We need to kiss and make up. Really, we do. As I understand it Dave said on his show yesterday that he got it a bit wrong when he wrote about the FairTax on Townhall.com. Now I'm trying to get him on the air so we can swap some spit. No problem, Dave! All's well.
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What others are saying
income reporting
Joyce, under HR25 the determination of social security benefits does not change - it is still based on income that is reported to the SSA.
If the income tax goes away and the Fair Tax is implemented, everyone will have an incentive to over-inflate their reported income to maximize their social security benefits. The ONLY way to avoid this is to continue income audits the same as is done under the current income tax system.
Income reporting under HR25 takes on a very different focus, but it is still very important.
mistake on last post
Not "HR25 becomes moot", but reporting.
duh, fingers got in the way
Sound familiar
Several of the last posts here have the same tone and style of writing, me thinks someone is trying to carry on a conversation with themselves.
Buying items overseas still requires shipping it in to the states. I'm sure you would be required to produce a bill of sale at customs and at that point you would have to pony up the tax, so that would NOT work. Just like the yacht in my earlier example.
And I believe if IRS is abolished, then HR25 becomes moot. However, if people still want to contribute to Social Security, then those could still be payroll deducted. And remitted to Social Security Administration instead of to the IRS.
See, no need to complicate things. Just know that the price of everything will come down. Now if you are buying something and want to get the biggest bang for your buck then shop wisely. 23% of a smaller amount is so much better.
income reporting under HR25
Re: Reason @ 05/07/09 11:54:14 PM
In fact, HR25 requires income still be reported to the government. Ostensibly for social security purposes, but who knows what other uses they would find for it. "Tax exemption ID cards" so "the poor" can buy food and clothes sales-tax free! And with folks like Obama and Pelosi in office, it could easily come to that.
Ultimately, ALL arguments in favor of the Fair Tax boil down to ONE common theme: trusting the government to not change one single word of the bill. Ever.
*cough*
Brad
Now see Brad, you took the math and went backwards with it. The dollar would be worth 22 times it's value today, not 1/22 of it's value.
buying overseas
JR, I have studied HR25 extensively and never thought of the foreign purchasing angle. There is NOTHING in the bill to get at those purchases, so yes, it seems likely many people would indeed start buying overseas. Especially those who live close to the border with Canada or Mexico.
So much for "supercharging" the economy, looks like it will destroy the economy. And the real estate sector doesn't need foreign competition to implode, as recent events have demonstrated...
The Fair Tax - just another bad idea in a long history of bad ideas for methods of taxation. There's a REASON why the current tax code is so damn complicated - ANY tax system is prone to avoidance and evasion and the number of rules need to grow and grow as ever more methods are found to avoid and evade. The Fair Tax would be NO different - give it a decade or two and it would bloat out to absurdity in size. It is the inevitable reality of all tax code.
some corrections are in order...
LiberalHater: I agree that the Federal Reserve is full of "stuff." However, your assertion that "A meager $10,000 salary at McDonalds (where Gavin Volaire works) would actually be worth $220,000 if the Fed didn't exist" would only hold true if a McDonalds worker was paid $10,000/year in 1913. It would have been more like $300.
Rob, NC: You said: "people will see everytime they purchase an item how much their government actually costs." This unfortunately won't be true unless it is part of the law that retailers write on the receipts how much of the purchase went to the government. That might be a good idea. The FairTax as written has the tax included in the price as posted on the shelf at the retailer (that is why the discussion about "inclusive" vs. "exclusive" tax reporting comes up). The tax is not added at the register the way current sales taxes are done.fl7e8
Fair tax on Neal's show
Truthseeker, it is not true that Neal refuses to allow FT opponents onto his show. But sometimes that's not the best way to highlight the other side of the issue. A discussion between him and Hewitt would be beneficial for all. Second best would be an essay by Boortz examining Hewitt's & Adler's contentions in detail. Yelling and calling people stupid does not advance much of anything (other than division among conservatives).
Thank God I'm not the only one...
...who sees the "Fair" tax for the bilge that it is.
The Boston Tea Party resulted from a roughly 3% stamp tax on just tea.
Import tariffs that are nothing approaching the confiscatory rates we see now led to the so-called "Civil War" (i.e., The War Against Southern Independence; The War Between the States).
Now these bozos continue to trumpet, "The IRS system is outmoded, but we're fine with a 30% consumption tax."
Rob
Don't be naive. Of course they'll be able to screw with the prebates. The fact that we don't report income for tax purposes won't stop anything. They'll say "If you make below this income, you can get a larger prebate." Then all you have to do is sign up for it and present your W-2 to prove your income. Bingo!
The FairTax is all well and good, but it's not perfect. And NOTHING is beyond being manipulated and distorted by those in power to serve their needs.
Fairtax?
What is to keep the evil selfish rich from buying everything offshore? Only their homes must be purchased in the US. Everything else could be bought in another country. Huh... Huh?
Allen Buckley gets it right
Allen Buckley wrote a lengthy critique about the Fair Tax and doesn't resort to any of the stupid non-arguments you hear Boortz allow on the air. These kinds of legit criticisms would never make it onto the air, if only because they are too involved to get through in the amount of time that could be dedicated to a caller, assuming Boortz even wanted to hear legitimate and bona fide criticisms of the bill in the first place.
There are a few things Allen doesn't emphasize nearly enough, and some things I'd have preferred he not dwelled on in such detail, but overall he does get all the key points into the article.
Really people, stop reading the book or the website or listening to what Boortz has to say about the bill, you should actually read the bill with your own two eyes and formulate your own personal opinion based on that first-hand knowledge. Don't let others form your opinion for you! HR25 isn't all what you think it is. It *could* be made better, but those who advocate the bill are already far too emotionally invested in it to want to change it even one iota. I know this from dealing with Fair Taxers day-in, day-out on various mailing lists. Any alteration of it is unthinkable to these people, even though the bill as written is inviting disaster. *sigh*
I'm reading. That HR1207 is a Ron Paul push, interesting. I've read a little on it but will be reading more and posting it on my blog too.
Thanks
Abolish The Federal Reserve
Oh, did I forget to mention three very important facts about The Fed that you may not know???
1. The Federal Reserve is a privately owned company, controlled by a board of bankers, and is not part of the U.S. Government. They are contracted to the U.S. Government to handle all money policies. Check out Lewis v. United States, 1982, in 9th Circuit Court of Appeals.
2. Since the Federal Reserve is a private company, they pay NO TAXES. That's right. They're a private corporation and they pay no corporate taxes. Ever wonder how much money they have coming and going out of there????
3. The Federal Reserve Act of 1913 states that, at any time, we can opt out of the contract with them for only $450 Million. That's $25 per American. That sounds much better than the $36,000 per American that is owed today!!!
Screw the Fairtax or any other tax
How many times do people who actually do the homework have to drill it into your heads?? Let me say it one more time, "HR1207 Federal Reserve Transparency Act". Do the math people. The Federal Reserve System has been tacking on, what is now $11 Trillion worth of debt and is growing every day. The U.S. Dollar was worth 22 times it's current value before the Federal Reserve Act of 1913 was passed (that is a completely accurate number by the way).
Let me put it into layman's terms for those of you that are government schooled. A meager $10,000 salary at McDonalds (where Gavin Volaire works) would actually be worth $220,000 if the Fed didn't exist. Are you with me so far??? Good....
Now, currently, the amount of money we're paying the Federal Reserve EQUALS the amount of money taken in by income and payroll taxes (another fact, go check it out). By abolishing the debt and restoring coining money back to the American People interest and debt free, we abolish the need for income and payroll taxes.
Once again, to put it into layman's terms, WE ABOLISH THE NEED TO REPLACE INCOME AND PAYROLL TAXES WITH ANY OTHER TAX SYSTEM. Let's ABOLISH taxes, not replace them.
JD here is why it works
JD those people MSNBC would try to parade around would be getting a check every month with the prebate instead of once a year like EITC so the amount of "gov't money they'll be getting would go up, not down. Furthermore to those who say the government will mess with prebate amounts based on income it couldn't be done because people would no longer be reporting their income, because it would no longer be taxed. And yes the real reason I support this thing is because people will see everytime they purchase an item how much their government actually costs.
I don't think that the FairTax would have as much an impact on the market for used goods as some on here seem to think. True, you wouldn't pay the FairTax on used goods, but you don't pay sales tax on them currently, either. That combined with the fact that retail prices will be more or less the same after the FairTax, due to embedded taxes washing out of wholesale prices, means that the relative values of new vs. used goods would be almost constant.
To Casey
I'm no expert on the fair tax, but my understanding is that EVERYONE will get the pre-bate and for the same amount. And to prevent politicians from jacking around with this it could be included in the amendment to abolish the current tax system and implement the new one that it will take 4/5 majority to change the pre-bate.
Now go to Staples and get yourself a "that was easy" button.
FairTax Senior Moment?
Maybe Dave ramsey just had a senior moment. I know I am increasing in frequency. Too bad it may have come out wrong in an article with wide circulation.
Thanks Fred
Thanks for the feedback. If the answer is to "educate" the poor or for that matter educate any American on any tax system, we might be in trouble. As Neal has pointed out, most Americans are not even aware what they pay in income taxes.
I still can see the MSM dragging out the family that used to get an EITC refund of $4800 every year that now gets zero under the fairtax and the cries would go out that it only helps the rich and penalized the poor. Whether or not that is true, it would not stop the MSM from reporting that.
How about one better than the fair tax? Eliminate the income tax all together!
yes JD you are missing something...
it's the whole fair tax book that boortz and linderman co-authored. the book explains, in great detail, but in vernacular language, the very issue you raised. for a short answer, essentially everyone below poverty gets a check from the government every month that covers their expected fair tax spending up to the poverty level. the critics of the fairtax constantly bring up this "unfairly taxes the poor" issue, yet research and reading shows their argument to be unfounded. like many problems in our country today, the underlying problem is being either uninformed, or misinformed.
Dave is a class act.
Hey, JD, the answer is to educate people on the fact that those people who pay little or no taxes will still be paying little or no taxes; people living near or below the poverty line will actually have INCREASED spending power even if retail prices don't drop (party due to the fact that the FairTax covers medicare and SS taxes, too). Given that retain prices would likely drop some amount (although not nearly as much as FairTax proposers suggest it might), those people have even more buying power than they possibly could have had before.
I heard Dave on his show yesterday, and he expressed interest in having Neal on; obviously the feeling is mutual. It was distressing to see two "pundits" that I agree substantially with to be seemingly at odds with one another, but after reading the "article," it was obviously a simple misunderstanding.
Dave's a good guy, supported Huckabee, and loves the idea of the FairTax even if he's got some details wrong.
Dave's all about getting people out of debt and KEEPING them out of debt. One thing is clear - you can pay off your debts a LOT faster if you're doing it with untaxed dollars, and Dave knows it.
Used goods are tax free
Can you be truly happy with oats that have already been through the horse?
Fair Tax
The question on "the poor" has already been addressed with the prebate that would occur every month for the lower income. However if we can bring back the companies that fled because of the oppressive tax system and foreign companies the want to move here, "the poor" will have a job!!!
Prebate == Free Money
What will happen when the Fed government starts changing the amount prebated to folks depending on your income bracket instead of based off of est sales tax for necessary good? Ie., there is nothing to prevent the government from giving a disproportionate amount to lower income folks (kind of like the EITC now) claiming they have higher cost. This will simply be another way to buy votes...
The "FairTax" rate
if it were really implemented, the "FairTax" rate would likely be higher than 23% - possibly closer to 33%. It doesn't matter - it would definitely raise the question in the mind of the taxpayer "WTF does gub'mint cost so freaking much, especially considering what I get in return?"
Truthseeker? Really?
Neal Boortz did not invent the Fairtax, he and John Linder co wrote the book. Economists put their heads together to come up with the idea. If they are saying it works, that's a pretty good endorsement. If Neal and John Linder found it flawed, I don't believe they would support it. But Truthseeker and Steve clearly know more about it so we should go with their indepth analysis. I hear you guys are tackling Constitutional law next. How lucky we are to have such highly qualified reader/commentors in our midst. I feel I should bow down and declare myself 'not worthy'! Too bad I have to get back to work so I can't watch your arguement fold like a cheap suit.
Question about the fairtax
How do you convince folks that currently pay zero income taxes and get refunds in the thousands via various refundable credits like the EITC, that a change to the fairtax benefits them?
It would seem to me that all the MSM needs to do is parade some poor family out on the stage and show they no longer get these refunds and the old mantra starts that it does not benefit the poor. I am not an expert on the fairtax, but am I missing something?
Swapping Spit with Dave Ramsey
Neal, if swapping spit with Dave Ramsey will get us another step closer to passing the Fair Tax--Swap away my friend!
Boortz is Afraid
Boortz is afraid to debate Hugh Hewitt on the FairTax.
(Don't you Kool-Aid drinkers understand why Boortz only let's people on his show that agree with the FairTax? Because it won't hold up to any actual scrutiney.)
Used Goods?
Steve O poses a good point. If the fairtax were ever implemented, the used goods market, ebay, craigslist and the like would most likely have huge increases in traffic, at least initially. However, that's not necessarily a bad thing. The people selling used those used goods, would most likely turn around and buy new items with that money. It's a win-win for everybody, including the gubmint.
Gracious
Neal has class... he could have ignored this topic, but conceded that Ramsey's article might not have been a slam on the Fairtax after all. An interview (on either show) would be very entertaining.
YES... PLEASE take Hugh down
Seriously. When I heard him talk about the problems on Medved's I was shocked. He didn't raise anything that you hadn't already shot down and he did the usual rewrite the bill first thing.
Steve O
Steve can you think of one way that people could get away without paying a sales tax? Used goods will only get you so far. Everyone is getting a check upfront for the poverty level so you would at least spend up to that. Who is going to go without their electronic gadgets, entertainment, cars. I always buy used, but I think most people buy new.
I can't see anything to be "enforced".
It's a change in the way we think. We would no longer be answerable to the government which we shouldn't have been to begin with. They would be totally answerable to us!
Dave and FairTax
I'm so glad to hear Dave is taking a (first?) look at the FairTax. He has been my financial hero and I always assumed he would be a huge advocate of the FairTax. I gotta say it did feel a little like a brick was thrown in my face when I learned Dave Ramsey wasn't up to speed on the FairTax and didn't think it was all-that. Thanks for reconsidering, Dave and thank you, Neal, for talking to him. Kudos to you both. I feel much better :-).
Reply to Steve O - "call me unconvinced"
Steve O, There was a time in this country that most considered independance a fantasy. We have to get up and do something BIG if soemthing is going to change.
When wrong
hard to find a man that can admit when he is wrong these days. dave ramsey is great, he would be an awesome advocate.
Call me unconvinced
If Fairtax has any merits as described by Boortz, by the time it was implemented by Congress it would be butchered into something worse than what we have today.
Getting rid of the IRS is a fantasy. Does anybody seriously think enforcement wouldn't be needed anymore?
Yay!!!
Can't wait to hear him.
I don't think most folks got the issue yesterday but glad it will be discussed.
Fair Tax
Neal, the Fair Tax is great. The math is easy but that doesn't mean it is always intuitive. Not everyone gets it. Take some different approaches to explaining it and keep going! MindYourOwnDamnBusinessPolitics.com
Hugh Hewitt
When are you going to do a take-down on Hugh? He's all wrong about your 23% tax rate.
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