Neal has headed out for a little R&R. Jay Severin will be filling in a bit on the air and the Nuze has been left in the hands of the webwench. None of you want to hear my views on politics so we'll be staying away from that. Instead, expect morning sickness style stories, entertaining tidbits, maybe a few nerdy things and whatever else I might find on The Internets. If none of this interests you, then come back September 19th. Neal should be well rested and "loaded for bear" as he'd say.

Neal checks in!

THE FAIRTAX --- STRAIGHTENING OUT SOME CONFUSION

When Congressman Linder and I were busy researching and writing The FairTax Book we knew full well that it would one day become the focal point for those opposed to this tax reform idea.  We tried, therefore, to make sure that our numbers and claims were correct and consistent with the research that went into the drafting of HR 25. 

On review, and after reading the critiques of opponents to the FairTax plan, we have concluded that there is one element of the FairTax that could have been present with more clarity in the book; the concept of embedded taxes and keeping 100% of your paycheck.  Those who have much to lose if the FairTax were to become law will focus on these areas in an attempt to undermine support, so let's put their objections and distortions to rest by addressing those matters here and now.

We explained in the book that the FairTax plan was revenue neutral.  By this we meant revenue neutral for everyone ... the government, businesses and individuals.  You can't put more money in the pockets of one without taking money out of the pockets of another.  The harsh reality is that politicians would not support the FairTax if it meant less revenue for the federal government; business leaders would not support the FairTax if it meant a decrease in corporate earnings and profits, and the people would most certainly not support the FairTax if it meant a decrease in their income.  Taking a snapshot view of our economy, an increase in income in one of these sectors would necessarily mean a decrease in another.  This is why the FairTax was designed to be absolutely revenue neutral – leaving everyone pretty much where they are in terms of income or revenue.  To put it more bluntly, there is no free lunch in the FairTax plan.  There is no "something-for-nothing."

This brings us to the question of embedded taxes in the cost of consumer goods and services, and your paychecks.

As explained in The FairTax Book, there are taxes embedded in everything we buy.  Every entity which provides a product or service in the design, production, marketing, distribution and sale of every consumer good or service will incur some tax liability as they perform their particular function.   This tax liability will be incorporated into whatever these individuals or business entitles charge for their services, and will all passed through to become a part of the final cost of the product or service. 

Now here's what we didn't explain well in the book.  Every employee of any company involved in American commerce is also a provider of a service, and, as such, the employee incurs a tax liability as a result of his or her work.  This tax liability is incorporated into what the employee charges the employer for their services, and is eventually incorporated into the final retail cost of the employer's product or service. Each employee is essentially a separate business entity providing a product, be it physical or mental labor, to the employer. 

The extensive research behind HR 25, The FairTax Bill, shows that the average embedded taxes in every consumer product or service is about 22%.  In some industries, such as leather goods, the embedded tax is smaller.  In other industries, such as homebuilding and construction, the embedded tax is higher, but it averages out to somewhere between 22 and 23%.  With the passage of The FairTax Bill, those embedded taxes disappear.  These embedded taxes include the combined tax burdens of all entities involved in bringing those goods or services to market, and that includes you, the employee, and the taxes you incur as a result of your employment. 

We write in The FairTax Book that the competitive pressures of the marketplace will force prices down when embedded taxes disappear from the cost of retail goods and services, and we cite 22% as the average amount of those embedded taxes.  Does this 22% include the income and payroll taxes that are paid by employees?  Yes, it does.  So ... what does this mean to your paycheck after the FairTax becomes law?

When the FairTax is implemented, and when business and personal income and payroll taxes disappear, your employer is going to have to make a decision.  He will either take some or the entire amount he had been withholding for federal income and payroll taxes and add it to your weekly check, or he will readjust your pay figures so that your entire paycheck will be equal to what you used to call "take home pay" before the FairTax.  The employer may also decide to do a little of both.  Either way, you can see that the amount of money you actually receive as pay – the amount you can put into your bank account – will not decrease, and may actually increase.

On a larger scale real wages will rise to the extent to which the nation's employers decide to return the embedded costs of their employee's income and payroll taxes to the employee.  Likewise, the cost of the products or services produced by the employer will be reduced to the extent to which that employer retains all or a portion of those income and payroll taxes together with the other taxes on capital and labor eliminated by the FairTax.  Once again, a zero-sum, revenue neutral game. 

Now, let's elaborate on the "keep 100% of your paycheck" line that appears in The FairTax Book.  It is certainly true that after the FairTax becomes law there will be no more withholding from your paycheck for any federal taxes.  What you earn is what you get. This is not to say that your gross pay will equal what it was before the FairTax.  This will depend on what your employer does when the embedded costs represented by the tax burden you have passed on to your employer disappear.  One thing is certain:  You will suffer no decrease in real or net earnings --- the amount of each paycheck you deposit into your bank account every other week.  The "keep 100% of your paycheck" concept can more easily  be applied to those who either change jobs or come into the labor force after the implementation of the FairTax.  A new worker will negotiate a wage with an employer knowing that the amount negotiated will be the amount that worker receives every two weeks ... no deductions.  Likewise, when you change employers you, too, will negotiate a wage that will not be subject to withholding, and you will get 100% of your wages in each paycheck.

Some of you reading this amplification of the principle's of the FairTax may have come to a rather interesting and accurate conclusion.  The reality is that in America we're already operating our federal government off a consumption tax.  A convoluted and impossible to understand consumption tax, but consumption tax nonetheless. We say this because ultimately all taxes paid by businesses or individuals eventually make their way through our economic system until they are embedded in the cost of some consumer item or service.  In other words, taxes, like that other stuff you've heard about, roll down hill.  At the bottom of that hill we find the retail sale and you, the ultimate consumer.

As we said in the book, and as we repeat here, the FairTax is not a "something for nothing" scheme.  It was designed to be and, in fact, is revenue neutral.  Having said that; the non-government economists who studied the FairTax plan are nearly unanimous in their agreement that the implementation of the FairTax will lead to unprecedented economic growth in the United States.  We will see economic growth in our economy of such magnitude that it will, sooner rather than later, lift all boats ---- including yours.

OTHER CRITIQUES OF THE FAIR TAX TO BE ADDRESSED

On Nealz Nuze you see a box which says "Keep the FairTax Momentum Going, Click here for the latest FairTax news and info."  Tomorrow the above item regarding embedded taxes and your paycheck will be moved to that site.  In coming days we will address some of the other widely-circulated critiques of the FairTax.  Items to be addressed include:

The 30% argument.  FairTax detractors will tell you that the actual amount of the retail sales tax will be 30%, not 23%.  The FairTax rate is quoted as an embedded rate because it replaces the income tax, which is quoted as an embedded tax, and the embedded taxes that are already present in the cost of everything we buy.  It's rather odd, don't you think, that these detractors don't insist on quoting the income tax as an exclusive rate.  If they did the 25% tax rate would be 33%, and the 35% income tax rate would be well over 50%.  Bottom line, you spend $100 and 23% of that $100, or $23, goes to the feds.

Adding the FairTax to the cost of goods.  Detractors will tell you that with a 23% national retail sales tax a car that once cost $30,000 will now cost nearly $39,000, or that a home that once cost $300,000 will now cost $90,000 more.  This critique both misstates the amount of the FairTax and the way it will show up in the price of retail goods.  It's a critique that Georgia Congressman John Lewis includes in letters to his constituents who have written about the FairTax.  People who criticize the FairTax in this manner either:  (a) are intentionally trying to mislead people about the FairTax; or, (b) just lack the capacity to understand it.  The truth is that the price of consumer goods will not rise under the Fair Tax.  Remember the zero-sum game?

Double-Taxing those who have already worked and saved for their retirement.  This one is so easy; I just don't know why some people are having trouble grasping it.  Retirees who have are living off their savings are still paying taxes.  They're paying the embedded taxes present in everything they buy.  Those embedded taxes will simply be replaced with the embedded FairTax.  Virtually an even swap.  Retirees will not be paying any more in taxes than they're paying now.

We'll address these matters in more detail in the coming days.

THE PLEDGE OF ALLEGIANCE.  IT'S ALL ABOUT LEGISLATIVE INTENT

Well, It looks like I'm going to go wading right back into this Pledge of Allegiance bit again ..... and this is surely going to result in another plague of those childish "I'm never going to listen to you again" emails. 

We now have another federal judge who has said that it is a violation of our constitution for a school operated by government to require the students attending that school to recite the Pledge of Allegiance.  Why?  Because the Pledge contains an affirmation of the existence of God.  Our Constitution makes it clear that the government should not be engage in a coercive exercise where people, in this case children, who are essentially under the control of government employees must acknowledge the existence of God. 

I would dare say that not one out of one hundred of you realize this, but when the words "under God" were added to the Pledge in the early 1950's the stated reason was to compel children attending government schools to acknowledge the role of God in the building of our nation.  President Eisenhower actually said as much when he signed the legislation.  This is a clear case of the government pushing a particular religious viewpoint ... and it is clearly unconstitutional.

Now I agree with you, this Michael Newdow character – the man who brought the lawsuit – is an insipid, self-serving cockroach.  The fact that he is a particularly sickening individual doesn't, however, change our Constitution.

OK .. it's time for those of you who put your religious beliefs above the law of the land to get out there and compose your emails to me.  To help you I am going to include a few phrases that you can simply cut-and-paste into your emails.  This way you will have to put even less thought than usual into your efforts:

• You are an atheist.
• You will spend eternity in hell.
• I'm going to write all your sponsors and tell them that I never listen to your show,  and that everybody I know never listens to your show.
• I'm going to see to it that our radio station stops carrying your show.
• I'm going to call my local Chevy dealer who advertises on your show and tell him that I and fifteen of my neighbors were going to come to his dealership this weekend to buy a truck, but now we're not going to because you are a Godless heathen.
• You need to read Chapter ______ verse ______ of the Bible.
• And the all time favorite .....  I'm never going to listen to you again.

 There ... do you feel better now?

Neal checks out!

Heather, Neal's former intern, has decided to help out while Neal is on vacation

Heather's Corner:

Lessons learned and applied.

Was nothing learned from Alberto ( July, 1994)? Albany Georgia was a basin much like New Orleans, without being a peninsula, of course. The dams were opened to release some of the building tension. It was claimed that there were racial injustices going on since the parts of the city that received the dammed up water were less than affluent areas. The Flint River's levies eventually broke and water swept through the city. Had the dams been allowed to overflow and break, then the devastation would have been much worse. While only 33 people died, costs soared upwards to $750 Million. A lot of the nation's farm land was rendered useless. A city, such as New Orleans, upheld by waterways should have done their homework or at very least stuck to their disaster plan.

Instead of blaming the dam keepers (et-hem, Mr. Trump) how about asking why the dams were not opened? How about asking why the busses were not used such as the Louisiana Disaster Plan of 2000 states on page 13, section B 'Assumptions,' #5 [ PDF]? Rev. Jesse Jackson said " there was no place to take them," implying that people will only come through after the tragedy strikes. Then again we can always take the easy route and blame President Bush again.

On September 11, 2001 the country bound together. Does it help any situation to so destructively blame and hold hatred toward others who certainly wouldn't have wanted such events to occur? So we aren't always as prepared as we should be, that is nothing new. We can only hope to be better prepared for the next horrific event, which will inevitably claim some lives. Luckily, less people died than expected. Are you aware that when Hurricane Andrew struck there were semi trucks full of dead and uncounted illegal immigrants? Does that make the devastation any less than that of Katrina's wrath?

These disasters give hope that not all Americans are selfish and uncaring. Quite the opposite, when we come together, we ensure that we will be lent a helping hand by our peers if ever we are in the same situation. Being an American means caring about our not only our country, but those who participate in upholding it. Showing kindness to our citizens in times like these is part of what makes us patriotic and a great nation.

The difference (beyond the obvious) when comparing the devastation on 9/11 and that of New Orleans and Hurricane Katrina: Katrina HAS survivors. On September 11 th 2001, we just had to deal with the psychological effects and burying the dead. On August 29, 2005, we realized we had to feed, clothe, and house Katrina's victims. The rebuilding from Katrina will be even harder than that of 9/11 due to complete restructuring of a culture and a city. At least this disaster will have some happier endings as family are reunited and rejoice at their survival.

Heather's Reading Assignments:

Males need not apply ... see what happens when we play God?

Vacuum your pets? My cats would climb the blinds so fast ... and NEVER come down!

Hey Neal! The left agrees with us ... almost. Just another bad law.

If you don't need it, then cut it off.

Shock does weird things to people ... and cows.

This is why these people can not biologically have children . And some people still deny a Higher Power.

NEAL LIVE

Neal has a few live appearances scheduled in the next month. September 23rd, there's a Boortz Power Lunch in Atlanta, GA, September 30 is WDBO's Meeting of the Mouths in Orlando, FL, and October 1 is WSB's Meeting of the Mouths in Marietta, GA. Keep an eye on the Neal's Appearances link on the home page for these additional book signing dates he keeps promising everyone and the details on these events.

Tour Gallery | amazon.com reviews

THE FAIRTAX BOOK BOOKPLATE

If you ordered your book online or you couldn't make it to a book signing near you, Congressman Linder and Neal will send you an adhesive-backed autographed book plate to place inside your copy of The FairTax Book.  Just send a self-addressed and stamped letter-sized envelope to:

Neal Boortz - Book Plate
1601 W. Peachtree St. NE
Atlanta, Georgia 30309

It's every important for everyone, even rednecks, to protect themselves from the damaging rays of the sun. More in the Redneck Scrap Book.

READING ASSIGNMENTS (webwench style)

Morning Sickness 1: Burgler smears passed out victim with frosting.

Morning Sickness 2: A Florida convenience store worker has admitted to urinating in Mountain Dew making a customer violently ill.

Morning Sickness 3: A Chinese beauty products company has been found to be using the skin of executed convicts in their beauty products.

Okay, back to the bizarre in the covers department. How about Johnny Cash doing I Walk the Line [.5mb mp3]...auf Deutsch. Wee! Not a cover, but definitely bizarre. You'll find more like that plus actual covers craving at April Winchell's site for many years to come.

From the department of time suck, all of the Saturday Night Live Celebrity Jeopardy skits online.

How do you think police figured out this guy was the paint huffer. Hmm....

Nature is crazy! Read about a bug that eats up a fishes tongue, then becomes the new tongue. Freaky!

Is this the goat-sucking chupacabra?

Pictures from WSB's reporter Richard Sangster down on the ground in New Orleans.
Sept. 8 | Sept. 9 | Sept. 10 | Sept. 11

WHAT THE HECK ARE THOSE POINTY HAND THINGS?
These are links to each individual story on the Nuze, p-links for the geeks out there. Plus, they work today and they'll work tomorrow. Now you can easily discuss/debate/rip apart the Nuze without worrying about the links going bad. Enjoy!

BOORTZ BLAST NEWSLETTER
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NEAL'S FANS GET TOGETHER
If you like Neal and are looking for like minded people to hang out with online or off, check out these places:

• Talkmaster Yahoo Group
• Meet Boortz fans in your area
• alt.fan.neal.boortz newsgroup (note, you're going to have to figure out newsgroups all on your own)

Belinda Skelton, Ken Rogers, Laura Nunemaker and Brian Ganey assist in the daily preparation of Nealz Nuze!