THE FAIR TAX IS NON-PARTISAN

The FairTax is favorable to Democrats, Republicans, Independents and Libertarians alike. It knows no boundaries. Taxes affect all of us alike and it will take all of us to fix the system. We don't take political sides when it comes to the FairTax - we take the people's side. We are fixing the tax system for us, not the politicians.

The FairTax organization (Americans for Fair Taxation) was formed in 1995 as a non-profit, non-partisan, grassroots organization solely dedicated to replacing the current tax system. It began as a research organization, finding out what the American people wanted in a tax system, the best way to collect the taxes and the most benefits to be derived for the economy and the taxpayers.

They have had extensive research done by economists, education and community leaders, and have arrived at the FairTax plan as the fairest and most beneficial plan for us and for our country. They have had a good number of "white papers" written on various aspects of the FairTax plan.

In the coming week, I will be referring to these "white papers" while going through the tax plan in more detail. I will cover the impact on Seniors, Farmers, Businesses, Realtors, etc. I will begin this coverage on Tuesday since Monday is a holiday. So have a good, long, happy holiday weekend and we'll meet again on Tuesday.

Bobbie

This Blog was called Today

This blog was called today on account of a Football game. Sorry about that - see you tomorrow.

If you need a FairTax fix, go to www.fairtax.org and check out their videos.

EMBEDDED TAXES EXPLAINED

Embedded taxes are business taxes that are part of the cost of doing business. Business passes these taxes along to consumers when they set the price for their products. At the federal level, theses taxes are the corporate income tax, the self-employment tax and the employer share of Social Security and Medicare payroll taxes.

Businesses at every level of the supply chain are taxed and pass the taxes along in the price of the goods or services they produce. The Europeans call this a VAT (value-added tax). We call it embedded taxes (silent taxes that aren’t talked about and most people do not even consider when making a purchase). These taxes amount to approximately 22% tacked onto the price of goods and services throughout the chain of the manufacturing and marketing process.

The FairTax repeals all of these embedded taxes that business pays and passes on to consumers in their prices (corporate income, self-employment, payroll) as well as all income and payroll taxes on individuals, plus the capital gains tax, the estate tax and the gift tax. And under the FairTax, business doesn’t pay sales taxes on their purchases.

This means there will be no more embedded taxes in the cost of goods and services sold to the consumer and prices should decrease by 22%. With our competitive free-enterprise system, it shouldn’t take too long for these prices to be backed out. When the 23% sales tax is added on, the prices of goods and services should remain about the same.

You will have 100% of your income to purchase goods and services at approximately the same amount of money as before while paying your federal income taxes. Pretty much a wash! Pretty much a no-brainer!

Reducing the Corporate Income Tax

Removing the income tax on corporations will reduce the cost of everything we buy, since corporations don't pay taxes. They just pass them along to consumers. The FairTax plan calculates that removing the corporate income tax will result in a reduction in the cost of virtually every consumer item on the market. In fact, it will just about offset the tax on those products. Imagine paying the same price for something but having your entire paycheck to buy it.

Then imagine the billions of dollars that flow untaxed through our economy today: drug dealers, prostitutes, pornographers, foreign tourists, illegal immigrants. How much more revenue could be raised simply by taxing the things these people consume?

When we get rid of the IRS, there will be no more audits, no more justifying deductions, and April 15th will become just another spring day. But only if "we the people" stand up to the elites and demand it.

23% vs 30% FairTax Rate

It is very confusing to people - Why do some people call the consumption tax rate 23% and others call it 30%? Well, it's all in how you do the figuring. (Also, whether you are for or against the FairTax)

30% is a percentage of the net. In other words, the grocer wants to net $1.00 on his loaf of bread. In order to net that amount, he has to add 30% to it. That makes the loaf of bread $1.30. The 23% is a percentage of the gross price - $1.30 - and is included in the price. Take $1.30 X .23 and you get $.30 and the grocer gets his $1.00 net. Your sales receipt will show $1.00 for the loaf of bread and $.30 for the sales tax.

The tax-inclusive gross rate (23%) is no different from the European value-added taxes or the income taxes, payroll taxes and death taxes that the Fair Tax will replace. The 30% tax-exclusive rate is one we already are paying today. By taking home your entire paycheck, including FICA, and removal of tax costs that are embedded in the prices of goods we buy today, purchasing power is maintained.

Here are a few facts:

• The "cost" of products and services upon which the FairTax is calculated will be substantially reduced by the elimination of all the hidden and embedded taxes currently imposed in the IRS-based system, making the total purchase cost (this includes the sales tax) very close to the same as it is today.
• The FairTax makes the cost of all our "government services" visable.
• The FairTax eliminates Congress' ability to distort our economic behavior.
• The FairTax will immediately give the U.S. a balance-of-trade boost by removing the embedded taxes of our exports and taxing imports equally. This is a much better, fairer way to deal with the "China problem".
• The FairTax will truly empower the taxpayer again. Our voices will be heard because we will control the tax revenues through our purchases. Polititions do not want to give up this power.

The FairTax is much better than the 60,000+ pages of regulatory tricks, schemes and charades we call our tax code. Not to mention the $billions of dollars spent in compliance of this code.

MAKES TAXATION OF INCOME UNCONSTITUTIONAL

The FairTax must be voted in by Congress and signed into law by the President. THEN they must repeal the 16th amendment to the constitution. This is critical because we don't ever again want to give Congress the power to tax our income and therefore control us like puppets on a string. The FairTax will generate the same amount of revenue that the income tax does, but it will be your choice of when and where you will pay this tax. And remember, each household will receive a prebate (rebate, only paid in advance) so you won't be paying taxes on the necessities of life up to the poverty level.

This is a huge undertaking for the general public, but it will take a strong grassroots support to get Congress to quit thinking about their pocket books and start thinking about ours. These people are here to serve us and if they don't do a good job of listening to the majority, we will simply vote them out of office and elect someone who thinks as we do and is willing to put us first for a change.

We can do this, but we need to stand together. Polls show that 85% of Americans understand and favor the FairTax. They are ready to get rid of the IRS and make April 15th "just another spring day".

If you have not yet signed a petition on this subject, please do so. Go to www.fairtax.org
and sign the petition and also sign up for membership (no cost to you) and get on our e-mail list for information about the FairTax throughout the United States.

The FairTax Taxes The Underground Economy

Nobody will be able to hide from the FairTax. The cost to you will be less because everybody will pay, even the trillion-dollar underground, criminal, drug, prostitute and porn economy. As it is now, these people deal only in cash, so they don't have w-2 forms and don't declare their income as taxable. Well, now it will be different: every time they buy gas, groceries, clothing, a new car, new boat, new yacht, new house, etc., they will be paying their fair share of taxes. There will be no way around it.

Even the illegal aliens will have to pay the FairTax. They have to eat too. They have to find work and if they get paid cash under the table, it won't matter any more because they have to eat, they have to have a place to live, they have to have transportation, they have to have medical care, they have to have clothing. And every thing they buy with that money will be subject to the fair tax, with the exception of used goods.

Right now, the government gets no taxes at all from all of these underground, under-the-table people. But think what 23% of a trillion dollars will add to our economy - that much less that you will have to contribute to keep our government fluid.

Tourists are another source of income that will not be overlooked. And we will see more tourism because our cost of goods will have gone down to more affordable levels after all the hidden taxes are backed out.

The burden will shift from the middle class (I hate that word) to all classes of people. We will all finally be truly equal.

Allows wage-earners to save more and faster

The FairTax would allow wage-earners to save more and faster for home owner-ship, 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 life-time 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 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

The FairTax Lowers Tax Rates + Gives a Prebate

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 (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.

Corporate Taxes and Compliance Costs

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 the 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 (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 todays 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.

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!

FairTax Facts regarding jobs

Over the next few days, I will go over some of the FairTax facts with you.
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.

Today I begin my blog

I am writing this blog to encourage a conversation about the FairTax (HB25 & S25) which is now before Congress and is getting a lot of coverage by several presidential candidates. The FairTax is a grassroots movement to totally replace our present income tax system, eliminate the IRS and bring home 100% of your paycheck. Then YOU will be in control of ALL of your money and you will pay taxes only when you choose to do so. This is called a Consumption Tax or Sales Tax which really levels the playing field and makes taxes really fair to all, not just to a privileged few.
The RICH will no longer have tax loop-holes to get out of paying taxes. The POOR and the ELDERLY will only pay taxes if their spending exceeds the poverty level. The UNDERGROUND ECONOMY (illegal immigrants, drug dealers, prostitutes, under-the-table transactions) will finally have to pay taxes.
This should hold your interest until I can write more. If you want to know more right now, go to www.fairtax.org We will be discussing all aspects of the FairTax Bill, but if you wish to read the bill yourself, you will find it on the fairtax website. If I can figure out how to get it on here, I will
Thanks for your patience. I am new at this and haven't quite figured out the template yet. (or maybe never?)
Bobbie