Support the Fair Tax


I wanted to share some good information that was given to me by Brian Prasifka of www.fairtax.org

“The FairTax is a 23 percent, inclusive, national, retail (not assessed on used goods) consumption tax charged on all new goods and services (with the exception of education- which it considers an investment). Savings and investment are not taxed- only consumption. Every household in America would get a “pre-bate” check at the beginning of each month based on the estimated cost under the FairTax of basic necessities only. Thus, the argument that a flat tax or a VAT is punitive for lower-income households is eliminated under the FairTax.

It is estimated that the average retail cost of a product in the US currently includes 22 percent in imbedded taxes that are passed through to the consumer. Since the FairTax replaces corporate income taxes, in a competitive marketplace the cost before the FairTax is assessed would reduce as much as 22 percent. The FairTax also eliminates personal income taxes, payroll taxes, estate taxes, and capital gains taxes. If someone makes $60,000 per year, there would be no income or payroll tax withholding and their check would immediately increase to their “pre-tax” income of $5,000 per month. (Think anyone will be complaining about losing their mortgage-interest deduction after that?)

Also, the 23 percent figure is considered revenue-neutral to Uncle Sam when compared with revenues generated under our current system because it broadens the tax base. There are trillions of US dollars floating around outside the US that would likely be repatriated. Furthermore, under-the-table cash payments to illegal aliens, underground economies such as illicit drugs, and even dollars spent in the US by foreign tourists, are all added to the tax base once the economy shifts to a consumption tax.

The clamor from conservative voters calling for spending cuts is all well-and-good, but, as you know, between defense, entitlements, and interest on the debt, three-quarters of our budget is already “baked-into-the-cake” going forward. Four or five more years of slow growth, high unemployment and underemployment, and structural deficits is going to be a tough pill for a lot of Americans to swallow, as are the kind of serious cuts to entitlements that will be required in such an economic environment. Even the most aggressive across-the-board cuts such as those proposed by Representative Cantor ($2.4 trillion over the next ten years if ALL of his recommendations are enacted-which you and I know WON’T happen) will be a drop in the bucket as more of the baby-boomers retire and our Social Security/Medicare obligations continue to grow.

You’ve probably heard the statistic that, regardless of what marginal tax rates are, tax revenues to the federal government have consistently come in around 18 percent of GDP year-after-year for the last forty years or so. A solution that broadens the tax base and grows GDP, makes us more competitive globally than we are today (with the second-highest corporate income tax rate in the world), mitigates the outsourcing of jobs overseas (probably-even reverses it and brings more jobs from foreign-based companies to boot), and increases private-sector investment and jobs is what’s called for.

Best of all, it restrains the ability of elected officials to manipulate/amend the tax code to pick winners and losers as they see fit!”

 

There are several books on the FairTax- you can take a look at Ken Hoagland’s The FairTax Solution. Also, Neil Boortz and Georgia Representative John Linder have written two books. Believe it or not, the Wikipedia page on the Fair Tax is very even-handed, informative, and well-researched.

Eric Bolling of Fox Business is a big supporter of the FairTax. Mike Huckabee won Iowa in 2008 largely due to his support for the FairTax, which is very popular there. You can go to www.fairtax.orgto get more information and sign up for their weekly newsletter.

It would be a powerful issue for the GOP in particular to one-up the President’s call for tax reform with a real proposal for reform that eliminates the IRS and replaces the current tax code with one that is transparent, fair, easy to administer, and makes us more competitive in a global economy.

I’d like to discuss how we can share resources with the Tea Party here in Fort Worth to get the word out. Kay Granger is a co-sponsor, but we need her to actually push it, not just put her name on it.

 

Thanks Brian for the information.  I strongly urge everyone to look into this and see if this is something you can support.  The largest department of our Federal Government is the IRS.  I say let’s all get together to take back April 15th and make it just another day!

GG

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2 Responses to Support the Fair Tax

  1. Mark says:

    I was a big fan of Fairtax — until I read their fine print, and asked questions about it.

    Fairtax sure sounded great, I loved that they said no corporate taxes, because “only people pay taxes”.

    I loved that no one would be taxed on the necessities of life.

    I loved that there was no double talk or hidden BS.

    But then I found out —WOW, there is a LOT of fine print. Like the fine print that didn’t even show up for the first ten years, and then was in ONE sentence.

    A trillion dollar aspect of Fairtax is in ONE sentence. They didn’t mention it in any speech, ever. They didn’t mention it in their videos, even to this day. They didn’t utter one word about it, for ten years, and then only mentioned in the BACK of the 5th book.

    This trillion dollar hidden tax is not in any index of any of their books. (In fact their books don’t even have indexes”.

    To find this tax in their fine print, their leaders have to show you where it is, it is in three parts! You have to put all three parts together, in your head, to figure it out.

    But their leaders defend this trillion dollar hidden tax.

    http://fairtaxbs.blogspot.com/

  2. Mark-

    In the spirit of your pull-no-punches blog, let me be as blunt as possible- I don’t believe you. I don’t believe you were ever a true supporter of the Fair Tax.

    If you were a supporter of the Fair Tax, you would understand that one of its fundamental underpinnings is that, as I explained above, retail products and services already contain in their costs, on average, 22% in embedded taxes.

    In a competitive market for goods and services, those taxes are stripped out, and REPLACED with the Fair Tax. And note that I said, above, that the Fair Tax applies to “ALL retail goods and services.”

    So, there is no deception here- not on my part anyway. If, for example, an individual, a corporation, or a government entity purchases a new product or service, they pay the Fair Tax within the price of those goods and services.

    This does NOT constitute a massive, additional tax on state and local governments, as you deceitfully imply; they are paying roughly the same amount in imbedded taxes ALREADY! A state government, for example, that contracts with private businesses to build new roads bears the cost of the taxes borne by these businesses that provide the asphalt, concrete, labor, etc. Those costs are embedded in their prices today.

    So, the Fair Tax doesn’t markedly change the costs to government entities. What it does do is make those costs more transparent, expand the tax base to capture lost revenue by taxing consumption (rather than income- which can be concealed), encourages savings, investment, and the re-patriation of overseas dollars (which spurs job creation) and puts all businesses and individuals on an equal footing rather than allowing the federal government to use the tax code to pick winners and losers and manipulate commerce rather than staying within its constitutional mandate to only regualte it.

    You say that the “fine print” of this 130-page piece of legislation and the Fair Tax books and literature conceal the fact that government entities must pay the tax as well? Where exactly did you ever see it stated or implied, fine print or otherwise, that ANY government entities would be exempt from it- or did you draw that erroneous conclusion on your own?

    The truth is, although I can’t recall any mention of state and local governments specifically, the second Boortz/Linder book makes it clear that; 1) no exemptions are to be provided for specific classes of purchases such as health care, for example, and; 2) that even the federal government, specifically, would not be exempt from the tax. I’d give you the page numbers, but my copies are out on loan presently.

    Furthermore, nearly every study you cite stating that the 23 percent rate would be inadequate (not revenue neutral) uses more Keynesian assumptions and fails to take into account that, even as your Georgia Libertarian candidate for US Senate Allen Buckley conceded, the economy would grow at a faster rate. Most de-bunkers of the Fair Tax also never address the increased consumption and production of an economy that doesn’t spend so much in time and resources complying with the current code, the difficulty in enforcing it, the size of the IRS and related government bureaucracy, etc.

    Buckley also asserts that it would be “difficult to administer.” Really? Are sales taxes “difficult to administer”? Even your citations from Chapter 8 of the report of the 2005 President’s Advisory Panel on Federal Tax Reform are deceptive in that the committee looked at a VAT tax- not the Fair Tax, and a VAT is assessed at every level of commerce, not retail-only (and does not include the prebate). Tell me, is that easy to administer? Yet many in Congress have endorsed or floated the idea of a VAT on-top-of the current tax system to help pay down the debt, and they don’t seem concerned that IT would be difficult to administer.

    And last, but certainly not least- even as you spend so much time and energy bashing the Fair Tax you offer no positive proposals for real tax reform whatsoever. You just call Fair Tax proponents “scum-sucking pigs” and “lying pieces of shit.” Real classy.

    The fact is, no one in their right mind who didn’t benefit from maintaing the current system would support it- it’s massive, complex, antithetical to economic liberty, and a drain on the country’s resources. It strains credulity to believe that you have anything other than a vested interest in attacking the Fair Tax when you spend NO TIME proposing ANY alternatives anywhere on your blog. And I’ll waste no more of my time arguing with you unless you have a better idea- because status quo simply isn’t it.

    -BP

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