What is the FairTax plan?
In Brief:
The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.
The FairTax Act (HR 25, S 1025) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.
The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.
The FairTax:
>>>Enables workers to keep their entire paycheck
>>>Enables retirees to keep their entire pension
>>>Reimburses the tax on purchases of basic necessities
>>>Allows American products to compete fairly
>>>Brings transparency and accountability to tax policy
>>>Ensures Social Security and Medicare funding
>>>Closes all loopholes and brings fairness to taxation
>>>Abolishes the IRS
Now does this plan not sound great. Simplification of ones life is a lifelong pursuit of mine. This would certainly end one worry in my life. Countless hours spent with worry and calculation at tax time. Also, what about the audit? Did I do everything correctly? Let's hope so.
Let us travel back to the founders of this great Nation. Jefferson, the greatest constitutionalist, believed in a strong but limited central government. The abolition of the current tax code, would reduce the size and reach of government significantly.
I know that my Congressman supports the Fair Tax. How do I know this? I asked him and I continue to encourage the reform.
Go to www.fairtax.org and get more info and get involved. It is time to enact this plan for the future growth of our Nation.
Read the book by Neal Boortz and Congressman John Linder of Georgia. If you need to borrow a copy, I may have one for you. I have introduced and planted this idea in hundreds of minds. Many have taken a book, read it and passed it own.
Check it out.
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4 comments:
I agree with your comments on Mike and I support him in his campaign. I will use you comments elsewhere. Thanks.
GS, news you can use:
At the end of the 18th Century, America proclaimed its independence from the tax slavery of Britain, and codified our soverignty, self-rule and liberty, as citizens, in the Constitution and Bill of Rights. In 1913, the wealthy elite conspired with politicians to persuade an elitist president (a former president of Princeton University) to buy into a scheme to again make us slaves by signing the Federal Reserve and the Income Tax acts. The Fed would print money, at interest, and the income tax would ultimately be the vehicle to ensure its payment. It would be the bankers who would pat themselves on the back.
President Wilson would later say ( 3:42 into Russo video), "I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by a system of credit. We are no longer a government of free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
And today many Americans are caught up in that "system of credit," much to bankers' delight, instead of working longer and harder hours. Why? Because of the increased tax bite that's taken from their paychecks. If you ask any worker about it, more than likely you'll receive a remark that expresses frustration, powerlessness, and the feeling like his, or her, voice doesn't matter because it's the politicians who are in control.
Of more urgent, and immediate, concern is the taxing of business income and payroll. Businesses attempt to recoup these costs by embedding them in their prices, which are ultimately paid by consumers. This pernicious system of hidden taxation accounts for 22 cents of every retail dollar spent by consumers. This gives Congress a "lever" to extract money from businesses, via lobbyists, to secure "tax favors" resulting in
• an increasingly complex, and expensive, tax code
• higher prices (or lesser dividends to shareholders/401Ks/public retirement funds, or lost jobs to employees - where foreign competition will not let a company raise prices)
• exports not price-competitive, globally
• company relocation to foreign countries with lower costs
• foreign products going untaxed upon entry into the U.S.
How serious is this situation? Dr. Laurence Kotlikoff is on record that, unless citizens' true tax costs are made visible by virtue of enacting the FairTax, politicians will continue to pit rich against poor, individuals against corporations, while they spend us into ruin.
Will the FairTax movement succeed in changing this tax slave / victim psychology? Do we, as individuals, have the ability to influence Congress to relinquish the power they've usurped from We, The People, freeholders engaged in free-enterprise?
First, let's understand how passage of the FairTax (HR 25) would actually affect us: Prices after FairTax passage would look similar to current prices - not "30% higher" as critics contend; the increased-competitive, tax-free business environment would see to it. So, the FairTax rate (figured as an income-tax-rate-non-comparative, sales tax) on new items would be 29.85% (on the new, reduced cost of items because business isn't taxed under FairTax - thus lowering retail prices by 20% to 30%), or 23% of the "tax inclusive" price tag - this is the way INCOME TAX is figured (parts of the total dollar).
The effective tax rate percentages, that different income groups would pay under the progressive FairTax consumption tax, are calculated by crediting the monthly "prebate" (advance rebate of projected tax on necessities) against total monthly spending of citizen families (1 member and greater, Dept. of HHS poverty-level data; a single person receiving ~$200/mo, a family of four, ~$500/mo, in addition to working earners receiving paychecks with no Federal deductions) Prof.'s Kotlikoff and Rapson (10/06) concluded,
"...the FairTax imposes much lower average taxes on working-age households than does the current system. The FairTax broadens the tax base from what is now primarily a system of labor income taxation to a system that taxes, albeit indirectly, both labor income and existing wealth. By including existing wealth in the effective tax base, much of which is owned by rich and middle-class elderly households, the FairTax is able to tax labor income at a lower effective rate and, thereby, lower the average lifetime tax rates facing working-age Americans.
"Consider, as an example, a single household age 30 earning $50,000. The household’s average tax rate under the current system is 21.1 percent. It’s 13.5 percent under the FairTax. Since the FairTax would preserve the purchasing power of Social Security benefits and also provide a tax rebate, older low-income workers who will live primarily or exclusively on Social Security would be better off. As an example, the average remaining lifetime tax rate for an age 60 married couple with $20,000 of earnings falls from its current value of 7.2 percent to -11.0 percent under the FairTax. As another example, compare the current 24.0 percent remaining lifetime average tax rate of a married age 45 couple with $100,000 in earnings to the 14.7 percent rate that arises under the FairTax."
Further, per Jokischa and Kotlikoff (circa 2006?) ...
"...once one moves to generations postdating the baby boomers there are positive welfare gains for all income groups in each cohort. Under a 23 percent FairTax policy, the poorest members of the generation born in 1990 enjoy a 13.5 percent welfare gain. Their middle-class and rich contemporaries experience 5 and 2 percent welfare gains, respectively. The welfare gains are largest for future generations. Take the cohort born in 2030. The poorest members of this cohort enjoy a huge 26 percent improvement in their well-being. For middle class members of this birth group, there's a 12 percent welfare gain. And for the richest members of the group, the gain is 5 percent."
Our "slavemasters," - elected, and not - scoff, "The FairTax is going nowhere." They do not believe we're capable of removing the shackles of an income tax system most of us have been born under.
Simply put, "If it's to be, the FairTax effort requires you and me." We must compel enactment of the FairTax bill and its salient provision to pay for government the way America's working men and women are paid - when, and because, something is sold! In the present political environment, we can accomplish our quest by:
• Becoming a recurring-donor member of FairTax.org
• Informing, and influencing, our family and friends on - and off - the Web.
• Setting up an automatic, recurring donation to those presidential candidates who ardently support the FairTax: Mike Gravel (D) and/or Mike Huckabee (R). You can do so via credit card, or even set them up as a Payee under your bank or credit union Bill Pay service, as follows:
Mike Gravel for President
P O Box 948
Arlington, VA 22216-0948
Phone: (703) 243-8303
Huckabee for President, Inc.
P.O. Box 2008
Little Rock, Arkansas 72203
Phone: (501) 324-2008
Let us bind together, with decisive action, to ensure April 15th soon becomes just another pretty Spring day.
(Permission is granted to reproduce any of my posts, in whole or part. - Ian)
The FairTax Act of 2007 (HR 25/ S 1025) represents a prospective power shift of massive proportions in America. It lays out a practical ideal of voluntary payment of taxes, based on a substantial level of taxpayer choice that the plan affords. Since FairTax untaxes basic necessities (up to socially-accepted poverty-level spending), what is taxed is marginal, and/or desired or preferred, on a broader base of retail products and services. This is to say that the taxpayer may, under the FairTax, choose to purchase used products and avoid paying the tax. And, to the extent desired, the taxpayer may choose to self-perform certain services rather than pay for them. This will stimulate do-it-yourself education, improve citizens' self-reliance; indeed the FairTax represents the possibility of ushering in a new can-do, citizen psychology that would accrue to greater demands for government accountability - truly, a cultural sea change.
Government is the "necessary glue" that enables the social fabric to cohere. It does this by effecting "rules" that ostensibly provide members with equitable access to wealth and resources. It also must provide ostensibly equitable enforcement of those rules in order to mitigate threats to the social fabric. It is unrealistic to believe that the structures of a national government can be supported on donations, thus the need for taxes. Naysayers love to characterize anything purporting to be a "fair tax" as an oxymoron - but it is not true. The idea of fairness has to do with equitable sharing in the cost by all members who depend upon the social fabric for food, shelter, clothing and post-necessity economic enterprise. And, because of the shift of power from politicians and special interests under an enacted FairTax, the elected will find it more difficult to both enlarge government, and implement any dual system of taxation. FairTax strategist, Dennis Calabrese, discusses how the FairTax repeals the income tax, how it does away with the IRS, and how it addresses other aspects of frequent concern to skeptics.
The FairTax has a much greater opportunity for success to operate as a "self-regulating" mechanism because of increased visibility. One finds that the current system, ostensibly regulated by the Internal Revenue Code, is in fact poorly regulated because of continually increasing complexity (the effect of tax favors from politicians, through lobbyists, to favored corporations and other special interests) stemming from the desire by those holding government position to steer public behavior using tax code "carrots." We have seen how 100 years of this type of behavior has eroded the Nation's currency and the purchasing power of working family incomes. "Visionist," Tom Frey believes the current tax system will simply collapse; and economist Laurence Kotlikoff heralds - short of enactment of FairTax (or an otherwise unlikely change in spending habits) - the U.S. will shortly face an irrevocable economic breakdown. (Kotlikoff believes that passage of the FairTax can stave off the economic ruin we're facing, but would be surprised to see it happen.)
Frey and Kotlikoff may be right on both counts, and we may not be able to successfully evoke change; but shall we not try?
(Permission granted to republish, in whole or part. -Ian)
Where is the outrage over sky-high taxes, regulatory costs?
by Steve Higgins
7/15/07 - New Haven (CT) Register
"Reports last week from two nonprofit groups should serve as a wake-up call to Americans to start agitating for tax reform . . .
"On Monday, the Competitive Enterprise Institute reported that the cost to consumers of complying with federal regulations exceeded $1 trillion in 2006 . . . almost 10 percent of the nation's gross domestic product. It's nearly half the amount of government spending.
"Even more worrisome, the cost of complying with these multitudinous regulations exceeds the amount of individual income tax paid in 2006, about $998 billion, as well as corporate incomes taxes of $277 billion.
"According to the Washington, DC-based advocacy group [ Americans for Tax Reform ], the average American had to work through July 11 this year just to pay all federal, state and local taxes, as well as regulatory costs including workers' compensation and unemployment benefits.
"Congress should take one of two paths: Either cut tax rates and government spending drastically, or adopt the FairTax, an innovative proposal that would involve abolishing the Internal Revenue Service and its income tax and replacing it with a simple national sales tax."
--(End excerpts)--
. . . The U.S. income tax system and the U.S. economy are inter-related, and are in DIRE trouble. If we, the citizens of these United States, do not act aggressively to spread the FairTax plan with family, friends and associates - our "nest eggs" stand to be devastated through a coming economic meltdown (Summary with podcast: "Laurence J. Kotlikoff on Long-Term Fiscal Problems in the U.S.").
Politicians are putting demogoguery and pandering above responsible governing - and they're able to do it because Americans do NOT understand - at the "get go" - politicians' / bankers' hunger for ever-increasing shares of the working person's bi-weekly paycheck; Americans do NOT understand the totality of taxes they pay. The FairTax shines the "light of day" on this, putting citizens back in charge to forcefully demand spending reductons.
YOU AND I MUST ACT to mobilize public opinion, and get the FairTax enacted, because the signs point to a probable devaluation of the dollar (reissuance of an "Amero" ? - under a U.S.-sovereignty-busting North American Union ?).
[ NOTE: Does this help clarify your understanding of what's going on globally? a) Bush's persistence on rewarding illegal immigration? b) the North American Highway now under construction in Texas (to stream cheap labor into the covertly-planned North American Union marketplace designed to compete with 21st-century China market? c) the gradual increase in value of the Chinese yuan by China corresponding to China's economic growth? (This will result in the dumping of dollar-denominated debt as its manufacturing economy grows stronger - which guarantees devaluing and ushering-in of the Amero.) ]
Keep in mind, this NAU strategy - supported by the "super-rich" (member-owners of the Fed) - together with their politician buddies who want NOTHING to do with FairTax - runs contrary to simply making the U.S. a "tax free zone" for business under the FairTax. Politicians and bankers lose power when the U.S. is returned to a "savings-driven economy" from a "debt/interest-driven" economy).
Powerful "elites," members of political and monied-interest "clubs" reaching into the halls of power in Washington, depend on keeping you and me uninformed of their plans. It is up to YOU and ME to ACT - and not live in a state of denial - based on what we now know is clearly happening to our financial futures.
After you consult the Kotlikoff interview (above):
• (If you're a member of your State FairTax organization) Contact your state or local FairTax Director to learn what you can do.
• (If you're just learning about the FairTax bill) Join FairTax.org here: Scrap The CODE, NOW !
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