Saturday, June 12, 2010

Can a Tax Be 'Fair'?

By Laurence M. Vance

Representative John Linder (R-GA), one of former House Speaker Newt Gingrich's top lieutenants, has announced that he is retiring and will not seek reelection. First elected to Congress in 1992, and representing Georgia's seventh congressional district since 2003, Linder's claim to fame is for continually introducing legislation that never passes.

Linder is the primary sponsor in Congress of the FairTax, a progressive national retail sales tax. The FairTax is the brainchild of three businessmen concerned about the crippling effects on the economy of the current federal tax code. After adopting the name "FairTax" for their tax-reform plan, they formed Americans for Fair Taxation in 1997 and enlisted Representative Linder to introduce FairTax legislation in Congress. Linder first sponsored the "Fair Tax Act" in the House in July of 1999, and has reintroduced a FairTax bill at the beginning of every term of Congress since then.

The current incarnation of the FairTax is H.R. 25, the "Fair Tax Act of 2009." This bill was introduced on January 6, 2009, and has 61 cosponsors, including one Democrat, David Boren of Oklahoma. Notably absent from the list of cosponsors is Representative Ron Paul (R-TX), continually acknowledged as the taxpayers' best friend because of his consistent voting record against unconstitutional spending. The FairTax bill is currently languishing in the House Committee on Ways and Means (as it does each time it is introduced). A companion bill was introduced in the Senate (S. 296) on January 22, 2009, by Saxby Chambliss (R-GA), but it only has 4 cosponsors, all Republicans. It is sitting in the Senate Committee on Finance.

Former Republican presidential candidates Mike Huckabee, Thomas Tancredo, and Duncan Hunter have been supporters of the FairTax. The most vocal proponent of the FairTax outside of political circles is radio talk-show host Neal Boortz. He is the author, with Congressman Linder, of The FairTax Book (Regan Books, 2005) and a sequel, FairTax: The Truth, Answering the Critics (Harper, 2008).
The FairTax is a consumption tax in the form of a national retail sales tax on all services and the final sale of all new goods. All services, except tuition, would be subject to the FairTax -- from heart surgeries and funeral services to haircuts and manicures. And although the FairTax would only be levied on the final sale of new goods, nothing is exempt -- not food, not prescription drugs, not new cars, not even new construction (what would the FairTax be on a skyscraper?). All Internet purchases of new goods would also be taxable.

In exchange for these new taxes, there would no longer be -- on the federal level -- personal income tax, corporate income tax, capital gains tax, Social Security tax, Medicare tax, unemployment tax, alternative minimum tax, gift tax, or estate tax. However, without an income tax, all tax deductions, exemptions, and credits would also be eliminated. No more child care credit, education credits, earned income credit, personal exemptions, home mortgage interest deduction, etc. The FairTax would not do away with other federal taxes like tariffs, excise taxes, and special taxes on things like airline tickets. State and local income, property, and sales taxes would be unaffected as well.

The reason for such a radical tax-reform proposal is obvious: the intrusive, wealth-destroying, income redistributing, social engineering monstrosity known as the U.S. tax code. With its progressive brackets that punish success, refundable tax credits that allow some Americans to receive a refund after paying no taxes, and arcane rules and schedules that confound not only seasoned tax preparers, but IRS employees, the tax code in the 20 volumes of Title 26, "Internal Revenue," of the U.S. Code of Federal Regulations is an abomination.

The appeal of the FairTax should be evident as well: no more record keeping, no more taxes withheld from paychecks, no more compliance costs, no more tax forms, no more IRS audits of individuals, no more lines at the post office on April 15th.

But that's not all. Proponents of the FairTax also tout some additional benefits it is supposed to bring. Congressman Linder believes that under the FairTax we would see an increase in GDP, exports, real investment, real wages, economic growth, and economic efficiency. Neal Boortz maintains that the FairTax would result in the creation of millions of new jobs, an increase in foreign investment in the United States, and be a financial bonanza for the poor and middle class. Both claim that prices would decline and interest rates -- which are already at historic lows -- would drop by 30 percent.

These grandiose claims for the FairTax notwithstanding, there is no question that the beauty of the FairTax is its simplicity. This beauty, however, is only skin deep. The FairTax promises a utopia that is simply too good to be true. The cure offered by the FairTax may even be worse than the diseased federal tax code it is designed to replace.

The price of the FairTax's simplicity is a 30 percent national sales tax on all new goods and services in addition to the state and local sales taxes already levied in most states and many counties and cities. And it is not just individuals who would be responsible for paying the tax: State and local governments would, unlike now, be required to pay taxes to the federal government on the goods they purchase, and the federal government would pay taxes to itself.

The FairTax rate is usually given by its proponents as 23 percent, with the caveat that the rate is figured inclusively (the tax is included in the price of the product) rather than exclusively (the tax is added to the price of the product) like it is computed in every state that assesses a sales tax.

Obviously, it is much easier to sell a national sales tax to the American people if the rate is 23 percent instead of 30 percent. But whether one thinks the rate is 23 or 30 percent, the fact remains that it will cost Americans an extra 30 cents on the dollar to purchase any new good or service under the FairTax. Some economists don't think that either of these rates would be high enough to fund the government at its current level. And as a practical matter, as bad as the current system is, I don't think the American people are ready to pay an additional 30 percent sales tax on their purchase of a $30,000 new car on top of the state and local sales tax that they already pay.

Although it seems as though the exchange of the income tax for the FairTax would lead to higher prices on all new goods and services because of the new sales tax, FairTax proponents claim that the removal of embedded taxes would result in the prices of goods and services falling by enough to offset the amount of the sales tax imposed. Now, it is true that the current price of consumer goods includes embedded taxes like corporate income taxes and the employer share of Social Security and Medicare taxes, but the amount by which it is claimed that prices would fall under a FairTax system has been grossly exaggerated. What we know for certain is that under the FairTax retail prices will increase by 30 percent; what we don't know is how much prices will decrease after their embedded costs are removed.

But not only will the lower prices on goods and services help consumers to pay their new federal sales tax, the FairTax also includes a monthly rebate to offset the taxes paid on basic necessities. This "prebate" would be based on family size and the government poverty level. There would be no means test; every household -- including the "rich" -- would receive a prebate. And as Boortz mentioned in his first book on the FairTax, for some households the amount of the prebate might even be more than the sales tax paid. Thus, although everyone would pay the same rate under the FairTax, the end result would be that some Americans would pay no taxes at all, some would have most of their taxes offset, and some would get more money back than they paid in taxes. This makes the FairTax an income redistribution scheme under the guise of tax reform.

There are three fundamental problems with the FairTax: the arbitrary concept of fairness, revenue neutrality, and the nature of taxation.

Maintaining that the FairTax is a "fair" tax system, or one that is "fairer" than our current system, is highly subjective. Boortz himself even acknowledges this in his most recent book on the FairTax: "Whether a tax system is 'fair' is a complicated economic and philosophical question, one that inevitably involves oversimplification and subjective judgment." Some Americans think it is fair that other Americans pay for their health care. Some Americans think it is fair that other Americans subsidize their housing. Some Americans think it is fair that the top 50 percent of wage earners pay 97 percent of the taxes. Why should it be considered fair for the federal government to confiscate 23 or 30 percent of the value of every new good or service? The late economist Murray Rothbard, although he died before John Linder introduced the first FairTax bill in Congress, said it best: "There can be no such thing as 'fairness in taxation.' Taxation is nothing but organized theft, and the concept of a 'fair tax' is therefore every bit as absurd as that of 'fair theft.'"

The concept of "revenue neutrality" is one that all advocates of liberty and less government should be suspicious of. The FairTax, like all other current tax reform plans, is revenue neutral. It merely allows the federal government to confiscate the wealth of its citizens more efficiently. The problem with revenue-neutral tax-reform plans is that every federal agency, every federal program, every pound of federal pork -- would be funded exactly as it is now. As Boortz likewise says in his newest book: "The goal of the FairTax movement is not to strangle the life out of government by depriving it of needed revenue." The FairTax merely shifts the debate from how much wealth the federal government confiscates to the manner in which it is confiscated. Obama's trillion-dollar budgets, like Bush's trillion-dollar budgets, shouldn't be funded by replacing one tax with another -- they shouldn't be funded at all.

The root of the problem is clearly taxation itself, not the tax code. Liberals are not opposed to taxes on principle, and have no problem using the tax code for their various social engineering and income redistribution schemes. Conservatives are generally not opposed to taxes on principle either, as long as they are used in the right way -- to fund U.S. military adventures around the world, anything related to law enforcement or homeland security, faith-based welfare programs, educational vouchers, abstinence-education programs, and the war on drugs. Yes, the tax code is too complex, too intrusive, too long, too full of loopholes, and too progressive. But if rates are low enough, then it really doesn't matter how taxes are collected. The FairTax perpetuates the fallacy that the government has a right to confiscate a percentage of the value of each new good sold and every service rendered. This is no different than claiming that the government has a right to the portion of each American's income that it takes under the current system. As Rothbard explains:

The consumption tax, on the other hand, can only be regarded as a payment for permission-to-live. It implies that a man will not be allowed to advance or even sustain his own life, unless he pays, off the top, a fee to the State for permission to do so. The consumption tax does not strike me, in its philosophical implications, as one whit more noble, or less presumptuous, than the income tax.

It's time to retire the FairTax. Although on the surface it sounds like a workable solution to the problem that is the U.S. tax code, it promises a utopia that it cannot deliver. The FairTax creates new taxes, new taxpayers, and new tax collectors, makes it easier for the federal government to raise taxes, institutes universal welfare with its prebate check, has unknown and potential huge transition costs, could saddle us with a sales tax and a reconstituted income tax, and has a stated rate that is too low to achieve revenue neutrality, a problematic concept in itself. The federal government has an insatiable lust for Americans' money to maintain the welfare/warfare state. All revenue-neutral tax-reform plans allow Congress to maintain its spending orgy while appearing to make taxes "fairer." The FairTax -- as acknowledged by Boortz and Linder -- would merely change the way taxes are collected. And not only is it not an incremental step toward lower taxes or tax rates, it contributes nothing toward returning the size, scope, and cost of the federal government to its proper constitutional authority. As Congressman Ron Paul has said: "The real issue is total spending by government, not tax reform."

10 comments:

R. George Dunn said...

The FairTax is an indirect tax. If you can't afford it, you don't have to pay it. The current tax structure takes your property before you see it, without choice.

The current tax structure is built into the cost of product so with free trade, American Manufacturers have a 22% federal excise tax handicap built into the price, thus making competition with tax free imports impossible. FairTax will level the taxation and bring jobs back to America, all the jobs we have lost over the past 30 years.

Fairtax will not be in the cost of the product in the store, but will be added on at the sale, thus exposing the true amount of taxation being done by government, making those who hide from their paycheck deduction see clearly the cost of Government.

Imagine, you are in a bind for cash, so instead of buying a new car with your gross paycheck, SSI, medicare not coming out, will buy a used car which will be tax free. Used products including houses are tax free at purchase. Tax is paid only once on a product. The cost of building a new house is reduced by the amount of taxes repealed out of labor paychecks, business taxes and such. When you buy the ;new house, the tax is added after sale and included in your purchase price, with a gross paycheck to pay for a home with a near wash on the difference before fairtax and after.

How can fairtax be so, fair? How many people do you know who work under the table and collect social programs? How many are criminal business? How many are rich people who have bribed congress for loopholes or have the earnings hidden off shore? Illegal immigrants will also start paying their fair share. That is how the fairTax plan will result in a cut in taxes paid for a family of four earning under $80,000.

The prebate program is one in which every single American gets tax free spending up to poverty wage, rich and poor alike. It is a safety net for you and yours, regardless of how you secure you feel today.

As to the 30% spam. You will not be adding the 23% fairtax in to the product before you calculate the consumption tax. Something costing a $1 today with tax will cost $.78 at the register, less the pay increase employees will be allowed to keep in the transfer of the tax structure. 23% of .78 is $.96 , not the scam explanation of $1.30.

Anyone who does not appreciate the FairTax plan loves the current political system of politicians being bribed to waive taxes, controlling our every decision by manipulating our economy to feed their cronies.

FairTax is what the founding fathers held as a proper taxation. Now for the federal government to need 22% of our GDP to fulfill the powers given them by the constitution, someone cannot read the constitution clearly. It should be about 5%, but that is another subject, separate from the freedom we can achieve by the tool fairtax, one that will help us bring the federal government back under Constitutional control

Daar said...

Part 1 of 6

Whenever a FairTax foe starts up with “the 23% is really 30%” attack and proceeds to presume upon FairTaxer’s motivations, I see it as disingenuous because they are utilizing the same motivational psychology that they are presuming upon the FairTax orginators. The simple fact is that the income tax (which the FairTax seeks to replace) utilizes “tax-inclusive” rates. Comparative analysis isn’t possible using the “tax-exclusive” 30% rate. Or, if you insist on using 30%, then be sure to let the reader know what the current income tax rates would look like using the same reasoning! (Go ahead, make the calculations; behold the "worst of all worlds" we presently have in the income tax system!)

In the classical sense of “a sales tax,” this consumption tax would be 30%. However, because the FairTax employs use of a “prebate,” it’s actual effective rate progresses along a curve from 0% (at poverty-level spending) to only approaching the actual 30%. (In point of fact, no U.S. citizen will actually reach the peak of 30% because of the prebate, i.e., the return of tax on poverty-level spending.)

Vance says,

"...the fact remains that it will cost Americans an extra 30 cents on the dollar to purchase any new good or service under the FairTax...And as a practical matter, as bad as the current system is, I don't think the American people are ready to pay an additional 30 percent sales tax on their purchase of a $30,000 new car on top of the state and local sales tax that they already pay."

Next, Vance contradicts himself, while still maintaining that the consumer would pay an additional 30%, witness:

". . . Now, it is true that the current price of consumer goods includes embedded taxes like corporate income taxes and the employer share of Social Security and Medicare taxes, but the amount by which it is claimed that prices would fall under a FairTax system has been grossly exaggerated. What we know for certain is that under the FairTax retail prices will increase by 30 percent; what we don't know is how much prices will decrease after their embedded costs are removed.” [In other words, Vance thinks they’ll decrease by zero percent]

How can that be so, when the plan is revenue-neutral and is a replacement for the other taxes? (In other words, we’re paying it now! Only, because business is taxed, part of the tax cost is hidden in the price.)
• Does Vance have no faith in the free-enterprise system?
• Does he not believe that relieving businesses of "tax collection" for the government wouldn't make the United States THE place for new business formation?
• Does he not believe that the consequent increase in competition (due to the influx of business into a business-friendly environment) would not drive out any temporary gains that businesses would realize after transition to the FairTax?

Vance wants to paint FairTaxers as pie-in-the-sky simpletons, claiming that the prices driven out of goods and services will keep prices even. This may not be true, from good and service to good and service. However, as a general proposition across the economy, what we're paying now would be commensurately the same under a FairTax. But more importantly, taxes paid are knowable, in advance, and visible. Because the FairTax rate is an instant, graspable indicator of the expense that Congress is putting us to – every time we visit the cash register, the effect of this profound restructuring would be to revolutionize taxpayer psychology and motivation.

(continued below)

Daar said...

Part 2 of 6

What’s more, with a FairTax there is no question who pays the taxes, and there is no question as to the equity of amount paid. It IS fairer, because for every dollar you - as a consumer - spend above the poverty level, it will reflect a uniformly-applied, fair and equitable increase in the tax RATE. The more wealth you have, the more you will pay – but you will be able to AFFORD to pay it, and you will have made a decision to pay it – because the rate is knowable, in advance. No politicians necessary to screw things up. No tax code necessary, as the vehicle to screw it up. With a FairTax, it’s always our choice: to spend, or not to spend.

Whatever price levels "settle out" to be after enactment of the FairTax (and one year would be plenty of time for this to happen), the actual tax load would be more visible, and the tax system would be infinitely less susceptible to corruption by politicians and lobbyists because the income tax code will be gone. Gone with it will be Congress’s ability to generate tax favors which act to foster an unholy relationship between giant corporations and government. In the current system, large businesses are oftimes in a superior position, in seeking those tax favors, to their smaller counterparts (who do not command the resources to compete). Thus, the FairTax will help eliminate government-hosted impediments to the healthy function of the free enterprise economy.

Bottom line: Scrap the income tax, and you eliminate unholy power by Washington to control business behavior and behavior by individuals. (EDITOR'S NOTE: I honestly don't understand why Vance, you Rose, and others, don't just end your opposition to the FairTax on this point alone!)

As for state and local governments paying the tax, their potential benefit of tax exemption increases dramaticallly by externalizing taxes presently buried in prices. This would be put them at a significant advantage over the private sector, and invite co-opting of their price advantage. For example, by utilizing a Construction Management approach to construction projects, where the “Owner” (in this case, the government) purchases materials and their "Consultant" (typically a General Contractor wearing the “hat” of a Construction Manager) would manage construction. One could argue that delivery could be obtained on a more cost-effective basis. The only problem, is that there is no limit to the upside risk! Under a general contract, the General provides a guaranteed price. Under a CM approach, instead of dealing with one "point person" (a General Contractor), the government, thru its Construction Manager, would be dealing with many trades and suppliers.

Now, you can could go ahead and make purchases by government tax exempt (by raising the federal rate and lowering state and local rates – reapportioning what we’d be paying anyway. But, in this case, the limited invisibility is offset by eliminating the possibility of manipulation and misuse.

(continued below)

Daar said...

Part 3 of 6

Now, Vance continues,

"Thus, although everyone would pay the same rate under the FairTax, the end result would be that some Americans would pay no taxes at all, some would have most of their taxes offset, and some would get more money back than they paid in taxes. This makes the FairTax an income redistribution scheme under the guise of tax reform."

It’s correct that while some Americans would pay no taxes at all after FairTax enactment, it’s also true that those same Americans would only be those whose income level is at subsistence! Under the current income tax system, as long as you have the means to successfully game the income tax code, sheltering income, there is no assurance of tax fairness, i.e., that those who spend considerably above the poverty level will pay “their fair share” of the tax load. (The FairTax will dampen the business of tax consultants, measurably!) Next, the FairTax’s provision for the return of tax on subsistence retail spending, through a “prebate,” reduces the static 30% rate to a variable from 0% (at poverty level) to 30% (paid only by those who are not eligible for the prebate, e.g., illegal aliens).

FairTax stipulates that if all of your spending supports only subsistence (as opposed to building wealth), you should not have to pay tax on that. Why? Because that would be a “permission to live” tax! As you begin to realize actual gain beyond the necessities to subsist (call it "acquiring wealth"), only then will the government realize a beneft. As YOU benefit, the government benefits. FAIR?

Currently, family income is plundered by the government – taking theirs first from every wage-earners paycheck via tax withholding. Then, the sorting out is done at the end of the year when every average wage-earner is placed at risk by requirements to render a "tax return" requiring us to divulge all of our personal financial information in strict accordance with a tax code that is accompanied by threats of audit, interest, penalties, and worse! These all vanish under FairTax (call it "freedom").

Vance says,

"Some Americans think it is fair that the top 50 percent of wage earners pay 97 percent of the taxes. Why should it be considered fair for the federal government to confiscate 23 or 30 percent of the value of every new good or service?

In the former sentence, the 97 percent tax is coerced because those at the bottom are more numerous, constitute a voting block, and now threaten the life of our Republic. In the latter, the people decide to pay the tax based on when they decide to make purchases new, at retail. Also, everyone pays, and everyone receives a prebate. Thus, those with greater wealth, or lesser wealth, are satisfied that each is paying their fair share.

Vance continues,

The late economist Murray Rothbard, although he died before John Linder introduced the first FairTax bill in Congress, said it best: "There can be no such thing as 'fairness in taxation.' Taxation is nothing but organized theft, and the concept of a 'fair tax' is therefore every bit as absurd as that of 'fair theft.'"

(continued below)

Daar said...

Part 4 of 6

Rothbard’s statement relating to a myth of “fairness in taxation” can only be true, if there is no government. Evidently, the Founders did not subscribe to this because the Constitution provides for the Congress to raise revenues. The Founders realized that if we, as a country, were going to have a productive economy, and a better standard of living for all, government is required – but a government with limits, and accountable to We, the People. What we have in the current income tax system permits Representatives and Senators to determine the "winners and losers" - and they are not always who you'd think that they should be. Under FairTax, those who are realizing the greater wealth, will also be spending the greater amounts to realize increased lifestyle benefits. The formula application is uniform under FairTax - not given to corruptible manipulation to "favor the few, at cost to the many," such as is now the case. Placing these decisions in the hands of politicians (whom are voted into office) - IS THE MOST DAMAGING TOOL OF THE MARXIST INCOME TAX. The “worst of all worlds” is with us; it enables what Benjamin Franklin most feared when he said,

"When the people find that they can vote themselves money, that will herald the end of the republic. Sell not liberty to purchase power."


Vance says there are "three fundamental problems" with the FairTax. (Only three? If so, then this is great news! Because the current income tax system has problems too innumerable to event start to get a handle on!) But, seriously, Vance outlines the three:

1) "Arbitrary concept of 'fairness'." Vance would rather have an ever-changing tax code, together with politicians and lobbyists determining what "fair" is, as opposed to a rational, uniformly-applied standard. It is the current income tax system - not the FairTax – which is chock-full of arbitrariness!

2) "Revenue neutrality." Vance says,

“The concept of "revenue neutrality" is one that all advocates of liberty and less government should be suspicious of. “

Huh?! In replacing an income-based tax system to a consumption basis necessarily involves the process of determining what the government is taking from us under the current system. (Notice that the question of how much taken is not the issue, in this instance. We are attempting to replace a system that is needlessly complex, expensive, with one that is simple, straight-forward, understandable by the public, and not susceptible to manipulation and corruption.) Next, the retail sales base, and the conditions in which the tax is applied, must be identified. And, finally, a rate must be applied to the base in order to result in raising like amount of revenue. Mr. Vance seems to be making an irrational implication as to the motives and beliefs of FairTax originators. Specifically, by not simultaneously dealing with the issue of “how much” is being taken, Fairtaxers condone the amount that Congress is taking. This is false. Mr. Vance panders to those who are, by nature, suspicious. Ignorance and suspicion, in this instance, supports the tyranny of the income tax and continued powerlessness of those taxed.

(continued below)

Daar said...

Part 5 of 6

Vance continues,

“The FairTax, like all other current tax reform plans, is revenue neutral. It merely allows the federal government to confiscate the wealth of its citizens more efficiently. The problem with revenue-neutral tax-reform plans is that every federal agency, every federal program, every pound of federal pork -- would be funded exactly as it is now.”

First of all, the FairTax represents the elimination of “confiscation,” in the sense that it is operational under the current system! Next, Vance implies that making the tax system more efficient (read: less complex and wasteful) is tantamount to saying that such efficiency automatically supports the end use of the monies taken! Apples and oranges! Mr. Vance could, but fails to, explore how the FairTax will influence taxpayer psychology, and actually empower the taxpayer to make his Congressional representatives more accountable! Under the current income tax system,
• No one knows what they really make (because of "net" and "gross"),
• No one really knows what they're liable for (because the tax language is so confusing, and enforces our sense of powerlessness).
• No one really knows what they owe (until they pay a tax preparer to navigate the tax code to ensure they pay as little as possible – what a paradox!)
But all of the above will be known, once the FairTax is enacted. It is core to identifying the true tax load that every working American family carries. The FairTax is instantly comprehendable – and you’ll feel its effects with every new, retail purchase you make. How long will it take for you to protest the FairTax rate you’ll be paying? How long will it be until you start making demands of your Congressional Representative to CUT PROGRAMS, and SPEND LESS!

Vance continues his presumptuous and confused thinking by remarking,

"The FairTax merely shifts the debate from how much wealth the federal government confiscates to the manner in which it is confiscated."

As we’ve shown above, this conclusion is irrational, and counterproductive. FairTaxers agree with Vance that the federal government confiscates too much from our family purses. But they see this as an issue to take forward, after the FairTax eliminates the many barriers to taxpayer psychology and understanding.

What does the FairTax accomplish?

1) First, and foremost, it REMOVES GOVERNMENT HANDS FROM OUR FAMILY PAYCHECKS AND PURSES (it ends a CLAIM ON INCOME), and returns the power of the family purse to the family.

2) Next, it stipulates that UNTIL A PERSON OR FAMILY ACTUALLY BEGINS TO ACQUIRE WEALTH, THE GOVERNMENT WILL GET NOTHING! (No more withholding; no more depriving families of income, waiting till the end of the year to get their money back - while in the meantime, going into debt on credit cards, to bankers' delight.)

(continued below)

Daar said...

Part 6 of 6

3) On this final item, Vance is really off the mark! He says,

"The root of the problem is clearly taxation itself, not the tax code."

Vance is condoning a Marxist income tax system; he is also at odds with our country’s Founders, on the matter of taxation! The Constitutions authorizes Congress to raise revenues. To listen to some FairTax naysayers, you'd think that someone other than We, the People, can pay Congress’s tax – it’s merely how the tax is laid that is the problem. I’ve been lectured to by aggressive FairTax naysayers who believe that all we need to do is,

* tax the exporters of goods into this country! (Result: We still pay the tax, invisibly, in prices – something FairTax gets rid of. The amount we pay still depends on how much Congress spends.)

* have a transaction tax! (Result: We, the People still pay the tax. The amount we pay still depends on how much Congress spends.)

* have all the hidden CAFR funds invested, and fund the government through interest payments emanating from the investments! (This one's a goody, given that the Federal Reserve is "on the loose" and can crash the market, at will. Another self-cancelling idea that sounds good, but doesn't hold water. We, the people, still pay the cost in the prices of things we buy, invisibly. The amount still depends on how much Congress spends.)

Rothbard's following statement, cited by Vance, is ABSURD when he links a consumption tax to the following statement,

"The consumption tax, on the other hand, can only be regarded as a payment for permission-to-live. It implies that a man will not be allowed to advance or even sustain his own life, unless he pays, off the top, a fee to the State for permission to do so."

These naysayer types love to enshrine Rothbard's "permission to live" argument as an argument against the FairTax. It is the Income Tax that is the “permission-to-live tax”! If you want to avoid income taxes, you have to STOP WORKING! (or otherwise, break the "law" by hiding income). FairTax ends this: If you want to avoid paying the FairTax, then you stop purchasing new, at retail. (Gawd forbid! Anathema to politicians, who could see a dramatic dip in GDP if the people decide to defer major retail purchases, or otherwise buy used!)

Vance says,

"It's time to retire the FairTax."

I say: “It's time for YOU to retire, Mr. Vance!

And, it's time that those who would oppose the FairTax to stop worshipping such quotes from irrational, disconnected naysayers, and to start doing some rational thinking of their own.

(end)

Rose said...

I agree with Mr. Vance as do all the people I have spoken with about the Fair Tax.

I say, it's time for R. George Dunn and Daar Fisher to retire and give us a break.

The truth is now out about the Fair Tax and the fact that it doesn't fix anything. It is still a redistribution Progressive Socialist plan that allows the government to continue spending.

The rise of the Tea Party's is now threatening any revival of life to the Fair Tax movement because people are now READING the plan for themselves and rejecting it.

Daar said...

A "quick list" of FairTax "fixes" can be ascertained from our postings above, Rose:

• Returns control of the family purse to the family.
• Income tax withholding ended.
• Federal gov't paid, only as families spend and benefit.
• "The rate" is an easily-graspable indicator of fed. costs to families.
• Only those who are genuinely subsistent pay no tax.
• The income tax code is gone.
• Social engineering gone with the tax code.
• Lobbyist numbers shrink by half - no more tax favors.
• FairTax far less prone to corruptible manipulation.
• The wealthy pay their fair share.
• Taxpayers have "new at retail" purchasing "strike" power to express displeasure.
• Externalizes taxes that are buried in prices - makes true tax load visible.
• FairTax can be jettisoned prior to export, enhancing our exports, and correcting current border problems.
• Trillions of dollars resting off-shore is repatriated.
• The U.S. becomes the global home of business formation, and will set the pace for other nations.
• Prebate replaces bureaucratically code-mediated credits, deductions with cold hard cash against EVERY CITIZEN's basic needs.
• No more income tax returns.
• No more IRS.
• No more threats by IRS (audits, interest, penalites, and worse!)
• Income tax withholding ended.
• Minimizes ability of gov't to compete against private enterprise (non-tax exempt) thereby encouraging "limited gov't."
• Eliminates the current "permission to live" income tax (i.e., tax liability ceases to be incurred by working).
• Purported 4th Amendment violations of income tax system, fixed.
• Purported 5th Amendment violations of income tax system, fixed.
• Purported 1st Amendment violations of income tax system, fixed.
• FairTax clears away the confusion and clutter (and intended Congressional obfuscation) that hampers a clearer focus on Congressional spending because it ends the ability of pitting poor against rich.

The FairTax does not purport to fix Congress's spending problem (that is not its domain); it does, however, remove impediments to focusing on the issue, increases taxpayer's ascention to wealth, and provides options to express their displeasure (other than ceasing to make income).

Still you believe that the FairTax "fixes nothing"?

Rose said...

Daar, your biggest problem is you don't understand what the public wants.

The public want's the truth exposed about who and what is taxable under the 16th Amendment and the FRAUD and VIOLATIONS committed every day by IRS agents.

The Public want's the size and cost of government reduced back within Constitutional Limits.

The Public want's the elimination of the Federal Reserve Private Bank and a return to Constitutional currency backed by Gold and Silver.

Most of what you claim in the list above is just pure outright hogwash and you know it.

Let's take Social engineering. How can you even begin to claim the Fair Tax will eliminate that Daar? Social engineering is done through the NEA and the Media. Your Fair Tax is just more Social Engineering to make us believe life will be better if we just take this trade off.

Minimizes ability of gov't to compete against private enterprise. Oh Really Daar? And does your Fair Tax Repeal the 13th Amendment Slave Act as well. That's where the government gets it's authority to use Inmate Labor for the great starting wage of $ .23 per hr. Both the Federal Prisons and our State Prisons have Prison Industries competing with private industry.

Now lets look at the added tax we will pay on food, doctor visits, prescriptions, services and the many more items that will be taxed that aren't taxed now. Your prebait won't even begin to cover the added tax which will far exceed what is being withheld from the average paycheck.

Oh yes, I forgot, we can all buy used items, cars, houses. And if the majority of people just buy used, who is going to support all those manufactures who will bring our jobs home Daar? It won't be the majority because we won't be able to afford the tax on new items. And you still haven't provided a list of companies who have committed to reducing the PRICE of goods if the Fair Tax gets passed.

You make a lot of promises with your campaign but you can't show anything to back up your claims. It's all hype Daar, and that's why you aren't getting anywhere with this campaign.

Even your new video isn't going to help, as long as people keep reading the Fair Tax bill for themselves instead of listening to people like you, it will never get anywhere.