The Fairtax Plan

masked08's picture

We has a wonderfully informative meeting in Newnan this morning. Thank you to Congressman Linder for speaking to us.

If you understand the benefit to you and your household, you will not disagree with the Fairtax Plan.

Please visit or for complete information .

Do you realize that with a consumption tax instead of an income tax, everyone has to pay the tax. Not only U.S. Citizens, but any visitors to this country and anyone that is here illegally?

People my age (29) and younger (and probably older too) should not be counting on Social Security to be around when you get there. SS is disolving as you read this. With the Fairtax Plan, our Social Security system can be more than successful again.

The Fairtax plan is not about being Republicans or Democrats. It is about being Americans.

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Basmati's picture
Submitted by Basmati on Mon, 01/22/2007 - 12:42pm.

Congressman John Linder is quoted saying President Bush's bipartisan commission on tax reform saying that FairTax "completely untaxes the poor". What Linder leaves out of his testimony , this tax does so by RAISING the effective tax rate on people who make between 15,000 and 200,000 dollars a year (arguably the vast majority of Peachtree City citizens). The dirt poor (less than 15K a year) and the well-off (more than 200K per year) get a huge tax break.

The panel has MANY reservations about the so-called "FairTax" system

Click here to see the report (PDF - Adobe Acrobat Reader required)

FairTax is dissected beginning page 213.

I took a screen shot from the panel's final report that will explain it better than I could hope to:

Maybe one of you shiny-eyed Fair-Tax-can-do-no-wrong types can explain the allure of the vast majority of people paying MORE to the Federal Government each year under the so-called "Fair Tax".

Bottom Line: If you want to pay up to 20 to 25% MORE in taxes, and think Paris Hilton and Delta Pilots need to pay less in taxes, by all means support your "FairTax".

Submitted by FairTaxTruth on Sun, 02/04/2007 - 9:50pm.

For the real truth about the FairTax go to

Submitted by aarondrake on Mon, 01/22/2007 - 6:23pm.

My congressman has replied to me with the some of the same info, the presidents commision report, complete with copies. However, if you read report closely, it does not really talk about the FairTax, not accurately anyway. Anyone (including the members of the commission) can pick and choose facts that they wish to make something sound bad.

If you want to do the research yourself and see here is a link to the answer to the presidential report.

You, and other readers I hope will notice on the screenshot that you provided that it states a national retail sales tax, not the fairtax. In the report they use their own version of the FairTax not the FairTax itself.

I wrote a really long answer to another post this morning but it has apparently been deleted or something as its not here now.

The tax burden is on those who buy things, plain and simple. The amount of tax that you pay will depend on what you buy. The more expensive the item the more tax you pay. Meaning that when u buy a Kia you are not paying nearly as much in taxes as when you buy a Lexus, sounds like the rich are getting their share of the taxes to me. Same for other things as well, hamburgers dont cost as much as Filet Mingon so more money will be spent on the taxes for the Filet.

The real advantages of the FairTax are the increases in efficiency. The current GDP is something like 12.x trillion, the money that businesses in this country waste complying with this (just complying mind you not what they are actually paying in taxes) is in the 400-500 Billion dollar a year range. Now stop and think on that...4-500 billion dollars a year, wasted, comlpletely thrown down the tubes, think what a difference to the economy that would be. To put that in perspective, the national budget is about 2.4 trillion i think, but that number may be from a year or 2 ago, sorry I'm doing this from memory. It should be close though, if someone has exact numbers please post them. Now even 400 billion is 1/6 of the collected taxes in the country, so we are wasting %18 of whats collected just figuring out what to collect? Does this really seem sane to anyway?

This of course doesnt count money businesses spend on lobbyists, and tax breaks that they work into the system, which is corruption by the way. How much time has your congressman or his aides spent with lobbyists? It must be signifigant or the lobbyists would not be there.

Now think of yourself, how much do u spend on your taxes? Estimates are that people spend at least 265 billion on their own taxes, buying software, hiring accountants, etc.

Yet more waste.

Oh but wait, u want to do your own taxes, but u have a question on something? Oh great the IRS has a number you can call for help, but if u get the wrong information (which is not a rarity) guess who is responsible? Not the IRS, but you...personally. Oh and I hope you don't have a problem with them because the IRS law is different from common law, so you are guilty until proven innocent there.

All of this does not even begin to cover the advantages of the FairTax, for a few more quickies...
Illegal immagrants will now be paying taxes on everything that they buy, but not getting the prebate, which will actually give them a higher tax burden than citizens.

By removing all taxes from businesses the US would become a tax haven for the world, think of how much money would flow in from overseas, not to mention businesses coming here for tax reasons for once instead of jobs going overseas for tax reasons.

Illegal money...Every nice new set of rims that the local drug dealer puts on his car is now taxed. None of that money is taxed now...

Foreign visitors, people on vacation will now be contributing to our tax base, nice eh?

That was just some quickies...I would say that the current tax system is a joke, but its really not funny, its sad, scary, and horrific.

Aaron Drake

Fairtax Podcast

Submitted by dollaradayandfound on Mon, 01/22/2007 - 6:18pm.

Used to be that North Carolina cigarettes which had no taxes on them were bought or stolen in NC and taken to NYC and sold bootleg either to stores or on the street.
Same would happen with a 30% sales tax (fair tax). Except not just cigarettes but EVERYTHING, mosly stolen. Even beef would be stolen from the field and butchered. (called Rustling).
It does not work to have a system where a substantial amount of value added tax is applied at every sale at retail.
It must be done at arms length like it is now, or at the borders, or by getting it all from our production and service companies as they produce.
This is an obvious con by high wage earners.

Submitted by aarondrake on Mon, 01/22/2007 - 6:33pm.

yes of course...its a caught us....except that I did the math, and I make a tad over 30k a year, and it would benefit me greatly.
Would there be some people taking advantage? Of course....but of course we don't have that now do we? we don't have a 60,000 page tax code, where most of it is added in to give benefits to specific things or even specific companies. Or a good thing those high wage earners havent put anything into the current tax code that allows ways to hide from taxes, or special deductions for things.

By the logic of your message wouldn't businesses just find their own ways of getting around it then? Wouldn't they just do more under the table when producing?

from Karl Marx's list of what must be done to bring about communism.
2. "Heavy, progressive taxation"

America...Living the Dream
When did we become marxists?

Aaron Drake

Fairtax Podcast

Submitted by Eric Hanly on Mon, 01/22/2007 - 7:34pm.

60,000 pages in the tax code with a compliance cost of over $800 billion a year.
But with the fair tax congress would have a harder time controlling our lives and buying votes from the soak-the-rich dimwits.

Submitted by resdesinc on Mon, 01/22/2007 - 6:58pm.

Very good point! Why are people so eager to keep our current tax code? Even tax accountants don't understand it.

masked08's picture
Submitted by masked08 on Mon, 01/22/2007 - 10:00am.

this tax plan will require illegals and visitors to our country to pay tax also. Under the current system, I would not even dare to guess how many people pay no tax at all.

Submitted by dollaradayandfound on Mon, 01/22/2007 - 6:21pm.

Not much tax to be gleaned from the subject items, now is there?

Submitted by aarondrake on Mon, 01/22/2007 - 6:42pm.

Are you really reduced to racism? Next you will say that the earth is 6k years old. Come on man think. If you are opposed to the FairTax because you think its bad with no evidence just say so. Or just say I believe in Marxism...let us know where u are coming from.

If you are willing to have logical debate, and try to understand the topic being talked about then, I'm all for it...I didn't really buy into the FT thing when I first heard about it either, it seemed to good to be true. But I read the book, then did a lot of research, then started learned economics to make sure of what I was reading.

I highly recommend Basic Economics - A citizens guide to the economy by Thomas Sowell by the way. It's available at amazon and iTunes. a VERY good read (or listen as thats how i went through it.)

Now after all of that I run the FairTax podcast, because it is something VERY good for our country.

As I said in a reply to one of your messages that apparently didnt make it online for some reason, anyone here who wants more information, or who has questions, there is a comment voicemail line on the fairtax podcast site, or you can email me through there. Ask a question and I will try to get a response to it, or if you would like I will be glad to call you personally to go over things you have questions about.

While I may not have a lot of $ to put where my mouth is, I am putting my time and effort there. That offer for calls and answers is open to anyone here who wants to take me up on it.


Aaron Drake

Fairtax Podcast

Submitted by loanarranger707 on Mon, 01/22/2007 - 7:33am.

What makes you think that a country whose people have been too dumb to adopt the simplicity of the metric system would agree to simplify its tax system?

ArmyMAJretired's picture
Submitted by ArmyMAJretired on Mon, 01/22/2007 - 8:55am.

If you ask someone hom much they make, many will tell you their take home pay. If there were no witholding and people had to write a check to the Governmant every month there would be a revolution.

I know a friend that made $88,000 last year and paid $29,000 in state and federal taxes. That is obscene!

Make Congress control their wasteful spending on studying the sex lives of eskimos, bridges to nowhere and buildings with Robert KKK Byrd's name on them and pass the fair tax!

I do not think it will happen because then congress will lose it's ability to buy votes and lobbyist influence.

Submitted by dollaradayandfound on Mon, 01/22/2007 - 7:55pm.

I don't know anyone who quotes only their take-home pay except people on the tax payrolls. They of oourse always want more pay and quote the smallest number.
Corporate employees add in everything when quoting---bonuses, cars, etc., and reeenlistment bonuses if they got any!
I agree that 29,000 taxes on 88,000 earnings is obscene, but I don't believe it either. However it wouldn't be far from the "fair tax of about 30%, either.
Just reform the current system or go to an import tax and a tax on coproprate production and services.

Submitted by aarondrake on Mon, 01/22/2007 - 8:43pm.


You have pointed out 3 times that i remember off the top of my head that we should go to a import tax, or tariff as it is commonly called. Can you give me one piece of evidence that that would work? How would that pay for our taxes? Unless I am mistaken we have tariffs now, so do u propose to raise tariffs to the point that they will pay for our taxes too? If they go up that much do u think anyone will buy any of these items? If no one buys them then what money pays for the taxes?

A tax on corporate production and services...ok so who is really paying for that? Guess what, you are...every customer is, its not the businesses, no business pays a dime in taxes in reality, they may be the middle man, using up tons of time, money, and resources in the process, but you end up paying the tax charged to business in the form of higher prices.

You state that 29k on 88k is obscene but you don't believe it, you don't believe it? What kind of statement is that? Seriously man, think...please...this isn't about belief or disbelief, its not a faith based thing. Its numbers, and those numbers represent money, if you want to waste more money and drag the economy down, then by all means be against the fairtax. If you want more money immediately, and directly, not to mention a booming economy, estimates are 10% growth the first year.

What you really are paying now...ok 88k...take that 29k off it...then, take off a lot more for what you are paying in taxes you don't see right now, that ipod? Well uncle sam got some of that too, oh u bought a ford this year? well uncle sam got some from ford, and from the steel plant, and the mining company, and the tire company, and the electronics company and the stereo company, etc etc for lots of parts in that car, now all those taxes you are paying ON TOP OF what you are paying for income tax. Figure that into every single item that you buy. Be it McDonalds or a house....

Those are called embedded taxes, and we all pay tons of them....every day, every tank of gas, every song bought on iTunes, every bag of chips...those embedded taxes range from about 18-25% of the price of everything...once again doing this from memory so if my numbers are off a percentage point or 2 I apologize. But the point is still valid, once those embedded taxes are removed, and the income tax is removed, and you add the fair tax in, the price of items may just a percent or 2 higher, but your available cash will be much higher too, especailly with the prebate added in.

and thats all on top of your income tax, your SS tax, and the dozens of other ones you pay...

The offer is still open for questions and a talk.

Aaron Drake

Fairtax Podcast

Git Real's picture
Submitted by Git Real on Mon, 01/22/2007 - 8:49pm.

And I thank you for your arguements supporting the Consumption Tax. But you could prove your point with 20 years of history and facts and there are those that would argue in your face about it. Proof...just ask Dollar who the Great Satan is... The answer will come back GWB.

Oh and as far as why I'm wearing the obscene "black face". Well it's a long story and you would have to read other threads here.

Submitted by aarondrake on Mon, 01/22/2007 - 9:30pm.

I have no idea how many other people are reading this..And if dollar's points are all people see they might believe them, or have them in their head the next time they see fairtax somewhere. So while someone can spout nonsense all they want, I want the good information out there too.

Aaron Drake

Fairtax Podcast

Submitted by loanarranger707 on Mon, 01/22/2007 - 9:50am.

I am afraid you're not very good at math. With a federal sales tax of 23% and a state sales tax of 10%, your friend would pay 33% of his $88,000 income. How close do you think that comes to $29,000?

($88,000 multiplied by .33 is $29,040.)

Of course, I have to agree about the waste, the corruption, etc. But how would a flat tax change that?

Actually, the flat tax debate is a way to divert our attention from the waste and corruption. It is not only in the military that you "create a diversion."

cowtipn's picture
Submitted by cowtipn on Mon, 01/22/2007 - 10:38am.

You're taxed on what you spend, NOT what you earn.

Submitted by loanarranger707 on Mon, 01/22/2007 - 1:08pm.

For a great number of people, what they earn is what they spend.

With a high universal flat sales tax, it is actually possible to spend more than one earns, and that's what usually happens the year people buy a house. In fact, the tax on a house could be greater than one's entire annual income. Buying a car also produces a distortion in the year of purchase.

There is no reasoning with a fool, and there is no shortage of fools in this country. That explains a lot of what we see in politics. As P.T. Barnum is credited (erroneously) with saying, There's a sucker born every minute. It's not my math that sucks.

ArmyMAJretired's picture
Submitted by ArmyMAJretired on Mon, 01/22/2007 - 1:28pm.

The current tax system discourages saving because it taxes interest and capital gains profits! If you have mutual funds that made 18% this year, you will be getting an unexpected tax bill because they cannot withold for taxes. Once you pay, the mutual funds can go back down in value! You are penalized for saving!

If you cut your spending, you reduce your taxes under the Fair tax.

Under today's system, every raise you get pushes you closer to the next higher tax bracket. It is a tax on success! What incentive is there for someone currently getting an "Earned Income Tax Credit" aka wealth redistribution to earn more money. They would actually have to pay taxes and probably lose food stamps, Peachcare etc?

Submitted by dollaradayandfound on Mon, 01/22/2007 - 7:58pm.

I'll take a 10,000 raise anytime for an additional 1,500 in taxes! That's dumb.
The most disappointed people I ever knew are the ones who think they are going to get a million dollars free but only get 500,000 free and feel bad about it for life. Just feel lucky to get what you get.

Submitted by skyspy on Mon, 01/22/2007 - 4:56pm.

You hit it on the nose, our current system punishes people who CHOOSE to be successful.(and it is a choice) It also punishes people who are fiscally responsible and save money.

ArmyMAJretired's picture
Submitted by ArmyMAJretired on Mon, 01/22/2007 - 10:30am.

My friend would not be paying Social Security witholding, or any other payroll tax. EVERYONE would get a 7 1/2 % raise! Their employer would also have their contributions freed (7 1/2%) up for salary or benefits to the employee, maybe a 401 (k) match increase instead of to the tax man.

Additionally, any investments income would not be taxed at 15% even if it is kept in their investments. It would be taxed when it is spent.

The Fair Tax would be an incentive to SAVE! Something Americans need to do desperately.

"If you work for an employer, 6.2% of your wages is withheld and your employer deposits the withholding, along with its 6.2% matching contribution, with the government for the social security programs. In 2007, the employee tax and matching contribution stop after the first $97,500 of wages. In addition if you work for an employer, 1.45% of your wages is withheld and the employer makes a matching 1.45% contribution to the Medicare program, making the total withholdings at 7.65% (6.2% OASDI and 1.45% Medicare)"


When criminals spend their drug money on Mercedes Benzs and mansions, they would pay their Fair Tax. How many Illegal aliens file 1040s vs. buying cars, food, etc?

masked08's picture
Submitted by masked08 on Sun, 01/21/2007 - 12:35am.

I have a list of concerns of my own to research and ask questions about at the next meeting. Bashing the only reasonable suggestion of a fair, simple, and transparent system here does nothing to educate yourselves more about the Fairtax plan and how it would work.

We should all attend the next meeting and ask these questions. I will if even if you won't since these are all valid concerns. Please take the time to educate yourselves more and to ask the unanswered questions instead of knocking something you have not taken the time to fully understand.

Sitting by and doing nothing, accomplishes just that. We have the power to change our futures and the future of our country.

Submitted by weglovers on Sun, 01/21/2007 - 4:56am.

The FairTax is an idea whose time has truly come. When Boortz first co-wrote his book on the system, I was a bit of an unbeliever. Upon further investigation, I strongly feel this concept would be the panacea this nation needs to overcome all of the ills indemic to our current method of gaining revenues for operations.

Go to to learn all about this idea whose time has come.

Submitted by new2ptc on Sat, 01/20/2007 - 11:58pm.

I have not seen anything fair about the “Fair Tax;” therefore, I prefer to call it the “Consumer Tax.” The reason I call it that is because not ever sale is taxed. When a person buys stock in a company that sale is not taxed under the “Consumer Tax.” I don’t see why not since they are buying a piece of a company and it is as tangible as any other piece of property.

I have other concerns about the “Consumer Tax” but I think to make it fair all purchases should be taxed.

Submitted by dollaradayandfound on Sat, 01/20/2007 - 6:17pm.

The Federal government's income should come from charges on all that stuff coming in from other countries, and on our natural resources going out of this country. If that were to ever fall short op our needs, then we would simply take what we need from the most unfair countries. (could have taken a full page to say that in PhD talk).
All we would create with a so called fair sales tax would be a giant cheating system. No one would report selling half of what they did sell. Can you imagine all of these small businesses taking in 30% more income to be sent to Washington?
We would be creating a mad-house system.

Submitted by trailwatcher on Sun, 01/21/2007 - 9:39am.

The current system we have "I.R.S. is a more Mad House System.The Fair Tax is a great idea!!

Submitted by swmbo on Sat, 01/20/2007 - 6:39pm.

I have to agree with you that a "fair sales tax" will be a giant cheating system. It will mean that nothing is ever sold. As it is, the current system is a big cheating system. Under the current system, businesses lease equipment in order to write off the entire lease expense rather than purchasing it and getting to write off only the amortized depreciation on a sliding scale. A "fair sales tax" system will simply mean that people will lease everything so that there is never a sale. The entity that is "stuck" with the sale will raise the price of the item to offset that cost.

Fair tax? Hah! Nice try.

If you and I are always in agreement, one of us is likely armed and dangerous.

Submitted by hechap on Sun, 01/21/2007 - 9:01am.

There's a saying that one should never argue with a fool, as people passing by will have difficulty telling which of you is the fool.

Unfortunately, when discussing matters of public policy, it is necessary to suffer fools because they vote . . . and, in this case, spread disinformation to other fools who vote.

All of the criticisms of the FairTax I have read thus far on this blog are nothing new. I know you guys think you are so clever coming up with these points about how the FairTax plan is unfair because it doesn't apply to stock purchases, or that it will result in rampant cheating because no retailer will comply with it, etc., etc.

Believe me, guys, you do not know of what you speak! Your comments do nothing but display your depressing lack of knowledge about the federal income tax under which we labor today - and it is clear that you have not really read very deeply into the TONS of literature, FAQs, videos, pamphlets and other sources of information that are all over the Internet!

* The FairTax plan reduces the number of filings by more than 80%, which makes the task of enforcing the tax law much, much less expensive and overwhelming than it current is. Look up the figures on the shortfall in taxes the IRS has failed to collect this past year!
* The costs of hiring lawyers, accountants, payroll administrators, etc., etc. for each and every business and individual who must pay an income tax is HUGE and is running this country's economy into the ground! Business have to deal with all that overhead by raising the price of everything we buy from them. YOU are unknowingly paying an extra 23% in higher prices for everything you buy! We need a simpler, system NOW!
* The current system is actually regressive, because the complexity and wastefulness of our insane system of income taxes falls harder on the backs of the less well-off and the smaller businesses. The rich and the corporations have the $$ to pay all those lawyers, accountants, and lobbyists to help protect them from the IRS. You and I and the old couple who run the corner grocery do NOT!

You are all lazy, and so you deserve the income tax and all the waste and other evils it brings to us! Go ahead! Make your smarty-pants ignorance-laden comments about this solution, and return to your sheep-like support of the status quo!

OR, you can decide to actually use your brain and go read what we have to offer at under "research" or "FAQ. Who knows, you might find that you too want this bill to pass more than anything else you have ever heard about.

I'm a middle class Mom who's scared to death of what is in store for my daughter when she starts trying to earn her own living. We need the FairTax implemented as soon as possible! If you do a little research, you will quickly come to the same conclusion.

Educate yourselves or SHUT UP!

Submitted by new2ptc on Sun, 01/21/2007 - 10:39am.

When you don’t like what is said then call him an ignorant fool and forget about the facts.

I read the house bill and the book last year and it is clear investment purchases are exempt (and I mean the word “Exempt” is used). Now you tell me how is it fair that a senior on a fixed income pays 23% on life saving drugs but investors pay nothing.

Submitted by hechap on Sun, 01/21/2007 - 7:30pm.

I am sorry I was rude. I lost my temper because it is so very frustrating to the read the same old canards being repeated by people over and over and over again.

Just as a small example, your concern over this hypothetical senior citizen paying tax on a life-saving drug, while those who invest in the drug company that produced it pay "nothing." There are so many assumptions you and others are making to come up with questions like that. And these assumptions are based on a lack of understanding of how the economy works. It drives me nearly to the point of despair . . . Ten years ago, I would probably have asked a question similar to yours; but I have been doing a lot of reading and learning since then, which which makes me object to the faulty premises of such a question today. Should I give you a reading list? Point you towards sites like or

How 'bout I counter with some questions of my own?
Why do you deem it unfair if an investor in a company that produces life-saving drugs would pay no tax? This investor risked his money by investing in the pharmaceutical company's R&D and is in-part responsible for the existence of that life-saving drug. Slapping a tax on such investments is just one way to end up with fewer new drugs being produced - and at higher prices too. How's that going to help the seniors?

Are you suggesting that your "senior on a fixed income" would pay 23% more on drugs than she currently does if the FairTax became law? If you are, then you are mistaken. Firstly, you're forgetting to take into account that very close to that same percent of the current price of drugs (and any other retail good or service) *is* the company's cost of paying and complying with the federal income tax. What I am saying is that your senior citizen is very likely already paying an embedded 23% tax on her medication (depending on the drug and a myriad of other distortions due to various regulations, etc., it may be slightly more or less) due to the financial burdens our current income tax regime heaps on the company that produces our life-saving drugs. In short, Granny (and everyone else) is already paying a 23% federal tax on everything she buys, and she doesn't even realize it! It's not long before I'm gonna be a Granny on a fixed income myself, and I know would rather not have to pay higher drug costs just to cover the salaries of all those tax lawyers and accountants filling out endless tax forms for the pharmaceutical company.

Oh, I'm getting tired, and I haven't even half covered all the points that can be made to show you that your objections to the FairTax are misguided. I hope this makes at least gets you to take a closer look at the site.

Submitted by new2ptc on Mon, 01/22/2007 - 11:50am.

Oh, I have read numerous literatures supporting the tax plan and it is my conclusion that the assumptions made are wrong. I admit I did not major in Economics but I have taken my fair share of courses above and beyond “Guns and Butter.” That does not make me an expert but it is enough for me understand the jargon and draw my own conclusions.

Your argument supporting no taxes on investment purchases is a clear example of subsidizing one segment of buyers. Why should consumers support a special interest group such as investors? Is it the responsibility of the government to reduce the risk for investors since they might loose in the stock market? If the consumers and government support investors will they receive a payback when the dividends are paid out? Any way you look at it investing is risky. If you don’t have the money to loose don’t invest.

Considering your response about the existing embedded taxes I believe you are suggesting that by the goodness of their hearts business will reduce the price of final goods and services by the existing embedded taxes. I ask you this; what determines the price of a loaf of bread? It is not the cost to produce that loaf of bread but it is what the market is willing to pay for that loaf of bread. We live in a market economy and with a change in tax systems business will do as they always do and maximize profits. Business will have the opportunity to blame the government while realizing substantial profits for investors. A perfect example of this is the oil industry. When the price of crude rises the price at the pumps rises instantaneously and the blame is placed on rising supply cost, but when the price of crude falls the price at the pumps falls slowly while oil companies are making record profits.

As I have said before I don’t like the existing system and some simple changes can be made to remove special interest that makes it so complicated. However, special interest groups have the money and the power and as the little guy I will always loose out.

Submitted by trailwatcher on Sun, 01/21/2007 - 10:05am.

Those that make things happen --Those that watch things happen--And then those that say "What Happened!!" Change is good and we need a change in the Tax System.

Submitted by dollaradayandfound on Sun, 01/21/2007 - 9:57am.

I am going to take your advice after this one e-mail to you.
You spent most of your comments downing the current tax system. We all hate it, lady. Just because it is bad doesn't make the stupid idea of a large sales tax useful.
The minute we don't have to pay taxes by deduction out of our check, our employers will reduce our wages by that amount since we won't need it anymore! Never get another raise or bonus.
It is a farce to reduce the over 80,000 dollars per year taxpayers liability, that's all.
Tax all the stuff we don't make anymore at the docks instead.
Own all utilities if necessary. They are monopolies anyway who make thousands of millionaires every year---employees and stockholders.
A 20,000 car retailing at 28,000? You have got to be kidding.
A dozen eggs now at 1.50 would be 2.00 dollars.
Meat at 6.99 per pound would be 10.00 dollars.
Gas up, about 1.00 dollar per gallon.
etc. Inflation would starve many people, wouldn't it?

Submitted by aarondrake on Sun, 01/21/2007 - 10:56am.

Ok There is obviously a LOT of misinformation about the fairtax here. Let me help to clean some of that up.
You're first comment that we all hate the current tax system, well there is a reason we all hate it, it is because it so so mindblowingly complicated that no one, and literally mean that, no one single person can understand all 60,000 pages of the code we are technically required to know and understand (since ingorance of the law is not a defense).
That is a reason to find a better solution. The sales tax, or consumption tax is the best solution I have heard of, but I am open to something better if someone can find it.

Employers cutting wages, it is not nearly that simple. Ok go grab one of your pay stubs, whatever the government took out of that check in the several taxes listed there, that is not nearly all the employer pays, there are other taxes that you as the employee do not see. Employers costs will go down with the fair tax even by keeping your pay the same as before. I understand that you do not believe me on this, but for proof we can find some business owners to say what they would do.

Raises and bonuses are not bases on taxes, unless of course you are a tax accountant or lawyer. Raises and bonuses are based on productivity of the individual and company, there is no reason whatsoever for them to change.

Your next statement has a misunderstanding in it i think. You use the term liability, that means that someone who works hard and earns more than 80,000 a year has a responsibility to pay more than other people. However you are right in a way. It would reduce what they pay in taxes, but only probably, because it is a consumption tax, it would depend on what that person buys, not what they make, For example, the person who buys a Lexus will pay far more in taxes than the person who buys a Kia, or the person buying filet mignon pays more than the person buying ground beef.

Tax the stuff we don't make at the docks, ok so you are saying to base our tax system on tariffs instead. Ok lets look at that. Forgetting the fact that a lot of American companies have their things made overseas (my iPod shipped from China), lets do an example. Say item X, you now buy that item for $10. To cover all taxes, tariffs would have to be huge, so we will say that item is now $15, the sales of that item will go down drastically, which will lower the amount of them coming in, which then lowers tax revenue. Would you really buy a foreign car if it had %50 more in taxes in it?

Now all of you prices...there is one major thing being forgotten here, and it is hugely important. No businesses would be paying tax so the prices of items would go down before the FairTax is put in place. Again an example, we will use cars. There are many many taxes in the things we already buy, taking the car. Car Company A needs parts for the car, so they buy steel from a steel mill, this steel mill is paying employee and other taxes already, and that steel mill is buying ore from a mining company which is also paying taxes. You also need tires, so taxes are being paid when buying the tires from the tire company, and the tire company buys from other companies to get the rubber and other items they use, all of these companies are paying taxes. Car Company A is also paying taxes on its employees too and other taxes. All of these are imbedded taxes. Now who pays for those? The company you say, ok fair enough, but where does the company get its money, its from you the customer, so in reality no company pays any tax whatsoever. It all come back to you the customer, in one way or another you pay for all those taxes.

Now the exact percentage of imbedded taxes in an item does vary depending on the item. But if the FairTax is implimented then they all go away. So the price will drop before the FairTax is put in, which will bring the price back up to a couple of percent more than it is now (that percentage has a little bit of variance depending on the item of course).

Inflation would not be much of a problem as it is not much of a problem now, the FairTax does not change the amount of money in circulation it just allows it to go to places where it can be put to work instead of being used to figure out how to pay taxes.

There is one thing you forgot to mention at all, the Prebate. Everyone will get a prebate every month, which is equivalent to the taxes on the poverty level. I have an simple example I used on the last podcast that talked about how the FairTax will help the poor.
Here it is.
Let's do an example here with round numbers...we will use a family of 4 for the example. And we will say that the family income is 20,000 and we will use that as the poverty level for simplicity sake. If the poverty level is 20,000 a year...and they make 20,000 a year and spend all of it, they will get a prebate of 4,600 (sent in 12 monthly installments), so their effective rate of taxation will be 0%, they are paying no taxes at all!
Now lets say that there income goes up by 20k to 40,000 a year, their prebate will still be the same, and assuming that they spent every penny of that money they will now have an effect tax rate of 11.5%, because no one is really paying tax on the income below the poverty level, so under the FairTax the less money you make the less you will pay in taxes.

If anyone has any questions, my site is below, and there is a voicemail number you can call with questions and I will get them answered for you for the next show.

Do be aware that this is not a complete list of the advantages of the FairTax there are more.


Aaron Drake

Fairtax Podcast

Submitted by new2ptc on Sun, 01/21/2007 - 4:29pm.

So you don’t want to comment on investment purchases. I have noticed an effort by those supporting the tax plan to simply ignore the question and discuss only what will benefit the sale of the plan. Here is another issue with the plan that is ignored.

A house is on the market for $200,000.00. With the proposed tax plan the buyer of the house will need $246,000.00 (taxed at 23%). That is $46,000.00 in taxes that will have to be borrowed but will not be considered equity.

Sit back and think what that will do to the market.

Robert W. Morgan's picture
Submitted by Robert W. Morgan on Sun, 01/21/2007 - 4:44pm.

Most items that go into a house are not consumer goods sold as retail and subject to the Fair Tax as proposed - appliances maybe, but not much else. In fact the cost to produce a house will go way down when the imbedded taxes are eliminated. It is best to read the whole book before commenting.

Investment purchases such as a used office building or used RV - no tax. The businesses that will really be hurt are airplane and RV manufacturers, maybe car dealers.

Submitted by new2ptc on Sun, 01/21/2007 - 5:33pm.

So are you suggesting that when I sell my house built and paid for prior to the new tax system it should be devalued to the cost of a new house that was built without imbedded taxes?

I read the book but the book makes some broad assumptions and skips over details. Also, there would be a transitional period that could crumble people’s livelihood.

Submitted by hechap on Sun, 01/21/2007 - 7:42pm.

Nope, not necessarily. That's not how things work. You're thinking of one factor at one point in time, and failing to take in the whole picture. Consider this thing, for example: The FairTax will enable countless numbers of families to save up the down payment for a house than are able to under our current income tax. THis means more folks in the market for a house. What will that do for the price of your house? (Answer: increase the value)

There are other macro and micro-economic effects to take into account. There are, like, 3 research papers on the FairTax and Real Estate at If you're worried about the value of your home being adversely affected by a switch to the FairTax, why don't you ease your mind by reading one or two of 'em?

Submitted by dollaradayandfound on Mon, 01/22/2007 - 7:00am.

You assume that we haven't read the propaganda you refer to, most of us have researched the proposed new tax.
Just because you saw something there that would benefit you doesn't mean it is better for all.
Anyway 23% will barely cover the current sales tax, property tax, and current social security costs, much less the running of the defense department and the rest of the us government, and I assume the state governments that have income tax.
Afraid we would end up with your 23%, plus more assessments to run the other necessary things.
Make a charge at the border for all this stuff we buy from the orient and europe for our government income. Soon we would be making some of it here again. Economics is the worst science we have it is so unpredictable--it is really an art, not a science.

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