More information is available at FairTax.org.
As my more liberal blogger buddies seem to like to point out (with only the occasional vitriolic verbal kick), the country voted for Obama and the Democrats. And this, of course, had nothing to do with the Republicans and their failure of nerve and principle (except Bush and the last 8 years and the rape of freedom and the torturing of the poor and proper English, blah, blah, blah). But I don't really want to talk about that. I want to talk about the tax code. After all, this is April 15. And if it's time to pay taxes, and it's time to talk about taxes, then it's time for my annual post about the FairTax.
So as the millions who do pay taxes put their final touches on their piles of government forms, and the rest look to see what largess is next to flow from Washington, let me approach my perennial subject of the FairTax from the liberal-friendly angle. And yes, before you comment on my need to parrot, every bullet point below from the FairTax site:
- The FairTax meets the entire Democratic tax agenda, starting with progressivity. The FairTax is far more progressive than the current income tax system. Under the FairTax, low-income households experience five times the benefit increase as compared to high-income households.
- The FairTax eliminates the highly regressive tax on wages of the working poor and middle class. The FairTax removes the single most regressive element (the payroll tax) for wage earners.
- The FairTax is the only plan that completely untaxes the poor. Even a person
with a zero percent income tax rate today must pay payroll taxes on the first dollar they earn and also pay hidden federal taxes in the prices of everything they buy. - The FairTax stops the export of jobs. Our income tax favors imports over U.S. production by exempting imports from U.S. tax, and we penalize U.S. exports by allowing foreign nations to impose taxes when our goods enter their shores.
- The FairTax is the only plan that targets and taxes existing wealth, not the fruits
of labor. The FairTax will tax every dollar of accumulated wealth in the most efficient way possible when it is spent. - The FairTax is revenue neutral. The FairTax, at a 23 percent tax rate, raises the
same amount of money for the federal government as today’s income tax system. This means that steep budget cuts are not required to pass meaningful tax reform. - The FairTax promotes the American Dream. The FairTax makes home ownership more affordable because used homes are totally untaxed, and three out of four homebuyers buy used homes.
There's one bullet point though that was completely missing:
- The FairTax eliminates loopholes. One complaint I've heard from most every liberal (except Satyavati, who will bitch if I don't add the words "most every") is that the rich find all kinds of shelters and loopholes to hide their money. As the tax is paid on every cent spent on new items, there are no loopholes.
- The FairTax is completely transparent. When anyone purchases goods or services, the price is right there. If they spend $100, then $23 of that is going to Washington. There are no tax codes. There are no deductions. There's no hiding anything. If you see sales numbers, all you need to calculate the FairTax is a little simple math.
In fact, the only people who I've dealt with that oppose this do so for a couple of reasons:
- They've never read the details, checked the figures, and come to the obvious conclusions that I came to, and are going on with distorted, or inaccurate information, or,
- They oppose the FairTax because it will take away their power to manipulate and control people by using an inherently flawed and unfair tax system to change behavior, punish their political enemies, and reward their buddies.
And President Obama, this is how you fix it. Any questions?
30 comments:
The idea of a spending tax as opposed to an income tax has been around for quite a while and I do think it is much fairer than our current system, but you have already stated the reason that there would be a huge fight to get something like this through:
"They oppose the FairTax because it will take away their power to manipulate and control people by using an inherently flawed and unfair tax system to change behavior, punish their political enemies, and reward their buddies."
A. Bullshit. Very poor people, who currently don't pay taxes, would instead, actually pay taxes but we would set up a new government entity which would refund them their basic cost of living costs. You and I would pay much more as we spend most of our income and the ultra rich, who hordes their money, would only be taxed on what they spent.
B. There would be hidden taxes on everything from Insurance, Medical Bills, etc. Some things would be taxed many times. For instance, lets say a paper mill buys some trees, They pay a 30% on their insurance premiums, they pay a 30% tax, then when they sell a roll of paper, the buyer would pay 30% tax when the buyer converted that into writing/printing paper or what have you, Office Depot, or whomever would pay a 30% tax, then when they sold it to you plus the 30% tax on their electric bill, insurance premiums, Cash Registers, shopping carts, etc. then you would pay a 30% tax on that printer paper. Talk about hidden and imbedded taxes!
The fair tax does nothing to trade laws and would do nothing to stop the export of jobs. By the Fair tax peoples own admission, the same amount of taxes would be collected (even though they are wrong). So, if the same amount of taxes are collected, doesn't that mean we are paying the same amount of taxes and if so, how does that benefit someone who was thinking of off shoring labor?
In fact, if companies are only taxed on items they buy, such as transportation costs, raw materials, electric bills, etc. Then you could be more profitable by having an operation in Mexico which doesn't tax everything at 30%. You would only be taxed on your profits and by the way, you could no longer write off your losses. If your business lost money, you would still have to pay the same amount of taxes as you would if you made money. This would force many start ups and young/small companies out of business.
Wealth isn't taxed now nor would it be once it has been accumulated. Taxes are only collected if the money is spent on something. Rich people have millions of dollars tied up in the banks, CDs, securities, 401ks, bonds, etc. That stuff may never be taxed, even when they die and leave that money to their spoiled brat kids who will simply live off the interest.
The fair tax isn't fair as my money would be redistributed to poor people. Also, rich people, such as Neal Boortz, would benefit and pay fewer taxes than they do now, that is why they want to change the tax code. Why would they care either way if they were going to pay the same amount of taxes? It would be like me asking my mortgage company to let me pay off percentages of my mortgage daily as opposed to monthly as I would be paying the same amount either way. It would make no sense for me to do that unless I would benefit from lets say not paying as much interest.
The fair tax makes the cost of home ownership 30% higher the day it would be signed into law. Every home would come with an extra 30% mark up. Your 200,000 dollar home purchase would increase to 260,000.
It may indeed close some loopholes but would create an even bigger black market where people would be selling goods out the back door and would increase profits for anyone who could hijack a truckload of good to sell at a 30% discount. You close one door you open another.
It’s transparent but his math is wrong. If you bought an item that cost $100 today, under the fair tax, it would cost $130.
Some more points:
The federal budget would increase by 30% overnight as the Feds would now have to pay a tax on everything they purchase.
Charitable donations would no longer be tax deductible.
We would create a new government entity which distributed welfare checks to the poor to cover the cost of groceries.
Your new 25,000 car would now cost $32,500
Your $80 gas bill would now be $104
Your $40 drug or doctor office copay would now cost $52
Your $5000 Lawyer bill would now cost $6500
Drug dealers and drugs would still go untaxed.
Lower middle class, poor and middle class people spend a greater proportion of their income on daily living expenses as rich people so rich people would be paying a smaller percentage of their income on taxes.
Rich people would still get a refund welfare check to cover the cost of groceries. However the cost of living in Mississippi is way lower than the cost of living in NY, IL or California. Costs in Chicago are higher than people downstate IL as well. Either people in those places get ripped off, or we would need to add another level to the refund entity in order to make up for the difference in cost of living.
The cost of the prebate would be one of the federal governments largest expenditures at around $500 billion
The government could no longer give tax incentives to defense industries, green industries or promote certain businesses with lower tax rates.
Businesses could no longer write off the depreciation of new machinery or other business expenses.
You could no longer write off the mortgage interest on your home loan (and as I said before, your home will now cost 30% more)
No more sin taxes which could be a good thing but that means Cigarettes would sell for about $1.00 per pack
The list goes on.
I am open to the idea of changing the tax code, and I am not saying there isn't problems with the existing one but this isn't the answer as only the extremely wealthy and the dirt poor will benefit and as the song goes, its the simple man who pays the bills.
Rocky: This is why it has to be a bipartisan effort. Anything less will be dismissed, because there are plenty of people who live for disinformation (like Toad). So let's set the record straight.
Toad: You are the first group. You continue with the same fucking bullshit lies for some insane reason. Unless it's because you want the government to continue to have the power to control people through the tax code.
Nevertheless, I'm going to cover a few important points that you've lied about or adjusted.
23%/30% - the 23% is inclusive, compared to the current income tax system. It will replace the approx. 22% embedded taxes that are already in the price of everything that we buy. Prices will not go up 30%!The Prebate - This is a check every household receives to offset the tax paid on the cost of living (up to the poverty level). If you don't spend over the poverty line, you are not taxed.
Taxing the underground - The FairTax is paid by anyone who buys a product. This includes drug dealers buying bling.
Lower middle class, poor and middle class people spend a greater proportion of their income on daily living expenses as rich people so rich people would be paying a smaller percentage of their income on taxes.You can't do math, can you? Everybody pays the 23%. If you spend less than the poverty level, the prebate negates that tax, so you net no tax. If you spend an assload of money, you get close to the maximum possible tax, 23%. The more you spend, the higher your tax rate.
Businesses could no longer write off... - That's because they don't pay taxes. Every tax (and deduction) is wiped out, replaced with only the FairTax.
No more sin taxes which could be a good thing but that means Cigarettes would sell for about $1 - You're right. This also happens to untax the poor even more.
Now if you want to persist in long diatribes with wrong information, then I'll start the deleting. I'm getting good at that.
But Patrick, prices could go up 30% when business owners want to pass off the 30% they have to send to the government. Stores won't see this as a fair tax, they will see that they now have to send 30% of profits to the government immediately. Just like with 8% sales taxes, they say one price but add the sales tax onto the price.
Old Sales Tax: Soda? $1. Plus tax= $1.08.
Fairtax: Soda= $1. Plus tax = $1.30.
They'll just do what they always do, Patrick. Pass it on to the consumer while padding their own pockets.
James:
Patrick actually thinks Coke will reduce its price to $.77 so the real cost would be $1.07. He thinks that the minute costs for businesses go down, they lower the price. As a business person who buys low and sells high, I can tell you that isn't always the case. I still buy for as low as I can and sell for as high as I can.
Another example would be clothing. When Levis and tennis shoes were made in the US they cost around $35-$40. Now that Levis are made in Mexico, they cost $50 and most tennis shoes cost $60-$100.
Also, are the VW cars made in Mexico cheaper than the ones in Germany? Well, only when they sell them in Mexico with no emission standards but I had a Jetta made in Mexico and it cost the same as the one a friend had which was made a year later in Germany. Which one of those cars do you think were cheaper to make? Yet, they didn't price them differently they just put that money in their pocket.
Converse Chuck Taylors, up until a couple years ago, were made in NC and I could buy a pair for $35. Now, in order to "compete" they are made in China and sell for almost $40. If their costs went down, why didn't the price go down?
What he doesn't know is that Coke, even though they don't have to pay income tax and payroll tax, now has to pay 30% for every bottle they buy, 30% on their carrier costs, 30% extra on their legal fees, 30% extra on any new machinery or property they buy and will no longer be able to write off interest or depreciate the machinery the cost of their employees health care will go up 30% theri delivery van costs will go up 30%, uniforms up 30%, unility bills up 30% etc. Not only that, 7/11, now that all its prices are up 30% will sell less, be less profitable and will also have to pass that 30% extra cost in their property, utilities, etc. Sure, they will no longer have to pay a payroll tax on the one guy standing behind the counter so they will save money there.
JW: There is a possibility that a store might try to jack their prices up 30%. But they'd be out of business pretty quick. There are a couple of reasons for this.
First, there are a whole lot of taxes, and their related expenses that businesses have to deal with. This is on average about 22% of the price of the item. This goes away. It's replaced by the 23% inclusive tax on the existing price, on final consumption items. So they essentially break even if they don't change the price.
Second, there will be a whole lot of education and fanfare when the FairTax is implemented (we have to repeal an amendment, dammit!). And one of the things that people will understand before it goes into effect is that prices will not go up, as the whole tax structure will change instead. So any business that thinks their customers are that dumb will be deader than fucking fried chicken.
Toad: Yes, I cleared one of your diatribes for brevity (as it just repeats the same shit you already covered and not just because you lie). And I already addressed the point about businesses paying taxes for James.
Bit I will deal with a point.
Ok If I am telling lies, lets say an Ipod cost $100 today. When your fair tax is enacted, how much will it cost?
A.$130
B.$123
Correct, the answer is A. No, the answer would be C. $100.
Also, I thought the cheap Ipods did cost $100. Maybe less for the really useless ones.
NO, you tried to refute what I said and I demonstrated why you were wrong.
So anyway, with your $100 Ipod you just want apple to make $70 instead of $100?
As I said, no one is going to lower their prices because they will still be paying the same amount in taxes as the fair tax site states. Either they are still paying the same in taxes or the federal government won't be collecting the same amount in taxes or the Middle Class will pick up the majority of the tax burden because we know it wont be rich people because they are the ones who came up with this idea.
So now, why don't you go ahead and explain your math because we all know a $100 Ipod will cost $130 under the fair tax OR the federal government will not be able to collect the same amount of taxes for their Empire OR one of you (you or fair tax people)is lying about something.
Toad: I've explained it a few times, but you seem incapable of undertanding.
The price ($100) does not change. The burden the businesses pass on (approx $23) disappears. It's replaced by the FairTax ($23), which is paid when the end consumer buys a product.
Email me your address and I'll send you a fucking calculator.
A national sales tax or some variation thereof has been kicked around for years now.
While there may be issues with the plans being presented, it is an idea that should be considered.
Wouldn't it be more constructive to produce a pro/con list to identify and address potential weaknesses in the plan?
The current tax structure is certainly a complicated nightmare.
Rod Blagojevich proposed a similar tax to your plan Patrick. He called it a gross receipts tax. It went down unanimously in the Illinois House and Senate. It was opposed by Labor and Business.
To simplify what you're saying here. You're calling for a 23% sales tax. That's a hard sell to families who pay the feds from 0 to 22% of their household incomes Brother. And if your "fair tax" applies to business as Blagojevich's plan did, I can only ask "Are you serious"?
Rocky: All I can say is that you have to study the deeper part of the FairTax legislation. It's all there. I was hesitant to support it until I studied it.
You'll notice FairTax banners and buttons on my blog now.
101: I can't speak to what Blago proposed, although I'd surspect it was probably an additional tax.
As for the FairTax (and you can visit the site for details on this), I've already covered it, but here we go again.
The tax replaces ALL federal taxes.
The tax only taxes final retail products only once.
And 23% is the maximum you would pay. The minimum (which is what I currently pay) is 0%.
Also, FYI, when I ran the numbers last year, I broke even on a conversion to the FairTax.
So you are saying that 23% of all taxes just magically disappear??
If that is the case then you are admitting that the fair tax is not revenue neutral and the federal government will be collecting 23% less than it is today which makes our deficit 23% larger than it is today.
They still have hidden costs in their raw materials that are taxed at 30%, their electric bills are now taxed an additional 30%, their shipping costs are now taxed an additional 30%, their health insurance premiums are taxed at an additional 30%, their corporate jets are now taxed at an additional 30%, their legal bills are now taxed at 30% etc.
What do you not get about those hidden costs still being there?
Either the costs are there or the government is no longer collecting the same amount of revenue. You can't have it both ways.
To simplify, is the Fair Tax revenue neutral? Will it generate the same revenue as we do now and how if 23% of corporate taxes have been eliminated?
toad said: "The fair tax does nothing to trade laws"
That is a good thing about it. The last thing we need is government imposing more trade restrictions.
Toad: So you are saying that 23% of all taxes just magically disappear??No, they're repealed (along with the 16th Amendment) and replaced with the FairTax.
To simplify, is the Fair Tax revenue neutral?YES!The 23% is the number the researchers came up with if all other taxes were eliminated and the FairTax were implemented as written. Then the government has the power to adjust that one number depending on their spending habits.
And do you think they're going to raise taxes on everybody? Ever?
If 23% makes it revenue neutral why bother? It would out all the accountants and IRS agents out of work.
But then again, that might be a benefit.
101: Yeah. To quote the FairTax site:
Those tax preparers, tax lawyers, and Internal Revenue Service employees, who are typically well educated and well equipped with transferable skills, will have to find other, more productive work.
Getting around taxes one way or another is the way this country came about.
If the government's sole source of revenue from the public was through this one tax, it would be amazingly easy to virtually bankrupt the government with cheaper bootlegged or black marketed goods.
Black market items are sold and bought every day, but if you try to bankroll the entire country from this one source, what happens when people find ways to circumvent it?
And even if people KNOW that they're actually paying less than they were before, they'll STILL try to get around it; one, because 23% "sounds" like an awful lot and two, because Americans cheat on taxes because it's the American thing to do. Historically, from the very beginning.
You may think that there's no way that enough items could be blackmarketed to make an impact, but if this is your sole source of income, how much leeway does it give you, and how much diversion elsewhere could it tolerate? I don't know the numbers on this, but it seems to be putting all the government eggs in one basket, and in that respect a risky venture on their part.
Truth 101,
I agree that the fair tax would be a lot simpler and that is a good thing and some tax professionals would loose their jobs. However, under the fair tax the black market would become very viable again so all these people could go to work for the Mob hijacking truckloads of goods and selling them on the black market at a 30% discount vs. what the retail stores will be paying. Or they could become a cop whose job it is to deal with the resurgence of the mob and organized crime so there will still be jobs for these people.
Patrick:
Ok, most experts agree that 23% is, well, first and foremost not really 23% but 30% but even then, its not enough but if your people say it is fine, lets go on that. But,
You didn't explain how businesses no longer have hidden costs and no longer pay taxes. Like I have said time and time again and you have avoided time and time again, their electric bills, legal bills, freight bills, raw material costs, real estate costs, rents, etc. have all gone up by 30% overnight. Sure they no longer have a payroll tax on their one employee and they don't have to pay taxes on their profits but they are now paying 30% more for everything else.
Again, not only that, they can no longer write off losses which most new businesses need to do for the first couple of years in order to survive. You have yet to explain that one as well.
Saty:
Good point, now, even whith a small black market and a huge illegal activity market such as drugs, the government can't tax the sell of the goods, just like they wouldn't be able to under the fair tax, but under the fair tax, we would no longer even be able to punish them for income tax evasion. Al Capone may still be running Chicago if we were on a fair tax.
Sure, most criminals still don't report their income but the big crooks still have to explain to the IRS where their 3 homes and boats are coming from. Under the Fair Tax they would have no such scrutiny.
Patrick:
Im not trying to be a dick. I get it, you want a better system that what we have and so do I. You believe we are taxed to death and so do I. You want the government to reign in expenses and so do I(from different areas of course).
But just as I, in vague principle, agree in part with the Teabaggers, I just don't think you or they are barking up the right trees. Nor do I think you are getting your information from impartial people. I am skeptical of a bunch of rich people and Fox News executives (aka rich people)pushing for their taxes to be lowered and convincing a bunch of unemployed, redneck poor people to go and do their protesting for them and I am skeptical of ultra rich people like Neal Boortz who say a fair or flat tax will benefit everyone and not just themselves. Thats why I researched it and thought about it and came up with what I did.
I don't know, maybe we should come up with our own proposals but there are so many holes in this fair tax thing that we are better off with our current broken system.
Saty: That is a good point. And there will be people dodging taxes under any system we try.
However, to be able to buy materials to make something to sell on the black market, they would have to either register as a business or pay the FairTax on their items.
And then (in the case of the latter) the Fairtax enforcemnet would know who they were. It's easier to police thousands of businesses instead of millions of people.
And the government is trying to go bankrupt right now anyway. We might as well fix the tax code and have them go bankrupt.
Toad: Ok, most experts agree that 23% is, well, first and foremost not really 23%...By experts, I assume you mean lying cocksuckers that intentionally distort the numbers to their own end.
Im not trying to be a dick.LOL :)
Seriously, though, the problem is that you keep repeating false information. That's why I end up being a (very small) dick in return (family curse).
I don't know, maybe we should come up with our own proposals but there are so many holes in this fair tax thing that we are better off with our current broken system.This is where we're going to have to disagree. I'm not going to say the FairTax is perfect, but of everything I've seen, this is the answer. So until someone comes along with a better plan....
There is nothing I have stated which is false.You go with that.
As for Oabmessiah, my guess is that like many, you’re looking for some sort of acquiescence or capitulation from the other side now that Bush is gone and The Chosen One has arrived in DC. Unfortunately, winning an election does not make stupid ideas any less stupid, and neither I nor anyone else who understands what this despicable creep is really up to has any intention of just throwing up our hands and walking away. He will be opposed, he will be fought, and for America’s sake we can only hope he will be defeated, and will not be re-elected, because American will never be capable of sustaining that moronic dictator loving traitor, for 8 years. .
Well, it looks as if "The One", our worshipped leader has conquered all of Europe this week.
We hear glowing media reports of PM Brown laughing without end at one of Obama's quips. Americans don't find Obama particularly funny, especially since he laughs at his own mediocre jokes. And besides, it's hard to find a Messiah funny in all seriousness.
We hear how Michelle hugged Queen Elizabeth, who gave her a big hug back, unlike the way the Queen usually responds to everyone else on Mother Earth. We hear how Michelle has the same effect as Princese Diana while sitting at the bedside of the British ill. We hear that Michelle has the same beauty, social graces and fashion sense as Jacqueline Kennedy...how about that tacky sweater she wore to the Opera, heard it was too small and buttoned wrong...but no matter...the gushing just goes on and on...
We hear that all the European leaders hated Bush but love Obama...why shouldn't they, he is another socialist joining their fold.
What's wrong with Ahmadinejad and the Taliban anyway? Don't they realize they are in the presence of true greatness and should be bowing before 'The Messiah' as has the rest of the world this week.
In the meantime, at home the stock market has picked up a bit since Obama left for Europe and his popularity has gone down another five points.
Can't all of you liberals convince Obama to become an European and keep him there?
Well e have Chavez in Venezuela. Morales in Bolivia, Castro Brothers in Cuba, Ortega in Nicaragua and Obama in Washington..."We are family"
Get up everybody and sing!
SarahG and OMATW: Great. Whatever. I have one question for both of you:
What the fuck does this have to do with the FairTax?
Now that I can agree with.
Just because I can make a buck, just because I can be an entrepreneur or invent a product I should pay more for the slackers in society ? Or pay more for those without drive, passion, motivation, creativity ? That could be viewed as rewarding lazy behavior. Like the boys that hang on the corner.
The fair tax is just that.....FAIR, it makes people pay the same percentage
Obama said he didn't want to do it. Now what kind of President of the free'est nation inthe world would be so dumb to say such a thing on camera but claim he cares about the people. Can anyone say "hidden socialist agenda"...because socialism didn't just sweep into the failed great nations of the past, it had to come through revolution, it was carried on the shoulders of emotionally controlled idiot voters and the countries people. Then after it was in place, the people got stuck with it and could do nothing about it until the country collapsed. This robbing the productive to give to the non productive is unsustainable and unfair.
The question shouldn't be regarding the burden of the middle class, but should be how to cut government waste down so they stop stealing more and more of our money.
Government initiates a crisis.......oh, lets say creating a housing bubble by backing up Fannie and Freddie......HUD and others try to boost its business and increase its share of the market.....Government puts in place policy that over-rides lenders right to see if someone is qualified for a loan or can even pay it back.....the world goes to hell in an economic spiral since this egotistical and financially unsound method can't be sustained......then of course the democrats in charge of congress blame it on predetory lending.....when it was them that set the stage and the rules. This obviously chain reacted with the credit defaults markets and derivatives that were spread all over the globe.
Government needs to get the hell out of the private sector. They also need to learn to live on a budget and stop printing money and stealing more of ours. When politicians are claiming that Americans don't have the right to keep the money the earned.....then things have gone TOO far socialist and need a good old fashioned beat down.
Toad: LOL. I left them because this is their first time trolling, but they at least have blogs of their own. Next time I won't be as kind.
Ain't: You'd have been better (and more sensible) had you stopped shortly after the first Paragraph.
Although I do know that Obama is, and never will, embrace something that would strip the government of power.
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