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

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.
  

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!)

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!

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.

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.

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

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?

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 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!

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 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"."

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”!

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...................

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!

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.

SEE, IT IS A NON-PARTISAN ISSUE!

Following is a letter to the Editor of the Wall St. Journal from a member of Americans for Fair Taxation. It proves the FairTax movement is alive and well, even in Brazil!

Editor, Wall Street Journal

Dear Editor,
Steve Moore's advice to Republicans in his opinion
piece of October 5, 2007 to give its tax message a
makeover - perhaps a radical one - gives the GOP an
opening to the Fair Tax, HR.25 - provided the
Democrats or the Country of Brazil (yes, a
presidential candidate in Brazil wants to run on the
FairTax) don't seize it first. The Fair Tax is a bold
idea that, if handled properly, can hand the
initiative back to the party that supports it.

There are several powerful new messages in the
FairTax. First, keeping one's entire paycheck has
surprising resonance with lower-income and middle
class families. Second, when people are put back in
control of when they pay tax and how much tax they
pay, they support the FairTax. These messages speak to
the personal finances of every voter and are readily
understood.

Republicans, or any other political party (or
country), would benefit from open support of the
FairTax.

Jim Bennett
Co-State Director for New Jersey
Americans for Fair Taxation

WELL, I DIGRESSED - SORRY ABOUT THAT

While awaiting a reply from Houston with all those important names and universities that helped with the research and studies on the FairTax, I spent the day reading my HOA CC&R's and Bi-Laws and replying to the proposed changes the homeowners are proposing. Our subdivision developer is turning over the HOA to the homeowners and boy, what a mess. Everyone is uptight about it, saying we should junk it, change it, stomp on it, etc.

The FairTax info is easy to understand compared to this HOA stuff. And everyone would like to see 100% of their paycheck every month, so agreement is pretty much a no-brainer. We just have to figure out how to get the government bodies to agree with us.

So write, call, e-mail and fax your Senators and Representatives. Tell them you want them to stand up for the FairTax and become Co-sponsors of it. Then tell them to get it on with! We want action. I'm getting old and I want to see the tax system changed to the FairTax before I go to the great beyond. I know it won't help me out much, but I am hoping for a better life for my kids, grandkids, AND my GREAT grandson!

Help us make it happen! Thanks for listening

WHO DEVISED THIS FAIRTAX ANYWAY?

I received an e-mail today from a fellow FairTax advocate. She said she and her husband had lunch the other day with some friends who have been reading The FairTax Book, by Neal Boortz and Sen. John Linder. The lady read the book and immediately went into http://www.fairtax.org and signed the petition, showing her support. Her husband read the book and immediately asked who, exactly, were the leading economists who had helped devise the FairTax. Well, some people just need more information than others.

I have been searching through the FairTax website and the book and I cannot come up with any specific names. What I did come up with is this:

The FairTax was developed many years ago. It is a product of more than $20 million of advanced economic research and studies from various universities. They have also sought input from regular citizens as to their preferences for the best possible national tax system. They compared the flat tax, the VAT and the consumption tax and came to the conclusion that the FairTax would raise the same amount of revenue as the current income tax system, but in a less intrusive, abusive and expensive manner.

I will be sending this blog on to the Americans for FairTax Organization (www.fairtax.org) to see if they can provide some specifics on the researchers. Check back in a day or two for an answer.

FAIR TAX TREATMENT OF CHURCHES AND OTHER NON-PROFIT ORGANIZATIONS

In the FairTax bill, churches come under the definition of not-for-profit organizations. These organizations need to be operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes; as a civic league or social welfare organization; as a labor, agricultural, or horticultural organization; as a chamber of commerce, business league, or trade association; or as a fraternal beneficiary society, order, or association. No part of the net earnings of said not-for-profit organization shall serve to the benefit of any private shareholder or individual. Churches that meet the above criteria are issued a “qualification certificate”.

Individuals making payments or contributions to churches or other non-profits do not pay taxes under the FairTax. Likewise, if churches or non-profits provide taxable services at no charge (such as running a soup kitchen for the poor, etc.), these are also not subject to tax.

Taxable property and services purchased by a qualified non-profit “for business purposes” are not taxable. The organization must present its qualification certificate to the seller when making a purchase in order for the sale to be tax exempt; however, if the church is selling to consumers (such as selling Bibles), then it must collect a sales tax. It bought the Bible without a sales tax, then turns around and sells it with a sales tax. (Remember, goods and services are only taxed once, with the end-user)

Since the FairTax exempts savings and investment, there would be no tax on interest earnings on endowments – assets, funds, or property donated to a not-for profit organization as a source of income.

I have covered the basics of the FairTax in previous weeks. I will spend the next couple of weeks or so covering some of the fringe elements, such as the non-profits above. If you want to go back to the basics, I suggest you start over and read my blog starting in August. I have obtained most of my information from the White Papers in the www.fairtax.org website. If you wish more information on any of these subjects, please go into this website and read the whole thing. I have cut it down considerably for quick and easy reading.

REPEAL OF THE 16TH AMENDMENT

The 16th amendment calls for an establishment of an income tax. This happened in 1913 and at that time, the politicians promised that only the rich would be taxed. It was an annual tax on everyone who made over $4,000 ($50,000 in today’s economy). I remember my dad talking about the first time he had to pay income taxes and he was by no means rich. It wasn’t long before the politicians decided everyone must pay. They used as an excuse WW11, and started withholding the taxes from paychecks. When the war was over they just never got around to going back to annual collection of taxes.

There has been much discussion about whether the 16th amendment should be repealed before or after the enactment of the FairTax. The consensus is to put the FairTax in place and give it time to show how well it works; then repeal the 16th amendment. Even the most conservative studies predict tremendous growth under the FairTax. Growth that will eliminate our deficits and put Social Security and Medicare on solid ground – no more worries that upon retirement, we will have no way of collecting our retirement pay and medical benefits that we have paid for all those years while working. And think of the personal peace of mind that comes from no record keeping, no reporting, no filing, no audits, no federal tax collector lurking around.

I say “get on with it”! Let’s make those politicians listen to us for a change, not the greedy lobbyists or their greedy co-horts. Let them listen to the people for a change. Tell your congressman to sign on as a co-sponsor of the FairTax and get that bill rolling towards victory!

Go into www.fairtax.organd sign the petition. Write to your congressman. Go out and speak at meetings on the FairTax. Start a Blog. Do something, or we will wake up one day all taxed out!

Betty W. started a FairTax blog yesterday. Check it out at: http://fairtaxfocus.blogspot.com