Huckabee pitches IRS elimination_(..._)

upi ^ | 5/27/07 | upi

[Flavius]

WASHINGTON, May 27 (UPI) -- Mike Huckabee, a GOP candidate for U.S. president, Sunday pushed his idea of replacing the federal tax system with a 23 percent "consumption tax."

The former Arkansas governor said on "Fox News Sunday" the current tax system "is not only burdensome, but extremely expensive."

[Austin Willard Wright]

He’s a Johnny Come Lately on this. Ron Paul has been pushing for this for years. It should also be noted that he raised taxes while governor or Tennessee and proudly defended these tax increases in the debate. If he gets elected, and then raises taxes again, don’t say you weren’t warned.

[Principled]

Personally I do not find the current system that complicated.

You are not alone, but there are very few of you. Besides, the money GM (or any domestic business) spends on tax planning, tax avoidance, and compliance are all part of the price you pay for their goods - and that is whether your individual taxes are simple or complicated.

[Principled]

If you are a legal participant in today's income/payroll tax system, I don't think it's possible for you to do worse.

Sorry for the omission...

[svcw]

If you are a legal participant in today’s tax system,

YES, I am legal.

[Principled]

Well, using CBO numbers (I'm using 03 data) and if you pay income and payroll taxes now, I don't think you'll come out worse by any means. There sure is a chance, but minute.

There are obviously reasons that legal participants in today's income/payroll tax system do better of course - the biggest two are a) nrst effective rates of federal tax are lower and b) the base for the nrst is larger.

To do a comparison, I need a number to use for income and family size (number of family members and married or not). More accurate info can be provide if you have an estimate of how much you spend/save in %.

[big'ol_freeper]

Ron Paul? Who’s he?

[svcw]

Gross income app. 82K
gross deductions app 47K
I could be wrong of course, some of the information on the official web sites are a bit vague. 2 people Our effective rate is usually about 5.2%.

[Principled]

I will assume that 5.2% is your effective INCOME tax rate. If it's not, let me know.

Your income is at the lower end of of the 4th quintile and CBO (2003) says your TOTAL effective federal tax rate is from 16.8% (low end ) to 24.5% (high end). That included payroll taxes too. So 15.3 plus 5.3 is just about 20 - so that's about right in line. Good.

You have just two people in your household... I'll assume married w/ no kids (grin).

According to CBO, you have about 67000 today to save or spend on goods and services after taxes. That came from your 5.2% effective income tax rate plus payroll taxes on both sides (you're under the limit, so it's all payroll taxed) for a total effective fed tax rate of 20.5%, which is right in line w/ CBO numbers, but I'll use 18% for you since you're on the low end of 4th quint I'll use low end of tax too.

Under the nrst, I see you with 73,200 to spend. That's from your income of 82000 plus a small rebate 4500 or so. 23% of that is about 20000 for taxes leaving you 66500 after tax... about the same as now. But prices will fall after the income ta xis eliminated (estimate stipulated by anti nrst folks is 8-10%) by 9%. So your 66500 will buy more stuff... 9% more to be precise... adding 6587 worth of stuff you can buy.

You're better off financially under the nrst by about $7000 - but there may be other things you don't like about it, I dunno. BTW, I assumed you save zero and spend 100% in this scenario.

[ProCivitas]

Good question. Where's best to get accurate figures on current foreign imports? Whatever the current foreign import sales figures, one can suppose that those sales would decline with the Tariff applied.

Also, the Adjustable National Tariff would be much higher on products from 'predatory trade' countries like China and low to nil for 'fair trade' countries with civic standards comparable or better than the U.S., and it's the 'predatory trade' countries that probably comprise most of our retail sales here.

[BplusK]

I believe that what Neal Boortz proposes is the same thing that Mike Huckabee proposes: both are talking about The FairTax plan (for more details visit this site: http://www.fairtax.org/site/PageServer).

[lewislynn]

That's from your income of 82000 plus a small rebate 4500 or so.

There you clowns go talking out of both sides of your mouth again. No surprise there, you're the one that said a three step average of 9 is 3.1...LOL!

On the one side you say the rebate isn't a welfare entitlement (though you did just that) on the other side you call it a rebate (even though you get one whether you pay any taxes or not).

Using your example of adding the rebate to his take home pay you increased his gross from $82,000 to $86,500 with a government check. Could you demonstrate where that extra money for everyone comes from?

Oh btw, if you're going to use 15.3% payroll tax for the tax calculation you have to add the 7.65% employer paid amount to the gross...anything else is dishonest.

[Hostage]

I am withholding taxes from my income and I pay every 3 months.

You did not answer the question though. I expected that you wouldn’t since you have no case.

And you show a gross lack of understanding with your cut and paste nonsense.

Anyone can cut and paaste, it does not make your argument any less specious.

For people that are ‘employed’ they will owe no taxes and have no reporting requirement.

For people that are self-employed and selling to businesses they will owe no tax and have no reporting requirements.

Those that sell to consumers will be registered as retail businesses and they will pay the NRST to the state along with local sales tax. They will benefit by not having to fill out federal income tax forms of any kind.

The situation is as clear as can be. Your attempt to muddle what is so clear only serves to advertise your folly.

[Hostage]

You’re a liar. And it’s Jorgenson, not Jogenson.

He never ‘debunked’ his estimates and he has never ‘bailed’ on the FairTax. His grant was up and he has moved on, the same as any number of academics. He still stands by his estimates and his methods.

The fact is studies are ongoing and it is more clear that the the estimate of 23% is accurate.

A very simple example for readers to understand (not you because your aim is to muddle):

Retail Product X priced at P
Cost break down
Materials company A -—> P1
Packaging company B -—> P2
Transport company C -—> P3

When the repeal of corporate income taxes in implemented under the FairTax then the price of X will fall at least by:

t1 x P1 + t2 x P2 + t3 x P3

where t1, t2, t3 are corporate taxes no longer paid by companies A, B and C respectively.

It is thus easy to see that 23% tax is very reasonably embedded in the cost of doing business. Some companies will have less, some more.

But your lies are not going to stop the publications that are forthcoming that will show clearly to American businesses how they will benefit. And once they get educated you can hit the pavement looking for your new job because no one is going to need your income tax service anymore.

[Polybius]

By removing all income taxes, including those on businesses through the entire manufacturing process of a product, about 23% of the cost of the product is removed.

All costs incurred along the manufacturing process are currently tax deductible and therefore add no cost to the product. What is taxed in business are the PROFITS.

As the owner of my own business, the tax cost of running my business is now tax free but my PROFITS are taxed.

Add the 23% consumption tax, and the price is back to where it is today.

Cough!! Hack! Crash!!! Ow!!! I'm bleeding!!!

Sorry. All that smoke and all those mirrors.......

So, let me get this straight, you are telling me, a business owner, that you propose that I give up having the goods I buy for running my business be tax-deductable business expenses?

Okaaaay?

So, the cost of running my business is no longer tax deductible but then I get to keep 100% of my profits untaxed?

Okaaay? Sounds better.

But then, when I buy something to run my business, not only is it not tax deductible but it also costs 23% more because of the Federal Sales Tax?

Are you trying to pull a fast one here?

But it will not really cost 23% more, it will cost the same as it costs now, because you expect us, the business owners to turn right around and, instead of giving away a large percentage of our remaining profits to the IRS, you expect us to give away a large percentage of our remaining profits to every client or customer by not keeping our profit but using our PROFITS.......OUR OWN (NOW "AFTER-TAX") MONEY ....... to subsidize lower prices so that you can say that prices will drop?

Are you on crack?

And what about those of us that have spent decades earning those profits, having those profits taxed, saving those profits and now, when we spend them in the future, (after being income taxed at close to 39%) you expect us to be taxed ANOTHER 23%?

You claim that tax money will be created out of nothing because income taxes will disappear, sales taxes will rise 23% but prices will drop 23% so, children, you will not pay any taxes at all.

Well, your claims only work if some of us, the business owners who have busted our butts to run our businesses and have saved our own after tax profits are screwed over, again and again, in order to make your numbers possible.

Sorry. No sale.

You people do not even try, not even TRY, to address the double taxation issue of those of us who have saved after tax money outside of a retirement account.

Look at the FAQ posted by Pricipled on Post 43.

I looked up the issue of the double taxation and there it appeared to be on Question 16:

"16: Are seniors taxed twice on savings, once when they saved it, and now again when the spend it?"

Well, I am not a senior but I have well over $1 million in AFTER-TAX savings that I have saved over the course of my career that has absolutely nothing to do with ROTH IRA's, SEP's, KEOGH's or any other Government alphabet soup retirement account. That $1 million plus is good, old fashioned American savings that I worked for, paid taxes on and saved just like Grandpa used to do in the days when "security" did not mean expecting the Government to take care of you in your old age or paying for your retirement by maxing out credit card debt or giving away your house to a bank in return for spending money from a "reverse mortgage".

THAT kind of savings.

So, you click on Question 16, and what do you get?

Well, you end up with a totally different question:

"16. How does the Fairtax help seniors who have paid taxes on their retirement savings or invested in Roth IRAs? and the answer DOES NOT EVEN ADDRESS the original question of "will you be taxed twice". The originally posed question of the money I have already paid 39% income tax on being taxed once again at 23% when I spend it is completely ignored.

See the shell game?

See the trickery?

They pretend to answer the question "Are (people) taxed twice on savings, once when they saved it" and then they shuffle the shells around to COMPLETELY IGNORE the issue of true after-tax savings being taxed twice.

Hell, yeah, your savings will be "taxed twice"! If you have any.

Just say it!

Instead, you get the smoke and mirrors:

"Under the FairTax, these hidden taxes are driven out of retail prices. And note, they elect to pay these taxes through their lifestyle choices."

Yeah, thanks a lot.

As I noted above, we business owners are expected to donate our profits to our clients and customers instead of to the IRS to have your claim of price drops be true and we are then told that the way to avoid the new Federal Sales Tax double taxation on our savings is to make "lifestyle choices" by not spending our savings!

"Lifestyle choices"?!?!

I earned that money in my savings. I paid the top or near the top income tax rate on my savings and now you are telling me that I should make "lifestyle choices" and not spend it so that I can avoid your double taxation.

Yeah, that's it. After a lifetime of working, paying taxes and saving, I will avoid the double taxation by "lifestyle choices" which means "Don't spend your saved after-tax money, sucker!"

Maybe I should go the Purina Cat Chow web page to see if they have any good recipes so that I can start getting used to the "lifestyle choices" that will help me avoid the double taxation in my retirement.

The true winners in a Fair Tax will be the Grasshoppers who have not bothered to save and have run up huge credit card debts and mortgage debts. The issue of double taxation on after-tax savings does not bother them and they do not give a rat's behind how it affects the true savers. Not only that, they will be able to pay off the debt they used to buy goods in the past with no Federal Sales Tax with future money they will earn without Federal Income Tax.

What a deal!!

It's good to be a present day Grasshopper under the Fair Tax! It's not merely good ----- It's downright orgasmic!!!

In the mean time, we current day hard working Ants with considerable after-tax savings and no debts will be screwed by being taxed twice when we spend our after-tax savings and we are told that prices will drop because we business owners will be expected to give away the business profits that we used to give away to the IRS to our clients and customers instead.

Well, that makes a good Fairy Tale but, in the original Fairy Tale, the Ants were not stupid and neither are we.

[Principled]

5.2+7.65=12.85 which is 25% below the CBO floor for your income level - so you are one helluva statistical anomolie.

I did make the error of using ER side payroll in your calculation - holding grandkids in lap while freeping is always dangerous... apologies. The correct #s are: 12.85% net effective fed tax rate leaving you with $1750 more in purchasing power under the nrst, not the amount i posted above. This represents a 2.43% purchasing power increase under the nrst. Seems negligible to me, but it's just me :)

[TeenagedConservative]

Most of your post argues that Saddam was bad, which I never disputed, so I'll just address this:

FACT: Terrorists commit acts of violence against civilians as an intentional modus operandi; our soldiers and Marines suffer courts martial when they shoot at suspected enemies without first verifying their identity. You seemingly fall for the perpetual media spin and enemy propaganda line that even terrorists, car bombers, and other enemies of the United States somehow qualify as civilians because they do not qualify as soldiers under the Geneva Conventions. The suggestion that the United States constitutes the “world’s biggest terrorist” represents a patent absurdity especially given the excessive pains that we take to avoid killing civilians even within the context of a battlefield.

First, as usual, since this is an almost blindly pro-US government board, I must clarify: I do NOT believe "America" is the world's biggest terrorist. Nor do I believe 99.9% of the troops are anything but patriots. I'm referring to a select group who control our government. Remember Hiroshima and Nagasaki? Whether or not you believe that to be justified, that was a FAR more despicable act of terrorism than 9/11. And lest you claim that there were military bases in those cities, everyone knows perfectly well than nuking a city is far from the only way to cripple enemy military power. Those cities were nuked for one purpose alone: To intimidate the Japanese people into believe Americans were incredibly ruthless and willing to massacre them and their families if they did not stop their imperialism. Did the ends justify the means? Probably. But there's no denying what the means were - terrorism.

As to Iraq, this statement will no doubt find no friends here - and may be censored - but most of the insurgents would be living peaceful agrarian lives if we weren't an occupying force in their homeland. There's no way you can argue that every single insurgent in Iraq would have joined terrorist groups if America hadn't invaded. The majority of evil we're fighting are reacting as most people would when they see such heartless collateral being inflicted around them. And this time, there is no imminent threat as there was with Imperial Japan. The only reason we fight is to protect Iraqis themselves, who elected a parliament that voted for us to leave.

[Principled]

Using your example of adding the rebate to his take home pay you increased his gross from $82,000 to $86,500 with a government check.

Um, this is the way your boss wanted it worked, as it comes out the best for the income tax. I can change it if you like and the nrst will look a little better. Ok? But you better check with im - he may send you to your room.

The money that is the rebate has as its purpose to offset taxes due on necessity level spending. It goes directly back to the government - just like your standard deduction. It's withheld from your checks but sent back to you. Well, the rebate is the same but you get it BEFORE you have to pay the tax.

Could you demonstrate where that extra money for everyone comes from?

Well, everyone knows it comes from taxes. But I'll explain it for you... the tax rate is about 2.5% higher IIRC in order to untax necessities. Without the rebate, the rate could be lower, but more would be taxed. The net tax wouldn't change. DOH!

[eyespysomething]

Tancredo comes pretty close, don’t you think?

I don’t want Ron Paul as President, and probably wouldn’t vote for him, but it would be useless for me to argue that point with you, or you with me. I agree with him 99% of the time. And I do see his point re: war and conservatism.

I think he is far and away the strictest adherent to the Constitution in DC, and hope he continues to be a thorn in the side of everyone else sitting in Congress.

I still won’t vote for him for President.

But I also won’t bash him on FR.

[Principled]

It is thus easy to see that 23% tax is very reasonably embedded in the cost of doing business.

I think it's there too, but much of it is problematic to quantify. I gave up years ago trying to show this forum how it could be so high. I allow the anti folks to stipulate 8-10% as an existing tax component in prices.

That's fine, the nrst still has more purchasing power - significantly more. BTW the 8-10% they stipulate represents the hard costs of the income tax system... taxes per se and some compliance costs. Their number does not include any other costs.

[SittinYonder]

You may want to look at Huckabee’s immigration stance before you make a decision. His support for the FairTax made me include him in my top three picks until I examined him on immigration.