The FairTax Thread: Discussion Only

[Paradyme]

Thats awesome, man. Wish I could've met him.

 

[SuBe]

It's the 3rd time I have, I met him at 2 other Book Signings, then he had this Event a few nights ago and I actually got to talk to him for a few minutes one on one. It was a lot of fun.

 

[Paradyme]

He looks like he's lost weight like he said he was.

 

[SuBe]

Making Big Business Pay Their Fair Share of Taxes
Wednesday, May 13, 2009
By: Ken Hoagland

Making Big Business Pay Their Fair Share of Taxes

When you hear any politician indignantly demanding that corporations finally, “pay their fair share of taxes,” look to your own wallet. Corporations don’t have a secret cache of money to pay taxes nor do CEOs take it from executive compensation. These taxes are always paid by workers, consumers and stockholders.

The recent shocking, shocking revelation that American businesses are sheltering their overseas profits far away from our second highest corporate tax rate in the world comes as a “surprise” to no one but those feigning surprise for political gain. Of course, they keep their profits away from our corrupted tax code and the sweaty outreached hands of both Members of Congress and Washington tax lobbyists.

In some parts of the world the bribe to gain government favor is both a common and illegal transaction. Here in the United States, it is has been codified and made not only legal but the basis of a thriving business inside Washington’s beltway. More than half of the two and half billion dollars spent annually on lobbying in Washington is spent in pursuit of “favors” in the income tax code. Hey, it’s the cost of doing business in the USA.

With a wink and a nod “contributions” are made to political campaigns and even to hometown foundations and causes that Members of Congress favor or in which they have an interest. Lucrative fees are paid to the richest and most powerful lobbyists in Washington, tax lobbyists, to broker sweetheart deals for businesses and individuals.

These lobbyists commonly come from Capitol Hill after staff or elected careers that provide them currency with and access to tax writing committees. The hallway outside the House Ways and Means Committee is even called, “Gucci Gulch” in deference to the shoes these lobbyists wear that cost more than most American’s monthly house payment.

“Closing business loopholes” really means that some past favors are being rescinded and a new feeding frenzy of lobby activity for new favors is about to begin. It’s all part of the corrupted tax code that makes Members of Congress from both parties very powerful, lobbyists very wealthy and which does real damage to the American economy. Unfortunately, this is one activity that sees true bi-partisan cooperation among the power elite in Washington.

Closing loopholes also means that workers will continue to see wages and benefits depressed and that consumers are about to pay higher prices for goods and services--because that is how business pays business taxes. Teacher retirement funds and other investors can take cold comfort, as well, that returns will be lower or dividends trimmed, so that business can “pay its fair share”.

Pitting Americans against each other to achieve “fairness” in the corrupted tax code has been raised to a fine art in Washington. Taken together with the lucrative industry that has grown up around the tax writing committees, it is little wonder that Washington so vehemently resists the FairTax. The fact that the corporate tax and all the current complicated and unevenly applied taxes on earnings could be replaced with a no- exception consumption tax simply does not compute to most in Congress.

Elimination of corporate taxes under the FairTax is predicted to bring, not just American business profits, but $10-15 trillion of investment back to our shores. That means very little to those who profit so mightily from the income tax system. Elimination of $300 billion a year in tax preparation costs as individual returns become history? Not worth it, according to most of Congress. How about making the cost of the federal government visible instead of hiding taxes through payroll withholding? Unthinkable to those who spend our dollars freely (and our children’s future earnings) to win our votes today.

But outside Washington, the FairTax grassroots movement continues to grow. Advocates know all about the self-interested resistance that exists on Capitol Hill. They still come to rallies, they still form local chapters and they still sign petitions. Why? They still believe that American citizens have not only the right but the power to create public policy that actually benefits the public. Unthinkable.

 

[VampElvis]

Scenario:
I have started my own business. For reason X I decide to sell my business.

Fair Tax Question:
When purchased, does the buyer pay taxes?

 

[SuBe]

Short Answer: No.

Long Answer: Yes, through the Personal Retail Purchases, the Buyer will be paying taxes into our System, but he will NOT be paying Taxes on the purchase of your Business as the Business is not a Retail item or Retail Service.

 

[SuBe]

Travel information for everyone who would like to plan on attending the Midwest Rally
http://www.midwestrally.com/

1. Food will be available from 8 am through the evening. Banks and Shane will be performing starting around 4 pm and will continue until people are gone...they said they will play till 10 pm if folks are lovin' it!!! I think that most will be exausted by that time, but who knows???

2. Hotel -- Block of rooms at the Hilton Garden Inn 1 mile from the event
Hilton Garden Inn
3300 Vandiver Drive
Columbia, MO 65202
T: (573) 814-5464
F: (573) 814-5465

3. Airports are Columbia (COU), STL next closest 1.5 hour drive (St. Louis) and Kansas City third (KAN) 2 hours

4. Ground transportation: MO - X provides shuttle services from Airport to anywhere in Columbia: https://www.moexpress.com/tac/default.aspx

5. Schedule of events: http://www.midwestrally.com/Event.htm

Please pass this information on to anyone who would be interested in attending!

Hey everyone, if you are from Missouri, you may want to attend.

 

[SuBe]

May 19, 2009
The Flat Tax vs. the Fair Tax

By John Tamny

If there’s a positive to the leftward economic lurch among our political class, it has to do with the certainty that the imposed initiatives will fail. No matter the political party or supposed ideology overseeing it, when politicians seek to share the gains of the productive, their efforts come up short. Simplified, collectivism applied is collectivism’s capitulation.
So while there’s good reason right now to be pessimistic, there’s also reason to be optimistic given the certainty that we’ll eventually move in the other direction. On the tax front, whatever the result of President Obama’s attempts to move the cost of success upward, his efforts insure a strong response from those eager to simplify the income tax, or abolish it altogether.


When it comes to tax simplification, the debate seems to come down to the merits and demerits of the Flat Tax and the Fair Tax. The former would tax income at one flat rate, while the latter would tax our consumption.

At first glance, it should be said that both tax solutions are dreamy when we consider their economic implications. Both, if applied correctly, would lead to the abandonment of all manner of deductions that distort behavior and ****** economic growth. If either were passed, the economy would no longer suffer under economy enervating incentives that cause people to plow money into sinks of wealth like housing, not to mention the purchases of federal and municipal debt that would be much less attractive absent their tax advantages. For the abolishment of the various deductions alone, the economy would boom given the more rational path that capital would take in the direction of productive investment.

Regarding the flat tax, its greatest appeal is its simplicity. As its most prominent advocate (Steve Forbes) frequently notes, under a flat tax individuals could calculate what they owe the federal government on what would amount to a postcard. The potentially greater unseen here would be the economic boost that would result from smart minds producing, rather than evading the tax collector, not to mention all the money formerly consumed on lawyers and accountants that would flow into the productive economy.

Assuming these taxes weren’t withheld, but instead were paid on a monthly or quarterly basis, the dynamism of the flat tax would be even greater. Indeed, one problem with tax withholdings is that individuals don’t as much feel the sting of writing a check to the federal government with regularity. If this were to be implemented under a simplified tax code, Americans would become intimately aware of the cost of government, and hopefully ask for less of it in return for lower tax bills.

The obvious negative of a flat tax has to do with the basic truth that taxes on income are a price put on work. Work is penalized when income is taxed. And while the most productive among us would presumably embrace with vigor a lower, flatter rate, there is the problem that usually materializes under low rates of taxation whereby the rich provide the vast majority of federal revenues. In that case, it seems a flat tax perfectly applied would include a ceiling after which the rate would go to zero.
Considering a consumption tax, or what its advocates call the Fair Tax, if applied correctly this is surely the ideal tax. Rather than a system that penalizes work and savings, we should have a tax that only shows up when we consume. This would insure that more money would be saved and flow to productive investment, plus with each purchase, Americans would see up close the horrific cost of government.

It’s pointed out by many that a consumption tax would be more equitable for those in the underground economy paying their share of taxes given the difficulty of evading taxes assessed at the time of purchase. On its face this is a positive, but it could be argued that we shouldn’t cheer big increases in government revenues. We shouldn’t because rather than save those revenues for a rainy day, governments invariably use revenue spikes to create new programs that are difficult to sunset. Higher revenues could well be the result of flat or fair taxes, but this wouldn’t necessarily be a good thing.

Naysayers suggest that a consumption tax is regressive due to the reality that the poor almost by definition consume more of their total income. But those naysayers speak with a forked tongue. Indeed, out of one side of the mouth they decry regressive tax rates, but out of the other they frequently wail about what they deem the ‘wealth gap’.

The problem there is that the only way for an individual to amass wealth is if that individual saves. The beauty of a consumption tax is that it would drive incentives among the non-rich to save more, and in doing so, build their wealth. The alleged regressive nature of taxes on consumption would in fact reduce gaps in wealth. It says here the wealth gap is not a problem – if anything it’s a positive for the risk taking it engenders – but if a reduction of wealth inequality is the goal, a consumption tax is the answer.

Another potential negative of a consumption tax involves the certain frenzied lobbying that would ensue for exemptions. With “our children’s future” used as an excuse, the education and book publishing lobbies would seek exemption from the tax altogether. Following them outside the office of each legislator would be the lobbyists for every weak industry in the United States (think carmakers, airlines, newspapers to name three) looking for similar exemptions. The good would likely outweigh the bad, but it’s not unrealistic to fear that the imposition of a consumption tax would also lead to a process whereby exemptions would serve to prop up the weak, thus blunting the healthy process of Schumpeterian “creative destruction.”

Despite the negatives mentioned about both taxes, assuming either were a possibility, it would be foolhardy to let the perfect be the enemy of the good. At present, our wildly complicated tax code saps our productivity all the while driving massive amounts of precious capital away from the productive economy. Be it the Fair or Flat tax, either one would drive massive economy-wide gains alongside large wage increases for all.
So while things may look bleak today, the looming failure of our bipartisan flirtation with collectivism means that somewhere down the line there will exist the opportunity to right our economic course. Here’s hoping that when that day comes, the coalitions are in place to push through the very tax simplification that would forever discredit the impoverishing notion suggesting we’re better off economically when we penalize the work and savings of the productive.

John Tamny is editor of RealClearMarkets, a senior economic advisor for H.C. Wainwright Economics, and a senior economic advisor to Toreador Research and Trading (www.trtadvisors.com). He can be reached at [email protected].

 

[SuBe]

http://www.aninconvenienttax.com/

Trailer for a new film coming out called "An Inconvenient Tax". Check it out.

 

[SuBe]

Long Synopsis:

Taxes affect the lives of every American. Since the founding of the United States, there has been an ongoing debate over the proper way to tax and the role the tax code should play in people’s lives. These debates show no signs of resolution as Americans currently must deal with the country’s most complicated tax system ever - the Federal Income Tax.

The product of 95 years worth of additions, subtractions, deductions, and exclusions, the income tax has become such a headache that many are calling for it to be drastically simplified or even removed all together. Despite the obvious need for reform, the tax code remains one of the most controversial subjects of our time. From political handouts for corporate contributors to vote-buying gimmicks, the income tax is no longer simply a means to raise revenue but a proxy war over the country's social and economic goals.

Also, most would agree that the tax system should at least raise enough money to pay for government spending, but even that is not being accomplished. With a looming fiscal crisis on the horizon, and a growing dread of tax consequences, April 15th seems more like a scene from a B-horror movie than a day to contribute to the common good of the nation. But how can Americans decide the best way to change the income tax when few people even understand the code or the many startling effects it has on the country.

“An Inconvenient Tax,” a feature-length documentary film, explores the history of the income tax and brings to light the causes of its many complexities. The film follows the tax through wars, economic booms, and the most significant presidencies in U.S. history. This whirlwind tour includes everything from early IRS propaganda films to the tax reform campaigns of Ronald Reagan, whom historian Steven Weisman describes as “the poet laureate of capitalism.” The film uncovers redefinitions of income, the creation of corporate loopholes, and even a brief moment in 1986 when Congress actually tried to simplify everything. But with over 16,000 changes to the tax code in the last 20 years alone, Americans find themselves in a more dire situation than ever.

To help crack the code, the film employs the country’s top economic experts, commentators, and political voices. Noam Chomsky, Steve Forbes, Joseph Thorndike, Mike Huckabee, Charles Rossotti, Dave M. Walker, Neal Boortz, Michael Graetz, Daniel Shaviro, Leonard Burman, and others discuss the problems America faces in the tax code and give valuable insights on how to move forward. The film then gives a voice to the creators of several tax reform solutions who claim to have found a better way. In a time when many Americans are concerned about the future of the economy, rising deficits, and unfair tax treatment, “An Inconvenient Tax” provides a critical, honest look at the income tax. For the first time ever, Americans can finally engage in the tax debate with confidence and perhaps discover a new way to tax. As Joseph Thorndike, one of the film’s experts, says, “We face fiscal problems in this country right now that are so serious, we should all fear for the safety of our children. Americans are going to have to deal with the topic of tax reform because it’s just too important.”

 

[SuBe]

 

[Franklin Richards]

Nobody but you has posted here since May.

 

[Paradyme]

Great vid, SuBe, thanks for that.

 

[SuBe]

Nobody but you has posted here since May.

There hasn't been much news concerning the FairTax in a few months.

 

[Handsome Rob]

There hasn't been much news concerning the FairTax in a few months.

So I went to my old workplace today. Sitting down with a couple of Democrats who, with smiles on their faces, are asking me how I'm enjoying the Obama administration--I hadn't been there since before the election. So, over the course of the conversation, one of them says that basically everything would be OK if I were in charge. I said, "That's right. The first thing I'd do is implement the FairTax."

And then one says, "Man! FairTax! I haven't heard that word since you were working here!"

t:

 

[SuBe]

I actually took a break because I was too busy with work. Now it's time to get back to my Crusade.

 

[Bunker]

The FairTax is just another way for the rich to get richer and the poor to get poorer.

No thanks.

 

[Handsome Rob]

The FairTax is just another way for the rich to get richer and the poor to get poorer.

No thanks.

Sorry, that's not a valid criticism, especially when the poor will pay absolutely no federal taxes up to the poverty line under the FairTax. This includes the 7.65% that is taken out of their gross pay in every paycheck for SST/MRT taxes and is non-refundable on their tax returns. A working class head of a family of four making $20,000 in gross wages per year will automatically take home $1,530 more per year based on that alone. Calculated as a percentage of his original net pay (and excluding other state taxes and the income tax for simplicity), that amounts to an instant 8.2% raise. That's a conservative estimate, because including the federal withholding for income taxes and any state taxes would actually make the percentage higher.

PLUS, under the FairTax, he and his family would be eligible for a monthly prebate of $560 (rounded up). That works out to an additional $6,720. Now, if we decide to include that as income just for the fun of it, that means that his 8.2% raise goes up to 44.7% raise.

Does ending up with 44.7% more money each month sound good to you? I'll bet it sounds good to that poor person. And it holds up even in the face of those who wrongly insist that the price of goods/services will increase by 30% under the FairTax. Why? Because his home pay increase outpaces the (incorrectly calculated) price increase by almost 50%.

While the rich may very well keep more money (although they won't be able to take advantage of accounting and tax loopholes to get out of paying taxes), the poor will definitely get richer.

The FairTax works.

 

[SuBe]

The FairTax is just another way for the rich to get richer and the poor to get poorer.

No thanks.

When you keep 100% of your paycheck and you choose when you get to pay taxes and the amount of taxes you pay...How is it that the Rich get Richer and the Poor get poorer?

Those who spend less than the Poverty Level has a 0% Tax Rate. Actually, if you don't spend ANY money at all, you could be in a Negative Tax Rate. Please, educate me on your statement. Point me to the study.

 

[Kelly]

The FairTax is just another way for the rich to get richer and the poor to get poorer.

No thanks.

Care to elaborate, because at this point the counter point to yours has wiped the floor.....

 

[SuBe]

What You Lose Under the FairTax
1. The Home Mortgage tax deduction - no more deduction your mortgage interest - no incentive to buy a house.
2. The Per-Child tax deduction for dependants - no more help for large families.
3. The deduction for State and Local taxes - tack on the taxes.
4. The College Tuition tax deduction - sorry kids.
5. Roth IRA - will be taxed twice because your money is taxed again when you spend it.
6. Charitable Contributions deductions - no help for the faithful.
7. Child Care Credits - no more help for single moms and poor families with kids.
8. Refinancing Points deduction - no more incentive to refinance.
9. Health Insurance Premiums deduction - no more help for the sick

1. You would lose your Home Mortae Tax Deduction because you would no longer have Income Tax to deduct from, ie. You get 100% of your income. Not Taxes taken out of your paycheck.
2. You would lose your Per-Child Tax Deduction because you would no longer have Income Tax to deduct from, ie. You get 100% of your income. Not Taxes taken out of your paycheck.
3. State and Local Taxes are a seperate entity all together and not affected by the FairTax.
4.College Education, like ALL education is Tax Free because it is considered an Investment and No Investment is Taxed
5. Roth IRA, as with ALL other Investments are Not Taxed. There is only one single Tax and you are taxed when you SPEND, not when you save or invest.
6. You can't deduct Charitable Donations, but studies have proven, when you have more money, you donate more. And you WILL get more money because you receive 100% of your Paycheck.
7. You receive help in, YOU get 100% of your Paycheck AND the Prebate that offsets the taxes you spend on Food and necessities.
8.You would lose your Refinance Deduction because you would no longer have Income Tax to deduct from, ie. You get 100% of your income. Not Taxes taken out of your paycheck. It's easier to pay your mortage when you receive 100% of your Income.
9.You would lose your Health Insurance Tax Deduction because you would no longer have Income Tax to deduct from, ie. You get 100% of your income. Not Taxes taken out of your paycheck. AND, since you receive 100% of your Income, you can afford Health Insurance if YOU choose.

What You Gain Under the FairTax
1. New 30 percent tax on every New House or property you buy.
2. New 30 percent tax on Cars, Boats, Campers, Home Appliances, TV's
3. New 30 percent tax on Food, Clothing, Shelter, Rent, Electricity, Gas, Phone Service
4. New 30 percent tax on Medicine, Surgical procedures, Hospital stays, Dental Services
5. New 30 percent tax on Legal Services, Trial Services, Legal Advice, Legal Winnings and losses.
6. Double Taxation on Roth IRA's or retirement money you took as a lump sum.
7. Your consumption is now directly linked to inflation - prices go up - your taxes go up.
8. Interest on Credit Cards, Loans, and Mortgages now taxed at 30 percent on top of what you owe.
9. You now have to pay the government for permission to live in America by paying taxes on all you consume

1. Compare Apples to Apples. The Income Tax is stated in an Inclusive Manner, not Exclusive. Therefore if you are comparing them, you will be paying LESS taxes than you are now. You currently pay @15% in Income Taxes, 7.5% in FICA, 15% on Investments, and 22% on any purchase. Under the FairTax, you only pay 23%. You are being intellectually dishonest on this one. For every $1 you spend at Retail, $0.77 goes to the Retailer; $0.23 goes to the Government. 23/77 is 29.87% or rounded up, 30%. But you are still paying only $0.23 out of every $1. So, it is 23% INCLUSIVE.
2. You have a 23% Tax on every purchase. No Exclusions. This eliminates Corporate Lobbiests fighting for lower taxes on their end.
4. You already pay Federal Embeded corporate Taxes on these items, up to 22% Today. Under the FairTax, you receive a prebate to offset your Taxes so NO Taxes are paid up to the Poverty Level.
5. You already are paying Taxes in the Embeded Corporate Costs of these services. Now you see it on the receipt where as today you don’t.
6. You are NOT being Taxed on investments. Currently you are taxed on your Income, then, when you invest, you pay taxes again!
7. Your consumption is magically NOT linked to inflation currently? Really?
8. You are already paying Taxes on Credit Cards. Do you think they operate Tax Free?
9. You lose your Health insurance Tax Deduction because you are NOT PAYING TAXES on Income. So, you find out how you are going to deduct from your income taxes when you are not paying ANY INCOME TAXES!!!!

Again, you are being intellectually dishonest this your assessment.

 

[SuBe]

TAXING ACHIEVEMENT


By Neal Boortz @ November 2, 2009 8:34 AM

A must-read blog every day in preparation for the show isCato@Liberty. There you will find information like this ...KPMG released its latest global survey of corporate tax systems. Sounds like a real snoozer, right? Well that's why you have me. I'm the guy who wrote a New York Times best seller about taxes.


So back to this survey ... for the 10th year in a row, the average corporate tax rate world-wide has fallen. Now it rests at 25.5%. But that's the average. This means that some countries have a corporate tax rate higher than 25.5% and some less. So ... where is the United States? Well, we're stuck. Stuck at 40% .. where we've been for quite some time. Only one country has a higher corporate tax rate than the United States; Japan.

In case you haven't noticed .. .the world is shrinking. Businesses and businessmen find it easier to move around the world in search of advantageous business climates. In a world of instant communications; in a world where no business hot spot is more than one day's travel from another ... why would a company continue to subject itself to a confiscatory tax rate when it can simply move?

This, of course, brings me to the FairTax. Right now we have the second-highest corporate tax structure in the world. But what would happen if we had the lowest? In fact, what might happen if businesses could operate in the United States without any tax component on capital or labor? What if corporate leaders never had to consider the tax implications of any decision? What if business decisions could be made on the basis of what is good for the company, the stockholders, the employees and the customers, rather than on how to minimize tax consequences. This would be life under the FairTax.
Right now you can bet that business owners are contemplating ways to escape the coming increases in tax rates in the United States. The response will be to move more jobs and more business out of the country. Sure, The Community Organizer will try to find a way to erect some sort of an economic Berlin Wall to keep American wealth from fleeing tax tyranny, but it will only be partially effective. Why not try to attract wealth, rather than looking for ways to chase wealth away?

Well, you know the answer; don't you? To attract wealth the political class must transfer power to the private sector. That isn't going to happen; not with the looters in charge. The game here is power, not the economic welfare of the American people. The FairTax would be the greatest transfer of power from government to the people in the history of our Republic. You don't' see very many people with a "D" after their names who like that idea.


​

 

[mclay18]

How does the minimum/maximum amount of taxes you pay? Is there a set minimum/maximum dollar limit for everyone, or does it vary by how much money people make? I'm a bit confused.

 

[Handsome Rob]

How does the minimum/maximum amount of taxes you pay? Is there a set minimum/maximum dollar limit for everyone, or does it vary by how much money people make? I'm a bit confused.

The FairTax is a pure consumption tax. You only pay the tax if and when you purchase a good or service.

There is a prebate paid at the beginning of each month to offset the cost of the tax up to the poverty level--it's based on the number of dependents in the home. Everyone gets it, regardless of how much money they make. And, it obviously benefits those with lower incomes or those who exercise financial discipline and spend less.

 

[A&W]

Most economits believe this will hurt the middle and lower classes and help the rich. No matter what anybody says about it here, at the end of the day economists are still saying it will hurt the middle and lower classes.

that is all I need to know. That is all anybody should need to know. To those that think they know better than the economists? That is arrogant. You wouldn't argue with your doctor about whether or not you have cancer would you? Than why think you know better than the economists? This is their area of expertise, not yours.