gfn wrote in
:

On May 26, 1:05*pm, RD Sandman wrote:
gfn wrote
innews:6b95e91a-138f-49b0-a7bd-e8e44a57e311@
e35g2000yqc.googlegroups.com:

On May 25, 5:42*pm, RD Sandman
wrote:
gfn wrote
innews:7c91830c-c968-4f08-9c9e-77bc0350d428@
y19g2000yqk.googlegroups.com:

Sure I do. *The "flat tax" has the government deriving its
revenue from the income tax.

Yep....at a flat rate for everybody.

As does the FairTax. *Best part is the consumer pays it only
when the
y
buy something. *They decide when to pay it, not when the
governmen
t
decides you owe it on payday.

It looks like they are trying to mix sales tax with the old luxury
tax.

The FairTax is effectively a replacement of the compliance costs
that are already built in to every product and service you buy.

Not quite since those compliance costs are not the same revenue
source as the income tax. *For your Fair Tax to work, that revenue
source from income needs to be added.....so it isn't simply the
'before' costs added to the price of purchase.


No it doesn’t need to be added.

Of course it does. It is NOT part of that 23% you keep saying is already
paid in product cost or the product taxes, etc. were actually less than
23%. What you have is this:

Product selling price
Product cost
Corporate taxes
Inventory taxes
Excise taxes

Now subtract the bottom three from the product selling price.

Now you have:

Product selling price
Product cost
- Corporate taxes
- Inventory taxes
- Excise taxes

Now add those to a Fair Tax

Corporate taxes
Inventory taxes
Excise taxes

Now you need to add in the tax portion that was covered by federal income
taxes. You now have:

Corporate taxes
Inventory taxes
Excise taxes
The revenue from income taxes
Revenue from FICA

You can't subract 23% from a product, add more stuff to it and add it
back and still have 23%.

It’s already part of what you are
paying anyway. Here’s a very simplified example:

Product costs $100, broken down as follows:

Under current system
- wholesale = $50
- compliance costs = $23
- sales and other taxes = $27
- Grand total = $100

Under the FairTax
- wholesale = $50
- compliance costs = - $23
- FairTax = $23
- sales and other taxes = $27
- Grand total = $100

Ooops, forgot the revenue to make up for no income tax and FICA.

* The luxury

tax would have been a tax on top of that.

And to cover the loss of revenue from the income tax being removed,
it is also added into that Fair Tax number.


No, not added to the FairTax number. The FairTax IS the replacement
to the income tax.

Not if the other taxes were already 23%. You can't put ten pounds of
crap in a five pound bag.

The FairTax is related because it is a flat sales

tax that generates revenue from sales. *It replaces the
income tax as the method of funding government. *If you fully
understand the FairTax
you will see exactly where I am coming from.

Then to keep it from becoming regressive you must drop that
sales tax from certain items, like food, housing, public
transportation, gasoline, etc.. or you end up with the poor
paying a much larger percentage of their income on those taxes
than the wealthy.

Nope, There are two reasons why it's not regressive. *First,
peopl
e
pay no net FairTax at all up to the poverty level.

Which means that someone, somewhere needs to know your income.

*Every household

No, they just need to know how many people are in your household.
That determines the prebate, not one's income.

How do you you receive that prebate? *Do you get a check every month?


That, or direct deposit to your bank account. The infrastructure is
already set to do this for any number of government programs so
implementation is not difficult. Well, we are talking government here
so….

OK

receives a rebate that is equal to the FairTax paid on essential
goods and services.

I looked at the prebate schedule. *Where in there does income come
into it for that poverty level? *

It doesn't. *Nor does it need to. *It only needs to figure what the
cost of essential goods and services are for a family of X number
of people. *A family of four that makes $100,000 requires the same
essential goods and services as a family of four that makes
$50,000.

And how is that prebate received?


See above.


From what I see, it is based on number of
adults and number of dependents.

Correct, that's all that is needed.

*Second, per my example an item that costs $100 today still costs
$100
*under the FairTax.

* If that's regressive then sign me

up.
The poor are always going to pay a larger percentage of their
income on everything. *No tax system is going to change that.
*Isn't that what the bulk of this thread is about?

Not on a flat tax like I proposed. *The difference is slight,
depending on your income, but it is there.

Not sure I follow. *If taxpayer A makes less than taxpayer B,
assumin
g
both buy the exact same thing then taxpayer A is always going to
pay more of a percentage of their income for buying something.

My flat income tax proposal is on income not goods.


And under that system you are taxed on what you earn AND what you
spend. Under the FairTax you are taxed ONLY on what you spend.

Wrong. Under the flat tax system, you are taxed separately on what you
earn and what you spend. With Fair Tax, you are taxed on what everyone
earns and the product costs but it is all in one tax in lieu of being
separate.

The FairTax is a replacement

for the income tax.

Yes....and a flat tax is another method of figuring income
tax.

Yeah....and they both accomplish the same thing. *The FairTax
i
s
better because a flat tax still involves taxing income which
then leads to exemptions, deductions, and keeps the 16th
amendment in place as well as the IRS, and I can go on and on
about the pitfalls of our current tax system.

A flat tax on income replaces the current tax system. *If
properl
y
administered it only has ONE deduction and that is poverty
level wages for a family of four. *Everyone gets that ONE
deduction, or exemption if
you prefer, and no other. *You can do your tax on a postcard.

Under the FairTax you don't have to worry about deductions or
exemptions. *You don't even have to do your taxes on a postcard
because there is nothing to do. *April 15 would be just another
beautiful spring day.

Here's the problem with the flat tax, it retains the invasive
income tax administration apparatus and can easily revert to a
graduated, convoluted mess, as it has many times over many
years.

And your fair tax needs to know number of adults in the household
along with number of dependents. *

Correct. *Again as it should. *That's how the prebate is determined
.

And how is that prebate handled? *There is really nothing in the
propos
al
that indicates that.


From the FAQ: All valid Social Security cardholders who are U.S.
residents receive a monthly prebate equivalent to the FairTax paid on
essential goods and services, also known as the poverty level
expenditures. The prebate is paid in advance, in equal installments
each month.

Read that. I was asking how and you seem to have answered that earlier
when you said it could be in the form of a check or a deposit to one's
account.

The size of the prebate is determined by the Department of
Health & Human Services’ poverty level guideline multiplied by the tax
rate. This is a well-accepted, long-used poverty-level calculation
that includes food, clothing, shelter, transportation, medical care,
etc.

Yes, I know what is in it.

Sent via check or direct deposit.

You answered that earlier. My point was that the FAQ doesn't say that.
It says you get it but not how.

Oh, and with regard to the first paragraph if you aren’t legal you
don’t get the prebate, but you still pay the tax. Think illegals.

I already figured that out.

Or, how about the drug dealer who pays no income tax at all on his
“earnings”. The government currently get no, zero, nada, zilch,
income tax from him. But, does Joe Criminal buy nice cars, clothes,
electronics, houses, etc? Guess what? Now he’s paying the FairTax on
that. How about the tourist who comes to the US for a pleasure trip?
Does the government get any income tax from them? Nope. Do they buy
a lot of goodies while here? Yup. Get the picture now?

I already had the picture. I was asking details.

There is also nothing there that prevents it
from becoming another convoluted mess. *Congress can **** up a
bowling ball.

Yes, congress can **** up a bowling ball. *In fact, the first
implementation of our current tax system was just a handful of
progressive tax brackets (several flat taxes if you will),

Prograssive tax brackets do not a flat tax make.


No they don’t, but my point still stands. Look what has happened to
those brackets since 1913.

And with Congress, there is nothing stopping that from happening again in
one form or another with the Fair Tax.

*with no

exemptions, no deductions, etc. *And look what happened. *There is
no
reason to believe a flat tax would wind up going back to the
convoluted mess we have now.

I think you meant to say "wouldn't". *Anyway, there is no reason to
believe that a Fair Tax wouldn't either.


Yes, you are correct. Agreed, but the reasons I laid out make it far
harder to do than the current tax code or even the flat tax which
still would have all the nonsense that goes along with our current
code.

Why would it be harder? All Congress has to do is to modify the code.

* Plus, you would still have a tax code,

the IRS, the 16th Amendment, compliance costs, and on and on and
on. Under the FairTax the tax code – gone, IRS – gone, 16th
Amendment
–
gone, compliance costs – gone.

That said, congress can raise the FairTax rate just as it could
raise the flat tax rate or can and does raise the income tax rate.
*The current income tax is effectively hidden.

So are the costs contained in the Fair Tax. *I saw no provision for
showing them.


The costs contained in the FariTax are just a replacement for income
taxes. That’s the whole point.

I don't think you get the whole point. At least not in your examples.
You cannot subract a percentage from a cost, add things to it and put it
back in place at the same percentage.


* It's just taken every

paycheck and I bet 99% of workers don't even know how much is being
taken out every week. *Out of sight out of mind.

That would effectively *be the same with the Fair Tax. *You would hav
e it
taken out on every purchase but no indication of what all was in it
in what amounts.


The receipt would have a line item that states “FairTax: 23%” with the
applicable dollar amount. Better yet, you only have to look at that
line item when you make a purchase. And, you only have to look at
that line item when you purchase a new item. Buy a used car? No
FairTax. Used bike? No FairTax.

One reason is that most used stuff is purchased directly from the seller.
There is no one who in the middle to act as a collection point for that
tax. Not a lot of used stuff is taxed on sale in the current market.

* They just accept

that government takes it.

Same with your sales tax.


Sure, we’re all hostage to what the government shovels on us. But,
again, you pay income tax no matter what. You have no choice. With
the FairTax you have a choice.

Not if you wish to purchase anything in other than the used market.

And, to the extent that you need to
buy necessities of life you get the prebate.

But still pay the tax on those items at time of purchase.

* Purposely designed that way by government.

The FairTax is highly visible (displayed on your receipt) and there
is only one tax rate.

That isn't the problem. *Taxpayers DO know what is in their income
tax.
*

I couldn’t disagree more. Go ahead and ask the next person you see
that you know how much was withheld from their last paycheck. Bet
they don’t know.

Bet they do when they fill out their taxes. Those who use CPAs are smart
enough to have a good idea what is in the taxes and those who don't,
wouldn't know anyway.


They do not know what portion of that Fair Tax is the replacement for
income tax, what portion is corporate taxes, what portion is
government taxes for whatever purpose when Congress changes the
percentage of the Fair Tax.


So what? What they do know is that the FairTax replaces the income
tax. They no longer have to file. They no longer have to keep
records, see accountants, worry about deductions, exemptions, audits
and so on. Instead, all they do is buy a product and that’s it.

*Changing that will be harder for congress to do.

Why? *Because the FairTax affects EVERYBODY. *The income tax does
not. *Right now, almost 50% of workers pay no federal income tax.

The only folks who would pay no federal income tax under my proposal
would be those who income was below the federally declared poverty
line for a family of four and EVERYBODY gets that one and only
deduction.


Fine. You still have in place the 16th Amendment, the IRS,
compliance, record keeping, accountants, fear of audits. Then you
have people that pay no income taxes, as I already mentioned, such as
criminals, tourists, illegals, those paid in cash.

And with the fair tax, you have the used market, the under the table
market and swapping.

It's easy for them to say raise taxes on the top 50% that actually
pay.

No, it isn't or Obama would have done it in lieu of extending the
Bush taxcuts.

Have you seen the most recent tax stats?

Are you insane? Who do you think has been posting the numbers in here?

Nearly 50% of wage earners
pay nothing in federal income taxes. That’s the highest it has ever
been since the implementation of the income tax.

The actual percentage, just for your input, is 45%. The bottom 50% pays
just under 3%.

This class warfare
thing is in all out mode…and it’s working.

Yep......but you will always have that with Democrats. When they get
into power, they will mess around with your Fair Tax also.

* Raising the FairTax means raising it on them too. *Good luck to

any politician trying that.

As does raising the income tax percentages or do you think
politicians make less than the poverty level? *


No, but I say again, you still have in place the 16th Amendment, the
IRS, compliance, record keeping, accountants, fear of audits. Then
you have people that pay no income taxes, as I already mentioned, such
as criminals, tourists, illegals, those paid in cash.


*In addition, a

large part of the burden of the flat tax -- the business tax --
will remain hidden from people in the retail price of goods and
services.

This is an interesting point since there are supposedly
intelligent folks in this newsgroup that don't understand that all
businesses end up passing all their costs to the consumer in the
price of the product or service. *If they don't, after awhile they
go under.

Under a flat tax, individuals would still file an income tax
return each year. *Postcard or not, it's still a return. While
this is a simple postcard, the record keeping requirement is
still there. Under the FairTax, individuals never file a tax
return again, ever!

Federally, that could be true, however, when looking at state and
local taxes, it is bull****.

Not could be…would be. *There would be no federal filing.

Which isn't done with state and local taxes anyway. *They currently
get used as a deduction on federal income tax, but even though there
is no federal income tax, they still need to do state taxes. *All
they have saved is entering a number.


But, they are still filing federal forms and worrying about
deductions. Why bother doing that when all you have to do is…
well….nothing! Well, except buy a good or service. And even then you
don’t have to file anything and no concerns about deductions.


*But, to

your larger point, the FairTax is a replacement to the federal
income tax, not state income taxes.

Which is what I said.

*Federal taxes are what is at issue

here. *So, what would you rather do on 4/15? *File federal, state a
nd
local tax forms; or just a state and local?

When I do my federal taxes, TurboTax, for example, also does my state
taxes. *The extra time for the state tax is about 5 minutes.


Thanks for making another case for the FairTax. You said "When you do
your federal taxes". How about implement the FairTax and not do them
at all? I know I'd rather just have to worry about doing my state
and local taxes.

I wish to control my taxes as much as I can. Don't you?

How much did TurboTax cost you? $50, $60 maybe? Wouldn’t it have
been nice to spend that $$$ on something else rather than complying
with the federal tax code?

I wasn't worried about complying with the federal tax code. I was simply
interested in paying my share of the tax burden, but no more than that.

*Under

the flat tax, the payroll tax would be retained and income tax
withholding would still be with us.

Yep.

Under the FairTax, the payroll
tax, which is a larger and more regressive tax burden for most
Americans than is the income tax, is repealed.

No, actually, it isn't. *It is simply placed in the Fair Tax.

And once the FairTax is implemented none of that is withheld from
your paycheck. *

My point was that it was still there. *You just don't see it or
really know how much it is.


It is still there because the FairTax replaces it. We’re not talking
about doing away with government collecting revenue. We’re talking
about the mechanism for how it is collected. This is so much simpler
than the current system or even a one size fits all flat tax.

Yep, but you need to take a closer look at how you present the figures or
learn more about them. You cannot subtract x from y, add z to x and have
x be the same amount as it was before.

With the exception of state and/or local withholding you

keep 100% of your check. *So, the payroll tax that is now
effectively incorporated into the FairTax is paid by you only when
you buy a new good or service. *It's not automatically withheld
from your pay. *Y
OU
decide when to pay it. *Not the government. *So, where's the downsi
de
to that?

Knwing what is in it and how much each entity is. *For example,
assume your percentage of 23%. *Now, certain corporate taxes get
changed. *Y
our
Fair Tax rate has to change to cover that. So now, this year it is
24.5%.
*
How does the consumer know which changed.....the income tax portion,
the corporate portion, the FICA portion, the whatever portion?


I’ve already talked about changing the rate and how easy (or not so)
that would be. Do you really think people care what has changed?

Many will.

What they care is that an item that costs $100 under the current
system still costs $100 under the new system.

No, it won't. Stop and think about why.

And if they buy it
used, they don’t even care.


Under the FairTax, what

you earn is what you keep. No more withholding taxes; no more
income tax.

Just more taxes on the point of sale while all taxes from state
and local governments remains intact.

You are not accounting for the removal of the 23% built in costs
that YOU ARE ALREADY PAYING on every good and service that you buy
(that government doesn't even get, by the way – just wasted
dollars).

Yes, I am and it isn't 23% or the Fair Tax could not be 23% and cover
all those costs plus the amount currently from income taxes or FICA.
*

FWIW, all costs of doing business are placed in the price of the
product or service that is produced. *Anyone who doesn't understand
that won't understand either your Fair Tax or my flat income tax
proposal.


The 23% does account for it. This tax plan is the most widely
researched tax plan in the history of the planet.

The 23% may account for it, but then it couldn't have been 23% when it
was first deducted.

Economists and
businessmen smarter than me have examined it inside and out. The 23%
figure is the figure arrived at the make current government receipts
revenue neutral.


* When

those built in costs go away you are back to the same price.

Not really. *You have added additional taxes to that proposal in the
fo
rm
on income tax replacement and FICA and federal sales taxes which were
part of certain purchases.


Yeah, really. What has been added replaces the compliance costs that
go away. On average, it’s a wash.

Are you trying to tell us that the compliance costs are the same as the
entire income tax revenue? That would be interesting since about 45% of
that federal revenue is individual income tax, 36% is payroll taxes, 12%
is corporate taxes (which you did put into your Fair Tax number), 3%
excise taxes and 4% from other.

*See my

previous example.
It uses a flat 23% as the revenue generator.

Call it what you will, the FairTax is a winner.

You may think so. I don't. I think it needs too many
adjustments so that it does not become regressive.

I don't think so, I know so. *Tell me how this is regressive?

snip......

Same taxpayer......buys $100 worth of groceries.....pays $123
for them.

Stop right there. *That's incorrect. *Under the FairTax the $100
of
groceries will still cost $100. *There's no need to even go any
further with your example.

I was speaking of the actual worth of the product. *Yes, there are
business taxes, etc.. in there but one cannot generate a new tax
without adding to what is already there. *So a product which today
costs $100 plus city and state sales taxes will now cost the
difference between the 23% sales tax and the old taxes on the
product plus city and state sales taxes. *What you have done is
taken the taxes previously included the product price and moved
them into your Fair Tax in addition to the hit on that tax
replacing federal income taxes and FICA.

Nope. *The item that costs $100 today will still cost $100. *Here's
why. *The built in compliance costs are, on average, 23%.

Then where did you put the replacement for the income tax? *It has to
b
e
there or the feds are missing a major, major part of their revenue.


As I said, the income tax replaces the compliance costs that go away.
If you don’t have an income tax there is no income tax code to comply
with.

And I say your number is wrong. Compliance costs are NOT equal to 45% of
the entire federal budget. Now, Social Security, Medicare and Medicaid
are about 40% and both are expected to increase in cost over the next ten
years. Social Security by 70%. Medicare by 77% and Medicaid by 99%.

Are you trying to say that compliance costs with our current system is
equal to SS, Medicare and Medicaid?

*Take that

away and your $100 now costs $77 (which already include the state
and city taxes you mention). *Replace those compliance costs with
the FairTax and you are back to $100.

See above.

Rich guy, he eats the same, so he buys a $100 worth of
groceries...pays
*
$123 for them. *Which one spent the bigger percentage of their
incom
e
o
n
a necessity? *OK, let's fix it....we will not pay that tax on
groceries....oooops, you just generated an exception. *

Three suggestions for you to find out why as well as any
other questions you might have:

1) go visit fairtax.org and read it from front to back. *Pay
particular attention to the FAQ.

I have.

mmmmmmm okay....

2) Buy and read "The FairTax Book" by Linder and Boortz.

Why? *If they can't explain it on their website..........

Boortz and Linder didn't create the web site. *They are advocates
of the FairTax and have their own writing on this. *You can fit a
whole lot more into a book than you can a website. *You really need
to read the book. *You will not regret it.

3) Then buy and read "FairTax:The Truth: Answering the
Critics"

It will all become crystal clear.

I am familiar with sales tax schemes, they have been around for
years.
*
With exemptions, they become just as convoluted as the current
system. Excise luxury taxes were another attempt to soak the
rich as poor poeple would never buy luxury taxed items. *How
did that work out?

You may be familiar with sales tax schemes, but it's clear you
aren't familiar with the FairTax. *Instead of speculating as you
have done above why not go visit the site and base your
criticisms on the plan itself? *You will find that many of the
things you raised above are answered there.

Been there, read it.

Not all of it then because many of the questions you asked that I'm
replying to come right from the web site.

Look, I'm with you that a flat tax would be better than the
current system. *Problem is that it, as opposed to something
like the FairTax
,
leaves itself open to far more manipulation than the FairTax.
*The ta
x
code itself is evidence of just that.

Are you trying to say that Congress cannot **** with the Fair Tax
as much as they can **** with a flat tax? *I don't think so.

That's exactly what I'm saying and I explained why above.

LOL!!

Laugh if you will. I see that you won't be convinced.

I simply don't feel that you can subtract product costs with taxes, add
income tax revenue to that, put the product costs back in and have the
same number. If you know how to do it, let me know.



--
Sleep well tonight....RD (The Sandman)

If you woke up this morning....
Don't complain.