Topic: Taxation
The FairTax is an unnecessary Federal Slave Tax The sound-good idea of FairTax by Congressman John Linder and Neal Boortz should be recognized for what it is: never ending federal tax enslavement.by Nickalis N. Tower
(Libertarian)
Monday, June 2, 2008
One of the things late 19th and 20th century American politicians have been exceedingly good at is 'the shell game'.
When voters force the hand of politicians to end a dishonest activity and reveal the abuses of government, the politicians already have 'new and improved' legislation that promises an end to those abuses and dishonesties. But in fact, they only take one public step backward to take two hidden steps forward toward more statism.
There aren't many voters who wish the I.R.S. would become larger, more invasive, and would take larger amounts of tax on income.
But now with America's downturned economy, and with illegal immigration being one polemic used by politicians as a scapegoat for our economic woes (ominously providing little distinction between today's America and fear mongering conditions that led to the rise of the Nazis in 1930s Germany), middle class Americans, such as myself, are becoming indignant that not everyone is 'paying their fair share' of the federal income tax.
But is it wise to implement a national sales tax scheme, such as the FairTax? Is it even necessary?
These were the primary reasons I formerly supported the FairTax:
1. It proposes to eliminate the IRS. Anything that eliminates an invasive, gun-toting, envious nest of bureaucrats has my blessing.
2.It proposes to end all payroll taxes, including social secuirty and medicare taxes. How can I argue with keeping my full paycheck?
3. MOST IMPORTANT : It provides a formula for adjusting the tax rate down if more money comes into the system via new job creation and immigration.
But now I oppose the FairTax for one simple reason: It uses a tricky term called 'Revenue Neutral'.
Revenue neutral means that the FairTax rate will initially be set by taking a 'baseline year' for the Federal budget. But notice what the Republicans have done over the past 8 years: spend as much or more than the Democrats have been known to do.
So before the politicians sell us the idea that the FairTax is the best idea, they first have to establish their full spending appetite, and that appetite has not been fulfilled yet. Consider all the Democratic Presidential candidate promises during this campaign. You can safely wager your last remaining pennies that a Democratic white house and congress will far out spend those outrageous new limits set by the Republican controlled congress and white house through 2006. And neo-con Republicans are really me-too impersonators of Democrat welfare statists, so not much is going to change this election year.
So the bottom line is the federal 'gang of 434' (Ron Paul omitted) won't be fully behind the FairTax until they're satisfied they have ballooned the federal spending to a level they think will provide a satisfactory 'base year'.
We should expect the federal politicians to get behind a FairTax or national sales tax soon, because:
1) Middle class people are more saavy at using income tax software to reduce their federal income taxes.
2) Wealthy people continue using their high paid lawyers and accountants to reduce their taxes with IRS sanctioned loop holes.
3) Illegal immigrants (and underground Americans) continue getting paid under the table and not reporting their income.
4) Politicians eventually won't be able to resist the temptation to look like 'heroes' for eliminating the IRS.
But we should oppose the FairTax because:
1) It's not going to prevent Federal spending from getting out of control. Indeed it incentivizes the federal bureaucrats and politicians to continue inflating the budget deficits and demanding 'more more more' from tax payers.
2) It makes a federal tax on your labor and your life unavoidable.
My sentiments are with you, Mr. Boortz: I want to make April 15th just another day. It's your FairTax I oppose.
It's Congressman Ron Paul, not Congressman John Linder who has the best 'flat tax' rate of all: Zero percent. We can eliminate the IRS and replace the income tax with nothing, if we can go back 10 years for a 'baseline' size for the federal government.
Only Ron Paul has proposed a plan for how to shrink the federal government spending that is easily doable, and very sane.
That's why I recommend Ron Paul's 167 page book 'The Revolution: A Manifesto', over Boortz and Linder's FairTax book. It's not a FairTax: it's a federal enslavement tax, exactly the same as the income tax is today.
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Wow, you are so far off base with the FairTax and your opinion about taxes ballooning out of control I do not know where to start. Let say that the FairTax is passed and everyone is paying the tax on every purchase of new goods and services. Each time the gov't attempts to hit us with a tax increase, people WILL scream. Why? Because the money is coming directly out of their pockets and not hidden like they are now in pre tax payroll checks. And when people see the increased amount of the FairTax coming out of their pockets and shown directly on each and every receipt they WILL take action by voting politicians out of office. Much the same as is happening now with the gas prices affecting us all directly. It is why the dems are in control now, people voted the GOP out of control because the spending was killing them.
Outside of that I doubt your worry over revenue neutrality will even be a concern because the revenue will be coming from so many more sources than in a pre FairTax economy, I know even you can see that. Imports are taxed, exports are not. Corporations will relocate here with no corporate income taxes. Many factors of the current drab inflation ridden economy will be gone and your scenario will most likely not play out. I think it is unwise and poor judgment to reverse your stance against the FT just on this issue, which most likely will be a non-issue after the FT is passed. I am expecting the rate to go down, not up, with a robust economy, as projected by over 100 economists who support the FT. Much of your opinion is shaped by your dislike of Boortz, in my opinion. You need to get past that. The FT is not his, or Linder’s, or anyone else’s. IT is the people who composed it, conceived it, and are driving it, not these authors or politicians. I hope you can at least see that.
The Fair Tax is an improvement over the income tax, because: 1) it is more efficient to collect, 2) it transfers some of the tax burden to foreign visitors (who will become more numerous as the dollar crashes), 3) it supresses excess consumption and promotes savings, and 4) allows the average citizen to understand the linkage between increased gov't spending and reduced personal economic freedom.
Of course it's not an 'end-all' because it does not close the more sinister loophole through which plenty of federal spending flows--monetary expansion (i.e. the inflation tax). Ideally we would have no taxes other than those which launched the republic--excise, tariffs and licensing fees. But a good intermediate situation would be the Fair Tax along with some restraint on the Treasury creating new money faster than the overall growth of GDP.
It is ludicrous to blame the FairTax for government over spending.It is like blaming the existence of the twin towers for the attacks on 9-11. They are independent of each other.
The government has been over spending since the Revolutionary war.Today is no different, with or without the FairTax.
I choose to support the FairTax because it puts me on level ground with the Gates and Buffet’s of the world.
Government spending is a very important issue, but it has nothing to do with the method of taxation. The FairTax is designed to be fair. It is designed to be revenue neutral. And it is designed to be transparent. If it takes a 40% or 50% consumption tax to achieve this, people will see exactly how much of our hard earned dollar ends up in the governments hands. With the FairTax, American people will be reminded every time a purchase is made that the government is taking 30%, 40% or 50%. The only way to increase revenue will be to vote for an increase in this one single consumption tax. Any congressman who does so will soon be out of a job. Under our current tax system, there is no way you or anyone else can tell how much of a $1.00 spent ends up in Uncle Sam’s hands. They like it like this. This is why many politicians are against the FairTax. They know the system makes it easy to manipulate the code to create more revenue without making waves. Under what conditions would you take the necessary steps to lower your blood pressure? Seeing every day that it is 180/110 or never knowing what it is.
Slavery is when someone has the right to the productivity of another. If the "gummit" has the right to one penny of your earnings, it has the right to take ALL of it. And that's exactly what the federal income tax does now. They get paid first. You only see your paycheck AFTER the fed takes its pound of flesh out of your hide.
On the other hand, the FairTax allows you a degree of choice in when and how much you pay in taxes.
If you don't spend, you don't pay any tax. A single person with a $50,000 annual incime, spending all of it on new goods and services would result in paying $11,500 (23%) in taxes. The prebate would lower that by around $2350 providing an effective net tax of around 18%.
But if YOU CHOOSE to buy just $10k of non-taxable items (i.e. investments, tuition, used goods, etc) out of your 50k earnings, your taxes drop to $9200 and the prebate lowers your rate down to between 6-7%.
Point being, with the FT, you have a choice. With the current system you are nothing but a slave.
If you want to ABOLISH SLAVERY.... support the FairTax!
You're right, essentially. The fair tax is only another type of taxation, not a reduction, and its significantly complex as to raise questions about its application.....like I'm just not seeing me ever actually getting a "pre-bate" check-that will be the first part to die in committee.
When you must invent words in order to tax people, its a red flag in my book.
Reduce the size of government for crying out loud, its not that hard-stop writing the checks, it'll get smaller.
As soon as I started researching this "Fair Tax" and found out that Huckabee and his ilk were behind it, I smelled a rat. Not only does the IRS not go away, but they become even more omnipresent in our lives.
You are so right on target about the middle class becoming a little bit too "savvy" at using software to knock off their taxes -- just like the "big boys" have been able to do for years. The IRS does not like that.
During my research, I read the fine print where it said we won't be receiving 100% of our paychecks after all; and the IRS has the option to bring back the payroll tax after we're hit with the extra sales tax. With the added sales tax on necessities like food, paper goods, etc., we'll become like welfare recipients, waiting for our monthly checks just to make ends meet.
Oh, yes, and the IRS will dig down deep to determine if you are eligible for that monthly check. They'll go back 20 years if they have to, to see if you owe them one penny, just so they can turn you down. They'll still have the power to garnish your paycheck, attach your bank account or take away your property.
Wake up, people. It's just another government scam. We need to stick with Ron Paul's plan and cut back spending so we won't need the IRS at all.
I can’t believe anyone can use government spending as a reason for not supporting the FairTax. I suppose they would support the FairTax if it guarantee a 50% reduction in government spending. Reducing government spending and a fair tax system are two different subjects. Using reduction in government spending as an excuse for not supporting the FairTax is like refusing to purchase a more efficient car until gas prices come down. At least with the FairTax our system will be more transparent. Each time we make a purchase, we will see exactly how much of our hard earned money ends up in the government’s hands. I guarantee any congressman who votes for an increase will be out of a job come next election. Why do you think many congressmen are against the FairTax? It’s not because it’s an inferior system; it’s because they will loose their power. As it is, they can tweak the tax code resulting in an increase without making waves. They can tweak the code without fear of loosing their jobs. Give the power back to the people; support the FairTax.
Nick, you and a few of the posters are far off here. Since the tax is very visible, American's will kick and scream when they have to pay more due to some pork barrelling senator or congressman's tax increase. Those folks won't be long in office. As for the folks suggesting that they could pull or reduce the prebate... the really wealthy wouldn't care much as it would be peanuts to them... but the little guy would again scream blue murder as they'd be taxing the majority. Please people, read the document before you post.
Our anti-FairTax Congressman debated his pro-FairTax challenger this week on ETV. A co-worker that watched the debate told me that he agreed with our congressman, that the FairTax would cause him to pay $130 for $100 worth of groceries.
I asked him how much he first had to earn in order to have that $100 in his pocket. If as I suspect that he is in the 25% tax bracket and has 7.65% employment taxes removed from his check before he ever sees it, I told him that he would first have to earn around $150 so as to be able to pull that $100 bill from his wallet.
I told him that paying $130 would be a bargain compared to what he is currently paying for that same $100 worth of groceries.
And that’s not even considering the fact that by abolishing the embedded taxes that went into the cost of that $100 worth of groceries would reduce that cost to less than $80.
And no mention of the ‘prebate’ feature that would refund to each and every taxpayer the amount of tax they would pay up to the poverty level.
Has anyone here actually read the whole bill yet? It is very very long. Anything that long gives the government many more powers than it has now. (Simple formula for determing if a bill is good or not.) More power is bad, umkay?
Stop buying into the hype. Read some of the actual things written against this awful tax. Read what an economist or two who actually understands this thing says: http://www.mises.org/story/1975
And no, the people won't scream as the tax is raised. They didn't scream when we lost habeas corpus and that is much more important. They didn't scream when the Constitution was shredded. Even if they do scream, they are ignored, so what do you really think is going to happen.
The tax will be increased by a penny here and a penny there. We, the gullible, will most likely pay an income tax on top of this in a few years because guess what? It takes a lot to overturn a Constitutional Amendment. And once they have, we the gullible, signed up for this plan, making an ass out of ourselves assuming that the Income tax will be gone for good, they will laugh and laugh and laugh.
Anything, I mean ANYTHING, that makes it easier for the government to take money from you is BAD. Umkay? STOP FALLING INTO THE TRAP. The government is not your friend. This bill will look nothing like you wanted it to. It will have tons of hidden traps in it. (As always). It will be the worst thing you ever begged for. The rich will get hundreds of exeptions built in and you and I will get nothing, except higher prices everywhere.
Here is another article written by an actual economist: http://www.fee.org/Publications/the-Freeman/article.asp?aid=5911
And this:
http://www.fff.org/freedom/fd0704d.asp
Until you have read all those articles you are keeping your head in the sand and choosing to remain ignorant. If you have read them, understand them and have some rebuttals, I would love to hear them. But, I trust these authors much more than a talk show host and a politician. These authors have actually studied economics.
When will they ever learn? When will they ever learn? sigh.
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