FairTax

Originally posted by madnessinmysoul
i wonder what will happen to the rest of the world if all of these positive effects happen

would the chinese economy collapse?
would the third world move further down the ladder?

Im not going to pretend I have all the answers to everything because I dont.
America is sending most of it's manufacturing jobs to China because of labor costs, taxes and regulation.

Now a Fair Tax would make it more profitable to manufacture in America!. In effect, removing 20-30% of the price of a good by the time it hits the end user. With a 23% percent sales tax then you can call it a wash (in theory). Finally, it forces transparency on the government. They will no longer be able, to be able to increase spending through schemes without it being obvious to the people.

Now, China wouldnt be experiencing its current economic growth. I think it would more or less kill chinas economy because they have so many ppl. Eventually that nation will divide itself into several different nations because china wont be able to help is population. Simply put its just to big. Anyways, We Americans are in need of a massive overhaul with our current taxation system which is unfair and to expensive to keep.

Right now this world is only big enough for 1 megapower. And that is the US.

Heres another pretty good read about the fairtax.
polipundit.com...

If you have any futher question regarding the fairtax i suggest you look at the link below. Just click on the question and it will explain it for you.
www.fairtax.org...

Heres an interesint blog article I found from
freedomistheanswer.blogspot.com...

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Defeating China, Russia, North Korea, and Iran in the Cold War of Terror

China and Russia are allied and using all the tools at their disposal, including supporting North Korea and Iran, and to a lessor extent Venezuela, to defeat us in a new Cold War of Terror. China and Russia have supplied weapons, diplomatic cover, and economic support to these rogue states to drain American resources, our respect in the international community, and generally create chaos. China is stealing our technological secrets through a coordinated program of traditional intelligence and computer infiltration. China and Russia are threatening our satellites. China constantly threatens our ally, Taiwan. We can use the lessons from the first Cold War to figure out how to win this new one.

JFK got nuclear missiles out of Cuba by equating the Soviet Union with Cuba, and convincing the USSR that he was willing to go to war over it. Ronald Reagan ultimately defeated the Soviet Union by breaking them economically using a coherent strategy combining trade, foreign policy, and domestic policy. We can use a similar strategy with China and North Korea to remove nuclear weapons from North Korea and defeat Communist China, their Russian allies, and Iran, and win this new Cold War.

First, we should acknowledge that China has provided the military, economic, and diplomatic resources so that North Korea could develop the bomb. China is responsible, and has in effect equated itself to North Korea and it's nuclear threat. As JFK did with the Soviets, we should hold China accountable for the provocative actions of North Korea. We should adjust the status quo so that we apply the same sanctions to China we apply to North Korea. From this new position that we are dealing with one unit, China/NK, we should offer improved trade with China/NK if it takes steps to remove nuclear weapons from the Korean peninsula. We should also make it clear that any new provocations from China/NK will be met with harsher sanctions, and that any nuclear attack by China/NK will result in full retaliation against China/NK.

Once we put China in this position, it won't allow North Korea to be the tail that wags the dog. China will be upset with the U.S., as will the rest of the world who will call us dangerous cowboys, like they did Reagan, but China's only good option would be to work for a nuclear free Korean peninsula. China would suffer the economic pain (no more Kentucky Fried Chicken) of losing the world's greatest consumer as a costumer, plus it would be in the untenable position of being at the mercy of the madman in North Korea. America could get China's support for regime change or some other policy to remove the nukes in North Korea.

America would also suffer economic pain (T-Shirt prices would rise) from these trade restrictions, but domestic policy would limit that pain, and turn it into an advantage. By adopting the FairTax, America would begin to return as a manufacturing juggernaut. Reducing government interference in the free market would assist this process. American products, no longer burdened by the income tax, would compete with Chinese made products on the world market, further enriching America and hurting China/NK. This American growth in manufacturing would drive prices lower to compensate for the price increases from restricted trade with China/NK. This would put pressure on China to democratize.

Without American money flowing into China, it won't be able to purchase as much fuel. Oil prices will fall, hurting Russia and Iran and helping the U.S economy. This will immediately impact Iran's ability to develop nuclear weapons and fund terrorism as well as reduce Russia's leverage over Europe. Venezuela would also be affected. Further, we can use a domestic energy independence policy in the U.S. to further reduce the world's dependence on oil, export that technology to our allies, and further reduce the economic power of Russia and Iran.

It's likely that China's response will be to stop buying America's debt. America can diffuse that problem by cutting spending to balance the budget. When all this is done, we will have effectively economically disarmed China, Russia, and Iran, while strengthening the economies of the U.S. and our allies. China will work with us to remove the nuclear weapons from North Korea, regime change would become likely in China, Iran, North Korea, and Venezuela, and Russia would begin to move back towards democracy under economic pressure from the U.S. As these countries become more friendly, we would reward them with better trade deals, while preserving trade as strategic tool. All the while terrorist organizations would be starved for money, and would have to resort to throwing rocks.

America has foolishly given up trade as a strategic lever to effect change in the world. By trading freely with our enemies in this new Cold War of Terror, we provide the funds they use against us. We also no longer have either a carrot or a stick for influence. We need to take control of our trade, use it as a tool coordinated with foreign and domestic policy, and defeat our enemies without firing a shot, just as Ronald Reagan did. While we could do this alone, it would work even more effectively if our allies for democracy joined in. This is in the interests of America, our allies, and the world.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Very good post. I really hope that they pass a bill enabling Fair Tax this year.

im worried about how long fairtax would take to get through now that the democrats have control, dems these days are for big government and higher taxation. this would eliminate them manipulating taxes because we would see how much we pay in taxes on every receipt we get which is awesome, clearing the smoke screen so we can actually see what we are paying in taxes giving us more influence when politicans deciide to try and screw us.

education is the key. right on good info semper.

Excellent post semperfoo! I'm very glad that I have stumbled across your thread. Would you happen to have a list of scholars/professors/economicists who support Fair Tax?

Originally posted by pugachev
Excellent post semperfoo!

I'm very glad that I have stumbled across your thread. Would you happen to have a list of scholars/professors/economicists who support Fair Tax?

Its good to see another poster posting on this subject.

It is important to all of us. It has to do with our very future as a nation.

If we want to take back our country we are going to have to inform alot of ppl. Because when it comes to polotics numbers count.

Im haveing a harder time finding all the names however one of the staunchest supporters of the fairtax is Vernon L. Smith who won noble prize in econmics back in 2002. Alan Greenspan was also a supporter of the fairtax proposal. Once I find a complete listing of all 75 economist who are endorsing the fairtax I will post it ASAP.

fairtaxreform.blogspot.com...


"Top Ten Economic Benefits of the Fair Tax

Fair Tax Legislative Package -HR 25/S25

1. Supported by Alan Greenspan and 75 other Economists and Economic Professors. They all support a consumption tax as better for America than an income tax.

2. Removes the most regressive tax on the poor and middle class- the payroll tax. Provides a broader based tax for Social Security and Medicare. The Fair Tax also replaces the personal and business income tax, AMT(Alternative Minimum Tax), death tax, capital gains tax and investment taxes.

3. Removes business income and payroll taxes resulting in a drop in prices by 10 to 15%. Saves an estimated $250 to $400 Billion annually in unproductive tax compliance costs.

4. Eliminates the cumbersome IRS Tax code and replaces it with a National Sales tax of 30%(income tax equivalent of 23%). With price drop consumers pay about the same. Under the arcahic Income and payroll tax a middle class family had to earn a gross pay of $148 to bring $100 Home. Under the Fair Tax you bring $148 dollars home and with a minimum 10% price drop that same $100 of Goods costs you $90. Add the Sales Tax your new total is $117. You net $31 extra.

5. Fights outsourcing; increases Manufacturing and business growth back in America. Boosts Economic Growth an estimated 6 to 10% in the first year. Increased job growth.

6. Reduces the trade deficit because exports will not pay the sales tax and be 10 to 15% cheaper for sale overseas. Leveling playing field with low wage countries. (Unions should support)

7. US shores will be the most competitive corporate tax -free zone not the Bahamas. Corporate headquarters and many other businesses can return to US soil and be more competitive. Investment capital will flow and American Based business and jobs will grow.

8. Average working families take home 100% of their paychecks, no Federal income tax or payroll deductions. Average family of 4 making $50,000/yr takes home $5,000 to $7500 more.

9. Families have more Spendable income for Health Insurance, Childcare, College tuition, and Private retirement Savings accounts. It’s their choice for their family. “Ownership”

10. Fair Tax package is revenue neutral and Progressive with a Prebate of Sales tax up to the Poverty line of spending. Family of 4 gets $492/m. Couple receives $367/m. No receipts no complicated filing for refunds. A refillable monthly debit card to cover Sales tax on all purchases up to the poverty line of Spending - Family of 4 HHS sets in 2005 at $25,660- Prebate is $492/m

The Fair Tax is revenue neutral, progressive and fair. Net tax rate for the Poor at the poverty line is 0%, for the middle class at twice the poverty line is 11.5%; for 4 times poverty line 17.2% and the more you spend your net rate is between 20 and 23%.

The Fair Tax meets requirements set by President Bush when he said, "simplify" the tax code in a way that is fair, does not raise or lower the overall tax burden and better promotes "long-run economic growth and job creation." It also meets his standard for promoting Home ownership and Charities."
fairtaxreform.blogspot.com...




Heres a good read. www.heartland.org...



[edit on 033131p://1601pm by semperfoo]

I found this interesting to say the least because it is the democrats who are not hoping on board with the fairtax proposal.




"Wealthy Democrats don't pay their Fair Share of Tax.

Is our current system of taxation a Fair Tax on American Families? Democrats would have you believe that they want to tax the rich more and protect the Middle Class. Not True ! Democrats like the current system because their wealthy friends like the system, their wealthy Lobbyists help create the system over 40 plus years of Democratic control of the House.

Democrats impune the attempts of Republicans to simplify the tax code, lower tax rates and close loopholes. Democrats scream on one hand about the wealthy but they don't pay their fair share of tax at all. Tehresa Heinz Kerry and her Husband( John Kerry) paid a net 12% on their tax returns shared during the last Presidential race.
Millions in investment income and wages and they pay only 12%. On investment income they paid ZERO toward supporting Social Security and Medicare. Why? There is no payroll tax on investment income.

Democrats like to respond that they will pay when they pay the estate tax and that is why we should keep the estate tax. But wealthy Democrats who say that( like Senators Kerry and Kennedy) use other loopholes to avoid that as well.

Al Ose, Regional Director for Americans for Fair Taxation, wrote a recent letter pointing out the Hypocrisy of the left.

Letter to the Editor.

You have my permission to publish this letter.



The enemies of the FairTax are the ultra-wealthy, those whose jobs depend on the current tax system, the National Retail Federation (NRF), and the uninformed.

One of the taxes eliminated by the FairTax is the estate tax. Warren Buffet, Bill Gates' father, Sen. Ted Kennedy, and George Soros have all requested that we keep the estate tax. If you look at their publicized financial records you will find that their money is protected from the IRS through trusts or foundations. For example Sen. Kennedy has $500 million in trusts based in Jamaica, Cayman Islands, and the bulk of it in Fiji. The Kennedy oil company operating in five states, once called Kenn Oil, is now named The Arctic Oil Royalty Trust. George Soros "holds the bulk of his billions in tax-free overseas accounts."

The ultra-wealthy pay lobbyists six-figure incomes to offer campaign contributions to legislators. The legislators in return make changes to our tax code that benefits the wealthy. The legislators use the contributions to get re-elected. If a legislator is against tax reform you should be able to figure out why.

The NRF doesn't want to collect the FairTax although they already collect a sales tax in 45 states and the District of Columbia. The FairTax would require only 16 million retailers to collect and remit the FairTax. Our current system makes them and every other business and individual to maintain records and report to the IRS. That is over 200 million reports to the IRS as opposed to just 16 million retailers reporting to their states with the FairTax.

Of those who become educated about the FairTax, 85 percent approve.

Privacy is one of the major benefits of the FairTax. The government and your accountant would no longer know more about you than your children do. Visit www.fairtax.org.

Best regards, Al Ose

Regional Director WI, IA (volunteer)

Americans for Fair Taxation
Resources:

Newsmax magazine, November 2005.

Do As I Say (Not As I Do) : Profiles in Liberal Hypocrisy by Peter Schweizer




The Fair Tax eliminates the Estate tax, AMT, Capital Gains tax, investment income tax and all payroll and income taxes. The Fair Tax replaces that with a new revenue neutral tax system that has a simple National Sales Tax for all new products and services plus a very important Prebate system to make the whole package progressive as well.

Under the Fair Tax the Ultra Wealthy will pay their fair share. When the wealthy buy big houses and new cars, fancy landscaping, in-ground pools and spas, and Yachts, they will pay the Fair Tax. Unlike the estate tax or the capital gains or investment income tax, the Fair Tax has a portion which goes to Social Security and Medicare. Now the Wealthy will pay a fairer share of supporting Social Security and Medicare. The rest of us will take home 100% of our paychecks and have more spendable income under the Fair Tax. The Fair Tax expands the tax base, provides a monthly prebate check and gives American Families more control over all they earn.

If the Democrats are truly the protectors of the poor and of Social Security why do they continue to support the most regressive tax on the working poor and middle class. The Payroll tax for Social Security is only paid on wage income up to $90,000. Most Senators and wealthy Democrats like the Kennedys, Kerrys, Soros family and Hollywood celebrities stop supporting these crucial programs after $90,000.

It is time to change the tax system to the Fair Tax; This is Tax Reform that truly untaxes the poor and removes the most regressive tax from the Middle Class and makes the Wealthy pay a fairer share without the loopholes that their tax attorneys use to take money offshore, put in tax free trusts or use fancy writeoffs to pay a smaller percentage than working families do."

fairtaxreform.blogspot.com...

general question here

what are the predicted tax revenues in relation to current revenues?

is it an increase, a decrease, or will it stay the same?

A Facinating thread. Some questions spring to mind when I read it.

Why will prices drop by 10% if payroll tax is removed?
Companies, as I see it, have no incentive to pass on reduced costs as price cuts.
Surely any savings in costs will be kept by the companies and passed on to share holders as increased dividends?

If a 30% sales tax is introduced, who collects it?
Companies I presume, who will then have associated costs which will passed on to the consumer of the products.
Therefore the increase in cost of goods is 30% plus the companies costs, which leaves you paying more for the same things.

If a 30% sales tax is introduced then companies raw material costs rise by that amount? Or is this tax only levied on goods when they are finally sold to the end user?

any ideas

regards
beagle

IT cost $5 dollars to pump a barrel of oil out of the ground in Iraq, Iran, Kuwait and elsewhere in the Middle East (or less). But it cost $50 per barrel to pay off the royal families, aytollahs, sultans and everyone else. OHMG! US oil companies are literally bribing the house of Saud and everyone else! THis is against the law! What do we do?

Fair Tax?

Not gonna work.
Not in my lifetime.

Originally posted by madnessinmysoul
general question here

what are the predicted tax revenues in relation to current revenues?

is it an increase, a decrease, or will it stay the same?

the system is designed to be revenue neutral for the first year and decided by our reps to either increase or decrease the % after depending on if they have our best interests in mind. we will always see the % we pay in taxes on every receipt we get making it very clear what we are paying in taxes hence more pressure on politicans not to mess with the % and increase our taxes, something they get away with right now.


federal government wont generate any more than what is allowed under current law.

[edit on 7-1-2007 by ape]

[edit on 7-1-2007 by ape]

Originally posted by the smoking beagle
A Facinating thread. Some questions spring to mind when I read it.

Why will prices drop by 10% if payroll tax is removed?
Companies, as I see it, have no incentive to pass on reduced costs as price cuts.
Surely any savings in costs will be kept by the companies and passed on to share holders as increased dividends?

If a 30% sales tax is introduced, who collects it?
Companies I presume, who will then have associated costs which will passed on to the consumer of the products.
Therefore the increase in cost of goods is 30% plus the companies costs, which leaves you paying more for the same things.

If a 30% sales tax is introduced then companies raw material costs rise by that amount? Or is this tax only levied on goods when they are finally sold to the end user?

any ideas

regards
beagle

it's capitalism at it's finest, take a look at the current competition in our country, companies would notice alot more people with stronger purchasing power and would want to compete for their business, this naturally drives down prices as we even see today.

the sales tax is 23%, there are no embedded and hidden taxes like our current system has, where are you getting this 30% figure? the tax is collected by the companies and then passed onto state and so on..

fairtax.org...

a person would not end up paying more for a product, infact they currently pay more for products under our current tax system, and it's not just payroll taxes that would be abolished its many more.

here is some information

fairtax.org...

fairtax.org...

fairtax.org...

fairtax.org...

fairtax.org...

23% is what you pay in taxes, no more no less, prices will not increase whatsoever, infact if companies want to stay competitive they will have to lower prices, people from all classes benefit from this because it does not play favorites like our current system.

[edit on 7-1-2007 by ape]

[edit on 7-1-2007 by ape]

Enjoying the Thread. Good information.

To me, it seems like the best thing the fairtax does is to give control over how much taxes one pays back where it belongs, to the citizen. It encourages saving, something today's America is sadly deficent in. You are not taxed until you spend something. Don't spend (ie: save) and don't get taxed. Frugality is rewarded, while extravagance and excess is penalized, but probably not beyond the capabilities of the rich and ultra rich to cope with.

Also, when you consider complience costs of the current system, you also have to factor in the stress associated with figuring out just what those costs are in a system seemingly designed by lawers and acountants to only be understandable by lawyers and accountants. That's stress and in many cases expense that the American People don't need and shouldn't be forced to endure. How much time, energy, and money is wasted on finding and using every little allowable loophole when the fact that there are loopholes at all is absolute proof that the current system is flawed and hopelessly wrong.

In my opinion, from what I've researched so far, the fairtax seems simple, logical, and fair when compaired to what we suffer under now. That is exactly why I don't think it will ever be allowed. When given a choice between the good of the country and the good of their own pocketbooks (and the special interests who fill them), I have no illusions about which our leaders will choose.

Originally posted by Ambient SoundDon't spend (ie: save) and don't get taxed. Frugality is rewarded, while extravagance and excess is penalized

Are you a communist? Russian? What? How can you support an economy without spending? Even if you save, inflation will only decrease the value of your money.

soitenly people would have massive amounts of income, you have to take into consideration the amount of high paying jobs that would be created along with wage increases with current jobs it would literally lift the poverty out of the poverty level. people are going to save and people are going to spend like dogs+ it's how our system works right now, the only difference would be the simplification of our tax code and the choice along with stronger purchasing power, interest rates would be slashed so people can afford to save and spend.

;-)

one thing about fairtax is that it's grassroots, if will never go away and it is just getting stronger, infact 2007 is going to be a good year for the fairtax. I donate and I have my name on a petition along with thousands of other americans, I'll be damned if some lobbyiest on K street controls my destiny, If my vote counts it will put all those bastards out of business, we need to elect people with integrity.





[edit on 7-1-2007 by ape]

You have voted semperfoo for the Way Above Top Secret award. You have two more votes this month.

WAY!!! Past time this was given it's own thread....

Wonderful idea and when discussed with any "Valid" economist, impossible to discredit...

Though not a perfect system, far preferable to the mess we have now..

WAY TO GO SEMPERFOO

Semper

well, when I got ticked off at NY state, I managed to reduce the amount of taxes they collected from me alot. the fair tax would would make that much more easier for me to do....and I imagine there's alot of people who would change their spending habits a little for just this reason...I don't buy, they don't get. save my money for when another set of clowns get into office and see if they are worthy of my money. I mean there are ways you could avoid this tax to some extent. go to garage sales looking for the stuff you want before you visit the store, ect. and, let's face it that top 10 or 20% isn't spending half of their income, they're stashing it away in stocks, offshore accounts, ect. so, that money will never be taxed. we'd be taking a large portion of the money that is now circulating within our economy out of the tax pool...so that kind of tells me we'd be paying higher taxes on the portion that is left within that pool. to meet the financial needs of the gov't. I don't buy the idea that since the corporations are saving so much money on taxes, they'll raise everyone's wages...they'll do what they've been doing, give out these lovely bonuses and salary increased to their favorite few.
all in all, I don't think the fair tax will be any better, although I might be missing something. if you don't like the high taxes you are paying, well, there's nothing much that can be done about that when one considers that the gov't is paying out far more than it's taking in....the taxes should really be higher, so we aren't passing our bills onto our kids and grandkids. the key is to get the gov't to trim down it's expenses to a more managable level. anything else if just shifting the numbers around, and well, maybe the burden.

I purchase Stock al of the time and while I am by NO MEANS an expert on the Fair Tax...

As purchasing stock is a "Purchase" after all, would that not also be taxed? SO that would not be a loop hole...

Also stashing your money into Off Shore accounts would help you no more than stashing it into savings accounts here. It is not taxed under the Fair Tax, unless you spend it. I believe this is the case anyway, just with what little reading I have done on it..

Semper

[edit on 1/8/2007 by semperfortis]

Originally posted by semperfortis
I purchase Stock al of the time and while I am by NO MEANS an expert on the Fair Tax...

As purchasing stock is a "Purchase" after all, would that not also be taxed? SO that would not be a loop hole...

Also stashing your money into Off Shore accounts would help you no more than stashing it into savings accounts here. It is not taxed under the Fair Tax, unless you spend it. I believe this is the case anyway, just with what little reading I have done on it..

Semper

[edit on 1/8/2007 by semperfortis]

"The purchase of stocks is considered a purchase for investment purposes and not personal consumption so they are purchased tax free. The service fees charged by the broker, however, are personal consumption and therefore subject to tax."

www.fairtax.org...

irrelevant considering the massive GROWTH we would have.

semper today I took a stroll into H&R block to check out that televison ad about coming in with your paycheck instead of waiting for the W2's but that was only a front for my final question which was... ' i heard you guys were reforming to mortgage and other types of loans etc because of the fairtax ??? '

'yeah, the company has already confronted the people behind fairtax saying they are willing and going to be reforming into other aspects eventually breaking away from income tax return assistance.


GYEAH!


edited for link !!!

[edit on 8-1-2007 by ape]

ape,

That is what I see happening...

We have created the monster that is the current tax system, and like all other good monsters, it is not going to die without a fight... When one considers the vast number of people, corporations and physical entities directly supported by the current tax system, the Fair Tax seems tremendously outnumbered.

I feel the only hope is that the Fair Tax is truly a "Grass Roots" institution, as stated earlier, and will grow in public opinion enough to over come these odds...

Also thanks for the input on the stocks, I knew my purchases were not taxed now, but was unsure under the Fair Tax.

Semper