Posted on 04/19/2007 1:55:56 AM PDT by Man50D
The following is an address I plan to deliver on the House floor this evening regarding Tax Day.
Madam Speaker, many things change from year to year. Tax Day, however, is an exception. Every year, millions of Americans send much of their hard-earned money back to the federal government. Because of the numerous complexities that have become the U.S. tax code, many virtually need an accountant, and others just send in a large check out of sheer frustration, hoping to figure out the right number later on.
What is fair about our current tax code? Absolutely nothing. Is there a better solution? You bet. One answer can be found in the form of the Fair Tax, and it is a solution that helps Americans keep more of the money they earn and creates a more equitable system of collection. In short, the Fair Tax eliminates our current broken tax system and replaces it with a national sales, or consumption, tax to be administered by the states. When a hard-working American receives his paycheck, he actually gets to take it all home. Gone, too, are the estate and capital gains taxes.
I applaud Congressman Linder of Georgia for continuing his strong push for his bill H.R. 25, the Fair Tax Act of 2007. With its enactment, the national sales tax rate would be set at 23 percent beginning in 2009, at which point Americans would no longer be afflicted by the current tax system. Gone would be personal and corporate income tax, the gift tax, taxes on social security and Medicare, and even the infamous alternative minimum tax, which is estimated to hit 19 million Americans in 2006, a figure that could easily double in the next few years if nothing is done. In the case of the Fair Tax, the only people that pay more are those that choose to spend more.
Currently, and in part due to the tax cuts passed under the Bush administration, there are many valuable deductions in our current tax code that are fair and serve a good purpose. On top of the overall savings provided by the Fair Tax to the consumer, it would also permit exemptions from the tax for property or services purchased for business, export, or investment purposes and for state government functions. Nonetheless, this pro-family legislation allocates a sales tax rebate for certain families, based on family size and income. Every family would receive a rebate of the sales tax on spending up to the federal poverty level, plus an extra amount to prevent any marriage penalty.
Another important aspect of this bill is the provision to let the individual states choose how to administer the collection of consumption tax and redirect that funding back to the U.S. Treasury. Many states already have a sales tax, and so the existing state tax authorities will essentially carry on as before without the need to create additional bureaucracies. This system will also be instrumental in eliminating the "tax gap" that exists under the current system. Instead of the Internal Revenue Service waiting on taxes owed, with billions uncollected every year, the Fair Tax is collected at the point of sale. Once the Fair Tax is in place in 2009, funding to the IRS would be eliminated after fiscal year 2011, with taxes directed through a Sales Tax Bureau. Gone would be the days of the IRS spending millions of tax dollars each year just to track down uncollected taxes - the IRS itself would be gone.
Hi UB,
The Fair Tax only applies to Fed taxes, not state taxes. The state would have no jurisdiction over it so its hard to see how they might use it against you.
Regarding your question... If you have a retail item that costs 100 dollars, about 23% of the cost of that item is embedded fed taxes. The FT eliminates those taxes and replaces them with a retail sales tax. But in the case you mention, where you are dealing with a work of art, I don’t THINK it would be taxed simply because there is no wholesale -> retail markup on it and there are no real embedded taxes. Its an interesting question though. Maybe Man50D or one of the other folks can jump in on this.
Lets say the painting is consigned by the artist. Normal relationships of this type are 60/40. 60% goes to the artist. So, I guess that is the wholesale price. Does the artist have to pay the 23%?
Instead I will play it straight and simply say I suspect you will be very disappointed in how this taxing scheme works out if you get your wish.
But I have no doubt you will never get your wish as long as the Demonrats are in control, and really doubt this will ever come to pass at all.
“I’m tempted to ask about your bridge investment portfolio in New York City, and whether you want to invest in another.
Instead I will play it straight and simply say I suspect you will be very disappointed in how this taxing scheme works out if you get your wish.”
In other words, you aren’t able to offer any actual evidence that I’m wrong and you’re right, so instead you’ll just make a snarky remark.
Have you actually read the Fair Tax book or the legislation? Yes or no?
Most Americans have no interest in changing the current income tax system. Which fact grieves me very much...
Hi UB,
Don’t know the answer to this question but its a good one and I’m going to try and find the answer. I’ll ping you once I know more.
Are you in the art business?
The Fair Tax is about far more than auditors or auditing. I hope you recognize that.
Additionally, you're assuming that the earner is spending everything they make on new items. Yes, lots of people live that, but many of us also save and buy used items (not subject to the proposed NRST).
With all that being said, I'm not a proponent of the NRST, but I am interested in alternatives to the current system.
http://www.maynarddixon.com Also art dealers.
I used to to believe a national sales tax was the way to go, that it would be an improvement. I changed my mind (although not right away) when the proponents said, “Oops, we made a mistake, the rate can’t be as low as 16-17%, it has to be about 23%.”
The change in rate wasn’t the issue, but it pointed out to me how easy it would be to change the rate. And having experience in the real world, I know the rate will only trend up, not down. Oh, maybe they’ll raise it, say, ten percentage points and give back, say, seven points for a few years, but that’s about it. It’s easy to raise, it’s easy to collect, there's no upper limit, what’s to stop them?
I’ve posted my opinion upthread, I stand by it.
There is no chance that this will pass a Demonrat Congress. That’s a fact of life. There’s too much political hay to be made in, “we’re going to soak the Evil Rich!!!” Ironic, isn’t it? The Demonrats are too obsessed with their hatreds to realize the amount of money they could collect with a national sales tax. Perhaps that is proof that there is a God, and He is good, He made our enemies stupid.
There’s very little chance it will pass in any Congress.
I read national sales tax stuff years ago, the concept hasn’t changed, why should I read it again? So the answer to your question is no, I haven’t read it. I won’t read again it until there’s at least a 20% chance it might actually get passed, and it’s nowhere near that now. What does that prove? It proves I have better things to do with my time.
And to repeat, I apologize for the first sentence of my post. That was uncalled for.
The various “protected classes” will get assurances that their government payments will be adjusted. And hey, the “protected classes” already vote for whomever promises to to put more money in their pockets. They aren’t going to care how the government gets the money.
No, I read what you posted. It seems to me that one giant mess would be replaced by another giant mess. If you want fair tax, just set the rates on an income scale of course and just let it be. No loop holes. No deductions or rebates. Then everyone would know what the rules were and there would be no advantage to paying a high priced accountant to find tax havens and loop holes.
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