Just how much do you think countries will ship here if we tax it all, and how much of ours will they buy when we do that? NONE. Fair Tax (Unfair Tax) is wrong and would be modified to death and be much worse than what we have. Tax IN and OUT goods and do away with other taxes.

A big factor in why we are getting hurt so bad is that a number of countries charge tariffs on us to them and subsidize their exports to us.

Our workers and business pay dearly in this formula.

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

Well, I've never heard of any kind of insurance you can get that will pay taxes for you. If there were we would all buy it. You say that "means you pay the first $100 and then the insurance picks up the rest - whatever that may be." But my insurance carrier only pays for the MEDICAL SERVICES and there's nothing in the policy about paying taxes. Unless legislation is enacted that requires the insurance carrier to cover the taxes also, the taxman is going to look for me to pay the bill. At my age I don't have the money so I guess I'll just have to forego medical care and (with apologies to Charles Dickens) "die and decrease the surplus population".

So you are telling me that when you got your wife's bill you had to pay the sales tax on all the sodas she was fed and on the IV solutions she received and the bandages used etc? My husband has had plenty of surgeries and never once have i gotten a bill for the sales tax on any of those articles.

Ya'll were right and I was wrong. Someone pointed out to me today that there is a section in HR25 which covers my concerns about having to pay the Fair Tax on large medical expenses. Subtitle A, Section 2 (8)(C) provides that "property or services purchased by an insurer on behalf of an insured shall be treated as used to produce, provide or sell taxable property or services if the premium for the insurance contract giving rise to the insurer's obligation was subject to the tax". So basically if the Fair Tax is paid on the inurance premium then the same exemption that applies to a "Business to Business" transaction will also apply to the medical expenses paid by my insurance company.

I'm still not sure about my co-pays. Are they also exempt? I only ask because between us my wife and I have 17 different drugs we take and the co-pays amount to about $500.00 per month. I know that if we had to pay the Fair Tax on them that would only be about $150.00 per month, but when you get to be my age you have to watch every penny.

Anyway . . . when I'm wrong I'm willing to admit that I'm wrong and in this case I was totally wrong. Please don't hold it against me.

I'm glad that you found out your answer and also glad that you are open minded enough to research this and ask questions. We are all learning. The bill is 133 pages long and not easy to read. As far as the co-pay I assume (no, i don't need a lecture from you, highgreen, about what assume means) that works the same as the deductable - those are all things that are set by the insurer as what you have to pay to them so they will offer their service to you of paying your medical bills.
I just found out something that will make you happy. I'm not exactly sure how this will work but it says that your social security payments will be indexed to pay for the taxes that will be accrued. I assume that means that if your soc sec payment is now $10K they would need to give you $13K - an extra $3K to pay for the sales taxes you will be paying when you spend this money. I am trying to get more info on this so if anyone knows anymore please let me know. Here's the wording from fairtax.org under Research/Demographics/The FairTax Benefits Seniors http://www.fairtax.org/pdfs/impact_on_seniors.pdf

The FairTax repeals the taxation of Social Security benefits and adjusts Social Security indexing to protect seniors
The FairTax legislation totally repeals the current income tax on Social Security benefits. The bill also adjusts the Social Security benefits indexing formula, commonly known as the cost of living adjustment or COLA, so that benefits increase to the extent, if any, that the federal sales tax results in higher costs to seniors.

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Why, of course it will! If you get a 25,000.00 dollar hospital bill (a couple of days, usually) then at 35%, the tax would be $8,750,00. Of course the HMOs will pay that also. What they are saying is of course that the bill will only be $25,000, including tax, and that the hospital will forward the $8,750.00 to the government. Insurance will only pay 16,250.00 to the hospital and the hospital will make up the difference........no that is not right, is it? Maybe it is this way: hospitals will be free to us and the government will simply pay them whatever they bill to Washington, or to Atlanta maybe in our case. Which of the three shells is the pea under? None of them, of course, it is in their palm.

you phunny highgreen109

When corporations pay no income tax, companies like Boeing, which sells a lot of airplanes all over the world, will pocket that much more profit. Boeing may reduce its airplane prices just a little bit, to compete with Airbus, but why should it reduce them a whole lot? (Reducing prices more the minimum required to meet the competition is known, in the business world, as “spoiling the market.” It is considered stupid.)

Under the Fairytale Tax system (which I refuse to call Fair Tax), corporations will have to file sales reports to account for the sales tax. Now, what’s the difference to a corporation between sales and income? All income is from sales.

Hospitals are in the same boat. All their income is from sales of health care services. Instead of income tax returns they’ll file sales tax returns. As for paying the employer portion of the payroll taxes, I must say that without that we must kiss goodbye to Social Security benefits based on earnings. Some Fairytale Tax proponents say employers will still pay the employer portion of Social Security taxes; I notice that you say they won’t.

The surgeon you say won’t be filing tax returns will have to file sales tax returns (and send a check along with them to the Fairytale Tax collection agency).

Tax preparers who now prepare income tax returns will, under the Fairytale Tax, be preparing sales tax returns. The Fairytale Tax is unlikely to be any less of a mess, and there’ll be a whole lot of cheating going around, with a large bureaucracy trying to do the collecting.

Things will have gone from bad to worse.

Well I personally am not concerned about the price of an airplane and I can't see that the average Joe would be either. I am more concerned with the price of everyday items where there is lots of competition. Those are the items where prices will go down. That is simply the way the free market works. Publix lowers it's price on blueberries and WinnDixie sees that and lowers theirs too.
Many corporations already pay sales tax and there is a very big difference between a corporate tax form and a sales tax form. My husband and I had a tiny business with one employee and the rest contractors and we had to file W2's for the employee plus FICA, FUCA, 1099Misc's for the contractors and probably other stuff I have mercifully blocked from memeory and then there was our own corporate form which we had to have an accountant do because I didn't have any idea of what they were asking for. I think if you ask accountants which is easier, sales tax would win hands down. And you seem to have completely ignored all the stuff having to do with payroll taxes that will go away. Yes, some people who don't do sales taxes now will have to do them but the surgeon I would bet has an office and a whole staff that he has to send in payroll taxes for. That all goes away. And, the number of people that are collecting sales tax are way less than all the people who have to do a income tax return right now.
And as far as going from bad to worse I can't imagine a system that could be worse than dealing with the currently existing 60,000 plus pages of tax code. I like della's idea. Give it a try and see how it works. I refuse to believe that anyone can defend our current system except the pandering politicians that get to use the system to hide the goodies they give away to their "supporters" or maybe the people who get more out than they paid in. Can any of you people who hate the FairTax idea tell me what it is about the current system that you like so much? This last tax season was it for me. Every year it gets worse and worse.

Well, in your little business you describe, you would really have had a hard time collecting and disposing of 35% tax income for which you would have had to account. It would have to be paperworked and deposited every single day, maybe every four hours if the amount was large enough. Can't you just imagine how many fruit stands and boiled peanut tubs will not ring up sales and keep the 35%? The black market will truly flourish!! Think a little bit about such a drastic move.

Just as I don't think that the FairTax people should use the 23% amount without a disclaimer that it is the equivalent of a 30% sales tax, I think it is disingenious of you to make up a new rate all your own and start using that as if it is the rate that is proposed. Are you an economist? Have you done any studies to support your rate of 35%? If not, please stop using that rate. And when you do use the 30% rate please put in a disclaimer that it is the equivalent of a 23% inclusive income tax rate. (I explained that in a previous post)
Now to the business, we were a business brokerage which is low volume so we would not have had to do what you are suggesting. As to fruit stands etc I don't see why you prefer to make things so complex. You start out in the AM with so much money in your till. At the end of the day you count what is now in your till. Subtract the two and come up with what you sold. (I've worked at the bookstore at chuch and we did that all the time - it takes about 5 minutes.)Now multiply that by .23 and you come up with the sales tax you received. (Notice where that inclusive business comes in again - when faced with a total amount you need to use the inclusive percent to get the exclusive amount.)You write it down in a book somewhere and once a week or month or whatever they do now you report it and send in a check.
As I've said over and over again this system isn't perfect but it is a lot better than the current system. There is also a lot of fraud in the current system. We ran a business brokerage firm. We heard lots of stories of people cooking the books. You are never going to get a system free of fraud. How many rich people keep offshore accounts so they don't have to report their income? Remember the story about John Edwards that came out about him setting up his business in some way that he escaped having to pay a huge amount in medicare taxes? There are always ways to scam the system if you want to and in particular if you think you are being treated unfairly. I would be a lot happier paying taxes if I thought I was being treated fairly at the least. My husband and I both worked for quite a few years and we were hit with the marriage penalty. It cost us thousands of dollars every year to be married. What kind of a system is that?
As far as thinking, I have done a lot of research and thinking on this system. As I said before I have been thinking about it for 4 years and researching it. I'm a tax preparer so I know a lot about tax laws. Next time you respond I would like to know how much research you have done on the system. Have you read the book? Have you read the proposed law? Have you gone to the fairtax.com web site and read the proposal and the rebuttals?
I do appreciate negative comments that are well researched and sincere because I am still willing to listen and change my mind but haven't heard any yet.

“The evil you know is better than the devil you don’t know.”

The current income tax system is the evil we know. It works reasonably well. Our economy has adapted to it. Scrapping it for something completely different is likely to destroy our economy and to impose a world of hurt on the people affected by the change.

For starters, the Fairytale Tax would destroy the Social Security system, where all non-medical benefits (disability, retirement, survivors) are based on earnings. It would scrap all the incentives now in the Internal Revenue Code for people to provide for their old age or the education of their children (IRAs, 401ks, Roth IRAs, Coverdell plans, etc.). It would also remove incentives people now have to contribute to charity, including churches, or to buy their own home (from the deductibility of mortgage interest and property taxes). It would offer no break to people with large medical expenses or other catastrophic losses (who can now deduct them on their income tax) and those with large families (who can now take dependents exemptions).

The Fairytale Tax would devastate investments people have (personally or through their pension plan or mutual funds) in companies which provide services related to the current system. H&R Block, for instance, is a real company owned by investors, with thousands of employees. Its business would be gone. So would that of the computer services companies that prepare tax returns (Tax Cut and the like). Of course lots of jobs would be lost too, and we know that for a lot of people retraining programs don’t bring jobs that pay as well as the old one.

There’s even more to it than that. The new national sales tax system would be very difficult to enforce. We have a lot of self-employed people in this country, and when confronted with the duty to turn over 30% of their take to the government a lot of them would start keeping two sets of books. I can’t imagine a kid mowing lawns for his neighbors turning over anything to the government. Restaurant servers would not remit 30% of their tips to the government either. Effective enforcement would demand a large bureaucracy, with even more forms to fill out.

Fairytales are fun to think about. Don’t we all wish the Internal Revenue Service would go away! But with a national sales tax it would not. It might not even change names. It would just hunt for taxes to be collected. To be sure there is no evasion, both sellers and buyers would have to report every transaction so each one could be matched and verified. We have that today, with W-2s or 1099s from employers and 1040s from employees. We’d need to have a comparable system with forms from buyers and sellers.

I notice that the Fairytale Tax supporters are fond of the word “embedded,” with which they explain away everything that otherwise seems to make no sense. You can be sure that with a national sales tax the government would be embedded in our affairs a whole lot, and some of us know better than wanting them in our beds.

As I said, the evil you know is better than the devil you don’t know.

Rather than do a detailed reply I guess I would have to say that the difference between you and me is that I would rather be free to choose how to spend my money rather than have the governmnet set up tax incentives if you play their way and tax disincentives if you don't. I'm big into choosing my own way. I think that is the hallmark of freedom when you have a choice. We have a saying in the Libertarian party that I love. It goes, the governmnet breaks your leg and then hands you a crutch and says aren't we good guys. What if the governmnent didn't take a large chunk of your money away from you before you even got to smell it. You would be free to choose how you want to spend it. You would be able to save money for your child's higher education without having to research all of the currently existing 16 education tax incentives. You could invest it any way you saw fit to, not the way the governmnet chooses for you. Remembr that education is not taxed and all the interest you earn will go right back into the account and earn more interest. (Do a Future Value calculation on an excel spreadsheet and you will see the huge difference that will make to your savings when you don't have to hand part of it over to the government - that's all they are really doing anyway with all their education tax incentives - but with a lot more conditions on them. The FairTax imposes no conditions and if you child decided to run away and join the circus you still have your money without having to pay huge penalties for not using it like you thought you were going to).
I understand that the current system is comfortable just like an old pair of shoes but when they start leaking and the soles fall off and the tops disintegrate it's time to scrap them and buy a new pair. The current system is completely broken. When you can no longer do your taxes and have to go to an accountant or buy a computer software package because you got a $10 qualified dividend it's time to find a new way. That way is the FairTax. Yaaaa FairTax. (Sorry I got carried away there).
Couple details, sorry I just couldn't let them go - it wouldn't ruin the SocSec system - the employers will still report the work credits that are used in the social sec system, restaurants already have a system of allocated tips for the servers, people are generous without the tax incentives - about 1/3 of the people that give to charities can't deduct them, you would be better off saving on your own for old age than putting money in an IRA, 401K etc where there are lots of restrictions (did you know that when you take money out of those the governmnet dictates to you how much and how you can declare the portion that you paid in and the portion that was return on investment based on actuarial tables - no choice again - and you can't take it our without a 10% penalty before 59 1/2 and must start taking out at 70 1/2 and if you don't you are penalized 50% of what you should have taken out - wouldn't a simply savings account or CD be a lot easier? use it when you CHOOSE to), H&R block has already seen the writing on the wall and is moving into other things, besides, should we keep a company that is no longer needed around because people are invested in it? means we would still have the horse and carriage companies because someone might get hurt if we go to automobiles, new jobs would open up, what happened to all those typewriter salesmen/builders etc? you can't stand in the way of progress just because some people are invested in the old way of doing things - maybe TaxCut could build software for sales tax or could provide the states that don't have sales tax with a system for doing that - don't hold onto all that old stuff just becasue you are afraid of the new - you're blogging, what about all the jobs that are lost becasue you aren't sending mail or calling everyone etc? - definetly NOT forms from buyers - the reason for this system is for simplicity - that would be crazy and I would never go along with a system like that

You are the pro. I will just add my comments.

When I questioned Basmati on the issues of not having the government tax me with my only avenue of keeping more money being finding loopholes and deduction, his answer was silence.

When I asked him if smart shoppers, those who buy used, where they can, and use coupons, generics and sales, could not actual gain more money than the Prebate, his answer was silence.

When I illustrated how hidden taxes get added by government laws, using the steel mill as an example, his answer was silence.

When I pushed him he growled and said he had no obligation to answer me.

But he fully attacked the Fair Tax, on his terms.

I am an extremely small business with simple book keeping. But I still end up paying over $550.00 to do my annual taxes. My tax forms stack up about 1" thick.

And I still have to pay sales tax when I shop!

I view the HR 25 as a complex issue. I see somethings, if my understanding is correct, that may need tweaked.

But I also see many more hidden taxes and fees that many are not aware of, that greatly add to the price of a product.

Is the government still going to get its money to run? Of course.

But will it be better not to have so much hidden taxes, greatly reduce the incredibly expense beauracracy that deals with taxes, take expenses off of businesses the consumer must pay for, and on and on? Of course.

The present tax system is broken. There is no fixing it.

Will the Fair Tax need tweaked? Probably.

But will consumers eyes bug when they see the taxes fully visible, added on at the register and no longer hidden. Most assuredly.

Then, and only then, maybe people will get serious on government waste and pork barrel.

This is way more complex than just tax collection.

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

If it works so darn well, why have so many American companies based their headquarters overseas?
If it works so well, how are illegal aliens paying their "fair" share to help support the federal government? What about the drug dealers? What is the IRS doing to collect their "fair" amount of taxes? What about the thousands of tourists/visitors in this country each day. Are they contributing their "fair" share for the operation of our government?
I thank Holy Jesus that we didn't scrap the idea of the telephone because it was going to hurt the telegraph business. Praise Allah that we went ahead with automobile manufacturing, even though the carriage industry took a huge hit. Blessed be the Buddha that we now have a hard time finding typewriters because of the introduction of the personal computer.
Would H&R Block suffer if the FairTax passed? One with any amount of logic would have to say, "Yes".
However, if the FairTax passed, the number of businesses that would relocate their headquarters back to the United States (along with the new businesses that would form) could provide thousands of accountants with jobs. Somebody will still have paperwork to fill out, just not the ridiculous amount that the IRS currently makes you complete. Would some people suffer from the passage of the FairTax? Yes (at first). Would more people benefit from it, and our country be better off if it passed? Yes & Yes.
You are so true when you say the income tax is evil. I'm not buying your idea that the FairTax is the "Devil", though. I don't care one way or the other. I have Jesus, Buddha, and the Mighty Allah by my side. Bring on the DEVIL!

I must say that I have a rough time understanding how drug dealers --I am thinking illegal drugs here-- would collect, and then remit to the government, sales taxes from their customers. If Bill Campbell (former mayor of Atlanta) didn't pay income taxes on the bribes he got, why would drug dealers pay up?

Pardon my lack of understanding.

Why would somebody collect taxes on an illegal transaction? There would be no FairTax charged on illegal drug sales, just as there is no tax charged for the sale of illegal items now. The junkie wouldn't be paying taxes on his "fix". The DEALERS would pay when they buy their new gold teeth, new rims, sound systems, and fuzzy dice.
Is any of this sinking in? I doubt it, but it was worth a shot.

Well OK then, the thing to do is to quit going to "stores" to get our groceries and stuff, and just buy them on the black market, 35% cheaper! When something costs too much due to excessive profit or taxes, the black market flourishes---35% is sufficient margin for them. I saw it in WWII during scarcities and, during NIXONs famous freezing of prices (my dentist told me that his charges would never again be frozen since he was going to complicate his billing procedure so much that he could collect whatever he wanted in spite of price freezes---he succeeded, didn't he?) Door to door banana salesmen, milk salesmen, sounds wonderful. Used cars at your driveway!

If you don't want to pay the tax, don't. Buy used clothes and used cars. Buy your bananas from a door to door banana salesman. I have never met one, but I can't imagine a salesman charging less to deliver you bananas than you can buy them in a "store". Buy a used home. There will be enough people out there that want new items to support our government through the FairTax. The FairTax is a voluntary tax, and you won't pay it if you don't buy new items at the retail level.
You keep throwing out that 35% figure. Where on earth are you getting that? Millions of dollars have been spent studying the FairTax idea, and no where have I read 35%. How much time and money have you spent researching it?
I do know that the purchase price of everything we currently buy has at least 21% embedded taxes included in the price. That 21% goes away after the FairTax passes. For the black market to be 35% cheaper after the FairTax were passed, the taxes charged on new items would have to be 56%. Is that what you are saying???
I'm all for saving a buck. Can I get the number of your banana salesman?

Some Atlanta entertaining jackass on radio and a do-nothing stupid congressman wrote a book is all I know. Libertarians remind me of silent Monks at the seminary: they should never have been born and have wasted everyone's time. I once spent some time in a mountain town above Genoa, Italy and noticed many large stone building above, high on the mountains, lots of them. I asked my host what they were. He said the main roads used to be up there for purposes of defending agains raiding hordes, but now they were used strictly to store alcoholic priests. It also used up all of the cheap wines.

I don't know about research in favor of the Fair Tax but a gentleman named William Gale (see his bio below) studied HR 25 and concluded the following:

"To determine the revenue- and budget-neutral tax rate in a national sales tax requires estimating the rates of evasion, avoidance, the extent to which deductions, exemptions and credit would be re-introduced, and the impact on economic growth. With extremely conservative assumptions about the magnitude of evasion, avoidance, and statutory base erosion, it would require a 60 percent tax-exclusive (38 percent tax-inclusive) tax rate to replace existing federal taxes, and a 26 percent tax-exclusive (21 percent tax-inclusive) tax rate to replace the existing personal income tax. These estimates do not include any allowance for economic growth, but even if the economy grew by 5 percent, which would be an enormous effect relative to existing estimates, the tax-exclusive tax rates would only come down to 57 percent and 19 percent to replace all federal taxes, or the income tax, respectively. Note that the eventual sales tax rate that households would face would likely be significantly higher because existing state sales tax would be added. In addition, most or all state income taxes would probably be abolished in the absence of a federal income tax system (since the states depend on the federal income tax system for reporting purposes) and converted to sales taxes. These would add considerably to the combined sales tax rate. Any transition relief provided to households would reduce the tax base and raise the required rate further. And if major consumption items like food, housing, or health care were exempted from the base (the assumption above do not allow for such large exemptions), the tax-exclusive rate could rise to over 100 percent. In short, any realistic plan for a national retail sales tax that replaced the bulk of the federal tax system would require extremely high tax rates. Sales taxes at such high rates raise crucial questions about enforceability. Advocates and sponsors of sales tax proposals have suggested that much lower rates, on the order of 23-30 percent would be sufficient to replace the entire federal system. These estimates are lower than the ones above for three reasons. First, they are quoted in tax-inclusive terms. Second, they assume that there is no evasion, no avoidance, and no statutory base erosion due to political pressures or hard-to-tax items. Third, quite simply, the advocates made a mathematical mistake in calculating their required tax rate. An analysis of the required rate in a sales tax requires some assumption about what happens to the level of (the prices that consumers see before sales taxes are imposed) in the transition to a sales tax. Producer prices could (a) remain constant in nominal terms, (b) fall by the entire amount of the previously embedded taxes, or (c) fall by an amount between the first two benchmarks. In calculating their required rate, the NRST advocates assumed that producer prices would remain constant when they calculated the amount of revenue the government would obtain from a sales tax, but assumed that producer prices would fall when calculating the amount of spending the government would have to do to maintain current programs. These assumptions are obviously inconsistent, and they either understate government spending needs, overstate the revenue likely to be obtained, or both. Making a consistent assumption about producer prices – regardless of whether the assumption is (a), (b) or (c), leads to a higher rate than the advocates have assumed."

William G. Gale is a Senior Fellow and holds the Arjay and Frances Miller Chair in Federal Economic Policy in the Economic Studies Program at the Brookings Institution. He is deputy director of the Economic Studies Program and co-director of the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute. His areas of expertise include tax policy, budget and fiscal policy,and public and private saving behavior and pensions. Before joining Brookings, Gale was an assistant professor in the Department of Economics at the University of California at Los Angeles, and a senior staff economist for the Council of Economic Advisers. He has also served as a consultant to the General Accounting Office and the World Bank. Gale received his B.A. in economics from Duke University and his Ph.D. in economics from Stanford University. He also studied for a year as an undergraduate at the London School of Economics.

PS - He also concluded that if the 23 percent inclusive rate was adopted and there was no increase in federal spending over the next 10 years, the federal budget shortfall would be 7 TRILLION dollars (that's $7,000,000,000,000.00)

Boy, if those who say fair tax is simple reads your blurb they will burn it.

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When they buy anything with the drug profits they pay sales tax. As in food, clothing, cars, boats and so on.

They cannot avoid filing because they no longer file.

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

Are you saying that the drug dealer is a business person who pays no fair taxes on the dope he buys from the wholesaler? Of course, I know that the smuggler who brings in the dope from either Mexico or Colombia paid the distributor there no general sales tax (fair tax), and I suppose the grower in Colombia doesn't collect any either from the distibutor. It would work the same way here for the farmer who sold tomatoes, or potatoes, to a pin hooker (A guy or gal who goes around farmers houses and offers cash money for tomatoes, or potatoes, loaded onto his truck) for distribution to stores, he would not collect any sales (fair) tax either. Nah, there is no way to cheat on the "fair tax." Who cares though as long as the guys making over $100,000 don't pay any income tax, just fair tax on their groceries, which they will get their maid to buy for them, as Rush Limbaugh did his Oxycontin, since the maid probably is on food stamps which has no fair tax, right? Just collect at the border! They are now sealed and it would be easy. I thought they were sealed!

Are you saying that the drug dealer is a business person who pays no fair taxes on the dope he buys from the wholesaler?

I am saying that under the present system a drug deal pays zero to very little income tax. As of right now.

Under Fair Tax, they will still pay no tax on buying illegal drugs. But they WILL pay the sales tax on all the legal purcases they make.

So, since their tax gets moved from the income end to their legal purchases end, they will not being paying taxes they did not pay before.

So, tax collection is not 100%, but it is far higher than under income tax.

On the rest you miss the point entirely. All those you listed will pay sales tax at the grocery store, Wal-Mart and so on. But before they did not pay income tax.

Now, get paid $5.00 an hour, under the table, pay no income tax and only X% sales tax at the store. Plus get earned income.

Under Fair Tax, get paid $5.00 an hour, under the table, and you get $0 Prebate and pay 30% Sales Tax. No earned income.

Think about it.

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

It has been repeatedly asserted [on the Neal Boortz show] that H.R. 25, regardless of its faults, would be a huge improvement over our current system. Under the current “system” Congress calculates taxes from profits, gains, salaries and other “income”, but there is no 23 percent tax imposed by Congress on the people‘s property, real and personal, which the fair tax would create.

Under H.R. 25, a 23 percent tax is created and imposed upon the people’s property, real and personal, which is in addition to a variety of excise taxes Congress may impose, and may be calculated from profits, gains, salaries and other “income”. Excise taxes may be laid upon businesses, corporations, occupations and certain individuals.

Although it is true there is language in H.R. 25 to intentionally “repeal” a few specified taxes which are now calculated from “income”, the language of H.R. 25 lets stand a wide variety of other taxes [excise taxes] which may be calculated from profits, gains, salaries, and other “income”. So, in effect, H.R. 25, maintains Congress' power to calculate taxes from “income”, while creating a new type of tax for the people to pay, a 23 percent federal tax upon their property, real and personal, which they do not now pay, and would close the circle of a socialists tax system in American which not only taxes success via income taxation, but extends the reach of federal taxation to property, real and personal!

How can one truthfully say H.R. 25 is an improvement over our current system when it creates a new federal tax upon the people’s property, real and personal, a federal tax never before known in America, while the language of H.R. 25 makes no attempt to “repeal” all taxes which Congress may impose calculated from profits, gains, salaries and other “income”?

Was it an oversight when creating the language of H.R.25 to not include wording to repeal Congress’ power to calculate taxes from income?

In addition, although we now have a number of voting constituencies dependent upon a monthly government check, there is no voting constituency as large as that which would be created under H.R. 25’s family consumption allowance__ an entitlement so large, the cost of which, would make Hillary Health Care look like chicken feed.

H.R. 25 would create a voting constituency dependent upon a monthly government check which would dwarf that constituency now dependent upon a monthly social security government check.

Have the promoters of H.R. 25 not thought about the political consequences involved with creating such a massive voting constituency dependent upon a monthly government check?

Seems to me the self anointed fountain of the “painful truth”, Neal Boortz, is far more worthy of using disingenuous “tactics” in promoting H.R. 25 than those who he accuses of using scare tactics when all they do is rely upon the truth and facts as a “tactic” in discussing H.R. 25.

How many times has Mr. Boortz asserted to his listening audience, especially those on fixed incomes who correctly worry about massive price increases under H.R. 25, that goods and services in America will not increase in the long run if H.R. 25 is adopted? The tale spun by Mr. Boortz goes something like this: because embedded taxes under “income” taxation will be repealed, thereby lowering the tax burden for business owners across America, business owners will be more than encouraged, because of “competition“, to use their reduction in income taxes to neutralize the 23 percent tax created by H.R. 25, and so, our elderly on fixed incomes have nothing to worry about.

Well, isn’t that peachy Mr. Boortz? . Can you, or other supporters of H.R. 25 guarantee to those on fixed incomes there will be no massive price increases, or is the tale one of pure speculation?

Tell us Mr. Boortz, can you guarantee there will be no excise taxes imposed upon those “evil” corporations in America if H.R. 25 is adopted, which are calculated from those outrageous profits they earn, and would, if imposed, negate the corporate savings from embedded taxes repealed by H.R. 25? Wouldn’t such excise taxes, if imposed upon Corporations, cause them to pass them on in the form of higher prices?

Tell us Mr. Boortz, if H.R. 25 were adopted, would it really be so outlandish for one to speculate that Congress would not find it difficult to justify to the general public a small excise tax upon those evil corporations and wealthy scoundrels who make millions of dollars a year in profits by bleeding the poor working people, such as was alleged about Leona Helmsley who they sent to jail for an alleged tax fraud, but actually contributed more in taxes than any twenty average working people in New York. And, if such excise taxes are impose, if H.R. 25 were to be enacted, would these corporations not be justified in passing such taxes onto their customers?

Unfortunately there is no language in H.R. 25 to repeal all taxes which may be calculated from profits, gains, salaries, and other “income”, which encourages and allows a future Congress, who may want to appear to be in compliance with H.R. 25, to lay various excise taxes upon specific businesses, certain occupations, corporations, etc., and calculate such taxes from profits, gains, salaries and other “income” which in effect, would slowely recreate our existing tax structure, but with an additional 23 percent tax upon the peoples’ property, real and personal?

As one of my favorite T.V. actors would often say, and dishonorable members of Congress who support H.R. 25 must be thinking ___ “how sweet it is”!

Regards,

JWK

"In matters of Power, let no more be heard of confidence in men, but bind him down from mischief by the chains of the Constitution"--- Jefferson

A drug sale to a doper is a sale is it not? Or, will the Fair tax law say that illegal drug sales are tax free?

Who is the competition for drug dealers?
Beer and Liquor stores?
Drug dealers must then LOVE the so-called "FairTax"!

Why? Just think, the price of getting drunk goes up 30% or so (slim chance of there being a "22% embedded tax" here on something with all these state and local excise taxes) and marijuana, crack cocaine and heroin are still TAX-FREE!

Opportunity to gain MAJOR market share here!

It gets EVEN BETTER for the drug dealers! What about the so-called "prebate"?

Let's examine the case of Willie Wino, current address under the interstate bridge. Willie is a classic member of the underground economy, and barely ekes out a living, sleeping in church missions, eating in soup kitchens, etc.

But hoooo-haaa! Along comes the so-called "FairTax" prebate!

Now Willie has $183 cash each month, courtesy of his Uncle Sugar!

That's more money than he's seen in years and he gets it EVERY month! Can't afford that newly expensive malt liquor, nossir, so he hooks up with his friendly neighborhood drug dealer for some cheap highs.

$183, judiciously rationed, will keep Willie high for a month! Every skell in Atlanta is going to LOVE the so-called “FairTax”.

The number of pot heads will skyrocket under the so-called "FairTax"!

If booze goes up another 35%, and it will because all the regular corn will be used for gas, then the old moonshiners and bathtub gin makers will be back into business! They will even grow special corn underground with lights like they do Mary Jane now. Lets do the "Fair Tax" thing, I think all this would be interesting----not boring at all. I already have my seeds stored.

Yahoo - tell all the drug users and dealers about the FairTax. We can use every supporter we can find not matter what they use or sell.

LindaLiberty, You want to get together and pass out pro-FairTax fliers under the bridges around town? I'll pay to print them up!
I don't know how basmati thinks they will receive their prebate checks, but I'm sure we'll be getting a detailed explanation real soon.

You truly must be high to think that people would start doing crack and heroin if the cost of a bottle of Cabernet goes up by a dollar. I've heard a lot of arguments against the FairTax, but some of the people on this site really take the cake! What is in the water down there!?
Keep those posts coming! This is funnier than Comedy Central!

Under our current tax structure, the "doper" is buying illegal drugs. He is buying these drugs at an astronomical markup, because they are illegal. Whether they should be illegal or not is another argument for another day. Nobody is going to pay taxes on illegal transactions under the FairTax, just as nobody pays taxes on these transactions under the current "evil" income tax system. That was just a flat out STUPID question.
Where the taxes will be collected is when the drug DEALER buys his/her new Mercedes and all the "bling" that goes with that lifestyle. That is when we will start collecting taxes on drug dealers.
Now, let me find another dumb question to waste my time replying to.

But currently a drug dealer doesn't declare his income (since it is illegal there isn't a lot of incentive to do so) and when he spends his ill gotten gains he doesn't have to pay taxes either. It least with the FairTax he will be paying into the system when he spends his money. The glass is only half full but that's better than being empty. Of course if drugs and prostitution were legalized they could collect and report sales taxes on their sales/services and then the the sales tax rate could go down for everyone because more services and goods will be taxed.

Currently corps factor in income tax as a base price component. Then calculate their profit margin charges from there.

But with sales tax, none of the taxes are a base price component.

Sales tax is charged at delivery and is never a charge to the corp.

There is no taking from the corp, since sales tax goes into its own account.

There is a difference.

As with what I sell in my business. Sales tax does not enter the forumula for product price. But income tax most assuredly does.

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

When are you people going to understand that retail product prices are not set by anything except competition. Prices will still be as high as is possible to sell them whether or not the IRS is eliminated. Do you really think gasoline would sell for 35% less if the IRS were deleted? And, all of these corporations now losing money (most of them) would want to become very profitable before cutting any prices, and you know it!!! Also 7 out of 10 retail business adventures would not want to fail, as they now do. Do away with IRS but tax our natural resources leaving here and other countrys' stuff coming in. We have everything we must have already here, except Chromium or nickel, I think. I'll grant you we would have to have a huge military to protect our stuff.

That's the first time I've seen anybody (even the folks at FairTax.org) describe medical treatment/coverage/sales as a "business to business" transaction. Do you know this for sure or are you just guessing (or hoping)? I would be very interested to read any reports or documents put out by the proponents of the Fair Tax which describe medical payments in this manner. Can you tell me where you got your information?

Mr Rice,
Looking at your previous article you linked to I see that you are bothered by the rate that is quoted by the FairTax crowd. As a FairTax supporter that bothers me also and wish people would just say 30% but with the additional disclaimer that a 30% exclusive sales tax is the equivalent of a 23% inclusive income tax. Explantion goes take a $100 bill. If your tax rate is 23% you will pay $23 in tax leaving you $77 dollars to spend. Take that same $100 and buy something for $77 and pay a 30% sales tax (ie $23)and your purchase and tax equals $100. I think the reason they use the inclusive rate is because it is more relevant to comparing the income tax rate and the sales tax rate but it makes it seem to some that they are being ingenious.

On that topic, that you linked, you failed to include all points and issues in your statements.

With that said, let me go a different way here, since I see tweaking needed done to HR 25 while, most assuredly, seeing the present tax system being eliminated. It is beyond fixing.

Does anyone, without including hypotheticals or position statemens, have any full listings of all costs that go into a drug's production and sales?

I would like for all to be able to see what would be removed, what would be preserved and what would be added.

From the steel example, that you never responded to, the issues of cost is far more complex than many know.

Really, I would love to see the numbers. Then everyone can look for themselves.

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

On that topic, that you linked, you failed to include all points and issues in your statements.

I failed nothing of the sort. Once again, you labor under the misconception that I am somehow obligated to you to present all sides of an argument, and to make your argument for you. My concept of blogging is that I present my position on a given issue, and present links to data backing up my position as I deem appropriate (Blogging, per se, is not scholarly research and I am under no obligation to justify every statement I make).

In other words, I'm "fair 'n balanced", albeit in a Fox News sorta way.

With that said, let me go a different way here, since I see tweaking needed done to HR 25 while, most assuredly, seeing the present tax system being eliminated. It is beyond fixing.

You are certainly welcome to your opinion that the tax code is “beyond fixing”. Personally, I think it is “fixable”: Remember the last revision in 1986 and how it squeezed excess real estate speculation out of the tax code?

Does anyone, without including hypotheticals or position statemens, have any full listings of all costs that go into a drug's production and sales?
I would like for all to be able to see what would be removed, what would be preserved and what would be added.

There are NO definitive “full listings” regarding all the costs that go into a given drug’s production and sales. Congress subpoenaed such information in 1991, the drug industry fought tooth and nail against disclosure for 8 long years and Congress eventually gave up.
There is, however, the DeMarsi/Tufts University report on drug costs. It’s very long and detailed, but the salient points are as follows:

The cost of field trials and certification of a drug by the FDA is roughly 30% of a drugs price
The cost of goods sold of a drug, exclusive of drug trials , is approximately 25% of a drugs price
The remainder of a drugs price is capitalized research and development. (Remember, only 1 of 5000 drugs proposed ever make it to market)

Now then, lets talk about R&D. There is a massive section in the IRS code called 174, Research and Development tax credits. Long story short: Companies that do R&D get a corporate tax CREDIT (above and beyond business expenses) equal to 34% of their profits. Essentially the government subsidizes 1/3 of big Pharm research.

As you’ve stated over and over, corporate income taxes go away under the so-called “FairTax”. Therefore, the cost of R&D jumps 34% overnight, causing one of two things, perhaps both: less spending on R&D, or higher drug prices.
I just don’t see much, if ANY, “embedded cost” savings in drugs. If you’d like to present a case for lower cost of drug trials due to embedded cost, feel free to do so, but I remain skeptical.

From the steel example, that you never responded to, the issues of cost is far more complex than many know.

I’ve noticed that you attempt to steer discussions into areas that fit your preconceived notions when you are cornered, and I choose to ignore your bait. My decision not to answer your spurious questions that are not germane to the core argument does not detract from the validity of my position. I'm keeping to the core of the issue, not the peripherals.

I know that it’s popular for proponents of the so-called “FairTax” to repeat the mantra of “average 22% embedded cost” as an article of faith. I simply have not been able to reconcile that claim with products and services where the cost of entry is high and competition is low/non-existant (i.e. medical), where commodity items are involved (fresh vegetables and gasoline, for example) or on products with high excise taxes (gasoline, beer, liquor).

You are not a debater. You are a preacher.

And preachers either get disregarded or banned. Depending on the forum and Admin.

I know your kind. When it does not go your way, you walk away.

As you say, I am entitled to my perseptions. And my perseption is one who will not answer is not worth talking to.

All you want to do is lecture and preach, to me and others. Never respond to actually refutations of what you say.

Have fun talking to yourself.

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

I don't know how medical costs will be taxed under fair tax, if they are successful in conning everyone, but one thing you can be assred about is that the proponents of this fair tax don't give a "rat" about old people, poor people (except a prebate---making them more dependent) or anyone else except high earners.

I think that the so-called "Fair Tax" will eventually join Prohibition, Japanese-American Internment in WW2, and former PTC Mayor Bob Lenox's second term as ideas that seemed like a good idea at the time, but later people sobered up and wondered "what the heck were we THINKING?"

Yeah it started out small, but now punishes achievement and rewards sloth

By 1913, 36 States had ratified the 16th Amendment to the Constitution. In October, Congress passed a new income tax law with rates beginning at 1 percent and rising to 7 percent for taxpayers with income in excess of $500,000. Less than 1 percent of the population paid income tax at the time. Form 1040 was introduced as the standard tax reporting form and, though changed in many ways over the years, remains in use today.

I believe the pandering politicians were using class warfare back in 1913 to get the Income Tax passed. It was only supposed to be on the very very rich and only 1%. So the sheeple went along with it never thinking what a monstrosity it would become. Look at it now. Middle class people who could be using their money to send their kids to college or buy a home etc are sending at the least 15.3% of their income to the governmnet (for theirs and the employer portion of social security and medicare - yes, even tho your employer pays it still comes out of your pocket in reduced wages benefits etc) plus if they have any tax liability add on 10%, 15%, 25% etc. I believe the people know how to spend their money better than the governmnet does. The 16th Amendment was a travesty. It made free people no longer free. When the government has the power to tax all of your income any amount if chooses you are no longer free. My candidates for next worse ideas are Social Security and the Federal Reserve.

Like the income tax, H.R. 25 is intentionally designed to subjugate our founding father’s [our Constitution’s] fair share formula for a general tax among the states to fill the national treasury.

The historical truth of the intentions of the founding fathers may be found by reading Madison’s Notes on the Convention and the state ratification documents of our Constitution as to what the founders intended with regard to the various member states contributing into the common treasury in a general among the states.

EXAMPLE:

Ratification of the Constitution by the State of New Hampshire:

Fourthly That Congress do not lay direct Taxes but when the money arising from Impost, Excise and their other resources are insufficient for the Publick Exigencies; nor then, untill Congress shall have first made a Requisition upon the States, to Assess, Levy, & pay their respective proportions, of such requisitions agreeably to the Census fixed in the said Constitution in such way & manner as the Legislature of the State shall think best and in such Case if any State shall neglect, then Congress may Assess & Levy such States proportion together with the Interest thereon at the rate of six per Cent per Annum from the Time of payment prescribed in such requisition-

Our Constitution provides a fair share formula by which each state is to contribute in a general tax among the states when imposts, duties and excise taxes are found insufficient to meet Congress’ expenditures___ the formula boiling down to representation with proportion obligation…a political philosophy dreaded by socialists, the friends of big government and those who promote H.R. 25.

The tax described in H.R. 25 proposes that each state shall contribute into the federal treasury based upon a 23 percent tax on property, real and personal within its borders …a kind of tax similar to income taxation in that it seeks to tax wealth, without regard to representation as our Constitution commands in Art. 1, Sec. 2, Cl. 3!

The philosophy of the tax described in H.R. 25 is . . . from each state according to its wealth, which was practiced under the Articles of Confederation and rejected during the Convention of 1787, which provided protection to the states required such a tax to be apportioned based upon representation.

In POLLOCK v. FARMERS' LOAN & TRUST CO., 158 U.S. 601 (1895) the Court eloquently points out:

The founders anticipated that the expenditures of the states, their counties, cities, and towns, would chiefly be met by direct taxation on accumulated property, while they expected that those of the federal government would be for the most part met by indirect taxes. And in order that the power of direct taxation by the general government should not be exercised except on necessity, and, when the necessity arose, should be so exercised as to leave the states at liberty to discharge their respective obligations, and should not be so exercised unfairly and discriminatingly, as to particular states or otherwise, by a mere majority vote, possibly of those whose constituents were intentionally not subjected to any part of the burden, the qualified grant was made. Those who made it knew that the power to tax involved the power to destroy, and that, in the language of Chief Justice Marshall, 'the only security against the abuse of this power is found in the structure of the government itself. In imposing a tax, the legislature acts upon its constituents. This is, in general, a sufficient security against erroneous and oppressive taxation.' 4 Wheat. 428. And they retained this security by providing that direct taxation and representation in [158 U.S. 601, 622] the lower house of congress should be adjusted on the same measure.

Moreover, whatever the reasons for the constitutional provisions, there they are, and they appear to us to speak in plain language..

And, as to the tax proposed to be laid by the federal government under H.R. 25, it turns out to be a tax upon property, the very kind of tax intended to abide by our Constitution’s fair share formula!

SEC. 101. IMPOSITION OF SALES TAX.

`(a) IN GENERAL- There is hereby imposed a tax on the use or consumption in the United States of taxable propertyor services.

b.

Rate-
`(1) FOR 2005- In the calendar year 2005, the rate of tax is 23 percent of the gross payments for the taxable property or service.

Unfortunately, there are people today, like those who promoted the 16th Amendment, who work to subjugate the intentions and beliefs under which our Constitution was agreed to, and prefer to create a new tax in America, a 23 percent tax upon property, real and personal to feed the pig in Washington, while allowing the pig to also lay and collect taxes calculated from profits, gains, salaries and other income!

Want real reform? Then demand our employees add the following words to our Constitution:

The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay ``any`` tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money

Regards,

JWK
"To lay with one hand the power of the government on the property of the citizen and with the other to bestow upon favored individuals, to aid private enterprises and build up private fortunes is none the less a robbery because it is done under forms of law and called taxation."____ Savings and Loan Assc. v. Topeka,(1875).

Count of politicians to ruin any good idea.

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

Well, it wasn't a good idea to start with which is why the founding fathers specifically prohibited that kind of taxation but the politicians took a bad idea and made it even worse than anyone could imagine.