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

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"

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.

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.

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.

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!

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.

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".

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.

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

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.

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.

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.

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.

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!

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.

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.