FACTCHECK.ORG is your friend

The Lizard

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http://factcheck.org/

That is, if you actually have a desire to ferret out the truth from various politcal ads and promotions. Sort of the snopes.com of politics, factcheck is totally non partisan and non-profit, and is devoted to the analysis of political ads and speeches to separate the truth from the fiction.

As a centrist moderate, I applaud factcheck. :up:
 
Excellent site......
 
One website that I would like to add is opensecrets.org for all your political campaign contributions. Yay PACs :up:
 
In the California Debate, Obama asserted that under hillary-care, one way she may fund her plan was to penalize those who either refuse to get the plan or can't afford it by garnishing money and fees from their wages.

Well, now reports are flying all over the place of that fact. CNN, CBS, FoxNews, ABC, The L.A.Times, Detroit Free Press, Washington Post, N.Y.Times, Wall Street Journal, and USAToday, and many others.

If this doesn't frighten hillary supporters, hell, all Americans, than I don't know what will. This is a form of a Gastapo. I cannot believe people don't see her Leftist ideology/philosophy and is just fine with that. Garnishment of your wages if you decide you don't want to be force to accept it. OMG!

Obviously, Americans have not learn, Socialize Health-Care not only has failed in many of the top Industrialize Countries of the World; but also, is one of the first steps in controlling our lives. Look at what the politicians was trying to do, to cut cost and so-called pollutants in California, by trying to pass a bill that would control your home's thermostat. OMG!

This is the mind-set of a lot of politicians in both parties, who feel only government knows what's best... sadly, more and more of the American populous are beginning to feel the same way... many others are simply apathetic.

RudyG is gone, but hillary is still there.
 
In the California Debate, Obama asserted that under hillary-care, one way she may fund her plan was to penalize those who either refuse to get the plan or can't afford it by garnishing money and fees from their wages.

Well, now reports are flying all over the place of that fact. CNN, CBS, FoxNews, ABC, The L.A.Times, Detroit Free Press, Washington Post, N.Y.Times, Wall Street Journal, and USAToday, and many others.

If this doesn't frighten hillary supporters, hell, all Americans, than I don't know what will. This is a form of a Gastapo. I cannot believe don't see her Leftist ideology/philosophy. Garnish your wages if you decide you don't want to be force to accept it. OMG!

Obviously, Americans have not learn, Socialize Health-Care not only has failed in many of the top Industrialize Countries of the World; but also, is one of the first steps in controlling our lives. Look what liberal was trying to do to cut cost and so-called pollutants, by trying to pass a bill that would control your home's thermostat. OMG!

This is the mind-set of a lot of politicians in both parties, who feel only government knows what's best... sadly, more and more of the American populous are beginning to feel the same way... many others are simply apathetic.

RudyG is gone, but hillary is still there.

STOP. Just stop. Why do you have to turn every thread into an anti-Hillary soapbox? This thread was about Factcheck.org, not some conspiracy to transform the United States into the Soviet Union. You're not even adding to the discussion by posting facts, you're exaggerating Clinton's positions and comparing her to Rudy Giuliani.

Granted, I show bias towards Clinton, because I'm a supporter and a volunteer and all that jazz. But I have taken a look at Obama objectively. I have praised a few of his stances and said he's strong on certain issues. But I've supported everything I've said with references to his Senate record or the organization of his campaign.

This is just obnoxious. Seriously.
 
In the California Debate, Obama asserted that under hillary-care, one way she may fund her plan was to penalize those who either refuse to get the plan or can't afford it by garnishing money and fees from their wages.

Well, now reports are flying all over the place of that fact. CNN, CBS, FoxNews, ABC, The L.A.Times, Detroit Free Press, Washington Post, N.Y.Times, Wall Street Journal, and USAToday, and many others.

If this doesn't frighten hillary supporters, hell, all Americans, than I don't know what will. This is a form of a Gastapo. I cannot believe people don't see her Leftist ideology/philosophy and is just fine with that. Garnishment of your wages if you decide you don't want to be force to accept it. OMG!

Obviously, Americans have not learn, Socialize Health-Care not only has failed in many of the top Industrialize Countries of the World; but also, is one of the first steps in controlling our lives. Look at what the politicians was trying to do, to cut cost and so-called pollutants in California, by trying to pass a bill that would control your home's thermostat. OMG!

This is the mind-set of a lot of politicians in both parties, who feel only government knows what's best... sadly, more and more of the American populous are beginning to feel the same way... many others are simply apathetic.

RudyG is gone, but hillary is still there.

I cannot speak for the "other" top industrialized countries but here, in mine we are very happy with our "socialized" medicine. Sure, it could be improved here and there but overall it's a very good concept.
 
I cannot speak for the "other" top industrialized countries but here, in mine we are very happy with our "socialized" medicine. Sure, it could be improved here and there but overall it's a very good concept.

Yeah, that's the reason why so many come here for the quality of care.

The only thing I can say about Socialize Health-Care, is that it's cheaper than the American system. You are force take certain medicines that may not be suitable for ones needs(generic cause it's cheaper), treatment is hampered, waivers against malpractice, bureaucracy, and much more.

Cost is the problem with our Health-Care, and that is mostly caused by delays in approving drugs(time-frame is improving), frivolous lawsuits(going down, but not fast enough), Medical Practice Insurance(MPI), record keeping(which has improved because of electronic data-bases), and lack of preventive care(which goes more towards our culture and lifestyle, but has gotten tremedously better in just the last ten years). Besides, America has the best Health-Care Professions on the planet.

I like our system much better, you can keep yours.
 
Yeah, that's the reason why so many come here for the quality of care.

The only thing I can say about Socialize Health-Care, is that it's cheaper than the American system. You are force take certain medicines that may not be suitable for ones needs(generic cause it's cheaper), treatment is hampered, waivers against malpractice, bureaucracy, and much more.

Cost is the problem with our Health-Care, and that is mostly caused by delays in approving drugs(time-frame is improving), frivolous lawsuits(going down, but not fast enough), Medical Practice Insurance(MPI), record keeping(which has improved because of electronic data-bases), and lack of preventive care(which goes more towards our culture and lifestyle, but has gotten tremedously better in just the last ten years). Besides, America has the best Health-Care Professions on the planet.

I like our system much better, you can keep yours.

Our health care system sucks.

Yeah, we have some of the best doctors in the world. Certainly, more of our sick get treated here than in other countries. But the fact that health care costs have become astronomical is incredibly sickening.

I don't like it when a single mother of four with a full-time job and steady income can't afford basic health insurance, yet the CEO of a major pharmaceutical or insurance company takes home an eight-figure salary. I think it sucks that our government has done enough to set up either a low-cost health insurance program or extended Medicaid as an alternative to high-cost, unaffordable insurance

I don't like it when a prescription drug costs $104 in the United States for someone without insurance coverage, but it costs less than $50 in Canada for someone in the same situation. And I especially don't like it when the United States government can't agree that children, of all people, deserve health care coverage.

So, yes, we have great scientific advancements, somewhat decent access to medicine, and a lot of health insurance providers to choose from. But we certainly don't have the best health care system in the world, and it definitely needs to be changed, whether it involves improving access and choice to private insurers (which I'm in favor of) or offering universal health care to everyone. 'Socialized medicine' only sucks because the conservatives turned it into another catch phrase designed only to instill fear through ignorance.
 
OpenSecrets is still my favorite political site. This one is good too.
 
For those who believe FactCheck.org:

FactCheck.org said:
Unspinning the FairTax
May 31, 2007

Summary
In our recent article on the second GOP debate, we called out Gov. Mike Huckabee as well as Reps. Tom Tancredo and Duncan Hunter for their support of the FairTax. We wrote that the bipartisan Advisory Panel on Tax Reform had “calculated that a sales tax would have to be set at 34 percent of retail sales prices to bring in the same revenue as the taxes it would replace, meaning that an automobile with a retail price of $10,000 would cost $13,400 including the new sales tax.” A number of readers pointed out that H.R. 25, the specific bill mentioned by Gov. Huckabee, calls for a 23 percent retail sales tax and not the 34 percent used by the Advisory Panel on Tax Reform. That 23 percent number, however, is misleading and based on some extremely optimistic assumptions. We found that while there are several good economic arguments for the FairTax, unless you earn more than $200,000 per year, fairness is not one of them.

http://www.factcheck.org/taxes/unspinning_the_fairtax.html
 
My Rebuttal, for those who believe FactCheck.org:

A FairTax(SM) rebuttal
Response to FactCheck.org article “Unspinning the FairTax”



June 2, 2007
The FactCheck.org/Joe Miller article conclusion:
“We stand behind our earlier analysis of the FairTax.
(A) The proposal to which Gov. Huckabee referred is not a 23 percent tax, but rather a 30 percent tax.
(B) And it is revenue-neutral only through an accounting trick.
(C) It will collect more money from those earning between $15,000 and $200,000 per year and less from those earning more than $200,000 per year.
(D) It is possible that the FairTax would make most people better off, but much of that gain would be a direct result of making the tax code less fair.”

The letters in parentheses have been added to aid the reader in following the response.
Introductory remarks
Americans For Fair Taxation’s many supporters throughout the country attempt to consistently monitor reports and representations about the FairTax from Web sites, media outlets, and public figures. Recently, we noted that FactCheck.org a site apparently devoted to “objective” analysis had taken a very biased tone against the FairTax and was propagating false and misleading statements. We shared with FactCheck.org our view that tax reform, like so many other national public policy issues, must be resolved in the crucible of public opinion based on accuracy. And because of the impartial reporting for which FactCheck.org is supposed to be devoted, we expressed to them grave concern that false and misleading facts appeared on their site in “Unspinning the FairTax” posted on May 31, 2007. We did so in the hope they might correct the misstatements and ensure that future reporting is more accurate.
The ability of the American people to properly analyze candidates and the policy they support is only as good as the accuracy in the analysis and reporting. And that, in a nutshell, is the very important mutual goal we share.
Unfortunately, we were successful only in part. Despite our telephone discussion with Joe Miller of FactCheck.org, FactCheck.org refused to correct blatant errors; for example, insisting that presentation of a chart on distribution that purported to be the FairTax but actually was an entirely different tax plan was acceptable. We pointed out to FactCheck.org that the FairTax taxes all consumption above the poverty line equally at 23 percent. We explained why the FairTax was more progressive and was revenue neutral. We also detailed that under the FairTax the vast majority of American families will be much better off because the economy will boom, U.S. economic competitiveness will be enhanced, compliance costs will fall, and incomes will grow. According to measures that capture real-world economic effects, the gains disproportionately go to low- and middle-income groups. Americans For Fair Taxation regards such an outcome as fair, just, and equitable.
We will continue to work to ensure accurate reporting on behalf of Americans For Fair Taxation. In the meanwhile, we want our supporters to understand the nature of FactCheck.org’s mistakes and biased effort.
(A) The proposal to which Gov. Huckabee referred is not a 23 percent tax, but rather a 30 percent tax.
This sentence is false and misleading. The FairTax is a 23 percent tax as measured by the same basis we measure all of the federal taxes it replaces.

The FairTax rate, measured the way existing U.S. federal taxes are measured, is a tax imposed at 23 percent. As Americans For Fair Taxation has noted in every opportunity on our Web site, in testimony, and in public position papers the FairTax rate can be considered to be 30 percent, but only if one measures the FairTax in a “tax-exclusive basis.” The fact that, by FactCheck.org’s own admission, 85 percent of our supporters who contacted your organization in regards to the article “get it” says that we must be doing a good job of explaining the importance of this distinction. (To further ensure that this is understood, we have revised this explanation and posted it on our home page. The text of this explanation appears at the end.)
Measuring the income tax in a tax-exclusive basis would result in completely different rates of the income tax. For instance, that a middle-income taxpayer in the 25 percent income tax bracket today would be in a tax-exclusive tax bracket of 48.5 percent because they would need to earn $148.50 to have $100 to spend after income and payroll taxes. In fact, this taxpayer’s total tax-exclusive rate is 67.5 percent because we should consider employer payroll taxes. According to the President’s Advisory Panel on Federal Tax Reform’s final report, “Economists have found, however, that the burden of the employer’s portion of the payroll tax is largely passed on to employees in the form of lower wages” (page 29).
Somehow, income tax proponents never get around to mentioning that the tax-exclusive tax rate on middle-income taxpayers today is over twice the FairTax 30 percent tax-exclusive tax rate.
Since the FairTax is a replacement for income and payroll taxes, and they are both measured, reported, and quoted on a tax-inclusive basis, it is appropriate to use the 23 percent tax-inclusive rate when referencing the rate. To do otherwise as FactCheck.org seeks would actually be misleading. In other words, apples should be compared to apples, not to oranges, and the tax-inclusive rate of the income and payroll taxes today should be compared to the tax-inclusive rate of the FairTax tomorrow.
To quote the tax panel’s final report, “Although tax-exclusive and tax-inclusive rates are both valid ways of thinking about tax rates, the easiest way to compare the retail sales tax rate to the state sales taxes paid by most Americans is to consider the tax-exclusive rate. On the other hand, it is appropriate to compare the retail sales tax rate with current income tax rates by utilizing the tax-inclusive rate” (page 208). We don’t disagree. That is why we refer to the rate in the appropriate tax-inclusive manner.
(B) And it is revenue-neutral only through an accounting trick.
This sentence is false.
FairTax.org acknowledges that increased revenue from taxing federal government consumption is exactly canceled by increased costs in the federal budget (as pointed out by the tax panel). What the tax panel neglected to point out is that this accounting method is used today by the Office of Management and Budget and the Congressional Budget Office.
The FairTax taxes all consumption, including government consumption, once. Today, the income tax and payroll tax are imposed on government consumption by taxing government employees and government contractors, making government pay more than it would in the absence of these taxes. This tax revenue appears in the receipts column in the federal budget, and the added expense is counted in the federal budget as spending (exactly canceling each other out). Fortunately, at least in this respect, the federal budget is honestly presented.
This tax revenue currently “paid” by the federal government is part of the tax revenue that the FairTax replaces. The federal government could artificially reduce both spending and tax revenues by exempting its workers and contractors from both income and payroll taxes and lowering wages paid to employees and amounts paid to contractors accordingly. Similarly, the FairTax taxes government consumption and, like today, the expense and revenue would be reflected on the federal budget as such. If the FairTax were to exempt government from tax and if federal spending were held constant, then the purchasing power and size of the federal government as a share of the economy would be dramatically increased. Further, not taxing government consumption would artificially make government consumption appear cheaper and promote increased consumption via government. So, though a wash, there would be negative economic consequences if the FairTax did not continue the practice of taxing government consumption. [1] This is not an accounting “trick” any more than it is an accounting trick to tax government workers and the income of government goods and services providers today.
Footnote: [1] For a detailed description of the FairTax base and step-by-step explanation of the rate calculation methodology, see Bachman, et al., 2006

(C) [The FairTax] will collect more money from those earning between $15,000 and $200,000 per year and less from those earning more than $200,000 per year.
This sentence is false. And FactCheck.org's own document shows their statement to be false.

FactCheck.org’s statement is based on a U.S. Treasury Department analysis (Figure 9.4 of which is shown) of a plan which is not the FairTax. The chart and the Treasury study depict an alternative retail sales tax plan invented by the Treasury Department that had a different tax base than the FairTax. In fact, the chart depicts a “plan” that does not repeal payroll taxes, which are 41 percent of personal income taxes, and leaves out more than $771 billion in regressive taxes that fall mostly on the poor and middle-income wage earners.[2] Although the chart label refers only to federal income taxes paid, this point is not made in the discussion of the results, thus almost begging for the reader to wrongly infer that the distributional picture portrays the FairTax.
According to the Brookings Institution’s Tax Policy Center, the payroll tax is very regressive with respect to current income, and in 2006 most Americans paid more payroll taxes than income taxes. “Among households with wage earners, 86 percent have higher payroll taxes than income taxes, including almost all of those with incomes less than $40,000 and 94 percent of those with incomes less than $100,000.” [3]
The chart below shows that for those with incomes less than $23,700, their payroll taxes were over 5 times their income taxes. For those with incomes between $23,700 and $42,305, their payroll taxes were 2.5 times their income taxes. Only in the highest income group do income taxes exceed payroll taxes. [4]
Footnotes:
[2] See IRS SOI Tax Stats-IRS Data Book: 2006. Available at http://www.irs.gov/pub/irs-soi/table_1_2006_dp.xls.
[3] Burman and Leiserson, 2007.
[4] Payroll and income tax data.

12975.jpg
Since the payroll tax is regressive and is the largest tax paid by lower- and middle-income Americans, ignoring the fact that the FairTax repeals payroll taxes is tantamount to ignoring what the FairTax is when analyzing the FairTax.
A recent study by Dr. Laurence Kotlikoff, that does analyze the distribution of the FairTax, was conveniently ignored by FactCheck.org, although brought to their attention. That study finds that the FairTax lowers remaining average lifetime tax rates,[5] thereby enhancing overall progressivity. This occurs because the reduction in rates is proportionately much greater at the low end of the earnings distribution than at the high end.
With respect to those earning $15,000 to $200,000 per year compared to those earning over $200,000, his results clearly demonstrate that the former experience a greater percentage tax cut than the latter. In the following table, each of the income groups between $15,000 and $200,000 has a lower lifetime tax burden under the FairTax. The two groups above $200,000 ($250,000 single and $500,000 married) also have a lower tax burden under the FairTax.
Let’s look at the middle-aged couple with two children earning $20,000 per year compared to that same couple earning $70,000 per year or $500,000 per year. In switching to the FairTax, the low-income couple’s FairTax rate is only 1.5 percent versus 11.0 percent under the current system. The middle-income couple earning $70,000 has a FairTax rate of 11.6 percent compared to 21.3 percent under the current system. The high-income couple earning $500,000 has a FairTax rate of 20.5 percent versus 35.6 percent under the current system. The low-income couple gets an 86 percent cut in their average remaining lifetime tax rate; the middle-income couple gets a cut of 46 percent, whereas the high-income couple gets a 42 percent cut.

Footnote: [5] The rates referred to above are average remaining lifetime tax rates, which take into account total tax payments net of Social Security benefits that the household will pay in its remaining lifetime. They measure the household’s future tax burden under the FairTax compared to what it would have to pay if the current tax system remains in place.
Average remaining federal lifetime tax rates the current system vs. the FairTax:
12922.jpg

Source: Kotlikoff and Rapson (October 2006), Table 5.
12921.jpg
In fact, even ignoring economic growth, lower compliance costs, better international competitiveness, higher wages, and other positive effects of the FairTax on the well-being of the American people and adopting outmoded “static” analyses of the distributional impact of the FairTax, households spending up to $50,000 annually will be better off.[6]
Footnote: [6] Tuerck, et al., “A Distributional Analysis of Adopting the FairTax: A Comparison of the Current Tax System and the FairTax Plan,” 2007.



 
(D) It is possible that the FairTax would make most people better off, but much of that gain would be a direct result of making the tax code less fair.
This sentence incorrectly assumes that economic growth will be distributed unfairly. The FairTax is called “fair” because it disproportionately benefits the poor and middle class and the economic studies support this statement.
The FairTax entirely untaxes the poor and reduces the tax burden on the near poor substantially. The FairTax taxes all consumption above the poverty line equally at 23 percent. The FairTax is progressive, and by two out of three commonly used measures of progressivity is more progressive than the current system. Finally, and most importantly, under the FairTax the vast majority of American families will be much better off because the economy will boom, U.S. economic competitiveness will be enhanced, compliance costs will fall, and incomes will grow.
By measures that capture real-world economic effects, the gains disproportionately go to low- and middle-income groups. Americans For Fair Taxation regards such an outcome as fair, just, and equitable. We believe that the American people do as well.
A Gini coefficient is a standard measure of inequality.[7] The higher the number, the more progressive the tax. Conversely, when looking at an income distribution, the lower the number, the more evenly distributed it is.
12923.jpg
As can be seen from the chart above, the FairTax has a higher Gini coefficient than any other tax except the estate and gift tax, and is therefore more progressive than all taxes except the estate and gift tax as measured by its impact on expenditure per capita.
Footnote: [7] For an explanation of the Gini Coefficient, see http://en.wikipedia.org/wiki/Gini_coefficient.

12919.jpg

The FairTax makes spending after tax more equal and income after tax somewhat less equal.[9]
Laurence Kotlikoff of Boston University, using a methodology considering lifetime effects, found that virtually every income and age cohort would be better off under the FairTax but that those in the lower-income groups are disproportionately better off. For example, take a middle-aged couple with two children earning $20,000 per year compared to that same couple earning $70,000 per year or $500,000 per year. The low-income couple gets an 86 percent cut in their average remaining lifetime tax rate; the middle-income couple gets a cut of 46 percent, whereas the high-income couple gets a 42 percent cut.[10]

His study uses a dynamic life cycle general equilibrium model to simulate the impact of the FairTax on the U.S. economy. The inclusion of demographics, including a realistic initial age structure of the population, realistic mortality rates, and realistic fertility rates means that the model is able to show how the economy fares over time in the absence of tax reform compared to how the economy fares with the FairTax enacted. Switching to the FairTax precipitates a very major increase in the U.S. capital stock and real wages over the course of the century, prevents what would otherwise be a doubling of the highly regressive payroll tax, and effects very major welfare gains, particularly for the poorest current and future members of society. Implementing the FairTax at 23 percent gives the poorest members of the generation born in 1990 a 13.5 percent welfare gain. Their middle-class and rich contemporaries experience a 5 and 2 percent welfare gain, respectively.[11]
Only studies that adopt a one year or very short horizon and look at income class show the FairTax to be less progressive than the current system. These studies use data showing that poor people in the aggregate spend many times their income year in and year out which is, of course, impossible. What is really going on is that many who are counted as poor are business owners who lost money, students living off of their parents, or those with illicit or unreported sources of income. The studies are inherently flawed.
To be accurate, FactCheck.org should include the Kotlikoff studies on distribution that specifically examine the FairTax.
Footnotes:
[8] Tuerck, et al., op. cit.
[9] Ibid.
[10] See Table 5 in Kotlikoff and Rapson, 2006.
[11] Jokisch and Kotlikoff, 2007.


Other points made by FactCheck.org
[C]onsumers would pay taxes on a great many things that may not intuitively seem like consumption. The list would include:

(E) Interest on credit cards, mortgages and car loans
This sentence is misleading. The FairTax does tax the loan service charges or fees charged by the lending institution to the borrower. If the lending institution does not separately state these charges, but rather rolls them into the interest rate for the loan, then a portion of the interest is really hidden services charges. The FairTax taxes only that small portion of interest. For example, on a typical home mortgage only about one-half of one percent of interest is subject to tax. This represents the value of the financial intermediation services provided (such as loan origination fees, loan servicing fees, etc.) that are disguised as “interest” today. Thus, on a $200,000 mortgage the FairTax liability (calculated by the bank) would be $230 per year or only $19 per month.
A more noteworthy effect of the FairTax on interest, which dwarfs the above, is that the FairTax will bring down interest rates by about 25 percent.[12] This would reduce the homeowner’s payment from approximately $1,200 per month to $1,014 per month, a monthly savings of $186 per month (based on an average existing mortgage rate of 6.0 percent which decreases to 4.5 percent under the FairTax.)
(F) The result is that many FairTax supporters (about 15 percent of those who wrote to us, for example) do not understand that the 23 percent figure is tax-inclusive.
When 85 percent of the public understands a relatively complex tax issue, then it would seem that FairTax is (1) not being misleading and (2) doing a pretty good job of explaining the issue. We would bet that those same people do not know that the current income, payroll, capital gains, alternative minimum, and estate taxes are also expressed as tax inclusive, which is the whole reason for making the honest comparison in the first place.
(G) In other words, proponents assume that no one will cheat on taxes.
No, but we do assume that the FairTax will do a better job of reducing the amount of cheating that is rampant today. The FairTax would reduce tax evasion by reducing the marginal tax rates and therefore the incentive to cheat and by increasing audit rates and therefore the likelihood of tax evasion being caught. Audit rates would increase because audits would be much simpler and more could be undertaken (assuming that appropriated enforcement resources are held constant). Overall administration and enforcement would be more efficient, given the vastly reduced number of collection points (e.g., there are about 20 or so million taxpayers under the FairTax versus 155 million today).
Footnote: [12] Several economic studies have estimated that switching from an income tax system to a consumption tax system such as the FairTax would result in an interest rate drop of approximately 25 percent. See, e.g., Golob, John E., “How Would Tax Reform Affect Financial Markets?” Economic Review, Federal Reserve Bank of Kansas City, Fourth Quarter, 1995.

Revised explanation of 23 percent rate vs. 30 percent rate
Perhaps a simple example will explain best.
Assume there is a worker named Joe who earns $125 and spends all of his earnings. Let’s further assume that the government requires him to pay $25 in taxes.
If the government put a tax on Joe’s income, he would earn $125 before tax and would have $100 after tax to spend at the General Store. Thus, Joe has to earn $125 to have $100 to spend. Joe would also have to file an income tax return.
If the government put a tax on what Joe spends, he would earn $125 and would have $125 to spend at the store. Of the $125 paid by Joe to the storekeeper, $100 would be for the goods he bought at the store and $25 would be taxes that the storekeeper would send to the government. Joe would not have to file a tax return, as the storekeeper sends the tax in to the government.
Either way, Joe pays $25 in taxes and the government gets $25 in taxes. With a tax on income, Joe pays the $25 directly to the government, and with the tax on spending (sales tax), he pays the $25 in taxes indirectly when he buys something from the General Store. The General Store sends the tax that Joe paid to the government.
12920.jpg
We may report the tax rate as $25/$125 = 20 percent, which is the tax-inclusive rate (meaning that the tax is included in the base). Alternatively, we may think of the tax rate as $25/$100 = 25 percent, which is the tax-exclusive rate (meaning the tax is excluded from the base).

The 23 percent FairTax rate set out in HR 25/S 1025 is a tax-inclusive rate, as is the current individual income tax, whereas most state-level sales taxes are quoted on a tax-exclusive basis. For ease of comparison, Americans For Fair Taxation gives the tax rate both ways. Both rates pertain, since the FairTax is a tax on spending that is replacing an income tax system, and 23 percent correctly represents the tax burden compared to the current income tax system.
It is both inaccurate and misleading to say, using the above example, that the income tax is 20 percent and the sales tax is 25 percent. This implies that the sales tax burden is higher, when in fact the burden of the two taxes is precisely the same either both taxes are 25 percent or both taxes are 20 percent.
References
Americans For Fair Taxation (AFFT), “Promoting home ownership: How the FairTax’s benefits for homeowners exceed the mortgage interest deduction,” February 2007. Available at http://www.fairtax.org/PDF/PromotingHomeOwnership.pdf.
AFFT, “The FairTax and economic growth,” April 2006. Available at http://www.fairtax.org/PDF/TheFairTaxAndEconomicGrowth.pdf.
AFFT, “The FairTax prebate explained,” February 2007. Available at http://www.fairtax.org/PDF/FairTaxPrebateExplained2007.pdf.
AFFT, “What the federal tax system is costing you besides your taxes,” April 2007. Available at http://www.fairtax.org/PDF/WhatTheFederalTaxSystemIsCostingYou.pdf.
An Open Letter to the President, the Congress, and the American people Concerning Reform of the Federal Tax Code. Available at http://www.fairtax.org/PDF/Open_Letter.pdf.
Arduin, Laffer & Moore Econometrics, “A Macroeconomic Analysis of the FairTax Proposal,” June 2006. Available at http://www.fairtax.org/PDF/MacroeconomicAnalysisofFairTax.pdf.
Bachman, Paul, Jonathan Haughton, Laurence J. Kotlikoff, Alfonso Sanchez-Penalver, and David G. Tuerck, “Taxing Sales under the FairTax: What Rate Works?” Published in Tax Notes, November 13, 2006. Available at http://www.beaconhill.org/FairTax2006/TaxingSalesundertheFairTaxWhatRateWorks061005.pdf.
Burman, Leonard E. and Greg Leiserson, “Two-Thirds of Tax Units Pay More Payroll Tax Than Income Tax,” Tax Notes, April 9, 2007. Available at http://www.taxpolicycenter.org/UploadedPDF/1001065_Tax_Units.pdf.
Chamberlain, Andrew and Gerald Prante, "Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 1991-2004,” Tax Foundation Working Paper No. 1, March 2007. Available at http://www.taxfoundation.org/files/wp1.pdf.
Jokisch, Sabine and Laurence J. Kotlikoff, “Simulating the Dynamic Macroeconomic and Microeconomic Effects of the FairTax,” National Tax Journal, forthcoming, 2007. Available at
http://people.bu.edu/kotlikoff/FairTax%20NTJ%20Final%20Version,%20April%2024,%202007.pdf.
Kotlikoff, Laurence J. and David Rapson, “Comparing Average and Marginal Tax Rates under the FairTax and the Current System of Federal Taxation,” NBER Working Paper No. 12533, revised October 2006. Available at
http://people.bu.edu/kotlikoff/Comparing%20Average%20and%20Marginal%20Tax%20Rates%2010-17-06.pdf.
President’s Advisory Panel on Federal Tax Reform, “Simple, Fair, and Pro-Growth: Proposals to Fix America’s Tax System,” November 2005. Available at http://www.taxreformpanel.gov/final-report/.
The FairTax Act of 2007, 110th Congress, introduced by John Linder, January 4, 2007. Available at http://thomas.loc.gov/cgi-bin/thomas.
Tuerck, David G., Jonathan Haughton, Keshab Bhattarai, Phuong Viet Ngo, and Alfonso Sanchez-Penalver, “The Economic Effects of the FairTax: Results from the Beacon Hill Institute CGE Model,” The Beacon Hill Institute at Suffolk University, February 2007.
Tuerck, David G., Jonathan Haughton, Paul Bachman, Alfonso Sanchez-Penalver, and Phuong Viet Ngo, “A Distributional Analysis of Adopting the FairTax: A Comparison of the Current Tax System and the FairTax Plan,” The Beacon Hill Institute at Suffolk University, February 2007.
Tuerck, David G., Jonathan Haughton, Paul Bachman, and Alfonso Sanchez-Penalver, “A Comparison of the FairTax Base and Rate with Other National Tax Reform Proposals,” The Beacon Hill Institute at Suffolk University, February 2007.

What is the FairTax Plan?
The FairTax Plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue replacement, and, through companion legislation, the repeal of the 16th Amendment. This nonpartisan legislation (HR 25/S 1025) abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities. The IRS is disbanded and defunded. The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.

What is Americans For Fair Taxation (FairTax.org)?
FairTax.org is a nonprofit, nonpartisan, grassroots organization solely dedicated to replacing the current tax system. The organization has hundreds of thousands of members and volunteers nationwide. Its plan supports sound economic research, education of citizens and community leaders, and grassroots mobilization efforts. For more information visit the Web page:
www.FairTax.org or call 1-800-FAIRTAX.


Though I doubt you will read all that RDh007, FactCheck.org isnt always right, and if they are wrong about a plan as simple as the FairTax, what else are they wrong about?
 
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Though I doubt you will read all that RDh007, FactCheck.org isnt always right, and if they are wrong about a plan as simple as the FairTax, what else are they wrong about?

but, what if they are NOT wrong.
then that means that the fairtax is flawed.
you would have to consider this possibility wouldn't you?
 
but, what if they are NOT wrong.
then that means that the fairtax is flawed.
you would have to consider this possibility wouldn't you?
Did you read the Response? They are judging the Fairtax by a different set of Measurment. They are biased in their review of the Fairtax. It is obvious in their explaination.
 
so, you're suggesting the response is NOT biased?
why is that?
 
so, you're suggesting the response is NOT biased?
why is that?
I am saying that over 14 years of research and over $29 million private dollars are spent on the Fairtax Plan with hundreds, if not Thousands of Individual Economists and Tax Research Offices looking into the Idea. That the FactCheck.org Review of the Fairtax is wrong.
 
I am saying that over 14 years of research and over $29 million private dollars are spent on the Fairtax Plan with hundreds, if not Thousands of Individual Economists and Tax Research Offices looking into the Idea. That the FactCheck.org Review of the Fairtax is wrong.

I didn't ask that.
I asked if you thought the response was NOT biased.
since you called factcheck.org biased.
plus, I hope you realize that you just cited reasons WHY the response WOULD be biased.
 
From Factcheck.org

We don’t actually call the FairTax “regressive,” as AFT implies that we do. We reiterate, however, that those earning between $15,000 (or perhaps as much as about $24,000 – see our addition to the “Who Really Pays” portion of our article above) and $200,000 per year – virtually all middle-class Americans – would pay a higher share of the tax burden under this proposal. Those earning more would see their share drop, as even AFT economists admit.

Even in the Corrections Section they say that people making less than $15,000 a year would be paying more. That is not true because of the Fairtax Stipulates that the Prebate would cover the Tax Burden on every purchase under the Poverty line. So, people making $15,000 a year would only have only $5000 of their spending taxed, and that is only if they spend the $5000. Remember, under the Fairtax, you decide when you pay taxes, not that it is forced from you before ever receive your Paycheck.
 
haha! your mind is pretty much made up man.
that's why I merely asked you questions, that you obviously don't want to answer.
it's cool, I'm sure it's a good idea, I'll still depend on factcheck.org for unbiased analysis on political matters in the US and you can skip it.
 
This is in reference to FactChecks assertion that it is really a 30% tax, not 23%:

The 23% Fairtax Rate in Inclusive, just like how our income taxes are Inclusive. 30% is if the price was exclusive. If you buy something that is $100 dollars, under the Fairtax, the retailer forwards $23 dollars to the Government. 23 out of 100 is what? 23%. Now, if you take the difference, it is $77, $23 is 29.87012% or rounding up, 30% of $77
 
:up:

I do like what Factcheck stands for, but if they get one wrong, how can we take anything else seriously?

FactCheck at least had the decency to offer the pro-FairTax buttal to its own article in its entirety in the resources section... http://www.factcheck.org/taxes/unspinning_the_fairtax.html , as well as offer the follwing disclaimer:

We did not ignore Americans for Fair Taxation’s research. Much of that research is publicly available and is listed among our sources. We do, however, approach all evidence with a healthy skepticism – including research that is funded by the very group whose claims we are investigating. Where possible we rely upon neutral sources, such as the bipartisan President’s Advisory Panel on Federal Tax Reform, and on opinions from third-party scholars from think tanks like the Brookings Institution and the Cato Institute.

That really doesn't seem biased or unreasonable to me. Plus, the FairTax debate is a lot more dense and multilayered than merely determining the amount of spin on claims made by the Republicans and Democrats during an election year.
 

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