So you trust the Treasury Department Tax Analysts? The same ones who who lobbied to keep the existing system? Tell you what Basmati. I'm willing to make the change and risk it. We've tried your way for decades and our current punitive system has been responsible for driving many businesses offshore and ruining many others.

Even if it costs a little more it would be worth it to me to have the powers of our government reigned in virtually eliminating the manipulation of the tax system for social engineering and special interest purposes.

Hey, I'm willing to forgo the prebate / rebate. Keep it. Freedom does have a cost and please, oh please, oh please free me from the IRS.

Are you a professional tax preparer by chance? Do you own a H&R Block franchise?

I already said I see your points on the excise tax. But I also see they cannot escape being impacted by the Fair Tax plan.

I also see a number of things will cease under the changes to the excise taxes.

Really, these 'experts' claiming they know how much Paris Hilton will pay are either idiots or they have agendas.

Why? Because they don't know her actual total spending habits. And they do not know if she will change them based on lossed deductions for handling income in one manor versus spending it in another.

They CANNOT know.

I see parts that concern me. I see parts that are really excellent.

My point is the current system is so biased in favor of the rich this has to cost them more in the long run. So many things they were writing off as business expenses will become taxable, in example.

We have to do something. At least this will shake things up and make a ton more things transparent when that cash register rings up and states the sales tax amount.

Many people do not realize how many intervening levels of tax currently go into the price of a good.

In a steel mill, in example, at least some years ago, coal, dolomite, taconite ore, and more, were income taxed from mine to transport, transport to mill, loader to furnace, furnace to oven, oven to roll mill, roll mill to transport, transport to manufacturer, manufacturer to distributor and distributor to customer.

That tacked on so many layers of income tax it was absurd, because law required them to make a profit at every transition.

I don't know if you understand that his what has been happening, but it artificially jacks the price of something through the ceiling.

I see your issues. Do you see mine?

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Keeping it real and to the core of the issue, not the peripherals.

If a person buys as much used, as they can, and shops specials and so on, can they not actually gain money on the rebate?

We are firm believers in coupons and specials. Buy generics that are the same as the name brands. Not into paying a bunch for entertainment. Own our house and vehicles clear.

We enjoy our home life. Go out as we feel, just don't feel like it a lot. Don't have a desire to spend (house is full).

Our hobbies are very enjoyable, but cheaper than most.

Are we going to gain or loose under the Fair Tax?

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Keeping it real and to the core of the issue, not the peripherals.

The National Retail Sales Tax and the VAT tax are not the same types of taxes. The VAT (Value Added Tax) is added onto the cost of each item at each stage of it being produced. Every time a transaction is made during the manufacturing and assembly process the cost of the VAT is added into the cost of that item. The National Retail Sales Tax is added on ONLY at the point of retail consumption. Thus no hidden a buried taxes.

Heck...If it were the VAT tax everyone is soliciting for then I'd scream and run for sure. Talk about pricing your products out of the market the VAT would be the way to go. Read the book MS.

Talk about hidden taxes.

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Keeping it real and to the core of the issue, not the peripherals.

Having lived in Germany and visiting most other coutries, my assessment is that the socialist nature and extemely employee friendly labor laws (can you say union) are the major drain on the economy. They take in x but spend y.

They have 6 week vacations, too many national and regional holidays. France has a 35 hour work week and it is virtually impossible to fire a bad worker.

Please do not use Europe to argue against the Fair Tax. Here's a radical idea, why don't we enact it for a 3 year trial period, if it is not better revert back to the current oppresively complicated system.

I'm glad to hear that ONLY Europe has spending problems. I would hate to think we had spending problems here in the US. I mean, didn't we just turn a $127B surplus in 2000 into a half-trillion $ deficit in 4 years? Listen, I too wore the uniform. I spent over half of my career between Korea and Germany. I am well aware of the government spending related issues in European countries. It isn't the same and you know it.

This much is not arguable. The "Fair Tax" is a VAT. It works in Europe because, by and large but not always, the difference between what the president of a bank, owner of business, etc., makes yearly and what the manager at McDonalds makes yearly is not even remotely similar to the same two individuals here in America. Not saying that's bad or good...just stating the facts. So the difference between those same two people in Germany, tax-wise, is not comparable to the same two in America.

If you are only taxed on what you buy, then the wealthy will DEFINITELY see a tax reduction. The VAT is definitely better if you are WEALTHY. You can't argue that. WEALTHY people pushing a tax plan that benefits them has to come at the expense of someone else! WE CAN'T ALL WIN. And since the Fair Tax crowd believes it has taken care of the poor (I would debate that) who do you think the LOSERS will be? I am stunned at the number of middle class folks that think this somehow will benefit them. They are irrational and will be the first to cry when they realize the shaft they been given. The government would pass, for arguments sake, the fair tax then realize that they didn't have enough "funds" to cover commitments. They would then RAISE the VAT as necessary. They would also pass requirements to the states who would RAISE state tax rates. Nothing would change except who paid. Again, if the Germany system is the answer, move to Germany.

Finally, I read with some interest your dissertation on why you retired as a Major. Honestly, I was embarrassed FOR YOU as I read your excuse (because that's exactly what it was) for why you didn't make O5. Some of the greatest people I have met in my lifetime wore and still wear the uniform. I am not embarrassed, nor will I make excuses, for leaving the service as an O4 nor should you be. We all know how the system works and timing is everything, but at the time you got out, it was very competitive and you didn't get selected. It was a different time and todays Army is a different Army. Let it be. Be proud of what you did and what you accomplished.

Don't cry for me Argentina, I know you know the system, there are a few trolls here that don't and were attacking anyone that did not make Battalion Command level.

I will never apologize to anyone and am straight up about my service.

I believe you meant to say entitlement! Even the President’s advisory Panel on Tax Reform correctly referred to the family consumption allowance as an “entitlement” program, the largest entitlement program in America [if H.R. 25 should pass] costing about $ 600 billion per year which would make Hillary Health Care look like chicken feed!

The panel found in its conclusion:

“Like other consumption taxes, the full replacement retail sales tax has pro-retail growth features. Nevertheless, the Panel does not recommend a full replacement retail sales tax. Without a large cash grant program to ease the burden of the tax, a retail sales tax would not be appropriately progressive. A cash grant program to make the tax appropriately progressive would cost at least $600 billion per year – which would make it America’s largest entitlement program. The Panel concluded that it was inappropriate to recommend a tax reform proposal that required the federal government to collect and redistribute this amount in additional revenue from taxpayers. The Panel also was concerned with administrative and compliance issues associated with a retail sales tax, as well as difficulties involving coordination with existing state sales taxes.”

Did you know that the family consumption allowance under H.R. 25 entitles those who do not work for a living, nor contribute into the common treasury, to receive the allowance? Drug dealers and drug addicts are entitled to the allowance; burglars, armed robbers and car thieves are also entitled to the allowance; prostitutes and bookies and, even your local un-wed welfare moms who stay at home, do not contribute into the common treasury but makes babies to increase their current monthly welfare check, are entitled to the allowance. As a matter of fact the above would be getting an approximate $400 per month bonus under H.R. 25 for either breaking the law or sitting at home making babies. And Neal Boortz supports such a plan?

H.R. 25 happens to be a socialist windfall to the slugs and leaches in our society, and, would be a gift to Senator Ted Socialist Kennedy and his disciples in Congress who would gladly promise to increase the family consumption allowance during elections to buy votes and remain in power! And Neal Boortz supports this idea?

Seems to me, under Neal’s convoluted thinking those who pay taxes on articles of consumption from a government welfare check, and those who steal other people’s money and use it to pay taxes on articles of consumption are “contributing into the common treasury”, and so, the family consumption allowance is not a redistribution plan as everyone, even the above mentioned, pay when purchasing articles of consumption. Sorry Neal, but paying taxes with stolen money, and paying taxes with a government welfare check, is not the same as contributing into the common treasury.

The Neal Boortz cure is worse than the disease. The Neal Boortz cure would create a massive voting constituency dependent upon a monthly government check which would be more powerful then our nation’s existing retirees now receiving a monthly government social security check. We all know how Ted Socialist Kennedy and his underlings in Congress use this dependent voting constituency to buy votes and remain in power. Is this what your are willing to accept, the Neal Boortz cure? Were we not warned in the Federalist Papers that “control over a man’s subsistence amount to a power over their will.”?

Regards,

JWK

Then, all we would need to vote would be a SS number which the voter checker could just simply enter into her big ole computer and away we go! We could even check mexican and arab looking people right on the street with a blackberry and their SS number. Give me a break?

Arnie and Mary, I appreciate your comments. I still think the achilles heel of the plan is the prebate -- the only way an inherently regressive tax can be made non-regressive. Sounds good -- every household gets a check every month as an offset -- but the devil is in the details.

So how exactly do you define household? A PTC nuclear family? Two gay guys? What about a 30-year-old grad student living with his girlfriend but still dependent on his parents? The variations are endless, as is the potential for scams to create "households" to get govt money. Which household member gets his/her name on said check? How do you possibly ensure that this money goes to the intended purpose, i.e., basics?

I had an earlier exchange with someone on this and he pointed out that the government does a pretty good job mailing out SS checks. Point taken, but I'm not persuaded. SS goes to individuals, who are a lot easier to define and track than a "household." Also, the money is a simple payback for a lifetime of paying in -- not an offset for specific exepenses.

I just think this is a can of worms if ever there was one and could create a mess that'd make the IRS look like a model of efficiency. I'd also worry about the impact on our economic culture of having everybody used to getting a government dole every month of their life, based on their inclusion in some official definition of a "household."

THis is my second attempt to post a reply - for some reason my first one didn't seem to go through. Sorry if this is a duplicate.

Your comment that giving a prebate and determining a household would be so difficult shows me that you don't understand what the prebate is nor the current complexity of the income tax system.

As far as the prebate goes, your statement that you are living off the government dole is incorrect unless you think that when you file your income taxes and you are allowed to take a standard (or itemized) deduction and exemptions from the income that you pay taxes on that that is living off the government dole. Neither the prebate nor the standard deduction and exemptions are living off the government dole - they are both setting limits below which you don't have to pay taxes. As far as determing what is a household the government currently does that and it is a lot more complex than it would be for the Fair Tax. I have been a tax preparer for 6 years, mainly for low income and elderly people and for tax year '05 the government changed all the rules on who can take the Earned Income Credit for whom, who can take the child tax credit, who can use the dependency exemptions, who can take one of the 16 education credits, who can take the child and dependent care credit and who can qualify as Head of Household. These determinations are so complex even us tax preparers were confused this year. Determining who qualifies for the prebate can't possibly be any more complex than the mess we currently have and in fact will be much easier. Fill out a simple post card and list the members of your family. As far as can 2 gay people be a household, what difference would it make? The prebate is exactly the same (ie it is FAIR) for 2 singles or 2 married people so if they want to file as a household who cares. Same thing for a graduate student with a girlfriend living with his parents - they both consume food, they both get the prebate. If they want to give it to the people they are mooching off of then they can. And when you object that the prebate may not be used for basics it shows your misunderstanding of the prebate. Who cares what the prebate is used for. It reimburses you for the sales taxes you pay up to the poverty level, period. Use it to buy Versace if you want. Do I care what you use the money on that you don't have to pay income taxes on? There aren't going to be Prebate Police snooping around the grocery stores.

If you haven't read the Fair Tax book I would suggest you do so and become more informed. Also, go to IRS Pub 17 and start reading who qualifies for what and what a qualifying child is etc etc and you will see that the prebate is a piece of cake compared to that.

Ok, I give up LindaLib. You are right.

Sending checks/deposits to every single over-18 American (or is it over 21? Or everyone with an SS number?...oh well, never mind, just more details) every month of their life will go like clockwork, not a hitch.

There won't be any unintended consequences, not a chance of fraud.

Everybody will always agree on the nice neat little matrix of prebate amounts, so Congress will never mess with it or expand it or try to work in extra amounts for people in certain situations.

Waiting for your government check every month won't foster any sense of dependency at all. In fact you'll hardly even know the government exists under this utopian plan.

And like you say, if some people are too stupid or lazy to file for the proper amount or use their monthly dole responsibly, or if a wayward husband blows it all on booze, well, that's their problem.

Thanks for setting me straight. By the way, I have some oceanfront property in Nebraska you might be interested in....

You mean if I am poor that I have to first pay the grocery tax without a prebate in my hand, then I can deduct it when I file? What if I didn't owe anything anyway. How would I get back my grocery tax...oh, never mind. You must make over 100 grand.

Everything you currently purchase (from a loaf of bread to a new car) has embedded taxes that amount to to about 21% of the total cost of the item. Every company that makes every part/ingredient for everything we buy has to pay payroll taxes, and each of those companies pass those costs on to the consumers. Under the Fair Tax, the cost to produce goods and services would drop by roughly 21%. When the cost to produce the item drops, the competitive marketplace will in turn lower the cost to the consumers. You will pay 23% under the Fair Tax AFTER the cost of the item has dropped by 21%. That is about 2% more for the item than you were paying before, but you would have 100% of your paycheck (minus state sales tax, if your state has a sales tax) to spend.
Think about all the people in this country that do not contribute to the operation of our federal government... Drug dealers, illegal aliens (aka "undocumented workers"), prostitutes, and tourists. If the fair tax passed, when each of these folks bought a bag of chips they would be contributing to the government.
Having recently been made a second class citizen by a constitutional amendment in my home state of Georgia, I certainly support the Fair Tax. It is about the only way I can hope to be treated fairly by the government.

Your comments are interesting. I've been watching this discussion from the sidelines because I have no idea as yet what to think of the Fair Tax proposal.

But I just have to ask: whose buns do you handle?

Ah, Another shiny-eyed proponent of the so-called “FairTax” reciting the Gospel of 21% Embedded Taxes.

I sincerely doubt there is anything close to 21% embedded taxes on commodity items like groceries and gasoline.

Take the components of a gallon of gasoline for example:

Price of crude oil – 48%
Federal and state excise taxes – 23%
Credit card cost – 4 %
Refinery cost and profit margin – 18%
Everything else (transportation, storage, retailer profit) – 7%

Suppose the so-called “FairTax” is enacted (God forbid).

Do you think OPEC is going to lower their prices 21% because America changes its tax structure?
Do you think Federal and State excise taxes will be lowered 21%? (Remember, the so-called “FairTax” specifically DOES NOT repeal excise taxes).
Do you think credit card companies will lower their industry-standard 4% charge on transactions?

Let’s be generous and assume that refineries and retailers actually DO have the “best case” scenario of 21% embedded taxes and are willing to pass those savings along to the customer (I realize this is highly unlikely, work with me here people!)

Assuming a $3.00 gallon of gas today:
75% of the cost remains unchanged: $2.25
25% of the cost is lowered 21% due to embedded taxes (.79 * 75 cents) = 59 cents
$2.25 + .59 is $2.84
Add in the “FairTax” sales tax of 30% (“23% tax inclusive” in Boortzspeak) and you have a grand total of $3.69 a gallon for gas.

$3.69 is a good bit more than the “2% more” that BunHandler blithely said we’d be paying for goods. It’s 23% more than the existing $3 gas.

The so-called “FairTax” is a fraud.

The only people that I can think of that would be opposed to getting rid of our broken system of taxation are the following: Drug Dealers, Prostitutes, Illegal Aliens, Tourists, Lobbyists, and of course IRS Employees. Which one are you?
Why in the world would OPEC lower their prices because our representatives FINALLY did something good for our country?! I'm sorry, but your question about OPEC was just ridiculous. If you (basmati) receive a pay raise, does that mean I can spend more money? NO. Because you are better off financially does not affect my disposable income one red cent.
If you are going to argue against the Fair Tax (or praise our current system of taxation) you need come up with a better reason against it than OPEC prices. It is not going to affect what we pay for foreign goods and services, but you will have 100% of your paycheck to make those purchases.
It is not a perfect system, but it sure as heck beats the current system.
Just for the fun of it, list the many reasons that you love the IRS and our current system of taxation. I need a good laugh this morning!

While I am not saying the Fair Tax might not need some tweaking, your claim there are no hidden taxes on food is gas is nonsense.

Here is an example from Houston.

Here is some reading on the issue.

A $1.14 load of bread has .$35 hidden tax. That is 30%.
A $.50 can of soda has $.18. That is 36%.

An $80.00 hotel room has 43% tax.
A $153.09 utility bill has $39.35 tas.
Over half the cost of a gallon of gas is tax.

This is a 2001 study. You think taxes and fees have gone down since then?

With food you still have packaging and transportation costs. Plus much more.

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Keeping it real and to the core of the issue, not the peripherals.

While I am not saying the Fair Tax might not need some tweaking, your claim there are no hidden taxes on food is gas is nonsense.

I did NOT claim there were “no hidden taxes”. I said, and I quote, “I sincerely doubt there is anything close to 21% embedded taxes on commodity items like groceries and gasoline.” I stand by that assertation.

I read your link to the IPI report. The underlying “hidden” tax rate was 27%, I guess your partisans at IPI just rounded up to 30%. Typical.

It was very interesting to see exactly WHAT taxes your linked research considered as part of their 27 percent figure:

Federal income tax
*State income tax
* state and local property taxes
federal payroll taxes
capital gains taxes (on bread?)
unemployment compensation taxes
workmen’s compensation taxes
*retailers’ state excise taxes
*state and local business license taxes and fees
*state utility taxes
*state wheat farmer checkoff taxes

Over HALF of the taxes in your example would NOT be rolled back with the adoption of the so-called “FairTax”. All the taxes marked with an asterisk would remain unchanged.

Because the underlying Price Waterhouse data does not segregate each tax impact separately, you can quote “27%” or “30%” as Gospel but in truth you do not know exactly what the embedded tax impact is that will change with the adoption of a so-called “FairTax”.

You CAN be sure that their will be a minimum 30% sales tax though.

The so-called “FairTax” is a fraud.

Presently Fed and State income taxes are charged at every level of production and transportation. So, yes, they would not be rolled back, they would be deleted.

There is no income tax in a National Sales tax.

excise tax
A tax on the sale or use of specific products or transactions.
Gone as well.

National sales tax means all the taxes collected by the government MUST be to the end user. So the end user knows exactly how much tax they are being charged.

Then the government has to stop hiding them and has to start defending taxes that people otherwise are not even aware of.

Can you say "being held more accountable?"

I am not stupid. I know the government will adjust the rate to what they need.

But when people actually start seeing how much they pay on every purchase, you don't think it is going to wake a good number of folk up?

Why are you so determined to keep taxes hidden? Because it funds liberal agendas you don't want touched?

Because it might actually help put an end to pork barrel spending by both parties?

Or might actually get some true fiscal conservatives in office?

What is your point?

The pipe dream rich folk pay a higher rate of income tax than you do?

If that is it, you are indeed blind.

Get rid of the blasted loopholes and nonsense letting rich folk off the hook. Make them pay the same % we pay on purchases and listen to them scream.

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Keeping it real and to the core of the issue, not the peripherals.

excise tax
A tax on the sale or use of specific products or transactions.
Gone as well.

This is an absolute falsehood.

Have you even READ H.R. 25?
The legislation (Section 104 specifically) states that excise tax provisions of the Internal Revenue Act will remain!!

Section 104 (a) CONFORMING AMENDMENTS. The Internal Revenue Code of 1986 is amended by redesignating--
(A) subtitle D (relating to miscellaneous excise taxes) as subtitle B
(B) subtitle E (relating to alcohol, tobacco, and certain other excise taxes) as subtitle C…

The existing “subtitle D” is the authority for all excise taxes not administered by the Bureau of Alchol, Tobacco and Firearms. The existing “subtitle E” is the authority for all excise taxes administered and collected by BATF.

Other than changing the subtitles (due to repeal of personal, corporate and gift taxes) NOTHING will change regarding excise taxes under the so-called “Fair Tax”.

Why are you so determined to keep taxes hidden? Because it funds liberal agendas you don't want touched?

Not at all. Here is why I consider the so-called “FairTax” a fraud:
I pay $10,000 a year to the Federal government under the existing IRS rules. Under the so-called “FairTax”, I will pay something like $12,000 a year.

Paris Hilton pays $500,000 a year to the Federal government under the existing IRS rules. Under the so-called “FairTax”, Paris Hilton will pay something like $455,000 per year.

I don’t think I should have to pay more to the Federal government each year simply because YOU don’t like the IRS (and I don’t think Paris Hilton should pay less, either)

My calculations, btw, come from President Bush’s Bi-Partisan Commission on Tax Reform, which in turn got their calculations from the United States Treasury Department. It’s worth noting that they recommended AGAINST implementing the so-called “Fair Tax”.

The Excise Tax definition was from the IRS site.

And you know how much Paris Hilton would pay? Based on WHAT? You do not have a clue what her spending habits are. So you don't know what she would pay.

And what you pay? You have NO way to calculate that amount. Because you DON'T KNOW what the prices will be after adjustment.

Now tell me, what does the numbers come out under the experts muddle posted? They recommended the Fair Tax!

But I do see your concerns on the excise taxes.

Really, when I see a legit point I do admit it. Can you?

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Keeping it real and to the core of the issue, not the peripherals.

Never mind. You are understanding none of this.

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Keeping it real and to the core of the issue, not the peripherals.

Great comments on the National Retail Sales Tax. Keep up the good work and support and welcome to the site.

I'm afraid to ask you where you got you handle from.

Actually, the company I work for makes hamburger buns for a famous burger joint. I'm the guy that makes sure the buns make it to the 337 stores that we deliver to... Been doing it for nearly 10 years, so you could say I'm a professional "Bun Handler".

thing wrong with the farce of "fair tax"

That issue is already on the table.

You currently file as individual or joint. Tax tables are based on on this, as are deductions. And number of dependents.

Why would this filing principle need to be changed for computing a rebate? It would only need to be updated time to time.

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Keeping it real and to the core of the issue, not the peripherals.

Rebate everyone over the age of 18. Make it the taxpayers responsibility to keep their address up to date or apply their rebate to reducing the debt.

Thanks for your comments. Some things just plainly make sense for Conservatives and Liberals. This is certainly one of them and I appreciate your chiming in. Please post more and jump in on some of our little bickering sessions. But please don't advertise on the blog. Pay for your advertisement....this isn't a guvment subsidized hand out program.

I'm not a Democrat, but I wish you well.

Let me know if I can help.

My website is http://gopwing.us and http://ksfairtax.org

Send me your website URL and I'll post a link on my website.

email: netvictory@yahoo.com

Read the crap, read the crap, read the crap, read the crap, read the crap...........unfair tax, unfair tax........

But how can you claim knowledge of something you haven't read ?

The words are too big to understand?

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Keeping it real and to the core of the issue, not the peripherals.

able to understand and comprehend what your reading. It's really not that difficult Highgreen. Many from your side agree that the Fair Tax is the way to go. Come on man. It makes sense and like PTC Guy admits he agreed with you once how about dropping your pride and agreeing on something that makes sense even on an elementary level? How about it...just once?