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Why Democrats should love the FairTax
Boston Globe ^ | February 24, 2008 | Laurence Kotlikoff

Posted on 02/25/2008 12:51:24 PM PST by Man50D

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To: MrB; All

First of all I would like to know are we referring to Congresman Linder’s form of the tas. I asked him for a copy of his 65 page or longer bill and read most of it, so will list some of the things it proposes and some of the arguments for and against.

It suggests a 23% sales tax on all new items. There would be no tax on used items, presumably, old houses, cars, airplanes, clothes, furniture, etc. This would do a lot for recycling, and rehabilitation of run down neighborhoods.

It is suggested this would eliminate the IRS. However, a new sales tax office would be needed to collect the sales tax being paid for all new sales. Business people would have to file this information on a regular basis.

Some figure representing a percentage of the poverty level would be selected, and 23% of that figure would be paid to everyone each month as 1/12th of that poverty level figure. Thus poor people and all of us would get a guaranteed monthly payment. Enough to cover basic foodstuffs, rent, etc. A government agency would have to administer all this.

If people were not on the government radar, i.e., illegal immigrants, they would not get that monthly payment, but would have to pay the 23% on everything new they purchased.

There did not appear to be any mechanism for taxing money sent or taken out of the country, whether by illegal immigrants sending money back to their families, or by tourists and rich people taking money out of the country to travel, or purchase foreign cars, villas, yachts, artwork etc. Some countries have limits on how much money their citizens can take out of the country and they have to pay a tax on the excess amount. Perhaps the limit could be the same percentage of the poverty level used to send back to money to the people. Should this be taken under consideration?

What happens to purchases of life and health insurance, stocks, bonds, CD’s, and similar instruments? Are these considered new or used?

A fair tax or flat tax sounds nice and easy, but there are complications involved, and some beauracracy will still exist.

41 posted on 02/25/2008 1:38:46 PM PST by gleeaikin
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To: Man50D
You may be an income tax lover if you:

1. …believe that taxing the creation of wealth is better for the economy than taxing the wealth when it is spent.

2. …believe that returning people’s tax payments to them is welfare.

3. …have no problem with a tax code that is wordier than the Bible.

4. …believe the IRS is a good department and does a good job.

5. …believe that the worst thing you could do is tax the wealth of old geezers who are living off of the sweat of the younger workforce.

6. …love to tell everyone you see that the FairTax was created by Scientologists.

7. …believe that what Bruce Bartlett says is the gospel and that scores of other credentialed economists are only paid shills.

8. …have a habit of going to online chat rooms and posting insults about the “Fairy Taxers.”

9. …think that calculating a tax the same way as the tax it is replacing is dishonest.

10. …think the economy has always been fine under the income tax.

11. …call the FairTax a “cult” because you can’t think of anything else to say.

12. …believe that cutting one tax by 25% and raising another by the same amount is inflationary.

13. …think inflation is caused by high taxes.

14. …think Milton Friedman is an idiot.

15. …have a soft spot in your heart for European style VAT’s.

16. …wrote the ten planks to the Communist Manifesto.

17. …think the prebate is Marxist but not the Communist Manifesto.

18. …sell some sort of tax advantaged product.

19. …claim you clamor for tax reform but have no earthly idea how to do that.

20. ...howl in outrage when the BATF violates the 2nd Amendment but have no concerns when the IRS violates the 1st, 4th and 5th Amendments.

21. ...believe that having the bottom 50% of income earners pay little or nothing to the government has the best chance of limiting that government.

23. ...think that people give to charity just because there is an income tax.

42 posted on 02/25/2008 1:39:10 PM PST by groanup (Don't let the bastards get you down.)
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To: Nervous Tick
I’m afraid it is you who is patently wrong on this issue.

Sorry but you are just WRONG!

I am one of those people who worked and saved for a lifetime and who is now retired. I and virtually everyone like me would be FAR better off under the FairTax!

What you are failing to realize is that every single one of those things you list IS happening to those folks today under the income tax!

43 posted on 02/25/2008 1:40:22 PM PST by Bigun (IRS sucks @getridof
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To: longtermmemmory

“...embedded taxes are only 7% AT BEST.”

Correct me if I’m wrong, but any tax paid by a business is a cost of doing business, and must be recouped in the sales price of the service or merchandise. Payroll taxes alone are about 12%. So that’s the minimum amount that becomes embedded in the price.

Where on earth did you come up with 7% ???? The Social Security tax alone is more than that!

44 posted on 02/25/2008 1:41:36 PM PST by ROLF of the HILL COUNTRY ( Terrorism is a symptom, ISLAM IS THE DISEASE!)
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To: Nervous Tick
Huh? That isn’t “essentially” a flat tax. It “is” what it mathematically is! A PROGRESSIVE INCOME TAX.

Huh? Taxed only one rate at 1% on $20,000 can only reasonably be interpreted as a flat tax. It's the same format proposed with a flat tax. By your line of reasoning the so called "flat tax" is then not a flat tax.
45 posted on 02/25/2008 1:43:23 PM PST by Man50D (Fair Tax, you earn it, you keep it!)
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To: Man50D
Taxes are more than simply a source of revenue.

Taxes are also largely about control.

To most Dems (and a fair number of Pubbies) a tax structure with a higher revenue generation but low control is less desirable than one with a lower revenue generation, but more control.

That’s how I see it anyway.

46 posted on 02/25/2008 1:44:14 PM PST by El Sordo
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To: groanup
You may be an income tax lover if you:

Bingo! I suggest you post this puppy frequently.
47 posted on 02/25/2008 1:45:19 PM PST by Man50D (Fair Tax, you earn it, you keep it!)
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To: MrB
because it removes the control from the central government.

The "central government" writes the laws on how much to tax and when. The "central government" enforces the collection of the tax. The "central government" taxes the rich and redistributes the wealth.

It sure sounds like the "central government" is in pretty firm control.

48 posted on 02/25/2008 1:45:34 PM PST by Prokopton
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To: Bigun
As you have been told many many times already it isn’t just the taxes alone that get passed along but ALL the costs associated with those taxes as well.

Gosh, I'm told my car is warming the planet, loads of times. Guess I should believe them too. Or all we have to do is hug those suicide bombers and they'll understand us. Or that the tooth fairy will be by with some coins for my pillow.

Tell me whatever you want; would be nice if you'd offer some form of reasonable evidence to support your conclusion. Because no economist anymore will stand up and continue this fiction. This is a thoughtful forum, where people actually communicate, not dictate 'you will think this way.' I challenge your conclusion - mine's easy to prove or disprove - there are well over 22 million small businesses across this nation, you can walk into any of them and talk to the owner, tell them how you're curious about this new fair tax thing, and get some rough numbers from them.

Almost every large corporation has publicly published gross sales, gross profit, net profit and gross taxes numbers that you can download from almost any financial site and go over yourself. Do not come up with the fiction that paperwork costs will be eliminated - there is a higher paperwork requirement in the FairTax plan, affecting tens of millions of people who will go from filing a yearly return to a monthly return.

We live in a very interesting time - the number of steps between the retailer and the factory floor is at an all-time low. It is why we, as an economy, are so efficient, vs most other nations. Enough with the propaganda.

49 posted on 02/25/2008 1:46:36 PM PST by kingu (Party for rent - conservative opinions not required.)
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To: Man50D

“Thus, it’s remarkable that so many Democrats, with the exception of presidential candidate Mike Gravel, oppose the FairTax”

Not really. The FT significantly reduces the control of the masses to which the DhimmiRats incessantly aspire. surprise that they don’t support the FT.

And, the plane analogy seriously misspeaks the FT plan. This author needs to get the facts straight before spewing more incorrect information. We have enough of an uphill battle with the FT, without idiots like this adding to the burden.

50 posted on 02/25/2008 1:49:53 PM PST by PubliusMM (RKBA; a matter of fact, not opinion)
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To: El Sordo
Taxes are more than simply a source of revenue.

Taxes are also largely about control. You're on the mark! What Congress critters don't want people to know is that the people control them instead of the opposite. Anyone who doubts that needs only to remember what happened twice this summer when the people flooded Congress with calls, emails and faxes telling them to reject amnesty for illegal aliens. Congress wilted under the pressure.
51 posted on 02/25/2008 1:49:54 PM PST by Man50D (Fair Tax, you earn it, you keep it!)
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To: Nervous Tick

You’re not very smart. You make no sense at all.

52 posted on 02/25/2008 1:52:28 PM PST by Onerom99
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To: longtermmemmory
...if she does not go to the expense of producing an itemized reciept she will be a criminal.

You are comparing pre FairTax rules to post FairTax rules. She doesn't itemize now, but would after the FairTax is enacted, itemizing the cost of the product or service and the amount of the FairTax. Right now, she is not required to do that, thus the taxes are embedded in the cost of the product or service. Remove those embedded taxes and the cost will drop. The price then reflects the new lower cost plus the new FairTax.

53 posted on 02/25/2008 1:53:00 PM PST by Tatze (I'm in a state of taglinelessness!)
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To: longtermmemmory
Free from what? oldIRS vs NEW-IRS?

Free from the communist inspired, class warfare promoting, income tax and all it's appendages! The IRS is defunded and all it's records are required to be destroyed under the FairTax. Did you not know that?

Free from book keeping? not according to HR25 which has the draconian registration and reporting requiremetns.

There are no such requirements in the Fairtax bill. You are being disingenuous!

Free from lobbyists? not accordign to the K street lobbyists who will be marching to the Hill for all sorts of exemptions and from lobbyists.

Lobbiest will pull a vacuum on Washington D.C when the Fairtax is enacted as there will be nothing for them to do there. There are no exemptions to lobby for under the FairTax!

Free from politics? not on you life as democrta demand a “living rebate check”. Free from entitlement programs? not from the prebate/rebate entitlement program that dwarfs the wealfare and social security systsms. Especially around each election cycle. It will very well be the monthly living expense as social security has become from the socialist con job of FDR as a mere supplement for seniors. The only Free will be trading the chains of the IRS slavery to the NewIRS slavery with new and improved draconian intrusivness and that fresh entitlement program scent.

There is no "entitlement" program in the Fairtax but there IS a mechanism which allows now FREE individuals to determine for themselves what their "necessities are rather than some government hack doing it for them. VERY appropriate for a FREE society me thinks!

54 posted on 02/25/2008 1:53:14 PM PST by Bigun (IRS sucks @getridof
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To: Man50D
Increasing numbers desire a fundamental overhaul by replacing a tax code that takes money from people before they touch it to one they gives people the freedom to choose how much and how often they are taxed.

I hope you are right, but honestly, I really don't see any ground swell for tax reform out there.

The masses are dumbed down to the point that they think an "instant refund" of their own money from H&R Block (at 20% APR) is some kind a damn windfall.

The middle to upper middle are also laboring under the idea that mortgage interest deductions and 'tax free' IRA contributions represent some sort of constitutional entitlement.

55 posted on 02/25/2008 1:53:24 PM PST by Ditto (Global Warming: The 21st Century's Snake Oil)
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The FairTax won’t happen because obviously there’s too many morons who don’t understand how it works, but go around blathering about it anyway.

Many on this forum.

56 posted on 02/25/2008 1:55:17 PM PST by Onerom99
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To: longtermmemmory
I believe the fair taxers already admitted the alleged embedded taxes are only 7% AT BEST.

Perhaps you can direct me to some source where the FairTax authors have admitted this??

And of course we need less taxes. We also need less spending. And unfortunately, all of this bickering is rather pointless as Congress is not going to pass ANY major tax reform, be it the FairTax or the Flat Tax, either of which would be a great improvement over the current system.

57 posted on 02/25/2008 1:59:16 PM PST by Tatze (I'm in a state of taglinelessness!)
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To: kingu
Here is an excerpt from remarks made by The John M. Olin Distinguished Professor of Economics at George Mason University, Dr. Walter E. Williams, recently to a standing-room-only crowd of students, faculty, and guests at Hillsdale College's Constructive Alternatives Seminar:

"...Keep in mind that a working definition of slavery is that you work but do not have any rights to the fruit of your labor. Taxation and regulation constitute confiscation of some or all of the freedom to own and use property. This confiscation has reached unprecedented proportions. In 1902 expenditures at all levels of government totaled $1.7 billion, and the average taxpayer payed only $60 per year in taxes. In fact, from 1787 to 1920, federal expenditures never exceeded 4 percent of the Gross National Product (GNP), except in wartime. Today federal expenditures alone are $1.8 trillion - almost 30% of GNP - and state and local governments spend over a trillion more. The average taxpayer now pays more than $8,000 a year, working from January 1 to May 8 to pay federal, state, and local taxes. In addation to the out-of-pocket cost, Americans spend 5.4 billion hours each year complying with the federal tax code-roughly the equivalent of 3 million people working full time. If it were employed in productive activity, the labor now devoted to tax compliance would be worth $232 billion annually. The federal cost of hiring 93,000 IRS employees is $6 billion. If these Americans weren't fooling around with the tax code, they could produce the entire annual output of the aircraft, trucking, auto, and food processing industries combined..." Emphasis added

I gess Dr. Williams doesn't know what HE is talking about either!

58 posted on 02/25/2008 2:00:38 PM PST by Bigun (IRS sucks @getridof
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To: Ditto
I hope you are right, but honestly, I really don't see any ground swell for tax reform out there.

I suggest you consider the 74 cosponsors for The Fair Tax. They didn't sign on out of altruism. They did so because of pressure from an increasing number of constituents who made it clear politicians either support The Fair Tax or risk losing their jobs.
59 posted on 02/25/2008 2:04:25 PM PST by Man50D (Fair Tax, you earn it, you keep it!)
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To: Man50D
Right on! In fact, a former chairman of the Federal Reserve Bank of New York, Mr. Beardsley Ruml, said that TAXES FOR REVENUE ARE OBSOLETE.
60 posted on 02/25/2008 2:08:17 PM PST by Bigun (IRS sucks @getridof
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