Facts on Fair Tax show it's a great idea

Tribune & Georgian ^ | 9/16/2005 | Jay Moreno

[lewislynn]

In addition 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.

Uh huh, we've seen that phoney study. That's where they value your time watching Oprah at $25.00 an hr. Instead you're doing your taxes when you could be making candles in the garage, or mowing your neighbors lawn (for $25 hr.) As if everyone would get a second job rather than spend a few hours doing their taxes.

The fairtax answer to unproductive people is to "untax" them by sending them yet another big government check every month paid for from the fruits of someone elses labor simply because they can afford to buy more stuff. What's the value if all those people were employed in productive activity?

[balrog666]

... but he made a major gaffe in the book and his stupid explanation is close to jeopardizing the whole thing.

Yes, he did. But without that gaffe, there would be no book.

And let's hope this is the stake in the heart of the FAIRTAX vampire and we can finally get back to fixing the federal budget and reducing the size of government. And then abolishing the IRS.

[pigdog]

Sorry, Nightie ... nobody here picked Boortz at all - nor are all his ideas somehow blindely accepted. He is, however, correct on far and away most of the material.

A few errors don't make the overall message any less correct. As for the prices being shown inclusive of tax, here's what the bill requires:

"`SEC. 510. TAX TO BE SEPARATELY STATED AND CHARGED.

`(a) In General- For each purchase of taxable property or services for which a tax is imposed by section 101, the seller shall charge the tax imposed by section 101 separately from the purchase. For purchase of taxable property or services for which a tax is imposed by section 101, the seller shall provide to the purchaser a receipt for each transaction that includes--

`(1) the property or services price exclusive of tax;

`(2) the amount of tax paid;

`(3) the property or service price inclusive of tax;

`(4) the tax rate (the amount of tax paid (per paragraph (2)) divided by the property or service price inclusive of tax (per paragraph (3));

`(5) the date that the good or service was sold;

`(6) the name of the vendor; and

`(7) the vendor registration number."

(emphasis added)

[pigdog]

The inventory situation you mention is for cetain qualifying inventory defined in the bill and it gives an immediate 23% reduction in price on DAY ONE - the retailer of course will be the one to decide what to do with this Transitional Inventory Credit (as it's called) but it is a credit for taxes already paid so as not to tax the thingss involved more than once.

See SEC. 902. TRANSITION MATTERS. in the bill.

The poster Conservative Goddess explained it very well on post 316 on this thread:

http://www.freerepublic.com/focus/f-news/1485008/posts?q=1&&page=301

The Roth IRA isn't anything like this since taxes have not already been paid on the instruments nor are they being held for retail sale to end consumers. Perhaps you should lobby our congressman about it.

[Return to the Public]

Some people use scepticism as a way to feel intelligent. A truly good sceptic is sceptical of his own scepticism. It seems to me that any good debate requires the latter.

It's good to see some of you are good sceptics.

Thanks for the discussion.

[lewislynn]

lewislynn: Why do you constantly disparage people on the FairTax threads?

It was a compliment.

Is crying to mommy the new Fairtax tactic of silencing everyone you don't like?

[lewislynn]

Is our current wealth-redistribution taxation system really that good, in yur eyes?

I'm sorry, I missed the part of the Fairtax that eliminates wealth distribution. Maybe you could point out the part that does that.

[pigdog]

No, that's not correct on several counts. One is that prices will, indeed go down. See the post #96 to get an idea of how taxes boost prices artificially. When these embedded tax costs are removed it is clear that prices will go down. They have to.

How much you spend depends upon several things - only one of which is how much you make. Another is whether you have savings that you CHOOSE to spend. Another is the CHOICES that YOU make for your own consumption. As you may have noticed, not all things are taxes under the FairTax (e.g. college tuition in the "college costs" you mention).

Most people will be paying far less of their wages (which will, despite naysayers to the contrary, almost surely remain as it is and then later increase due to economic growth caused by the FairTax) than 23% since there is a prebate unless you choose to not have it and 23% will actually never be paid by any taxpayer - though a few very rich big spenders will be very close to that.

[Fierce Allegiance]

It does not contain the EIC, a streaight-up redistribution of wealth program - aka socialism.

I have not read the whole thing and I am clearly not the super-expert on Fairtax like you, so maybe you can point out where it does include redistribution of wealth.

[pigdog]

That's certainly your choice to make. But when you do just be aware that under the present system you'll be paying not only taxes sometimes on some of the withdrawals, but also the "hidden taxes" embedded in all that you buy as indicated in post #96.

It is obviously a conscious choice on your part but you need to be aware of all the considerations that are involved, that's all.

[pigdog]

"... stake in the heart of the FAIRTAX vampire ..."

Not in your wildest dreams. A small hiccup like that will have little overall effect and will eventually be straightned out.

You also don't seem to realize there will never be a "... fixing of the federal budget and reducing the size of government ..." under the present system. Cannot possibly happen as taxpayers have no real influence - only the government does.

[Bigun]

Uh huh, we've seen that phoney study.

LOL! It's only phoney to folks who's minds are to small to grasp what has been presented. Everyone else seems to understand it just fine!

[voteconstitutionparty]

Oh sure, a National Sales Tax on everything.
Great idea. Not!

[Bigun]

You REALLY should take a little time and read this.

[cherry]

I think that Property taxes and the sinful SS tax would be raised rather quickly, and we don't have any say or little say in those taxes...

the govt thinks is can keep creeping up the SS tax and make we poor suckers work longer without a glitch....

and property taxes....it'll force us out of our home if things keep going the way they are...

where govt people see extra money, they go after it....

[cherry]

"Hopefully a fair tax means a single tax on income of all types, no exclusions."

you're going to get the captial gains people whining again.....

[GregoryFul]

I've run some numbers on some of the top companies in the US. Many have income tax burdens that are a very low percentage of revenue.
Some are negative, so they get money back from the Gov't for being in business, this I guess lowers the cost of the product in the supply chain.
Anyway, just thinking from a scientific point of view (total energy in a system). Federal tax revenues come from both the companies, and the people.
Ultimately all are paid by the consumer, so all we are talking about in a revenue neutral situation, is do I pay all my taxes at the register, or only
a small portion. I could also look at it in reverse. The corporation pays all taxes. They pay the employee withholding taxes to the Gov't so that they
may employ me at my take home pay. That's all I realize and can utilize, and I guess is sufficient to motivate me to do their bidding.
So ultimately, I will be paying just as much as I pay now (potentially minus the claimed efficiencies) at the register.
But this analysis does not recognize that I have accumulated, after tax wealth that will now be burdened with a new tax. If I have $500,000 in
after tax savings, I get a $75,000 reduction in purchasing power at the register, even considering the most generous "embedded" tax analysis you give.
As I'm reaching retirement, I have considerably more than that in after tax savings, and I am only a middle class lowly employee in a big company
living a modest lifestyle. I imagine that there are many baby boomers with much more accumulated savings, and if they realize what a highway
robbery is being considered here, they will revolt.
	Exxon
PERIOD ENDING		31-Dec-04	31-Dec-03	31-Dec-02
Total Revenue		$298,035,000	$246,738,000	$204,506,000
	Income Tax Expense	$15,911,000	$11,006,000	$6,499,000
		5.3%	4.5%	3.2%
	WalMart
PERIOD ENDING		31-Jan-05	31-Jan-04	31-Jan-03
Total Revenue		$287,989,000	$258,681,000	$246,525,000
	Income Tax Expense	$5,589,000	$5,118,000	$4,487,000
		1.9%	2.0%	1.8%
	GM
PERIOD ENDING		31-Dec-03	31-Dec-02	31-Dec-01
Total Revenue		$185,524,000	$186,763,000	$177,260,000
	Income Tax Expense	$731,000	$533,000	$768,000
		0.4%	0.3%	0.4%
	Ford
PERIOD ENDING		31-Dec-04	31-Dec-03	31-Dec-02
Total Revenue		$171,652,000	$165,066,000	$163,420,000
	Income Tax Expense	$937,000	$135,000	$302,000
		0.5%	0.1%	0.2%
	A T & T
PERIOD ENDING		31-Dec-04	31-Dec-03	31-Dec-02
Total Revenue		$30,537,000	$34,529,000	$37,827,000
	Income Tax Expense	($4,560,000)	$816,000	$1,587,000
		-14.9%	2.4%	4.2%
	GE
PERIOD ENDING		31-Dec-04	31-Dec-03	31-Dec-02
Total Revenue		$152,866,000	$134,187,000	$131,698,000
	Income Tax Expense	$3,661,000	$4,315,000	$3,758,000
		2.4%	3.2%	2.9%
	Intl Paper
PERIOD ENDING		31-Dec-04	31-Dec-03	31-Dec-02
Total Revenue		$25,548,000	$25,179,000	$24,976,000
	Income Tax Expense	$206,000	($92,000)	($54,000)
		0.8%	-0.4%	-0.2%
	P & G
PERIOD ENDING		30-Jun-05	30-Jun-04	30-Jun-03
Total Revenue		$56,741,000	$51,407,000	$43,377,000
	Income Tax Expense	$3,182,000	$2,869,000	$2,344,000
		5.6%	5.6%	5.4%
	AIG
PERIOD ENDING		31-Dec-04	31-Dec-03	31-Dec-02
Total Revenue		$97,987,000	$81,303,000	$67,482,000
	Income Tax Expense	$4,620,000	$4,264,000	$2,328,000
		4.7%	5.2%	3.4%
	DOW Chem
PERIOD ENDING		31-Dec-04	31-Dec-03	31-Dec-02
Total Revenue		$40,161,000	$32,632,000	$27,609,000
	Income Tax Expense	$877,000	($82,000)	($280,000)
		2.2%	-0.3%	-1.0%
	EI DuPont
PERIOD ENDING		31-Dec-04	31-Dec-03	31-Dec-02
Total Revenue		$27,995,000	$27,730,000	$24,522,000
	Income Tax Expense	($329,000)	($930,000)	$185,000
		-1.2%	-3.4%	0.8%
	Pfizer
PERIOD ENDING		31-Dec-04	31-Dec-03	31-Dec-02
Total Revenue		$52,516,000	$45,188,000	$32,373,000
	Income Tax Expense	$2,665,000	$1,621,000	$2,609,000
		5.1%	3.6%	8.1%
	Kroger
PERIOD ENDING		29-Jan-05	31-Jan-04	1-Feb-03
Total Revenue		$56,434,000	$53,791,000	$51,760,000
	Income Tax Expense	$390,000	$454,000	$740,000
		0.7%	0.8%	1.4%
	Sprint/Nextel
PERIOD ENDING		31-Dec-04	31-Dec-03	31-Dec-02
Total Revenue		$27,428,000	$26,197,000	$26,634,000
	Income Tax Expense	($591,000)	($212,000)	($39,000)
		-2.2%	-0.8%	-0.1%

[Bigun]

Someone has their facts all screwed up.

Go back and read it again, REAL slow this time.

[GregoryFul]

Annual output of one company in the Aircraft industry= $54 billion.

Annual cost of 93,000 IRS employees = $6 billion.

Ok, smarty, what's the small print?

[upchuck]

Thanks for the suggestion. I read that document a while back when it was first posted on the fairtax.org site.

The only paragraph in that document that is germane to this discussion:

The FairTax delivers a tax holiday on IRAs and other tax-deferred plans.
The income tax imposed on investment income and pension benefits or IRA withdrawals is repealed. No form of savings or investment is taxed. Pension funds, IRAs, and 401(k) plans has assets of over $11 trillion in 2003. An income tax deduction was taken for contributions to most of these plans. All beneficiaries and owners of these plans expected to pay income tax on them upon withdrawal, but are not required to do so once the income tax is repealed. Roth owners and post-tax retirement savers break even.

And the only sentence from the above germane to this discussion is the last one where this issue is glossed over again.