As a Democrat, I like the FairTax. More specifically, I like the Republicans liking the FairTax. I am not going to be at the FairTax rally where Gene and Don are going to counter the negative statements being made about the FairTax, so if some of you do go please ask about a few of these items that the Democrats are going to use to slaughter any Republican candidate who supports it.

First off, the FairTax is going to impose a 23% tax on the interest you pay over the prime rate on mortgages and on your credit card debt. Look up HR 25, Section 802 (a)(3)(B)(ii)(I) .. where it says the tax will apply to: “the excess (if any) of the rate paid on such debt over the basic interest rate (as defined in section 805)”

Any interest incurred on car loans, mortgages, credit cards, student loans, etc over the monthly Fed rate is considered taxable as “financial intermediation services.”

Ouch! There is a real vote getter.

Next, in no particular order, let’s hypothesize that you were in an automobile accident or your house burned down or you had a medical problem which costs you quite a bit of money, which these things tend to do. Keep track of how much insurance you paid because anything that the insurance company pays you over and above the cost of your premium is taxable at the FairTax rate of 23%. This includes, according to HR 25, `SEC. 206`(e) Insurance Contract- For purposes of subsection (a), the term insurance contract' shall include a life insurance contract, a health insurance contract, a property and casualty loss insurance contract, a general liability insurance contract, a marine insurance contract, a fire insurance contract, an accident insurance contract, a disability insurance contract, a long-term care insurance contract, and an insurance contract that provides a combination of these types of insurance.

Speaking of medical costs, those are taxable too under the FairTax, but since nobody is really concerned with medical expenses in the United States; the Democrats probably will not be able to wring any votes out of Republican FairTaxers increasing them 23% in one fell swoop.

Also taxed are new homes, food and as it says in Section 2 (a) (14) (A) (1): rents. Specifically, any property (including leaseholds of any term or rents with respect to such property). Taxing rents may provide a couple of Democratic votes here and there.

But, you’re going to get 100% of your paycheck! Go to the FairTax sites and they will tell you so. Check out this site:

Paychecks

Read The Book!

Alas.

This is what we Democrats are going to be calling in polite terms “a bald-face lie”. Wish it were so but it ain’t. After the book came out and after it went into several editions, somehow this was never clarified enough so that people don’t keep telling me to “READ THE BOOK”. Well, It’s Not In The Book! This is from Neal’s website here:

THE FAIRTAX --- STRAIGHTENING OUT SOME CONFUSION

Quoting from Neal now, pay close attention to what he’s trying not to say:

“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.

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.

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.”

Got it? Your paycheck is going to be reduced to your “take home pay” and you are then going to have to pay the FairTax.

Finally (for now), all that money that you have saved? Equity in your house, stocks, bonds, cash in the bank. All of the assets you now own outright and have paid for with money you earned before the FairTax and have already paid income tax on? All will be subject to the 23% FairTax when you spend it.

The downside to this gift to the Democrats is that Mitt is going to be bringing all this up now that Huckabee is beating him and Huckabee will soon be dropping his support for the FairTax like a hot potato.

So please go to the seminar and talk to Gene and Don. Please blog back because I am really interested in what they will have to say.

But for now, I’m off to watch the Iowa caucus results. I’m anticipating that Huckabee is going to smash Mitt and that Hillary is not going to meet expectations against Edwards (who has lived there since the last election) and Obama (who is relying on the notoriously unreliable college and youth voters).

It’s finally getting interesting!

And the FairTax was fun while it lasted.

I have several real problems with this new tax system but whenever I ask a question on the issue the only response I get is “read the book.” I have read the book and the House Bill and that is why I have questions. I seriously doubt there would be anyone there who would step out of line and answer a real question on the core issues of the tax.

It sounds like a gloss job on the tax and hurray for Huckleberry.

It is at the Gathering Place!!

Huckabee 08'