Augusta Chronicle forwarded false claim that taxpayers would get "their entire paycheck" under "Fair Tax"
SUMMARY: An Augusta Chronicle editorial supporting the "Fair Tax," a proposal that "replaces all federal income and payroll based taxes" with a national sales tax, falsely stated that under the "Fair Tax" people will "get their entire paycheck." In fact, Georgia residents would still have to pay the Georgia income tax, which is withheld from their paychecks.
A November 16 Augusta (Georgia) Chronicle editorial supporting the "Fair Tax" plan, a proposal that "replaces all federal income and payroll based taxes" with a national sales tax, falsely stated that under the "Fair Tax" people will "get their entire paycheck." The editorial failed to point out that the "Fair Tax" would not pre-empt state income taxes, so Georgia residents would still have to pay the Georgia income tax, which is withheld from their paychecks. The editorial also cited radio host Neal Boortz as a supporter of the "Fair Tax" plan but did not note that Boortz himself has said that employees might not receive 100 percent of their current paychecks under the "Fair Tax" plan.
As the editorial noted, Sen. Saxby Chambliss (R-GA) -- who is in a run-off Senate election against former Georgia state Rep. Jim Martin (D) -- has endorsed the "Fair Tax" proposal. On November 14, the Chronicle endorsed Chambliss in his run-off against Martin, saying "the re-election of Chambliss is a must. He may be all that stands between the American people and congressional tyranny."
According to the Georgia Department of Revenue, "[e]mployers are required to withhold Georgia income tax from the wages of residents for services performed inside or outside of this state and from nonresidents for services performed in Georgia." Georgia income tax is "computed at a graduated rate and is assessed in a range from one to five percent on the first $10,000 of net taxable income (total tax on first $10,000 of net taxable income is $340) plus six percent of the excess of net taxable income over $10,000."
As Media Matters for America previously noted, on the November 29, 2007, edition of CNN's The Situation Room, correspondent Ali Velshi rebutted the claim that, under the "Fair Tax" plan, workers would get to keep their entire paychecks: "Now, this would be a 23-percent tax on everything you buy. Promoters like [former Arkansas Gov. Mike] Huckabee [R] talk about how you'd get 100 percent of your salary paid to you. Now, that is a myth. ... [Y]ou'd still have to pay all of your state and local taxes and property taxes. And, by the way, everything will be taxed -- including things like rent and health care."
Additionally, the editorial stated: "On Nov. 16, at the Gwinnett Center in Duluth, there will be a Fair Tax 'Truth' rally to clear up some of the lies and distortions about the Fair Tax featuring GOP presidential candidate Mike Huckabee, nationally syndicated radio host Neil [sic] Boortz and U.S. Senator Saxby Chambliss as guest speakers, among others." But the editorial did not note that Boortz, co-author of The FairTax Book: Saying Goodbye to the Income Tax and the IRS (William Morrow, August 2005), wrote in a September 25, 2005, post on his website: "Now, let's elaborate on the 'keep 100% of your paycheck' line that appears in The FairTax Book. It is certainly true that after the FairTax becomes law there will be no more withholding from your paycheck for any federal taxes. What you earn is what you get. This is not to say that your gross pay will equal what it was before the FairTax. This will depend on what your employer does when the embedded costs represented by the tax burden you have passed on to your employer disappear." Boortz later stated: "The 'keep 100% of your paycheck' concept can more easily be applied to those who either change jobs or come into the labor force after the implementation of the FairTax. A new worker will negotiate a wage with an employer knowing that the amount negotiated will be the amount that worker receives every two weeks ... no deductions."
In the post, Boortz also wrote: "When the FairTax is implemented, and when business and personal income and payroll taxes disappear, your employer is going to have to make a decision. He will either take some or the entire amount he had been withholding for federal income and payroll taxes and add it to your weekly check, or he will readjust your pay figures so that your entire paycheck will be equal to what you used to call 'take home pay' before the FairTax. The employer may also decide to do a little of both."
From Boortz's post headlined, "The FairTax -- Straightening Out Some Confusion":
When the FairTax is implemented, and when business and personal income and payroll taxes disappear, your employer is going to have to make a decision. He will either take some or the entire amount he had been withholding for federal income and payroll taxes and add it to your weekly check, or he will readjust your pay figures so that your entire paycheck will be equal to what you used to call "take home pay" before the FairTax. The employer may also decide to do a little of both. Either way, you can see that the amount of money you actually receive as pay - the amount you can put into your bank account - will not decrease, and may actually increase.
[...]
Now, let's elaborate on the "keep 100% of your paycheck" line that appears in The FairTax Book. It is certainly true that after the FairTax becomes law there will be no more withholding from your paycheck for any federal taxes. What you earn is what you get. This is not to say that your gross pay will equal what it was before the FairTax. This will depend on what your employer does when the embedded costs represented by the tax burden you have passed on to your employer disappear. One thing is certain: You will suffer no decrease in real or net earnings --- the amount of each paycheck you deposit into your bank account every other week. The "keep 100% of your paycheck" concept can more easily be applied to those who either change jobs or come into the labor force after the implementation of the FairTax. A new worker will negotiate a wage with an employer knowing that the amount negotiated will be the amount that worker receives every two weeks ... no deductions. Likewise, when you change employers you, too, will negotiate a wage that will not be subject to withholding, and you will get 100% of your wages in each paycheck.
From the Augusta (GA) Chronicle editorial:
A proposed 23-cent national sales tax, the Fair Tax would replace the current federal system of taxation -- meaning no income tax and no Social Security tax.
That means power to the people, because, first of all, they get their entire paycheck. Secondly, they determine the amount of tax they pay by the decisions they make on their purchases.
The Fair Tax also contains a feature called a "prebate" -- money that would wipe out federal taxes completely for those at or below the poverty line.
[...]
It's an awful shame that such a partisan shroud has fallen down around the Fair Tax. On Nov. 16, at the Gwinnett Center in Duluth, there will be a Fair Tax "Truth" rally to clear up some of the lies and distortions about the Fair Tax featuring GOP presidential candidate Mike Huckabee, nationally syndicated radio host Neil Boortz and U.S. Senator Saxby Chambliss as guest speakers, among others.
This isn't a Republican or Democratic idea. Fact is, it's a grass-roots movement that has been catching steam in recent years. What a tragedy it would be if Nov. 4 were to sap the energy out of the movement.
IIRC, the High Priest of the Chruch of the Painful Truth addressed this.
Wuss, what the hell are you talking about? are these Sci-Fi/Trekkie references or something?
Gotta be referring to limpaugh.
Really, there's nowhere but in the MegaChruch of the Immaculate Neoconderthal that the holy water of truth burns like fire. And only Father limpaugh can sermonize Aesop's Dharma for 3 hours straight while simultaneously fighting off the oxy-fueled demons attacking him from the ceiling above the pulpit.
I don't mean to seem ungrateful, Neon. I find it very helpful that Dawuss notifies everybody that a topic has possibly been addressed by somebody who is only identified by a cryptic nickname. I just think it's unfair that he keeps the important details from us.
He doesn't know the details, how can he keep them from us?
Think back. When has DaWuss ever posted a detail?
So, the Col. was right, and the correct response to his original comment would have been:
"He's givin' ya everything he's got, Capt! He can't take much more..." or "Dammit, Harlan! I'm a doctor, not an accountant!" or...???
Well, the Iraqis did...why not us ?
Sounds to me like this "fair tax" is just another right wing effort to push all the burden onto the middle class and lower. And if Neal Boooooooorktz supports it, there's definitely something crooked with it.
But of course the rightwing is very supportive of this idea.....
Take away every kind of federal tax and make it a national sales tax.... and the rich will no longer have to pay any money on their millions/billions here in the states....
And then to avoid paying even the sales tax... they will simply buy all their stuff in other countries that have no sales tax... perhaps even keeping those items in those countries to avoid having to declare them here in the states....
Yes people.... the rich are looking to do nothing more than not have to pay taxes period... and yet are more than willing to use the 'commons' that the taxes pay for...
Hypocitical bastards!!
It’s really not fair to equate the Fair Tax to a right wing help the rich only program. The truth is our current system is much more skewed to benefit the wealthy and powerful. If you believe that any business really pays any taxes you are very mistaken. They are just collecting the taxes and forwarding them to the government. Their customers pay all business and corporate taxes in the form of higher prices. Every time the corporate tax rate is raised we end up paying for it in higher prices. The biggest loser in our current system is the working stiff, the employee that does not have the chance to defer their tax liability to other like their boss does. Even if they lower the corporate tax rate as the right wing pundits exalt as the panacea to job creation, we still loose big time. In the last decade, according to IRS estimates, around $13 trillion of America’s wealth has flowed out of our economy into offshore tax shelters. So much for trickle down economics, if most of this American wealth remained in our economy we would not be in our current economic condition. The whole system is upside down, failure is rewarded and success penalized. If you work harder, more overtime or a second job, it’s possible to loose income by being kicked into a higher tax bracket. Upward mobility is stifled by our current income tax system. The rich and powerful are the only ones that are really benefiting by gaming the current income tax loop-holes and tax incentives.
The Fair Tax would turn things back around because we, the actual producers of wealth, will have control again. Under the Fair Tax consumption is taxed not income the way the founding fathers envisioned. This is a completely different paradigm and does not lend itself to simple one to one comparison to the current income tax system. To say the wealthy will benefit from the Fair Tax because they spend a smaller percentage on life necessities makes no sense. Everyone pays less federal taxes under the Fair Tax because there are many more tax payers. The people that will pay the most are those that consume the most new products and services, it has nothing to do with income. No, the Fair Tax does not punish the wealthy for being rich but it does remove barriers for the rest of us to move up the ladder. Saving and investing is not taxed at all under the Fair Tax, including education which the ultimate personal investment. If you believe in moving America into a brighter future the Fair Tax is the key. Give the Fair Tax an honest look and don’t be swayed by those that have a vested interest in maintaining the status quo. The Fair Tax is not a help the rich scheme.
You get what you deserve, so do your own research and find out the facts for yourself. Start at http://www.fairtax.org and get the big picture.
A National Sales tax? So, people in the middle class get to pay more for everything they buy?
True, rich folks would also have to pay more for their purchases, but a much smaller portion of their income goes to necessities. Their tax burden would be markedly reduced. But, I guess that's the point.
Sounds like the middle class would get screwed again under the "Fair" tax.
"Their tax burden would be markedly reduced. But, I guess that's the point."
As proposed, yes - that's the point. But there's nothing inherent in a "Fair Tax" that precludes haveing a progressive tax based on how much is spent at the time. The more you spend, the more tax you pay. Yet I've never seen anyone but ME propose such a tax.
How does this address issues like the current recession, or a possible depression?
It could work. But you would have to exclude food. Because a larger portion of the poor's income goes toward food. And you'd have to exempt rent, because a larger portion of the poor's income goes toward rent. Of course, that's only on primary residences. And you'd have to exclude gas. And insurance. And some clothing. And school supplies. And...
"It could work. But you would have to exclude food. Because a larger portion of the poor's income goes toward food."
Personally, yes, I would exempt food.
"And you'd have to exempt rent, because a larger portion of the poor's income goes toward rent."
I don't know anyone who pays taxes on rent now, why should they pay under a different tax system?
"And you'd have to exclude gas."
Why?
"And insurance."
I've never paid taxes on insurance, why should that change?
And some clothing. And school supplies. And..."
Why?
A progressive sales tax could be set up in levels, as is income tax now. These are just examples, not suggestions:
You spend up to $20,000 - you pay a 10% sales tax
Spend $20,000+ to $500,000 - you pay a 20% sales tax
Spend $500,000+ - $2,000,000 - you pay a 30% sales tax
Spend over $2,000,000 - you pay a 40% sales tax
It's a "sales tax". Nobody pays federal sales tax on anything right now, but if that's going to be the main source of federal revenue, expect to pay a federal sales tax on everything. Exempting the "necessities" is the only fair way to not end up with a regressive system.
And have you considered the logistics of keeping track of how much everyone spends? You think the current tax code is confusing? Wait until you have to report your annual purchases. What - present an ID every time you buy a Starbucks so that the clerk can enter your info into the computer? Save your receipts and hope that everyone else is as honest as you at the end of the year?
Don't get me wrong - I'd love to see a national sales tax that worked out to be progressive. But to expect our politicians to come up with something progressive, viable, and not written by special interests groups is fantasy.
"And have you considered the logistics of keeping track of how much everyone spends?"
What logistics? You look at the total on the cash register, or an equivilent, and that tax is added to the total you spent. How else would you keep track of what you spent? It's paid at the time you spend. All the "IRS" needs to do is collect from the seller.
So a person who spent $4,000,000 could pay a 10% sales tax on all of his purchases as long as he kept it in increments under $20,000.
That reply was supposed to be to doggone.
"So a person who spent $4,000,000 could pay a 10% sales tax on all of his purchases as long as he kept it in increments under $20,000"
Sure. But it's kind of hard to buy a $2,000,000 house and keep the increments under $20,000...don't you think?
This is exactly what neon desert was asking about when he said:
And have you considered the logistics of keeping track of how much everyone spends? You think the current tax code is confusing? Wait until you have to report your annual purchases. What - present an ID every time you buy a Starbucks so that the clerk can enter your info into the computer? Save your receipts and hope that everyone else is as honest as you at the end of the year?
You say:
Sure. But it's kind of hard to buy a $2,000,000 house and keep the increments under $20,000...don't you think?
But that doesn't address ndesert's point; how does the cashier at the Starbucks what rate to tax each latte-buyer for their libations if he doesn't have up-to-date real-time access to how much that customer has spent to that point in the year? Unless, perhaps, every purchase anyone ever makes is immediately recorded in a database accessible to anyone who conducts business transactions? And yes, this is the point at which the tinfoil-hatted fundamentalists burst into song about the mark of the beast and the end times...
"how does the cashier at the Starbucks what rate to tax each latte-buyer for their libations if he doesn't have up-to-date real-time access to how much that customer has spent to that point in the year?"
It isn't based on how much you spend per year...it's based on how much you spend AT THE TIME. Nothing to keep track of. If the cash register doesn't do it automatically (virtually all do, though) all you need is a small table - amount spent is between A & B = tax - 10% of the total, amount spent is between C & D = 20% of the total, etc. Why would that be so hard?
It's not hard. It's hurts those that can least afford it. It's the unfair tax and that's why it always will be dead in the water.
"It's not hard. It's hurts those that can least afford it. It's the unfair tax and that's why it always will be dead in the water."
Which? The flat rate Federal Sales Tax, or my progressively rated tax? I agree that the flat rate tax - either income or sales - is unfair to the less fortunate. Hence MY proposal for a progressive sales tax.
Either. Go ahead and float it and see how far it gets you.
But the rich can go years without buying a house or similar big-ticket items. I can see all sorts of price payment schemes being developed in order to avoid (legal) or evade (illegal) taxes. If purchases are assessed for tax value at the time of purchase the real tax rate of the wealthy would run much closer to the 10% than to the 40%.
Your plan would be either ineffective or, as neon desert pointed out, a logistical nightmare.
"But the rich can go years without buying a house or similar big-ticket items."
So can the not-so-rich. I've bought exactly 1 house, and 4 cars in the last 30 years. "Big ticket" items are more than just houses. There are cars, planes, jewelry, yachts, 2nd-3rd-4th, etc houses, condos.
Plus, you're leaving out that, yes, there would be MORE money in your paycheck - though, of course, not ALL if the states keep their state and local taxes - which translates to more money to spend.
Naturally, the dividing lines and the assessed tax rates would have to be adjusted to reflect what is needed to replace the Federal Income Tax. As I said, the amounts I gave are examples, not suggestions.
And if you are concerned, as I am, for the much less fortunate, you wouldn't HAVE to start the taxes at $1 spent. You could adjust the bottom be somewhere higher than that. Which means, yes, if you spend little enough you would pay no Fed Sales Tax...but heck, if you care enough NOW to do the work necessary you can avoid paying just about all taxes now.
It's a regressive tax. End of story. The Cons are wasting their time on this turkey of an idea.
I could also support a national sales tax (replacing the income tax) but it would have to exclude necessities like food, clothing, shelter (primary only), health care and winter heating costs. Other items could be open for consideration and education costs would be near the top of that list. Calculate a flat rate that would be necessary to charge on non-excluded items that would generate the revenue necessary to run government. I have a feeling the wealthy wouldn't like it because it would put their tax rates on disposable income up close to that of the poor and middle class.
No, don't go down that road. That's how we ended up in the mess we're in. NO EXCEPTIONS!! The prebate is designed to remove the tax on basic needs up to the poverty level for everyone equally. We get into a big mess when the government gets to choose what is taxed and what's not. That's the income tax model not the Fair Tax.
"Sounds like the middle class would get screwed again under the "Fair" tax."
Exactly Nerzog.... Just looking at the name of every bill created and pushed by these rightwing conservative pigs and then looking at what those bills actually do...Clean Air, Clear Skies, NCLB... you get the picture
Yes.... it is all about screwing all those not in the top 3%.... and even more so in the protection of those in the top 1 tenth of 1 percent among us!
As I just said above.... hypocritical bastards!
Flat out lies are disgusting; flat out lies in a newspaper are doubly so, whether they are on the editorial page or elsewhere.
There's nothing fair about the Fair Tax.
"Fair Tax" "Flat Tax". Its all BS so that the rich can pay less in taxes. Its just a riff that the right puts out every so often.
The rich will pay less in taxes, the poor will pay even lesser taxes, as the FairTax is based on spendings, and the rich spend more than the poor, as the rich has more.
There's some good limpaugh logic.
Except that because both pay the same price for essentials, the poor guy pays more in taxes as a percentage of income than the rich guy. And that's just stupid, unless you entertain visions of an aristocracy.
Another way to put it is that the poor and middle class have far less discrectionary spending as a percentage of their income. Thus, they would have less opportunity to dodge the tax by purchasing less. Poor people would have little choice but to pay the max percentage and the rich would have all the choice in the world.
Please do some research and stop repeating talking points of those that are vested in keeping the broken income tax system intact. The Fair Tax was created by a group economists and initially funded by a group of Houston businessmen tired of making business decisions based on taxes. Personally, I find it quite odd that most of the support for the Fair Tax in congress is with conservative republicans because the wealthy will actually have to pay taxes like the rest of us under this system.
The "Fair Tax" is only fair to the Lower and Upper ends of the income scale, the lower because they would get a rebate to cover the necessities (which most of their tax would go for), the upper because they would not spend as much (at least domestically). The Middle would be hit the hardest. I would rather see a two or three tier flat tax (ok, that makes it "unflat"), with a generous personal allowance (one that would shelter all income up to the poverty level from taxation). Three tiers, say 15% for incomes between poverty level and $200,000/year, 30% for $200,001 to $750,000 and 40% above $750,000.
SSI and Medicare Insurance Premiums would stay as they are but apply to all income, regardless of source.
That is so not true, everyone will pay less federal taxes under the Fair Tax. Millions of more taxpayers will be added to the rolls, so everyone will pay less. SSI and Medicare will not be tagged to income but instead to cost of living. Read SR25 yourself, don't listen to those that make their living gaming the current income tax system. They don't have your interest at heart.
If you read Bootz's books it will become clear as to why it is far better than our current system. The price of goods would not change because of the reduction in embedded taxes.
...far better for the rich, which is why Boortz is pushing it.
Actually, it will be better for everyone. The middle class will get the most relief because they are the one's that are being hurt the most by our current system of hidden, embedded income tax costs in everything we consume. Billions of dollars are spent every year on compliance to the current income tax code. Who pays? Mostly the middle class because the wealthy can pass their costs along as higher prices. How can anyone defend the current system, it's a total mess.
I wish someone could dig up an old quote from PigBoy Limbaugh. He said, in essence, that taxing the rich was futile because "the middle class is where all the money is". He really said that.
I guess that's why the Numbnuts administration worked so hard to increase the middle class tax burden.
"I wish someone could dig up an old quote from PigBoy Limbaugh. He said, in essence, that taxing the rich was futile because "the middle class is where all the money is". He really said that."
Limbaugh has also recently claimed solar panels can't power your house and wind turbines use electricity to turn and produce wind. I'm not kidding.
As much as I hate agreeing with "Lush", it's actually true. With our current income/corporate tax structure any raise in the tax rate is seen as a cost of sales and reflected is the price of their product or service. The customer actually pays it, they are only collection agents.
Maybe the proponents of the Fair Tax don't say it enough; we are only talking about FEDERAL TAXES. It would be nice if my state would follow the example of Texas and Florida and repeal the state income tax as well. Wouldn't that be nice everyone paying less taxes in a totally transparent way. Even non-citizens will be paying our taxes at the same rate as we, adding millions to the rolls. Tourists, illegal residents, the underground economies all paying our taxes but they don't get the prebate to un-tax basic needs up to the poverty level. Compared to the current situation wouldn't that be a better than any fence to discourage illegal immigration. There would be a real incentive to become a legal resident. No more government intrusion into our personal lives, no more filling forms declaring how much we earn or how we spend our earnings. No more saving receipts for endless tax forms so we might get a few dollars of our own money back from the IRS. Even better NO MORE IRS.
Actually the claim is true, not false. Georgians would get their entire paycheck as it relates to federal. Other taxes could be immediately eliminated as well as they would no longer be needed. A state fair tax would take care of that.