Ignoring Bush tax panel's findings, Boortz again misled on "Fair Tax"
SUMMARY: On Fox News' Hannity & Colmes, Neal Boortz made misleading claims about the Fair Tax Act, introduced by Rep. John Linder, which would replace all existing federal taxes with a national retail sales tax on most consumer and government purchases. In fact, Boortz relied on an unusual method of describing sales tax rates. Moreover, according to President Bush's Advisory Panel on Federal Tax Reform, Boortz significantly understated the tax rate necessary for the Fair Tax Act to be revenue-neutral.
On the May 24 edition of Fox News' Hannity & Colmes, nationally syndicated radio host Neal Boortz made misleading claims about the Fair Tax Act, introduced by Rep. John Linder (R-GA), which would replace all existing federal taxes with a national retail sales tax on most consumer and government purchases. In his interview with co-host Sean Hannity, Boortz claimed that in order to fully replace all federal taxes, the national retail sales tax rate would have to be set at only "22 or 3 percent." In fact, Boortz's relatively low figure relies, in part, on an unusual method of describing sales tax rates that differs significantly from the method used by most states and localities. Moreover, according to President Bush's Advisory Panel on Federal Tax Reform, Boortz's figure significantly understates the tax rate necessary for the Fair Tax Act to be revenue-neutral.
Boortz appeared on Hannity & Colmes after speaking at a May 24 "Fair Tax rally" in Atlanta, which was also attended by Hannity, Linder, and ABC News' John Stossel. In 2005, Boortz and Linder co-authored The FairTax Book (ReganBooks, August 2005), which laid out the case for Linder's bill.
Boortz and Linder have repeatedly asserted that the Fair Tax would be revenue-neutral -- that is, it would fully replace all revenue generated by existing federal taxes. On Hannity & Colmes, Boortz stated: "So, we get rid of all these taxes, and we take the embedded tax out of everything we buy. We replace it with a retail sales tax on the final retail sale of all goods and services. It's revenue-neutral." Boortz went on to say that in order to be revenue-neutral, the Fair Tax would have to be set at "22 or 3 percent." (In their book, Boortz and Linder said the proposed tax rate is "currently 23 percent" but could be "somewhat lower" [page 76].)
But neither Boortz nor Hannity explained that Boortz was referring to a "tax-inclusive" sales tax rate. As Media Matters for America has noted, inclusive taxes are calculated differently from the "tax-exclusive" sales taxes generally used by state and local governments. In fact, the "23 percent" inclusive tax touted by Boortz would actually be a 30 percent sales tax as most Americans understand it.
Moreover, according to President Bush's Advisory Panel on Federal Tax Reform, to whom Far Tax proponents submitted their proposal, the actual revenue-neutral rate for the Fair Tax would likely be much higher than the 23 percent tax-inclusive (30 percent tax-exclusive) rate touted by Boortz and Linder. In its November 1, 2005, final report, the Advisory Panel noted that the figures provided by Fair Tax proponents conflicted with the calculations of the Bush Administration's Treasury Department:
In their submission to the Panel, proponents of the FairTax claimed that a 30 percent tax exclusive sales tax rate would be sufficient not only to replace the federal income tax, but also to replace all payroll taxes and estate and gift taxes and fund a universal cash grant. In contrast, the Treasury Department concluded that using the retail sales tax to replace only the income tax and provide a cash grant would require at least a 34 percent tax-exclusive rate.
Some may wonder why the tax rate estimated by FairTax advocates for replacing almost all federal taxes (representing 93 percent of projected federal receipts for fiscal year 2006, or $2.0 trillion) is so much lower than the retail sales tax rate estimated by the Treasury Department for replacing the income tax alone (representing 54 percent of projected federal receipts for fiscal year 2006, or $1.2 trillion).
The Advisory Panel explained that the Fair Tax proponents' proposal appeared to have made internally inconsistent assumptions that largely account for their "relatively low revenue-neutral tax rate." The Advisory Panel further stated that Fair Tax advocates "appear to assume that there would be absolutely no tax evasion in a retail sales tax," an assumption that the Advisory Panel called "unreasonable":
First, it appears that FairTax proponents include federal government spending in the tax base when computing revenues, and assume that the price consumers pay would rise by the full amount of the tax when calculating the amount of revenue the government would obtain from a retail sales tax. However, they neglect to take this assumption into account in computing the amount of revenue required to maintain the government's current level of spending. For example, if a retail sales tax imposed a 30 percent tax on a good required for national defense (for example, transport vehicles) either (1) the government would be required to pay that tax, thereby increasing the cost of maintaining current levels of national defense under the retail sales tax, or (2) if the government was exempt from retail sales tax, the estimate for the amount of revenue raised by the retail sales tax could not include tax on the government's purchases. Failure to properly account for this effect is the most significant factor contributing to the FairTax proponents' relatively low revenue-neutral tax rate.
Second, FairTax proponents' rate estimates also appear to assume that there would be absolutely no tax evasion in a retail sales tax. The Panel found the assumption that all taxpayers would be fully compliant with a full replacement retail sales tax to be unreasonable. The Panel instead made assumptions about evasion that it believes to be conservative and analyzed the tax rate using these evasion assumptions.
Neither Boortz nor Hannity mentioned the Advisory Panel's findings, and co-host Alan Colmes did not participate in the interview.
The Advisory Panel did not provide an alternative revenue-neutral rate for the Fair Tax, and economists disagree about what that rate would be. But a 2000 study conducted by Lindy Paull of the Congressional Joint Tax Committee after Linder first introduced the Fair Tax Act in 1999 estimated that the revenue-neutral rate for the Fair Tax would be 36 percent, using Boortz and Linder's tax-inclusive method, and 57 percent using the tax-exclusive method that most states use to describe their tax rates.
From the May 24 edition of Fox News' Hannity & Colmes:
HANNITY: Neal Boortz, tell our audience we could literally eliminate the IRS and the income tax.
BOORTZ: Well, we can. We eliminate business taxes, personal income taxes, estate tax, capital gains taxes, Medicare tax, Social Security tax. All of these taxes show up eventually in the price of everything you buy. The embedded taxes, in every car, every house, every can of soft drink that you buy, amounting to about 22 percent.
So, we get rid of all these taxes, and we take the embedded tax out of everything we buy. We replace it with a retail sales tax on the final retail sale of all goods and services. It's revenue-neutral, and we don't have to worry about April 15th anymore.
HANNITY: So, in other words, if you make $50,000 a year, you don't make $33,000, you make 50.
BOORTZ: No, you make 50. You're -- if you're -- under the Fair Tax, if you're -- if you sign on, sign a contract, get a $50,000 a year salary, well, then each one of your 26 paychecks is 1/26 of $50,000. There's no withholding.
[...]
HANNITY: We have a certain level of things that we expect from the government.
BOORTZ: Yes.
HANNITY: How is this revenue-neutral?
BOORTZ: The Fair Tax was designed -- by the way, this is the first tax reform idea ever completely designed by the private sector, by economists at places like MIT and Harvard, by businessmen, not by politicians. This is not a good plan for politicians. It takes power away from them. But they looked at our economy. They looked at the consumption levels. They said, "This is how much money the federal government takes in in tax revenue right now. What would the Fair Tax rate have to be to match that?"
HANNITY: And it is?
BOORTZ: It would have to be just about equal to the embedded tax in our goods and services now. The embedded tax is about 22 percent. The Fair Tax would be 22 or 3 percent. So, a $10,000 car would still cost about $10,000.
While perhaps not in this interview, Boortz has said often that the Fair Tax is an inclusive tax system. Whether or not people are familiar with this or not, does not change the validity of presenting the tax in that manner. Rather than picking nits, why not address real issues of substance or deal with the fundamental political games and vote buying that is done with the current income tax system.
Boortz does often mention this is a inclusive tax, but his explanation is always lacking. He also doesn't mention that in comparisson to the way things are currently taxed (exclusively), the math shows that an inclusive tax is always higher than an exclusive tax.
Leaving out this little tidbit gives the viewer/listener a false basis for comparing the effective impact of such a tax system. Boortz has always been deceptive on this issue.
I think he may not exactly understand how it really works. He doesn't seem to know a lot of the details of the plan. When I hear callers on his show ask him detailed questions Boortz almost always says to ask John Linder about that. Many of the answers that Boortz dares to give, I have found to be misleading (in a pollyanna-ish way) at best.
I think the Fair Tax on the surface is an idea definitely worth consideration. But I admit to having some economics-based concerns. I have an MBA in Finance and I am not sure on some economics points. However, I do not think that Boortz or possibly even Linder is qualified to address those points. That is why I need to take the time to read what some real economists have to say. I do not want to get the work of a think tank regardless of their political leanings on this issue.
Of the Country-Clubbers trying to push the tax burden downward. Since Billionaires don't spend a high percentage of their money on consumer goods, most of their income would go untaxed. But that's the point, right? The trailer-park Troglodytes have bought into the notion that the wealthy owe nothing back to society, and they foolishly vote accordingly.
Behold the return of the Landed Gentry. That is what Puddinhead George is referring to with his "ownership" society. A privileged few would own the rest of us.
And, please, spare me the "class warfare" talking points. I don't feel any sympathy for the tax burden of people with six-car garages.
This was an infomercial more than it was an interview. Boortz should know that if he really wants to convince thoughtful people about this, he needs to stop doing Hannity's stupid show and get out into the real world of debate.
Americans should be skeptical about this type of massive change in the way taxes are imposed and collected. There are many things to consider that have not even been discussed.
MMFA correctly points out that the rate Boortz mentions is much too low. This is often the case. It is my experience that these published tax rates are always too low, because that makes them easier to sell to the public.
Also no one seems to mention the feedback effect of all of this. Conservative economists always remind us of the punitive nature of taxes. We tax behavior we don't want. The behavior in this case is spending. Naturally we can assume spending will go down under this tax as a reaction. The American economy has depended on consumption and debt for a long time. What will happen to the economy when people curtail spending money on consumption?
It is easy for armchair quarterbacks everywhere to support this change, but everyone should be aware that this type of change can be catastrophic if not thought out well. A Hannity infomercial is a terrible venue to thoughtfully discuss something of this magnitude.
The immediate result would be a surge in consumer prices. Those on the lower end of the scale would be hit hard, and probably scale back their spending, as would most of the middle class.
Who do these elitists think is buying most consumer goods? Can the Billionaires buy enough Yachts and jewelry to offset the downturn in consumption by the lower 95% of the population? I DOUBT IT! (Yachts will probably be exempt, anyway)
What makes you think that yachts would be exempt? You keep talking about "consumer goods." This Fair Tax is not limited t consumer goods, but all goods and services.
I think Fantagor's post below is closer to what will happen. Poor and middle class people are more likely to spend all of their money on necessary items they cannot cut back on like food, gas, rent/mortgage. The real benefit will be to people who don't have to spend money just on necessities.
Upper income earners (and perhaps some middle to upper middle-class households) can avoid tax by saving or investing (or whatever other options or loopholes this new law may give them) the money they used to spend on general consumption items.
It is harder to save money (and avoid the tax) when you don't have much of it. If you have a lot of money, it is easier to save it, because your necessity level is already met.
This tax plan likely will greatly accelerate the separation that is going on between the haves and the have-nots. Of course, that mirrors Boortz widely known personal view about economics. I don't know why he even pretends this isn't likely.
You must think that "The Rich" just take piles of dollars and spread in a spare bedroom and just roll around it.
If they save it in a bank... it makes interest rate go down.
If they invest it in stock... the company will expand and hire more workers.
Who benifits the most... the lower income workers!!!
Think about it...
By providing the prebate, the tax burden of necessities is largely offset. This should mitigate much of the alleged increased burden on the poor.
You forgot that there is a monthly prebate up to poverty level, currently set at 16k a year per person. So the poor would pay nothing. Unlike our current system where they still have to pay social security and medicare taxes, but get tricked by politicians by a yearly refund on all overpaid taxes. Study the idea before you bash it. But oh yeah I forgot, liberals just bash others ideas instead of actually coming up with their own. Keep trying people.
So, you say that we tax unwanted bahaviors, right?? That means you are saying that income from a real job should be an unwanted behavior? This is why it is more profitable to deal drugs or make money illegally because of the fact that there is no tax burden on it. Please explain this so that I can have a better understanding.
the more you make, the less you end up paying as a percentage of your income. It's not a "fair" tax by any means. A progressive income tax is the only way to go. What really, really bothers me is that payroll taxes for social security are actually a regressive tax - you pay less after the first $100K - SUBSTANTIALLY less. These clowns are just trying to hoodwink those who don't know any better and don't care to know any better.
Ever notice that the people hawking this crap are wealthy? Does anyone think that's a coincidence?
Remember the story about the handful of Billionaires who actually hired a think tank to repeal the Estate Tax? What happened to that story? You'd think people would be ticked off for being lied to and manipulated....but, wait....Rush Limbaugh poo-pooed the story, and assured his sychphantic audience that it was no big deal. Of course, they lapped it up and gratefully licked his hand for setting them all straight.
Why, just because someone makes more, should that person have to pay a greater portion of their income? What gives the government more of a claim on their income than any other American? Yes, by nature of a larger income, those with higher incomes should pay a higher dollar value of taxes, but a higher proportion is inherently unfair.
You believe a progressive tax is unfair? Try being poor or middle class and squeeking out a living. Then tell me how fair the whole thing is.
I have been in every income group from $3,000 a year when I was 10 years old (and on evil foodstamps and other social welfare) to minimum wage part time in high school to minimum wage in college to eventually about the top 5% of wage earners in the country now. Being poor was by far the most unfair in every way except maybe taxes.
I wouldn't trade my income now and the tax burden it brings for the scraping and scrounging I did back then just to survive. I think that is something rightwingers seemingly just don't get.
The Bible says (and I believe it), "To whom much is given (and I have been given far more than I rightfully deserve), much is expected." If my taxes provide opportunities for underpriveledged kids (like I believe I was) to survive and eventually succeed, then I think it is well worth it.
That is commendable regardless of your political viewpoints. However, I disagree with your method for doing so. We should help those with less when we have done well in life. However, we should do so through charity and through kindness of heart, NOT through forced charity via big government. When you take things by force, that is not exactly a situation where someone is living up to their expectations of helping. They are being forced to do something and the willingness and kind heartedness may not be there.
As for you attempting to suggest the financial struggles of being a student working minimum wage jobs is some argument for unfair taxation, I am not sure I see the relevance. Students struggle to make ends meet. That is typical. For the person who is working two jobs trying to feed his family, I have more sympathy. But I do not think the plight of students who are only in a temporary phase of their life as they further their education is a convincing argument for our inequitable tax system.
If the poverty level is $25K... and Fair Tax is 23%
Someone earning $25K and spending $25K will pay $5.75K in taxes that will prebated each month $480 and thus pay $0 0% tax rate
Someone earning $100K and spending $90K will pay $20.7K in taxes. After their prebates of $480 a month will pay $14.95K in taxes. 15% tax rate
Someone earning $500K and spending $450K will pay $103.5K in taxes. After their prebates of $480 a month will pay $97.75K in taxes. 19.5%
Remember: No loop holes. No write-offs. No deductions. The Rich can't hide it anymore!!! If they spend it... they pay tax!
Everyone pays. Everyone gets the same prebates. Everyone pays 23% on everything they buy.
He who has more, will buy more, and thus will pay more.
If we are going to critique other's misinformation we should read up on exactly what something does do before speading misinformation like this about the Fairtax being regressive; It is clearly not. Built into the plan is a "prebate" to every U.S. citizen of the tax amount of a poverty level income - effectively zeroing the tax at the poverty level. If someone at the poverty level spends every cent they make on new goods, with the prebate they've been reimbursed their full tax amount. If they spend on used goods or education, or even manage to save some or invest it, they actually make money off the system (and don't get taxed on it)! This system benefits the poor. Moreover it brings business and investment to the U.S. creating more and better jobs.
Left of Center,
You could not be more correct about the Social Security tax being regressive. It is the most regressive tax that we have in our system. That is exactly the reason the FairTax would get rid of the SS tax. Thanks for pointing that out.
Also, a typical sales tax would be regressive, but the FairTax has the rebate provision that gives everyone back the taxes paid on spending up to the poverty level, which makes it a progressive tax. In fact, this article leaves out another item the Tax Reform Panel brought up, which is that the FairTax is the only touted tax plan that completely untaxes the poor. Doesn't sound regressive to me. If someone is below the poverty line, and therefore spends below the poverty line, they will have no tax burden what so ever. If they really don't make any money, they will even get money back.
People like to stop at the idea when they hear that it is a national sales tax. They typically leave out important points, such as the rebate.
We should all read more about the bill at www.fairtax.org.
To further shift the tax burden on the backs of those who spend most or all of their income to live, notably the poor, many of whom pay no income taxes whatsoever and spend every dime, who would now pay 30%, and those in middle income brackets whose aggregate taxes are in the 20-25% range, who also save little to no money, spend everything they make. Meanwhile, rich people, who pocket most of what they make, could in theory circumvent ANY taxation through self-sustaining schemes, mail order imports and smuggling. What a great idea! If there's one thing America needs more of it is black market trade.
Suppositions aside...this is just another ploy to destroy Social Security, for there is no way to know what portion, if ANY, of the sales taxes collected would be allocated thereto. If the Republicans control Congress and the budgets, you can bet that SS catastrophe George “Chicken Little” Bush predicted will come to full and rotten fruition.
That is the beauty of the Fair Tax that I think the left will grow to hate worse as more people learn about this proposal. This system would remove much of the power the federal government has to control our lives and force us into suboptimal programs such as Social Security. Americans are a resourceful people and if you give the freedom to makes choices for themselves, which the Fair Tax should help, why would be expect those choices to be less effective than the already poor track record of Social Security?
SS is the most successful social program in history. What galls you and the rest of the "pull yourself up by your bootstraps" crowd is that it mostly benefit the poorest Americans, therefore, to you, it's "welfare" while tax breaks for the top 1% and "bid biddness" is just "economic stimulus". I'm all for this notion of financial independence, but first let's get the rich off the governments teat then we'll trickle down to the rest.
On what metric? Please provide some rational, fact-based rationale for that assertion. What is the effective return on money "invested" into the SS system? Tell me about the rights of survivorship to that "investment" if the SS recipient dies shortly after beginning to receive their benefits they have been contributing toward? How do his or her relatives go about collecting their loved one's "investment" returns? Provide me some evidence just how beneficial that "generous" death benefit is to survivors when a loved one on SS dies? What portion of funeral expenses does that benefit cover? Surely after paying in decades that should offset most if not all of end of life expenses right?
This is not about helping rich people retire. This is about letting the average, ordinary system invest their money in routine investments (read, nothing exotic or overly fancy...just routine investments) and building a real retirement fund that really allows someone who has worked their entire life, retire and relax in their senior years. Does SS allow that to happen? This is about getting big government off the backs of the average citizen and allowing them make decisions in their best interest rather than be forced into suboptimal choices by a flawed government system. The rich do not need the help of SS security. In fact, because of the income cap, they do not even pay that much, compared to income taxes, into SS. This is about benefiting the average citizen. The side benefit is that it removes power and vote buying ability from politcians (while it is more often Democrats, I admit that too many Republicans play political games with SS as well). This is about eliminating politicans attempting to scare our elderly who, under SS, have little control over their retirement funds, in order to preserve their political power.
Given such instances, please tell me just how SS is so incredibly successful compared to a system we could if we actually trusted our citizens to make smart decisions on their own.
couldn't have said it better
This is the always the comment on the Fair Tax. "The real tax rate is much higher!!" This is simply not true.
The current tax system takes your money before you get it. So to compare the two system equally you must also consider how much money you have to earn to buy the item in each system. Let's assume a 23% tax bracket and 23% FairTax rate.
Current Tax System:
You go to Home Depot and buy a $77 leaf blower. In the current price of the leaf blower is all the corporate tax for the maker of the leaf blower, the suppliers of the parts, the trucking company that delivered it, and Home Depot. Also include in the price is all the companies payroll taxes, social security and Health Tax.
To get the $77 dollars you need to buy the blower you had to earn $100 because your employer took $23 and then added their own contribution and sent it to the IRS.
You pay $77 dollars for the blower and leave the store.
Under the Fair Tax plan:
Let's say the actual cost of the leaf blower is still $77 (even though it will be less without the embedded taxes in the price) The price on the shelf will be $100 because Home Depot will include the Fair Tax in price.
To get the $100 to buy the blower you had to earn $100 because NO INCOME TAX was taken from you!
You pay the $100 and on the receipt it shows you paid $77 to Home Depot and $23 to the Fair Tax.
You still had to earn the same $100 for the blower. The nice part is that competition will make the products even cheaper as they realize the payroll tax reduction. You get more buying power.
This plan is revenue neutral which means the government gets the same amount of money as they currently get.
The "Rich" will pay more because the Boats and Cars they buy will have tax in price and they will not be able to write them off like they do today.
The "Poor" will get more buying power because no tax will be taken out of their check and everyone will get the Pre-bates for the all cost up to the poverty level. Even if they don't spend it!
The underground economy starts paying their way!!! All illegal drug trade, illegal workers, and under the table jobs will pay tax when they buy stuff.
I bet the revenue will much higher than expected because they aren't really sure how big the US economy really because much of it is "off the books"!!!
I think your example highlights a weakness in the "higher tax rate" argument. Without considering the discrepancy between earning power and buying power due to income tax, the argument that the tax rate as commonly calculated using an exclusive method is higher sounds more alarming than it is. To only consider that point without adjusting for the income/buying discrepancy is to only consider half the picture.
The underground economy starts paying their way!!! All illegal drug trade, illegal workers, and under the table jobs will pay tax when they buy stuff.
Are you saying that these people currently don't pay retail taxes now? So now, a kilo would be taxed when sold, and when it's broken up, each eightball will generate it's own sales tax, and in addition to that, addicts will have more money to buy coke? Count me in!
This is what Enron was telling everbody for years before it all blew up in our faces. This all sounds good and the numbers probably add up, I'm too dumb to add. The Fair Tax bowel movement is forgetting one small thing; government will be in charge of this fiasco, not to mention the corporate interests that aren't being discussed. On paper, you're right, nothing misleading - but in reality (where few wingnuts dare to venture) it just may lead to new types of tax evasion, never mind the explosion of flea markets. Or black markets. Or Overseas markets. Or...
JS. You make a number of imperical statements about the FairTax in your article, however, I do not see where you reference the documentation and studies which support your position. Without supporting documentation your article is just an opinion and we all know what opinions are like.
Nerzog I'm glad to see that people who are proud to be poor still exist. There's something to be said for those who like it down there.
Open_mind If you believe in the ideals of this country, you must believe in equality. What is more equal than one tax rate for everyone? In fact the FairTax is NOT regressive. It is the only proposal which totally untaxes the poorest among us.
Fantagor It is evident that you have no idea of what the legislation contains. As I said to Open_mind, this proposal totally untaxes the very poor. Not just in terms of income tax, but also with payroll taxes for social security and medicare.
An example, a married family of 4 is not taxed on the first $25,660 of spending. That same family spending $50,000 is taxed at a rate of 11.5%.
To all of you I say read the book or go to Thomas.gov and read the legislation. Have knowledge before speaking.
Oh the web they weave.... First a flat tax is totally bs. It would be better for everyone to pay 25%! Everyone gets to have a standard deduction, personal exemption , the number of family members exemptions, child tax credit, a maximum of 5 % of the value of their house, and esa,ira,msa and (fill in the blank)....All wages, and any other sources of income (including capital gains, inheritance , stock options et al) shall be taxed at 25%! I'm always hearing about the very wealthy paying 38%, but if you enacted a straight flat income tax, as mentioned above the wealthy would be screaming. Close all the loopholes. This will be one hell of a debate, and I certainly hope the flat tax proponents get their jaws broke.
How does a so-called "flat tax" in which income isn't measured manage to measure income so the poorest Americans aren't taxed???? With an exemption floor, I suppose. Been there, heard that, still not impressed. Overall, this scheme still favors the very rich, who will sock away their disposable cash while the rest of the country ends up paying, as a PERCENTAGE of what they earn, the highest actual tax rate.
Want to collect a "fair tax"? Phase out the 15% preferential brackets for the richest Americans, and seal up the New Orleans levy-esque holes in the corporate tax code so multi-billion dollar corporations start paying their fair share. Stop welfare for the wealthy now.
Anyone who believes that corporations pay taxes must also believe in the tooth fairy.
Any tax assessed on a corporation is simply passed on to the companies customers in higher prices. So who pays corporate taxes... you do!
In 1986 Ronald Reagan tried that. Since then the tax code has grown to more than 60,000 pages of loopholes and special deals. Go to a flat tax and it's just an invitation to start selling the exemptions all over again.
The tax system will never affect the really wealthy. Who do the politicians get their sacred campaign contributions from? The rich will always find a way to avoid taxes through legal means. It is better to join them than beat them.
Regardless of what the Corporate Tax rate... THEY PASS ON THAT COST IN THE COST OF GOODS AND SERVICES THEY SELL TO YOU AND ME!!
You and I pay their taxes. Get rid of the Corporate Taxes and competition will drive down prices and we pay less for the goods and services.
Remember this... Today the consumer PAYS ALL TAXES!
Increase Corp. Tax and prices go up to cover it.
So you are saying that the change will be absolutely revenue neutral, but everyone seemingly benefits with lower taxes? Your BS detector must not be as sensitive as mine is if you believe that.
Is this that mythical free lunch everyone has wrongly given up on?
In a zero sum situation (which I believe this is because of the revenue neutral claim), someone has to lose if someone else gains. In order to accurately assess this plan, it is important to know who is the big loser here. So tell me, who loses with this plan?
There is ample, well sourced research available at FairTax.org in addition to the book, which is more of an introductory look at the FairTax.
The FairTax offers significant protection to the poor and working class, which was a pre-requisite for me because I am by no means wealthy.
The inclusive/exclusive calculation is never obfuscated by FairTax supporters in order to curry favor with the uninformed. I'm sure Boortz is kicking himself for failing to point out that the 23% number is inclusive as he usually does.
Their misrepresenting the Fairtax is an opportunity; The Fairtax is an idea we should appropriate as quickly as we can from the conservatives before they figure out how to represent it correctly - because it serves every liberal interest and does more to benefit people than any concept since the 60's.
The Fairtax is a progressive tax reform that eliminates our absurd tax code in total and replaces it with a tax channel already in place and working quite well, thank you. It very simply untaxes the poor and hits the rich big spenders far and away the hardest, increases government efficiency and reduces government overhead by hundreds of billions of dollars without cutting programs. It benefits every honest U.S. citizen and guts the K street lobby machine and the corruption it breeds.
We need to pay attention and grab this one!
what the graph of actual tax-rate vs. income looks like. The graph would need to take into account all taxes, including regressive taxes like social security and payroll, and all sources of income, including unrealized capital gains (since these are hard to estimate and vary a lot from year to year, it might be better to take say 8% of assets instead). I have a feeling that if we saw this graph, a flat tax like FairTax might not look much worse than the current system (or, put another way, the current system might not look much better than a flat tax). Does anyone know if I can find something like this anywhere?
Yes, the tax is regressive. If a family (or person) makes $400 in a week, and they need $100 of food, and the fair tax is 25% for example, they will pay $25 in tax, which is 6.25% of their income. If a family the same size makes $2000 in a week, and they buy $100 of food, they will pay the same $25 in tax, but it is only 1.25% of their income. The second family is paying at a rate 5 times lower. It is a tax with a rate that decreases as the taxpayer's income increases, which is the definition of a regressive tax.