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Monday, May 12, 2008
Mike Adams :: Townhall.com Columnist
Nothing is Certain but Death and the FairTax
by Mike Adams
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My good friend Lee – a Vietnam veteran and proud gun-toting conservative – recently declared to me that the FairTax is a great idea that will never actually happen. Because I am a true Reagan conservative – one full of optimism and faith in the American people – I respectfully dissent. And I write today to explain exactly how we will win the war against the I.R.S. and make the FairTax a reality.

We can all agree that the FairTax movement is a grass roots effort that must prevail over the resistance of politicians and lobbyists who have a powerful interest in maintaining the status quo. But this does not mean that every supporter of the FairTax must dedicate a significant amount of time volunteering to make the dream of abolishing the I.R.S. a reality. There is something retired veterans like Lee can do, which will require little time and money and will virtually guarantee the success of the FairTax movement.

The idea comes to me from a former student who was waiting on me the other night at the bar of a seafood restaurant in Wilmington. I had a beer in one hand and my copy of FairTax: The Truth in the other when an Obama supporter asked the following: “Why do you support the FairTax? We just need to change the tax code to punish corporations that are sending our jobs over to China.”

Armed with FairTax: The Truth, I responded with the following: “I’m from Texas as is Representative Bill Archer. He testified in front of Congress about the results of an interesting study of 500 companies in Japan. When asked what they would do if the U.S. abolished its present tax system and went with a consumption tax, 80% said they would build their next plant in America. The remaining 20% said they would relocate to America altogether. Now that’s change you can believe in!”

Clearly, my response gave the young man something to think about. But so did my waitress and former student. She jokingly said “Dr. Adams, you probably aren’t even reading that book. You’re just trying to provoke a debate.”

Of course, I really was reading the book but it gave me a very good idea. I decided to keep carrying it with me everywhere for a week after I finished reading it just to see whether that would be a good way of provoking debate on the issue. The very next day it produced the following exchange with a flat tax supporter:

Supporter of the Flat Tax of Yesterday (SOFTY): Sorry, I support the flat tax.
Adams: How often do you change your underwear?
SOFTY: What?
Adams: I assume you change your underwear every day?
SOFTY: Yes, what the hell does that have to do with it?
Adams: That means you’ve changed underwear 8036 times in the last 22 years.
SOFTY: And?
Adams: And the I.R.S. has changed the tax code 16,000 times in the last 22 years. They change the tax code twice as often as you change underwear. How long do you think a flat tax would remain flat?
SOFTY: (Silence)
Adams: Would you like to borrow my book?

I’m sure SOFTY was still thinking about the FairTax the next day while he was (hopefully) changing his underwear. Meanwhile, I was sitting at a bar having this exchange:

Badly and Desperately Pessimistic Realtor (BADPR): I know the FairTax is going to kill people in my line of work.
Adams: I think you’re exaggerating, to say the least. I’m about to buy my fourth house and my first new house.
BADPR: So.
Adams: So I’m like a lot of people out there. Most of our home purchases are not of new homes.
BADPR: And?
Adams: And the FairTax only applies to new home purchases.
BADPR: Can I borrow your book?
Adams: Sure. And be sure to read the portion on embedded taxes, too. It may convince you that new home purchases will be impacted to a lesser extent than you imagine.
BADPR: I will.
Adams: Finally, and in the interests of full disclosure, I do know someone who bought four new homes in a row. He was a very wealthy former student of mine. Before he went to prison he bought four new homes. But he never paid income tax on the cocaine he sold on his way to becoming wealthy. Too bad we didn’t have a consumption tax like the one you will read about in the book I gave you.

Some conversations were a little more cumbersome. Like this one I had with a young fellow who was drinking Budweiser at 12:35 p.m. in a pizza place in Wilmington:

Bud-loving unemployed drunk dude (BUDD): What are you reading?
Adams: FairTax: The Truth.
(The portion of the conversation talking about our waitress’ tattoos is deleted).
BUDD: If I thought it would get me a job, I’d be all for it.
Adams: Here, take my copy. Make sure you read the chart on page 131. It shows how states with high income taxes fare relative to states with no income taxes in terms of economic growth.
BUDD: Are you just giving me this?
Adams: Yep. I’ve been making good money on the speaking circuit this year. When people have more money they are more charitable. See the statistics on page 166. If you agree with it, buy a copy for someone else.

My little experiment with FairTax: The Truth convinced me of a few things. First, it convinced me that it’s an easy way to get people talking about the FairTax. It also convinced me that most people who oppose the FairTax do so because they are insufficiently educated about all of its benefits. I read Boortz and Linder’s first FairTax book twice and thought I understood it well enough to explain all of its benefits. But after I read Fair Tax: The Truth I realized there were more benefits than I had imagined previously.

I don’t have much time to volunteer to the FairTax cause. But I do have time to briefly discuss it at the coffee shop in the morning, the diner in the afternoon, or the restaurant at night. That is why I’ve decided to extend my experiment by carrying FairTax books with me every day for the next year. I’ve also decided to give my copies away to anyone who promises to read them.

I plan to write off all these FairTax books as “charitable contributions” on next year’s tax return. If you join me today, I won’t have to do it again.

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About The Author
Mike Adams is a criminology professor at the University of North Carolina Wilmington and author of Feminists Say the Darndest Things: A Politically Incorrect Professor Confronts "Womyn" On Campus.
 
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Right on the Money Mike
Great article, I loved the underwear example. Just ordered 10 more copies of the "Truth" book. I plan on giving them away to anyone who promises to read them.

I recommend includingt the website address in your next artical ablut the FairTax http://www.fairtax.org



Advocate for Fair Tax - minutes/week!
Mike -- You CAN advocate for the Fair Tax, no matter how little time you have! Just send 8 of the specially made postcards each week -- visit http://www.OperationOffTheFence.org and join the national grassroots movement of Citizens demanding the Fair Tax!

Ft Worth Scott:


You and KY and boortz/Simpson acknowledge that savers will not fare as well as current wage earners and you and KY contend that the differential is only a minor thing. (boortz/Simpson simply says the savers will not fare as well) Both you and KY seem to think that any sacrifice for your kids future is worth the price . . . as long as it is someone else making the sacrifice. I’ll tell you what, lets revise the program and make savings (not income or interest earned after the inception of the SCHEME) exempt from the tax. Since it is only a minor advantage that current workers have over savers then lets flip the tables and give the savers the slight advantage. Now your kids will get the advantage of the FairTax SCHEME without giving the savers the shaft. How does that bite you. Doesn’t feel so good does it ? ? ?

It remains to be seen if manufacturers will pass on the embedded tax savings the consumer. The price of any object is set by supply and demand NOT BY THE COST OF PRODUCTION and embedded taxes are a cost of production. Removal of embedded taxes on imported goods will only result in a reduction of 3-4%, IF the supplier indeed passes these savings to the consumer, there is no requirement that he does. The FairTax SCHEME guarantees that the 30% CONSUMPTION TAX will be added.

My term of stealing the savings may be abrasive but it is true. How else could taking of 30% of a persons savings be termed, a gift ? ? ? ? ?

Again . . . If this system fails, it has NEVER been tried anywhere, You, at 37, can recover . . . . The saver who has had a lifetime of savings decimated cannot recover, he or she will die in poverty after working a lifetime providing the best for you and your childrens generation.


Another perspective for GT...
I think that YK made a valid point in respect to your imported goods argument. These items may indeed have no embedded taxes (US taxes that is) when they arrive at our ports, but they certainly obtain embedded taxes from that point forward. Granted, these embedded taxes will be only a fraction of the taxes compared to American produced goods. Even this fraction should result in a price reduction.

The reduction in price of goods and services is not without any factual basis. Capitalism, the market, will handle the price reduction and the less than noble but fairly pervasive human quality if greed will ensure it happens. What company is going to risk their market share by not dropping prices to remain competitive? This is a suicide policy for any non-monopolies that attempt it. I think the monopolies will be taken care of via either government oversight or new competition.

You are correct in your statement that seniors will benefit least from the FairTax. This is absolutely a weakness of the system. Your abrasive comments about "stealing" from the older generation though seems more than a bit exaggerated though. This is indeed an acknowledged shortcoming, but one that seniors I have spoken to are not nearly as outraged as you seem to be. I don't have a personal perspective on this as I'm only 37, but if I were 30 years older and this was being presented I seriously doubt my view on this issue would be dramatically different. The reason for this is simply my love for my son, and the wish to see him do better than myself. Isn't that a great part of the American dream to pass along a better life to our children than that which we ourselves enjoy?

Keep spinning GT
While I respect the fight in you, I am saddened by the dishonesty (and disrespect) that you show in your arguments.

I did dedicate another blog post to you titled FairTax - Fairness Across Generations that can be found at http://ytknight.blogtownhall.com/2008/05/20/fairtax_-_fair ness_across_generations.thtml. Read it if you like... or just leave it be.

I do admit defeat with you. I thought I could get through to you but it is clear that I cannot.

YK: you keep working on it

I don’t think I’m going to respond any more to your lies and nonsense. You’re doing a pretty good of disproving your own original adement statement that savers and/or seniors were no worse off under the FairTax SCHEME than they were under the income tax system. I don’t agree with any of your premises/supositions but At least now you admit that savers and seniors would be shafted at least 13% more by the SCHEME than they were under the income tax system. I’ll just leave you alone and maybe you will get a better light bulb than the 10 watt you have been working with. . . . And maybe you’ll eventually see the dishonesty of the FairTax SCHEME and realize that is is inheritantly unfair to expect your benefactors to have to resort to buying Komrad Klintoons used jockey shorts just to make ends meet.




GT... one more consideration...
Can we agree that on imports that the actual cost of the good upon entry into the U.S. is about 40% (probably less) which includes manufacturing and shipping to the U.S.? The remaining 60% goes to U.S. marketing, sales, distribution, admin, profit, etc.). Considering this, When you buy your pair of Wrangler jeans for $30 no more than $12 of that is actual cost-of-goods sold paid to non-U.S. firms which leaves $18 on the U.S. side. So apply the FairTax math that gives us 22% off the $18 (U.S. portion) = $4 of tax that comes off of the product leaving $26 pre-FairTax. Post FairTax you might pay $34 which represents a 13% overall increase over the $30 you pay now. 13% is significantly less than the 30% figure that would concern me as well.

But still, a 13% increase in and of itself is not a lateral move. Ah, but when you factor in domesticly produced consumption AND the FairTax prebate ($200 per month for a single adult), you can see how the gap closes. Finally, buy that pair of jeans in a second-hand store and you pay zero tax. Your choice!

Finally, GT, do you pay any taxes on your retirement income currently? Even if it just on interest income from CDs you have to consider it...

So, I maintain that Seniors are no worse off with the FairTax. In fact, they are better off.

Peace,

YK

GT, your args fail to consider...
1. that even imports have embedded taxes. You don't consume anything here without U.S. payroll, corporate, and tax compliance being priced in from distrubution through retail which include marketing, advertising, sales, administration, legal, etc. at every step of the way.

2. What about all of those services you consume in our lands? Anything service is 100% affected by embedded taxes.

3. Why do you purchase mainly import anyway? Chances are because you can't find similar quality that is U.S.-made? Think that might change if the U.S. becomes a tax haven that attacts investment in our lands vs. the tax oppressor that chases investment (and jobs and prosperity) away?

4. Do you think illegal aliens, drug dealers, pimps, prostitutes, etc. buy eggs, milk, burgers, sandwiches, liquor, cars, clothes, medical treatment, etc.?

5. Hey thanks for the compliments. Right back at ya.

If you want me to reply going foward I ask that you tone it down. I don't come accross as uncivil to you I hope.


Peace,

YK

YK: I can believe you’re baffled
You keep making assumptions that are not backed by facts. You are alluding to an assumption that there is a 22% embedded tax on everything and that the person who paid the embedded tax will pass it on to the final seller. Two a$$-umptions that are not backed by facts. Anyone who can see though the smoke and mirrors would baffle you because you are so blinded by the desire to eliminate the income tax anything would do in its place.

As I explained to you before The 22% that you claim will be deducted from the price is an average, it is not 22% on everything. The things I buy are imported food like bananas, tomatoes, pineapples, wranglers, shirts, socks etc if there are any embedded taxes they are a function of the government of the originating country and the United States does not have the authority to remove these embedded taxes so there will be no 22% reduction in price at the point of consumption/sale VIOLA FairTax SCHEME adds 30% to the price of all these items.

If you imagine that the illegal aliens, drug dealers, pimps, prostitutes, etc are going to start paying taxes you have your head where the sun don’t shine. They are dealing in the black market now and they will continue to operate in the black market.

The statement about having more jobs in this country is beyond stupidity. Until the government ceases this free trade agreement our jobs in this country will continue to be exported until equilibrium with other countries is achieved.

Your grandfather’s generation and your father’s generation managed to get on their feet without the crutch of stealing the security of their partens why can’t you duplicate their feats.

I’m afraid your working in a 200 watt environment with a 10 watt bulb. The lights are on but you just have the shades of envy/greed covering your eyes so you cannot see them.



Liar Liar Pants on Fire? Really?
I'm baffled!

At times I feel like we are talking the same language. At other times I feel like the disconnect is just too big of an obstacle to overcome.

Try this... Imagine a tax system that still taxed folks at 23% (your 15% from way back when +7.65% for Social Security/Medicare) and that lowered prices to consumers by 22% but then added it back in at the cash register so that there would be no material difference in prices today vs. prices under this new tax alternative...

Imagine that the middle and uppermiddle classes got tax relief under this new tax alternative but that, since the tax is now at the register, illegal aliens, drug dealers, pimps, prostitutes, etc. all contributed fairly rather than saddle middle/upper-middle, and high-income earners with their share + the share of tax avoiders...

Imagine also that our country has more jobs and more prosperity because of this new tax alternative...

Imagine that the socialist agenda starts reversing itself so that we are all free to thrive or fail (and get back on our own feet) as was the case up until 100 years ago...

Will the light please go on for you?

Peace,

YK

YK: Yes enough socialism is enough
Again I challenge you, I have suggested at least 5 feasible ways that this double taxation can be eliminated. Find some program that is acceptable to you to eliminate this double taxation and incorporate it into the original proposal. Stop denying that it is double taxation, Even your god boortz/Simpson admits savers are not treated as favorably as are current wage earners under the FairTax SCHEME. There should be no favorites otherwise you start the whole corrupt cycle over again.

Just to ease you mind, I currently provide my own private medical insurance, however if this abomination ever passes I will drop my private insurance and go on Medicare. (I am paying for it now anyway) and I will go for emergency care for any splinter, cough, sneeze or hiccup that I have. Emergency care is much more expensive than regular Dr appointments.


YK Yes enough socialism is enough


Again . . . . . I challenge you find someway to finance your FairTax SCHEME without DOUBLE TAXING the savers of the nation. Is it beyond your limited comprehension that the savings were taxed once by the income tax system and this FairTax SCHEME would tax these same savings again when they are spent on new goods. Even boortz/Simpson admits to the double taxation.

If it makes you feel any better I will promise you this. Currently I provide my own medical care, Should this abomination ever pass I will drop my private insurance and start using the Medicare program to the utmost. I will go to the doctor for an emergency appointment (they cost more) for any splinter, cough, sputter or any irregularity I can dream up.




YK: Yes enough is enough


You’re lying again, even boortz/Simpson says the prices will be reduced by an “average” of 22% by eliminating the embedded taxes but YOU insist that the reduction will be across the board. LIAR LIAR PANTS ON FIRE.

IT’s time you and your generation stopped suckling at the teat of your fathers and grandfathers generation and you stood on your own two feet or is that incomprehensible to you.

No, I am not asking for compensation for the hardships of my youth what I am demanding is that you stop living off me and my earnings. I don’t know where you got your information, probably infopedia where anybody can post anything they want whether factual or not. Income tax was much more onerous when they took 15% of and annual salary of $5000 leaving $4200 than it is to take 10% of $50000 leaving Just $45000 to live on. Out of that $4200 we still had to pay the taxes to pay for your school bus, your hot school lunch, your school swimming pool, your school sports centers, your summer camps. Support your college. Provide nearly interest free student loans. In other words nurse YOU and your generation from cradle to the crawler you now use because you cannot stand on your own two feet.

I don’t insist upon saddling generations behind me with oppressive/abusive taxes. BUT I DO INSIST that I am not saddled with the oppressive/abusive taxes that have already been paid and then have a generation of ingrates saddle me with a oppressive/abusive tax a second time with the Fair Tax SCHEME

You misstated your mission. It is not a handful of patriots . . . . . It is a bunch of liberal socialists attempting to steal what their betters have worked and saved to accumulated so that the socialists can continue an opulent lifestyle at the expense of the savers.


Averaging is the currancy of socialism





GyroTyro - enough.
Your bitterness and hate are unwelcome.

What you are asking for is the equivalent of compensating you for having to walk 2 miles in the snow as a kid when bus-service hadn't quite made it into your area yet. That was the way the world was when you grew up.

The oppressive/abusive income tax is becoming more oppressive/abusive as time goes on - far worse than when you were in your earning years. That is the honest truth. What was the Social Security % when you were earning? Did we even have Medicare? The truth is that Social Security/Medicare were bad ideas to begin with (more pandering to the masses in order to keep politicians in power). Big Government/Big Power/Big Control – it is all bad. Free markets should rein. Your insistence in saddling generations behind you with more oppression/burden or… that you are somehow compensated beyond a simple lateral move (i.e. prices won’t change for you) for all of the oppression/burden that you had to survive through is not valid. Stop.

A handful of patriots are attempting to put some common sense back into government. Or, we can stay with what we have. Be aware though… the current solution for the government is to print more money and cause runaway inflation but to not index cost of living to true inflation. Result? Your entitlement payouts don’t keep up with true inflation AND your savings are diluted and your purchasing power erodes. And… we continue to chase prosperity overseas. Happy?

Peace,

YK

Rely to YK


YOU might try being honest and stating the truth for once instead of distorting the ramblings of the boortz/Simpson.

You referring to boortz/Simpsons explanation of linders FairTax SCHEME is like oboma citing wright who in turn refers to jim cove for religious leadership. Neither you, boortz /Simpson, wright or obama know what the blazes you are talking about. It’s like using the koran to teach Christianity. You just want to preach to the masses to see if you can ignite some fire.

You acknowledge that savers had a much more difficult time not only making a living but saving for their futures then why do you object to providing a safety net for them and their savings? Find some way to incorporate compensation for taxes previously paid and you might get some support from the 22 million seniors who are retired and would be screwed by this FairTax SCHEME.

You cannot justify trying to communicate with someone who doesn’t want to address the issues and at least be honest. That’s a laugh when you even deny that the god boortzSimpson himself stated that retirees and savers would not be treated as favorably as new wage earners. Why should retirees and savers be discriminated against?

You had better go back to recent history if you think that tax evaders and avoiders are going to suddenly see the light and fall into line. Those that can afford it will go to foreign markets to make their purchases. Black markets will thrive. If people will go to great lengths to avoid a 8% sales tax think of what they would do to avoid a 30% consumption tax.





Reply to GyroTyro
What can I say... Go back and reread your posts. I hope they make sense to you because they certainly don't make sense to me...

Your generation followed massive industrialization of our nation. Paying as you earn didn't affect our global competitiveness because our other freedoms were our big competitive advantage. Even if you did have to succeed with one arm tied behind your back, why would you want to ask current/future generations to do the same in a much more competitive global environment?

I can no longer justify trying to communicate with someone who doesn't want to be address the issues and at least be honest.

I like the FairTax. It will reverse the trend with jobs and investment by inviting both back to our lands which will be great for economic and individual prosperity. It puts families first - ahead of the government - with the tax prebate. It invites tax evaders and tax avoiders to become active participants in funding our gov't when they consume. Its simple 133 pages are far better than the joke that is our current 66,000 tax code. It is also better than anything else I have seen.

Peace,

YK

SS in white shirts
How far might the IRS go to destroy or at least discredit any presidential candidate who favors the fair tax?

fair tax
i think the fair tax is basically a good idea, but instead of consumers paying it wevery time thet buy something lets mlet businesses and corporations pay if wevery tiime they sell something to someone. much more efficient and it will give business a better cahnce to continue there long tradition of cheating on their taxes. they wont have to fire all thiose auditors and lawyers.

fair tax balogna
nah. you are worng about the inevitability of the fair tax.

Eliminating all other taxes
would remove them from the price paid for everything by everyone including government and reduce the price by 1/3. This would end the deficit and enable paying off the national debt.
ONE TAX AND DONE, ONE TAX AND DONE.

The only way
any tax reform will make the economy the best it can be is for the resulting tax to be THE ONLY TAX IN EXISTENCE FOR EACH LEVEL OF GOVERNMENT. Having a second or subsequent tax will screw up the whole concept.

Response to Yks Post on his Blog Pt 3

KY s original post in quotes

“KY: If you answer “yes” to the question that we can unravel why the prices will remain materially the same (not dollar-for-dollar on every specific item but on average – similar). I am happy to go through the math with you … that your $85 actually buys $85 in merchandise but I need you to be honest about the question first.”

Now we get to the meat of the matter Your gonna play the equivalent of the RACE card to promote the SCHEME. ITS for the CHILLLLLLLDDDREN we must do it my way or the children will suffer.

Sorry I don’t buy that HORSEPUCKY. It is for YOUR benefit and the kids are just thrown in as a tear jerker. By the time my grandkids (Not many years away) have to pay taxes the SCHEME will be just as corrupt as the current tax system.

This change of tax system is to benefit YOU and no one else. Your fathers generation and grandfathers generation with a grossly inferior education to yours worked under this system and succeeded. They managed to raise their families and give them a fare better education then they themselves had. In gratitude, You, thru either envy, incompetence or laziness can’t even duplicate their achievements and wish to steal the benefits of their labors to continue on your road of self indulgence. Your FEEBLE attempt to play the RACE card of “Its for the CHILLLLDDDRRREEENNN explains a lot. And it don’t cut ice.

Response to YKs Post on his Blog Pt 2
YKs original post in Quotes

“YK: If … if you go under the assumption that prices will not change materially (i.e. a $10,000 medical procedure will still cost $10,000 after the FairTax, a loaf of bread will still cost, what, $2 before and after, a car wash will still run $10, etc.), AND you get a $200/month payment by the Fed for yourself (another $200/month if you are married), AND your children/grandchildren would be far better off, would you at least consider the possibility?”

YOU or I cannot make the a$$-umption that prices will not change in fact the big premise boortz/Simpson SCHEME is that the removal of the embedded tax will lower the average price of everything 22% therefore negating the 30% consumption tax this SCHEME will impose on ALL new consumption. My contention is that items with a BIG embedded tax like jewelry and luxury cars will have a 70% tax removed and items I purchase that are imported clothing and foods have 3-5% tax removed but it averages 22% . The diamond buyer pays $300 for a $1000 ring but I have to pay $97 for $100 worth of imported Wranglers. What is fair about that? ? ? ? By the way That’s the second time you are disputing your god, boortz/Simpson. You’re gonna go to taxpayers hell for that denial of the great truths of the FairTax SCHEME.

“KY: If you answer “no” to the question than you should be against any form of progress or benefit to generations that come behind you. You will have wanted your child to walk in the snow just like you did so that they appreciate what you went though. I appreciate what you went through… Our tax mess wasn’t born on your watch. It grew worse over time. It happens to be time for a change though.”



Response to Yks Post on his Blog Pt 1
YK Post in quotes

“YK: How do I get this point across? Prices will not change materially. Prices will not change materially.”

I don’t know where you came up with that a$$-sumption. Even the boortz/Simpson THEORY says the prices will come down at least an average of 22% when the embedded taxes are removed. Now your disputing your god boortz/Simpson?

“YK: When Boortz says that retirees will not get “as good of a deal” why are you interpreting it as “retirees will get the shaft”? In fact, retirees will get a good deal but current workers will get a better deal. What is wrong with that? “

Why should anyone get preferential treatment? This is just the beginning of tax loopholes for preferred taxpayers. It’s the same problem we have now with income tax.

“ YK: If you had to walk five miles to school in the snow but your child got to ride the bus are you bitter about the progress or are you thankful?”

I did have to walk 2 miles sometimes in the snow but that is another question. We are speaking about the same time frame. Why should I put my child on the bus and then be forced to walk the same five miles in the snow. Why can’t we ride the same bus ? ? ? ? ? If we do ride the same bus why do I have to pay twice the fare?

“YK; Let me ask you a question. Please answer this honestly. The question requires that you make an assumption that goes against your grain but if you answer honestly we can come back to the meat of the issue.”


Let's be fair about the FairTax
--
And look into a well-reasoned critique of the concept by way of L.M. Vance's recent review of *FairTax: The Truth: Answering the Critics* (Harper, 2008), which is available online at: http://mises.org/story/2961

Elsewhere, Vance states:

"...a tax plan that perpetuates the welfare state and pays for the warfare state is not the solution. Obviously, the 'best' tax reform plan, from the standpoint of liberty and less government, would be to eliminate taxes entirely. None of us are naïve enough to think that will ever happen as long as we have the state to deal with. However, in the mean time, the next best type of tax reform is one that results in a substantial lowering of the amount of taxes collected. If taxes are cut by a large enough amount, then no one will be too concerned about how the government collects its taxes. Real tax reform begins with the drastic reduction of taxes and tax rates."


The FairTax proposition is bold (one might even say "bizarre"), and it cannot be disputed that a point-of-sale tax *MUST* have a detrimental impact on the trade of goods or services.

Just as the "income" tax diminishes the incentive to engage in productive work, the FairTax (like any other sale tax) would diminish the incentive to buy anything in the heavily-taxed marketplace.

Wanna see a thriving black market in every commodity, every service, everywhere?

Pass the FairTax.

This is a position that a CONSERATIVE can get behind?

--

'fraid not...
The first hill to climb in pursuits such as this is money. I and most others donated their time, but you can't "comp" filing fees, publication, petition-gathering, notification and other expenses. Just the transportation costs needed to mount a statewide effort was substantial (and of course more so now).

Most of our cost-defraying funding came from one individual, based in Michigan, who is committed to personal freedom on multiple fronts. But few individuals in the world have the funds to push this issue on a national basis. And, with the systemic opposition from the philosophical left, from special tax code beneficiaries, from country-club "conservatives", from mainstream business and from all forms of conventional (and now "asymetrical") media, the cost of countering the status quo is enormous. Mike Adam's conclusion that opposition must be grassroots-based is correct. But, like efforts to change the social security or medicare systems, we won't live long enough to influence people by traveling with a book. I mentioned the NRA for just that reason. They and NFIB are powerful grassroots lobbying groups. That's the nature and breadth of effort needed. We didn't have that then. Still don't.

Wow. So what do we do?
I am convinced that it would be amazing for our country (all generations). I have recently exhanged with some highly intelligent people who seem to not be in concensus for various reasons.

How do we frame this so that it will gain needed momentum while at the same time defend against the pot shots from politicans and their lobbyist masters?

Tom, I really appreciate your insights. Are you still pursuing this or is the mountain too high?

YK

I apologize for the duplication.
I thought the IRS ate my homework.

That's it...
4. The elimination of the IRS - although it's really sweet even to type those words - was never the point of the NRST movement. It was to eliminate the ability of the IRS, or whatever that agency's name eventually became, to invade citizen's privacy by demanding full knowledge of how we make and spend our income. Once the congress gave the IRS the right to determine the sources of all of our income, and how we spent it, they could travel almost anywhere into our lives. So if the IRS survives to be the funnel for the prebate, fine.

There were many other lessons taught us during this process. The largest, probably, was that replacement of the federal income tax industry would require some variant of the Marshall Plan or the work the N.R.A. does - almost endless funding and numerous high "Q" rated celebrity talking heads. Anything on a lesser scale is a tough sell.

Enough Fun...
4. The elimination of the IRS - although it's really sweet even to type those words - was never the point of the NRST movement. It was to eliminate the ability of the IRS, or whatever that agency's name eventually became, to invade citizen's privacy by demanding full knowledge of how we make and spend our income. Once the congress gave the IRS the right to determine the sources of all of our income, and how we spent it, they could travel almost anywhere into our lives. So if the IRS survives to be the funnel for the "prebate", fine.

There's more, of course. But these are hurdles we knew we faced from the beginning. We just hadn't judged their dimensions very well.

Any effort to replace the federal income tax with something else will have to be funded like an Air Force bomber program and have multiple advocates in the form of celebrities with stupendously high "Q" ratings. The resistance to change where trillions of our dollars are at stake is a burden that we will have to meet the way, I think, the N.R.A. has supported the individual right preserved by the 2nd Amendment. Anything less is tilting at non-energy generating windmills. Sorry, Mike, but that's the story from the grass roots.

Almost Done...
3. The suggestion that a fair tax, in any form, is less susceptible to political manipulation than any variant of the flat tax movement is just incorrect. We never suggested otherwise and had never heard any National Retail Sales Tax advocate say that it was. We always knew politicians will play with any tax code at their disposal. Milton Friedman always said the income tax would never disappear simply because it was the only thing politicians had to sell - special benefits with their, and others', money. We countered that point (that politicians would always manipulate the rate and targets of the NRST) by noting, I think correctly, that a public outcry against raising taxes in a NRST world was far more likely if we, the consumers, would see the amount of tax we were paying with every purchase. 20%, 23%, 30% - whatever it might be - will be a staggering form of sticker-shock at the checkout counter and that's a natural impediment to any NRST rate increase.

Fun (IV)
What surprised us, though, was the vocal opposition from business people. We figured some of them would surface, but for all the reasons mentioned in this string of comments, we thought for sure most businesses would appreciate the value of the tremendous influx of capital into the marketplace, from here and abroad, if our federal income tax went away. Not so. Perhaps it was the pressure on Arizona business from state and local government, and their close friends in the paper, television and radio news business. Whatever the reason, when we went to statewide service clubs (Rotary, Kiwanis, Lions, BPOE - you know, business folks?), we were met with hostile questions from all corners. It just amazed us. It was as if we were in the midst of a reprise of the democrat party television ads in the 1996 national election - telling the elderly they'd be tossed from their homes and children would starve without the school lunch program if the congress had the nerve to reduce the rate of increase in government spending. It was bloody awful.

More fun...
2. The special interests I mentioned before? They were everywhere. Now, we expected some of that. After all, even 6 years ago, when we tried this, federal income tax payments were hugely regressive. It's even worse today. Specifically, for 2006 (the most recent U.S. Treasury figures available), the top 1% of U.S. earners (to the extent required to report it) paid 37.4% of all federal income tax revenue. Sliding to the bottom of that scale, the bottom 50% of U.S. earners paid just over 3% of federal income tax revenue. Why was that important? Because we knew that almost 50% of the Country didn't pay any federal income tax AT ALL and, so, wouldn't care at all about what we were doing (and would likely let their congressional representatives know that). Under any then-prevalent version of the fair tax, all of the previous non-tax payers would now be forced to pay at least some federal income tax when they purchased some good or service. So unless the movement really caught fire locally, politicians would inevitably ignore us.


Fun (con't.)
1. All of us involved in the effort realized that the 16th Amendment had to be repealed if a national retail sales/consumption tax were to be passed. That, by itself, is an intimidating prospect and not just for the most obvious reasons - special interest opposition (those treated differently from the great unwashed under the code), reactive political opposition (that is, politicians reacting to the pressure applied by the specially interested) and the mechanics of repeal. Once you get past congressional approval, no mean feat, you need ratification of 3/4 of the states. That, by itself, is an endless process. As one example, the 27th Amendment to the Constitution was originally approved by congress in 1789. It was finally approved in 1992, with Michigan's vote. No, despite all of the built-in problems of the constitutional process, we knew we had a chicken/egg problem, one alluded to here many times. So long as the 16th Amendment is in effect, passage of the fair tax could well result in two, equally onerous federal tax systems. So the current house bill tries to meet that problem by suggesting that the Cinderella bill turns into a tax pumpkin if the 16th Amendment isn't repealed within a certain number of years. As you can see, history on this point is daunting, and none too reassuring.

this has been fun...
I'm just sorry I'm late to the party. But I've read as many of the (now) 192 messages as time, temperament and eyestrain permit.

I thought I'd comment because I drafted an initiative involving an early variant of the fair tax (national retail sales/consumption tax) that eventually made the ballot here in Arizona (it was voted down). The effort required a good deal of research and background reading so that the text of the proposed law would both pass initial legal scrutiny (a division of the state attorney general's office reviews all proposed initiatives before they can appear on the ballot) and the philosophical underpinnings of the effort. I thought a few experiential observations might add something to the topic.

I'll mention them in the next message, or so.

Way to go Earnheart...
First off... thank you for your service. We all owe our freedom to those who serve/served our country on our behalf.

I believe the FairTax will come as well. it makes too much sense when people get their minds around it.

Keep on keeping on...

YK

The Fairtax will come
i AM RETIRED AND DON'T HAVE A LOT OF MONEY BUT i BELIEVE THE TIME OF THE FAIRTAX is Here . Ibought my copies read them , and then they have been borrowed several times . This past year I had a chance to be at the Fairtax Rally in Columbia . The one where the news people said we were war protesters . I am a Marine from forty years ago , not a war protester , and I do believe the Fairtax will come .

GyroTyro please read my reply
Hello GyroTyro. Please read my reply at my new blog on TH. I think you can click on my name near the post. Otherwise, you can go directly here - http://ytknight.blogtownhall.com/

Cheers,

YK

KT_Knight Just as I suspected
You and Christopher are both incapable of reading and understanding anything in depth.

Someone says here is a system that will replace an onerous income tax and you don't bother to delve into the meat of the proposal you just climb on the band wagon like the rest of the mindless sheeple.

You just can't grasp the fact that implementation of this SCHEME would confiscate the life savings of Hundreds of thousands of people to satisfy your selfish desires.

Utopias are non exsistant. theoretically comunes are ideal but of the thousands tried not even one has worked.

I'll let you go blithly on your own little cloud just like the rest of the mindless followers of boortz/linder




Makes you wonder...
You know, I am a bit flattered. I won't bother reading beyond post #2 though. When he is talking about insurance pay-outs it is clear that he still doesn't get it.

With all due respect, the insurance pay-out is not a taxable event. Any consumption that follows the insurance payout is taxable if it is a new good (not used) or a business-to-consumer service.

I have been debating a fellow named Andrews today as well. He has many arguments to the benefits of the FairTax as well but thus far he seems to be making mountains out of mole hills. I have to be careful because as much as I want to feel that other are stuck and plain stubborn, I don't wan't to be closed-minded to others as well. Andrews won't read the FT books but has many many opinions about the FT. He offers up two other alternatives (one that is FlatTax-based and the other being state-based with payments to the fed) but when I asked him to elaborate he didn't seem willing. I think he is mad at me.

Anyway, we need to all do our part to spread the word. I wonder how many people come to blogs like these and are influenced by naysayers. I think the FT police need to remain out in force to bring clarity to the misunderstandings/misrepresentations that are floating around.

Thanks for the support Christopher.

Best,

YK

Yt_Knight
Way to go!

GyroTyro finally had to make 15 posts to express his total misunderstanding or misrepresentation of the FairTax.

After reading GyroTyro's anti-FairTax manifesto I can see that GyroTyro is one of those lost souls who is either unable or unwilling to understand the concept behind the FairTax.

The sad part is there are many like GyroTyro, and they are the ones who help keep in place the oppressive system we live under.

FairTax SCHEME 15


There are $70 trillion dollars in tax paid retirement savings of one kind or another in this country a 23-40% tax on this amount is $16 to 28 trillion dollars that the tax and spenders see as a jump start on their SCHEME. When that is gone they will be looking for some other thrifty person or group to raid to continue their spendthrift ideas. A good example is the SS fund. Here was a large accumulation of savings. LBJs Great Society stole the SS reserve fund and look where that has left the SS system.

Remember when you made payments on your house you did it with after tax money. Any savings you have in your home (equity) will be subject to the boortz/Simpson tax when the home is sold and you elect to spend the money.

Another question, what do retail stores do with inventory that was purchased prior to the Fair Tax? Do I get a refund from Uncle Sam for $1 million I have in inventory? Or do I go out of business paying the tax twice ,once to the manufacturer and again to the government? I know, its only a transitional thing, and eventually, my manufacturers will (might) pass along whatever savings that they get by not paying fed corp taxes, but what am I to do untill then?? Old Whig

Much retirement savings being spent today was earned prior to any tax shelters for savings. Tax was paid on it and it was earned at a different rate.


Ty Knight read and reread and reread and finally DIGEST that if you are capable.



FairTax SCHEME 14


People who continued paying income taxes would have to have some form of ID that could be used at point-of-sale to exempt them from the sales tax.

A second alternative could be: An asset debit tax card. Conduct an audit of all a savers assets, it can easily be done. It is currently done upon the death of the taxpayer to calculate the estate death taxes. For most people it would take: a year end bank statement, an investment statement, an county assessors statement and lenders statements. The total of the assets, minus the debts, is then credited to an asset debit card and given to the taxpayer, When a purchase is made the taxpayer pays for the sale and in lieu of the sales tax, gives the clerk the asset debit card and the amount of the sale is deducted from the payers asset total. When the asset total on the tax debit card reaches zero the buyer then pays the normal sales tax. Any asset appreciation from the date of the inception audit would be subject to the so called "Fair Tax Scheme" . . . .. . . . .

A third suggestion is to make all people over 68 exempt from the FairTax SCHEME..

A fourth suggestion, just have the government donate a 30% bonus to each and every savings account or investment of any kind. That should be easy to do, right?

A fifth suggestion the person spending any savings of any kind will just report it to the Government and his monthly **stipend will be increased by 30% of the savings spent**.

Social Security DeJa VU
Here's where the repeat of the Social Security fund raid by LBJ comes in.

FairTax SCHEME 13

Shouldn't this same logic be applied to savings? If the savings was taxed by the income tax system then it should be exempt from the point of sale boortz/Simpson tax.

boortz/Simpson in his first attempt at an explanation of the of the tax on page 169 of "the (worthless) book" under the Chapter titled "Questions and Objections". The question was to the effect that the individual was living on retirement income on which he had previously paid taxes and why should he have to pay yet another round of taxes on that income as he spent it during his retirement.

The answer from boortz/Simpson was that, unfortunately they (retirees) were not getting "as good a deal" as current workers. That retired people fell in the same category as anyone who had saved money previously and was now ready to spend it. He said that there was nothing they could do to alleviate the fact that you were going to pay taxes on income that was already ravaged by taxes, but you would benefit from the (non existent) 22% reduction in prices and the pre-bate.

If exemptions can be written into the act for insurance benefits why cannot the same exemptions be made for savings?

I have five possible solutions to end the double taxation dilemma. .. . . ..
One alternative could be: Phase out the income tax. . . Make the consumption tax optional. The Fair Tax Scheme would be mandatory for anyone born/starting employment after the date of inception. Anyone else who has ever filed a tax return has the option of continuing with the income tax option, or switching to the sales tax option, but you can never switch from sales tax option to income tax option.

FairTax SCHEME 12

you in the US new from a dealer. There is no reason the rich would not do the same thing with a 30% consumption tax. 30% on a $60000 car is $18000 . . . That would finance a nice European vacation.

I also have visions of floating malls (converted ocean liners) off the coast of the country with big neon signs saying TAX FREE ZONE. If Europeans can come here to do their shopping because of the difference in the value of the dollar think what the wealthy would do for a 30% discount, they would do all their personal shopping outside the country. Those without easy access to the offshore floating malls could go to tax free indian reservations. (The precedent has been set with tobacco)



One critic of the SCHEME wrote:
"One other huge complaint that I have with this law is the quality of it’s composition. It is, by far, the poorest written piece of legislation that I have ever seen, As I pointed out . . . . when discussing the taxability of insurance payouts, one section implies that they are not taxable as long as the taxes were paid on the premiums and another referenced section implies that they are taxable. It is written such that a regulator can pretty much interpret most of it any way they want. This has to have been done intentionally."

A SCHEME zealot responded "The legislation was written by two tax attorneys who realize that God-willing, life insurance policies "mature" long after they're written. Contracts can span decades. If the premium isn't taxed, then the payout should be. If the premium has been taxed, thereby reducing the amount of death benefit purchased, then the payout shouldn't be."



FairTax SCHEME 11

If p....ps and drug dealers are avoiding the law now it will not be any challenge to avoid a simple tax law.

Rich avoidance
Rich have tax avoidance methods not available to the plebeian

Those that think the FairTax SCHEME is fair are living in LaLa land. There are so many ways that the rich can avoid the tax is not even debatable. All you have to do is go back a very short time in history.

In the early 70's congress in its infinite wisdom decided the rich were not paying thier fair share of taxes on yachts so they put a luxury tax on them. Result: yacht buyers went offshore to buy yachts. Many yacht builders went out of business, those that stayed established offshore sales which avoided the confiscatory taxes, others moved out of the country altogether. The tax was finally repealed after the country lost many of the businesses overseas. They still have not returned.

Then there is the true example of buying a Mercedes in the Early 50's. Because of the very high import tariffs on cars, You could go to the local Mercedes dealer and buy a car to take delivery in Europe. You paid the dealer who arranged for a car to be delivered to you from the factory with left hand drive. You then vacationed in Europe driving the car for two weeks at prepaid hotels, returned the car to the dealer who then prepared it for export to the US. Since it was now a used car any tariff on it was very low. This could all be done for the same price as a car delivered to

FairTax SCHEME 10
Next, the buyer of the item with a 70% imbedded tax gets a price reduction of 70% making the price of his $10000 piece of jewelry or clothing or Cadillac a real bargain at $3000. Add a FairTax SCHEME tax/Homer Simpson Tax of 23% brings the total cost to $3690.

I can’t really grasp the fairness of adding 10.7% to the food cost and reducing the cost of luxuries 271% . . . . . . . . Averaging . . . DOH



**This FairTax SCHEME will be an auditors nightmare.**

The retailer will have to be constantly audited to be sure s/he is not selling things without the tax. The retailer/wholesaler will have to be constantly audited to be sure his products are going for consumption or resale. Someone brought up the example of the production of steel products. Where do you add the tax. The iron ore that miner brings up is most certainly new. Is it taxed at this point? It goes to the smelter. Is it taxed at this point? As pig iron it can go to the steel manufacturer or to the foundry to be cast into finished or raw castings. Is it taxed at this point? The raw castings are then sent to a finisher for further manufacturing or maybe to a hobby shop . Is it taxed at this point?

**Pi...s and Drugs**

There are two problems with this theory. First: Right now the p...p or drug dealer has to launder the ill gotten gains in some manner and this frequently is where the leads come from to actually apprehend the p...p or unlicensed pharmacist. With the boortz/Simpson tax there is no accounting for any sums that you might be spending or how you obtained them.


FairTax SCHEME 9

But I buy very little expensive jewelry. Like many of you I buy mostly from WalMart, Sears, Target, Kmart, Albertsons, A&P and local stores because they are the only ones who have what I use most. If you look at the items in these stores, the TVs, the Stereos, the kitchen appliances, mostly are imported. NO embedded tax. Likewise the food we eat. Much of the beef comes from Brazil, Australia, Canada, the lamb from New Zealand the produce from SA or Mexico. None of these imported items have embedded taxes that can be removed by the SCHEME, Therefore the $500 TV from Japan will cost $500 plus the SCHEME tax of 23% or $650.

The luxury jewelry buyer gets a price reduction of 38.5% and the TV buyer has a price increase of 23%. That's fair in boortz/Simpson speak.

**Averaging is the currency of Socialism.**

So what you are saying is, if hard goods has an imbedded tax of 70% and Food has an imbedded tax of 10% the guy who buys a Cadillac with a 70% imbedded tax gets a 70% reduction in the price of his Cadillac while the guy who is trying to stretch his dollar on necessities only gets a 10% break in the price of the reduction of goods?

Lets see $100 worth of food gets a 10% price reduction due to removal of imbedded taxes. That makes the food cost $90. Then a 23% FairTax SCHEME tax of $20.07 is added. That makes the $100 worth of food now cost $110.07, according to my 7th grade math. Explain to me how that an advantage ?? ? ? ?



FairTax SCHEME 8


Situation 4: Barry wants to build a McEdwards size house. He purchases 10 acres No boortz/Simpson tax (all land is used) and build a very modest 2 bedroom home on the land and pays taxes on the New home. He moves in or rents it out for a short time. He then proceeds to remodel the home to his desired 40,000 foot McEdwards home with no more taxes.

Many more examples of avoiding the boortz /Simpson tax could be cited but they would only prove the same thing . . . . there are big holes in the original FairTax SCHEME.

**EMBEDDED TAX DECEPTION**

That brings up another discrepancy in the boortz/Simpson tax.

From pg 169 of The FairTax Book: "the items you purchase with your already taxed retirement savings will be about 22% less expensive than they were before the FairTax."



One of bootz/Simpson tax selling points is that when the FairTax SCHEME is passed the 22% embedded tax will be removed and prices will come down 22% so that when the boortz/Simpson tax is added the price will remain about the same. Confusing ain’t it.

Once you are confused the deception comes in. The 22% embedded tax is an average, it is not 22% on everything and therefore the 22% embedded tax cannot be removed from everything. In reality the embedded tax can only be removed from those items which have an embedded tax and then only to the extent that the embedded tax is reflected in the final price of the object. A $10000 piece of jewelry with an imbedded tax of 50% will have the price reduced to $5000 and when sold it will have the SCHEME tax of 23% added to make the final price $6150. Sounds good so far.


FairTax SCHEME 7

reach of both of them. But being enterprising young men they decide they will use the investment loophole. Tom will buy the house Jim desires and rent it to Jim for 30% less than the payments on the house. Jim in turn will buy the house that Tom desires and rent it to Tom for 30% less than the payments on the house. Because the houses will be used as an investment they do not have to pay the Huge 23-40% boortz/Simpson tax. After a period of 5 years both Tom and Jim can show that the house is being rented at a loss and can divest themselves of a poor investment. Tom sells the house that Jim is living in to Jim as a used house and Jim does not pay any tax on it. Jim sells the house Tom is living in to Tom as a used house and Jim does not pay any tax on it. It is necessary to pay 30% less in rent than the payment on the house because this convoluted boortz/Simpson tax hits the renters with a 30% tax on the rent.

Situation 2: Larry wants to obtain a mountain retreat. He purchases a 400 sq ft summer cabin in the mountains and since it is used he pays no taxes on it. Then he proceeds to remodel the cabin to suit his desires and ends up with a McMansion with all sorts of amenities. Don't laugh it was done in the mid 60's in Santa Cruz, Ca. Look up what happened in Santa Cruz County when they gave the 18 year old the vote. Prices of tool sheds and chickencoops skyrocketed when building permits were limited or denied, existing buildings were worth thier weight in gold.

Situation 3: Jack is a developer, he has a model house, he uses the same model house for 20 years and decides to sell it. Is it a used house? It has 20 years of wear and tear. Or must he collect the 23-40% boortz/Simpson tax on this 20yr old relic that needs remodeling and refurbishing?

FairTax SCHEME 6

tax. Every estate gets an estate tax deduction for all property received by the deceased's spouse, as well as a $2 million standard exemption for all other property. Thus, many middle class Americans will owe no federal estate tax."

**That's a $4,000,000 exemption **for a married couple. Few of us has assets beyond $4,000,000. That means for all practical purposes **there is no Death tax for most of the middle class.** boortz /Simpson tax is going to eliminate something that is not there to begin with. BRAVO . . . With proper estate planning there will be NO estate tax for any inheritance of any size. Stop to think once . . . . How much tax has t kennedy paid on the 100s of millions he inherited over the years.

But the **FairTax SCHEME will impose a 23-40% tax** on any thing spent from this estate as opposed to no tax now. In other words the FairTax SCHEME imposes a tax on Death it does not eliminate it for most of us.

**Real Estate Avoidance**

The FairTax SCHEME imposes a 23-40% tax on new construction sold for owner occupancy. There is no tax on used real estate or on new construction intended for investment. BOY talk about loopholes . . . . where do you start.

Situation 1: Lets say Tom and Jim are brothers and they both want to purchase a new home for $200,000 plus the FairTax SCHEME tax of $60,000 to $80,000. The taxes put the home out of

FairTax SCHEME 5


Over the Internet, obviously. Products purchased from websites located in Canada, Mexico, and elsewhere.

Example: Just two months ago, I logged onto EBay.com and purchased an item from a private seller in Australia. Go ahead, tell me how you would collect the FairTax on it!!!

What the FairTax a huge does is create incentive for retailers to set up shop in foreign countries and sell their products via Internet websites to Americans.

You don't think that will happen? The Internet porn industry is already a multibillion dollar worldwide industry. All of which is illegal, and underground. The FBI is engaged in a constant game of "whack-a-mole" trying to shut down child porn sites, which spring up in another country as soon as they get shut down in one country.

And that's what will happen with the FairTax. You'll be sending Government agents all over the world to demand that those foreign websites pay the FairTax whenever they sell to American consumers. Good luck with that.

**Death Tax**

Another deception perpetrated by boortz/Simpson is the claim that it will eliminate the "death" tax. The following is a statement from a estate planning attorney . . . . "The federal government imposes an estate tax on all citizens and residents of the United States. It imposes no inheritance

FairTax SCHEME 4

percentage of their income on living expenses. This means that lower income people will be paying taxes on 100% of their income while the rich would only be paying taxes on a fraction of their income. A flat tax of 10-15% would tax rich and poor alike rather than tax the poor at 23-40% and the rich at a much lower rate . . . .. possibly even at 5-8% or less.

**The preBAIT is just that . . . BAIT**

All purchases of new items under the SCHEME will be taxed. The **preBAIT is just that, it is a BAIT** to try to buy the support of those on the dole to get a larger portion of your earned income. Since everything new is taxed all that means necessities are also taxed. To pacify those on the dole the SCHEME promises to preBAIT the taxes on all purchases up to the poverty level.

The preBAIT is based on the poverty level declared by the government. If the government declares that $24,000 per year is the poverty level for your size family you will get a preBAIT of $7200 per year payable in monthly payments of $600. (based on a 30% exclusive tax)

There are several problems with this proposal. First, if the government decides it wants more of your money to keep, it will freeze the official poverty level, thereby effectively raising the taxes on everyone. Second, the WIC (women, infants and children) program bases its benefits on 185% of the poverty level. That tells me that the poverty level does not cover the basics needed to sustain. Third. $7200. THATS BIG BAIT. IT's also your money.

**Black market argument** assumes an unending supply of goods will be available to supply said 'Black Market.' Where or where are they going to come from?"


FairTax SCHEME 3


The answer from boortz/Simpson was that, unfortunately they (retirees) were not getting "as good a deal" as current workers. That retired people fell in the same category as anyone who had saved money previously and was now ready to spend it. He said that there was nothing they could do to alleviate the fact that you were going to pay taxes on income that was already ravaged by taxes, but you would benefit from the (non existent) 22% reduction in prices and the pre-bate.

If exemptions can be made for insurance benefits why can they not be made for savings?

The answer is simple, there are $70 trillion dollars in retirement savings of one kind or another in this country a 23-40% tax on this amount is $16 to 28 trillion dollars that the tax and spenders see as a jump start on their SCHEME. When that is gone they will be looking for some other thrifty person or group to raid to continue their spendthrift ideas. A good example is the SS fund. Here was a large accumulation of savings. LBJs Great Society stole the SS reserve fund and look where that has left the SS system.

**FairTax is a misnomer National Consumption tax would be more descriptive**

The name is a complete misnomer it does NOT represent the proposal. Mountain Rose said "Pick a descriptive name, instead of choosing one that sounds suspiciously like they are trying to put lipstick on a pig."

Poor people usually have to spend all of their income on daily living expenses. At the end of the month they have nothing left over to save. They would pay the 23-40% tax on their entire income exclusive of the **preBAIT** sums. Compare this to rich people who only have to spend a small

FairTax SCHEME 2



One critic of the SCHEME wrote:

"One other huge complaint that I have with this law is the quality of it’s composition. It is, by far, the poorest written piece of legislation that I have ever seen, As I pointed out last night in one exchange when discussing the taxability of insurance payouts, one section implies that they are not taxable as long as the taxes were paid on the premiums and another referenced section implies that they are taxable. It is written such that a regulator can pretty much interpret most of it any way they want. This has to have been done intentionally."

One SCHEME zealot response was "The legislation was written by two tax attorneys who realize that God-willing, life insurance policies "mature" long after they're written. Contracts can span decades. If the premium isn't taxed, then the payout should be. If the premium has been taxed, thereby reducing the amount of death benefit purchased, then the payout shouldn't be."

Shouldn't this same logic be applied to savings? If the savings was taxed by the income tax system then it should be exempt from the point of sale boortz/Simpson tax.

boortz/Simpson in his first attempt at an explaination of the of the tax on page 169 of "the (worthless) book" under the Chapter titled "Questions and Objections". The question was to the effect that the individual was living on retirement income on which he had previously paid taxes and why should he have to pay yet another round of taxes on that income as he spent it during his retirement.


Just for Yt_Knight. . .
.

FairTax SCHEME 1

Any time someone questions or castigates the FairTax SCHEME s/he is told to "read the book" and treated as if they are too stupid to understand this"infallible" SCHEME.

At the risk of offending (if possible) the FairTax SCHEME zealots who are either not intelligent enough or too naive to challenge the inconsistencies and loopholes of the FairTax SCHEME, I will post a few of the problems that I, as a layman, have found with the SCHEME. Possibly the zealots themselves are too blinded by self interests to admit the fallacies and weaknesses of the SCHEME. I will point out some of the more obvious problems with the FairTax SCHEME. Before opening your to mouth trying refute my statements I would suggest you read "the worthless book" . . . . and reread . . . . and reread until you BEGIN to understand it. Remember this SCHEME is a THEORY, never before tried anywhere, there are many unexplored and undisclosed intricacies to this SCHEME. When you have questions of your own you will know that you BEGIN to understand the SCHEME and its implications. Any one who can read this THEORY of taxation and not have serious questions is not playing with a full deck.

The law as written has so many intentional or unintentional, ambiguous, incorrect assumptions and outright lies that boortz/Simpson(as in Homer) has had to write a book explaining the proposed law then write a second book explaining the impreciseness of the act and his first book and now has written a third book attempting to explain the second book. Here's a hint for boortz/Simpson, if you tell the truth the first time you don't have to keep trying to explain a lie. If you still have questions after reading and rereading the third book by boortz/Simpson don't be dismayed he will soon write a fourth book explaining book 1, 2, and 3 because he is still trying to cover the lies and deceptions of the proposed act and the first three books.




taxes for drug dealers
Does he really expect us to believe that a consumption tax would generate taxes on the exchange of money for illegal drugs? Pardon me while I spew my coffee on the monitor.

After you wipe off your computer monitor, please know that the drug transactions themselves wouldn't be taxed under the fair tax. The four new houses the dealer bought afterward, however, would have been. That's one of the best parts about the fair tax. Drug dealers, illegal aliens, and foreign tourists would be sharing some of the tax burden.


Optional
Is there any way to CHOOSE as part of the proposal ?

If Fairtax supporters can find a way to make this an option for the taxpayer _ we can all VOTE with OUR pocketbooks.

Calculate your bottom line both ways- Hell, throw in a Flat Tax option- and then VOTE with CHOICE.

People will educate themselves as to what works best for them_including compliance cost and EFFORT involved with each scenario.

GT doesn't get it or doesn't want to (1)
GyroTyro, You either don't want to get it or you are a tax lobbyist & it is in your best interest to misrepresent...

I looked at page 176 of both books & don't see what you are trying to communicate.

On the tax prebate, my family of 4 would get a $537 monthly to cover tax on roughly $2,300 in consumption. Does it cover all basic needs? Only if we lived very very basic... but my job and investment income more than cover the rest (as should most people's). No taxing of investment income or social security income more than offsets. I live in California. If the standard of living is too high (and opportunity doesn't offset) I can move to the mid-west. So can the people of Manhattan. If the poverty-line is too low, that is not the FairTax's fault.

On the medical procedure: free competitive markets will punish the doc who proifits excessivly in favor of the doc who adjusts the price accordingly. I had a procedure done just last month & asked if he didn't have to pay income/corporate/payroll taxes but instead pay 23 cents on the dollar to the Fed without raising his prices... he gave an enthusiastic "Yes". What part of "prices will not change materially" do you not understand?

Your argument about the older generation having NOTHING TO GAIN... the older generation has NOTHING TO LOSE! And, if you have kids/grandkids, they have more to gain which should make you happy.




daderdog, Post #53
Absolutely loved the Princess Bride reference. Thought I'd mention just in case you thought no one caught it! It's one the top 5 best movies ever.

Yt_Knight: No YOU still don’t get it,

Part 2
There is nothing in the SCHEME that requires the physician who charged me $10,000 for some procedure to lower his price that mythical $2600 you tout, BUT there are provisions in the SCHEME that require me to pay a 30% overt tax on his $10,000 procedure. So now I am paying $13,000 out of pocket for a procedure that cost $10,000 before the SCHEME. That’s better ? ? ? ?

The older generation has NOTHING TO GAIN with this SCHEME but they do have much to loose. This SCHEME is about STEALING the security of the savers of the nation that they worked all their lives and did without other benefits to accumulate. Evidently at 40+ you have not accumulated a pot to pi$$ in or a window to throw it out of and that is why you are so cavalier/nonchalant with savings of others.
Your parents worked all their lives only to be relegated to going to used clothing stores to buy used jockey shorts so that you can squander their savings ? ?

If I cannot afford to buy new jockey shorts how can I possibly afford to purchase a $100,000 boat, Yachts Start at closer to $500,000 to $750,000. Being 40+ you are not aware the last time the government tried to heavily tax yachts. In the early 80's congress passed a heavy tax on yachts. Those people who could afford yachts stopped buying US made yachts and went overseas to purchase their yachts. Yacht builders followed them overseas and the US lost an entire industry in yacht building. They still have not come back to the US. Remember Those who refuse to learn from the mistakes of history are doomed to repeat these mistakes.

Yt_Knight: No YOU still don’t get it,

Part 1
Even linder in his blundering interpretation of the SCHEME admits that the Savers will be screwed. Look on page 176 of his First explanation. There is no reason other than to finance this ill begotten SCHEME that the savers will be double taxed. There are numerous ways that have been suggested to credit the saver with having paid taxes on his/her savings and earnings.

Get this straight, the prebate is based on the poverty level but even the WIC program recognizes that poverty level income is not sufficient to provide the BASIC needs of the individual. They supplement it with the WIC supplements and are also eligible for food stamps. The prebate needs to be quadrupled or more to cover the basic needs of a working family. The basic needs of a family in Manhattan or San Francisco are far different then the basic needs of a family living in Mississippi.

If you think this SCHEME will be free of unreasonable taxation think again. Politicians/lobbyists will find some way to exclude item “a” from the taxes and will find that item “b” does not have favor in Washington so the taxes will double or triple on that item. It has been done before and will be done again. ANY tax relief is a temporary solution, the real solution is to stop spending. Or to “adjust” the prebate to a preferred area depending on the areas political influence. Look at the current tax preferences that are being given to eco-energy projects. Pull your head out.

Mother of 4
BTW My proposal has absolutely nothing to do with the "Fair Tax". It does, however have a lot to do with a fair tax. Now read it again because what I wrote is a real fair tax in its simplest form.

Mother of 4
I am a business owner. I have been self employed for nearly 20 years and have made a living wage for most of that time and have made a profit for some of it. Taxing profit is not the same as taxing income so until you get a clue don't try to tell me about being in business.

Mother of 4
Let me explain the difference between income and profit. It is very simple. Profit is what you have left after everything else is taken out of the cost of a particular item. Income is what you take home from doing a job. Now, Gross income is what you make before you pay taxes etc. net income is what you actually receive a check for from your employer. Under my proposal gross and net would be nearly identical. What is wrong with that?

King Liberal
actually climate change is dead issue for you as your candidate believes in it.

Mike Huckabee and Neal Boortz have been the most vocal of your champions. you need some new frontmen or it will never go anywhere.

Besides if the issue had any legs it would still be on the GOP platform and it isn't.

And with the GOP recent track record I don't think it matters how many voters you get behind the idea as GWB don't change policies based on opine polls.
****

You make assumptions in your reply to me which lead to errors on your part.

1. You assume that McCain is my candidate. I did not support him and do not to this day plan to vote for him unless doing so is the ONLY way from keeping the Socialist Hillary or the Marxist Obama out of the White House.

2. The two people you cite are the two who garner the most media attention for being outspoken supporters of the FairTax, but as for being the most vocal I'd say that honor lies with either John Linder or those who operate AFFT.

3. The GOP platform has lost a lost of issues of the years which true conservatives hold most important, which is why many are looking at other parties or opting out of the process. The FairTax has never been a issue of the GOP because it does to them what it would do to the Democrats, take all their vote buying power and ability to abuse the revenue system to their own benefit and gives it back to the people where it belongs.

4. I don't think a single FairTax supporter who visits this site believes that GWB or the GOP leadership in place today would do anything to move forward with passage of the FairTax (see # 3). It will take new leadership and that is what the whole grass roots movement is all about.

Now try responding with facts and understanding of what or who it is you write about instead of assumptions.

snake0311
You seem to believe that businesses exist independently of the people who own them.

There is no way to apply any form of taxation without some, individual person having money taken from his/her pocket.

And there is nothing liberal about believing that a person has the right to do as he pleases with the produce of his own hands without the government having anything to do with setting its value.

Reactions like yours -- which refuse to grasp the conflicts between the wonderful, idealistic vision, and the messy, difficult, real world where it is impossible to force people into tidy, little molds -- are what has convinced me that this whole Fair Tax business more closely resembles a cult than supporters making a reasonable case for a well-thought-through idea.

Jesse
You said, "how about a requirement to donate a flat percentage of income to charity?"

Requirement means Mandatory. Compulsory giving is not charity because its not voluntary. If you can't say "No, I'll keep my money for myself," it doesn't matter what you call it its taxes.

The only justification for taxation is to fund the key and necessary functions of government.

Fair tax will never happen
More than 50% of the population collects benefits & pays no taxes, the "fair tax" doesn't address the millions of people who actually make money off our government and currently pay no federal income taxes, nobody is going to vote against their own economic interests.

From the IRS The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC), is a refundable federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return.

The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments.


Jesse
The overall effect of all taxes on society is always negative. Anything that is taxed is discouraged. The more vigorously it is taxed the more firmly it is discouraged.

The funding of core government functions -- national security, and the like (clearly laid out in the Constitution), is sufficiently important to outweigh the drawbacks, but the line must be carefully drawn and the burden spread in the most equitable way.

And when testing the merits of an idea it is the trees and not the forest that matter most. There are many, many, many ideas in the world that sound good. Real world application is the only true test because only when you get into concrete applications do the true virtues and merits become obvious.

No real world application scenario can be waved off as trivial in comparison to the big idea because big ideas only matter according to the actual results they produce as applied. Theory is immaterial. Practice is everything.

Still don't get it...
Gyro Tyro...

If the tax burden invites 30% of those who live within our lands to contribute to the government coffers (so that you and I don't have to pay our fair share and their share as well) AND after-tax prices of new goods and services won't have a material change... What is the issue?

Keep in mind that there are two significant things that work in older generations' favor:

1. The tax prebate...
2. Buy used goods...

Look, the physician who will charge you $10,000 pretax for your procedure before the FairTax will all of a sudden have $2,600 of tax burden removed from his service offering. He will still charge the $10,000 and send only $2,300 to the Fed. Where do you lose?

I appreciate that the older generations don't have quite as much to gain. Hey, I am in my mid-forties so in terms of "fairness among generations" I am at a mid-way point. This would still work out for me in my twilight years though. The best part though is that my kids (our kids, grandkids, etc.) will be free again.

The tax prebate covers taxes on the basic necessities of life. Buying used items is tax free. Looking to buy that brand new $100k yacht? Chances are it will cost roughly $100k give or take $5k. Again, buying the used one is an option as well.

Peace,

YK

Mother of 4
How does eliminating the consumer from paying any direct tax to the feds make them unlikely to work? You are a real piece of work if you really believe that taking a threat away will produce an adverse result.

Mother of 4
Just saw your post regarding charity. Wish I'd been a little less respectful in my prior response.

If you don't know the difference between charity and taxes, let me try to shine a light into the dark space where your brain should be.

With "charity", individual are free to assess the worth of a cause and the level at which they are willing to support it.

With "taxes", government takes money from you at gunpoint to do with as they please.

And don't presume to lecture me on socialism or the founding of this country. I'm not the one making a fool of myself asking stupid questions. I'm the one tossing out new ideas to be considered.

Idiot.

Mother of 4
Don't be ridiculous. The option is there for him to set the value by having it already on the market or to establish a fair market value for it before he actually takes possession. His company owns it and he has to establish a value for it when his company transfers it to him. You are reacting like most liberals do to information that doesn't fit neatly into their world view by making far reaching assertions to distract from the real issue. You didn't strike me as particularly liberal so your reaction surprises me a bit. Once the end user gets the product there is no need for any taxation. But take a look at my post about an alternative taxation strategy please.

Mother of 4
You are presenting yourself as someone who can't see the forest through the trees.

You will always be able to dream up some scenario whereby someone will be adversely affected by any change.

I believe the important points are these:
1. What is the *overall* effect on our society in general? and
2. What are the *principles* that we are upholding or promoting?

I believe you are probably a good person, and I'm making these comments as respectfully as possible, but really, I think it is kind of disrespectful of you to refuse to read the book or do your own research, then come here demanding remedial lessons.

Jesse
Mandatory charity is just taxes in dressed up in a fancy name. Garbage wrapped up in gold paper with silk ribbons is still garbage.

Forcing people to engage in "charitable giving" via government mandate is one of the keystones of socialism -- "From each according to his abilities. To each according to his needs."

Its 100% antithetical to the principles of individual freedom and human liberty that this country was founded upon.

Yt_Knight: GYRO TYRO does get it


and that’s the problem.

I do have to admire that you are calloused enough to come right out and say that this FairTax SCHEME will screw an entire generation of the savers of the nation.

The people who paid high taxes to put you through one of the most expensive school systems in the world. The people who brown bagged to work so that you could have hot lunches at school served at much less than cost. The parents and grandparents who could not go on a vacation so that they could send you to summer camp. The parents who scrimped to send you to college even though they only had a eleme4ntary or high school education.

These are the people from whom you wish to steal 1/3 of their life savings. People who will be double taxed and do not have the opportunity to recover from this devastating blow.

You and every other liberal sees the seniors savings as a vast pool of money for you to finance a SCHEME that has never been successful anywhere in the world. You are willing to tax the retired and those ready to retired a second time to finance your extravagances. You are willing to sacrifice the savings and retirements of an entire generation to satisfy you selfish whims.



snake0311
Taxing profit is what the income tax we have today does already.

Its also a great way to send the economy into a tailspin because people are punished for working hard and smarter to make more money.

snake0311
So now the government is going to tell someone not only that he can't build something for his own use but its going to set the price as well?

As a homemaker will I need to present the government with a bill of sale for each meal I present to my family and treat my kitchen as a restaurant so I can pay tax on it?

Will my husband have to pay tax on the bookshelves he builds for our living room?

The idea of government not only forcing a person to formally buy his own property from himself for his own use at a government-determined price is ludicrous.


For your consideration
At one time, on another column, I posted the idea of combining the FairTax and a flat income tax. Normally I'm not much for compromising, but both paradigms have their advantages and the change would be less drastic.

I am of course aware of the potential for mischief in not repealing the 16th amendment. Eternal vigilance is the price of freedom.

The other day, I had a different idea. Instead of an income tax paid to the government, which would allegedly use this money to "help people", how about a requirement to donate a flat percentage of income to charity?

Obviously, if one simply superimposes this idea over a static view of society, it looks impossible. That seems to be the same problem people have with the FairTax. I try to think of how society would look AFTER it has adapted to the new paradigm.

p.s. I know "paradigm" has become a terribly overused buzzword, but it is the correct choice for my meaning.

Galltegfa
But if you're only taxing things at the RETAIL level the builders, who buy wholesale, will not have paid any tax on those materials. And if manufacturers ARE paying Fair Tax on all their materials then you're right back to those deep layers of embedded taxes.

Additionally, you are completely missing the point that -- whether you think its wise or not -- builders almost always provide a completed, furnished show house to give buyers of the other houses a good idea what they are going to get. Then, they sell that show house AFTER all the other lots are sold and it goes for a considerable discount because its no longer new -- having suffered a certain amount of wear and tear for the amount of time that it was in use.

how about this?
Instead of taxing the end user of a product tax the profit, any profit. That would be pretty straight forward and easy to track. What did you pay for the material, labor, transport, marketing, etc. Now, what did you sell it for? All of that is easily verifiable because in order to do business you have to know those things. The profit is taxed and passed along in the product's price to the consumer. This eliminates the consumer from being bothered by the feds for unpaid taxes even tho he is paying the tax in the end. End of the IRS as a harassment agency of the gov and the people have no forms to fill out. Any civil comment?

Mother of 4
Real Estate scenario #3 would work like this: when he actually wanted to move in he would need a Certificate of Occupancy. to get that he would need an inspection by the local building inspector who would give him the CO. this would trigger the same process that any buyer would have to go through when buying a house and would result in a value being assigned to the structure based on one of several criteria. Such as the selling price that was listed on the property or on a similar piece of property in the neighborhood. Hmmm... sounds like a property tax valuation or a real estate sales valuation doesn't it. That would be the basis for the tax bill he would receive from the tax people. He would not be allowed to undervalue the house because a standard procedure is already available to determine a value for it. I hope that helps you.

same old
This column just repeats the same things we keep hearing over and over. I can see some theoretical benefits from an NST. Mainly, domestic produced items would have the embedded tax removed while imports would not, thus making US production more favorable.

But some things the true believers (TBs) don't comment on:

NST relies on state taxing authorities to administer. TBs seem to think there is no sales tax fraud now.

NST does not repeal the whole internal revenue code, just parts of it. The remaining parts would still have to be administered by an IRS.

NST requires a determination of "qualified family" by the state taxing authority. The states then provide data to Social Security for the prebates. The rules for "qualified family" are complex and subject to fraud.

NST assumes state tax authorities will collect it, in return for a part of the take. IT ALSO PROVIDES FOR STATE SALES TAX ON ALL INTERNET AND MAIL ORDER PURCHASES.

NST makes no provision for state income taxes.

NST TBs like to quote the "inclusive" tax rate, under the idea that embedded taxes would result in identical final cost. There is no data to back this up.

BTW the 16th amendment did not make income tax legal and repeal would not make them illegal. It only has to do with which rule is used for income from rents and dividends (apportionment or uniformity).

DEATH & TAXES
Mike, when my father died, I didn’t have time to check
my mail box until I returned home late that night.
When I did, there was a letter from the IRS for him inside.
There are 360 stories of coincidences like that on my website at:

http://hereoisreal.com

They are free. Please check it out.

Zero

Footnote to the Housing Scenarios
Builders usually buy the materials with which to build on credit terms like 90 days, at which point the purchase begins accruing interest. The money to pay for the materials and labor is usually borrowed and released by the lender once a certain amount of work is completed, and the meter starts running on the interest on the building loan after the stated grace period, usually right after the last payment is made.

Builders therefore have several incentives to turn new homes quickly, over and above the tax considerations. Few builders are sitting on enough cash to build houses for themselves out of pocket.

When housing values were climbing out of control, it made sense to sit on them for a while and realize bigger profits, but they were covering their expenses by selling previously built homes that were in the pipeline. The idea that they are going to use the profit from previous sales to basically squat in an unsold new home indefinitely ignores the fact that they've got materials to pay for and bank notes to pay off with the money they make on the sale of the new home.

dave #42
Let me help you out with this one. It pains me so to watch people miss something so simple.

At 5,000,000 a year, I invest large portions of capital into business enterprises. One of those happens to be a company you work for. My taxes go up, I squeeze the company to maintain my lifestyle, your position is eliminated.

Happy?

Objections not founded on facts
Gene (Reply 19); inkling_revival (reply # 10); Steves S (reply 36),

It is obvious that you are not familiar with “Fair Tax – The Truth” because each and every one of the objections you have raised is addressed, explained, and debunked. Best you become familiar with the proposal before you start making assumptions and launching arguments based on them.

Mother
"Making changes just to make changes is silly. When change is necessary it is a must that the changes also be IMPROVEMENTS." - and you cannot prove FairTax will NOT work any more than its proponents CAN prove it will - because this is something that has never been tried. Besides that, we aren't making changes just to make changes - 90 percent of Americans think our current tax system is quite unfair. The mere fact alone that people are held liable for mistakes under the tax code when you can't get the same result from 10 different IRS agents on the average family's taxes each year, is testament to that.

Let me put this scenario to all the dissenters:

I fix computers for a living. My Company is taking ALL its computer people and forming a new company, so as to "bill" the parent companies for its services and thus create major tax breaks as we will be an "expense" that is, evidently, deductable. Legal? Yes. Fair? Well, under FT, they would also be having to add the 23-30 percent or whatever it is to any bills it sent the parent company, so such a "creative" action would only hurt them. The FairTax system just closed a commonly used loophole in today's system.

Whether we keep our current system, go with Flat or Fair, or whatever, the fact of the matter is that what is patently UNfair is/are deductions. The current system and flat tax both make it possible for our politicos to pass deductions that enable people to have to pay less taxes. FairTax will not give politicians near as much power.

Clarification
The idea being that once the FairTax is passed, the populace will exert irresistible pressure on our legislators to repeal the 16th amendment.

Good Column
I am a FairTax supporter, and I've given away plenty of the books. Even my uber liberal in laws are warming up to the idea.

Mother of 4. The tax is collected on the house when it is first sold, regardless of how long the builder keeps it. He'd be a moron to sit on it because he'd still have to sell it at market value, which will include the embedded FairTax, so his take will be considerably lower than if he sold it while it was squeaky clean, bright, and shiny. Are you on board now?

The FairTax eliminates the IRS (don't have to read the book, just look up the bill). Last time I looked, there will be language in the preamble that will sunset the FairTax if the 16th amendment is not repealed within a fixed amount of time (I wanna say two years, but I'm too lazy to look it up right now). The idea being that once passed, the populace will exert irresistible pressure on our legislators to repeal it.

The social security administration will issue prebates to heads of households who can produce a social security number. If immigrants can produce a social security number, they can get the prebate.

The FairTax replaces the embedded taxes in all goods and services. The prices of things on the day after the FairTax is enacted will be essentially the same (you can call it 23 or 30 percent, it is calculated to be replace the embedded taxes at the same overall rate plus 1 percent for the retailer who collects and submits the tax) as before the FairTax was enacted. And you will take home your paycheck without any Federal withholding of any kind. Most of us will enjoy a substantial increase in take home pay.

If you are living on retirement income now you are already paying the embedded taxes that will be replaced by the FairTax, so you will not be taxed any more unfairly than you already are, and there will no longer be any capital gains on your investments, so you actually will enjoy and 15 percent tax reduction on your retirement income.

Can't help some
I purchased and mailed a copy of the book to someone who really opposed the Fair Tax. His reasons were the typical issues cited in the book (not 23%; unfarely taxes the middle class, etc.). He may not have read all the book but came back to me with the same lame arguments. Maybe I should just carry it around like you did.


THE FAIR TAX HAS ALREDAY BEEN SUBVERTED
It is a crying shame that greed and politick nowadays seems to castrate and contaminate just about every good line of logic that can be used to improve a bad situation. Income tax is a nightmare, it is a police state situation and the fear it brings is becoming more pervasive each year.

The "fair tax" has already met that fate, a once good idea to improve is now becoming a new way to rape, pillage and saddle the public with a new way to reach poverty. In the beginning, a mere 7% was the goal, it has since reached 17% and is still growing, in addition to the paying of this tax will again become soley the burden of the middle class and exemptions are planned and this idea is meeting with such resistance any reading this will be dead before it ever is instituted. The idea is not only far out but corrupted beyond recognition, it will be unrecognizable.

A sales tax is not inconcievable, far more controllable and much more significant when using the word fair. It has not gender, no ethnicity, no country and no age, it would give the people a real chance to put their money where they want it and help shrink this greedy oversized, bloated, fatbutt government.

well , that did it, that kind of logic will bring me a black helicopter.

GyroToro doesn't get it.
While it is true that it will take a generation to end your double taxation concern when we go to the FairTax, once completed, EVERYONE will be taxed only once.

In the mean time... the benefits still stack up to make the move.

1. The tax burden will be spread to all who consume in our lands (tax avoiders, tax evaders, tourists, everyone) which lowers the burden to those of us who tow the line.
2. Aftertax prices will be relatively the same after corporations are able to strip out payroll taxes, corporate taxes, and tax compliance costs out of the pricing of goods and services.
3. No more keeping track of all those receipts, 1099s, W2s, K1s, etc. The need for IRA accounts, Health Savings Accounts, College savings accounts, etc. all go away. Our lives become easier.
4. Future generations will have more freedom, more opportunity, and more prosperity.

Can you pick apart any one thing about the FairTax in a vaccum? Sure... But if you consider the big picture it is clear that it is the way to go.

Folks, be careful of the tax lobbyists and politician staff bloggers who mischaracterize here. This is really important legislation & now is the time to fight the fight.

Peace,

YK

Dream on.....
Steven Tyler's song is sssoooo appropriate when it comes to hope for changes to the taxation of America.
If significant changes were made many of the government's revenue employees, public accountants, and attorneys would be out of work.
As long as the legal profession(new mafia) has a stranglehold on this country and occupy so many legislative offices it will not happen.
So Drearm on.

fair tax
don't forget that any tax system overhaul must include the repeal of the 16th amendment to the Constitution!

Obvious Problems with the FairTax SCHEME

Calling this consumption tax a fairtax is like putting lipstick on a pig.

Part 2

The FairTax SCHEME also pretends to remove the inheritance tax. It does in a fashion, you will no longer pay a 10 to 15% tax when money is received from a benefactor. But watch out for the left hand. The right hand removes the 15% inheritance tax, While the Left hand imposes a 30% overt consumption tax on the inherited assets when they are spent.

There are many more problems with the FairTax SCHEME that the SCHEMERS have not even considered. For instance many eminent economists have stated that a consumption tax rate of no less than 40% would be needed to replace the current tax system. Who is to collect these taxes and how are the tax collectors going to be compensated and monitored. What about the Black market that will charge NO tax. What will be done about offshore purchases? Tax free zones in airports? Changing to this tax system just opens a new Pandoras loophole box for tax evaders.

Obvious Problems with the FairTax SCHEME


Calling this consumption tax a fairtax is like putting lipstick on a pig. Part 1

The fairtax SCHEME taxes all pretaxed savings at the same rate as new earnings. Therefore income taxed savings, home equity that was income taxed when earned, retirement nest eggs (not IRAS) and any inheritance will be taxed a second time at the confiscatory overt rate of 30% when spent. Don’t believe me? ? ? Look at page 176 of linders 1st book attempting to explain this FairTax SCHEME ripoff . If it takes a book to try to explain a tax proposal and a second book to explain the first book then something in wrong with the original proposal. LOOK OUT book 3 and 4 and 5 and 6 etc are on the way. There is no logical explanation for this ripoff.

The FairTax SCHEME supposedly removes the embedded tax on purchases. Taxes that the manufacturer, raw material provider pays to the government. If the product is made in the US that is possible BUT, what happens when that manufacturer/grower/originator is outside the US? Our government has no authority to remove a tax imposed by a foreign entity. The embedded tax on the bananas, pineapple, lettuce, t-shirts, Wranglers etc cannot and will not be removed, so the price will at best remain the same. But the price on the Mercedes which has been heavily taxed by import taxes will go down due to the removal of taxes. I buy lots of fresh produce, t-shirts and wranglers but NEVER could afford a Mercedes. So I get NO TAX REDUCTION with the removal of the embedded tax, I just get an added 30% overt consumption tax added to my purchases. Oh, this tax is only on new purchases ? ? ? Still don’t help. I personally do not want to purchase used bananas, pineapples, or lettuce

Fair Tax..................
Weather Lee was a Viet Vet or not and the fact he likes guns really has not a damned thing to do with the Fair tax movement.
A fair tax ammendment is being sought no only by our party but the ugh Dems also, well some of them, like us.
The problem is defining what is a fair tax and what is gouging. Whether it be a ealthy or poor individual or family.
The few Middle Class still about will get screwed no matter what I feel, but hope not.
If we make it fair for all, how will congress get its extra money to pay itself more than they are worth.
I hate to pay my taxes like everyone else, but I also feel I owe my Nation a means of supporting our mutual interests like defense, reconstruction of the infrastructure, and aide others who are really in need.
I am against giving it away to nations that miss use the funds to build themselves estates and grandeous palaces as their people starve.
I am also against paying someone not to grow crops, not to raise beef, pork or chickens. Not to find new fuel sources or to pay someone to support them while they rape the rest of ours pocket or wallet.
We will only get a FAIR TAX, when we illemenate those that want unfair favortism.

scottK
Thanks for the info on LD. He is very good.

bottom line
should we tax income period? our goverment trys to use itto modify behavior and purchase our voteswith money we are forced to givethem .i know we need taxes and the goverment has a legitimate place but it is not entitled to interferin every aspect of our lives as it currently does .the fair tax would help

E man
I have not read the book for a very good reason. The Fair Tax is being promoted as a simple, easy-to-understand system. IF it is REALLY simple and easy-to-understand then it will be easy for a person to explain it in a few words and easy to respond to my misgivings and scenarios.

The fact that not one Fair Tax proponent in the course of discussing 4, separate articles on the Fair Tax has ever been able to provide that easy explanation proves:

A. The Fair Tax is nowhere near as simple as its claimed to be.

B. Fair Tax proponents, who claim that all will be clear if only the unenlightened would read the sacred book, have only the most superficial idea of how the program is supposed to work.

I started this investigation as a person inclined toward a flat tax -- because I grew up and began working in Pennsylvania some 20 years ago when the state income tax was a flat 2.2% with almost no deductions. It used to take me 10 minutes to do my state taxes and the withholding was never more than a few cents in error one way or another.

I was willing to consider the possibility of an even better way. BUT what I found wasn't a rational discussion of a better way to do taxes but a cult -- with all the confusion, double-talk, and hidden agendas to be expected of such.

You accuse me of "class envy"? When you're the one promoting an idea rooted in the idea that people shouldn't want to have lots of stuff so we'll tax stuff and punish those greedy rich people who want to buy more than they "need"?

The whole thing turns out to be every bit as much of a "soak the rich" scheme as the current mess.

FAIR TAX
I REALLY ENJOY YOUR ARTICLES ON TOWNHALL.COM AND TRY TO CATCH EVERY ONE. TO NOW KNOW YOU SUPPORT THE FAIR TAX IS AN ADDITIONAL PLUS. I DON'T ALWAYS AGREE WITH YOU BUT I LOVE THE WAY YOU STIR UP ALL THOSE LIBS AT UNCW. KEEP UP THE GOOD WORK.

craigctx
In re: Comment 80,

"It would be insanity to be heading to Houston yet keep going north when you see the Canadian border..."

It would also be insanity to turn west and drive until you hit the Pacific -- just to do something.

Making changes just to make changes is silly. When change is necessary it is a must that the changes also be IMPROVEMENTS.

If you're in the frying pan a wild leap over the side will only take you into the fire. Better to look for the pan's handle, scramble up, walk along it, and escape to safety outside the flame. Panic is never useful.

FairTax: Shoveling money into the street
I’m all for lowering taxes and making everyone pay something, but what makes Dr. Adams think the Fair Tax will remain “fair” any longer than he wears his underwear?

But the real problem with the FairTax is the prebate is not a rebate instead.

Courts have ruled time and again that you cannot deny illegal aliens any benefit you give to legal residents and citizens. This proposal claims that if passed even illegal aliens “will pay taxes too.” So all the illegals will get a prebate check, somewhere just under $500 for a married couple.

Well, guess what. It won’t take the illegals long to figure out that they can live on $500 a month in Mexico without even having to work, and will just move back while arranging for their prebate checks to be direct-deposited in a bank here.

Then it won’t be long before word gets around Mexico that the US is shoveling money into its streets, and they all try to get here any way they can. Even if we stop them, those here will figure out a way to enroll all their relatives south of the border. Is there any Mexican national without at least one cousin in the US? Probably not.

We then end up supporting the whole population of Mexico. Brilliant.

Inkling Revival
Adams gives us another example:

"But he never paid income tax on the cocaine he sold on his way to becoming wealthy. Too bad we didn’t have a consumption tax..."

Does he really expect us to believe that a consumption tax would generate taxes on the exchange of money for illegal drugs? Pardon me while I spew my coffee on the monitor.

The problem I'm having with the "fair tax" is the level of sheer silliness I'm hearing from its advocates.

Actually the problem you have with the fair tax is you haven't got the slightest idea of how it works.... The example you quote above is proof of that. The drug dealer of course pays no tax on his income...But the fair tax "snatches" just a bit from everything he buys...High income = increased spending on goods and services all of which are "fair-taxed"

Hmm, let's see now....
Disabled veteran gets disability income tax free now. How is that to be handled?

Prebates, intermitent child custody, living in new but unsold house.....

Seems the IRS will simply shift gears and continue to tick off every citizen--that's their measure of success! Tax evasion and cheating will simply have new and fertile ground to plow.

Even if tax reform is passed (which I doubt) Congress will find ways to circumvent even constitutional prohibitions to get in your wallet/purse. Not all the thieves are in jail! Some get reelected over and over.

VAT? Some bureaucrat will still have to decide what things will be subject to the VAT, and how many times.




Fair tax is a brain f.rt
Sorry Dr. Adams, your analogy comparing the changing tax code to changing underwear doesn't wash (pun intended).

Establishing the Fair Tax (Natl Sales Tax)is simply moving the income tax from direct taxation to indirect taxation. Indirect taxation is excise taxe and are a tax on doing business, in other words a defacto sales tax. It is impossible to buy anything in this country without paying an excise tax. Taxes are always passed through to the consumer.

You may escape excise taxes by engaging in barter with another person, both of you exchanging goods made or produced from natural resources such as dirt and organic fertilizers. Even there one would have to use totally hand made tools such as stone hoes and axes.

The stupidist idea to come along in years is the fair tax. If it becomes law, what makes you think for one moment that congress is actually going to abandon the IRS? The same deceptive Congress that you recognize gave us the mountainous tax code is actually going to kill the IRS? Yeah right.

Furthermore, I have lived in many states that have sales tax and for certain they too have always crept upwards. No tax code is guaranteed non-changing and it is the height of stupidity to believe for one moment that the fair tax will be the exception.

The fair tax will become a Value Added Tax (VAT), as it has in every nation it has been implemented in. The guarantee that this will happen is that Congress knows better than you how to increase their cut of the pie, and revising the fair tax into a VAT can be sold to the ignorant people of America as easily as you find it to convince people that a fair tax is better than the income tax.

Sit by me in a bar and come on with your fair tax approach and on that subject I'll laugh in your face; and justifibly so, because for your scenario to work, fair tax, you will put faith in the very same people that are shafting you now. Congress.

It is to laugh.

BillCC As I said (Reply #84) ...
... read the book(s). All the expressed concerns I've seen in any of these posts are addressed therein. Go to the FairTax website for more information.


dont even try
Its a waste of time to try to get a FT. People have said so. People told Roger Bannister the 4 minute mile could not be broken.

Loyal Democrat
I always appreciate your posts. Whenever I'm feeling rebellious and dissatisfied with what I perceive as injustices, I can read one of them. They settle me down and help me to be happy with my condition, that of our beloved country and (my ill-conceived perception of) the inadequacy of our rulers.

Thanks again and I'll add this latest one to my collection which I can read whenever I'm down.

Somewhat self-centered concern...
admittedly.
For someone just starting out in adult life, a consumption tax would certainly be simpler and more self-regulated.
For someone like me, approaching retirement, I fear double-dipping taxation. My "old money" was severely taxed already; I would be facing once again high taxes as I consume.
Unless someone can figure out how to separate my pretaxed old money from untaxed new money for the purposes of future consumption, what benefit do I obtain from the "fair" tax, which sounds very unfair to me?
Side issue: will high point-of-sale taxes encourage the development of a black market?

Anna from OR and mother of 4
Gals take a deep breath and get over your class envy. My guess is that if I gave you the choice of either giving you a $1000 dollars or making a wealthy person pay $10000 dollars and you get nothing, you would pass on the money.

Mother quit asking us to do the work for you and read the book. You might be surprised that your questions are addressed.

Anna why does the idea of people (including you) keeping more of the money they earned bother you? Quit worring about what other people do with their money, and focus more on improving your own financial situation.

What sold me on the FT is that it forces the politicians to listen and work for the very people they represent not the special interests groups. That alone should be incentive enough to read the book.

Fair Tax Plus
RE says:"You are already being taxed to death and paying way more than the fair tax would require."

With the current level of expenditure at the federal level, that's just not so. The current level of taxes of all kinds leaves the feds almost 400 billion short (on-budget) as it is.

The fair tax estimate at 22% on consumption simply isn't feasible. The tax would have to be more in the 35-40% range o cover federal expenditures. All the state and local taxes aren't affected by a fair tax so those will still be paid.

Look, this kind of discussion just takes away from the real debate(s) such as who will start to cut government expenditure and find a way to reduce the excess cost growth in health care.

rmdouglas

LD just happens to be our resident satirist, and quite a good one. You are not the first one who has fallen for his silly verbiage.

Happy posting.


Yes to HR-25
#44 - make everyone have direct deposit

#111 - only a "Loyal Democrat" is stupid enough to believe that our current abusive tax system is fair. The money I had to pay could have paid in full three credit card debts. And as real Americans it is our duty to ensure power hungry socialist are removed from office. It states "we the people" not the few rule over the masses.

Pay
Pay no attention to the trolls....
(is there a way to tax them into hibernation?)

No FairTax
Since the FairTax isn't 100% perfect and guaranteed free of any potential flaws, we should keep our current tax system intact. The current progressive method of taxation has proven itself to be the most outstanding taxation system ever devised by man, and there isn't one American that can truthfully find any inequity with the way our taxes are currently being handled. In short, if it ain't broke, don't fix it.

Furthermore, there is absolutely no way that our rulers are going to allow us to implement this system if they think it is unwise to do so. If the FairTax system is indeed superior to our current method, our rulers would enact it for our own good.

We need to leave the running of the country to those with the superior minds, and only a sheer fool would even try to bring about a change that our rulers did not approve of. It is not the place of the common citizenry to tell the rulers what they should do in the way of policy.

So give up any thoughts of changing the current tax system. As American subjects, it is our duty to obey the edicts made by our rulers. We are powerless to create policies that our rulers do not want, and for our own sake that is the way it should be.

Most degrading document in history!
No, not your column.

Form 1040 is one of the most degrading documents in human history, in my opinion, far more offensive than any pornography you care to name, and most Americans are forced to fill one out every single year. Shame on you, government.

The real boondoggle
is the IRS. It is a total waste of time and money. The beauty of the fair tax is just that everyone who consumes pays the same tax. No matter what your income is, which by the way if it's $40k you get the whole $40k, you control how much tax you pay by your spending habits. If you do a little research you will find that for staples(food) you are already paying and imbedded +/-22% over what they could charge you so that the grocery store can make payroll taxes. That is a consumption tax in itself and just one item that everyone must buy so just keep adding that extra 22% to what the IRS forces from you every week. You are already being taxed to death and paying way more than the fair tax would require.

How to Git 'er Done
jacob the barbarian said in post #4 "...Until I hear how are we going to put a gun to congress' head to pass this it will be just so much pie in the sky..."

Send an e-mail, snail-mail, or call the Republican National Committee and/or the Democrat National Committee and tell them you do not plan to send any contributions for candidates until the FairTax is part of the Party Platform. When you start messin' with "their" money, only then will you get any results.