The Fair Tax Book!!!

LiquidSound

Two problems with the plan that I can see so far.

1. State and local governments will have the sayso on whether they will abide by the tax system. This will a: be up to the citizens to make it happen b: likely happen, according to the authors, due to political/voting pressure, and the fact many governments make their tax laws according to the federal tax laws. In my opinion, if a bordering state has a better tax code, the people that will travel to that state to make purchases, will reflect in the state's tax revenue. I hope that would change the state's tax system.

2. The 23% tax rate can be increased by the government. It will be our fault if they do. Vigilance will be our weapon against this. We'll have to pay attention and speak with our votes. The ability that they can change it, but the fact the tax will be the same across the board on all services and new consumption, is a double edged sword. A good thing in my opinion. The politicians won't be able to pander to a particular group of people by cutting taxes for them, but not another. No class warfare. No unfair taxing. No buying of votes.

So it's not perfect, but I still prefer it to the current system..as of this post.

LiquidSound

So hey jdhdiggs, if the ideas of Neal Boortz, Congressman John Linder, and the entire Fair Tax movement are so easy to beat, you only need a 101 class to do so..you gonna call Boortz up and school him? If it's that easy, why don't you? Oh, have you read the book yet?

LiquidSound

"Meanwhile, the poor are stuck here buying things like clothes and food and are now forced to pay the burdon of the rich who escaped." First off, the poor would be much better off because of keeping all their paycheck, as well as getting the prebate to cover all of the tax expenses they would have during a month. As far as them being the only people who would carry the burden, not true. The millions of tourists that visit our country would be paying the same amount of taxes that the locals do. All of that, coupled with bringing the jobs home in a more lucrative market and the tax paying workers it would employ, plus all of the new businesses that come to our country because it's now a better market to work in that do the same as above, added to all of the money that's already spend to supply and service the country..would take care of the super-rich buying and playing outside of the country. Not all of them do that, by the way.

jdhdiggs

Tried to call in, they ask what arguments you'll be using then hung up. All I was going to point out how home prices would have to rise: If demand is stagnant and everyone has more spending power, prices rise. Econ 101, screener heard this and hung up. Just like Bill O'Reilly's show and all other brow beat specials. I've seen this idea come up in lecture circuits while still in school and this idea got it's **** handed to it by economists. Boortz isn't targeting economists, he's targeting the layman. Conservatives support it because it is a tax break for the rich and feel that it is fair for the poorer to pick up the slack. The economist's support? A big list, but most of those guys (the ones I recognized anyway)are progressive supporters and disregard classical and keynesian models in favor of a ceterus paribus type model.

Let me reverse the question: If this is so blindingly brilliant and simple, why has it taken 30 years to even get a bill written on it? Why hasn't it passed? Why isn't it law?

Poor keeping their money? Not really, just everyone is getting paid $5,800 to live in the US Sounds like income redistribution to me. Granted no one in this plan will be taxed more than 22%, their purchasing power is also decreased since COGS is up 30%

This is great for the rich in that they are currently paying 40%, and now would only pay 22% as a max. For a zero sum game, someone MUST make up that money. Since it is not the rich, then who?

Tourists? Why? When the dollar was strong, we had a shortage on tourists. If everything here raised in price 30%, how would that increase tourism.

Jobs coming home? No way, not happening with this plan. First off, it costs tons of money to move facilities. Secondly, you still haven't cured the reason for the companies being overseas in the first place. Even if you believe the numbers that he quotes for payroll taxes and "hidden taxes", you still won't have similar pay to what the overseas worker will work for.

The whole concept is based on very fragile assumptions that can easily be blown to the wind using either classical or Keynesian models. The ADT method for taxation would be much fairer than this (a 0.3% tax on every transaction)

The entire basis for this "fair tax" is that people will spend whatever money they have. That's it. If people save more, the entire concept comes crashing down.

Me, I'd love it since my taxes would be a third of what they are now. My parents? Their burdon would go from $200K/year to about $10K per year. They would be elated with this. Where is this money being made up? That's a lot of loaves of bread to make up for $190K of lost revenue.

The biggest hole in the entire idea is that the well off spend all of their money like the lower middle class do. Unfortunately, this is not so. Go check the savings rate of individuals as incomes increase. The only way to solve that is to tax investing. I think we can both agree that this is a bad idea.

The second biggest hole is that differentiation defines wealth-If everyones income goes up 10%, then prices will go up 10% and everyone is still at the same level.

There are some great points and interesting ideas in it, I just don't think that the average American will benifit. Housing costs go up, salaries go down, tax burdon for middle to low income families goes up... None of those are adequately addressed, at least on the website.

(Reduction in COGS will be consumed by the companies owners and not typically be passed on to consumers. Also, a reduction in salary costs to the company will not translate into higher wages. In fact, the reverse trend is just as likely as favorable.)

RuSsMaN

Govt cheese tastes GOOD. MMMM Good. It's almost like Cheddar.

LiquidSound

DAMN good points jdhdiggs. That 101 class paid off huh!
On a much more basic level, my new problem is this. If it's up to us to keep tabs on the politicians ability to raise the tax rate, one of our only weapons is voting. Well, what if the guy who says he will keep taxes the same supports euthanasia for people caught driving while talking on cell phones. *helluva guy huh* and the guy who wants to raise the rate supports wetland conservation. We can't just vote on one subject while ignoring the rest of the baggage that comes with the guy. I don't like that. I can't take credit for this insight, that would be my girlfriend who deserves the credit. Gotta love a smart girl!
Russman, I think you're onto something.

aaharvel

well said JdHiggs. I'm 1/2 through the book since yesterday and yes it's an interesting read to say the least. Many of the guys theories are impressive but there are just too many holes that he can't fill in; primarily he's basing his theories on a micro-level of economic and sociological theory; not macro.

AsSiMiLaTeD

youthinasia - great album

jdhdiggs

LS and AA, Good points. LS, I think you are onto something a bit deeper. Just had a discussion about this with an old prof for 5 minutes over lunch. What he said (as close to word for word as I can get): "The good thing about it is my taxes go down and those poor dumb **** who keep voting for bigger government finally get the bill" (Not a very PC guy at all)

The point: The money you are paying out is a lot more obvious so the common man will more closely examine where the money is going and holding their representatives responsible.

All in all, I think that is the biggest plus of the whole idea.

Also, some quick math with this method compared to the current system (Assuming everyone up to 72K spend all of their money and then only 15% of their cash after that point): Those under $25K pay the same, $25K-$36K pay less, $36K-$100K pay more, >$100K pay less

AA- You're absoluetely right on that.

LiquidSound

"If this is so blindingly brilliant and simple, why has it taken 30 years to even get a bill written on it? Why hasn't it passed? Why isn't it law?" Big reason on why. Too many pockets to be filled by this current monster. Or maybe it just won't work. Helluva concept though.
aaharvel, about half way through is where you really start into the concepts of the Fair Tax. The first half is a brief history on our currently screwed system. *not telling you anything you didn't know*
While my faith is dwindling, I still love the idea. If anything, it flushes the subject to the forefront. People will become more aware because of this, even if it turns out to flop.
jdhdiggs, are you sure they hung up on you? Could it possible have been a wrong button pushed? If not, rephrase your statement, and call back tomorrow. I'll be calling tomorrow as well with my question about political baggage attatched to tax stances. Man I love seeing things get all stirred up.

MacLeod

Ive always said, if people had to write out a check to the government every month for taxes instead of it being withheld, the democratic party would end!

Prices wouldnt go up with this plan. Businesses would no longer have to pay taxes so their cost would go down. Competition would force them to start lowering them again so the prices would go down. A lot of people always say, "no the businesess are greedy evil rich people and theyll keep all the money for themselves or theyll make a secret pact with other businesess that nobody can lower prices". This is ridiculous. If this were true, WalMart would be putting everybody out of business by lowering their prices. If Target didnt have to pay taxes anymore they would lower their prices in a heartbeat to take on Walmart, who would lower theirs in return.

My main problem with this bill is once its passed, whats to stop those dumbass politicians from starting another income tax! "Oh its only 1%, are you so greedy that youd deny starving children 1% of your income"?

aaharvel

MacLeod I don't know about where you live but Walmart has ended ALOT of small business operations. At least here in NC.

neomagus00

yeah, walmart ends small businesses, but so it goes... boutiques for whatever product will always be around, i think, but i think the day of the mom and pop store is ending...

LiquidSound

True that, Wallus Martum *that's latin* has put LOTS of business down..but not all. There is still competition, albeit lame competition on most of their consumables.
What he's saying is that, if it can be done for a lower price, it will. The book cites a tax situation where airlines had a big drop in taxes. One airline dropped the price accordingly, and the rest started following suit. As soon as the taxes were reinstated, the prices went right back up.
If any of you have produced and/or tried selling any quantity of something..you understand this. I'm always looking for good wholesale prices for dvd's and whatnot, because I want to undercut the other guy. It's difficult! Because most of the people I'd be competing against, are getting the same wholesale prices, and only raise it a bit to stay competitive. Unless there is a drop in the cost of products, wholesale prices will remain the same-ish.
Removing the embedded taxes would drop the wholesale prices. How much remains to be seen.

LiquidSound

neomagus, it used to be that once a year, you'd write a check for all of your taxes. Thanks to help of Donald Duck *read the book* and the politicians..witholding began. And so began the slow, but steady increase of taxes. Also began the blind eyes to exactly what the government is doing. If you got bitten by two mosquitos a month, on the 1st and 15th, each year..no biggie..you'd scratch a little and move on. If you were bitten by 24 mosquitos at once..it's a different story altogether. You might get some alcohol and clean them, or some anti-itch medicine.
Once we stopped focusing on what we've lost, and started focusing on we 'take home'..the government has won. We continue losing.
I'm just so mad.

MacLeod

aaharvel wrote:

MacLeod I don't know about where you live but Walmart has ended ALOT of small business operations. At least here in NC.

Exactly my point. This proves that if a business' cost is reduced, it will reduce its prices and wont make any "secret pacts" with other business to keep the prices artifically inflated. So if businesses dont have to pay taxes and their cost goes down 20%, they will in turn reduce their prices by 20% which offsets the 20% sales tax.

George Grand

I was asked to comment on this thread. I can't really do that without getting into a political thing. I have not read The Fair Tax Book.

By my own estimates with all the charts and graphs, I earn more than 85% of the folks in this country. I don't live like it. My heart and brain always go to the little guy, and the underdog. There are far too many people in this country who are decent, hard-working individuals who will never have more than a couple nickels to rub together unless they hit the lottery. We also all know about the welfare kings/queens who should be tied to the bumper of a car and dragged around a little. If we could get rid of one group while somehow providing for the other, that's the tax I'm all for.

The rich don't do dick, and trickle down economics supposes that the jobs created will be IN THIS COUNTRY. The only trickle down stuff I've seen lately are the wonderful opportunities awaiting those who want to join the exciting, FAST GROWING world of landscapers and Wal-mart sales associates. That's right, all you lazy, fat **** that can't find time to mow your own damn lawns, well I guess you're my heroes.

I saw an article in todays newspaper. Of the 10 largest water bill scofflaws in New York City, Leona Helmsley is one of them. One of her 4 star hotels owes the city a bundle.

SOMEBODY, has to take care of the people who don't have ****, and despite their willingness to labor like dogs, probably never will. Find me the tax that somehow or another does that, and I'll pay my fair share with a smile on my face, and a tear of joy in my eye.

George Grand (of the Jersey Grands)

LiquidSound

Thanks George..

The Fair Tax would allow the grease covered, bloody knuckle bunch to keep all of their paycheck. All of it. They would also get a "prebate" every month, sized in accordance with the estimates of ther tax expenditures on neccessities for that month. This would put more money in the working man's pocket. Period.
There is talk of how the lower class would carry the burden of the country's taxes while the super-rich spend some of their cash offshore. This is not true. The tax is a VOLUNTARY tax. They only pay tax when you decide to spend your bloody, grease covered dollars. So they won't be forced into carrying the burden as suggested.

Me, I've dug the ditches and turned wrenches. I've been cut, burned by chemicals, set on fire..then was reprimanded for being set on fire. I've sought out to make a better living for myself by playing the stock market. As for me, I'll be spending quite a bit of the cash I'll earn. While I plan on living a comfortable life *if I can keep a hold of my money. stock money is easy to make, keeping it a different story* but I will never turn my back on a brother in need.
In my eyes, I'm not the only guy who, if he has more cash, will spend it. There is also talk of *what if* people don't spend their money, and just tuck it away. This is America folks. If we've got it, we'll spend it. Yes some people will save..not always, but usually to buy larger, more expensive products. Am I wrong?

MacLeod

Youre paying that now George. The bottom 15% are basically off the tax roles while youre paying 40% and over 50% if you count SSI. Income redistrobution doesnt work, didnt work when the Soviets tried it and it wont work now.

One thing to remember, your income bracket is not like your race, you can change it. If you dont like making $12,000 a year then make more! I know its not that simple but its possible. Not everybody can be rich but everybody, barring disability or mental handicap, can be comfortable. Those crappy jobs at WalMart can either pay $6/hr as a cashier or $12/hr as a dept manager or $100,000 a year as a store manager. Just because its not working in a foundry pouring molten metal doesnt mean its not a good job. My wife has one of those "service jobs arent real jobs" working in a retail store. She has excellent benefits, makes more money than I ever have, has a comfortable environment and a very good and flexible schedule with good retirement. Ive never understood why a job assembling widgets for $12/hr is a real job but being the produce manager at WalMart for $12/hr is not.

Unemployment is low as hell, new housing starts are at an all time high, GDP is up every quarter, the economy grows every quarter, personal income is up and consumer spending is up. This is not a "soup line" economy. Just the opposite.

And if you put more money back into Americans pockets they will spend it every time. Even if they save it in the bank its earning interest and the bank is using it to loan it out to inverstors. Unless you stick your money under your matress, the extra money is going to go into the economy. Evil rich people getting to keep more of their money is also a good thing cause evil rich people want to make more so they invest it.

Not to overuse WalMart but theyre a good example. When WalMart makes more money do they close up all their stores and horde their money? No, they open up new stores, create more jobs and pay more taxes! This is how it always happens. Do you think rich people will take their extra money and say,"well this is all I want to make so Ill stick it in a hole in the backyard"? NO! Theyre going to either invest it into a business or go out and buy toys. And for them to buy toys, somebody has to sell them and somebody has to make them.

Class warfare is pointless and illogical. It was ok about 100 years ago when you were either born to a super rich family or you worked in the coal mines. There was nowhere else to go. Not the same nowadays. You can be born dirt poor and work your way up to billionaire status. You can also be a trust fund baby and lose it all. The economy is not static.

LiquidSound

Well said.

George Grand

You tell me who set you on fire Liquid, and I'll break his legs, his mom's legs, and his dog's legs.

I know one person I'm helping out and that's about it. The others I can't really say for sure. The rich have a lot less chance to lose their money than the poor do of ever making any real money. The rich hire superbrains to figure out new and better ways of **** this government out of its money. The poor just steal.

Whatever happens, it's going to take something a lot more catastrophic than 9-11 to ever change this country, and the way it's been going. It has more to do with caring than it has to do with money and taxes, that's for sure.

I really can't say more without getting politically nuts, and nobody wants that.

George Grand (of the Jersey Grands)

markmarc

The biggest problem with a national sales tax would be the emergence of a massive black market.

A flat tax like the one Steve Forbes proposes is far fairer to all. Most states run a flat tax, why can't the feds?!

LiquidSound

Thanks for keeping your political chips in your pocket and not on your shoulder, George. Us doing that is the only thing keeping this thread from being locked.
A pile of broken, twisted, family related flesh..set ablaze..would draw quite a news crew..but do nothing for taxes. A call to your congressman, visits to town hall, and an editorial piece in your local newspaper..might get more accomplished. Although, I'm certainly not an expert.
As for the rich using their cranially gifted parrots to find new ways around the tax scheme..I see it like this. Yes, not all, but some will buy their toys, and play with them outside of the US. Granted. But, *and that's a Kirsty Alley butt* they will have to pay for goods and services inside the US if they choose to live here. They'll have to eat, have their hedges trimmed and their eyebrows plucked..so on and so forth. If they try and import cheaper products, they'll have to pay taxes on them through customs. *I know, some will get past* So, if they can live so much cheaper by buying their goods and services elsewhere, why are they still living here? A plane trip to have a bowl of noodles in Nam will negate any extra cost they incur buying American noodles, imported from Nam. Am I wrong here?
*Black market* I think, having a hired expert manipulate the current, sixty four thousand page tax system, would be slightly easier than buying black market gasoline on a daily basis.
Lets say the black market exists. You can buy your daily needs from the guy down the street. In order for him to make it worth the jail sentence if he were if caught, he has to move volume..or have a jacked up price. *more expensive than the current pricing under the plan* This means lots of people, lots of purchases, lots of attention. The police wish someone would draw that much attention to a black market. The criminals would be easier to catch than drug pushers. Remember, it's not crack, it's bread..milk..toothpaste.
Oh, I'm so glad we don't have a black market scheme with taxes going on today. Something so bad, like thousands of illegal aliens, working for cash, not paying income taxes..on a daily basis. Oh wait, we do. And yes, they would pay the tax on everything they would buy. Black market again? Tell me, can you smuggle a gallon of milk in your shoe?

markmarc, Fair Tax Benefits Over Flat Tax Fair Tax vs. Flat Tax

scottnbnj

ain't gonna happen any time soon, much less in one fell swoop. electeds would be voting themselves out of too much power and contribution fodder.

though, i think it's helpful to think about, and talk about, bang garbage cans and rable rouse over,.. so that some day incremental steps could have the cumulative effect of getting gov't shitbirds out of the business of finding inventive new ways for people to comply with outrageously intrusive, time consuming, complicated and perilous financial obligations.

i'd rather the gov't find a way to fund itself where it isn't assumed that gov't has the authority to inspect law abiding citizens' every financial transaction for no other reason than to decide what it will take, take its share of earnings first, as though all wealth and property, *first* belongs to the gov't and only through its benevolence are we allowed to shelter and feed our children with what is left over, where it is assumed that it is just to petition gov't to decide what level of greed suits the common good, where it doesn't pit the needy, the lustful and political strategists and pollsters against anyone that has something of value that might be turned into a quick, politically available buck for insatiable politically motivated committees or a vice that can be created and/or exploited, where the wealthy, the industrious and the ingenious are obliged to spend valuable energy and resources to comply and protect themselves from all of the above.[/RANT]

anyway, a tax system like what's being discussed here would be a good bit closer to what i'm looking for than what we have now.

)

Shizelbs

Picked up a copy at Costco earlier today. Will be reading it soon.

jdhdiggs

Just found out that Dr. Robert Mundell will be speaking/working at our "Institute" in September. I'll ask him about this topic, I'll report back the results, out!

johnwk

H.R. 25 does nothing to control the wasteful spending and borrowing practices of Congress; does nothing to encourage Congress to start following sound fiscal and economic policies beneficial to America’s businesses, industries and labor; nor does it compel Congress to extinguish annual deficits in a manner in which members of Congress would be quickly held accountable by their State Governor and Legislature for their reckless spending and borrowing habits!

Sad thing is, in this respect, H.R. 25, the Forbes flat tax and the value added tax plan, are just another way to allow Congress to skin the goose which lays the golden eggs and continue in its unaccountable profligate borrowing and spending habits which is the worm at the root of the tree . . . Just another plan offered which is intentionally designed [see H.R. 25's revenue neutral feature] to support existing big government and the countless political plum jobs on Capitol Hill, many of which have six figure salaries. This is why I support a return to the founder’s original tax plan which contains various checks and balances to control the actions of Congress, and was intended to not tax the tools of production, supplies necessary to conduct business, nor the necessities of life___all of which are taxed under the big government, socialist friendly H.R. 25 alleged reform.

The only stinking tax reform we need is to add the following words to our Constitution which would bring us back to our founder’s plan:


The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay “any” tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money.


For those who are unfamiliar with our Founding Fathers original tax plan, as they intended it to work, a plan which also includes a specific method to extinguish an annual deficit, CLICK HERE and scroll down to :

American Constitutional Research Service Before the
Committee on Ways and Means
United States House of Representatives
June 1995

Mr. Chairman and Members of this Committee:


To see what real conservatives in America are promoting with regard to raising a federal revenue, CLICK HERE

regards,

JWK

As Thomas Jefferson warned us
"In matters of Power, let no more be heard of confidence in men, but bind him down from mischief by the chains of the Constitution"
.

LiquidSound

The Fair Tax isn't government reform. Nor is it social security reform, or medicare reform. These are entirely different subjects. I've never heard it once touted as government reform.

markmarc

Liquid:
Read the link, interesting but I could find arguments for the flat tax that would dispute it. Which is right, no one really knows. Why, because it is all hypothetical at the federal level. The one difference is that many states run a flat tax; very simple forms, easily completed. For example, here in Oregon the rate is 9% (no sales tax). Doesn't matter if your a teacher or a Trailblazer. One rate for everyone.

I'm just tired of paying 30%, while Ross Perot pays 6%. Make us both 15% and I'm a happy camper.

Shizelbs

I just got done reading this book - start to finish tonight -

It was an interesting read. I appreciate the recommendation. It will not be in any book sale anytime soon. I will be passing it off to my father in law this weekend, however.