This was presented to the East Tennessee Libertarian group on May 13th. It was an adaptation of an article by our own John Linder. Perhaps this will help some of you in presenting the FairTax.
Upon telling folks about the FairTax bill, they frequently say, “It’ll never happen.” This has been the common reaction to every big idea ever proposed in the history of man. If the FairTax plan is such a great idea, if it is much needed, then why will it never happen?
Have we become so cynical that we cannot believe that much-needed change is possible?
Have we come to accept the current tax code as a permanent, immutable part of our lives?
The FairTax bill would repeal all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, death taxes and gift taxes. They would be replaced with a revenue-neutral, 23% personal consumption tax. Americans would receive their entire paycheck. They would have the power to choose exactly when and how much to pay in taxes. It is in keeping with Libertarian thinking that all taxes should be voluntary and that government should not have the power to confiscate our earnings.
The FairTax achieves this by offering to every household of American citizens a tax prebate. The prebate will amount to 23% of the money they spend up to the poverty level. Families that spend only to buy basic necessities will be tax free because the prebate will cover their taxes every month. When a rich man decides to buy a new private jet 23% of the purchase price will enter the federal treasury. America will return to taxing wealth instead of wages.
There are many reasons why changing the way we fund our federal government is necessary. Here are three of the most compelling:
1) Our current code is taxing American businesses into a severe disadvantage in competing in the global economy. Because of corporate, personal and payroll taxes our businesses have a 22% embedded tax in every good they produce. Foreign goods do not have this burden and so have a leg up on American industries. The FairTax will give our industries the best business cost structure in the world.
2) Our current code punishes productivity. On average, Americans lose 33% of their wages to taxation. The FairTax will unleash the power of the American worker and greatly increase their spendable income.
3) Our current code violates the right to privacy of Americans. The FairTax will restore the privilege of anonymity long cherished but long denied. Under the FairTax, there will be no more IRS and no reason for the government to know how much you earn and how you spend it.
Change should be a no-brainer, but the current system is perceived as a constant that has always been and always will be. The reality is that following the 1894 Supreme Court decision declaring an income tax unconstitutional, it took politicians 19 years to contrive and have ratified the 16th amendment in 1913. Subsequently, Congress adopted a simple tax code that permitted only a small flat tax on the very wealthy. This was the beginning of the monstrosity of a code that suffocates American liberty today.
We can only wonder how many people in 1894 when they heard the idea of an income tax said, “Bad idea, but it’ll never happen.” How many people hearing in 1895 that all senior citizens would be provided a government pension said, “Great idea, but it’ll never happen.” The Social Security program we have today began in 1896 as the Civil War Pension program. As all entitlement programs are wont to do, it grew and evolved until it was signed into law as the Social Security Act in 1935.
The FairTax bill was introduced in Congress in 1999. It is a big idea and big ideas take time to establish. Gaining momentum is the greatest challenge to the enactment of the FairTax bill, and there is no greater momentum killer than Congress. The only antidote to the failure of Congress to act is to let them know the will of the overwhelming majority of American voters. In just nine years, a grass-roots force of over a million FairTax supporters has been mobilized. FairTax rallies of over 10,000 Americans have been held, and 72 members of Congress have been persuaded to co-sponsor the FairTax bill. Most Americans have not heard of the FairTax bill and most politicians probably have not read the bill. Only by spreading the word on it will the FairTax bill be passed.
Ronald Reagan touched on the greatness of our country when he stated that the American people have always had the capacity “to do whatever needs to be done to preserve this greatest bastion of freedom.” We will do this; we will do it because we must if we are to preserve the greatness that generations before us created. In closing, to those of you out there who say, “great idea, it will never happen,” imagine the dinner table talk when John Kennedy told America we were going to send men to the moon.
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4 comments:
Fairtax will happen just fine -- as soon as you talk 100 million American workers into taking a voluntary pay cut.
And then talk everyone into paying the world's highest sales tax.
Oh -- and you will have to suspend math and economics. Cause Fairtax is based largely on taxing the federal government -- well, all governents.
IN fact, government would be by far the BIGGEST tax payer -- in the WORLD. OUr government would pay more taxes -- to itself -- than any economic entity has ever paid, in the history of the planet.
So that should happen real soon. Im sure you can suspend the laws of economics, and the laws of math, and Im sure you can get 100 million Americans to agree to pay the worlds highest sales tax, and take a 25-30% pay cut.
Sure -- no problem.
What makes Fairtax believe they can tax the federal government 800 billion dollars?
Its hard not to be sarcastic about this, frankly. But I realize "expert" have misled you on this an other points.
But think for yourselves, Can the federal government pay a major portion of its own taxes?
You should get up an walk out of the room.
The basic problem of Fairtax -- and there are many problems -- is that it will just apply the highest sales tax on EARTH to the government -- and get money. Lots of money.
Well -- why not put an INCOME tax on the government. Why not just make the governmetn pay an INCOME tax. If its possible to put a sales tax -- why would it be impossible to put an income tax on the government?
You probably would say "Huh?" If someone said they were going to make the government pay itself almost a trillion dollars in income tax.
But someone can tell you that the government will pay a sales tax, of 800 billion, and you buy it.
Yet Fairtax depends on the federal government become a MAJOR taxpayer. Plus they depend on state and local governments paying another huge chunk of taxes.
When your paid guru -- Dr Tuerck of Beacon Hill -- was trying to discredit Bartlett for exposing the farce of taxing the government, Tuerck admitted that the government paying itself didn't create any income to the government. SO then he asked "So whats the problem?"
The problem? As Tuerck well knows, is 800 billion doolars.
Cause the fairtax fantasy math is off 800 billion dollars just from that ONE "oversight"
And here is a clue. This was no innocent mistake. Tuerck has a PHD in economics, he is a math wiz kid. He knows full well you can't get money from the government to fund the government.
In fact, he cleverly never says you can. He just says "So whats the problem" but he never claims you can get 800 billion that way.
He might fool you. He doesnt fool anyone else.
Plus about 800 billion more from state and local government taxes fairtax pretends to collect,
Oh -- yes -- Fairtax could actually collect a sales tax from state and local governments, and count that as income. Unlike Federal sales tax on federal government -- which is just silly check kiting nonsense.
But where are the state and local governments suppose to get these many hundreds of billions?
I thought Fairtax said repeatedly -- ONLY PEOPLE pay taxes?
Suddenly -- for about 1.5 trillion dollars --- Fairtax forgets that, and pretends the GOVERNMENT can pay taxes.
Well you go right ahead with your little plan Dr Tuerck.
I would like to see it. You go ahead and pretend all you want, that you can get the federal governement, and all these state and local governments, to pay trillions in taxes.
Uh huh.
But have a few congressional hearings first, and let your experts try to explain this. That should be fun.
Wonder why Fairtax can't even get a hearing in front of any Congressional committee? I think I know. They don't want one.
In fact, Fairtax would do anything to KEEP from having to answer questions under oath from anyone. Someone might as them how they plan to get 800 billion FROM the federal
SOmoene might ask Dr Tuerck some basic math questions, and ask him how much he was paid to slide around the truth. Dr Tuerck is part of the team HIRED -- yes HIRED -- to confuse the issue.
And they aren't about to LET this EVER get to a congressional hearing.
You might think you are dealing with leaders of the Fairtax movement who want this to go the next step, and get hearings, under oath, in front of Congress.
You will never see such hearings. Oh, Fairtax could have them, they could have had them years ago.
They don't WANT them.
I wonder why?
Maybe its because they have something to hide. Like the truth about their "plan"
The Fairtax replaces the Old 35% income Tax Bracket (those making over 150K) with the new 35% Bracket... those making UNDER 50K.
Yes people who make under that amount thsese days have to Spend ALL of their income to live, even after prebate, and will be taxed at Fairtax's 23/30% (actually independently scored at 50+%.)
So someone making lets say $30,000,000 as a Wall streeter or CEO is currently paying 35% or app $10,000,000 in taxes.
His taxes will drop to just 1/3 of what he spends- probably 3 or 4 mil to live. OR just 1 Million in taxes.
His new rate on income 3%.
6% if he gets ultra-lux and spends 6-8 milion (house etc)
His burden will be replaced by 100 people making 25K-50K paying 35% on ALL their income.
Prebate notwithstanding- someone has got to make the system whole on 'revenue neutral'.
IOW, the NEW 35% bracket-- working Poor.
Bobby, Saw your earlier discussion with 'ALEX' On rent in Novenber.
You sem to concede (on even just this one point), that We would Depopulate the Big High Rent Cities Like NYC, LA, SF, Boston, etc because adding Fairtax's even stated rate of 23/30% (which is False and low), would destroy many people living there- and rent isn't the only more expensive, non-indexed expense.
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