Skip to comments.“FairTax: Fire Up Our Economic Engine.”
Posted on 08/15/2012 10:58:20 AM PDT by Hostage
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To transform our economy and to get America working again, we need your friends to join our efforts to replace the income tax system with the FairTax.
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Cynthia T. Canevaro Campaign Manager Americans For Fair Taxation
Changing the tax collection METHOD does not alter the economy one iota. Spending and entitlements are the problem not tax collection. Further, those that assert that their favorite form of taxation will “limit spending” are only fooling themselves. Congress can continue to spend and borrow as much as they want. Tax collection has no impact on spending.
I would prefer to see representative apportionment where the tax amount to be collected is then passed on to the state. 50% of the tax bill is assessed as a per senator bill and the remaining 50% is assessed as a per representative bill. States can then decide for themselves the best way to collect taxes. For some, that might be a sales tax, others property taxes, etc. Each state can then decide what works best for them. As an enforcement, the penalties for not making tax payments from the state to the federal government start with representatives losing their votes in committee and goes up from there.
The Fair Tax is a wrong headed sales tax that will do as much damage as any other tax.
Look at the way cash moves through the nation. Money flows into the hands of individuals (or companies) and out of their hands. If we do not capture a bit of this flow (in both directions), we will find the individuals (or companies) going offshore for the other side of the transaction.
eg, if you abandon income tax, in favor of a 28% sales tax, then people will make all the money here, and spend it on internet purchases from other countries. Oila’ NO REVENUE and damaged economy.
If you abandon the small sales tax, then people will attempt to earn money elsewhere and will spend it here. Oila’ LOW revenue and damaged economy.
We need a small sales tax and lower income tax. Then, consumers and earners will both participate in the cost of running this gigantic enterprise.
This Fair Tax thing seems all well and good on paper, it may even work. But, I dont think We the People stand a snowballs chance in hell from ever getting away from the unlawful income tax imposed on us by the Feds.
> “Changing the tax collection METHOD does not alter the economy one iota.”
The FairTax will tax spending in the USA and its territories. It will not tax US exports!
That means that American goods and services can be priced at 20% to 30% less to foreign buyers. This fact alone will revive American manufacturing and provide a bolus of +10% GDP growth in the first year of enactment.
America was once the economic engine of the world for quality goods. We Americans set the standard but since WWII our income taxes have crept up from below 10% to more than 30%. The result has been a shelving of our way of life and a comatose economy.
Even if we were to return to the tax policies of the 1950s, the tax system ALWAYS grows back like a cancer to what we have today. With the FairTax tax code, that can’t happen!
Read here and Study UP!
> “If we do not capture a bit of this flow (in both directions), we will find the individuals (or companies) going offshore for the other side of the transaction.”
Oh really? So if we buy goods overseas for our use purposes at home, how do you propose getting these goods back into the USA? Smuggling? Are you suggesting that all American companies and individuals become lawbreakers?
I don’t know about you but if I buy a car overseas and ship it back here i will end up paying more especially when I try to register it and have to pay customs.
At the same time if there are people who don't like that they should be allowed 6 months to settle their affairs and go somewhere else.
Now, about the Fairtax ~ it ends up being related, in general, to personal income.
That's a big huge enormous mistake. That gives the government an opportunity to estimate what you should pay and then set laws so that they can force you to pay that.
144 individual tax filers versus 50 thousand tax lobbyists inside the Beltway. Not even a match but....it’s a question of educating the public now.
The debate is won by the FairTax on all points but the education process has only begun.
To turn a congressional member to the FairTax takes only about 3,000 committed FairTax activists in each district. To train the 3,000 takes education.
The video in the link is part of the education process.
Anything that would abolish the IRS, stop taxing my productivity and capture monetary transfer from the illegals/criminals flying under the radar.
Oh, did I mention....tax the crap outta money transfers to foreign nations?
>”Now, about the Fairtax ~ it ends up being related, in general, to personal income. That’s a big huge enormous mistake. That gives the government an opportunity to estimate what you should pay and then set laws so that they can force you to pay that.”
There is nothing in the FairTax code legislation about forcing any type of payment. The code is only 128 pages long. I suggest you show us the provisions in the code that cause people to be forced to pay anything.
Each year Congress must vote on the FairTax Sales Rate and every American will see what is going on, it will be completely transparent, no smoke and mirrors.
The method does matter. First, the income tax imposes a deadweight economic loss on the economy that may be as much as $400-$500 billion. Second, the civil liberties cost of the income tax is incalculable and utterly incompatible with a free society. Third, an income tax lends itself to political corruption to a far greater extent than the Fair Tax.
Nevertheless, you are entirely right that even with a Fair Tax the government will continue to spend and borrow as much as they can get away with and then some. The Fair Tax isn’t a solution to the spending problem. We need a Congressectomy and a Governmentectomy to accomplish that.
The FairTax does HELP with spending by making federal tax revenues transparent.
True the FairTax is not a solution to out of control spending but the Fairtax does provide an important piece of the arsenal for slaying the spending dragon.
To control the spending problem requires reform of the Federal Reserve Act of 1913.
Notice that both the 16th and the Federal Reserve Act were both acomplished in 1913 under an arrogant academic president by the name of Woodrow Wilson, the absolute worst president in the history of the United States. The ratification and passage of 16th and the FRA in the same year is not a coincidence. And both were under the radar with the first post-16th income tax at only 1% on more than 98% of Americans.
Took one law!
Do you currently report all items purchased on the internet that are brought into your state? In AZ, we are supposed to report the total of OOS purchases so that a "use" tax can be assessed. Most people claim "O" purchases made. UPS delivers worldwide.
And, vehicles (such as Volvo) can be "overseas delivered" with a trip over to pick up, drive and ship back. The cost is actually lower than US delivery (well, it was a few years back). The customs is lower due to it being a "used" car.
But, you miss my point. If we abandon income tax altogether, then those who receive in-flow will escape tax altogether if they purchase overseas. Do you think a yacht purchased in the Caribbean will be taxed for the US consumer? Do you want the US Coast Guard to become the IRS?
Right now, the low income folks can escape taxation, which does not seem fair. If the Fair Tax is implemented, the rich will escape tax and that does not seem fair. Both are needed, but not a 28% rate and not by itself.
No country has ever had a FairTax. It is entirely an American innovation.
>”And, vehicles (such as Volvo) can be “overseas delivered” with a trip over to pick up, drive and ship back. The cost is actually lower than US delivery (well, it was a few years back). The customs is lower due to it being a “used” car.”
Every item imported into the United States will be subject to a FairTax under the customs section of the FairTax code. And “used car” tricks will not be tolerated.
You are talking about a small sliver of the overall global economy by persons who think they are clever to commit tax evasion. A few examples of such persons will be all it takes to let the public know to comply with the FairTax code.
The real benefit will be that US goods and services that are exported will not be taxes and that fact will provide a huge competitive advantage to the companies of these goods and service.
The FairTax in no way exempts the rich. Since it's entirely tied to spending, the only way for a rich person to avoid it is to live like a pauper. Frankly, I don't see the Kennedy clan, living off their trust funds, suddenly becoming beach bums. The FairTax also gives a prebate to the everyone up to the poverty level so, yes, the poor do 'escape' paying taxes to a certain degree but just on the portion of tax that is deemed necessary for a minimal standard of living.
But, as in the Kennedy example above, it greatly expands people who aren't covered by the current tax laws. Not just the trust fund babies, but everyone who buys something helps fund our government. Tourists, illegal aliens, criminals, etc. For the first time, all these people whose income is unreported (or earned elsewhere) will be supporting us!
Some may argue that this will create a huge black market. Studies show that this happens when people think (and, possibly, are correct) that prices are too high. The FairTax shifts the taxation from the entire production chain and puts it all on the end. It's designed to be revenue neutral so the total effect will be little net shift in the final price. Remember taxes are an expense to businesses and a free market will drive down prices when expenses are removed.
The majority of the politicians in Washington don’t want to fire up the economy so the fair tax has no chance. We have no chance to change the majority of the politicians in Washington so long as the majority of Americans hold a philosophy that holds production and free trade as evil.
You didn’t read my post. The great majority will shop online, from non-taxed countries. Purchasing will shift out of the US and we will be chasing cheater consumers just as the IRS now chases cheating earners. And, who exactly will it be that doesn’t tolerate tricks? The IRS, the Customs dept., the Coast Guard. A consumption tax is simply the mirror image of an income tax. We need to capture a small amount in both directions.
Of course they won't become beach bums...they will become internet bums. Buying online from non-tax countries will shift our consuming economy offshore, much the way income earners shift it.
Probably half of Hollywood has a Consulting/Advising Co. located in a Cook Islands country where the IRS has no access. The Consulting company charges the actor/actress 75% of their income to keep them current and in vogue. The actor/actress deducts the fee and pays little or no tax. Check Sean Penn if you think this is not going on with Venezuela. Most of the 67,000 pages of tax code is written to stop this, but it still persists.
You will get exactly the same thing (in reverse) if you eliminate the income tax and rely solely upon a consumption tax. We need both, with lower rates.
“The FairTax does HELP with spending by making federal tax revenues transparent.”
You could be right, but I really don’t think it would have any material impact on spending.
>”The majority of the politicians in Washington dont want to fire up the economy so the fair tax has no chance.”
To be clear you mean to say the FairTax has no chance among the political class of the Beltway. This is true but it’s amazing how these clowns start to tap dance to our tune when we threaten their political viability.
The FairTax is the largest tax reform by more than tenfold among the political class. There is no other tax reform that even comes close to the number of sponsors in Congress held by the FairTax. This large number of congressional sponsors is even larger than the number supporting Ronald Reagan’s 1986 tax reform. So it is not a fringe movement. It is big stuff.
It is Wall St. that stands in the way of the FairTax because Wall St. has worked for decades to get all skids greased for their 401k and deferred retirement plans which is essentially dead money made into play money for the greedsters on Wall St.
Under the FairTax there will be no need to defer retirement income under IRS rules to Wall St. 401k rackets, because there will be taxing of income period.
Right now Wall St. has a near mandated gravy train of play money driven by people wanting to put away retirement funds under a number of tax deferred schemes. Under the FairTax we ruin their dollar utopia.
But there are not that many of them compared to the rest of us. All that needs to be done is get the word out and get people educated because there is one hell of a lot of disinformation put out by the NY financial press as surrogates of Wall St. investment moguls against any tax reform that threatens their fiefdoms.
That’s really the crux of the battle:
Wall St. and their minions on K St. against the American people.
But history shows that when Wall St. loses battles in Congress they are pretty good sports and they cut their losses including their power. But damned if they don’t know well how to come back from the dead for a resurgence of bubblemania and influence inside the Beltway.
If someone has your credit card and you suspect they are spending past the limit you set for them, what is the first thing you look at?
You look at their spending but what if they tell you “Oh but I paid that back already”.
So they confuse you and now you will need to see an accounting.
And what side of the accounting ledger is just as crucial to accounts payable? It’s account receivables.
And that’s where the FairTax is handy because now they can’t lie and say “Oh but I paid that back already” because it’s so clear what the revenues are.
This is how you get control of spending, by first defining what the budget revenues are.
As it stands now, the spending issue is clouded by lies of revenue, or projected revenue, or double accounting revenues, or fiscal tricks etc.
The FairTax is an essential part of controlling spending by removing the ability to lie about revenues to justify profligate spending.
The other essential part of the reform of spending is the Federal Reserve which is the Credit Card of the United States, a credit system whereby credit limits are increased at whim.
But any spending reform without revenue accounting reform is DOA. And the FairTax is the best revenue accounting reform proposal par none.
>”The great majority will shop online, from non-taxed countries.”
Online retail transactions are easy to track and tax. Every retail purchase made for outside foreign goods that are destined for the USA will be taxed at the FairTax retail rate.
Under the FairTax there will be never be a simultaneous income tax and sales tax, only a sales tax to replace the income tax. A simultaneous income and sales tax will never be allowed as evidenced by the crash of Cain’s tax plan.
It may put hundreds of thousands of people out of work only to put millions of people to work. I am fine with that.
I have studied it. It would not only set this country on fire and have many companies around the world chomping at the
bit to get here, it is also a moral tax code being voluntary. I think it would be the greatest thing since the founding and the ending of slavery. I just don’t think it has a chance of being implemented in the current philosophical climate of the populace. That could change of course and it would require a massive education campaign.
Not so. The state of AZ has resorted to asking the taxpayer to fess up. Tracking online purchases is extremely difficult.
And, the lack of a simultaneous income tax & sales tax is exactly the problem with the so-called "Fair Tax". Those who consume within the US borders are targeted just as those who earn are now targeted. We need both.
I'm curious about this response... no sarcasm intended at all! =)
The FairTax is a consumption tax. Of course, if someone choose to make their money in the US and live overseas, they wouldn't be paying into the system. But imagine how extraordinarily difficult it would be to manage such a trick for one's entire existence. Also, for those who continue to live here, it's very hard to buy a house through the internet (the delivery is a beee-yatch!), one of the big-ticket items for the wealthy.
Since the FairTax structure does away with those "167,000" pages, it becomes much easier to track down any big-ticket tax avoiders if they are truly doing something illegal. From my recollection, imports are subject to the FairTax so there is no advantage to buying a yacht overseas, especially if the pre-FairTax price on both is cheaper in the US.
It's not designed to. In fact that point is covered specifically on the website and the books about it. It is solely designed to make revenue collection transparent, more fair, resistant to tinkering (aka choosing winners and losers), and set the stage where people can make informed decisions about reducing spending. Tax breaks are the BIGGEST method of giving your friends a handout... this far dwarfs every pork barrel project and 'Bridge to Nowhere' scheme because it doesn't show up on the spending side of the ledger. Just removing that corrupt power will automatically bring some spending reductions as a side-effect of transparency. If someone wants pork, they'll have to get a vote to put it into place!
The Fair Tax is a consumption tax ONLY. And, the consumption will occur over the internet, not by physical travel. Homes will become exempt (notice, here we go again), because the poor little family forced to move six times for job relo will squawk to their congressman and, oops, the "Fair Tax" is now as complicated as the income tax.
"Since the FairTax structure does away with those "167,000" pages, it becomes much easier to track down any big-ticket tax avoiders if they are truly doing something illegal."
And, no, there is not 167,000 pages. It is about 67,000 pages and about 66,750 pages of that is about stopping Honda from using transfer payments to reduce its domestic income to zero. The actual tax code for a normal family is currently about 50 pages. If you involve yourself with exotic transactions, you will enter into that more complex world, also, but this is about 3% of the population.
If the IRS is dissolved (according to Fair Tax folks), just who will police that Yacht being brought in? The Coast Guard? The DMV? And, if you don't think the rich can get their products brought in without detection, you are not paying attention to the drug trafficking.
We need both.