is or is not a family. The government does NOT adopt a “natural family” definition. Just wait for the sexual politics to infest that debate.

True, but this argument applies just as well to the present system and to so many other parts of our lives where government does not belong.

[Mojave]

No, the difference is that the luxury tax was levied in addition to the taxation of income.

That's not why it failed.

[Cheburashka]

Why must you continually repeat a LIE that you have been called on numerous times? The “luxury tax” you speak of was nothing at all like the Fairtax and you damned well know it as you have been called on it MANY times already.

---

But the National Sales Tax will make it profitable to buy outside the country, just like the the luxury tax. Therefore the comparison is correct.

The idea of a National Sales Tax advocate calling someone else a liar. Russians have a saying, “It makes a cat laugh.”

[longtermmemmory]

so now we give it easily without need of a cause the government would need. It also belys the fact that the government decides what is or is not a family.

[longtermmemmory]

not a lie. It is a pure and simple fact.

The fair tax scam is 100% spot on like the luxury tax with its impact. It is a dead certainty that people SHALL move the transactions outside the USA to avoid the 30% tax.

it is a history, it happened, IT HAPPENS TODAY,

deal with it.

[foxfield]

How does it compare with other welfare programs?

I really don't know. But, if you apply for food stamps, for example, I'd bet that you have to let the government come into your kitchen to check your cupboards.

I'm sure I don't have to tell you about the extent to which the current income tax code opens every taxpayer, and those who the IRS thinks should be taxpayers, to invasion of almost every aspect of their businesses and personal life. Applying for the prebate (for taxpayers) and remitting the tax due (for merchants) is nothing like the burden of the current tax code.

[ovrtaxt]

That's not why it failed.

I'm not sure what you mean. You're thinking about taxation in terms of success and failure?

Can any tax be considered a success?

[robertpaulsen]

"Applying for the prebate (for taxpayers) and remitting the tax due (for merchants) is nothing like the burden of the current tax code."

You left out reporting your income for Social Security purposes.

[DivaDelMar]

I’m no fan of Huckabee. I despise some of his positions, but none of the other candidates have given me ANY reason to vote for them. I might just have to hold my nose and vote for Huckabee.

[ovrtaxt]

I believe Hunter and Paul also support HR25.

[Bigun]

The fair tax scam is 100% spot on like the luxury tax with its impact. It is a dead certainty that people SHALL move the transactions outside the USA to avoid the 30% tax.

Wrong on ALL counts! The "luxury" tax was imposed on top of ALL already existing taxes and was imposed only on certain items - the ones some government puke thought to be "luxury" items. The FairTax repeals virtually ALL other federal taxes thus EVERYONE would have more spendable income and the U. S. Economy would be booming like no one alive today has ever seen.

I know you will keep right on with your lies because it is ALL you have but others have figured it out rather easily and will continue to do so.

BTW: I DO appreciate all your help in drawing attention to the FairTax!

[snowsislander]

You can read more about The Fair Tax at The FairTax.org website.

I noticed in the article the question and answer pair:

Q. How do we determine the interest portion of mortgage payment?

A. Interest above the rate on 10-year Treasury bonds is subject to the FairTax. This will prevent suppliers from discounting prices and making it up with high interest rates on financing. The 10-year Treasury rate is a market-determined interest rate that is not targeted by the Federal Reserve.

Where exactly on the FairTax website is that explained? I have looked at the FAQs, and I don't see any mention of this provision under section 801 of HR 25.

I also read through the document Promoting Home Ownership: How the FairTax's Benefits For Homeowners Exceed the Mortgage Interest Deduction. It nowhere mentions this FairTaxation of mortgage interest paid --- in fact, it shows a computation putatively comparing the cost of home ownership under the income tax versus the FairTax, and nowhere does it mention that FairTax will be assessed on mortgage interest in excess of the section 805 "basic interest rate."

[robertpaulsen]

"2. There would be only about 20 million entities that would need to file FairTax returns, compared with 140 million who must file income tax returns now."

BWAHAHAHAHA!

Plus another 100 miilion individuals who will legitimately start up their own side business in order to purchase tax-free goods and services.

That new Mercedes and computer and iPhone and HDTV will be for "business" purposes, resulting in a savings of close to 40% (Fair Tax plus state and local taxes).

[William Terrell]

I dont know about you, but a tax proposed by John Linder and Neal Boortz is a helluva lot better than a tax proposed by Karl Marx

A tax on consumption will certainly fund our socialist programs more efficiently and with less political risk than a tax on income. Matter of a fact, HR25, like HR2525, and its prebate provisions, makes socialist programs accessible to more people than ever before.

[foxfield]

i>You left out reporting your income for Social Security purposes.

You are right. Fair Tax would eliminate the withholding for Social Security (and Medicare), but the employers would still have to report the income. What we need is a big dose of Social Security reform. Something like phasing it out some day. I'm not holding my breath for that one.

[PubliusMM]

Fully aware of it. But how does it have anything to do with 30%? The exclusive FT rate applied to a shopping cart of the ‘basics’ establishes the prebate, subject to a few other notions. Your choice of the word ‘entitlement’ includes the concept of selecting recipients based on some criteria that entitles them to the funds/assistance. That’s not the case with the prebate, as you likely are aware. The prebate is not means tested.

FWIW, I don’t agree with the idea of the prebate, although I’m an FT supporter. I’d be more than happy to settle for a slightly lower FT rate and eliminate the prebate idea.

[DivaDelMar]

He has no real claim to fame. And if pressed, he would have to disclose his firmly held belief that the government acts within its proper authority when it uses the income tax to toy with and manipulate the citizens. He thinks we need to be made less selfish by the income tax....ie....he thinks it is perfectly appropriate for the government to take from the rich and give to the poor. He supports the use of government force in the redistribution of wealth.

Gee, now where have I heard that concept elucidated before?!?!?!?!?

[Man50D]

I am a true believer in tax reform but the fair tax does not appeal to me as reform for two reasons: first it has as its main assumption that it will be revenue neutral and second it will require a massive federal bureauracy to run its monthly rebate program to taxpayers.

Size of the federal bureaucracy is an understandable concern. There are some points as to how The Fair Tax will reduce the bureaucracy you need to consider. There are currently 140 million individual tax filers with the income tax. That figure will drop to 20 million businesses filing the consumption tax collected from purchases. Such a dramatic drop in filers will allow for a considerable drop in size of bureaucracy needed to monitor The Fair Tax. Another factor that will reduce bureaucracy is The Fair Tax and it's 133 page tax code will replace the 67,000+ page tax code by abolishing the IRS. The existing Treasury Department will administer the consumption tax.

Their power stems largely from how much money overall they take away from people through taxes and how they spend that money and this is the factor that is specifically not reformed through the fair tax "revenue neutrality" assumption.

No tax code is designed or can be designed specifically to address spending. However The Fair Tax does reduce spending to some extent by abolishing the IRS and its $11 billion dollar price tag. Also you need to also consider The Fair Tax will collect tax money from a much larger number of people(310 million) than the income tax (140 million thereby reducing the tax burden on each individual more than the income tax. Another advantage to The Fair Tax is that people will be able to see the tax rate as it will be itemized on each receipt. People will be able to see any change Congress makes as opposed to the unseen changes for the hidden taxes with the income tax code and therefore more likely to speak up against any changes. Congress will be less likely to make a consumption tax rate too high as it will only encourage people to reduce their purchases. Reduced purchases results in less taxes collected by the Treasury and will force Congress to reduce spending. Congress can only maximize tax collection by keeping the rates within reasonable boundaries. Founding father and first Secretary Of The Treasury Alexander Hamilton pointed out this concept in his Federalist paper #21. To quote:

It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end proposed-that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.

It seems to me, to be fair, the government would have to have detailed information about people's incomes and purchases and life circumstances such as illnesses to correctly figure out how much each citizen deserved to be prebated.

Income will not be a factor to determine the size of the prebate. The size of the prebate will be determined by the Department of Health & Human Services’ poverty level guideline multiplied by the tax rate and is based on family size as you can see from the chart below. Fair Tax FAQ #3



Such intensive and personal monitoring of individuals would be no improvement over the IRS which most people now only deal with once a year.

The IRS requires people to fill out a multitude of forms detailing every aspect of a person's life. No system could be more intrusive. Contrast that with The Fair Tax that will not require any tax forms. You will only have to fill out a form for the prebate but it will not require near the detail demanded from the IRS.

[mad_as_he$$]

Winner!!

BTW if you do not have a business under the current code you are wasting money foolishly.

[ovrtaxt]

Your point brings up an interesting effect that US manufacturers and exporters deal with today- namely, the instant disadvantage they have in competing with foreign import products. A US manufacurer has the cost of the present tax scheme and compliance built into their product before it ever leaves the factory.

There’s a convincing case to be made that repeal of the tax code and levying a retail sales tax will beef up America’s manufacturing base once again.

By the way, under the FairTax, the US would also become the world’s most attractive tax haven for foreign investment.

Just saying.