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WOODALL INTRODUCES FAIRTAX BILL ON DAY ONE WITH RECORD NUMBER OF ORIGINAL CO-SPONSORS
Press Release | Jan. 5, 2011 | U. S. Rep Rob Woodall

Posted on 01/06/2011 3:52:22 AM PST by phil_will1

Washington, DC—On Wednesday, January 5, 2011, Congressman Rob Woodall (GA-07) introduced H.R. 25, the FairTax. The FairTax legislation eliminates the current income tax paradigm and replaces it with a system of taxation based on consumption. The bill was introduced on Wednesday with 47 original co-sponsors—the most original co-sponsors the bill has ever had for its initial introduction.

“I committed to the Seventh District of Georgia that my efforts in Congress would focus on reclaiming freedom for the American people. It is for that reason that I am proud to make the FairTax—the only bill that restores transparency and simplicity to our tax code—my very first action in Congress. I have said since its inception that the FairTax is not a tax bill; it is a freedom bill,” Woodall said.

Woodall, who was sworn-in to Congress earlier in the day, played an integral role in crafting the original text of the FairTax as former Congressman John Linder's Chief of Staff when the bill was originally introduced in 1999.

"Our current tax system is a bloated, convoluted mess that gives government power over Americans' pockets. With 47 Members of Congress and counting signing their names to the FairTax, we are closer than ever before to voting on legislation that eliminates the frustrating mess that is the IRS."

Although the FairTax was introduced with 47 original co-sponsors, Woodall anticipates adding many more Members of Congress to the bill. Once the FairTax is introduced with the original co-sponsors, Members are able to sign on to the bill as co-sponsors throughout the 112th Congress.

"The number of signatures on the FairTax this time around is a testament to the will of the people. It is clear that Americans do not want to have their hard-earned money taken away and they want to reclaim the freedom to spend their money how they choose and when they choose.”

The list of original co-sponsors is as follows:

1) Tom Price (GA)

2) Brian Bilbray (CA)

3 ) John Carter (TX)

4 ) Michael Conaway (TX)

5 ) John Duncan (TN)

6) Virginia Foxx (NC)

7) Steve King (IA)

8) Michael McCaul (TX)

9) Pete Olson (TX)

10 ) John Sullivan (OK)

11 ) Mac Thornberry (TX)

12) Phil Gingrey (GA)

13) Roscoe Bartlett (MD)

14) Don Young (AK)

15) Ander Crenshaw (FL)

16) Todd Akin (MO)

17) Lynn Westmoreland (GA)

18) Tom Graves (GA)

19) Gus Bilirakis (FL)

20) Ted Poe (TX)

21) Randy Neugebauer (TX)

22) Jeff Miller (FL)

23) Robert Wittman (VA)

24) Jack Kingston (GA)

25) Marlin Stutzman (IN)

26) Jeff Flake (AZ)

27) Billy Long (MO)

28) Cliff Stearns (FL)

29) Tim Walberg (MI)

30) Dennis Ross (FL)

31) Dan Boren (OK)

32) Mo Brooks (AL)

33) Darrell Issa (CA)

34) Richard Nugent (FL)

35) Tim Scott (SC)

36) Blake Farenthold (TX)

37) Jeff Duncan (SC)

38) Rob Bishop (UT)

39) Mike Pence (IN)

40) Sandy Adams (FL)

41) John Mica (FL)

42) Sue Wilkins Myrick (NC)

43) Dan Burton (IN)

44) John Culberson (TX)

45) James Lankford (OK)

46) Mike Pompeo (KS)

47) Gary Miller (CA)

###

-- Jennifer Drogus Communications Director Congressman-elect Rob Woodall

Seventh District of Georgia 202.225.4272 | jennifer.drogus@mail.house.gov


TOPICS: Business/Economy; Constitution/Conservatism; Front Page News; Government
KEYWORDS: 112th; fairtax; taxreform; unfairtax
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To: CSM

“I have to admit that I have not been active in the discussions for awhile, so I may have lost touch. How would the federal law eliminate state income tax?”

I mistyped it. I meant to say that it would eliminate individual and corporate (federal) income taxes.


101 posted on 01/07/2011 8:54:40 AM PST by phil_will1 (My posts are in no way limited or restricted by previously expressed SQL opinions)
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To: Lynne
I can’t see prices being lowered by business owners, at least initially. I think that once they don’t have the tax burden, they will look at it as bonus income. Maybe over time prices would be reduced due to competition, but I just can’t see them coming down that much that quickly.

This is one of the complexities of introducing the Fair Tax that is most times not addressed in discussions. The examples with the automobile is when the system is fully in place and functioning. Right now, all inventory, both finished and in process has embedded tax value. A methodology to transition from embedded tax value to point of sale taxation would be required. There are several options available that would work and since the overall trend has been toward just in time inventories, the transition period would not necessarily very long, probably less than two years in even the most complex businesses. Yes, there would be some foolish businesses that would think of it as a bonus and not realize that the funds reclaimed from the tax flow are not a bonus but must be used to maintain wages and dividends. If the Fair Tax system is set up as revenue neutral, the consumer still needs the same size pay check since their tax burden has not gone down, they will just be paying the tax in a different way.

If you believe prices are set by competition and the laws of supply and demand, then prices will come down as the embedded tax burden is eliminated. For anyone who doesn't believe that, then there is no point in further discussion. The prupose of the example was to indicate what an economic windfall the transition to the Fair Tax would be. Take the current total trade deficit and multiply it by 10%. This would be a good approximation of the lost revenue that the US consumer would regain. The number is huge and it is there for the taking.

102 posted on 01/07/2011 8:58:12 AM PST by CMAC51
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To: taxcontrol

That could very well be true, but it would still be a very huge improvement over the current state. In addition, every piece of legislation could be framed with the % increase in the sales tax.....


103 posted on 01/07/2011 9:07:16 AM PST by CSM (Keeper of the "Dave Ramsey Fan" ping list. FReepmail me if you want your beeber stuned.)
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To: phil_will1

OK, thanks. It is good to know that I am not giong crazy.

I do think that ultimately state income taxes would be elimated once the fed income tax is eliminated. The State’s would find it much easier to “piggy back” on the fed system.


104 posted on 01/07/2011 9:11:01 AM PST by CSM (Keeper of the "Dave Ramsey Fan" ping list. FReepmail me if you want your beeber stuned.)
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To: Taxman

Fair Tax bump - any income tax is wrong! Tax spending, the underground economy. I am proud to see so many Texas sponsors.


105 posted on 01/07/2011 9:31:36 AM PST by austingirl
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To: Bigun
That is the (stated) goal of the Fairtax plan, not mine.
Wrong again Lewis! That is what the LAW requires of any replacement tax plan Lewis!
No, once again, as always, I am not wrong.

Fairtax:

The FairTax will not be revenue neutral (i.e. bring in the same revenue as the current system) at 23%"

The truth: The FairTax rate of 23% (when calculated inclusively like income tax rates) has been thoroughly researched to provide all the revenues now collected under both the income tax system and through FICA payroll taxes. Reports otherwise are largely based on the President's Advisory Panel on Tax Reform which declared the rate would have to be much higher. What the Panel failed to make clear in an amazingly shameless sleight-of-hand is that they never studied the FairTax legislation as it exists in pending legislation. They ignored $22 million of FairTax research and, instead, quietly devised their own national consumption tax which they loaded with the exemptions and deductions they felt were "politically realistic". They also failed to calculate the effects of elimination of the FICA tax on annual taxpayer burdens or on the distributional effects of the FairTax across the income spectrum. Upon completion--and after declaring a national consumption tax flawed--they then refused to publish their underlying assumptions.


106 posted on 01/07/2011 10:02:10 AM PST by lewislynn ( What does the global warming movement and the Fairtax movement have in commom? Misinformation)
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To: lewislynn

That does not disprove a ting I said Lewis.

If you think it does so be it but you are just plain WRONG! AGAIN!


107 posted on 01/07/2011 11:28:10 AM PST by Bigun ("It is difficult to free fools from the chains they revere." Voltaire)
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To: phil_will1
"The current system measures over 70,000 pages as measured by CCH."

And when they get through grandfathering all the decisons that were made under the old system, the new system will be 120,000 pages had have a few more loopholes.

108 posted on 01/07/2011 1:41:36 PM PST by DannyTN
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To: rrrod
A fair tax is not fair. There are two problems with it.

1) It assumes the rich spend everything they make. If they don't spend it, there is not tax.

Example: Avg Joe makes $60,000 a year as an accountant. Joe lives paycheck to paycheck and spends practically everything he makes. Assuming a 25% so-called Fair tax rate, Avg Joe tax $60,000 * (.25/1.25) = $12,000. Effectively a 20% tax rate.

Rich George makes $10,000,000 a year as a CEO. George despite his income, doesn't live extravagantly. He also spends $60,000 a year. (Of course he has a lot of perks from the company but they don't count.) Rich George's rate is $60,000 *(.25/1.25) = $12,000. Effectively a 0.1% tax rate.

George benefits more from the system than Joe does, yet George pays a fraction of what Joe does. George's taxes are effectively deferred until he spends his income, which he may never do. Which brings us to problem #2.

1) During economic downturns, government revenues will drop precipitously. When consumption falls off, the very time that government could help mitigate a consumer panic, government will either be forced into layoffs exacerbating the downturn or they will take on truly huge amounts of debt to keep basic services running. If you think debt growth is bad during this recession, wait till you see it on the Fair Tax plan. The income tax is far more stable than a sales tax. It doesn't vary with consumption, but rather with employment. And employment is more stable than consumption.

109 posted on 01/07/2011 2:15:51 PM PST by DannyTN
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To: DannyTN

“And when they get through grandfathering all the decisons that were made under the old system....”

That makes no sense at all. You don’t have all the complications of defining what taxable income is under a sales tax system. For example, depreciation methods, useful lives, depreciation recapture, the earned income tax credit, various and sundry itemized deductions and a whole host of other complications are irrelevant under a sales tax.

If you are going to defend the status quo, you need to come with a much stronger argument than that.


110 posted on 01/07/2011 2:19:32 PM PST by phil_will1 (My posts are in no way limited or restricted by previously expressed SQL opinions)
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To: phil_will1
"You don’t have all the complications of defining what taxable income is under a sales tax system. For example, depreciation methods, useful lives, depreciation recapture, the earned income tax credit, various and sundry itemized deductions and a whole host of other complications are irrelevant under a sales tax."

You don't?
Are you going to tax medical services? Because TN doesn't. Is the Unfair Tax going to raise the cost of being sick by 25%
What about food? A lot of states tax that differently than other goods? Is the Unfair Tax going to raise the cost of food for the elderly by 25%?
What about sales of equipment used by businesses to make other goods and services? Businesses are usually exempt from paying sales tax here in TN. Are you going to do that nationally? Or maybe it's just certain equipment? Is the Unfair Tax going raise the cost of business investments?

What about the internet sales? Are you going to tax them? Interstate transactions? Is the Unfair Tax going to apply to those?

UnFair tax advocates say the UnFair Tax will be collected by state Sales Tax departments. So how are they going to collect when people make out of state purchases? Are there going to be reciprocal agreements between states?

Etc.

Etc.

Etc.

etc.

etc.

TX sales tax law is 161 pages. And that's just the code. Who knows how much the regulations and interpretations behind it are.

111 posted on 01/07/2011 2:34:43 PM PST by DannyTN
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To: DannyTN

All consumption purchases are taxed. The FairTax uses a rebate, rather than exempting specific items or classes. It is much simpler and fairer. No one pays taxes (on a net basis) up to poverty level purchases; everyone is a net taxpayer who consumes above the poverty level.

Business inputs are not consumption and are therefore not taxed. The idea is to tax a product once and only once during its life cycle.

Internet sales would be taxed the same way brick and mortar sales are. The idea is to stop playing favorites with the tax code and stop all the economic distortions and political games of the current system.

The sales tax will be collected in the same state that the sale takes place by the business making the sale. It doesn’t matter if the buyer is from down the street or from France.


112 posted on 01/07/2011 3:29:41 PM PST by phil_will1 (My posts are in no way limited or restricted by previously expressed SQL opinions)
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To: DannyTN

“TX sales tax law is 161 pages. And that’s just the code. Who knows how much the regulations and interpretations behind it are.”

I have never seen the TX sales tax statute, but I am guessing you could reduce that by at least a third if you substituted a rebate system, such as the FairTax has, for the exemptions/exclusions that I assume Texas uses.

The FairTax bill is, I think, around 140 or so pages. Even if Treasury supplements that with regs that are 3 times that long, you still would have less than 1,000 pages in the system. CCH counts the current system at over 70,000 pages. Are you really implying that you don’t consider that a significant simplification?


113 posted on 01/07/2011 3:36:12 PM PST by phil_will1 (My posts are in no way limited or restricted by previously expressed SQL opinions)
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To: Taxman
I have noticed these Fair Tax discussions seem to come up most frequently during “tax season”, which for me is December through April 15. I spent several days in December assembling data to estimate my 2010 taxes and planning moves to (legally) minimize my income tax. During January and February, I will be reviewing W-2’s, 1099’s of various sorts, business expenses and receipts and collecting deduction information. Then I will assemble a package to send to my tax accountant. I may then file about March 15, unless I owe more tax. Then filing date will be April 15.

I mention this because the Fair Tax works way different than this. With the Fair Tax:

1. Tax is paid when I buy something and it is over. I don't have to tell the government where I got the money, or how many dependents I have, or what I gave to charity, or how much property tax I paid. I pay tax every time I buy something at retail. (Used items are tax-free.) There is no “tax season”. April 15 is just another day.

2. I don't have to keep track of where my money comes from, or how much tax has been withheld. Salary, profits, capital gains, dividends are all the same. I pay tax when I spend it, not when I earn it. And the government no longer cares about depreciation, or which formula was used to calculate it for a particular item.

3. Cute little gimmicks to defer taxes, like IRA’s (standard or Roth) or 401(k)’s or 403(c)’s, are totally unnecessary. Saving accounts are savings accounts. Income from them is not taxed until it is spent.

4. I don't have to keep track of donations to charities or worry about whether they are registered as a 501(c)(3) with the IRS.

5. It is no longer any of the government's business how much income I have. Fair Tax payments are anonymous, so they don't know how I spend it either.

As I read these posts, I see very little discussion of how much life would be simplified by the Fair Tax. That is a major benefit for me. Depending upon whose flat tax proposal is used, very little of the complexity of the current system goes away. What does a flat tax really gain us?

114 posted on 01/07/2011 3:53:22 PM PST by Cracker Jack (If it weren't for the democrats, republicans would be the worst thing in Washington.)
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To: Cracker Jack

“What does a flat tax really gain us?”

You are right about that. The flat tax is appealing to the inside the beltway crowd because it essentially wipes the slate clean and enables the lobbyists to go right back to work peddling influence and reinstating the tax preferences that “the flat tax” wiped out. This is what history has taught us.


115 posted on 01/07/2011 4:08:50 PM PST by phil_will1 (My posts are in no way limited or restricted by previously expressed SQL opinions)
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To: Cracker Jack
Great post my FRiend! It really is ALL about

F R E E D O M ! ! !

116 posted on 01/08/2011 6:31:38 AM PST by Bigun ("It is difficult to free fools from the chains they revere." Voltaire)
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To: CitizenUSA
Pass an amendment abolishing the income tax first. Then we can talk about Fair Tax

Read the bill. and then you can talk.

117 posted on 01/08/2011 3:28:44 PM PST by maine-iac7
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To: DannyTN
TX sales tax law is 161 pages. And that's just the code. Who knows how much the regulations and interpretations behind it are.

Statement of Billy Hamilton, Deputy Comptroller,
Office of the Texas Comptroller of Public Accounts,
on behalf of Honorable Carole Keeton Cylinders, Texas State Comptroller of Public Accounts

Testimony Before the House Committee on Ways and Means

Hearing on Fundamental Tax Reform

April 11, 2000

---------

As you know, H.R. 2525 would permit states to collect and administer the Fair Tax on behalf of the federal government. In my opinion, Texas would be well-equipped to administer the Fair Tax based on our experience in administering our own sales tax. Even though the base, rate and other characteristics of the Fair Tax are significantly different from the Texas sales tax, it would be feasible for our office to collect the Fair Tax by expanding and enhancing the systems we currently have in place. For example, we would:

· Expand our current system for registering Texas retailers to include registration of sellers under the Fair Tax (615,000 businesses are currently registered as sellers in Texas; under the Fair Tax, 1.5 million Texas businesses would have to be registered);

· Expand our taxpayer assistance efforts to respond to a larger volume of telephone, letter and e-mail inquiries from sellers who collect the Fair Tax and individuals who pay it;

· Expand our Revenue Processing Division to process more returns and tax payments on a more frequent basis and to remit tax collections to the federal government on an almost-daily basis;

· Expand our current audit team and train all auditors to examine businesses for both the Fair Tax and the Texas sales tax; and

· Expand our information technology systems to collect and maintain the computerized records critical to effective administration of a consumption tax like the Fair Tax.

The expansion of our systems to administer the Fair Tax, in the manner I've just described, would be sizable. Under the Fair Tax, we would serve approximately 900,000 more filers than we do currently. We estimate that serving that many additional taxpayers would require 1,100 to 1,600 more full-time employees. The Texas Comptroller currently employs about 2,700 people on a full-time basis.

In spite of this large expansion, the compensation for collecting the Fair Tax that would be provided to states under H.R. 2525 would likely cover our projected costs. As a first approximation, we estimate that the cost to the Texas Comptroller's office for collecting the Fair Tax at full implementation would be $100 to $150 million per year. I emphasize, however, that there would be significant costs to begin collection, including the cost of facilities to house the additional processing facilities, the capital costs of information technology and revenue processing equipment, and the costs of notifying, registering and educating taxpayers on the new tax.

In closing, I believe that if the Fair Tax is to become a reality, the U.S. government would be well-served to make use of the existing expertise of the states. Many states have administered consumption taxes since the 1930s and have developed particular capabilities in this area. We also have extensive experience in dealing with the affected businesses. As long as the administrative fee paid to the state is adequate in relation to the costs of collection, I see no reason that the State of Texas could not effectively administer the Fair Tax.



118 posted on 01/08/2011 10:02:16 PM PST by lewislynn ( What does the global warming movement and the Fairtax movement have in commom? Misinformation)
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To: Carry_Okie
If you think for one minute that this country won't then incur all the inefficiencies of a barter economy and a black market, I've got news for you

It already does with the federal income tax whose overall tax burden keeps increasing with the corresponding number of pages that have been added onto the tax code over the last 98 years. You're naive if you think there isn't bartering and a black market system with a tax code in excess of 67,500 pages. There will be far less bartering and a far smaller black market with a consumption base tax that will increase people's purchasing power and eliminate the increasingly intrusive IRS along with their multitude of tax forms.

A "Fair Tax" is no panacea. Focus on cutting spending instead.

No tax system is a panacea but The Fair Tax will be far better than what we have today. We can focus on cutting spending and reducing taxes at the same time since The Fair Tax will eliminate the IRS's $11 billion price tag.
119 posted on 01/09/2011 6:34:51 AM PST by Defend Liberty
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To: Defend Liberty
You're naive if you think there isn't bartering and a black market system with a tax code in excess of 67,500 pages. There will be far less bartering and a far smaller black market with a consumption base tax that will increase people's purchasing power and eliminate the increasingly intrusive IRS along with their multitude of tax forms.

You're naive if you think that the type of enforcement you'll get with a Fair Tax won't be far more intrusive than the existing system. The very assertion commonly made on this thread to that it captures everybody's expenses displays the level of comprehensive enforcement envisioned.

Unfortunately, most of the evasion will be done by low-income people who now pay no income taxes. Paying nearly 50% on a transaction (as they would in California) is a LOT of money to them (the law of the diminishing marginal value of money being what it is). So this law will criminalize vast numbers of people who now face no such complications.

Worse, for you to make such a hand-wave assertion of "far less bartering," when I cited an existing example of bootleg cigarettes and alcohol, begs for an example. You offered none. I promise you, the majority of people in this country don't worry about 67,500 pages. They fill out a short form or an EZ.

I was an NRST advocate long before there was a Fair Tax proposal. No more. Cut spending. That's the real problem.

120 posted on 01/09/2011 7:53:48 AM PST by Carry_Okie (The environment is too complex and too important to manage by central planning.)
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To: Cracker Jack
As I read these posts, I see very little discussion of how much life would be simplified by the Fair Tax.
That's because you're wrong on most if not all points.

Wages, salaries and self-employment income are required to be reported.

If you want a (GAG!)"prebate" you'll have to disclose your dependants.

You are not "required" to disclose your charitable contributions now, what's your point?

How do you pay property taxes without the government knowing how much you paid?

If you have profits it means you sold something, you'll have to keep books on what and how much you sold it for, if they're taxable or not and if so remit 23% of your gross...including 23% of your self-employment income from services...How is that different again?

Savings and both interest paid and earned ARE taxable. There is a 23% tax on any amount over the basic FED FUND interest rate as well as a 23% (actually 30%) on any fees.

The Fairtax doesn't change banking laws requiring banks to report large deposits...so you could still hoard cash without the government knowing. But how is that any different?

121 posted on 01/09/2011 10:29:41 AM PST by lewislynn ( What does the global warming movement and the Fairtax movement have in commom? Misinformation)
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To: Carry_Okie
You're naive if you think that the type of enforcement you'll get with a Fair Tax won't be far more intrusive than the existing system. The very assertion commonly made on this thread to that it captures everybody's expenses displays the level of comprehensive enforcement envisioned.

Why would the federal government care about anyone's expense patterns when people will have already complied by paying the tax at the point of sale?

Unfortunately, most of the evasion will be done by low-income people who now pay no income taxes. Paying nearly 50% on a transaction (as they would in California) is a LOT of money to them (the law of the diminishing marginal value of money being what it is). So this law will criminalize vast numbers of people who now face no such complications

Your statement might be accurate if it weren't for the fact the tax rate will be 23%, not 50% and that the prebate will reimburse people monthly for taxes paid on necessities up to the poverty level in order to lessen the burden on low income earners.

Worse, for you to make such a hand-wave assertion of "far less bartering," when I cited an existing example of bootleg cigarettes and alcohol, begs for an example. You offered none. I promise you, the majority of people in this country don't worry about 67,500 pages. They fill out a short form or an EZ.

People will be far less likely to bootleg any product considering their purchasing power will increase since federal income taxes will no longer be deducted from their paychecks or dividend checks. I promise you more people have become worried about the 67,500 plus pages as the Alternative Minimum Tax continues to lower the threshold for taxable income to include lower income earners who the ATM wasn't originally meant to target.

I was an NRST advocate long before there was a Fair Tax proposal. No more. Cut spending. That's the real problem.

So your alternative is to keep in place a tax code that has continues to be increasingly intrusive and oppressive, especially now with unconstitutional Obamacare adding 16,000 more IRS agents and requiring businesses to file 1090 forms for any transactions over $600, until spending is cut to some unspecified level? No tax code is designed to specifically cut spending. The Fair will reduce spending by eliminating the IRS and its $11 billion price tag.
122 posted on 01/09/2011 11:47:04 AM PST by Defend Liberty
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To: lewislynn
I am going to respond to this, though I have read some of your posts, and it appears you, for some reason, are a slow learner. Your points seem to demonstrate a near total ignorance of the Fair Tax proposal.

Wages, salaries and self-employment income are required to be reported.

By whom? Certainly not the one that makes a purchase.

If you want a (GAG!)"prebate" you'll have to disclose your dependants.

This is the one point that separates you from demonstrating total ignorance of the Fair Tax. Obtaining a refund for overtaxation (prebate) does require disclosing some dependent information.

You are not "required" to disclose your charitable contributions now, what's your point?

You are "required" to do this if you want to pay the minimum legal tax.

How do you pay property taxes without the government knowing how much you paid?

I am sorry, I thought the topic was federal taxes. I do not pay property tax to the Feds. But, to get those wonderful federal income tax deductions, I have to tell the IRS how much I spent for the local property tax.

If you have profits it means you sold something, you'll have to keep books on what and how much you sold it for, if they're taxable or not and if so remit 23% of your gross...including 23% of your self-employment income from services...How is that different again?

You are way off. Profits are not taxed or reported to the government. Business record-keeping would also be simplified--a lot. The partners or stockholders may require detailed books to be kept, but the tax bureaucracy has no legitimate interest in net profit. They need to know the total of retail sales. If your sales are all to other businesses to use in their product, your business owes no Fair Tax. Items or services sold at retail would indeed require record-keeping, with records very similar to records used to pay state sales tax.

Savings and both interest paid and earned ARE taxable.

Wrong. Interest or dividends from investments are not taxed when received by the consumer. When paying "interest" on a loan, the payment has two components--interest and service. Fair Tax is paid on the service portion. The tax on financial instruments is only on the service portion. Buy stock at a brokerage and pay no tax on the stock and Fair Tax on the broker's commission.

That's because you're wrong on most if not all points.

I do wish you would try to read and comprehend the Fair Tax bill. It must be tiresome spreading so much misinformation.

123 posted on 01/09/2011 12:01:02 PM PST by Cracker Jack (If it weren't for the democrats, republicans would be the worst thing in Washington.)
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To: Cracker Jack
Wages, salaries and self-employment income are required to be reported.
By whom? Certainly not the one that makes a purchase.
LOL! HUH?

`SEC. 903. WAGES TO BE REPORTED TO SOCIAL SECURITY ADMINISTRATION.

You are "required" to do this if you want to pay the minimum legal tax.
No, you choose to do it, no one requires you to do it...were you saying someting about ignorance?
I am sorry, I thought the topic was federal taxes. I do not pay property tax to the Feds. But, to get those wonderful federal income tax deductions, I have to tell the IRS how much I spent for the local property tax.
Property taxes are public information. Even your neighbor can know how much you pay. The fact YOU CHOOSE to voluntarily tell the IRS is your problem...ignorance is bliss.
You are way off. Profits are not taxed or reported to the government.
The Fairtax law is NOT written for the consumer. The 23% rate is what the business pays, not the consumer. The 23% tax is a percentage OF the (taxable) gross including profits, so the Fairtax does indeed tax profits...Yet more ignorance of the concept
Wrong. Interest or dividends from investments are not taxed when received by the consumer. When paying "interest" on a loan, the payment has two components--interest and service. Fair Tax is paid on the service portion.
`(3) IMPLICITLY CHARGED FEES FOR FINANCIAL INTERMEDIATION SERVICES-

I do wish you would try to read and comprehend the Fair Tax bill. It must be tiresome spreading so much misinformation.

124 posted on 01/09/2011 7:14:36 PM PST by lewislynn ( What does the global warming movement and the Fairtax movement have in commom? Misinformation)
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To: JaneNC
If it is possible, the flat tax - a single-rate Income Tax - is even more deceptive than the Income Tax. We passed that in 1985. Being an Income Tax, though, it still had a Tax Code, and Congress was still able to change it.

Over the next 25 years, Congress added FIVE tax rates and more than 18,000 Amendments to the Tax Code (so it is no longer “flat”), at an average of more than FOUR Amendments PER DAY it is in session. Each of those Amendments gave a TAX BREAK to a friend or contributor of someone in Congress, shrinking the tax base incrementally. The result is that we are worse off than we would have been if Congress had done nothing.

American retail prices still have a 26% average federal tax component in their product pricing, imports are still not taxed, Americans still spend more than $400 billion per year on compliance costs, we still have our $1.5 trillion trade deficit, production lines and jobs continue to migrate overseas, the funding for Social Security and Medicare are still Ponzi schemes (soon to be broke), and the IRS collects less than 49% of the Income Tax owed - that figure keeps shrinking and collection costs keep rising, as the Tax Code grows. No, we do not need to try the flat tax again.

Conclusion: we HAVE to get rid of the Income Tax AND its Tax Code. The only tax bill that does that is H.R.25, The Fair Tax Act. It has 48 co-sponsors already. How many does the flat tax have, this time around?

125 posted on 01/10/2011 8:41:16 PM PST by Pete Malone
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To: Pete Malone
Welcome to FreeRepublic

We've never had a flat tax and there is NOT "26% average" federal tax component in our product pricing.

Enjoy the koolaid at the Fairtax meet and greet??

126 posted on 01/11/2011 12:25:15 AM PST by lewislynn ( What does the global warming movement and the Fairtax movement have in commom? Misinformation)
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To: Defend Liberty
Why would the federal government care about anyone's expense patterns when people will have already complied by paying the tax at the point of sale?

Point of sale times the number of transactions equals the degree of intrusion. With the combined load of the Feds and the States adding half-again the purchase price, you can bet your bottom dollar that people will avoid paying it. Cash and barter transactions will become more common. In order to enforce their take, the Feds would have to engage in not only illegal searches and seizures, but massive sting operations to get their cut. If you think the IRS is intrusive now, just wait until your "FareTax" induces a police state with revenue collectors everywhere deeming what constitutes barter or not.

Your statement might be accurate if it weren't for the fact the tax rate will be 23%, not 50% and that the prebate will reimburse people monthly for taxes paid on necessities up to the poverty level in order to lessen the burden on low income earners.

Typical FAREtax duplicity. There isn't a single other sales tax anywhere that isn't calculated as a fraction of the base transaction. Not one. Yet your FAREtax advocates calculate its impact as the fraction of tax AFTER it is assessed, a duplicitous practice at best. The actual rate is 0.23/(1-0.23) = 0.30 or 30%, as I said. Your second failing is failure to read: I said "(as they would in California)," meaning that the total sales tax would consist of the FAREtax hit, PLUS California's existing sales tax of 8.5% of the base transaction, PLUS the amount California would need to ADD because the lack of a 1040 would make a State income tax untenable. Hence, California would need to bump its State 8.5% sales tax to make up for lost income tax revenue. Given that the average marginal State income tax rate in California is now 12.5%, I swagged that the sales tax rate would have to rise to nearly 20% to cover both the existing sales tax plus the rate needed to make up for the now defunct State income tax. Hence, 30% Federal NRST + 20% SRST = 50% total sales tax, which is what I said above. Even if it was 5% less, it's still too much to keep people from cheating.

If you think for one minute people won't do everything they can to avoid a 50% sales tax rate, I've got news for you. As I said, look at the market for bootleg cigarettes and booze.

People will be far less likely to bootleg any product considering their purchasing power will increase since federal income taxes will no longer be deducted from their paychecks or dividend checks.

You people are something else. Never in human history have people been so overjoyed to know what they're actually paying for government that they take their fattened paychecks and willingly go find a government agent to pay at a kid's lemonade stand. You seem to think that the entirety of retail is at electronic cash registers.

So, how are they doing collecting that existing Federal tax on marijuana?

So your alternative is to keep in place a tax code that...

So, not only are you dishonest, but putting words in my mouth as a straw-man will get you ignored from now on, that is, unless I feel like rubbing your sanctimonious nose in your BS numbers again. G_d's system was an income tax, but it was only a 10% flat tax. Nor am I totally opposed to tariffs. I think sales taxes are fine as long as one can keep the real rate, State and Federal included, below 15%. Beyond that and people will cheat, in droves, no matter how much cash they've got. Hence, the real problem is the scope and cost of government, not the tax system. My focus is cutting spending and regulation for those operations not specifically listed in the Constitution because that is where our focus must be.

127 posted on 01/13/2011 2:53:25 AM PST by Carry_Okie (The environment is too complex and too important to manage by central planning.)
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To: Carry_Okie
Point of sale times the number of transactions equals the degree of intrusion.

What intrusion? There will not be any forms to fill out detailing every aspect of your personal life to the feds. The IRS will no longer be looking over your shoulder since the agency will no longer exist. You won't have to worry about fines, penalties or imprisonment since the tax will already have been paid.

With the combined load of the Feds and the States adding half-again the purchase price, you can bet your bottom dollar that people will avoid paying it.

Let's see. The Fair Tax rate will be 23% per the bill. States impose a sales tax rate of no more than 8.5%. You must be using some type of new math to reach 50% by adding those figures together. That ignores the fact people's purchasing power will increase as they will no longer have federal tax deductions from their paychecks or other sources of income.

If you think the IRS is intrusive now, just wait until your "FareTax" induces a police state with revenue collectors everywhere deeming what constitutes barter or not.

If you think there will be an IRS then you haven't read The Fair Tax Act(HR25). The IRS will not be intrusive at all since The Fair Tax abolishes the IRS by defunding the agency. Even if the IRS would still exist, they would not be policing consumers since they will have already paid the tax at the point of sale and will not have any forms for people to file for the IRS to extract any personal information. Businesses will be more inclined to remit the tax due to being paid 1/4 of one percent for the taxes they remit.

The actual rate is 0.23/(1-0.23) = 0.30 or 30%, as I said. Your second failing is failure to read:

Nothing like spreading misinformation with only a partial truth. There are already embedded corporate income taxes in all items people purchase today. They amount to almost 23% of the price. A $100 item actually costs $77 with $23 in tax. It is known as the tax inclusive rate. In this case it is 23%(23/100). The fair Tax removes the inclusive tax by eliminating corporate income taxes and applying that same rate separately at the point of sale. it is the tax exclusive rate. The same item will cost $77 with a $23 tax (23/77=30%). The dollar amount collected will be the same regardless of which rate is quoted.

California's existing sales tax of 8.5% of the base transaction, PLUS the amount California would need to ADD because the lack of a 1040 would make a State income tax untenable.

You really need to get past associating state sales taxes with The Fair Tax since the it only addresses federal sales tax. However The Fair Tax Act will permit states to replace their sales tax with The Fair Tax. States maybe inclined to do so as The Fair Tax will have a much broader tax base.

If you think for one minute people won't do everything they can to avoid a 50% sales tax rate, I've got news for you. As I said, look at the market for bootleg cigarettes and booze.

Don't look now but you are contradicting yourself. You keep quoting a 50% tax rate despite citing in your previous comment the Fair Tax rate will be a far lower rate of 30%, which in itself is erroneous and despite that fact the 23% rate is written the Fair Tax Act legislation!

You people are something else. Never in human history have people been so overjoyed to know what they're actually paying for government that they take their fattened paychecks and willingly go find a government agent to pay at a kid's lemonade stand. You seem to think that the entirety of retail is at electronic cash registers.

The growing number of grassroots Fair Tax supporters are supportive of a tax system that will fundamentally shift power away from the federal government and back to the people by giving people the power to decide when and how often they are taxed based on when they choose to make purchases thereby dovetailing with the limited government principles the founding fathers instilled in the Constitution.

So, how are they doing collecting that existing Federal tax on marijuana?

Try using a little common sense for once. It is a federal crime to possess marijuana. The Feds will arrest and confiscate any proceeds from the sale of marijuana in the future as they have in the past along with any physical property purchased with money obtained through those sales.

So, not only are you dishonest, but putting words in my mouth as a straw-man will get you ignored from now on

I'm assuming you can read. That statement you are referring to was in the form of a question, not a declaratory comment. Note the question mark at the end of that remark. You respond as if I made a claim even though there is clearly a question mark at the end of the comment and you call me dishonest? LOL!!!!!

G_d's system was an income tax, but it was only a 10% flat tax.

Oh really? If that is the case then God has already failed miserably. The current federal income tax code began as a flat income tax. People were taxed 1% on their first $20,000 of income and 7% on any income over $500,000 when the 16th Amendment was enacted in 1913. Less than 1% of the population earned more than $500,000 in 1913. That also means more than 99% were taxed just the 1%. We've all seen how that simple flat income tax has evolved into the increasingly intrusive, oppressive and convoluted mess we have today. Another flat income tax will only turn the clock back 98 years but will morph back into what we have today only faster thanks to the thousands of lobbyists that didn't exist in 1913 and it will maintain the IRS!

If your contention God intended for a flat income tax then he must also be a Communist since one of the planks in Karl Marx's Communist Manifesto is a heavy progressive tax on income. Marx understood by gradually increasing the tax burden on productivity would eventually discourage people from being productive and consequently depend on the state for their existence. I doubt that is God's intention given his experience with the Romans.

Hence, the real problem is the scope and cost of government, not the tax system. My focus is cutting spending and regulation for those operations not specifically listed in the Constitution because that is where our focus must be.

It that is your intention then why do you support a flat income tax that will maintain the single costliest agency in the federal government. The Fair Tax will abolish the IRS's 11 billion dollar price tag.
128 posted on 01/13/2011 5:44:49 AM PST by Defend Liberty
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To: Taxman

I’m a bit late to see the thread. I travel all the time, its my job.

National sales tax is actually the singular thing that could destroy the progressive movement. When all citizens become ‘vested’ in the taxation issue, it will destroy the class warfare card played by progressives, and make pleas for “investing” in progressives little communist programs very unpopular because raising taxes means EVERYBODY pays more taxes. Kind of takes the fun out of massive wasteful spending.

If phased in incrementally, while fed withholding is phased out also incrementally, there should be limited impact on economy. If the process begins with phase out of withholding first, there could actually be a small uptick in economy seems to me. Since the idea of a ‘tax holiday’ to spur economy has already been floating around, it seems possible.

What we need are some pres candidates to push this. If they wwin they can claim a mandate for it. Fairtax sounds like a step in right direction but National Sales Tax is better . Neal Bortz has been pushing it for years.

Even illegals and tourists would have to pay a national sales tax, another bonus.


129 posted on 01/21/2011 5:49:35 PM PST by 1-Eagle (B.Franklin: "A Republic...if you can keep it." Let us all resolve to be Keepers!)
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To: Carry_Okie

I think the point you actually make here is if fairtax was in place 20 years ago it might have stopped States like California from going on massive spending sprees. Taxpayers will quickly grow adverse to big govt spending.


130 posted on 01/21/2011 5:57:22 PM PST by 1-Eagle (B.Franklin: "A Republic...if you can keep it." Let us all resolve to be Keepers!)
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To: Lynne

Also, because income is not withheld by fed, you have more cash to pay the pos tax, painless


131 posted on 01/21/2011 6:01:16 PM PST by 1-Eagle (B.Franklin: "A Republic...if you can keep it." Let us all resolve to be Keepers!)
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To: 1-Eagle

Not a problem — you have kept the thread alive and added new perspective.

The reason there is so much difficulty in getting Congress and many Americans to support FairTax is PRECISELY BECAUSE FairTax will destroy the Progressive movement.

That is one of the major reasons I and many other Real Americans support it — Progressives have been attempting to destroy America since roughly 1900. They have very nearly succeeded.

It is likely that Real Americans will spend the next 100 years rebuilding America.

And, it starts with the FairTax.

For the sake of my children and grandchildren, and my countrymen and women, I hope and pray (and am working diligently to ensure that) we succeed.

If the bright light of FReedom is extinguished in the USA, as the Progressives are attempting to do, it will be hundreds of years before it is relit.

I would not wish a 21st Century Dark Ages on anyone!


132 posted on 01/21/2011 6:36:36 PM PST by Taxman (So that the beautiful pressure does not diminish!)
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To: Taxman

I sure hope we can succeed in getting this in 2012 but the campaign for it must begin now. Let’s get some activism going?


133 posted on 01/21/2011 7:21:00 PM PST by 1-Eagle (B.Franklin: "A Republic...if you can keep it." Let us all resolve to be Keepers!)
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To: 1-Eagle

I recommend that you check out http://www.fairtax.org. All sorts of helpful information there.

Educate yourself and then get involved. There may be a local FairTax chapter near you.

We have a several active chapters in the greater Jacksonville area.


134 posted on 01/21/2011 7:30:36 PM PST by Taxman (So that the beautiful pressure does not diminish!)
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