Who has ordered it or who is planning on buying it? Going to Barns and Noble tomorrow to pick up my copy . I urge EVERYONE to get this book.
I'd like to know more too...
Pre-ordered mine on Amazon today
Abolish the IRS and replace the income tax with a national sales tax. That will tax everyone, and eliminate the fact that a good 1/3 or better of our country pays no taxes. It will also encourage personal savings, something thsi nation has gone way downhill in.
It will also eliminate the IRS as well as the power of the politicians to buy votes by simply eliminating people from the tax roles and making more exemptions, and for those under the misconception that the rich get out of taxes with loopholes this will be eliminated also, even though the facts show it is not the case.
It will also eliminate the condition where a large number of people, due to the Earned Income Tax Credit, get back more every year than they pay in.
The more you spend, the more you pay.
Food, a home, and some other things are exempt, and he makes a very strog arguement for the viability of it every time he speaks of it. If the book is anything like all his others and his show it will lay it out in a very rational and logical way that will be hard to argue against.
Here is an example of how he lays it out:
During yesterday's show a caller asked what would happen to her 401K funds if the Fair Tax bill became law. No income taxes had ever been paid on that money residing in her 401K. If, by the time she starts drawing that money out, the income tax is history, will she have to pay some sort of penalty? One month ago I would have rattled off the answer. No. No penalty. No taxes. You take the money and run. Yesterday, however, I was a bit more cautious. I've spent many hours over the past weeks studying the history of the income tax, the history of withholding, and various schemes for tax reform including, of course, the Fair Tax. I wanted my answer to be dead-on accurate, so I deferred until I could dive into the bill.
OK. Now I've done the research, and here's your answer: You take the money and run. No taxes. If you are sitting fat and pretty with a 401K plan or other deferred income plan when the Fair Tax hits you will be able to withdraw the cash with no penalty and no tax consequences. Not such a bad deal, huh?
I've been collecting questions about and objections to the fair tax. It is amazing how many people don't like the idea because they don't think that the rich will be paying enough in taxes. It doesn't matter that paying taxes will be voluntary under the Fair Tax plan. It doesn't matter that nobody pays the retail sales tax on the basic necessities of life. It doesn't matter that lower income Americans will virtually get a free ride when their entire federal tax liability disappears, including Social Security and Medicare taxes. What does matter? Some people are afraid the evil, hated rich won't pay enough. How dare these people work hard, make good decisions, and save all that money? How dare they achieve that much more than I have? Make 'em pay!
The Fair Tax can overcome a lot of things. I don't know how it can overcome the angry jealousy so many Americans feel toward those who achieved more than they?
Does not compute...
Imagine receiving 100% of your paycheck!
Neal Boortz (archive)
August 27, 2004 | printer friendly version Print | email to a friend Send
Two weeks ago a man stood up at a George Bush campaign appearance in Florida to ask about a piece of legislation known as HR25. Many, including myself, were pleased to hear Bush respond with some positive thoughts about the Fair Tax plan, a movement to replace the federal income tax with a national retail sales tax.
Washington is a city of inertia, and right now the inertia belongs to our present method of funding the operations of our government, the income tax. Politicians will not easily surrender a funding mechanism that lends itself so well to political demagoguery and which can be used to reward political allies and punish enemies.
The Fair Tax plan deserves a thorough public examination and debate. John Kerry seems dedicated to making sure this doesn’t happen. Soon after Bush cited the national retail sales tax as something worthy of further exploration, Kerry stepped forward with the typical class warfare rhetoric of the left. Acting as if he actually knew what was he was talking about (he didn’t), Kerry announced that the Fair Tax would amount to the largest increase in the tax burden on poor and middle income Americans in our history.
John Kerry was wrong. He was either speaking out of ignorance, or he was deliberately lying about the Fair Tax proposal in order to gain a political advantage. A politician lying in order to gain political advantage --- imagine that.
This column is lengthier than the norm, but I promise you that if you will invest the time it takes to read it you will be well on your way to becoming yet another rabid supporter of the Fair Tax plan. You will know that the poor and middle income Americans would be the prime beneficiaries of the proposal. You may even organize your own neighborhood march on Washington to demand that HR25 receive a fair hearing. In the next two minutes I’m going to turn you into a HR25 Fair Tax zealot. Read on:
First … the briefest of overviews: Simply put, HR25 would provide for the repeal of the 16th Amendment (the income tax amendment) and the dismantling of the IRS. All personal and corporate income taxes would end, as would all payroll taxes. There would not be one cent of federal taxes of any nature taken out of your paychecks. No more Social Security taxes. No more Medicare taxes. You earn $2,000 a payday; you get $2,000 a payday. The federal government would be funded through a national sales tax on goods and services sold at the retail level. No taxes on investments. No taxes on savings. You only get taxed on what you spend at the retail level. Store your earnings in a shoebox if you wish. They won’t be taxed.
When originally proposed, calculations showed that the sales tax would have to be in the area of 23%. A complete economic study is now being completed that is expected to bring that total to under 20%. For the purposes of this column, we’ll stick with the 23% figure.
OK … let’s put on our sensitivity hats for a few minutes here and think of the consequences of the Fair Tax Act on our nation’s poor, poor, pitiful poor. After all, they can hardly afford a 23% sales tax when they’re living paycheck-to-paycheck in the first place, right?
Bear in mind that for the most part those whom we define as “poor” aren’t paying any income tax anyway. In fact, many of them are getting checks from the government; a form of outright income redistribution. The absurdly named Earned Income Tax Credit, for example. How can these people survive going from a no-tax situation to paying a 24% sales tax on all their retail purchases?
The implementation of the Fair Tax would fail in short order if, as the question presupposes, nothing were to change except that all of us would be paying today’s prices for a gallon of milk or a loaf of bread, plus a 23% sales tax. But … that’s would be far from the reality under the Fair Tax. Under the Fair Tax the poor won’t only survive, they’ll positively thrive! The Fair Tax could turn out to be the best poverty-fighting tool devised in this country since the concept of hard work.
Let’s begin by considering two realities.
First, remember, please, that the poor, along with everybody else, will no longer have Social Security taxes or Medicare taxes withheld from their paychecks. Whatever they earn, they get on payday. For the poor this means an immediate 12 to 15% increase in their earnings.
Second. Don’t forget the 22% in imbedded taxes. These embedded taxes exist in virtually everything poor Americans or any other Americans have to buy. These embedded taxes represent all of the corporate and business income taxes and payroll taxes that the companies involved in the production, manufacture, marketing, distribution and sale of the goods and services must pay in the course of business. As soon as these taxes are gone, and after the competitive forces of the free market work their magic consumers, including the poor, will be paying at least 20% less for virtually everything they buy. This includes such basics as food, clothing, shelter and transportation. Yes... they’ll have to pay the new national sales tax, but when you factor in the lower prices caused by the disappearance of the embedded taxes you’ll see that the total price paid for consumer goods in terms of real dollars will fall or will remain very nearly the same.
So … just considering these factors, the Fair Tax delivers a winning hand to people living in or near to what we call poverty. They get every penny they earn on payday, amounting to a 12 to 15% pay raise, and when you factor in the Fair Tax and the lower prices, they’re actually end up spending less of their money for a retail purchase than before. What John Kerry calls the greatest increase in the tax burden on the poor in the history of our country is, in reality, their greatest tax reduction.
You need a clearer picture? Pull out your calculator. Let’s say that a single mother with two children spends $45 a week on groceries. The removal of the 22% embedded tax would bring the price of those groceries down to $35.10. The sales tax at 23% would be $8.07. This brings the total price to $43.17. That’s less than would have paid under today’s tax system. This single mother, whom we’ll consider “poor,” has just received a 12% to 15% increase in her weekly paychecks, and she’s paying less at the grocery story for her basic necessities.
So far, so good. At this point you should be thoroughly convinced that the Fair Tax would actually benefit, rather than harm the poor. But, then again, maybe not. Here’s the convincer. Brace yourself for the knockout punch.
Under the Fair Tax plan every consumer, rich and poor alike, will receive a check or an electronic credit to their bank account from the federal government every single month equal to the sales tax that person or that family would be expected to pay on the purchase of the basic necessities of life for that month. The size of the monthly payment will be based on the government’s published poverty levels for various sized households.
Here’s an example of how the rebate payments would have worked in 2003.
Let’s say you’re a married couple with two children. The Fair Tax Act sets forth a formula for computing the poverty level, based on government figures, which negates any marriage penalty. If the Fair Tax Act had been law in 2003 you would have been granted an annual consumption allowance of $24,240. This is what the government would assume you would have had to spend during that one year to buy the basic necessities of life for your family. The sales tax on this amount would equal $5,575. The government would have rebated this amount to you in 12 equal monthly installments of $465. What about a single woman with one child? Her monthly rebate in 2003 would have been $232. The lowest payment would be to a single person with no dependents. That person would have received $172 per month.
Now … bear in mind, this rebate isn’t only paid to the poor. It is paid to everyone, rich and poor alike. The purpose here is to make sure that no American has to pay the Fair Tax sales tax on the basic necessities of life. Unlike the present income tax system, the Fair Tax treats each and every person in this country exactly the same. This, of course, presents somewhat of a problem to politicians who like to use the tax code to foment class distrust or outright warfare.
OK … let’s add it up for America’s lower income citizens:
1. They get their entire paycheck.
2. Even with the sales tax, and considering the drop in prices, they’ll be paying essentially the same or less for everything they buy.
3. They get a check from the federal government every month to rebate any sales taxes they had to pay on life’s basic necessities.
Are you beginning to see just how far off-base John Kerry was with his intemperate criticisms?
Though most of the poor don’t have what we would call complex tax returns, let’s also include the time these they (all of us, really) will save by not having to keep tax records or file tax returns.
If you’re looking for some reason to oppose the Fair Tax plan, you’re going to have to find a better excuse than its effect on the poor. John Kerry might find it politically expedient to demagogue the issue for votes, but now you know enough to know what he’s up to.
For more comprehensive information on The Fair Tax you can visit www.fairtax.org
if they enact the Fair Tax as outlined, then great. My fear is they will put back in loopholes and we wind up with the same problems we have now.
Still it would shift the taxation to where it belongs: Consumption, not income.
I agree it would be a real mess if politicians try exempting people from the tax, but they can't really do that now.
It would be a huge net positive in my opinion.
Business's don't pay taxes.
They just consider taxes an additional expense and pass them on to the consumer, who ends up paying the taxes when they buy the companies product.
In the end, the consumer pays all taxes.
Right. Businesses should pay no taxes.
Only the final consumer should pay any tax. All business taxes do is artificially inflate the final cost of consumer goods.
Don't worry, most business OWNERS will pay plenty of taxes, in fact, far more than most other people if history is any indication.
JPFO has a lot to say about the FairTax: THE FAIRTAX: A TROJAN HORSE FOR AMERICA?
Esentially, they don't like it. This short write-up basically explains worst-case scenarios. They paint a grim picture, but I don't necessarily agree. All of the things they mention can and might happen, but compared to the current situation, I think the FairTax is worthy of consideration.
I really like the idea of the Fair Tax...I have always wanted a flat tax like they have in russia but the more I hear about the fair tax, the better it sounds. There is no way peope would go along with a flat tax (homeless pay 30% or so of what they make LOL) but this fair tax thing is downright awesome.
There are BIG opponents to this plan though. Namely the Demoncraps. They have to be against it because otherwise they can't scare their voters with "tax cuts for the rich" lines anymore.
Other big opponents as Neal mentioned on his show will be the armies of accountants that make a living finding the tax loopholes for the giant corporations. Also, some retail federation is coming out against it because they think it will cause poor americans (the ones that FUBU and basically the whole mall) to save more money.
I'm going to have to agree with the JPFO on this one.
We need to drastically reform the IRS and the tax-code, but a national sales tax is just asking for disaster.
Now here is something I can agree to:
From the JPFO website:
What type of tax do we propose instead?
Now comes the moment where we're supposed to propose our alternative. “Be constructive,” someone will demand. “If you don't like their proposal, what have you got to offer that's better?”
Here's our alternative: Nothing.
Ban the income tax, definitely. Banish it. Disband the Internal Revenue Service and auction their buildings to the highest bidder. Let all the IRS auditors, clerks, and armed enforcers get honest jobs.
But don't replace the income tax with any tax, of any variety.
The United States survived until 1913 without an income tax. It survived until World War II without wage withholding (a federal trick “for the duration of the war” that increased tax collections enormously).
The income tax has enabled and encouraged wild governmental spending sprees. And irony of ironies, the federal government has now gotten so drunk on reckless spending and its attendant debt that (5) an amount equivalent to all the income taxes collected west of the Mississippi River accomplishes nothing but helping pay the interest on that debt! You pay and pay and you're not even getting government services for your money. Just paying off debt that should never have been incurred – and probably wouldn't have been incurred if Americans hadn't been forced to hand over so much money to government.
If you want smaller government, then don't spend your time thinking of “better” ways to feed big government. If you want freedom, don't fall for ploys that simply enable to government to find new routes into your pocket and your life.
If you want to tame the beast of tyranny – starve it into submission. Ban the income tax. Trash the unFairTax. And put the government back on a leash.
If you are planning to order the book, please do so through AMAZON.COM. (No, this isn't a spam for Amazon) but apparently they are HIGH on the list of sources monitored for the so-called "Best Sellers" list.
The politicians are going to try to sweep this Fair Tax thing under the rug, but they can't ignore it if the book hits high on the "Best Sellers" list.
just my .02, nothing more...
Go read the plan, but basicly your business purchases at the retail level would be taxed since you would be the consumer of the goods, but good bought for resale or manufacturing would not.
All items would be taxed, but a rebate will be credited every month based upon the amount computed to have been taxed on basic sustinance, such as food, clothing etc.
It sounds out there untill you read it and study the concept.
“A National Sales Tax No Vote.”
National Review Online. August 9, 2004.
The rates would be vastly higher than what you might suspect.
House Speaker Dennis Hastert created a flurry of excitement in Republican circles the other day when it was reported that he is proposing the abolition of the Internal Revenue Service in his new book. This would be accomplished by eliminating all existing federal taxes and replacing them with a national retail sales tax.
There is no indication of what tax rate Speaker Hastert thinks would be necessary to replace all federal revenue. A current proposal by Rep. John Linder (R., Ga.) says that a 23 percent rate would be adequate. But such a low rate can only be sustained by making completely absurd assumptions about what would be taxed. Every serious economist who has ever looked at this question has concluded that a vastly higher rate would in fact be needed.
An unstated assumption is that the 23 percent rate proposed by Linder is comparable to existing state and local sales taxes, where the tax comes on top of the purchase price. Thus, a 5 percent sales tax on a $1 purchase comes to $1.05.
But that’s not the way the Linder plan works. He deceptively calculates the rate as if the tax is part of the purchase price. He calls this the tax-inclusive rate. Calculating the rate the normal way people are accustomed to with state and local sales taxes would require a 30 percent tax rate, not 23 percent.
When Congress’s Joint Committee on Taxation scored the Linder proposal four years ago it estimated that it would actually require a tax-inclusive rate of 36 percent, not 23 percent, to equal current federal revenues. Calculating the rate in a normal, tax-exclusive manner would mean a 57 percent rate.
Economist Bill Gale of the Brookings Institution notes that supporters of the sales tax assume that there will be no tax evasion under their proposal and that the size of government will not grow, even though they would send a large annual check to every American in order to offset the regressivity of the tax. Making realistic assumptions, Gale estimates that the tax-inclusive rate, comparable to Linder’s proposed 23 percent rate, would actually have to be about 50 percent. A rate comparable to existing sales taxes would be close to 100 percent.
And let us not forget that state and local sales taxes would come on top of the federal sales tax, pushing the total rate even higher.
Obviously, the federal government is not going to impose tax rates this high, nor would anyone pay them if it did. There would be a massive tax revolt.
The Linder bill (H.R. 25) is also deceptive in its basic assumption that all consumption of goods and services in the U.S. would be taxed. Implicitly, Americans would be taxed on, among other things, all medical care, purchases of new homes, and services provided by state and local governments if Linder’s bill became law.
This means that if you are sick and have large doctor bills, you are going to pay 30 percent on top to the federal government. (Alternatively, you would pay 30 percent more for health insurance.) If you buy a new house listed for $150,000, your actual purchase price is going to be $195,000, including the sales tax. (Alternatively, there could be a tax on the imputed rent homeowners pay themselves for living in their own homes.) And if your children receive $20,000 worth of education each year from the local public schools, somehow or other you are going to have to pay an additional $6,000 to the federal government.
Of course, it is completely idiotic to think that the American people will ever allow this to happen. The idea of taxing all consumption sounds nice in theory until you realize just how broad the definition of “consumption” would be under Linder’s plan.
Economist Evan Koenig of the Federal Reserve Bank of Dallas makes the point that any new sales tax is going to raise prices by that amount. If the Federal Reserve accommodates it, we are going to have 30 percent inflation the year the tax is introduced. If it is not accommodated, then producer prices are going to have to fall by 30 percent, which will cause a severe recession and greatly reduce the tax yield.
Somehow or other, Linder has gotten 54 House members to co-sponsor his proposal. They should all pray that their opponents overlook their poor judgment. When last the national retail sales tax was a major campaign issue — in the 1996 senate race in Louisiana — the Republican sales tax supporter was crushed by his anti-sales-tax Democratic opponent. That may explain why only two senators support Linder’s plan, one of whom is retiring this year.
With all due respect to Speaker Hastert, trying to eliminate the IRS by adopting a national retail sales tax is a very dumb idea.
Just remember, when you buy that ream of paper you are paying a state sales tax, not a federal sales tax. A federal sales tax will not necessarily remove state sales taxes.
The above shows how most people have no clue how taxation works in this country.
Take the example of the medical bills. The author forgets to mention that your medical bills already include loads of taxes that are hidden, including all the payroll taxes for everyone from the doctor, nurses, aids, medical billing assistant, janitors, you name it. All that jack up the cost of the operation and are passed on to the consumer anyway..... medical bills are not tax free, the taxes are just hidden and the ignorant, such as the above author, fail to see that act.
So long as the majority of people are ignorant of how taxes work, articles like this will serve to scare folks without actually addressing the facts.
1. Social security taxes do not come close to 30%.
2. If you think service providers will drop their prices 30% over night I think that is a foolish assumption on your part.
3. You are an internet expert and claim Bruce Bartlett doesn't know about taxation?
4. You were too lazy to even google him and find out about him.
Now lets look at Bruce Bartlett's credentials, shall we?
Bruce Bartlett is currently a senior fellow with the National Center for Policy Analysis of Dallas, Texas. Before joining the NCPA, he was deputy assistant secretary for economic policy at the U.S. Treasury Department, where he served from September 1988 to January 1993. In 1987 and 1988, Bartlett was a senior policy analyst in the Office of Policy Development at the White House.
From 1985 through 1987, he was a senior fellow at the Heritage Foundation in Washington, D.C.
Between 1976 and 1984, Bartlett held numerous positions on Capitol Hill. In 1976, he served on the staff of Rep. Ron Paul of Texas as a legislative assistant. In 1977, he joined the staff of Rep. Jack Kemp of New York as a special assistant and staff economist. While with Kemp, Bartlett helped draft the famous Kemp-Roth tax bill. Between 1979 and 1980, he worked for Sen. Roger Jepsen of Iowa as chief legislative assistant. In 1981, Bartlett joined the staff of the Joint Economic Committee of Congress as deputy director, becoming executive director in 1983. Bartlett is a prolific author, having published over 900 articles in national publications, including The Wall Street Journal, The New York Times, The Los Angeles Times and The Washington Post, as well as many prominent magazines such as Fortune. In 1996, one of his columns inspired Bob Dole's 15 percent tax reduction plan.
Bartlett has also written for important academic journals and published four books, including Reaganomics: Supply-Side Economics in Action, published in 1981.
So we can take the offhand comments from an internet expert, or we can listen to a real expert like Bruce Bartlett.
Neal boortz should stick to talk shows.
He is ignorant of basic economics.
I heard him explian the cost of goods to a caller. Neal used gasoline as an example.
Station owner starts out and fills his tanks with gasoline paying the going rate.
The next day the wholesale cost of gasoline jumps by $0.25 per gallon.
Good ole Neal says that the station owner has to increase the price of the gas he sells because he is going to have to pay $0.25 more per gallon when he refills those tanks.
Sorry Neal. The cost of the gas ALREADY PURCHASED did not change, and the dealer will STILL make his profit WITHOUT increasing the price of his gas. If the station owner increased his price by $0.25 per gallon he would be making extra profits that he wasn't even counting on. Now that is fine, but it didn't HURT that station owner if he sold his gas at the lower price.
Now when the station owner REFILLS those tanks at the higher price he will have to adjust his selling price at the pump to make his desired profit.
Neal Boortz would not pass Econ 101 with that type of reasoning.
And you guys are listening to Boortz and latching on to his flat tax craze.
OK, so he knows about taxes, and instead is using the average Americans ignorance to his advantage. That is even worse.
Will service providers drop rates? If you believe in the free market model, they will simply due to competition. Granted, the medical field is so heavily regulated that it is hard to say it is even still a free market, but I would expect the prices would still drop, simply because insurance providers would know that overhead dropped and expect thier payouts to drop just the same.
go to www.fairtax.org and you will see plenty of economists with excellent resumes as well who support it.
you get X amoutn of dollars per year (in 12 monthly payments) based on your family size to compensate for those things.
everyone gets the same amount so if you choose to live the high life, the government doesn't have to finance it.
Your whole gas example is weak, and your logic flawed, and here is why.
You assume that he can sell that gasoline for the lower price untill he refills, then raise his price. True, he could. But you forget that gasoline, like all commodities, fluctuates. That means it also goes down.
Under your example, if gas goes up .25 a gallon and he keeps it at the same price untill he refills his tank he is not hurt. But as I said, gas fluctuates, and will go down.
Guess what happens when gas drops .25 a gallon. Under your example, he will have to sell at the old price. After all, he sold at the old price when it went up, and if he does that but drops when the price drops he ends up losing money over the path of the fluctuation. And with everyone else basing prices on the commodity price, he will be .25 a gallon higher than everyone else. How long do you think he will stay in business? But if he raises as soon as wholesale rises, and drops as soon as it drops, over time the whole margin evens out.
So what would you have him do? Lower prices as soon as they drop, but not raise prices when they rise? That is unrealistic and bad business. When you sell a commodity that fluctuates, you have to base price on what your replacement cost is, not your purchase price.
Don't talk about how well others understand economics when you do not even understand how to sell a commodity.
Call me cynical, but no matter how straightforward it might appear in some radioguy's book, the same old shit will happen.
1) Those with "enough" money will find loopholes.
2) Those with "no" money will continue receving checks, some percentage of this group will still be frauds.
3) Everyone else will continue to get screwed.
I will certainly talk about your lack of understanding of basic econ 101.
First of all, you are still lazy. You didn't check out Bruce Bartlett before you said he knew nothing about a subject about which he is an expert. Now, you don't read very carefully. It was not MY example, it was Boortz's example.
What BOORTZ said ( you got that? BOORTZ, not I ) was that the station owner HAD to sell his gas at a higher price because his COST OF GOODS SOLD had increased.
This is BASIC ECONOMICS.
His cost of goods sold does not increase until he BUYS at the higher price.
Boortz doesn't understand that, and evidently neither do you.
His COST for the gasoline is WHAT HE PAID. That SHOULD be easily understood. And that is why it is BASIC economics.
If the going price for gas goes DOWN in the future, his COST remains unchanged. If the going price goes UP in the future his COST is STILL unchanged.
His COST is STILL what he PAID for that gasoline. And he makes a GROSS PROFIT ( or LOSS ) based on his PAST cost of product, not his FUTURE cost.
When he refills that tank, his COST will be whatever he had to pay per gallon of gas. He will then adjust his retail price to obtain the GROSS PROFIT he desires.
For the gas already in the tanks - what the station owner decides to do to the retail price of gasoline after wholesalers increase his wholesale price is simply a decision that station owner makes.
He can be content with his normal profit and sell based on his cost, or he can take advantage of the fluctuation in price and make more profit.
BUT HIS COST OF GOOD SOLD DID NOT INCREASE FOR THE GAS HE ALREADY BOUGT - and THAT is what Boortz said happened and he used that to justify why the station owner HAD to increase the price of gas that he had ALREADY PURCHASED at a lower wholesale price.
Here's the flashing-red-light, OMFG, Achilles Heel of the Fair Tax:
I suppose that the income tax system we have now didn't start out as the vote buying/assuring scheme it has become, but grew into such a scheme. NOTHING will stop the "Fair Tax Rebate" from creeping up and up. Politicians will be unable to resist promising a higher and higher rebate to gain votes while "assisting the poor." Maybe the rebate can be tied to the Consumer Price Index (CPI) or something, but I very seriously doubt it. Not linking the CPI to the Fair Tax Rebate will be required to gain enough bi-partisan support for it to pass.
Right and wrong; good and bad; stupid and smart has ZERO to do with American politics. Doing what it takes to get elected is the ONLY thing that matters.
Folks, the income tax isn't the problem; every Tom, Dick and Harry voting is the problem. The Fair Tax--or any legislation--will fall prey to vote buying. Count on it.
Bruce Bartlett is WARNING you and other proponents that you are not going to get what you think you are getting.
You ignore him at your peril.
The interest in the flat tax comes from one thing - nearly everyone hates the IRS and federal income tax. And, with good reason.
But if you think that the flat tax is going to be BETTER, you are naive. It will not end up in the form that is being bandied about.
But even in its proposed form it is socialist, it diminishes privacy, it will even encourage more lawlessness, it will encourage more government intrusion into our personal lives....... It is socialist in nature because every household will be on the federal dole. It will diminish privacy because the .gov will discourage or eliminate cash in order to curtail the lawlessness that will occur when the black market expands. And as the elite make decisions for us about what he should or should not buy, they will adjust the sales tax on those items.
It is a mess.
I believe the old saying goes like this.... Out of the frying pan and into the fire.....
Your right, what he paid for the gas already in the tank did not change.
But you still fail to grasp the whole concept of selling a commodity that fluctuates in price like gas does. To remain competative, if prices fall you must drop as soon as they do becase your competiton will, either because they understand how retail works or they simply refilled thier tank before you did (assuming the real world of business works like you assume it should, when it does not). So therefore you must tie any price drops into your retail price asap. In order for that to be a viable option, you must tie in increases as well.
You keep saying the station owner can "take advantage of the fluctuation in price and make more profit" yet you fail to grasp that he in the long run will not make more profit because station owners drop prices as soon as the wholesale price drops as well, they do not just do it whe it would be to thier advantage. In the end it all balances out.
I did not hear the discussion in question, so I can't say for sure what he said. But I can tell that if you actually think a gas staion owner could run his operation like you say, your gas staion would be bankrupt in under a year.
You have no clue.
You can't even deciede what kind of tax we are talking about.
Nobody here mentioned the flat tax, which says every person pay X% of thier income.
Yet here you rant against it. Or can you just not get the basic terms of the subject straight?
Have you read the specific proposals? I see the tinfoil creeping out in your arguements now..... banning cash, the elite deciding what we will buy.... I guess I am crazy but seeing what the IRS is now, I will take its destruction and fight what you predict should it begin to come about. It is a better start than what we have now.
I figured the only people who would actually oppose this, other than democrats, were accountants and tax lawyers and others whose entire living is made by helping the masses with the huge system..... do you fall into that category perhaps?
You're a great American.
Oh wait, wrong guy. Or is it...?
Anyone who thinks the politicians (who are also potential "FAIR" tax payers, too) and the fattest of the fat cats will allow the tax system to be simple and "fair" had better get hit the bottle a little harder.
Being taxed on consumption rather than production makes sense.
Consider how the costs of goods and services are affected by employers having to deal with tax obligations. If these business expenses were eliminated, the market would drive costs accordingly.
It took me a while to come around to this concept because I initially equated this national sales tax with the luxury tax that almost killed the U.S. boat industry a few years back. However, if the cost of the product drops, then the end cost (post-tax) to the consumer wouldn't be much different than it is today.
Note: I'm not an economist, nor do I play one in the movies.
Has anyone heard Walter Williams' take on this?
Do you really believe that "Republicans" won't be against any fair tax system, too?
You have a point about the nature of the beast, but look at it this way. Even if what you say is true, this plan will set all previous vote buying legislation aside, and at least force the politicians to start over. And gives us a better starting point to fight from.
The proposal now calls for the rebate to be the poverty level as determined by the Department of Health & Human Services’ poverty level multiplied by the tax rate. Is it perfect? No.
Is it better than a tax code so huge no one person or even 10 people can understand all of it, and we must hire lawyers and accountants to navigate it for us? A tax code so complex that an audit found calls to the IRS help line asking questions were often aswered incorrectly because the people who enforce the law do not understand it? This would replace the entire US tax code witth a law that is under 200 pages.
It is to me.
Its not perefct, but its a start. And better than the system we have now, unless you are a parasite who makes his living off the comlexity of the current system.
Looking at the list of cosponsors so far for HR 25, it would appear not..... and the momentum for this is just getting going.
It sounds like you care more about the price of gas than you do about a good replacement for the current shitty tax system.
No, what I care about is one of the main proponents of a flat national sales tax is clueless about basic economics.
You keep referring to the example of rising prices as if it exists in a vacum. If you only take that one short time period into account, than sure your theory works.
But in the real world in the long term it does not.
You see, if a station owner does like you said in the end they face a lose-lose situation.
Say Monday gas is $1. The it rises to $1.25. Under your example the owner would sell at $1 untill Wed when he fills the tank the raise the price to $1.25. (this price is simplistic and assumes a set profit per gallon measure in cents and not percentage, the wrong way to do business but we will keep it simple for the example). Then Friday comes and gas goes down to $1. However, our hero won't be refilling again until Wed..... so what can he do?
If he continues to sell at $1.25, few people will buy gas from him. Therefore his profits will drop from lack of additional sales on other items, and he will hold on to the overpriced fuel longer because it sells slower, therefore hurting his other sales longer.
If he drops down to $1, he stays competative, but he is losing money on each sale.
However, if he raised prices as soon as they went up, and then lowers prices as soon as they drop, the net increased profit from the raise will offset the net loss from the drop more or less. Over time the two will average out fairly close as gas goes through up and down cycles.
Over time, using your method, net losses, or at best net reduced profits, will be the result from every up/down cycle.
No, I see exactly what has happened. We have a tax code now that is huge, complex, 54,000 pages long, and by all means sucks.
And I see a chance to knock back all the evil that was done by politicians buying votes with tax exemptions back to zero.
Will they try to do it again? I would bet on it.
If we leave the existing code in place, will it just get worse? For sure
Am I willing to take a resetting back to zero? Hell yeah, it makes it easier to fight when you start close to the ground you want to sieze and hold.
Without arguing the premise of your point, doesn't it bother you that the proponents of keeping the current system are totally clueless about economics?
If the current tax system is changed into anything even remotely fair or better, and if the IRS is even downsized let alone eliminated, watch out for low-flying pigs.
I wish I had heard the show in question, so I could comment on it directly.
But assuming he said what you claim, he may have explained the reasoning poorley, but in the end what he explained was the only competative way for a station to operate..... I know a little about the industry, and selling a fluctuating commodity like gasoline is not the same as selling shoes.
I still maintain that while the system may have, like any system, potential for abuse it still is better than what we have, and resetting the perks done by politicians via the tax system back to zero would be a huge step.
An added gain is that illegal immigrants who work for cash will still end up paying taxes to buy food, gas, and everything else.... and not get a refund on any since they do not hold a valid SS#.
Yep. Eventually you'll get the calls from politicians that 'luxury' items are taxed at a much higher rate.
Want that boat? Pay a 40% tax on it.
Want that H1? Pay a 55% tax on it.
Can't have those darn rich buying up toys.
Yeah. Aren't we all still waiting on cheap EBRs and standard-capacity magazines after the sunset of the AWB? With the sunset of that law and the artificial shortage of these items that was imposed, shouldn't the competitive forces of the free market system have corrected this with its magic and rocketed prices to the bottom?
I hate to say it, but my faith in the power of the free market to correct these sorts of things is rather limited.
You are making a BIG mistake. The proponents of the current system know economics very well. You should not underestimate the enemy.
This is not about economics as much as CONTROL.
The real issue should be about the SIZE and POWER of government. The method of taxation is a secondary matter. If the size and scope of government was where we want it right now, federal income tax would be a non-issue.
Want a flat sales tax? In consumption fixated America? Government will GROW and have MORE POWER and CONTROL than it now has.
You don't really think your government will allow a system to exist that DIMINISHES their power and influence, now do you?
The only way the .gov will allow a flat sales tax is if it INCREASES what THEY want.
You can see that in your city gov., your county gov., your state gov., and your federal government. ALL want MORE money and MORE power and MORE control over your life. Whether they are republican or democrat is beside the point.
Today's "conservative republicans" are yesterday's liberal democrats.
Yeah, if you listen to politicians when they're at home they all cosponsored the 10 Caommandments, too. Let's see it passed and implemented without being watered down and without enough loopholes added to rival the current tax code. Theyre all gonna be for it while the issue is hot. They know that most of us will give up or forget before they would ever have to be accontable for inaction.
How will it have more power? As it is the government siezes a portion of every paycheck, demands to know how much money we make, and takes a chunk of every profit or wage we make.
So what your saying is we may as well just sit back and watch the current system grow because we are all powerless to change anything.
Your tinfoil is crinckling again.
54,000 pages of tax code to under 200. Elimination of all of the past political vote buying tax laws. Elimination of the IRS.
Is it perfect? No. Is it better than what we have now? Hell yes. Does it set us in a better position to fight future abuses? When every american can pick up and read the whole tax code a few hours , they can understand it and see whats happening and react to the small cahnges that our parents and grandparents allowed to grow into 54,000 pages.
The system needs a reset.