I enjoyed Dr. Laurence Kotlikoff rebuttal of the Wall Street Journal’s story analyzing the FairTax. The WSJ’s story was preposterous on the face of it! What would those crazy jokers at the WSJ know about taxes and finance?

In his rebuttal, Kotlikoff says “Bartlett’s first significant critique of the FairTax… (which was that there would be an enormous shift in the tax burden from the wealthy to those with lower and middle incomes) contains a table from the Treasury’s Office of Tax Analysis entitled “Distribution of the Federal Tax Burden Under the FairTax.” After criticizing the source of the table (and rightly so in my view! Who ya gonna believe? Some nuts shilling for the FairTax or the United States Treasury’s Office of Tax Analysis?); Kotlikoff list two specific problems with the table’s analysis. First, “the Treasury produced this table in response to a request from President Bush’s Advisory Panel on Federal Tax Reform.” Horrors! That panel is suspect because it was chaired by Republican Senator Lindsey Graham, who in the FairTaxer’s rich imagination is a known shill for the IRS! (Let’s not even mention the known tax and IRS lover, President Bush, who commissioned the panel).

Kotlikoff’s second objection was that the analysis did not include the elimination of the FICA taxes. Correct! Because the Panel was showing that the FairTax rates were unrealistic even if they only included the income tax. If the FICA taxes were included the FairTax rates became wildly optimistic.

But Kotlikoff seems to have a beef with Republican Lindsey Graham’s analysis and the President Advisory Panel on Federal Tax Reform? Why? Because Graham and the Advisory Panel pointed out that when Kotlikoff computed the FairTax rate, he assumed that the Federal government would pay the FairTax on all of its purchases BUT when he computed the amount of money the Federal government would need to collect with the FairTax to maintain revenue neutrality, guess what he forgot to include? You guessed it! The extra costs that the Federal government was paying under the FairTax! Now that had to be embarrassing to Kotlikoff.

The Advisory Panel pointed out that the amount of money the government spends on a tax is exactly the same amount as the government collects on the tax that it paid itself (DUH!), an economic point that had totally escaped Dr. Kotlikoff. After the Advisor Panel threw out the fiction that the Federal government taxes itself, it found that the FairTax would have to rise to over 36% (exclusive) and Kotlikoff was then forced to recalculate his tax rate which (under his very suspicious assumptions) then came out to 26.1%.

Now 26.1% is a very interesting number!

If you go over to really shady research, which I hope Dr. Kotlikoff will accept since it is his own work, you will find that Dr. Kotlikoff proposes a hypothetical situation in which Ted, who makes $10/hour is buying a pizza which costs $10 to make. Forget the gobbledygook and look at where Dr. Kotlikoff is discussing the matter under the current tax system: “An hour of Ted’s work leaves him with $7.37 after taxes.”

OK, under the current tax system, Ted is paying 26.3%

Dr. Kotlikoff continues, “Now let us consider what Ted’s situation under the FairTax would be. Ted’s wages would drop to $7.62 an hour.”

Giving Dr. Kotlikoff credit, he knows that Ted’s wages ARE GOING TO DROP TO HIS TAKE HOME PAY as I have been contending! Under these calculations Ted is paying 23.8% in taxes.

So even after Dr. Kotlikoff is forced by the Tax Advisory panel to recalculate his FairTax rates, ole Ted buying that pizza is paying only 23.8% in taxes and even if he were not and he was having to pay the more realistic rate recalculated (after the government taxing itself fiction is removed), well guess what? Ted still wins because he is only paying 26.1% as compared to the current rate of 26.3%.

Remarkable how that worked out for Ted!

You can check the whole farce out here in Dr. Kotlikoff’s own paper:

The FairTax and Charitable Giving

But Wait! 23.8% is a very interesting number also! If someone stupid like me were to bother to waste the time to trot that number over to the IRS tax tables and look in Figure F – Average Tax Rates including Social Security Taxes by Percentile Class 1979-2001 they would find that 80% (EIGHTY PERCENT) of taxpayers pay less that 23.8 % but to start including somebody somewhere to pay the taxes (remember the top 5% pay almost 40% of the taxes) guess where the top 20% rate starts?

Would you believe 23.81% ???

See it here:

Tax Rates

The FairTax still wins by a hundredth of a percent!

Whew! I was worried there for a minute that there was a scenario where the FairTax was going to lose.

"Now that had to be embarrassing to Kotlikoff."

It can't be anywhere near as embarrassing as having a father by the name of Jimmy Carter.

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“...the term “democrat” originated as an epithet and referred to ‘one who panders to the crude and mindless whims of the masses.’”

Stick to the topic and eliminate the personal attacks. It doesn't add anything to the discourse except ramp up the rhetoric.

I'm open to the idea of changing our current tax system and believe we need to have an open dialogue to discuss alternatives.

Cheap shots don't help.

From the other side of the tracks

I’m more than willing to let everyone reading this blog to judge for themselves who should be more embarrassed beav; me for my father or you for posting such lame drivel. Hahaha!

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In his rebuttal, Kotlikoff says “Bartlett’s first significant critique of the FairTax… (which was that there would be an enormous shift in the tax burden from the wealthy to those with lower and middle incomes) contains a table from the Treasury’s Office of Tax Analysis entitled “Distribution of the Federal Tax Burden Under the FairTax.”
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Can you show me any table from Treasury about the FairTax? The only one I know of is from President Bush’s Advisory Panel on Federal Tax Reform and that one is most definitely not about the FairTax, but a national retail sales tax that panel invented.

You can see if it’s still on Wiki here: http://en.wikipedia.org/wiki/FairTax
However I’ve asked for it to be removed because it is not about the FairTax and so is misleading.

From page 4 here: http://people.bu.edu/kotlikoff/Grading%20the%20President%27s%20Tax%20Reform%20Panel.pdf

“The Panel wasn’t allowed to consider reforming payroll as well as income taxes.”

Sounds to me like they considered payroll taxes exactly the same as they are now, the most regressive part of the code.

“Thus, the panel ignored a main advantage of the FairTax—eliminating the regressive payroll tax—and required the sales tax to generate more revenue than the FairTax stipulates.”

I’m not sure how President Bush’s Advisory Panel on Federal Tax Reform came up with their sales tax rate…no one knows for they have yet to release their methodology.

However, I did read somewhere they used the way states collect sales taxes and extrapolated to the national level. The problem with that is states don’t collect taxes on many things like services or other things. Sorry, I’m not finding the link, but it ended up being a significant difference from the FairTax.

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Because the Panel was showing that the FairTax rates were unrealistic even if they only included the income tax. If the FICA taxes were included the FairTax rates became wildly optimistic.
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No, the payroll taxes were included somehow.
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Because Graham and the Advisory Panel pointed out that when Kotlikoff computed the FairTax rate, he assumed that the Federal government would pay the FairTax on all of its purchases BUT when he computed the amount of money the Federal government would need to collect with the FairTax to maintain revenue neutrality, guess what he forgot to include? You guessed it! The extra costs that the Federal government was paying under the FairTax! Now that had to be embarrassing to Kotlikoff
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Do you have a link or are you just going on blog post info?

Quote from page 666: http://www.fairtax.org/PDF/TaxingSalesUnderFairTax.pdf

“Government consumption is included in the FairTax base to put personal and government consumption expenditures on an equal footing.”

Looks like it was included to me.
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Giving Dr. Kotlikoff credit, he knows that Ted’s wages ARE GOING TO DROP TO HIS TAKE HOME PAY as I have been contending! Under these calculations Ted is paying 23.8% in taxes.
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I showed you evidence that 100% take home pay is in the calculations and that there is a lot of compliance costs that aren’t counted. Did you read any of that? If you adjust the 1.2 trillion “guesstimate” to today’s dollars it’s probably closer to 1.5 trillion.

As far as the example of Ted goes you are using an example of one thing to prove another and ignoring the fact the example is simplified.

“Assuming that the monetary authorities do not “accommodate” the imposition of the FairTax by allowing market prices to rise above their current level, and following Bachman et al., wages would drop to $7.62 an hour, while the tax-inclusive price of
pizza remained the same.”

There’s no reason to assume the Fed would not accommodate the FairTax. Also I believe they are using a low wage worst case scenario where there is a high supply of labor and low demand for laborers. As it says “Consider a simple economy…”
The point of that example is to show the effect of charitable giving, not the national effect of the FairTax on wages.

I suppose the point of the federal income tax table is to prove how progressive the current code is? Is the current progressivism worth wasting a potential 1 – 1.5 trillion a year?

In the “Why the Fair Tax Will Work” article I linked above, on page 10 we see:

“The proposition that the FairTax lowers taxes on workers and raises taxes on the rich is
not surprising. It’s precisely what the mathematics of consumption taxation implies. Indeed, moving from an income and payroll tax to a consumption tax is, mathematically
speaking, equivalent to moving to a tax system that taxes labor income at a lower rate
(than under the income and payroll taxes) and also taxes wealth. Bartlett’s suggestion
that from workers’ perspective “It’s all a wash.” is simply wrong.

How can a proposal that lowers taxes on workers and imposes a tax on wealth be branded
as regressive? Good question. But it would behoove those who care about social justice
to think again about this proposal. It’s not every day that wealthy Americans, many of
them Republicans, propose taxing their wealth, albeit indirectly.”

Oh but you’ve already decided Laurence Kotlikoff is some kind of kook. I have no rational reason to believe that however.

In case you haven’t noticed, America is headed toward a major problem; the ever escalating costs of entitlement programs.

http://www.cato.org/pub_display.php?pub_id=6155
http://www.centrists.org/pages/2003/12/1_guest_budget.html

If Conservatives, Moderates and Liberals can’t work together we will never solve the problem.

I’d rather try something and fail then have never tried anything at all.

I await your alternate solution.

Is that you link to a bunch of stuff put out by the FairTax people, blatant propaganda supporting lie after lie, and then you all point to it as evidence that you are right.

For instance you start right off by declaring this:

“Can you show me any table from Treasury about the FairTax? The only one I know of is from President Bush’s Advisory Panel on Federal Tax Reform and that one is most definitely not about the FairTax, but a national retail sales tax that panel invented. You can see if it’s still on Wiki here: http://en.wikipedia.org/wiki/FairTax
However I’ve asked for it to be removed because it is not about the FairTax and so is misleading.”

I could not care less what you may have found on Wikipedia. For a better reference on what the President’s Advisory Panel on Federal Tax Reform says, why don’t you look at the final report from the President’s Advisory Panel on Federal Tax Reform?

Since you are apparently incapable of finding it on your on, please feel free to use the following link:

The President’s Advisory Panel on Federal Tax Reform

Now I know that you FairTax people do not like the Advisory Panel’s conclusions because they do blow all of your silly propaganda out of the water. Or maybe the report was so well hidden that it was just beyond your capability to find so let me disabuse you of another of your seeming misconceptions expressed in you assertion that the Advisory Panel did not study the FairTax.

Quoting from the Advisory Panel’s final report here:

“The Panel initially evaluated the federal retail sales tax using the broad tax base described by advocates of the “FairTax” retail sales tax proposal.”

“The Treasury Department calculated that the tax rate required to replace the federal income tax (ONLY) with a retail sales tax would be 22%... This tax rate, however, does not include a program designed to ease the burden of the tax on lower-income Americans.”

Then there is a chart showing the current law vs. the FairTax where everybody’s taxes go up except those people in the highest quintile. (Figure 9.1)

Followed by another chart where everybody’s taxes go up until you earn over $200,000. (Figure 9.2)

Then the President’s Advisory Panel on Federal Tax Reform report explains that the FairTax, even without having to raise the money for the “Prebate” would “increase the tax burden on the lower 80% of American families, as ranked by cash income… Such families would pay 34.9% of all federal retail sales taxes, more than double the 15.8% federal income taxes they pay today. The top 20% of American taxpayers would see their tax burden fall… ”

Then, to make matters worse, the President’s Advisory Panel on Federal Tax Reform considers the FairTax rate necessary to raise enough money to cover the Prebate.

Quoting from the report: “The Panel considered the cash grant program advocated by proponents of the FairTax. This program (sometimes called a “Prebate”)…required a tax rate, assuming evasion rates somewhat lower than those under the income tax system, would be 34%.”

Further on:

“The Prebate-type program would cost approximately $600 Billion in 2006 alone. This is equivalent to 23% of projected total federal government spending…” It goes on to explain just how large this number is within the Federal budget.

Then you go on to quote me and challenge me again with:

Quoting me: Because Graham and the Advisory Panel pointed out that when Kotlikoff computed the FairTax rate, he assumed that the Federal government would pay the FairTax on all of its purchases BUT when he computed the amount of money the Federal government would need to collect with the FairTax to maintain revenue neutrality, guess what he forgot to include? You guessed it! The extra costs that the Federal government was paying under the FairTax! Now that had to be embarrassing to Kotlikoff
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Then you ask: "Do you have a link or are you just going on blog post info?"

You can use the same link I provided above and then you can search for Box 9.2 in the President’s Advisory Panel on Federal Tax Reform for an in-depth explanation of the fraudulent means by which the FairTax proponents calculated their rates.

Then you give another link to more useless FairTax.org propaganda and claim, “Government consumption is included in the FairTax base to put personal and government consumption expenditures on an equal footing.” Looks like it was included to me.

It was! Just like I said! The government consumption (that is when they buy something) was taxed at the FairTax rate to create a bigger base for the FairTax to draw on thus reducing the overall rate necessary to raise the amount of money to be revenue neutral. The problem is that the costs of paying this tax to itself was not reflected in the Federal government’s spending. My specific complaint!

Again, please refer back to Box 9.2 in the President’s Advisory Panel on Federal Tax Reform for a comprehensive explanation of this fraud.

Here you go again:

You quote me: “Giving Dr. Kotlikoff credit, he knows that Ted’s wages ARE GOING TO DROP TO HIS TAKE HOME PAY as I have been contending! Under these calculations Ted is paying 23.8% in taxes.”

And then you say: “I showed you evidence that 100% take home pay is in the calculations and that there is a lot of compliance costs that aren’t counted. Did you read any of that?”

Frankly, no I did not. Nor do I have any intention of reading it. It’s crap. Argue with Dr. Kotlikoff if you wish or, if you are interested in what I have to say, you can refer to the top of this blog here in which we beat the subject to death.

You then claim that: “As far as the example of Ted goes you are using an example of one thing to prove another and ignoring the fact the example is simplified.”

Doesn’t matter to me at all if the example is simplified! I only used it to pull the tax rate figures that Dr. Kotlikoff, the guy that computed the tax rates for the FairTax, was using. Again, argue with Dr. Kotlikoff if you think that he is mistaken, he goes into great depth explaining how he arrives at his tax rate figures.

You say: “The point of that example is to show the effect of charitable giving, not the national effect of the FairTax on wages.” I agree that was what the example was about. Again, I did not challenge the specific example’s conclusions before; I was extracting from it the tax rates that Dr. Kotlikoff uses.

Since you brought it up though, the article about charitable donations going up is crap too. Dr. Kotlikoff goes on and on about how the FairTax will raise charitable donations. How? Because as he says over and over and over again, when people have more money they give more to charity and good ole Ted will have $7.62 instead of $7.37 out of his $10/hour pay. However, as I pointed out before, using IRS statistics and referring to Congressional Budget Office publications, for which I provided links above, the rate Ted is paying is higher than that which 80% of Americans now pay! 80% of Americans will pay more! Using Dr. Kotlikoff’s own logic, the vast majority of Americans will have less money and will therefore give less to charity.

Finally, let me say this in response to your final assertion: “I await your alternate solution.” I don’t have an alternate solution. Nor am I interested in proposing one. Let some real economists do that work for the President and Congress.

Neither the fact that it is so easy for me to point out the ridiculous aspects of the FairTax nor the fact that you are so gullible that you will buy into anything, no matter how silly: (I’d rather try something and fail then have never tried anything at all), obligates me to provide an alternative tax system for the country.

Sorry.

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Is that you link to a bunch of stuff put out by the FairTax people, blatant propaganda supporting lie after lie, and then you all point to it as evidence that you are right.
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Well you put great weight on the President’s Advisory Panel on Federal Tax Reform. After browsing all the documents at their site, not just the one you linked, it’s clear to me most of their report is about selling their own plans. Fairly analyzing the FairTax or any other existing plan was not really what the President told them to do.

“President George W. Bush formed this Panel to identify the major problems in our nation’s tax code and to recommend options to make the code simpler, fairer, and more conducive to economic growth.”

I did not find in any of the documents anything about what assumptions, equations or calculations they used to evaluate the FairTax, just like AFFT claims. I thought we had the Freedom of Information Act so why don’t they send AFFT their methodologies? If their plans were so good, why aren’t we using them today?

Then there’s the work of AFFT where many well credentialed economists worked on the FairTax and provided to the public dozens and dozens of papers with all assumptions, equations and calculations about their research freely and easily available for anyone to scrutinize.

That you choose to prefer the work of a small group of secretive government employees trying to sell their own ideas over the work of the completely open professional economists of the AFFT is absolutely your right to do; I don’t understand it, but it’s your right.

I believe it was Bartlett that freaked out over the increase in government spending due to the FairTax and claimed it proved the incompetence of the AFFT.

Bartlett’s silly mistake is easy to see. He compared a yearly or quarterly income tax collection to the FairTax’s collection system and didn’t see that it’s continuous. The FairTax is sent to the government no later than a month after it’s paid on a purchase. So no matter how high government consumption spending may rise because of the FairTax the government will get it right back with only a slight delay.

That Barlett and the President’s Panel made this error show they are either incompetent or motivated to smear the FairTax for some reason. I don’t expect the average person to see something like this right off the bat, but highly paid professionals shouldn’t make this kind of error.

I don’t suppose I’m going to persuade you if you can’t get past your absolute belief in Bartlett and the President’s Panel so further discussion may be pointless.

you wrote:
"Can you show me any table from Treasury about the FairTax? The only one I know of is from President Bush’s Advisory Panel on Federal Tax Reform and that one is most definitely not about the FairTax, but a national retail sales tax that panel invented.

Absolute nonsense. You unFairTax zealots pimp this line out to an unsuspecting public.

The Tax Reform panel shook the most egregious inconsistencies (i.e. "Assume 100% compliance") out of the unFairTax and brought it's pie-in-the-sky assumptions down to earth.

The result is the graph in the second link in my signature below. In a nutshell: People making less than $30,000 per year or more than $200,000 per year essentially pay NO taxes.

The unFairTax is an extremely misguided regressive tax, and no amount of half-truths and distortions fobbed off by Neal Boortz and John Linder can mask that singular fact.
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Wall Street Journal: FairTax,Flawed Tax
Best FairTax graph ever

My critique of “Fair Tax, Flawed Tax” by Bruce Bartlett

“It was originally devised by the Church of Scientology in the early 1990s…”

Quote from: http://boortz.com/nuze/200708/08272007.html

“What Bartlett did was very simple, and astonishingly careless. He mistook a group called Citizens for an Alternative Tax System (CATS) for the people who developed the FairTax.”

http://www.hiddenmysteries.org/themagazine/vol14/scientology/front-groups.shtml

“This is only the beginning of the deceptions in the FairTax.”

Bartlett suggests that AFFT has started a deception and implies they are liars. The reality is the deception started with the income tax code that uses tax inclusive rates.

When one first reads about the FairTax rate it would be natural to equate it to whatever income tax rate they are paying now. It’s no wonder then that AFFT uses the inclusive rate when one first encounters it while reading and learning about it at their site, but then makes the tax exclusive rate easily available with an explanation.

Bartlett starts out with ad homonym attacks calling AFFT lying scientologists. The only purpose of this is to incite fear in the reader, the most powerful emotion. When people feel fear it diminishes their ability to think rationally. The only reason to do this is when you know the points you are making are not rational and you seek to manipulate the reader, not educate them.

“This is only the beginning of the deceptions in the FairTax. Under the Linder-Chambliss bill, the federal government would have to pay taxes to itself on all of its purchases of goods and services. Thus if the Defense Department buys a tank that now costs $1 million, the manufacturer would have to add the FairTax and send it to the Treasury Department. The tank would then cost the federal government $300,000 more than it does today, but its tax collection will also be $300,000 higher.”

Again calling AFFT liars. Then comes the manipulation; OMG, the government is losing $300,000!!! (I was so enraged I missed that last part) Somehow it’s a bad thing that the government pays the FairTax then gets it right back. Lol!

“It's also worth remembering that state sales taxes now average 6%, which means that the total tax rate will be 36% on retail sales.”

As I mentioned in a previous thread, state sales taxes tend to have far more exemptions, food, services or whatever. Most likely states will adopt their own versions of the FairTax and widen their bases which will lower the tax. Notice too that Bartlett consistently uses the tax exclusive rate for the FairTax to put it in the most unfavorable light.

Here’s Ohio’s FairTax plan: http://www.ohfairtax.org/OhioStateFairTaxEstimate.pdf

“Imagine paying 30% to the federal government on top of the purchase price of your next house.”

OMG I’m not going to be able to afford a house!!! The reality is that even the most conservative estimates from real economists say that although prices and wages may fluctuate for a short time, you will end up with at least the same purchasing power.

As I pointed out earlier, there appears to be some significantly low estimates that make me believe things may end up far better. Consider there are also good motivations to low ball estimates; 300 million angry citizens maybe.

“The FairTax does this by sending monthly checks to every household based on income.”

Bartlett can’t even get simple things right. All households receive the prebate regardless of income, as long as they fill out a yearly form. It was calculated that everyone would request the prebate, but of course many won’t because they are wealthy or simply proud; a bit more room for error.

“As noted earlier, the FairTax is designed only to match current revenues and does not cover any increased spending that it may require. Since the rebate will cost at least $600 billion the first year, either federal discretionary spending would have to be cut by 60% or the rate would have to be five percentage points higher than advertised.”

Again the President’s Panel has never disclosed where they got there numbers. AFFT fully discloses all data including how they determined households and they say the prebate will cost $486 billion.

“A 2000 estimate by Congress's Joint Committee on Taxation found…”

I’ve searched their web site using several different terms and can’t find anything. Why is it so hard to find their data?

“In 2005, the U.S. Treasury Department calculated that a tax-exclusive rate of 34%...”

The U.S. Treasury Department is what the President’s Advisory Panel on Federal Tax Reform reported to. As I showed in another post, their data is highly suspect.

“But there are also massive technical and administrative problems with collecting all federal taxes at the checkout counter and relying entirely on state governments to collect the federal government's revenue.”

Most states collect sales tax already. Bartlett is trying to make something out of nothing.

“Yet all but six states now have state income taxes. So unless one lives in one of those states, this promise is an empty one indeed.”

Just search for state and FairTax and you’ll see a few states already considering a switch to a complementary state FairTax.
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Submitted by sniffles5:
The Tax Reform panel shook the most egregious inconsistencies (i.e. "Assume 100% compliance") out of the unFairTax and brought it's pie-in-the-sky assumptions down to earth.
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The only bad assumptions were Bartlett’s and the President’s Panel. The AFFT used National Income and Product Accounts (NIPA) data, which undercount consumption expenditures due to evasion under the current tax system. So the only argument left is if evasion will be more or less then the current code.

Laurence Kotlikoff responds to this is his latest paper which is linked in a previos thread:

“First, the vast majority of retail sales occur in major retail outlets, like WalMart. Second, we’ll have vastly fewer taxpaying entities (14 million rather than more than 100 million) on which to focus our enforcement efforts. Third, we’ll have hundreds of thousands of otherwise unemployed IRS agents, accountants, and tax attorneys to enlist to enforce a single tax. Fourth, we can always compel firms to report, via 1099-type forms, their sales to other firms. This will provide the same records that arise under a VAT. Fifth, the government can stipulate that all retail sellers provide buyers with a written receipt, regardless of whether the transaction is or is not in cash, specifying that the FairTax has been paid. Thus if sellers don’t mail in the taxes, there will be a paper trail of his evasion.”

Now why on earth would any business, especially a big one like Wal-Mart, risk losing their business license just to give me or you a deal? Most likely evasion will be the same or less than currently.

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The result is the graph in the second link in my signature below. In a nutshell: People making less than $30,000 per year or more than $200,000 per year essentially pay NO taxes.
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Don’t you feel a little silly using a chart with no data to back it up? The burden of proof is on you now. However, from the tone of your post, I suspect Bartlett has done his job on you, so there’s probably no way to persuade you either.

I've seen studies on both sides of this argument, ad nauseum. BOTH sides seem to skew the argument to what fits their agenda the best. The Fairtax plan will effect different people VERY differently. My Grandmother, who never spends a DIME, would benefit greatly. Someone who spends most everything they make, would obviously pay MUCH more.

2ndly, you said you were giving up?

I was referring to giving up researching and writing long essays on the question of whether the FairTax would require that your employer reduce your gross pay to your net pay. I've settled that one, at least to my satisfaction. The rest is too much fun to ignore! Sorry for the confusion, which re-reading my post, is my fault for not being clearer.

Your statement that, "The Fairtax plan will effect different people VERY differently. My Grandmother, who never spends a DIME, would benefit greatly. Someone who spends most everything they make, would obviously pay MUCH more." seems very logical!

Please go over to the FairTax.org website and using their FairTax calculator, see if you can come up with any combination of data whereby you can prove your point.

Surprisingly enough, it seems that no matter if you are young, old, save, spend, have kids, don't have kids, are single, married, whatever... you still win under the FairTax!

Businesses don't pay the withholding tax or FICA, the rich or anybody who manages to save don't pay taxes on that, the poor don't pay because of the prebate, and everybody else pays less and the tax still maintains revenue neutrality!

Its truly wondrous!

Your analysis of the "fair tax," that includes your thought that the proponents say everyone will come out of it with more money (an impossibility), reminds me a little of the ads for military service: "everything" is in your favor in the military--food, clothing. shelter, schooling, glory, girls, and good pay.

It is amazing that we still have P. T. Barnum's theory around that "a sucker is born every minute!"

It really takes a fool to think that 300,000,000 citizens will go out and pay between 30-40% sales tax on everything they buy and be happy about it. Even with a check from the federals every month for $3-400---which will be spent on the lottery, whiskey, and other vices, by those people who currently pay no taxes anyway.

If we MUST change the tax method of collection, do it at the point of production---before the customer asks for the product or service!
Then when I walk into a store or call a lawyer, and they say bread costs $2.00, or that the lawyer charges $350 per hour, I know that and no more is what I pay.

Such a stupid tax is never going to pass congress, and even if
introduced for a vote, will be amended to death.

The proponents know that and will settle for a reduction in their tax and an increase in everyone else's tax!

You haven't read squat about it and it shows lol.

I personally think the current system requires WAY too much time/money to stay in compliance. I don't see the benefits of the current system, unless you are an accountant, etc. Or a Lobbyist that gets paid to influence Tax Laws. Now I can understand why they would want to keep those jobs, talk about cushy.

ih2005 in your earlier blob you started off by declaring:

"FOR INDIVIDUALS:
* You receive your full paycheck - no more deductions."

I have proven this to be utterly false and now its, “Big deal, even if this were true…”

Posting a long list of stuff you claim will happen in the future and claiming them as facts kind of reminds me of the polls in the New Hampshire election.

In fact, some of your claims are preposterously laughable such as this one: “Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax.”

Do you have any idea at all who pays income taxes in the United States? Any clue at all?

Go over to the Tax Foundation and educate yourself:

The top 1 percent of taxpayers (AGI over $364,657) earned approximately 21.2 percent of the nation's income yet paid 39.4 percent of all federal income taxes. That means the top 1 percent of tax returns paid about the same amount of federal individual income taxes as the bottom 95 percent of tax returns.

The top-earning 25 percent of taxpayers (AGI over $62,068) earned 67.5 percent of nation's income, but they paid more than four out of every five dollars collected by the federal income tax (86 percent).

And you claim that shifting this tax burden to the middle class is more progressive???

Ah ih2005! You got me didn’t you! I claimed that I knew facts and logic were useless and here you got me trying again after only one day.

Can YOUR arguments fit on a bumper sticker? Hmmm?

Seriously, I understand you taking a swing at ih2005's preposterous claims....talk about "hanging curveballs"!

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Wall Street Journal: FairTax,Flawed Tax
Unspinning the FairTax

How about some bumper stickers that say:

“Shift the Taxes to ME!”

Or:

“Please Tax My Mortgage”

Or:

“More Tax on Gas!”

Or:

“I Demand a 23% Tax on My Utility Bills NOW”

Maybe this one:

“The Tax on My Rent is Heaven-Sent”

When they computed the 23% figure, the FairTax people assumed that the Federal government would pay the tax on all of its purchases. Then they neglected to add the 23% back in as a costs on those same purchases. This of course increased the amount of taxable consumption while simultaneously decreasing the amount of taxes necessary to pay for the cost of government. Here then is my favorite bumper sticker:

“Let the Government Pay Its Own #%$* TAXES!”

They all laughed at ih2005 when he pasted these same talking points over at Slate magazine today. Rather than cut and paste their stinging rebuttals, I invite you to read the complete destruction of his simplistic arguments at this
LINK
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Wall Street Journal: FairTax,Flawed Tax
Unspinning the FairTax

the link this refers to? I see the anchors in the source code but no URL

Rather than cut and paste their stinging rebuttals, I invite you to read the complete destruction of his simplistic arguments at this
LINK

This is the way to blog!

Sorry about that Paul...must've fat-fingered it.
Corrected Link
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Wall Street Journal: FairTax,Flawed Tax
Best FairTax graph ever

Thanks to you and Spinoza.

And congratulations on the publication of your essays!

I could tolerate his misguided support of the fair tax because that is a fantasy that will long proceed SS reform, but these South Carolina panderings killed 100% of my support for Mike Huckabee:

The idea that he would say "if someone told us what flag to fly in Arkansas, we'd tell them where to put the pole" is soooo 1970s. I thought Mike was above rehashing settled debate, but if he now wants to run the confederate stars and bars up the Capitol's flag pole, he won't do so with my support. I pledge allegiance to one flag only; not Brazil's, England's, Jamaica's, or any African Country's flag. And definitely not a flag that represents an attempt to divide this nation so that state's "rights" to slave labor could be preserved. This is the second most idiotic thing Mike Huckabee could have said. The most idiotic was this:

The Constitution is more easily changed than The Bible, so we should change it. Yes, Mike: The Constitution should yield to The Bible. Would that be King James or NIV? Should we also explicitly make ignoring the sabboth unconstitutional? Shall we make it a misdemeanor to make idols of other Gods (like the Buddahs in Chinese restaurants)? Will we call envy "coveting" and arrest people for expressing an attraction to another person's car, motorcycle, or house? Mike, I thought you were ready, but this pathetic pandering would put us in the same league as Saudi Arabia, Iran, Afghanistan, and all of the other countries that place their religious laws above the laws of the land. I had so much hope for ole Huck, but I believe he just became a non-player. And I'll bet every blogger here lunch on that!

Kevin "Hack" King

"... he just became a non-player?" Hack, you have so misunderestimated the Republican Party! I'll see your lunch and bet you one back that if Giuliani or Romney end up as the nominee, they pick Huckabee as their VP.

That bothered me a lot, too, and for two reasons:

* The issue itself. Back before this forum existed, I engaged in a small debate with some people through a series of letters to the editor over the flag issue. They said that it is "heritage, not hate." (They also said I was a commie and a fag, or something like that.) I argued that symbols mean whatever they are widely perceived to mean, and, regardless of the prior history of that flag, it has since come to be widely associated with bigotry and hatred. (As a college student visiting Greece, I was stunned to see the swastika carved in relief on many ancient sculptures in the Athens Museum. Imagine arguing for that symbol's revival by asserting, "It represents eternity, not Nazis."

* "Pandering" seems to be the right word. For one thing, for him to come to SC as an outsider and to assume that this issue is voter bait is ripe for parody. It is as though he assumed that all South Carolinians are still standing by, lanyards in hand, ready to fire on Sumter again at the first provocation. Will he try to appeal to the African American community?: "Yous'n folk might not bleeb dis, but I likes fried chicken, coan brett, and chitlins. Yeah, man. I likes 'em reel goot, I do!"

_

I know someone asked me who I was voting for- take it easy on me, I don't answer to negative responses and I certainly don't argure.

You already knew- MIKE HUCKABEE

If he does not win- there's only one I don't want to win- hummmmmmm
guess who- won't take long.

We should not argue who we are voting for: we all have our opinions-
I respect yours, please respect mine.

Even though Romney is handsome- please I am sure you read that comment that Main said about me - I don't vote for if someone is handsome, if I did my husband would be President.

Look forward to meeting you, even though you let me have it at times, I have heard you are a gentleman and as nice as they come - honestly that is what I was told.

btw- I am also- they haven't told you. Ha.

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"Hope Changes Everything"

I've heard nothing but good about you. Can't wait to meet you in person.

Cheers,

Kevin "Hack" King

A Biblical Constitution would by necessity ban "blended fabrics" (Deuteronomy 22:11) and they'd have to fight me to take away my cotton/wool blend shirts.

I can see how this might appeal to Huckabeast fans like Dan Tennant though: his leisure suits are all 100% polyester.
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Wall Street Journal: FairTax,Flawed Tax
Best FairTax graph ever