I heard on the radio today that the IRS was spending around 3 Billion dollars to bring tax cheaters into compliance with the income tax. Can you imagine what our country could do with that 3 Billion dollars if they didn't have to chase tax dodgers? I think it's time for a change, don't you?
I am copying a letter written by Jim Bennett, a FairTax volunteer. It says a lot in few words:
To the editor of the Wall Street Journal:
Dear Editor, Several comments sent in by readers and appearing in the December 31, 2007 issue call for a response. Retirees who pay sales tax during their golden years for the most part contributed tax-free into IRA's and now under the Fair Tax will be able to withdraw from their IRA's tax-free.
Their Social Security benefits,on which they were double-taxed going in (yes, income and payroll) will be tax free coming out. The Fair Tax will stabilize the tax base for Social Security, whose future is in peril today because of the dwindling payroll base relative to burgeoning retirees.
Seniors will be able to sell their homes free of capital gains tax and pass their estates onto their children tax free. Even if it is true that crime figures and illegal aliens would pay little more under the Fair Tax, would it not be beneficial to shift the tax burden towards these types and away from business?
The fact is that crime figures would have the same purchasing power butnow would pay tax on their purchases. Crime figures and illegal aliens, together with foreign tourists, purchasers of imports and those who go into the corpus of savings would be more disadvantaged than lower and middle-income people as a group.
Wealthy people do benefit from the Fair Tax, as does everyone else, but lower-income people benefit disproportionately. A sales tax such as the Fair Tax is far more efficient to collect than an income tax. Collection points drop from 155 million to 20 million.
Furthermore, it takes two to cheat on a sales tax, and just one to cheat on an income tax. I welcome the attention the Fair Tax is garnering now from the Wall Street Journal.~Jim Bennett
Monday, December 31, 2007
Thursday, December 27, 2007
FAIRTAX FACTS BY LEO LINBECK, CEO AND CO-FOUNDER OF AMERICANS FOR FAIR TAXATION
The following is an e-mail sent to us FairTax Volunteers and I thought I would pass it on. It is lengthy, but a good read and encompasses much of the FairTax Facts. I will leave it up the rest of the week so you can pop in and read a bit every day if it is too long for you.
Meanwhile, I am struggling with my year-end bookwork, getting ready for tax-time. Good grief - what do people see in this present income tax system? What a waste of our good time. Well, here's the good stuff:
COMMENTARY - FairTax Facts By LEO LINBECK, December 26, 2007; Page A10, Wall Street Journal.
Much has been written lately about the FairTax, the proposal to replace the current federal income tax with a national retail sales tax. Unfortunately, much of it is wrong. This country needs a spirited and wide-ranging debate about fundamental tax reform. But that debate is not advanced by misimpressions and distortions of the FairTax. Let us then clear up a few.
One assertion about the FairTax is that it began as a project of the Church of Scientology at a time when it was seeking tax-exempt status. This is false. The FairTax actually comes to us from market research conducted more than a decade ago by a handful of business leaders. Their goal was to determine what type of tax system would be most acceptable to the American public. The studies they paid for cost millions of dollars, included hard economic research by respected scholars, and were subjected to critical peer review.
The result is a proposal, since introduced as legislation in Congress, now known as the FairTax. What emerged from this research is that a national retail sales tax is a preferred method of taxation among most Americans surveyed. Another is that the tax would have significant benefits for the nation's economy. Why? Because it eliminates income taxes and payroll taxes (for Social Security and Medicare), which are costly to collect and end up as "embedded" in the price of everything we buy.
Along with getting rid of the Internal Revenue Service and the complexities of the income tax code, the FairTax would eliminate the distorting effect that income and payroll taxes have on the economy. Research on the price of consumer goods reveals that up to 20% of all prices today represent hidden income taxes and payroll taxes. Once these taxes are repealed and replaced with the FairTax, it is likely that market pressure would force retail prices to fall.
Eliminating embedded taxes will also do something else -- it will remove significant price disadvantages suffered by American producers competing with tax-free imports. Eliminating corporate income taxes and capital gains taxes, which the FairTax would do, would likely make the American economy the most desirable place in the world to do business.
Another benefit of the FairTax is that, unlike other sales taxes, it would not hit the poorest Americans the hardest. The FairTax proposal calls for sending every American a "prebate" check to offset the cost of the national sales taxes paid by those living in poverty. This feature would effectively exempt those living below the poverty line from paying taxes to the federal government, and provide all taxpayers with a reimbursement of a portion of taxes paid.
The FairTax rate is 23% on retail sales when calculated "inclusively," as are income tax rates. It will, in a fairer, more transparent and less-expensive way, raise the same amount of money the federal government now collects through the income and payroll taxes. Because it would be levied on consumption at the final point of sale, instead of on earnings, it would dramatically expand the tax base.
The FairTax would collect revenue from the underground economy. Even illegal immigrants and the 40 million foreign tourists who visit the U.S. each year would pay it. The distributional effects of the FairTax have been extensively studied, and although the proposal has distinct advantages for investors and wealth creation across the income spectrum, the greatest benefit of the FairTax is to low- and moderate-income Americans.
The effect of eliminating regressive payroll taxes is commonly overlooked when analyzing the FairTax, but it would have a very significant impact, as these taxes represent the single largest tax burden on these income earners. Significantly, the FairTax eliminates all loopholes, gimmicks, exemptions and deductions from the federal tax system. Under the FairTax, Congress would no longer be able to reward friends, punish enemies or manipulate behavior through the tax code.
The FairTax would also eliminate the lucrative tax lobbying practices that represent more than 50% of all lobby dollars spent annually in Washington. It's no surprise, then, to see that vested interests have argued against the FairTax and in favor of keeping the mortgage interest deduction. But wouldn't it be better for everyone to stop the IRS from withholding from paychecks; to see the price of new homes -- and all other goods -- drop by removing embedded costs; and to have interest rates fall as the savings rate increases?
Is it really in everyone's interests to keep the income-tax system so that one-third of taxpayers can go on deducting a portion of their mortgage interest from their federal taxes? There have been many tax reform proposals over the years, but most of them simply call for reforming around the margins of the existing tax system.
The President's Advisory Panel on Tax Reform was assembled by the Bush administration and concluded its work a few years ago. Instead of seriously looking at the FairTax, the panel looked at a very different type of consumption tax, riddled with exemptions, and then declared that it would be too expensive and that the rate would have to be far higher than the FairTax rate.
Politically, the FairTax will only become law once enough citizens demand that it be enacted, overcoming the self-interest that members of Congress and others have in holding onto the current system. It is debatable whether a modern, citizen-led tax revolution is possible. But the growing popularity (even among presidential candidates) of the FairTax suggests that another Boston Tea Party may be at hand.
Mr. Linbeck is CEO and cofounder of Americans for Fair Taxation.
If you agree with the idea of the FairTax, go to my link on signing the petition and DO IT. We need all the support we can get to get our congressmen to listen to us instead of the lobbyists.
Meanwhile, I am struggling with my year-end bookwork, getting ready for tax-time. Good grief - what do people see in this present income tax system? What a waste of our good time. Well, here's the good stuff:
COMMENTARY - FairTax Facts By LEO LINBECK, December 26, 2007; Page A10, Wall Street Journal.
Much has been written lately about the FairTax, the proposal to replace the current federal income tax with a national retail sales tax. Unfortunately, much of it is wrong. This country needs a spirited and wide-ranging debate about fundamental tax reform. But that debate is not advanced by misimpressions and distortions of the FairTax. Let us then clear up a few.
One assertion about the FairTax is that it began as a project of the Church of Scientology at a time when it was seeking tax-exempt status. This is false. The FairTax actually comes to us from market research conducted more than a decade ago by a handful of business leaders. Their goal was to determine what type of tax system would be most acceptable to the American public. The studies they paid for cost millions of dollars, included hard economic research by respected scholars, and were subjected to critical peer review.
The result is a proposal, since introduced as legislation in Congress, now known as the FairTax. What emerged from this research is that a national retail sales tax is a preferred method of taxation among most Americans surveyed. Another is that the tax would have significant benefits for the nation's economy. Why? Because it eliminates income taxes and payroll taxes (for Social Security and Medicare), which are costly to collect and end up as "embedded" in the price of everything we buy.
Along with getting rid of the Internal Revenue Service and the complexities of the income tax code, the FairTax would eliminate the distorting effect that income and payroll taxes have on the economy. Research on the price of consumer goods reveals that up to 20% of all prices today represent hidden income taxes and payroll taxes. Once these taxes are repealed and replaced with the FairTax, it is likely that market pressure would force retail prices to fall.
Eliminating embedded taxes will also do something else -- it will remove significant price disadvantages suffered by American producers competing with tax-free imports. Eliminating corporate income taxes and capital gains taxes, which the FairTax would do, would likely make the American economy the most desirable place in the world to do business.
Another benefit of the FairTax is that, unlike other sales taxes, it would not hit the poorest Americans the hardest. The FairTax proposal calls for sending every American a "prebate" check to offset the cost of the national sales taxes paid by those living in poverty. This feature would effectively exempt those living below the poverty line from paying taxes to the federal government, and provide all taxpayers with a reimbursement of a portion of taxes paid.
The FairTax rate is 23% on retail sales when calculated "inclusively," as are income tax rates. It will, in a fairer, more transparent and less-expensive way, raise the same amount of money the federal government now collects through the income and payroll taxes. Because it would be levied on consumption at the final point of sale, instead of on earnings, it would dramatically expand the tax base.
The FairTax would collect revenue from the underground economy. Even illegal immigrants and the 40 million foreign tourists who visit the U.S. each year would pay it. The distributional effects of the FairTax have been extensively studied, and although the proposal has distinct advantages for investors and wealth creation across the income spectrum, the greatest benefit of the FairTax is to low- and moderate-income Americans.
The effect of eliminating regressive payroll taxes is commonly overlooked when analyzing the FairTax, but it would have a very significant impact, as these taxes represent the single largest tax burden on these income earners. Significantly, the FairTax eliminates all loopholes, gimmicks, exemptions and deductions from the federal tax system. Under the FairTax, Congress would no longer be able to reward friends, punish enemies or manipulate behavior through the tax code.
The FairTax would also eliminate the lucrative tax lobbying practices that represent more than 50% of all lobby dollars spent annually in Washington. It's no surprise, then, to see that vested interests have argued against the FairTax and in favor of keeping the mortgage interest deduction. But wouldn't it be better for everyone to stop the IRS from withholding from paychecks; to see the price of new homes -- and all other goods -- drop by removing embedded costs; and to have interest rates fall as the savings rate increases?
Is it really in everyone's interests to keep the income-tax system so that one-third of taxpayers can go on deducting a portion of their mortgage interest from their federal taxes? There have been many tax reform proposals over the years, but most of them simply call for reforming around the margins of the existing tax system.
The President's Advisory Panel on Tax Reform was assembled by the Bush administration and concluded its work a few years ago. Instead of seriously looking at the FairTax, the panel looked at a very different type of consumption tax, riddled with exemptions, and then declared that it would be too expensive and that the rate would have to be far higher than the FairTax rate.
Politically, the FairTax will only become law once enough citizens demand that it be enacted, overcoming the self-interest that members of Congress and others have in holding onto the current system. It is debatable whether a modern, citizen-led tax revolution is possible. But the growing popularity (even among presidential candidates) of the FairTax suggests that another Boston Tea Party may be at hand.
Mr. Linbeck is CEO and cofounder of Americans for Fair Taxation.
If you agree with the idea of the FairTax, go to my link on signing the petition and DO IT. We need all the support we can get to get our congressmen to listen to us instead of the lobbyists.
Friday, December 21, 2007
SOME ANSWERS A FAIRTAX CRITIQUE
A reader named Derek has done an excellent job of answering Hayden Kepner’s summary of James Taranto’s critique of the FairTax in the Wall Street Journal. I’m pasting Derek’s answer below. Hayden, thanks for the summary.
"Little David", this may answer some of your questions. Also, there are some glitches in the new FairTax Calculator. They are working them out, so you might try your figuring a little later. I will let you know on this blog when the problems are fixed.
1. “If someone’s tax goes down, somebody else’s need to go up.” Complaints along these lines rely upon a belief that the current tax system is set up perfectly, and that are placement is judged based on whether or not it taxed everyone the same as the old system. If that was the point of a replacement, why replace it?
The fact is, the current tax system taxes income, while the FairTax taxes consumption over the poverty level. So of course, it will go up for some and down for others. However, claims that the poor and middle classes get hard by this are ridiculous.
First,the FairTax removes all tax burden for those at or under the poverty level. They can spend 100% of their income on consumption and pay zero taxes, whether explicit or embedded in the price of the products. This is not true today, where even the poorest payabout 22% of all of their consumption spending on hidden, embedded tax costs. Anyone who argues that the poor will be adversely affected by the FairTax either doesn’t understand it or is purposely being deceptive.
For the middle class, the degree to which they get hit by the FairTax is completely dependent on the degree to which they spend money beyond the poverty level. So for those just beyond poverty, there is very little tax cost. For those spending at 2x times poverty, which probably covers most people, their tax cost is half of the FairTax rate (11.5% of their spending).
The full FairTax rate is only felt once you get to spending far beyond the poverty level, at which point you are probably no longer considered middle class. In addition to paying the correspondingly-lower sales tax rate, as explained above,middle class taxpayers will (like all taxpayers) benefit from a reduction in the embedded taxes in our current prices ... which will vary from one industry to the next, but in some circumstances are as high as 20% of the current price of goods.
Also, like everyone else under the FairTax, the middle class — which is increasingly savvy about investing their money — will be able to make their investments 100% tax-free. This makes it even easier for middle class families to become upper class families.For these reasons, it’s actually pretty mind-boggling to me why anyone would claim that the middle-class will be hardest hit.
The folks who are hardest-hit will be those who currently pay little-to-no income tax (e.g., trust fund babies, drug dealers, etc) but who live lavishly and spend a lot of money.
2. The underground economy is a lose some, gain some. We currently have no way to tax underground income now (taxing income of prostitues and drug dealers) - under theFairTax, we won’t be able to tax underground consumption (taxing the payment of prostitutes and purchases of drugs). There’s really little difference there. You move the imposition of income tax on the person purchasing an illegal product or service to imposition of consumption tax on the person spending the money achieved through illegal activities.
I agree that this isn’t a reason to enact the FairTax, but it’s not a reason to criticize it, either. In theory, though, it does bring more elements of the underground economy in line since even a drug dealer has to buy food at the grocery store, buy gas for their car, etc., all of which is participation in the taxable economy.
The amount of money that these people spend each year is no trivial thing, incidentally. Some knowledgeable estimates put it as high as a trillion dollars annually. Currently that money is not subject to the income tax, but it would be subject to the FairTax —potentially raising billions in revenue.
3. Economic growth. “When you reduce tax rates to zero...” Tax rates are not reduced to zero. They are replaced by consumption taxes. And in that scenario, businesses will no longer have to focus on the tax costs of their decisions, and it will free up businesses to make decisions based on growth and profitability without worry about taxes.
It also makes US companies much more competitive globally — our current tax structure is a major impediment to US economic growth.
4. “When you tax consumption, people spend less.” Is it assumed that the only reason people spend money is because it’s already been taxed as income? Certainly tax decisions influence consumption decisions — but the desire, need, and drive to consume will always be there. If people decide to spend less and give more to charity to avoid paying consumption taxes, isn’t this true under our current system? And if people decide to spend less and save more to avoid paying consumption taxes, doesn’t this help create jobs and expand the economy?
“The tax will hit hardest on those who NEED to spend money.” And it will only hit money spent beyond the poverty level. And that is consistent no matter how much you spend. And if you don’t spend it, you can only either give it away or save it. Both of them are positive things.
5. “The yacht industry suffered under a 10% ‘luxury tax;’ just imagine what would happen under a 30% FairTax.” The reason luxury taxes don’t work is because it shifts incentives from one category to another. If you raise taxes on a specific luxury (or class of luxuries), then other items because more favorable because they are taxed less.
So rather than buy a yacht, maybe I’ll consider a 2nd home since that won’t be taxed as much. TheFairTax avoids this because all products and services are taxed equally. It is, inreality, completely different from a luxury tax and the comparison doesn’t hold.
"Little David", this may answer some of your questions. Also, there are some glitches in the new FairTax Calculator. They are working them out, so you might try your figuring a little later. I will let you know on this blog when the problems are fixed.
1. “If someone’s tax goes down, somebody else’s need to go up.” Complaints along these lines rely upon a belief that the current tax system is set up perfectly, and that are placement is judged based on whether or not it taxed everyone the same as the old system. If that was the point of a replacement, why replace it?
The fact is, the current tax system taxes income, while the FairTax taxes consumption over the poverty level. So of course, it will go up for some and down for others. However, claims that the poor and middle classes get hard by this are ridiculous.
First,the FairTax removes all tax burden for those at or under the poverty level. They can spend 100% of their income on consumption and pay zero taxes, whether explicit or embedded in the price of the products. This is not true today, where even the poorest payabout 22% of all of their consumption spending on hidden, embedded tax costs. Anyone who argues that the poor will be adversely affected by the FairTax either doesn’t understand it or is purposely being deceptive.
For the middle class, the degree to which they get hit by the FairTax is completely dependent on the degree to which they spend money beyond the poverty level. So for those just beyond poverty, there is very little tax cost. For those spending at 2x times poverty, which probably covers most people, their tax cost is half of the FairTax rate (11.5% of their spending).
The full FairTax rate is only felt once you get to spending far beyond the poverty level, at which point you are probably no longer considered middle class. In addition to paying the correspondingly-lower sales tax rate, as explained above,middle class taxpayers will (like all taxpayers) benefit from a reduction in the embedded taxes in our current prices ... which will vary from one industry to the next, but in some circumstances are as high as 20% of the current price of goods.
Also, like everyone else under the FairTax, the middle class — which is increasingly savvy about investing their money — will be able to make their investments 100% tax-free. This makes it even easier for middle class families to become upper class families.For these reasons, it’s actually pretty mind-boggling to me why anyone would claim that the middle-class will be hardest hit.
The folks who are hardest-hit will be those who currently pay little-to-no income tax (e.g., trust fund babies, drug dealers, etc) but who live lavishly and spend a lot of money.
2. The underground economy is a lose some, gain some. We currently have no way to tax underground income now (taxing income of prostitues and drug dealers) - under theFairTax, we won’t be able to tax underground consumption (taxing the payment of prostitutes and purchases of drugs). There’s really little difference there. You move the imposition of income tax on the person purchasing an illegal product or service to imposition of consumption tax on the person spending the money achieved through illegal activities.
I agree that this isn’t a reason to enact the FairTax, but it’s not a reason to criticize it, either. In theory, though, it does bring more elements of the underground economy in line since even a drug dealer has to buy food at the grocery store, buy gas for their car, etc., all of which is participation in the taxable economy.
The amount of money that these people spend each year is no trivial thing, incidentally. Some knowledgeable estimates put it as high as a trillion dollars annually. Currently that money is not subject to the income tax, but it would be subject to the FairTax —potentially raising billions in revenue.
3. Economic growth. “When you reduce tax rates to zero...” Tax rates are not reduced to zero. They are replaced by consumption taxes. And in that scenario, businesses will no longer have to focus on the tax costs of their decisions, and it will free up businesses to make decisions based on growth and profitability without worry about taxes.
It also makes US companies much more competitive globally — our current tax structure is a major impediment to US economic growth.
4. “When you tax consumption, people spend less.” Is it assumed that the only reason people spend money is because it’s already been taxed as income? Certainly tax decisions influence consumption decisions — but the desire, need, and drive to consume will always be there. If people decide to spend less and give more to charity to avoid paying consumption taxes, isn’t this true under our current system? And if people decide to spend less and save more to avoid paying consumption taxes, doesn’t this help create jobs and expand the economy?
“The tax will hit hardest on those who NEED to spend money.” And it will only hit money spent beyond the poverty level. And that is consistent no matter how much you spend. And if you don’t spend it, you can only either give it away or save it. Both of them are positive things.
5. “The yacht industry suffered under a 10% ‘luxury tax;’ just imagine what would happen under a 30% FairTax.” The reason luxury taxes don’t work is because it shifts incentives from one category to another. If you raise taxes on a specific luxury (or class of luxuries), then other items because more favorable because they are taxed less.
So rather than buy a yacht, maybe I’ll consider a 2nd home since that won’t be taxed as much. TheFairTax avoids this because all products and services are taxed equally. It is, inreality, completely different from a luxury tax and the comparison doesn’t hold.
Wednesday, December 19, 2007
I ADDED A PICTURE!
I added a picture today of my great grandson, Wyatt. I imagine a lot of you people out there are getting just about as tired as he is. Well, hang in there - Christmas is almost here.
I couldn't resist putting this picture in my blog today. It says so much about why I am doing this. I won't be getting near the benefits that Wyatt will when he starts earning a paycheck, if the FairTax is in place by then. I hope we don't have to wait that long.
I appreciate the open discussions possible in this blog and I appreciate the fact that you are not abusing my blog with name calling and bad words ("bathroom language", as my Dad used to call it). I think we can all agree on one thing - we certainly do need a change in our tax system.
I would just like to see our politicians doing something - anything - of value to us while they are in office. They seem bent on one thing - lining their own pockets and getting on the government pension dole. They don't seem to care about fixing Social Security, Medicare, the Income Tax System, or anything else that benefits their constituents. I think it is time to write some letters and then back it up by going to the polls and voting these do-nothings out of office. They are treading on my freedoms.
Bah, Humbug.
Merry Christmas.
I couldn't resist putting this picture in my blog today. It says so much about why I am doing this. I won't be getting near the benefits that Wyatt will when he starts earning a paycheck, if the FairTax is in place by then. I hope we don't have to wait that long.
I appreciate the open discussions possible in this blog and I appreciate the fact that you are not abusing my blog with name calling and bad words ("bathroom language", as my Dad used to call it). I think we can all agree on one thing - we certainly do need a change in our tax system.
I would just like to see our politicians doing something - anything - of value to us while they are in office. They seem bent on one thing - lining their own pockets and getting on the government pension dole. They don't seem to care about fixing Social Security, Medicare, the Income Tax System, or anything else that benefits their constituents. I think it is time to write some letters and then back it up by going to the polls and voting these do-nothings out of office. They are treading on my freedoms.
Bah, Humbug.
Merry Christmas.
Tuesday, December 18, 2007
IMPACT ON TAX LAWYERS, PREPARERS & CPA'S
Following are a couple of paragraphs taken from a FairTax Volunteer letter. We discussed the impact on tax lawyers, tax preparers and CPA's a while back and I thought this was an interesting addition:
"I have talked to a couple of tax preparers and a CPA, and they are the first to admit our current system is way too complex. Blue ribbon economists have projected the Gross Domestic Product would jump 10% the first year, and continue at that rate for the foreseeable future. People with accounting skills should have no trouble finding new work in such an environment.
As far as the impact on the middle class is concerned, all except the very highest tax brackets would enjoy a net savings on their effective tax. The reason for that is that the FairTax opens up a much broader base to be taxed, including non-reported income, illegal activities, loopholes, and tourists. The FairTax is a win, win, win."
Also, I have posted a new FairTax Calculator in the links section. There are easy-to-answer questions that lead to a logical conclusion that gives you a side-by-side comparison of your own tax situation comparing the income tax with the FairTax. Give it a try.
"I have talked to a couple of tax preparers and a CPA, and they are the first to admit our current system is way too complex. Blue ribbon economists have projected the Gross Domestic Product would jump 10% the first year, and continue at that rate for the foreseeable future. People with accounting skills should have no trouble finding new work in such an environment.
As far as the impact on the middle class is concerned, all except the very highest tax brackets would enjoy a net savings on their effective tax. The reason for that is that the FairTax opens up a much broader base to be taxed, including non-reported income, illegal activities, loopholes, and tourists. The FairTax is a win, win, win."
Also, I have posted a new FairTax Calculator in the links section. There are easy-to-answer questions that lead to a logical conclusion that gives you a side-by-side comparison of your own tax situation comparing the income tax with the FairTax. Give it a try.
Monday, December 17, 2007
HERE'S MORE FOOD FOR THOUGHT
Thanks everyone, for keeping my blog active this week. You have had some good discussions and I appreciate the politeness and respect that goes along with it.
Below is an interesting letter from a fellow FairTax volunteer, Kenneth Van Dellen:
What do you think of this? I think we should put out an eye-catching leaflet that asks some good questions.Would you like a tax system that...
Below is an interesting letter from a fellow FairTax volunteer, Kenneth Van Dellen:
What do you think of this? I think we should put out an eye-catching leaflet that asks some good questions.Would you like a tax system that...
- Replaces the income tax, SS tax, etc., with a fairer tax?
- Lets you buy used items (houses, cars, clothes) with untaxed dollars?
- Lets you buy basic necessities with untaxed dollars?
- Completely untaxes the poorest?
- Taxes others according to what they are able to spend?
- Lets you give gifts to churches, charities, family members, and friends with untaxed dollars? (I don't think family and friends will qualify for untaxed dollars - Bobbie)
- Lets you use untaxed dollars for educational expenses?
- Does not require you to keep income and expense records if you want some of your tax payments back (as a tax refund)?
- Does not require you to pay an accountant to be sure you pay what you should and get refunded what you should get?
- Does not require you to reveal all kinds of private information to a government agency?
- Does not cause you any concern about being audited, investigated, or worse?
- Lets you pay your tax when it is due, not before you get the money?
- Makes it impossible to pay too much and have to wait months for a refund, or to not pay enough and have to send a check to the IRS?
And the list goes on…You get the idea. Rather than telling folks all about it, which we can do later, let's arouse their curiosity. Then tell them how to get more information.Perhaps my "50 Reasons Why I Like the FairTax" could be turned into 50 questions. I haven't studied that. The above items were pretty much off-the-cuff, and could possibly be worded better in some cases.
Monday, December 10, 2007
FAIRTAX – WELL, WHICH IS IT-23% OR 30%?
I keep getting letters and seeing articles about whether the FairTax is really 23% or maybe 30%.
The FairTax advocates like to say 23% (inclusive) for one simple reason – comparing it one on one with the current income tax (also inclusive). All of our taxes now are taken out of our gross paycheck, before anything else – right off the top. It is a certain percentage, based on your gross income. It is not added on top of your gross. Get it? (Of course, your income tax is arrived at after many individual deductions, but that is another story)
The FairTax naysayers like to say 30% for one simple reason – to kill the whole idea of the FairTax by making it sound worse than the FairTax advocates call it. The 30% is an “exclusive” tax, which does not compare at all with the present income tax.
Now let’s complicate things a bit. Let’s make a fair comparison with the present income tax. That’s where it gets confusing, people’s eyes cross and their minds go blank.
It is easy to take 23% of someone’s gross income (well, easy for the government), but let me show you how that would have to come about if, say, you were selling your house. Your Realtor comes and says your house is worth $100,000. Well, you look the Realtor in the eye and say “Fine, add your commission to the top of that and I will list with you”. So the Realtor gets out his trusty calculator, puts the $100,000 into it and divides that by 94% and comes up with $106,382.98, rounds it up to $106,400 and gets the listing. When the Realtor finds a buyer for $106,400, he shows you the amount you will gross after his commission: $100,016. That makes you happy and you sign the papers to sell. The Realtor is happy because he gets his 6% commission. The buyer is happy because he gets the house he wants. The lender is happy because it appraises up to price.
What we have just done is make the price of this home “inclusive” of the Realtor’s commission, whereas the homeowner had told the Realtor to make it “exclusive” (add the commission on top of my price). You see, the Realtor has to talk full price; therefore, the price of the home had to “include” his commission.
When the merchant sells his goods, he has an amount he has to gross. Let’s say he needs to gross $1.00. In order to do this, he has to add the amount of the tax to his gross profit, just like the Realtor had to add his commission amount. He gets out his trusty calculator, puts in $1.00 and divides it by 77% (1.00-.23=.77) which adds a 23% sales tax to his $1.00. Well, low and behold, that comes to $1.30 so naturally the naysayers call it a 30% tax. Well, if that were true, the merchant would have to charge $1.43 for his product in order to gross his $1.00 amount. Do the math. $1.30 - 23% = $1.00.
The merchant has to sell his goods and services at one price, a price that “includes” the sales tax. If you think it is worth it, you buy it; if you don’t, you won’t buy it. You make that judgment based on the total price, not the price the merchant wants, only to be hit with a 23% sales tax at the cash register. Your receipt automatically breaks out the tax amount so you will see exactly how much you spent in taxes. You don’t have to keep that receipt because you don’t need it to keep as a deduction when you file your taxes in April. Why? Because you won’t be filing (or paying!) taxes in April, ever again; therefore, you don’t need any deductions (including your home mortgage deduction)
The merchant has to keep that receipt, because he has to file a report along with the tax money he sends to the government every month. He gets paid for doing this, by the way, just like your tax account used to (only not nearly so much!)
These examples probably did not clear up the muddy waters for you. I think the only reason it made sense to me immediately is because I was a Realtor and many times have been told to add my commission to the top of the price I quoted to a seller. This is another example of embedded taxes, which is done all along the merchandising line, driving prices ever upward.
There are approximately 22% embedded taxes in every thing you buy. With the advent of the FairTax, this practice will stop, because goods and services are taxed only once: at the point of sale. How will it stop? Good old American competition. So if the prices go down by 22% and the FairTax is included in the price of goods and services (23%), it looks to me like you will be paying out 1% difference between the two, which isn’t going to change prices much at all, either up or down.
But you will be keeping 100% of your paycheck! No more payroll taxes and no more income taxes. Plus you will be getting a monthly prebate to help you stomach all of this .
This is terribly long today and the closer Christmas is, the busier I get. I am going to let you digest this for a week and comment on it. Also, go back and read my other blog on the 23%vs30% sales tax and maybe it will sink in. It’s a hard thing to grasp. I welcome your comments. Maybe someone else can explain it better than I. I have to relate it to something I know – real estate – and I thought these examples might be helpful to you also.
I noticed a number of interesting comments on my last blog - makes for good reading this week.
The FairTax advocates like to say 23% (inclusive) for one simple reason – comparing it one on one with the current income tax (also inclusive). All of our taxes now are taken out of our gross paycheck, before anything else – right off the top. It is a certain percentage, based on your gross income. It is not added on top of your gross. Get it? (Of course, your income tax is arrived at after many individual deductions, but that is another story)
The FairTax naysayers like to say 30% for one simple reason – to kill the whole idea of the FairTax by making it sound worse than the FairTax advocates call it. The 30% is an “exclusive” tax, which does not compare at all with the present income tax.
Now let’s complicate things a bit. Let’s make a fair comparison with the present income tax. That’s where it gets confusing, people’s eyes cross and their minds go blank.
It is easy to take 23% of someone’s gross income (well, easy for the government), but let me show you how that would have to come about if, say, you were selling your house. Your Realtor comes and says your house is worth $100,000. Well, you look the Realtor in the eye and say “Fine, add your commission to the top of that and I will list with you”. So the Realtor gets out his trusty calculator, puts the $100,000 into it and divides that by 94% and comes up with $106,382.98, rounds it up to $106,400 and gets the listing. When the Realtor finds a buyer for $106,400, he shows you the amount you will gross after his commission: $100,016. That makes you happy and you sign the papers to sell. The Realtor is happy because he gets his 6% commission. The buyer is happy because he gets the house he wants. The lender is happy because it appraises up to price.
What we have just done is make the price of this home “inclusive” of the Realtor’s commission, whereas the homeowner had told the Realtor to make it “exclusive” (add the commission on top of my price). You see, the Realtor has to talk full price; therefore, the price of the home had to “include” his commission.
When the merchant sells his goods, he has an amount he has to gross. Let’s say he needs to gross $1.00. In order to do this, he has to add the amount of the tax to his gross profit, just like the Realtor had to add his commission amount. He gets out his trusty calculator, puts in $1.00 and divides it by 77% (1.00-.23=.77) which adds a 23% sales tax to his $1.00. Well, low and behold, that comes to $1.30 so naturally the naysayers call it a 30% tax. Well, if that were true, the merchant would have to charge $1.43 for his product in order to gross his $1.00 amount. Do the math. $1.30 - 23% = $1.00.
The merchant has to sell his goods and services at one price, a price that “includes” the sales tax. If you think it is worth it, you buy it; if you don’t, you won’t buy it. You make that judgment based on the total price, not the price the merchant wants, only to be hit with a 23% sales tax at the cash register. Your receipt automatically breaks out the tax amount so you will see exactly how much you spent in taxes. You don’t have to keep that receipt because you don’t need it to keep as a deduction when you file your taxes in April. Why? Because you won’t be filing (or paying!) taxes in April, ever again; therefore, you don’t need any deductions (including your home mortgage deduction)
The merchant has to keep that receipt, because he has to file a report along with the tax money he sends to the government every month. He gets paid for doing this, by the way, just like your tax account used to (only not nearly so much!)
These examples probably did not clear up the muddy waters for you. I think the only reason it made sense to me immediately is because I was a Realtor and many times have been told to add my commission to the top of the price I quoted to a seller. This is another example of embedded taxes, which is done all along the merchandising line, driving prices ever upward.
There are approximately 22% embedded taxes in every thing you buy. With the advent of the FairTax, this practice will stop, because goods and services are taxed only once: at the point of sale. How will it stop? Good old American competition. So if the prices go down by 22% and the FairTax is included in the price of goods and services (23%), it looks to me like you will be paying out 1% difference between the two, which isn’t going to change prices much at all, either up or down.
But you will be keeping 100% of your paycheck! No more payroll taxes and no more income taxes. Plus you will be getting a monthly prebate to help you stomach all of this .
This is terribly long today and the closer Christmas is, the busier I get. I am going to let you digest this for a week and comment on it. Also, go back and read my other blog on the 23%vs30% sales tax and maybe it will sink in. It’s a hard thing to grasp. I welcome your comments. Maybe someone else can explain it better than I. I have to relate it to something I know – real estate – and I thought these examples might be helpful to you also.
I noticed a number of interesting comments on my last blog - makes for good reading this week.
Thursday, December 6, 2007
A GREAT LETTER TO THE WALL ST. JOURNAL
This letter is from a fellow Fellow FairTax volunteer. It makes some excellent points. It is nice that the media is starting to talk about the FairTax, but I do wish they would do their research and get it right. This letter goes a long way in setting them straight:
To: The Editor of the Wall Street Journal
Regarding: Article "The Huckabee Contradiction" December 5, 2007; Page A24
Dear Editor,
I'm responding to the comments made in your December 5 article on Huckabee where you say, "the fair tax would be worth consideration if we were writing a tax code from scratch. Realistically, we're not. The plan would require repealing the Sixteenth Amendment that allowed a federal income tax, and the chances of that happening are approximately zero."
The problem, plain and simple, is that the tax code has been manipulated for too long to benefit those who can afford to fund the 35,000 lobbyist army that descends on Capital Hill, year-in and year-out.
The solution, plain and simple, is that THE EXISTING TAX CODE MUST BE COMPLETELY SCRAPPED! No flat-tax or band-aid fixes will ever be true reform . A flat will simply revert us back to where our tax situation was 40-50 years ago, and any further tinkering with the tax code will just be more of the same abuse that we've endured over the past three decades.
The only answer to real tax reform is not reform at all, but replacement! The FairTax(sm), H.R. 25, is the only tax plan ever proposed that can and will lead us to eliminate the 16th Amendment, and here are just some of the reasons why:
A 23% consumption tax (calculated the same way as income tax today) on NEW goods and services will eliminate/replace all forms of personal and corporate income taxation, including inheritance tax, capital gains tax, AMT, and payroll tax.
No individual or business will ever file a tax return again. IRS forms and tax schedules will become a distant memory. The IRS as we know it will be obsoleted and eliminated, no longer needed to enforce a bloated, incomprehensible tax code that penalizes every hard-working American for their success with a graduated Marxist income tax that only the rich can afford to circumvent by paying a mere 15% in capital gains tax.
The simple monthly FairTax prebate will ensure that no household will pay taxes on their basic necessities of life up to the poverty level (as set by the US Dept. of Health and Human Services), making the FairTax the ONLY tax plan that will completely untax the poor while lowering the overall tax impact on middle income families. But the wealthier you are, the more you'll consume and the more you'll contribute to the federal revenue. That's fair.
Under the FairTax, anyone earning income under the table will no longer be able to get away without paying taxes, whether they are here legally or otherwise. No flat income tax proposal or "simple" reform plan will ever do that.
In addition, the FairTax will once-and-for-all prevent Social Security and Medicare from going bankrupt by providing a far more stable source of revenue (consumer spending vs. wages). Remember, consumers include EVERY living, breathing human being on American soil, including the 50 million+ visitors annually that come here to tour, go to our universities, or to fill temporary work visas.
Finally, in case you haven't seen it, Section 2.f. of H.R. 25 (attached here for your convenience), actually calls for the repeal of the 16th Amendment:
"SEC. 2. CONGRESSIONAL FINDINGS. (f) FINDINGS RELATING TO REPEAL OF PRESENT FEDERAL TAX SYSTEM.—Congress further finds that the 16th amendment to the United States Constitution should be repealed."
You can argue over the word "should" if you like, but all of the above will be a nail in the 16th Amendment's coffin, and there are many more to the FairTax than I've listed here. Rest assured, there will not be a soul in America that will want to revert back to the income tax once the FairTax is put into place.
Once the FairTax is enacted, the grassroots that helped make it a reality--the same grassroots that have been here long before Huckabee--will immediately turn attention to permanent repeal of the 16th Amendment. And we will prevail.
Until then, until you actually have a plan to replace the income tax, there's no chance for the 16th Amendment to be repealed.
THAT'S why the FairTax is the ONLY plan that will make the 16th Amendment history.
Best wishes,
Greg Dutton, Arizona Volunteer State Director
Americans For Fair Taxation
National Web Site: http://www.fairtax.org/
State Web Site: http://www.azfairtax.org/
Online Petition: http://www.fairtax.org/action/petition.aspx
eMail: StateDirector@AZFairTax.org
Phone: (480) 763-9791
Fax: (480) 718-8182
To: The Editor of the Wall Street Journal
Regarding: Article "The Huckabee Contradiction" December 5, 2007; Page A24
Dear Editor,
I'm responding to the comments made in your December 5 article on Huckabee where you say, "the fair tax would be worth consideration if we were writing a tax code from scratch. Realistically, we're not. The plan would require repealing the Sixteenth Amendment that allowed a federal income tax, and the chances of that happening are approximately zero."
The problem, plain and simple, is that the tax code has been manipulated for too long to benefit those who can afford to fund the 35,000 lobbyist army that descends on Capital Hill, year-in and year-out.
The solution, plain and simple, is that THE EXISTING TAX CODE MUST BE COMPLETELY SCRAPPED! No flat-tax or band-aid fixes will ever be true reform . A flat will simply revert us back to where our tax situation was 40-50 years ago, and any further tinkering with the tax code will just be more of the same abuse that we've endured over the past three decades.
The only answer to real tax reform is not reform at all, but replacement! The FairTax(sm), H.R. 25, is the only tax plan ever proposed that can and will lead us to eliminate the 16th Amendment, and here are just some of the reasons why:
A 23% consumption tax (calculated the same way as income tax today) on NEW goods and services will eliminate/replace all forms of personal and corporate income taxation, including inheritance tax, capital gains tax, AMT, and payroll tax.
No individual or business will ever file a tax return again. IRS forms and tax schedules will become a distant memory. The IRS as we know it will be obsoleted and eliminated, no longer needed to enforce a bloated, incomprehensible tax code that penalizes every hard-working American for their success with a graduated Marxist income tax that only the rich can afford to circumvent by paying a mere 15% in capital gains tax.
The simple monthly FairTax prebate will ensure that no household will pay taxes on their basic necessities of life up to the poverty level (as set by the US Dept. of Health and Human Services), making the FairTax the ONLY tax plan that will completely untax the poor while lowering the overall tax impact on middle income families. But the wealthier you are, the more you'll consume and the more you'll contribute to the federal revenue. That's fair.
Under the FairTax, anyone earning income under the table will no longer be able to get away without paying taxes, whether they are here legally or otherwise. No flat income tax proposal or "simple" reform plan will ever do that.
In addition, the FairTax will once-and-for-all prevent Social Security and Medicare from going bankrupt by providing a far more stable source of revenue (consumer spending vs. wages). Remember, consumers include EVERY living, breathing human being on American soil, including the 50 million+ visitors annually that come here to tour, go to our universities, or to fill temporary work visas.
Finally, in case you haven't seen it, Section 2.f. of H.R. 25 (attached here for your convenience), actually calls for the repeal of the 16th Amendment:
"SEC. 2. CONGRESSIONAL FINDINGS. (f) FINDINGS RELATING TO REPEAL OF PRESENT FEDERAL TAX SYSTEM.—Congress further finds that the 16th amendment to the United States Constitution should be repealed."
You can argue over the word "should" if you like, but all of the above will be a nail in the 16th Amendment's coffin, and there are many more to the FairTax than I've listed here. Rest assured, there will not be a soul in America that will want to revert back to the income tax once the FairTax is put into place.
Once the FairTax is enacted, the grassroots that helped make it a reality--the same grassroots that have been here long before Huckabee--will immediately turn attention to permanent repeal of the 16th Amendment. And we will prevail.
Until then, until you actually have a plan to replace the income tax, there's no chance for the 16th Amendment to be repealed.
THAT'S why the FairTax is the ONLY plan that will make the 16th Amendment history.
Best wishes,
Greg Dutton, Arizona Volunteer State Director
Americans For Fair Taxation
National Web Site: http://www.fairtax.org/
State Web Site: http://www.azfairtax.org/
Online Petition: http://www.fairtax.org/action/petition.aspx
eMail: StateDirector@AZFairTax.org
Phone: (480) 763-9791
Fax: (480) 718-8182
Tuesday, December 4, 2007
REPLY TO RICH LOWRY'S "MAGIC WAND OF TAX REFORM PLANS"
I have been reading e-mails about Rich Lowry's abomination of the FairTax in his opinion piece entitled "The Magic Wand of Tax Reform Plans. In it, he called the fair tax "daft", "politically unsalable", "so-called", "a bed-time story", "more complex than the current tax scheme".
His article was full of un-truths (lies) and I am submitting my reply to Mr. Lowry in the Oregonian as well as various other local newspapers in the area. I doubt if anything I send will reach print, so I guess that's what a blog is for: to state my views and refute the "big boys' lies".
Poor Rich Lowry, having to stoop to lies to turn us off the FairTax. We must be making progress with our grassroots campaign. Please allow me to address and correct Lowry’s Lies:
Lie #1: FairTax: “the most radical—and politically unsalable and substantively daft—proposal of any major presidential candidate of either party.”
Truth: FairTax: The most researched tax proposal to date, politically “salable” in that there are 72 members of Congress currently supporting this proposal. Lowry is calling the voting public “substantively daft”. I am not crazy—are you? Oh, and the FairTax reaches across the aisle, is non-partisan since everyone pays taxes and few, if any, like the IRS.
Lie #2: “The so-called (there we go again) FairTax would eliminate the income and payroll taxes and replace them with a (supposedly) 23% national sales tax.”
Truth: This statement is true except for the name-calling and the deliberate bashing of the 23% sales tax (Lowry says: “What they really are talking about is a tax of 30 cents on every dollar”). Doesn’t Lowry know the difference between an inclusive and an exclusive tax? The FairTax is being compared to the income tax on an “inclusive” basis, therefore it is 23%. It is like comparing apples to apples, Mr. Lowry.
Lie #3: “Nevermind that it is unworkable and would be politically deadly in a general election”.
Truth: The FairTax has been extensively researched by The Cato Institute, The Heritage Foundation, Fiscal Associates, Boston University, Stanford, Rice, MIT & other institutions. As for “politically deadly”, I say yes, only to the Lobbyists and the Senators and Representatives who want to control every aspect of our lives.
Lie #4: “The congressional Joint Committee on Taxation has estimated that the rate would have to go as high as 57%”.
Truth: With the FairTax, you will only be taxed once—at point of sale. No more embedded taxes added along the manufacturing line to cover the cost of payroll taxes and corporate taxes, which drives prices up and up. What we have now is a VAT tax PLUS and Income tax. And do you really think the Congressional Joint Committee wants to give up their control of you?
Lie #5: “it would amount to an incredibly regressive tax on even the most necessary purchases of low– and middle-income taxpayers.”
Truth: The FairTax would totally untax the poor and the elderly. The pre-bate makes this the most progressive tax of all the tax proposals on the table. As for middle-income taxpayers, you decide when and how much to pay in taxes.
Lie #6: “the government would send monthly “pre-bate” checks to all Americans based on income”.
Truth: The government would send monthly pre-bate checks to every head of household with a valid social security number, based on the annual poverty level determined by the Dep’t of Health and Human Services, NOT based on income. Remember, under the FairTax, no more income taxes, therefore no more reporting of income to the IRS..
Lie #7: “The mortgage deduction would be gone, and instead buyers would pay a 30% (at least) tax on their homes.”
Truth: There are two lies here: Yes, the mortgage deduction would be gone, but so would the income tax on every dollar you earn, therefore eliminating the need for a mortgage deduction. How much income tax deduction can you deduct from zero income tax? And yes, buyers would pay a 30% exclusive (Lowry used 23%, inclusive, in his other examples) tax on their homes, BUT only their NEW homes. Used homes and used goods are not taxed under the FairTax.
Lie of the day (#8): "Any of these points makes the FairTax so vulnerable to attack”…
Truth: Lowry is right about this point, and he knows just how to attack—with lies.
His article was full of un-truths (lies) and I am submitting my reply to Mr. Lowry in the Oregonian as well as various other local newspapers in the area. I doubt if anything I send will reach print, so I guess that's what a blog is for: to state my views and refute the "big boys' lies".
Poor Rich Lowry, having to stoop to lies to turn us off the FairTax. We must be making progress with our grassroots campaign. Please allow me to address and correct Lowry’s Lies:
Lie #1: FairTax: “the most radical—and politically unsalable and substantively daft—proposal of any major presidential candidate of either party.”
Truth: FairTax: The most researched tax proposal to date, politically “salable” in that there are 72 members of Congress currently supporting this proposal. Lowry is calling the voting public “substantively daft”. I am not crazy—are you? Oh, and the FairTax reaches across the aisle, is non-partisan since everyone pays taxes and few, if any, like the IRS.
Lie #2: “The so-called (there we go again) FairTax would eliminate the income and payroll taxes and replace them with a (supposedly) 23% national sales tax.”
Truth: This statement is true except for the name-calling and the deliberate bashing of the 23% sales tax (Lowry says: “What they really are talking about is a tax of 30 cents on every dollar”). Doesn’t Lowry know the difference between an inclusive and an exclusive tax? The FairTax is being compared to the income tax on an “inclusive” basis, therefore it is 23%. It is like comparing apples to apples, Mr. Lowry.
Lie #3: “Nevermind that it is unworkable and would be politically deadly in a general election”.
Truth: The FairTax has been extensively researched by The Cato Institute, The Heritage Foundation, Fiscal Associates, Boston University, Stanford, Rice, MIT & other institutions. As for “politically deadly”, I say yes, only to the Lobbyists and the Senators and Representatives who want to control every aspect of our lives.
Lie #4: “The congressional Joint Committee on Taxation has estimated that the rate would have to go as high as 57%”.
Truth: With the FairTax, you will only be taxed once—at point of sale. No more embedded taxes added along the manufacturing line to cover the cost of payroll taxes and corporate taxes, which drives prices up and up. What we have now is a VAT tax PLUS and Income tax. And do you really think the Congressional Joint Committee wants to give up their control of you?
Lie #5: “it would amount to an incredibly regressive tax on even the most necessary purchases of low– and middle-income taxpayers.”
Truth: The FairTax would totally untax the poor and the elderly. The pre-bate makes this the most progressive tax of all the tax proposals on the table. As for middle-income taxpayers, you decide when and how much to pay in taxes.
Lie #6: “the government would send monthly “pre-bate” checks to all Americans based on income”.
Truth: The government would send monthly pre-bate checks to every head of household with a valid social security number, based on the annual poverty level determined by the Dep’t of Health and Human Services, NOT based on income. Remember, under the FairTax, no more income taxes, therefore no more reporting of income to the IRS..
Lie #7: “The mortgage deduction would be gone, and instead buyers would pay a 30% (at least) tax on their homes.”
Truth: There are two lies here: Yes, the mortgage deduction would be gone, but so would the income tax on every dollar you earn, therefore eliminating the need for a mortgage deduction. How much income tax deduction can you deduct from zero income tax? And yes, buyers would pay a 30% exclusive (Lowry used 23%, inclusive, in his other examples) tax on their homes, BUT only their NEW homes. Used homes and used goods are not taxed under the FairTax.
Lie of the day (#8): "Any of these points makes the FairTax so vulnerable to attack”…
Truth: Lowry is right about this point, and he knows just how to attack—with lies.
Monday, December 3, 2007
THE FAIRTAX ALLOWS WAGE-EARNERS TO SAVE MORE MONEY, FASTER
The FairTax would allow wage-earners to save more money faster for home ownership, education, investments and retirement. The FairTax increases your purchasing power, making it easier to get ahead financially by eliminating:
the individual income tax
the payroll income tax
the estate tax and the gift tax
capital gains taxes
the alternative minimum tax
the self-employment tax
the corporate income tax
Each individual would have their entire paycheck to spend as they wish, save for a new home, pay their child's tuition, invest in the future, etc. Take a look at your pay check and add up the amount that is deducted each pay period for taxes. This is the amount you would be able to use to advance yourself monetarily in whichever way you choose.
The elderly would receive their entire social security check, not a check minus the deduction for medicare. (Medicare as well as Social Security deductions will be paid through the consumption tax) They would also have the prebate to help them with monthly expenses. Lots of older people don't spend more than a minimal amount for new goods and services. They already have a lifetime accumulation of furniture, dishes and "things", so the consumption tax is not going to be a problem for them.
The poor do not spend a lot on new goods and services, because they don't have the money to spend. The prebate will be a god-send for them. The poor buy used cars, clothing and "things", which will be exempt from the consumption tax. They will actually be better off and may even be able to get ahead in this world, for a change.
The rich will continue to spend as they have become accustomed to. They are used to buying the newest and the best and they will continue to do so. In fact, they will be paying their fair share for the first time in their lives because they can't hide their money in tax loop-holes or off-shore accounts. Well, they can, but they can keep it here now, circulating in the U.S.A. because they are no longer penalized or taxed to the max for having it.
None of us will be penalized for earning a living, as we are now. To read more about the FairTax, go to http://www.fairtax.org/ and read the basics or read the bill itself (HR25 & S1025)
I believe workers should keep their whole paychecks, don't you? www.FairTax.org
Friday, November 30, 2007
The following letter was sent to me by a fellow FairTax Volunteer:
Dear Ms. Strassel:
I will answer your question as to why the Thompson tax proposal went into the media black hole. Its that his proposal is nothing new or, in your words, 'the most creative tax proposal yet in the race for President.' It is just more of the same. Keep the current code and make little nips and tucks here and there that will never be enacted, or if they are, will be modified every year thereafter. Your statement tells me that you have not been paying much attention to this race, or the tax issue, in any detail.
Mike Huckabee has come from below nowhere to a real contender in very little time with very little money, despite being attacked by the mainstream conservatives and the Club for Growth. Why? The FairTax. In case you don't know what it is, the Fairtax is the only creative tax reform proposed by any candidate. It is by far the most supported tax reform in Congress today. While several other candidates support the Fairtax, Huckabee is the only one that has made it one of his core issues and talks about it all the time. His support is far beyond his share of the Christian Right, which is divided among several candidates. It is because millions of Fairtax supporters are getting behind him. Americans for Fair Taxation, the group and economists that researched and put together this comprehensive proposal, is non-partisan. But ordinary Americans who support the Fairtax are going with the leader on this issue, Huckabee. Americans realize what the pundits and media elite do not, that the Founders knew the evils of taxation on income and practically eliminated it in the Constitution. They realize that the 16th Amendment was the worst mistake in American history. They realize that the 1986 tax reform, while better than nothing, soon turned into an even worse nightmare. They know that the current code corrupts everything it touches, which means all otherwise honest Americans and otherwise honest Members of Congress. They know that they will never have their privacy back until they don't have to share the most intimate details of their personal and business lives with the Federal and State governments. They know that the Fairtax will eliminate the hundreds of billions of compliance costs, will lower the price of exports, that will return trillions of dollars to America, and will unleash the American economy for the shackles of the income tax.
I hope you will write again on the tax issue in a balanced way, and address the Fairtax and Mike Huckabee's support of it. You can learn all about the Fairtax at www.Fairtax.org, or by calling me or Americans for Fair Taxation. My number is 602-291-4805, and AFT is 1-800-Fairtax. As you so eloquently point out, we cannot count on CNN/Youtube or any of the uninformative television media to bring this issue to the fore in a meaningful way, so we need outstanding journalists and writers like yourself to get the ball rolling. I enjoy all your articles.
Gary H. Burger Jones,
Skelton & Hochuli, PLC
Phoenix, AZ 85012
Dear Ms. Strassel:
I will answer your question as to why the Thompson tax proposal went into the media black hole. Its that his proposal is nothing new or, in your words, 'the most creative tax proposal yet in the race for President.' It is just more of the same. Keep the current code and make little nips and tucks here and there that will never be enacted, or if they are, will be modified every year thereafter. Your statement tells me that you have not been paying much attention to this race, or the tax issue, in any detail.
Mike Huckabee has come from below nowhere to a real contender in very little time with very little money, despite being attacked by the mainstream conservatives and the Club for Growth. Why? The FairTax. In case you don't know what it is, the Fairtax is the only creative tax reform proposed by any candidate. It is by far the most supported tax reform in Congress today. While several other candidates support the Fairtax, Huckabee is the only one that has made it one of his core issues and talks about it all the time. His support is far beyond his share of the Christian Right, which is divided among several candidates. It is because millions of Fairtax supporters are getting behind him. Americans for Fair Taxation, the group and economists that researched and put together this comprehensive proposal, is non-partisan. But ordinary Americans who support the Fairtax are going with the leader on this issue, Huckabee. Americans realize what the pundits and media elite do not, that the Founders knew the evils of taxation on income and practically eliminated it in the Constitution. They realize that the 16th Amendment was the worst mistake in American history. They realize that the 1986 tax reform, while better than nothing, soon turned into an even worse nightmare. They know that the current code corrupts everything it touches, which means all otherwise honest Americans and otherwise honest Members of Congress. They know that they will never have their privacy back until they don't have to share the most intimate details of their personal and business lives with the Federal and State governments. They know that the Fairtax will eliminate the hundreds of billions of compliance costs, will lower the price of exports, that will return trillions of dollars to America, and will unleash the American economy for the shackles of the income tax.
I hope you will write again on the tax issue in a balanced way, and address the Fairtax and Mike Huckabee's support of it. You can learn all about the Fairtax at www.Fairtax.org, or by calling me or Americans for Fair Taxation. My number is 602-291-4805, and AFT is 1-800-Fairtax. As you so eloquently point out, we cannot count on CNN/Youtube or any of the uninformative television media to bring this issue to the fore in a meaningful way, so we need outstanding journalists and writers like yourself to get the ball rolling. I enjoy all your articles.
Gary H. Burger Jones,
Skelton & Hochuli, PLC
Phoenix, AZ 85012
Thursday, November 29, 2007
DARK & BEST KEPT SECRETS OF OUR SOCIAL SECURITY
This was e-mailed to me today - thought I would pass it along.........................................:
Something You Should Know About Your Social Security
AND WE HAVE NO CHOICE ABOUT PAYING THIS TAX,
HOW IT IS SPENT OR HOW
WE GET OUR PORTION BACK
Dark and best kept secrets about Our Social Security:
Many years ago in Seattle, two wonderful neighbors, Elliott and Patty Roosevelt came to my home to swim on a regular basis. They were a great couple full of laughter and stories that today I continue to marvel at. Both are now deceased, but their stories remain.
During the years of our friendship we had many, many discussions about Elliott's parents (President Franklin D. and Eleanor Roosevelt) and how his father and mother never intended for the Social Security and Welfare programs to work out the way they are today. Elliott used to say that if his parents returned to earth and saw what the politicians had done to their programs they would have burned all of them in hell.
Here is a story I received today regarding the Social Security Program and I immediately thought of Elliott's comments. I Hope you will read this and think about it.
_____________________________________________
Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program.
He promised:
1.) That participation in the Program would be completely voluntary,
2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,
3.) That the money the participants elected to put into the Program would be deductible from
their income for tax purposes each year,
4.) That the money the participants put into the independent "Trust Fund" rather than into the
General operating fund, and herefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,
5.) That the annuity payments to the retirees would never be taxed as income
Since many of us have paid into FICA for years and are now receiving a Social Security check every month --and then finding that we are getting taxed on 85% of the money we paid to the Federal government to "put away" -- you may be interested in the following:
Q: Which Political Party took Social Security from the independent "Trust Fund" and put it into the General fund so that Congress could spend it?
A: It was Lyndon Johnson and the democratically controlled House and Senate.
Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?
A: The Democratic Party.
Q: Which Political Party started taxing Social Security annuities????
A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding vote as President of the Senate, while he was Vice President of the US.
Q: Which Political Party decided to start giving annuity payments to immigrants?
This is MY FAVORITE:
A: That's right! Jimmy Carter! And the Democratic Party of Course! Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!
-----------------------------------------------------------------
Then, after doing all this lying and thieving and violating of the original contract (FICA),
the Democrats turn around and tell you that the Republicans want to take your Social
Security away! And the worst part about it is uninformed citizens believe it!
==============================================
"THE ONLY THING NEEDED FOR EVIL TO TRIUMPH IS FOR GOOD MEN TO DO NOTHING"
Something You Should Know About Your Social Security
AND WE HAVE NO CHOICE ABOUT PAYING THIS TAX,
HOW IT IS SPENT OR HOW
WE GET OUR PORTION BACK
Dark and best kept secrets about Our Social Security:
Many years ago in Seattle, two wonderful neighbors, Elliott and Patty Roosevelt came to my home to swim on a regular basis. They were a great couple full of laughter and stories that today I continue to marvel at. Both are now deceased, but their stories remain.
During the years of our friendship we had many, many discussions about Elliott's parents (President Franklin D. and Eleanor Roosevelt) and how his father and mother never intended for the Social Security and Welfare programs to work out the way they are today. Elliott used to say that if his parents returned to earth and saw what the politicians had done to their programs they would have burned all of them in hell.
Here is a story I received today regarding the Social Security Program and I immediately thought of Elliott's comments. I Hope you will read this and think about it.
_____________________________________________
Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program.
He promised:
1.) That participation in the Program would be completely voluntary,
2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,
3.) That the money the participants elected to put into the Program would be deductible from
their income for tax purposes each year,
4.) That the money the participants put into the independent "Trust Fund" rather than into the
General operating fund, and herefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,
5.) That the annuity payments to the retirees would never be taxed as income
Since many of us have paid into FICA for years and are now receiving a Social Security check every month --and then finding that we are getting taxed on 85% of the money we paid to the Federal government to "put away" -- you may be interested in the following:
Q: Which Political Party took Social Security from the independent "Trust Fund" and put it into the General fund so that Congress could spend it?
A: It was Lyndon Johnson and the democratically controlled House and Senate.
Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?
A: The Democratic Party.
Q: Which Political Party started taxing Social Security annuities????
A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding vote as President of the Senate, while he was Vice President of the US.
Q: Which Political Party decided to start giving annuity payments to immigrants?
This is MY FAVORITE:
A: That's right! Jimmy Carter! And the Democratic Party of Course! Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!
-----------------------------------------------------------------
Then, after doing all this lying and thieving and violating of the original contract (FICA),
the Democrats turn around and tell you that the Republicans want to take your Social
Security away! And the worst part about it is uninformed citizens believe it!
==============================================
"THE ONLY THING NEEDED FOR EVIL TO TRIUMPH IS FOR GOOD MEN TO DO NOTHING"
Wednesday, November 28, 2007
THE FAIRTAX LOWERS TAX RATES + GIVES YOU A PRE-BATE
This is a busy month for me and probably for you too, so I will be recycling some of my earlier blogs that you may not have read or you may wish to read again. Have a great Christmas Season!
Everyone will receive a Prebate from the federal government. It will be administered through the Social Security Administration and will be figured for each family residence based on the proverty level for the year as figured by the Dep't. of Health and Human Services.
The chart is shown in the FairTax Basics on their website (http://www.fairtax.org/) As an example, a single mother with one child will receive a monthly prebate of $262; a couple with no children will receive $391 per month; a couple with 4 children will receive $658 per month.
These amounts should cover the amount of tax (23% times your proverty level amount divided by 12) you would pay on new goods and services up to the poverty level. There is also a chart in the FairTax Basics showing your effective FairTax Rate for a family of 4 (2 children) beyond the poverty level income. For instance, if you (family of 4) make $54,760 per year, your effective tax rate would be 11.5%; if you make $109,523 your effective rate would be 17.3%. You would have to make $876,160 in order to pay 22.3% in taxes.
So you see, this is a truly progressive tax. The people at the poverty level are entirely untaxed; the prebate ensures this. And please remember, this is a tax replacement. This tax is designed to generate the same amount of revenue that the present tax system does.
The FairTax is just what it says - Fair. Every citizen who signs up for the prebate will receive it. Sure the rich don't need it, but we need to be fair to all, not to just a chosen few. Otherwise it would be like a glorified welfare system, not a truly fair system of no taxes up to the poverty level. There should be no exceptions and no exemptions in order to keep this tax fair to all.
Everyone will receive a Prebate from the federal government. It will be administered through the Social Security Administration and will be figured for each family residence based on the proverty level for the year as figured by the Dep't. of Health and Human Services.
The chart is shown in the FairTax Basics on their website (http://www.fairtax.org/) As an example, a single mother with one child will receive a monthly prebate of $262; a couple with no children will receive $391 per month; a couple with 4 children will receive $658 per month.
These amounts should cover the amount of tax (23% times your proverty level amount divided by 12) you would pay on new goods and services up to the poverty level. There is also a chart in the FairTax Basics showing your effective FairTax Rate for a family of 4 (2 children) beyond the poverty level income. For instance, if you (family of 4) make $54,760 per year, your effective tax rate would be 11.5%; if you make $109,523 your effective rate would be 17.3%. You would have to make $876,160 in order to pay 22.3% in taxes.
So you see, this is a truly progressive tax. The people at the poverty level are entirely untaxed; the prebate ensures this. And please remember, this is a tax replacement. This tax is designed to generate the same amount of revenue that the present tax system does.
The FairTax is just what it says - Fair. Every citizen who signs up for the prebate will receive it. Sure the rich don't need it, but we need to be fair to all, not to just a chosen few. Otherwise it would be like a glorified welfare system, not a truly fair system of no taxes up to the poverty level. There should be no exceptions and no exemptions in order to keep this tax fair to all.
Tuesday, November 27, 2007
TAXES, TAXES, AND MORE TAXES!
This was sent to me from a friend. I have read it before, and I imagine you have too. We all need to read it again.........and again..........and again..............Now does the FairTax make sense?
Thanks Friend! What brought us here is the fact that there are too many of us AMERICANS who either do not care to really know what and who they are voting for; or they want a free ride on someone else's back/shoulders. I certainly hope this can challenge a few to spend some time to get to know who to vote for next VERY CRUCIAL year. Vicrichard Wahl
This is funny til it gets too close to home.
At first I thought this was funny...then I realized the awful truth of it. Be sure to read all the way to the end!
Tax his land,
Tax his bed,
Tax the table
At which he's fed.
Tax his tractor,
Tax his mule,
Teach him taxes
Are the rule.
Tax his cow,!
Tax his goat,
Tax his pants,
Tax his coat.
Tax his ties,
Tax his shirt,
Tax his work,
Tax his dirt.
Tax his tobacco,
Tax his drink,
Tax him if he
Tries to think.
Tax his cigars,
Tax his beers,
If he cries,
thenTax his tears.
Tax his car,
Tax his gas,
Find other ways
To tax his ass
Tax all he has
Then let him know
That you won't be done
Till he has no dough.
When he screams and hollers,
Then tax him some more,
Tax him till He's good and sore.
Then tax his coffin ,
Tax his grave,
Tax the sod in Which he's laid.
Put these words upon his tomb,
" Taxes drove me to my doom..."
When he's gone,
Do not relax,
Its time to apply
The inheritance tax.
Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax Gasoline Tax (42 cents per gallon)
Gross Receipts Tax
Hunting License Tax
Inheritance Tax Inventory Tax
IRS Interest Charges
IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
Property Tax
Real Estate Tax
Road Usage Tax
Recreational Vehicle Tax
Service Charge Tax
Social Security Tax
Sales Tax
School Tax
State Income Tax S
tate Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Non-recurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Taxes
Vehicle License
Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax
STILL THINK THIS IS FUNNY?Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids. What the hell happened? Can you spell "politicians!" And.... I still have to "press 1"for English.
Thanks Friend! What brought us here is the fact that there are too many of us AMERICANS who either do not care to really know what and who they are voting for; or they want a free ride on someone else's back/shoulders. I certainly hope this can challenge a few to spend some time to get to know who to vote for next VERY CRUCIAL year. Vicrichard Wahl
This is funny til it gets too close to home.
At first I thought this was funny...then I realized the awful truth of it. Be sure to read all the way to the end!
Tax his land,
Tax his bed,
Tax the table
At which he's fed.
Tax his tractor,
Tax his mule,
Teach him taxes
Are the rule.
Tax his cow,!
Tax his goat,
Tax his pants,
Tax his coat.
Tax his ties,
Tax his shirt,
Tax his work,
Tax his dirt.
Tax his tobacco,
Tax his drink,
Tax him if he
Tries to think.
Tax his cigars,
Tax his beers,
If he cries,
thenTax his tears.
Tax his car,
Tax his gas,
Find other ways
To tax his ass
Tax all he has
Then let him know
That you won't be done
Till he has no dough.
When he screams and hollers,
Then tax him some more,
Tax him till He's good and sore.
Then tax his coffin ,
Tax his grave,
Tax the sod in Which he's laid.
Put these words upon his tomb,
" Taxes drove me to my doom..."
When he's gone,
Do not relax,
Its time to apply
The inheritance tax.
Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax Gasoline Tax (42 cents per gallon)
Gross Receipts Tax
Hunting License Tax
Inheritance Tax Inventory Tax
IRS Interest Charges
IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
Property Tax
Real Estate Tax
Road Usage Tax
Recreational Vehicle Tax
Service Charge Tax
Social Security Tax
Sales Tax
School Tax
State Income Tax S
tate Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Non-recurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Taxes
Vehicle License
Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax
STILL THINK THIS IS FUNNY?Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids. What the hell happened? Can you spell "politicians!" And.... I still have to "press 1"for English.
Monday, November 26, 2007
CORPORATE TAXES & COMPLIANCE COSTS
I hope you all had a good Thanksgiving. Now it's back to dieting and back to blogging:
You think Corporate taxes have nothing to do with you? Well think again. The costs of running a corporation are huge and they pass those costs right through to the consumer so they will have the money to pay their corporate taxes at taxtime.
By eliminating these taxes, the price of new goods and services should go down. The competitive nature of business will not allow these prices to stay at today's level. We should see a drop in prices equivilant to the amount of the sales tax (23%). This may take some time since a free market is a self-adjusting market. When the grocery store across the street lowers the price of bread by 23% because he no longer has to pay payroll taxes or income taxes, the other grocery stores in the area will do the same in order to compete. You will be the winner. To take this a step further, the corporation that baked the bread for the grocery store can lower his prices because of the same thing - his costs will be lower and he will pass that savings on to the grocery store or lose the business to a baker who does pass on these savings.
Further on down the line, the corporations that provided the ingredients to the baker for the bread will lower their prices and then finally the farmer in the field who grows the wheat for the bread can lower his prices because everything he has to purchase to maintain his farm can be bought at a lower price.
Do you see the snowball effect this will have on the price of everything? By the time all of the "hidden taxes" are removed the price of new goods and services will probably be lower, even with the sales tax added. Here are some statistics dealing only with the cost of compliance with the tax code, taken directly from the FairTax Website (http://www.fairtax.org/) : "Compliance with the tax code is not only very difficult and complicated, consuming a total of 6 billion hours, but unreasonably expensive as well. It is estimated that it costs taxpayers $265.1 billion for tax filing, tax record keeping, and tax reduction advice. That's just shy of $900 for every man, woman, and child in America! We have taxation without comprehension!"
Wow! By the time we buy that bread at today's prices, we still have to put up with the tax accountant and the IRS. It's just not fair. I would rather see the total cost of my tax dollars on my loaf of bread receipt rather than knowing there are hidden costs and added-on taxes and not being able to control it or know for sure how much I am really paying in taxes.Tomorrow we will discuss the Pre-bates, which even out the playing field for the poor and the elderly.
You think Corporate taxes have nothing to do with you? Well think again. The costs of running a corporation are huge and they pass those costs right through to the consumer so they will have the money to pay their corporate taxes at taxtime.
By eliminating these taxes, the price of new goods and services should go down. The competitive nature of business will not allow these prices to stay at today's level. We should see a drop in prices equivilant to the amount of the sales tax (23%). This may take some time since a free market is a self-adjusting market. When the grocery store across the street lowers the price of bread by 23% because he no longer has to pay payroll taxes or income taxes, the other grocery stores in the area will do the same in order to compete. You will be the winner. To take this a step further, the corporation that baked the bread for the grocery store can lower his prices because of the same thing - his costs will be lower and he will pass that savings on to the grocery store or lose the business to a baker who does pass on these savings.
Further on down the line, the corporations that provided the ingredients to the baker for the bread will lower their prices and then finally the farmer in the field who grows the wheat for the bread can lower his prices because everything he has to purchase to maintain his farm can be bought at a lower price.
Do you see the snowball effect this will have on the price of everything? By the time all of the "hidden taxes" are removed the price of new goods and services will probably be lower, even with the sales tax added. Here are some statistics dealing only with the cost of compliance with the tax code, taken directly from the FairTax Website (http://www.fairtax.org/) : "Compliance with the tax code is not only very difficult and complicated, consuming a total of 6 billion hours, but unreasonably expensive as well. It is estimated that it costs taxpayers $265.1 billion for tax filing, tax record keeping, and tax reduction advice. That's just shy of $900 for every man, woman, and child in America! We have taxation without comprehension!"
Wow! By the time we buy that bread at today's prices, we still have to put up with the tax accountant and the IRS. It's just not fair. I would rather see the total cost of my tax dollars on my loaf of bread receipt rather than knowing there are hidden costs and added-on taxes and not being able to control it or know for sure how much I am really paying in taxes.Tomorrow we will discuss the Pre-bates, which even out the playing field for the poor and the elderly.
Tuesday, November 20, 2007
FAIRTAX ELIMINATES SOCIAL SECURITY WITHHOLDING
Social Security - The most regressive tax of all. It takes a good percentage of your monthly paycheck and you don't even know if Social Security will be there for you when you retire. With the FairTax this withholding will disappear, but Social Security will be stronger than ever, since it will become part of the 23% consumption tax and therefore become a guarantee that it will be there for you as well as your parents and grandparents. Plus it will ensure your children and grandchildren of having that part of retirement guaranteed for them as well.
The FairTax will make Social Security and Medicare healthy again. For independent contractors and business owners, the FairTax will be a double blessing when it comes to Social Security taxes. These people have to pay double what the monthly wage earner pays - their share and the business' share. It becomes a terrible burden at tax time. Independent contractors and business owners have lots of tax write-offs, but they still have to pay their entire Social Security withholding and there are no write-offs for that.
With the FairTax, their Social Security withholding would be a part of the consumption tax so that every time they made a purchase a small amount would be going towards this particular tax and there would be no large lump sum due quarterly like there is now. For monthly wage-earners, the same would be true: You would receive 100% of your paycheck with no tax withholding of any kind.
These taxes would be paid over the year as a part of all new goods and services and only when YOU decide, not every two weeks or monthly as it is now. You would have the use of ALL of your money until you make a purchase. Then and only then will you be paying taxes. Wouldn't you like to keep 100% of your paycheck and YOU be the boss, not the government? The politicians are not going to like this - They will lose control over you.
The Lobbyists will not like this either - they will lose control over the politicians. TAKE BACK YOUR GOVERNMENT! YOU BE IN THE DRIVER'S SEAT!
The FairTax will make Social Security and Medicare healthy again. For independent contractors and business owners, the FairTax will be a double blessing when it comes to Social Security taxes. These people have to pay double what the monthly wage earner pays - their share and the business' share. It becomes a terrible burden at tax time. Independent contractors and business owners have lots of tax write-offs, but they still have to pay their entire Social Security withholding and there are no write-offs for that.
With the FairTax, their Social Security withholding would be a part of the consumption tax so that every time they made a purchase a small amount would be going towards this particular tax and there would be no large lump sum due quarterly like there is now. For monthly wage-earners, the same would be true: You would receive 100% of your paycheck with no tax withholding of any kind.
These taxes would be paid over the year as a part of all new goods and services and only when YOU decide, not every two weeks or monthly as it is now. You would have the use of ALL of your money until you make a purchase. Then and only then will you be paying taxes. Wouldn't you like to keep 100% of your paycheck and YOU be the boss, not the government? The politicians are not going to like this - They will lose control over you.
The Lobbyists will not like this either - they will lose control over the politicians. TAKE BACK YOUR GOVERNMENT! YOU BE IN THE DRIVER'S SEAT!
Monday, November 19, 2007
FAIRTAX FACTS REGARDING JOBS
I am going to be recycling some of my first blogs this week. Thanksgiving is a busy time for us, what with Doctor appointments, cooking, travel and such. Have a good week, give lots of thanks and enjoy reading my earlier blogs that you may have missed, or forgotten:
1. Creates jobs where the current system destroys jobs. Too many businesses are sending jobs overseas because the labor is cheaper AND the taxes are more favorable. If we enact the FairTax, these businesses will be happy to move back to the U.S. and I wouldn't be surprised if a number of other countries would rush to set up business in the U.S. because of the favorable tax system, thereby bringing more sales tax revenue that we didn't have before. Also, the individuals and corporations with off-shore banking accounts will bring their money back here. You will see a boom to our economy that you never would have dreamed possible. You won't have any trouble finding a job that suits you and pays well. 2. Gives you your whole paycheck. No federal withholding! You will receive 100% of your income. Look at your paycheck: How much is your employer holding out of your check for various payroll taxes? That money would come to you to spend, save or invest as you like. You would only pay taxes when you purchased new goods or services. In the meantime, that money could be sitting in YOUR bank account earning YOU interest. Or invest in stocks or bonds. Whatever YOU decide to do with YOUR money.
1. Creates jobs where the current system destroys jobs. Too many businesses are sending jobs overseas because the labor is cheaper AND the taxes are more favorable. If we enact the FairTax, these businesses will be happy to move back to the U.S. and I wouldn't be surprised if a number of other countries would rush to set up business in the U.S. because of the favorable tax system, thereby bringing more sales tax revenue that we didn't have before. Also, the individuals and corporations with off-shore banking accounts will bring their money back here. You will see a boom to our economy that you never would have dreamed possible. You won't have any trouble finding a job that suits you and pays well. 2. Gives you your whole paycheck. No federal withholding! You will receive 100% of your income. Look at your paycheck: How much is your employer holding out of your check for various payroll taxes? That money would come to you to spend, save or invest as you like. You would only pay taxes when you purchased new goods or services. In the meantime, that money could be sitting in YOUR bank account earning YOU interest. Or invest in stocks or bonds. Whatever YOU decide to do with YOUR money.
Friday, November 16, 2007
FAIRTAX CALCULATOR
I'm baaaaaaaaaaack!
Ian and Dutchman did such a good job sparring with each other on yesterday's non-blog, I thought I would continue in that vein so you can do your own figuring on how much the FairTax is going to cost you or save you. You can find a FairTax Calculator at www.fairtax.org that will help you out with this project.
With some, it may be a lot, with others, it may be a wash. But the benefits to America and the economy will be a huge winner and you can help take credit for getting America out of debt, leaving a wonderful legacy for your children and grandchildren. Sometimes you have to look at the big picture when figuring the end results.
The end results with the FairTax will be zero debt, a strong Social Security system, a strong medicare system, more jobs, more money free for investments, easier to save for your kids college education, etc. etc. etc........................
It's not just "what's in it for me". It's also "what's good for America", because without a good, strong, solid America, it is too late to worry about "what's in it for me".
Ian and Dutchman did such a good job sparring with each other on yesterday's non-blog, I thought I would continue in that vein so you can do your own figuring on how much the FairTax is going to cost you or save you. You can find a FairTax Calculator at www.fairtax.org that will help you out with this project.
With some, it may be a lot, with others, it may be a wash. But the benefits to America and the economy will be a huge winner and you can help take credit for getting America out of debt, leaving a wonderful legacy for your children and grandchildren. Sometimes you have to look at the big picture when figuring the end results.
The end results with the FairTax will be zero debt, a strong Social Security system, a strong medicare system, more jobs, more money free for investments, easier to save for your kids college education, etc. etc. etc........................
It's not just "what's in it for me". It's also "what's good for America", because without a good, strong, solid America, it is too late to worry about "what's in it for me".
Thursday, November 15, 2007
THE FOOTBALL GAME WON OUT
I thought about saying I felt old, so no blog today, but then decided to tell the truth. I was just lazy today and did nothing! And tonight the Football game came on and - well - as the saying goes, "there goes the ballgame".
Talk to you again tomorrow.
Talk to you again tomorrow.
Wednesday, November 14, 2007
NO BLOG ON BOBBIE'S BIRTHDAY
I refuse to do a thing on my birthday; therefore, no blog.
Happy Birthday to me...............................
Happy Birthday to me...............................
Tuesday, November 13, 2007
CLARIFICATION OF THE PREBATE – CORRECTED!
Well, I screwed up yesterday, so this is eat-crow day and correct my mistakes. First of all, I got the Prebate figures wrong. I started looking at my white paper, which had the 2007 chart of prebates. Then I thought I had better play it safe and go straight to the FairTax Bill. Well, that bill had 2005 charts in it, since that’s when it was written, and I didn’t notice the date change until “Dutchman” pointed out the discrepancies to me. Thank you, sir.
That got us wondering about my assumption that a parent or grandparent living with the couple and 2-3 children would be considered a dependent (or child). Bonnie, (head of the FairTax volunteers in my area, called down to the FairTax headquarters and this is how it works:
If you are 18 or older, living at home, going to college or working, you would get a prebate of a single person, or $196/mth, based on 2007 charts.
If you have 3 adults and 2 kids in a household, you would receive a prebate of $525/mth for the couple and 2 kids, PLUS the 3rd adult would receive a prebate based on a single person, or $196/mth, based on 2007 charts.
If you have 4 adults and 2 kids in a household, you would receive a prebate of $525/mth for the couple and 2 kids, PLUS the 3rd & 4th adult (if a couple) would receive $391. If the 3rd & 4th adult were not married, they would receive $196/mth each.
Bonnie also asked whether a person could receive a rebate at a P.O. Box number. The answer is yes, as long as that person is a legal citizen, has a social security number and is not registered at another address. The prebate is tied to the SS#, wherever it resides. I presume that would include the homeless, as long as they were able to get a P.O. Box #, could prove their citizenship and had a SS#.
As for “Dutchman” asking about the prebate status of 100 orphans in an orphan facility, I would think that orphan facility would be considered a “charity” or a “non-profit business” and would be handled as such. But that’s just my opinion. Anybody else out there have one? We welcome your discussion.
That got us wondering about my assumption that a parent or grandparent living with the couple and 2-3 children would be considered a dependent (or child). Bonnie, (head of the FairTax volunteers in my area, called down to the FairTax headquarters and this is how it works:
If you are 18 or older, living at home, going to college or working, you would get a prebate of a single person, or $196/mth, based on 2007 charts.
If you have 3 adults and 2 kids in a household, you would receive a prebate of $525/mth for the couple and 2 kids, PLUS the 3rd adult would receive a prebate based on a single person, or $196/mth, based on 2007 charts.
If you have 4 adults and 2 kids in a household, you would receive a prebate of $525/mth for the couple and 2 kids, PLUS the 3rd & 4th adult (if a couple) would receive $391. If the 3rd & 4th adult were not married, they would receive $196/mth each.
Bonnie also asked whether a person could receive a rebate at a P.O. Box number. The answer is yes, as long as that person is a legal citizen, has a social security number and is not registered at another address. The prebate is tied to the SS#, wherever it resides. I presume that would include the homeless, as long as they were able to get a P.O. Box #, could prove their citizenship and had a SS#.
As for “Dutchman” asking about the prebate status of 100 orphans in an orphan facility, I would think that orphan facility would be considered a “charity” or a “non-profit business” and would be handled as such. But that’s just my opinion. Anybody else out there have one? We welcome your discussion.
Monday, November 12, 2007
CLARIFICATION OF THE PREBATE
One of the students in the home school class we visited last week presented us with the following question: Does the pre-bate change or allow for 3 adults and 2 kids in the same household? This generated another question, this time from the teacher: What would happen if my parents moved in with us? That would be 4 adults and 2 kids. Do you know how this would work?
Well, I consulted my trusty white papers and also checked these questions out in the actual bill (HR25/S1025). Here are the answers:
QUALIFICATIONS
All qualified families, consisting of all family members who share a common residence, are entitled to receive the monthly prebate. Family members include an individual and his or her spouse, children and grandchildren, parents, and grandparents.
Children living away from home are considered family members if they are registered as a student for at least five months out of the year and receive at least 50% support from the family unit.
Children of divorced parents are considered to be family members of the custodial parent. Incarcerated individuals are not eligible to be members of a qualified family.
In order for a person to be counted as a member of the family, a person must have a valid Social Security number and be a lawful resident of the United States.
The application/registration form that families who choose to receive the prebate must file is simple and straightforward. Those choosing not to register will not receive a prebate.
CALCULATION OF THE PREBATE
The monthly prebate check is calculated by multiplying the annual poverty level spending published each year by the Department of Health and Human Services times the FairTax rate and dividing by twelve.
There is a chart in the white paper and also in the FairTax bill showing the prebate schedule for 2007. You can check it out and figure exactly what your rebate will be under the FairTax. These payments allow for additional amounts for a 2-adult household, which eliminates the marriage penalty. I am assuming that after that adjustment, additional adults in the family unit would be considered the same as a child as far as the amounts of the rebate.
ADMINISTRATION
The prebate is sent out by the Social Security Administration around the 1st day of each month. Prebate payments can only be made to persons 18 years or older; however, the prebate payment can be divided evenly among those persons as designated on the registration form.
So lets figure the prebates on the examples given in the questions.
3 adults and 2 kids in a household: (Counted on the chart as 1 couple, 3 kids)
The monthly rebate would be $554.
4 adults and 2 kids in a household: (Counted on the chart as 1 couple, 4 kids)
The monthly rebate would be $617.
I have a link on my blog to the FairTax bill, the plain English summary, if you wish to check out the chart or read further on this subject. It is in Chapter 3.
Well, I consulted my trusty white papers and also checked these questions out in the actual bill (HR25/S1025). Here are the answers:
QUALIFICATIONS
All qualified families, consisting of all family members who share a common residence, are entitled to receive the monthly prebate. Family members include an individual and his or her spouse, children and grandchildren, parents, and grandparents.
Children living away from home are considered family members if they are registered as a student for at least five months out of the year and receive at least 50% support from the family unit.
Children of divorced parents are considered to be family members of the custodial parent. Incarcerated individuals are not eligible to be members of a qualified family.
In order for a person to be counted as a member of the family, a person must have a valid Social Security number and be a lawful resident of the United States.
The application/registration form that families who choose to receive the prebate must file is simple and straightforward. Those choosing not to register will not receive a prebate.
CALCULATION OF THE PREBATE
The monthly prebate check is calculated by multiplying the annual poverty level spending published each year by the Department of Health and Human Services times the FairTax rate and dividing by twelve.
There is a chart in the white paper and also in the FairTax bill showing the prebate schedule for 2007. You can check it out and figure exactly what your rebate will be under the FairTax. These payments allow for additional amounts for a 2-adult household, which eliminates the marriage penalty. I am assuming that after that adjustment, additional adults in the family unit would be considered the same as a child as far as the amounts of the rebate.
ADMINISTRATION
The prebate is sent out by the Social Security Administration around the 1st day of each month. Prebate payments can only be made to persons 18 years or older; however, the prebate payment can be divided evenly among those persons as designated on the registration form.
So lets figure the prebates on the examples given in the questions.
3 adults and 2 kids in a household: (Counted on the chart as 1 couple, 3 kids)
The monthly rebate would be $554.
4 adults and 2 kids in a household: (Counted on the chart as 1 couple, 4 kids)
The monthly rebate would be $617.
I have a link on my blog to the FairTax bill, the plain English summary, if you wish to check out the chart or read further on this subject. It is in Chapter 3.
Friday, November 9, 2007
QUESTIONS ABOUT LAWYERS AND ACCOUNTANTS
My friends and relatives tend to e-mail me with questions rather than ask them under comments in the blog. I thought I would pass this one on for discussion. The question:
"My fear is that the accountants and lawyers will gang up on us because they will be losing lots of jobs. Or is there a solution for this?"
The answer (one or two anyway – you guys can probably think of more):
The accountants will be very happy to give up their work trying to figure out the 60,000+ pages of the IRS laws and concentrate their efforts on helping their clients make smart investments with the extra money they will have. Many accountants will turn to investment counseling.
Many tax attorneys will turn into investment attorneys or any one of the many other ways attorneys have of making money.
There will be lots of work for both accountants and attorneys. The economy is projected to grow with the FairTax, businesses and manufacturers will come back to the U.S. from overseas and there will be an abundance of jobs. These new wage earners will need advice on how to spend their money, among other things.
Read chapter 12 in “THE FAIR TAX BOOK” by Neal Boortz and John Linder. In this chapter, he discusses the impact on tax attorneys and accountants, plus the impact on the many people who work for the IRS. He puts it much better than I can.
Please, if there are any Tax accountants or Attorneys reading my blog, weigh in and tell us your thoughts on this subject. Thanks.
"My fear is that the accountants and lawyers will gang up on us because they will be losing lots of jobs. Or is there a solution for this?"
The answer (one or two anyway – you guys can probably think of more):
The accountants will be very happy to give up their work trying to figure out the 60,000+ pages of the IRS laws and concentrate their efforts on helping their clients make smart investments with the extra money they will have. Many accountants will turn to investment counseling.
Many tax attorneys will turn into investment attorneys or any one of the many other ways attorneys have of making money.
There will be lots of work for both accountants and attorneys. The economy is projected to grow with the FairTax, businesses and manufacturers will come back to the U.S. from overseas and there will be an abundance of jobs. These new wage earners will need advice on how to spend their money, among other things.
Read chapter 12 in “THE FAIR TAX BOOK” by Neal Boortz and John Linder. In this chapter, he discusses the impact on tax attorneys and accountants, plus the impact on the many people who work for the IRS. He puts it much better than I can.
Please, if there are any Tax accountants or Attorneys reading my blog, weigh in and tell us your thoughts on this subject. Thanks.
Thursday, November 8, 2007
DOES THE FAIRTAX TAX RENTALS?
I was asked this question the other day and thought this would be a good time to answer it. As you know, both owner-occupied and renter-occupied housing is taxable under the FairTax. With owner-occupied housing (new), the tax is collected up front at time of sale. With renter-occupied housing (new or used) the monthly rent is taxed as it is collected by the landlord.
Renter-occupied housing under the present Income tax is paid with after-tax dollars.
Renter-occupied housing under the FairTax is paid with pre-tax dollars, plus there will be a pre-bate added to the renters income to stretch his/her dollar further.
Since investment property is not taxed under the FairTax, but the rents are taxed, the rental property will not be subject to double taxation.
An example in the FairTax Research information compared the Income Tax structure with the FairTax structure using $500 in monthly rents. With a 15% income tax bracket, the renter would have to earn $647 in order to pay his income taxes and payroll taxes and have $500 left to pay his rent.
Under the FairTax structure, the $500 rent plus the 23% sales tax amounts to $649, $2 more than the income tax in order to cover his rent. HOWEVER, in comes the pre-bate to the rescue! And that renter has only had to use $2 of his monthly pre-bate to pay his rent, leaving the remainder to pay the taxes on his medical bills, dental bills, groceries, etc.
I hope that answers your question. If not, go to FairTax.org for more information. I don’t know how to make charts in this blog so you will have to rely on the FairTax website for visual proof.
Renter-occupied housing under the present Income tax is paid with after-tax dollars.
Renter-occupied housing under the FairTax is paid with pre-tax dollars, plus there will be a pre-bate added to the renters income to stretch his/her dollar further.
Since investment property is not taxed under the FairTax, but the rents are taxed, the rental property will not be subject to double taxation.
An example in the FairTax Research information compared the Income Tax structure with the FairTax structure using $500 in monthly rents. With a 15% income tax bracket, the renter would have to earn $647 in order to pay his income taxes and payroll taxes and have $500 left to pay his rent.
Under the FairTax structure, the $500 rent plus the 23% sales tax amounts to $649, $2 more than the income tax in order to cover his rent. HOWEVER, in comes the pre-bate to the rescue! And that renter has only had to use $2 of his monthly pre-bate to pay his rent, leaving the remainder to pay the taxes on his medical bills, dental bills, groceries, etc.
I hope that answers your question. If not, go to FairTax.org for more information. I don’t know how to make charts in this blog so you will have to rely on the FairTax website for visual proof.
Wednesday, November 7, 2007
THE FAIRTAXERS GO TO HOMESCHOOL!
Bonnie, our FairTax Volunteer Director in this area, and I presented our FairTax Program to some Forest Grove home-schoolers today. They had been studying the FairTax during their Government class and their teacher asked us to come and talk to the students about the FairTax. There were approximately 11 students ranging in age from 11-17, plus one parent, and Bonnie and I were simply amazed at the good behavior in class and the intelligent questions asked.
We showed them the DVD “The FairTax – it’s Time”, answered their questions as best we could and I read them my “Let’s Pretend” blog, which is my favorite. It give the facts of the FairTax in a fun and easy to understand manner. We then gave them a packet of printed matter, a CD for their computer and a FairTax Card.
Hopefully, we have some new blog readers and lots more questions and comments to come.
WELCOME HOMESCHOOLERS!
We showed them the DVD “The FairTax – it’s Time”, answered their questions as best we could and I read them my “Let’s Pretend” blog, which is my favorite. It give the facts of the FairTax in a fun and easy to understand manner. We then gave them a packet of printed matter, a CD for their computer and a FairTax Card.
Hopefully, we have some new blog readers and lots more questions and comments to come.
WELCOME HOMESCHOOLERS!
Tuesday, November 6, 2007
THE AUTO INDUSTRY HAS AN 18% HANDICAP
Our present Income Tax system is driving the manufacturers overseas for one reason: money. Foreign countries have an 18% advantage over U.S. produced goods, whether competing here or abroad. The following example brings it home real well:
U.S. Production:
If sold in U.S. markets, they pay U.S. income and payroll taxes.
If sold in foreign markets, they pay U.S. income, payroll and foreign VAT taxes.
Foreign Production:
If sold in U.S. market, they pay no U.S. income, payroll or foreign VAT taxes.
If sold in foreign markets, they pay foreign VAT taxes.
No wonder foreign countries can sell their cars (and other goods) cheaper than the U.S.
No wonder our U.S. manufacturing and jobs are leaving this country at an alarming rate.
Manufacturing today represents half of what its share of GDP was in the 1950s. Wages are lower (or non-existent) because of overseas competition.
AND THEN COMES THE FAIRTAX! (hopefully)
The FairTax will make the U.S. the manufacturing capital of the world by being the only industrialized nation with a zero rate of tax on manufacturing and hiring U.S. workers.
The change in our tax structure will put the U.S. on a level playing field and you will see the price of automobiles (and other goods) go down, able to compete with foreign markets. There would be more jobs at higher wages and more money to spend and invest. The FairTax will also save the U.S. more than $100 billion in exports annually, just by getting rid of our present unfair tax structure.
U.S. Production:
If sold in U.S. markets, they pay U.S. income and payroll taxes.
If sold in foreign markets, they pay U.S. income, payroll and foreign VAT taxes.
Foreign Production:
If sold in U.S. market, they pay no U.S. income, payroll or foreign VAT taxes.
If sold in foreign markets, they pay foreign VAT taxes.
No wonder foreign countries can sell their cars (and other goods) cheaper than the U.S.
No wonder our U.S. manufacturing and jobs are leaving this country at an alarming rate.
Manufacturing today represents half of what its share of GDP was in the 1950s. Wages are lower (or non-existent) because of overseas competition.
AND THEN COMES THE FAIRTAX! (hopefully)
The FairTax will make the U.S. the manufacturing capital of the world by being the only industrialized nation with a zero rate of tax on manufacturing and hiring U.S. workers.
The change in our tax structure will put the U.S. on a level playing field and you will see the price of automobiles (and other goods) go down, able to compete with foreign markets. There would be more jobs at higher wages and more money to spend and invest. The FairTax will also save the U.S. more than $100 billion in exports annually, just by getting rid of our present unfair tax structure.
Monday, November 5, 2007
THE FAIRTAX AND THE AUTOMOBILE
My husband got home from the hospital finally, and is feeling much better now, so I have again taken up my blog:
As you know by now, the FairTax taxes all NEW goods and services; therefore, if you are accustomed to buying a used car-no taxes are added. But, if you are accustomed to buying a new car, you will be paying a FairTax on top of the sales price.
The good news is, that sales price will be lower, due to the fact that the price of the car will no longer include all of those embedded taxes (you know, taxes and costs added to the price of the car all along the manufacturing line and up through the retail level)
The purchasing costs of a new car are predicted to be lower by about 10% (14% for self-employed people), and that lower amount INCLUDES the FairTax. There is a chart in the FairTax.org website, a white paper under Industries/automobiles, that shows this prediction. It shows the total new car cost, including taxes, to be $43,537 under the present income tax system, and $39,160 under the FairTax, a difference of $4,377. That difference amounts to 10.05% less under the FairTax.
Another reason for a lower price under the FairTax is interest rates. Interest rates are projected to fall 25-35% under the FairTax, which would be a substantial amount given the high price of new cars today.
Also, you will be buying this new car with pre-tax dollars, thereby increasing your buying power.
Tomorrow we will look at the unfair treatment of the U.S manufacturers vs.the Foreign manufacturers of autos.
As you know by now, the FairTax taxes all NEW goods and services; therefore, if you are accustomed to buying a used car-no taxes are added. But, if you are accustomed to buying a new car, you will be paying a FairTax on top of the sales price.
The good news is, that sales price will be lower, due to the fact that the price of the car will no longer include all of those embedded taxes (you know, taxes and costs added to the price of the car all along the manufacturing line and up through the retail level)
The purchasing costs of a new car are predicted to be lower by about 10% (14% for self-employed people), and that lower amount INCLUDES the FairTax. There is a chart in the FairTax.org website, a white paper under Industries/automobiles, that shows this prediction. It shows the total new car cost, including taxes, to be $43,537 under the present income tax system, and $39,160 under the FairTax, a difference of $4,377. That difference amounts to 10.05% less under the FairTax.
Another reason for a lower price under the FairTax is interest rates. Interest rates are projected to fall 25-35% under the FairTax, which would be a substantial amount given the high price of new cars today.
Also, you will be buying this new car with pre-tax dollars, thereby increasing your buying power.
Tomorrow we will look at the unfair treatment of the U.S manufacturers vs.the Foreign manufacturers of autos.
Tuesday, October 30, 2007
NO BLOG TODAY
I spent most of the day in the emergency room of the hospital with my husband. They finally admitted him and I got home about 4:30pm, hungry and tired. Therefore, no blog today. I'll see how it goes tomorrow - go to www.fairtax.org for your FairTax fix today. Thanks
Monday, October 29, 2007
FAIRTAX TREATMENT OF INSURANCE IV
This is the last day for the insurance thing. I will cover health insurance and then sum everything up at the end and be done with it. For more indepth info, go to FairTax.org and check out the white papers under Research.
Health Insurance:
Income Tax:
Premiums for health insurance are treated differently, depending on who purchases the insurance. If you as an individual, purchase it, the insurance is paid for with after-tax dollars and not deductible.
If you are pay part of the premium for insurance through your employer, it is not deductible unless your employer establishes a Section 125 Plan, in which case your portion is paid for with pre-tax dollars, thus reducing your future Social Security benefit.
Because of the tax preferences in the income tax code, almost all health care is purchased by employers and the government. This removes flexibility, control, and cost awareness from the consumer.
FairTax:
Since the FairTax taxes all new goods and services one time, your health insurance premiums are taxed, but the charges billed to the insurance company by the doctor are not taxed. This avoids double taxation. If the insurance benefit is paid directly to you, it includes the insurance credit to prepay any taxes due as the benefit is spent.
If you purchase health care services directly from the doctor, such as co-pays or deductibles, the charges are taxable.
From the doctor’s perspective, the FairTax removes the cost of payroll taxes, income taxes, self-employment taxes, the cost of administering income tax withholding and payroll tax deductions for his/her employees, and personal income tax, payroll tax and compliance costs.
This allows the doctor to charge less for his/her services. It allows for the consumer to pay his/her lower-cost premiums with pre-tax dollars.
Summary of the benefits of the FairTax to the insurance industry and consumers:
- The pre-tax cost of insurance should drop as embedded taxes and compliance costs are removed.
- The average American takes home 100% of their paycheck.
- Only the risk component of cash value life insurance is taxed.
- Cash values of both annuities and life insurance contracts grow and can be withdrawn tax free.
- A credit insures that all insurance benefits are consumed tax free.
- Death benefits are both income and estate tax free and include a credit to insure they aren’t taxed when spent.
- Health insurance benefits are tax free.
- Natural markets are restored to the purchase of health insurance, helping to control and even lower future health care costs.
There, I’m done. Can you see how tied-down we are by the present income tax system? Can you see how much more free we will be when Congress passes bills H25 & S1025?
Call, write and beg your congressmen to sign on supporting the FairTax ASAP.
Friday, October 26, 2007
FAIRTAX TREATMENT OF INSURANCE III
Hopefully we can finish up with insurance today, or Monday at the latest. Then maybe we can hit on something more interesting, like buying a car, or talking about gas and oil. Then again, that sounds a bit boring too.
I try to cut these things down as far as possible and still make sense to you. If you need
examples, or just want to suck in all the info you can get on insurance, feel free to go to the White Pages of the Research part of the FairTax.
We continue today with:
ANNUITIES:
Annuities can be sold as either qualified plans (IRAs, 401ks, Seps, etc.) or non-qualified, (such as mutual funds). Premiums to non-qualified annuities are made with after-tax dollars. Cash values grow tax deferred. Withdrawals are taxed as ordinary income and they slap a penalty on you if you withdraw anything before the age of 59½. This early withdrawal penalty applies to both qualified and non-qualified annuities.
The growth on non-qualified annuities is tax deferred; however, gains are taxed as ordinary income when withdrawn. The more traditional non-qualified investment, such as a mutual fund, would receive more favorable capital gains treatment.
Annuities also have higher costs than other investments. These extra costs are for administration and protection benefits, such as guaranteed minimum death benefits or living benefits.
Here is a comparison of the current income tax system and the FairTax in the treatment of non-qualified annuities:
Premiums:
Income Tax: The premium is paid with after-tax dollars and is not deductible.
Fair Tax: The FairTax treats the annuity premiums like all other forms of investment: does not tax them. Premiums are purchased with pre-tax dollars. The consumer has increased take-home pay (100%!) to invest. Any service charges are taxed, but these costs will be lower due to the removal of embedded income/payroll taxes in the cost of doing business.
Cash Value:
Income Tax: Accumulations are tax deferred. When withdrawn, cash values are taxed as ordinary income, in the highest income tax bracket for the consumer and with a 10% penalty if withdrawn before age 591/2.
FairTax: Accumulations are tax free. Withdrawals are also tax free. Pre-tax prices of goods and services purchased with the proceeds should be less expensive due to the removal of embedded costs.
Death Benefit:
Income Tax: At death, any gains are taxed as ordinary income to the beneficiaries.
FairTax: None of the proceeds are taxed at death.
Well, we still need to cover Health Insurance, so I guess we go into Monday. Have a good Friday and a great weekend. May all your favorite football teams win (unless they're playing mine!)
I try to cut these things down as far as possible and still make sense to you. If you need
examples, or just want to suck in all the info you can get on insurance, feel free to go to the White Pages of the Research part of the FairTax.
We continue today with:
ANNUITIES:
Annuities can be sold as either qualified plans (IRAs, 401ks, Seps, etc.) or non-qualified, (such as mutual funds). Premiums to non-qualified annuities are made with after-tax dollars. Cash values grow tax deferred. Withdrawals are taxed as ordinary income and they slap a penalty on you if you withdraw anything before the age of 59½. This early withdrawal penalty applies to both qualified and non-qualified annuities.
The growth on non-qualified annuities is tax deferred; however, gains are taxed as ordinary income when withdrawn. The more traditional non-qualified investment, such as a mutual fund, would receive more favorable capital gains treatment.
Annuities also have higher costs than other investments. These extra costs are for administration and protection benefits, such as guaranteed minimum death benefits or living benefits.
Here is a comparison of the current income tax system and the FairTax in the treatment of non-qualified annuities:
Premiums:
Income Tax: The premium is paid with after-tax dollars and is not deductible.
Fair Tax: The FairTax treats the annuity premiums like all other forms of investment: does not tax them. Premiums are purchased with pre-tax dollars. The consumer has increased take-home pay (100%!) to invest. Any service charges are taxed, but these costs will be lower due to the removal of embedded income/payroll taxes in the cost of doing business.
Cash Value:
Income Tax: Accumulations are tax deferred. When withdrawn, cash values are taxed as ordinary income, in the highest income tax bracket for the consumer and with a 10% penalty if withdrawn before age 591/2.
FairTax: Accumulations are tax free. Withdrawals are also tax free. Pre-tax prices of goods and services purchased with the proceeds should be less expensive due to the removal of embedded costs.
Death Benefit:
Income Tax: At death, any gains are taxed as ordinary income to the beneficiaries.
FairTax: None of the proceeds are taxed at death.
Well, we still need to cover Health Insurance, so I guess we go into Monday. Have a good Friday and a great weekend. May all your favorite football teams win (unless they're playing mine!)
Thursday, October 25, 2007
LETTER REGARDING FRED THOMPSON AND THE FAIRTAX
Every now and then a FairTax letter comes through my e-mail and catches my eye. I am digressing from the Insurance stuff to show you a copy of the letter, plus a reply. I was especially impressed with the reply that certainly would have put Fred Thompson in his place. After all the time and money and study that has gone into the development of the FairTax, it’s too bad you can’t think of a reply like that on the spot.
Here is the letter:
I had the opportunity to take my 8th grade civics class to hear Fred Thompson in Mt. Pleasant, SC this morning. He said, "As I scan the room, I see many people wearing FairTax stickers. I see them everywhere I go. FairTax has a better campaign going on than any of the candidates!"He was then asked to endorse the FairTax. His response was disappointing. He said, "I can't take the numbers they've come up with and run with them. I'll have to run the numbers for myself. I'm keeping all tax reform ideas on the table. We may wind up with a plan that takes a little from this and a little from that. We need a plan that can pass the Congress."Keep the heat on!
John SteinbergerCharleston, SC
Here is the reply to the letter:
Fair Tax put together by top Economists, over a number of years at several millions of dollars, surprised that you think you can do better. Cheers - Phin
One thing we DON’T need is a “plan that can pass the Congress”. We need a plan that can satisfy the people for a change – WE NEED THE FAIRTAX!
Here is the letter:
I had the opportunity to take my 8th grade civics class to hear Fred Thompson in Mt. Pleasant, SC this morning. He said, "As I scan the room, I see many people wearing FairTax stickers. I see them everywhere I go. FairTax has a better campaign going on than any of the candidates!"He was then asked to endorse the FairTax. His response was disappointing. He said, "I can't take the numbers they've come up with and run with them. I'll have to run the numbers for myself. I'm keeping all tax reform ideas on the table. We may wind up with a plan that takes a little from this and a little from that. We need a plan that can pass the Congress."Keep the heat on!
John SteinbergerCharleston, SC
Here is the reply to the letter:
Fair Tax put together by top Economists, over a number of years at several millions of dollars, surprised that you think you can do better. Cheers - Phin
One thing we DON’T need is a “plan that can pass the Congress”. We need a plan that can satisfy the people for a change – WE NEED THE FAIRTAX!
Wednesday, October 24, 2007
LET'S TACKLE INSURANCE #2
My eyes glaze over and I start hyperventilating when I talk about insurance. But it must be addressed in relation to the FairTax, so here goes:
For businesses, both the premiums and the benefits are treated as a tax-free business input. The following comparisons address insurance purchased for personal use only.
PROPERTY/CASUALTY INSURANCE
Income Tax: No tax benefits or tax credits. Like other services, embedded taxes are included in the price of the premiums.
FairTax: The premium is subject to the sales tax. The benefit is received tax free and includes a credit to prepay taxes that are due when consumed. (Remember, with the FairTax, you only have to pay a tax once, when you buy something)
LIFE INSURANCE
The FairTax treats both term and cash value life insurance as well or better than the income tax system does.
Premiums-------------
Income Tax: Premium is paid with after-tax dollars.
FairTax: Only the “term” component of a premium is taxed, not the “investment” component.
Cash Value-------------
Income Tax: Cash values grow tax deferred and is taxed as ordinary income. The principal is not taxed; however, it is paid for with after-tax dollars.
FairTax: Neither the principal nor the interest is taxed. They only become taxable if used to purchase new goods or services, which should be lower with embedded taxes backed out of the equation.
Death Benefit-------------
Income Tax: A death benefit is income tax free, but sometimes subjected to estate taxes.
FairTax: A death benefit is tax free PLUS the beneficiary receives a credit equal to 23% of the benefit to prepay any sales taxes due when spent. No estate taxes, ever again!
This is enough to digest for today. I should be able to finish up the insurance stuff tomorrow and then hopefully we will find a more enjoyable topic. Meanwhile, you insurance lovers can get lots more in-depth information in the White Pages of the Research section of the FairTax website.
For businesses, both the premiums and the benefits are treated as a tax-free business input. The following comparisons address insurance purchased for personal use only.
PROPERTY/CASUALTY INSURANCE
Income Tax: No tax benefits or tax credits. Like other services, embedded taxes are included in the price of the premiums.
FairTax: The premium is subject to the sales tax. The benefit is received tax free and includes a credit to prepay taxes that are due when consumed. (Remember, with the FairTax, you only have to pay a tax once, when you buy something)
LIFE INSURANCE
The FairTax treats both term and cash value life insurance as well or better than the income tax system does.
Premiums-------------
Income Tax: Premium is paid with after-tax dollars.
FairTax: Only the “term” component of a premium is taxed, not the “investment” component.
Cash Value-------------
Income Tax: Cash values grow tax deferred and is taxed as ordinary income. The principal is not taxed; however, it is paid for with after-tax dollars.
FairTax: Neither the principal nor the interest is taxed. They only become taxable if used to purchase new goods or services, which should be lower with embedded taxes backed out of the equation.
Death Benefit-------------
Income Tax: A death benefit is income tax free, but sometimes subjected to estate taxes.
FairTax: A death benefit is tax free PLUS the beneficiary receives a credit equal to 23% of the benefit to prepay any sales taxes due when spent. No estate taxes, ever again!
This is enough to digest for today. I should be able to finish up the insurance stuff tomorrow and then hopefully we will find a more enjoyable topic. Meanwhile, you insurance lovers can get lots more in-depth information in the White Pages of the Research section of the FairTax website.
Tuesday, October 23, 2007
LET’S TACKLE INSURANCE!
I have always hated insurance. But it seems to be a necessary evil. The primary purpose of insurance is to mitigate risk, either on property or people. Here are the differences between our present income tax system and the FairTax:
Income Tax system: The entire premium is paid with after-tax dollars.
FairTax: Only the monthly premiums are taxed, with pre-tax dollars.
Income Tax system: Insurance cash values grow tax deferred.
FairTax: Insurance cash values grow tax free.
Income Tax system: Cash values are taxed upon withdrawal.
FairTax: Cash values are withdrawn tax free.
Income Tax system: Benefits received are tax free today
FairTax: Benefits are received tax free.
To avoid double taxation, the Income Tax system taxes the premiums, but not the benefits. The premiums are made with after-tax dollars and they are not allowed as a deductible on your income taxes.
The Fair Tax taxes the premiums, but the benefit is received tax free. The proceeds are taxed as spent; therefore, there is an insurance credit paid out on the benefit to avoid double taxation.
That’s enough for today – more tomorrow.
Income Tax system: The entire premium is paid with after-tax dollars.
FairTax: Only the monthly premiums are taxed, with pre-tax dollars.
Income Tax system: Insurance cash values grow tax deferred.
FairTax: Insurance cash values grow tax free.
Income Tax system: Cash values are taxed upon withdrawal.
FairTax: Cash values are withdrawn tax free.
Income Tax system: Benefits received are tax free today
FairTax: Benefits are received tax free.
To avoid double taxation, the Income Tax system taxes the premiums, but not the benefits. The premiums are made with after-tax dollars and they are not allowed as a deductible on your income taxes.
The Fair Tax taxes the premiums, but the benefit is received tax free. The proceeds are taxed as spent; therefore, there is an insurance credit paid out on the benefit to avoid double taxation.
That’s enough for today – more tomorrow.
Monday, October 22, 2007
THE FAIRTAX AND MIKE HUCKABEE
The Oregonian had a large article reprinted from the New York Times regarding Mike Huckabee and his “Electability – Let me count the ways”. They counted everything about him except for his support of the FairTax. The FairTax has always been a staple in his speeches and this David Brooks writer didn’t even mention it!
I know the politicians are afraid of the FairTax. It will remove a lot of their powers over us. But is the Media afraid also? And if so, why? The FairTax would benefit so many people.
I am including my letter to the Editor of the Oregonian for you to read, since it may never see print in the big “O”:
To the Editor:
David Brooks’ article about Mike Huckabee was great, but it left out the most important aspect of his campaign – the FairTax. Mr. Huckabee is the only candidate among Republicans and Democrats who consistently talks about the FairTax. Some of the other candidates mouth it, but Huckabee lives it.
The FairTax is a bill in committee (HR25 & S1025) to replace the income tax, to fix the Social Security & Medicare systems before they go broke, to allow taxpayers to take home 100% of their income, and many more amenities.
The most important “fix” would be to give back control to the people. And that is exactly why you won’t see many politicians in favor of the FairTax. It takes away their control of us and removes the control of their lobbyists. Mike Huckabee isn’t afraid to empower his voters. He has my vote.
Bobbie Godfrey
I know the politicians are afraid of the FairTax. It will remove a lot of their powers over us. But is the Media afraid also? And if so, why? The FairTax would benefit so many people.
I am including my letter to the Editor of the Oregonian for you to read, since it may never see print in the big “O”:
To the Editor:
David Brooks’ article about Mike Huckabee was great, but it left out the most important aspect of his campaign – the FairTax. Mr. Huckabee is the only candidate among Republicans and Democrats who consistently talks about the FairTax. Some of the other candidates mouth it, but Huckabee lives it.
The FairTax is a bill in committee (HR25 & S1025) to replace the income tax, to fix the Social Security & Medicare systems before they go broke, to allow taxpayers to take home 100% of their income, and many more amenities.
The most important “fix” would be to give back control to the people. And that is exactly why you won’t see many politicians in favor of the FairTax. It takes away their control of us and removes the control of their lobbyists. Mike Huckabee isn’t afraid to empower his voters. He has my vote.
Bobbie Godfrey
Friday, October 19, 2007
IT'S NO-BLOG FRIDAY AGAIN!
Well, hey, I'm retired you know! We had company today and I didn't have time until right now to do my blog and I am not about to get serious on a Friday night.
Have a good weekend - we'll talk on Monday, ok?
Have a good weekend - we'll talk on Monday, ok?
Thursday, October 18, 2007
FAIRTAX BENEFITS YOUNG AND LOW-INCOME FAMILIES
Well, I don’t know about you, but I have had it up to my ears in investments, stocks, bonds, corporations, etc. If you want to learn more about that stuff, go into www.fairtax.org and check out the research papers. They have loads of information. As for me, I am more interested in the benefits for young working families, low-income families and fixed income families. I say “what’s in it for me?”.
The young working families represent my children and grandchildren. The fixed-income families represent my husband and me. The low-income families represent the people on welfare and the minimum-wage earners. For all of us, the following applies:
1. No more payroll withholding taxes. Take home 100% of your paycheck. You are no longer burdened with the prospect of paying out all that money in Social Security taxes that you are told you will never see.
2. No more income taxes withholdings, so paycheck-to-paycheck families can take home 100% of their paycheck. No more records to keep, returns to file, tax preparers to pay, or IRS audits to endure.
3. Every family can purchase the necessities of life tax free via the tax pre-bate that exempts all spending up to the poverty level, determined by the Department of Health and Human Services. Even the rich get this pre-bate so the system will be fair and equal to all and the politicians will not be able to start messing around with the FairTax like they have with the income tax.
4. The FairTax ends the sham of corporate taxes – the government levies taxes on business. Business “pays” such taxes by raising prices to consumers, lowering the wages paid to workers, or by lowering dividends paid to shareholders. Notice who gets the shaft here…………….we all do. No more hidden taxes with the FairTax.
5. Used products are not taxed, thereby reducing the tax burden on spending above the poverty level. This means you can buy a used car, a used home or go to your neighborhood garage sale and buy used merchandise, all tax free! The rich and the more affluent will be buying the new stuff, as they always have, and low and behold, they will buy more because they too will have more dollars left to spend.
6. Now you had better go back and study up on those investments, stocks, bonds, and such, because now even we can afford to buy those things!
The young working families represent my children and grandchildren. The fixed-income families represent my husband and me. The low-income families represent the people on welfare and the minimum-wage earners. For all of us, the following applies:
1. No more payroll withholding taxes. Take home 100% of your paycheck. You are no longer burdened with the prospect of paying out all that money in Social Security taxes that you are told you will never see.
2. No more income taxes withholdings, so paycheck-to-paycheck families can take home 100% of their paycheck. No more records to keep, returns to file, tax preparers to pay, or IRS audits to endure.
3. Every family can purchase the necessities of life tax free via the tax pre-bate that exempts all spending up to the poverty level, determined by the Department of Health and Human Services. Even the rich get this pre-bate so the system will be fair and equal to all and the politicians will not be able to start messing around with the FairTax like they have with the income tax.
4. The FairTax ends the sham of corporate taxes – the government levies taxes on business. Business “pays” such taxes by raising prices to consumers, lowering the wages paid to workers, or by lowering dividends paid to shareholders. Notice who gets the shaft here…………….we all do. No more hidden taxes with the FairTax.
5. Used products are not taxed, thereby reducing the tax burden on spending above the poverty level. This means you can buy a used car, a used home or go to your neighborhood garage sale and buy used merchandise, all tax free! The rich and the more affluent will be buying the new stuff, as they always have, and low and behold, they will buy more because they too will have more dollars left to spend.
6. Now you had better go back and study up on those investments, stocks, bonds, and such, because now even we can afford to buy those things!
Wednesday, October 17, 2007
THE IMPACT OF THE FAIRTAX ON INVESTMENT
Our present income tax system is a real downer when it comes to savings and investments, through double, triple, and even quadruple taxation. You get taxed when you earn the money (wages). Then, if you save or invest some of your money, you get taxed again and again. 100% of your income from investments is taxed (up to 80% if Nancy Pelosi has her way, leaving you a measly 20%). You have to pay capital gains taxes if you sell it for more than it was purchased.
Corporate income (including capital gains) is taxed at the corporate level and again when it is paid to shareholders as dividends. And on and on, until, when you die, the estate and gift tax may kick in for one final tax blow.
With the FairTax, the following is true. I copied it directly from the FAQ on the Fairtax website:
"What happens to the stock market, mutual funds, and retirement funds? Investors prosper greatly under this plan, since corporations face lower operating costs and individuals have more money to save and invest. The reform significantly enhances the retirement savings and/or retirement spending power of most Americans. The purchase of stocks is considered a purchase for investment purposes and not personal consumption so they are purchased tax free. The service fees charged by the broker, however, are personal consumption and therefore subject to tax. "
After the repeal of the income tax and the enactment of the FairTax, the U.S. will probably be the most attractive place on earth to invest. We will attract investment capital from around the world to finance new plants and create jobs here in America. American workers will build these plants, build the equipment installed in these plants and will be employed in these plants. Off-shore money will find its way back home and our economy will be booming like never before.
And you can laugh all the way to the bank!
Corporate income (including capital gains) is taxed at the corporate level and again when it is paid to shareholders as dividends. And on and on, until, when you die, the estate and gift tax may kick in for one final tax blow.
With the FairTax, the following is true. I copied it directly from the FAQ on the Fairtax website:
"What happens to the stock market, mutual funds, and retirement funds? Investors prosper greatly under this plan, since corporations face lower operating costs and individuals have more money to save and invest. The reform significantly enhances the retirement savings and/or retirement spending power of most Americans. The purchase of stocks is considered a purchase for investment purposes and not personal consumption so they are purchased tax free. The service fees charged by the broker, however, are personal consumption and therefore subject to tax. "
After the repeal of the income tax and the enactment of the FairTax, the U.S. will probably be the most attractive place on earth to invest. We will attract investment capital from around the world to finance new plants and create jobs here in America. American workers will build these plants, build the equipment installed in these plants and will be employed in these plants. Off-shore money will find its way back home and our economy will be booming like never before.
And you can laugh all the way to the bank!
Tuesday, October 16, 2007
MAKING THE CASE FOR CONSUMPTION TAXATION
"Unlike income taxation, consumption taxation does not discourage investment because it applies a zero effective tax rate to marginal investments. Unlike wage taxation, consumption taxation imposes significant taxes on investors who earn excess returns (and those with investments in place when the tax is introduced), thereby raising revenue from a generally affluent group without undermining incentives.[6] In short,consumption taxation offers a better combination of efficiency and equity than alternative tax systems."
This quote came from an excerpt from one of our FairTax people. Think about it - it makes sense. The buy-low, sell-high theory helps the investor in this instance. The investor pays taxes when he buys the stock, or mutual fund, or whatever, but when he sells he receives the full benefit of his (HIS) profits. The affluent invest more, thus pay more taxes. They also make more money when they sell - so what. They have earned it. It wasn't given to them on a Title 9 platter (or some other number of platter). And yet, the small investor gets to keep his profits also, therefore giving him more spendable income.
The world keeps going 'round and 'round with the FairTax. It just plain stops eventually, with the income tax, or the flat tax or any other tax the politicians try to sell you on. DON'T BUY IT!
With the FairTax, you keep what you have earned, you pay taxes only on what you spend. Makes sense to me.
This quote came from an excerpt from one of our FairTax people. Think about it - it makes sense. The buy-low, sell-high theory helps the investor in this instance. The investor pays taxes when he buys the stock, or mutual fund, or whatever, but when he sells he receives the full benefit of his (HIS) profits. The affluent invest more, thus pay more taxes. They also make more money when they sell - so what. They have earned it. It wasn't given to them on a Title 9 platter (or some other number of platter). And yet, the small investor gets to keep his profits also, therefore giving him more spendable income.
The world keeps going 'round and 'round with the FairTax. It just plain stops eventually, with the income tax, or the flat tax or any other tax the politicians try to sell you on. DON'T BUY IT!
With the FairTax, you keep what you have earned, you pay taxes only on what you spend. Makes sense to me.
Monday, October 15, 2007
THIS BLOG WILL MAKE YOUR HAIR CURL!
I received the following e-mail this weekend and thought it was worthy of passing it on to you. Really scary! This woman wants to take (er, tax)100% of your investment profits and give it to others - namely illegal immigrants! This is worse than communism! It's downright inhumane!
The FairTax would fix these problems. We would no longer be threatened by the likes of this politician or any other politician or lobbyist who wants your money so they can give it to someone else.
This is why it is so important that we vote for politicians who are in favor of the FairTax, both Democrat and Republican. Turn your back and they will take (tax) your money!
Here's the e-mail:
Madam speaker Nancy Pelosi wants to put a Windfall tax all stock
> market profits (including Retirement fund, 401K's and Mutual Funds!
> .... all to help the 12 Million Illegal Immigrants and other
> unemployed Minorities!
>
>
> This woman is frightening. Take special note of the last paragraph. Is
> she really this whacked out?
>
> Nancy Pelosi condemned the new record highs of the stock market as
> "just another example of Bush policies helping the rich get richer".
> "First Bush cut taxes for the rich and the economy has rebounded with
> new record low unemployment rates, which only means! wealthy employers
> are getting even wealthier at the expense of the underpaid working
> class".
>
> She went on to say "Despite the billions of dollars being spent in
> Iraq our economy is still strong and government tax revenues are at
> all time highs What this really means is that business is exploiting
> the war effort and working Americans, just to put money in their own
> pockets".
>
> When questioned about recent stock market highs she responded "Only
> the rich benefit from these re cord highs. Working Americans, welfare
> recipients, the unemployed and minorities are not sharing in these
> obscene record highs". "There is no question these windfall profits
> and income created by the Bush administration need to be taxed at 100%
> rate and those dollars redistributed to the poor and working class".
> "Profits from the stock market do not reward the hard work of our
> working class who, by their hard work, are responsible for generating
> these corporate profits that create stock market profits for the rich.
> We in congress will need to address this issue to either tax these
> profits or to control the stock market to prevent this unearned income
> t o flow to the rich."
>
> When asked about the fact that over 80% of all Americans have
> investments in mutual funds, retirement funds, 401K's, and the stock
> market she replied "That may be true, but probably only 5% account for
> 90% of all these investment dollars. That's just more "trickle down"
> economics claiming that if a corporation is successful that everyone
> from the CEO to the floor sweeper benefit from higher wages and job
> security which is ridiculous". "How much of this 'trickle down' ever
> get to the unemployed and minorities in our county? None, and that's
> the tragedy of these stock market highs."
>
> "We democrats are going to address this issue after the election when
> we take control of the congress. We will return to the 60% to 80% tax
> rates on the rich and we will be able to take at least 30% of all
> current lower Federal Income Tax tax payers off the roles and increase
> government income substantially. We need to work toward the goal of
> equalizing income in our country and at the same time limiting the
> amount the rich can invest."
>
> When asked how these new tax dollars would be spent, she replied ; ;
> "We need to raise the standard of living of our poor, unemployed and
> minorities. For example, we have an estimated 12 million illegal
> immigrants in our country who need our help along with millions of
> unemployed minorities. Stock market windfall profits taxes could go a
> long way to guarantee these people the standard of living they would
> like to have as "Americans"."
Friday, October 12, 2007
LET’S PRETEND WE HAVE THE FAIRTAX NOW!
Today is Friday. It is a time for relaxation from the weeks giving to the IRS. I think you all need a boost. Therefore, I am re-publishing my favorite blog: "LET'S PRETEND WE HAVE THE FAIRTAX NOW!" Enjoy! See you Monday.
Everyone who wants one, has a job. The economy is booming!
Corporations are moving their headquarters and manufacturing
back to the USA.!
We get to keep 100% of your paycheck!
Social Security is on stable footing for the first time in years!
Medicare is paying its own way and is no longer in danger of default!
The Corporate taxes and costs of compliance hidden in both wholesale and retail prices no longer exist!
We love our monthly prebate check! The lower income people pay no taxes because of this and the rest of us get a free ride up to the amount of
the poverty level!
This means we can save more, faster and have more money available for education, home ownership and retirement!
We don’t have to fill out those stupid IRS forms anymore! We save a total of $250 billion or more (about 3% of the GDP).
The government wins too! They get the same amount of revenue they are used to getting!
And guess who has to start paying taxes for the first time in their lives?
Illegals, prostitutes, drug dealers, the porn industry, criminals, plus all of the other under-the-table transactions that take place!
Then comes the repeal of the 16th amendment – when we are sure we get the kind of FairTax we want.
Do you know what we have done? We have eliminated the IRS as we know it. No more audits (except for businesses), no more nasty letters, no more high-handed tactics.
NOW DO YOU KNOW WHAT THIS MEANS? THIS MEANS THAT APRIL 15TH WILL BE “JUST ANOTHER SPRING DAY”!
Everyone who wants one, has a job. The economy is booming!
Corporations are moving their headquarters and manufacturing
back to the USA.!
We get to keep 100% of your paycheck!
Social Security is on stable footing for the first time in years!
Medicare is paying its own way and is no longer in danger of default!
The Corporate taxes and costs of compliance hidden in both wholesale and retail prices no longer exist!
We love our monthly prebate check! The lower income people pay no taxes because of this and the rest of us get a free ride up to the amount of
the poverty level!
This means we can save more, faster and have more money available for education, home ownership and retirement!
We don’t have to fill out those stupid IRS forms anymore! We save a total of $250 billion or more (about 3% of the GDP).
The government wins too! They get the same amount of revenue they are used to getting!
And guess who has to start paying taxes for the first time in their lives?
Illegals, prostitutes, drug dealers, the porn industry, criminals, plus all of the other under-the-table transactions that take place!
Then comes the repeal of the 16th amendment – when we are sure we get the kind of FairTax we want.
Do you know what we have done? We have eliminated the IRS as we know it. No more audits (except for businesses), no more nasty letters, no more high-handed tactics.
NOW DO YOU KNOW WHAT THIS MEANS? THIS MEANS THAT APRIL 15TH WILL BE “JUST ANOTHER SPRING DAY”!
Thursday, October 11, 2007
TOO POOPED TO BLOG!
It's been a hard day for an old lady. It was Doctor Day today. I took Gary in to get fitted for his hearing aids. That wasn't so hard, but when we got home, I decided to go out and chop down the Iris, the lilies, the other ugly stuff left over from summer. Then Gary trudged out with the ladder and decided to pick apples. Well, that amounted to sawing off limbs to reach the apples. Now we have a real mess. I called the yard man to do that, but his phone was disconnected - I guess you get what you pay for.
All in all, it was an exhausting day. I told Gary - "I can't cook tonight, after all this". He said go get take-out. So we ordered Lasagne from Little Italy in Cornelius (they have the best pizza too). I went to get it, dragging all the way.
So that's how my day went. I am too tired to check out another research paper for you guys tonight. I suggest you check out Betty's blog. I'll bet she has some new stuff for you.
See you tomorrow...................
All in all, it was an exhausting day. I told Gary - "I can't cook tonight, after all this". He said go get take-out. So we ordered Lasagne from Little Italy in Cornelius (they have the best pizza too). I went to get it, dragging all the way.
So that's how my day went. I am too tired to check out another research paper for you guys tonight. I suggest you check out Betty's blog. I'll bet she has some new stuff for you.
See you tomorrow...................
Wednesday, October 10, 2007
CHARITABLE GIVING AND NON-PROFIT ORGANIZATIONS
Many people assume that the level of charitable giving in America is driven by the tax code and tax deductions. Well, let’s see……….
After the 1986 Tax Reform Act, charitable giving increased rather than decreased. Charitable giving rose by $6.4 billion, or 7.6% in 1987, after the top tax rate fell from 50 to 28%. Also, charitable bequests were growing most rapidly from 1980 to 1987, when estate taxes were coming down.
The FairTax increases the incentive to give. Under the FairTax, wage earners are taking home 100% of their paychecks, leaving a substantial increase in available funds for charitable giving. Under the current income tax system, the charitable deduction only offsets a portion of a taxpayer’s tax liability. And in addition, that taxpayer is giving with “After-Tax Dollars”. For the 2-out-of-3 taxpayers who currently do not itemize deductions, the FairTax will allow them to make these charitable givings “Pre-Tax Dollars”, from 100% of their paycheck.
For Charitable Organizations, their donations would increase under the FairTax by $2.06 billion. This translates to a .89% increase the first year, a 2.40% increase within 10 years, and a 4.99% increase after 20 years. When the economy is up, personal giving is up; when it’s down, so is personal giving. With the FairTax, the economy will be on a steady rise, which means charitable giving will soar to new heights. So here again, it’s a win-win!
After the 1986 Tax Reform Act, charitable giving increased rather than decreased. Charitable giving rose by $6.4 billion, or 7.6% in 1987, after the top tax rate fell from 50 to 28%. Also, charitable bequests were growing most rapidly from 1980 to 1987, when estate taxes were coming down.
The FairTax increases the incentive to give. Under the FairTax, wage earners are taking home 100% of their paychecks, leaving a substantial increase in available funds for charitable giving. Under the current income tax system, the charitable deduction only offsets a portion of a taxpayer’s tax liability. And in addition, that taxpayer is giving with “After-Tax Dollars”. For the 2-out-of-3 taxpayers who currently do not itemize deductions, the FairTax will allow them to make these charitable givings “Pre-Tax Dollars”, from 100% of their paycheck.
For Charitable Organizations, their donations would increase under the FairTax by $2.06 billion. This translates to a .89% increase the first year, a 2.40% increase within 10 years, and a 4.99% increase after 20 years. When the economy is up, personal giving is up; when it’s down, so is personal giving. With the FairTax, the economy will be on a steady rise, which means charitable giving will soar to new heights. So here again, it’s a win-win!
Tuesday, October 9, 2007
NAMING NAMES!
I received information today from Karen Walby, Ph.D, Director of Research, Americans For Fair Taxation. She said the extensive research has been done by scholars at Boston University, The Cato Institute, The Heritage Foundation, Fiscal Associates, the Institute for Policy Innovation, Stanford University, Rice University and MIT.
In the footnotes of all the White Papers in the research section of www.fairtax.org, you will find a number of authors who have been quoted. For those of you who are interested, I suggest you do this research on your own. The above Universities and Institutions are impressive in themselves. It tells me this has been one of the most researched and studied tax plans of all time.
I read today where mere compliance costs of the present income tax amounts to 6% of the GDP (Gross Domestic Product). Now that really hurts! Think of what we could do with all that money freed up for other things……………
Be sure to watch the Republican Debate tonight, even if you are not one. Our object is to vote for the candidate who is openly advocating the FairTax, whether he be Democrat, Republican, Independent or whatever. It comes on at 6pm PDT on channel MSNBC. Anyway, that’s what I hear from the Huckabee campaign.
And when you receive a phone call asking for your vote for a candidate (local or national), ask if that candidate is in favor of the FairTax. If the answer is no, tell the caller that when the candidate comes out in public in favor of the FairTax, you will show your support for him/her. I don’t contribute to any candidate who does not meet this criteria. I am tired of voting for the least offensive.
In the footnotes of all the White Papers in the research section of www.fairtax.org, you will find a number of authors who have been quoted. For those of you who are interested, I suggest you do this research on your own. The above Universities and Institutions are impressive in themselves. It tells me this has been one of the most researched and studied tax plans of all time.
I read today where mere compliance costs of the present income tax amounts to 6% of the GDP (Gross Domestic Product). Now that really hurts! Think of what we could do with all that money freed up for other things……………
Be sure to watch the Republican Debate tonight, even if you are not one. Our object is to vote for the candidate who is openly advocating the FairTax, whether he be Democrat, Republican, Independent or whatever. It comes on at 6pm PDT on channel MSNBC. Anyway, that’s what I hear from the Huckabee campaign.
And when you receive a phone call asking for your vote for a candidate (local or national), ask if that candidate is in favor of the FairTax. If the answer is no, tell the caller that when the candidate comes out in public in favor of the FairTax, you will show your support for him/her. I don’t contribute to any candidate who does not meet this criteria. I am tired of voting for the least offensive.
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