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H R 25, the "fair tax" proposal

Discussion in 'Business & Economics' started by PLC1, Jul 17, 2017.

  1. PLC1

    PLC1 Moderator Staff Member

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    Being considered currently in Congress:

    Opinions?

    source
     
  2. dogtowner

    dogtowner Moderator Staff Member

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    This appears to be the same fair tax put forth each year. In general I like it in concept as it pulls the curtain off all the taxes we pay not realizing it and replaces them all with a single, very visible one.
    It does nothing to address government spending which is also needed but rather to add transparancy.
    And one other benefit, the underworld starts contributing to revenues.
    Beats what we have and makes it very difficult to raise taxes being so visible.
     
  3. Stephen Eldridge

    Stephen Eldridge New Member

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    The FAIRtax℠- i.e., H.R. 25 (FT) is a Progressive Scam – we need a 10% “Tithe” Tax!


    I am a retired lifetime tax consulting professional (JD, LLM in Taxation, CPA, co-author of a 3 volume tax treatise, lecturer), with no financial stake in ANY tax system. This only a brief summary - for supporting details, call Stephen C. Eldridge tel. 423-532-7337. Website: http://sceldridge.wixsite.com/sceldridge& YouTube video


    FT admits readily (advertises) that it is MOREProgressive (more welfare) – see http://sceldridge.wixsite.com/sceldridge%23!fairtaxs-progressive-socialist-heart/c1hzm


    Of prime importance, the Prebate is not a real refund of FT paid, as it appears to be. It is a $600B NEW ENTITLEMENT, with all Americans receiving a big monthly federal check – a very bad idea for those of us who are not Socialists. It is financially and politically unwise to create yet another huge entitlement that will only increase in the future.


    FT (Prebate) has the poor pay for no part of the fed budget, pay nothing for their personal SS/Medicare benefits, AND give them a big tax welfare check. FT (Prebate) extends tax welfare to the non-working poor – and also takes the next Progressive Cloward-Piven step towards giving SS/Medicare to all regardless of work, by removing the tax cost of reporting SS Wages, which “invites” fraud in reporting them (as also noted by other authors).


    The Prebate is calculated to merely repay the poor for any FT they pay (as if we all agree with that), but it would actually pay them far MORE by “assuming” the poor spend more than the underlying HHS Poverty Guidelines and thatthey will pay FT on all of their purchases (but they WON’T) – see http://sceldridge.wixsite.com/sceldridge#!ft-increases-tax-welfare/copu



    Some FT’ers still market the old FT lie that we get a big raise (no Income & P/R taxes) AND FT prices would be the same as today’s - that just cannot be true. FT is merely supposed to change the method of paying the same total tax dollars we pay today, so if you get a big raise, prices must go up by the same total dollar amount (except for minor savings in compliance costs). Retail prices would rise by nearly the full 30%. Even the AFFT, and an economist it engaged, now admit that prices would rise substantially, and perhaps the full 30% - see http://sceldridge.wixsite.com/sceldridge/ft-will-increase-prices-by-nearly-30


    This results in a combined fed+S/L 30-45% initial in-your-face sales tax that would spark a

    taxpayer revolt that would destroy our retail-sales-sensitive economy - that’s 30% FT (not 23%) plus 0-15% S/L. Those rates might go up to (say) 60-75 at an illustrative 30% evasion/avoidance rate (incredibly, FT “assumes “zero evasion, zero intentional reduction in spending and zero migration from new to used goods – instead of increasing the FT rates, the $600-$900B shortfall will more likely result in a new Income tax, see below).


    The FT’s 30% rate is really closer to 50%. FT hides another appx. 20% in taxes (but FT’ers deceptively say “the FT is fully transparent - just look at your receipt and you will see all of the FT you will pay”). 1) 12+% is hidden by having fed + S/L govts pay FT (which is likely unconstitutional) – ultimately, they must get that money from us, 2) The fed budget will rise for a) SS & all fed pension COLA’s caused by FT’s 30% price increase, and for b) fraudulent new SS benefits “invited” by FT’s removal of the tax cost for reporting SS Wages (as noted by other authors ), 3) FT economists have admitted that the FT is 5% short.


    Incidentally, USED property is advertised as exempt from FT, but that may be a cruel hoax, because of the practical difficulty of establishing that the buyer has met the requirements that FT was paid AND that none of 3 listed credits against the FT wereclaimed.


    It is a myth that “IRS is Abolished.” FT’s new IRS (i.e., STAA) may be more invasive than today’s IRS - the buyer is liable to pay FT and receive/show a receipt and so STAA may audit consumers – see Sec 101(d). Also we may well have to file an “Annual FT Summary”. See http://sceldridge.wixsite.com/sceldridge#!the-myth-that-the-irs-is-abolished-/c1tu0


    As also noted by Cato Institute (see https://danieljmitchell.wordpress.com/2012/08/11/a-primer-on-the-flat-tax-and-fundamental-tax-reform/), FT leaves us more vulnerable to winding up with both a NEW Income Tax and FT (instead of adding 20-30% on top of the FT’s already high explicit 30% rate). Congress would surely repeal FT’s laughable Sunset Clause and (with the 16th Amendment surely still firmly in place) would use the excuse of the large revenue shortfall from evasion/avoidance to (in lieu of raising the already high FT rate) enact a new Income Tax which I believe is Congress’ true ultimate objective – i.e., to be able to grab even more of our money to redistribute to those who will vote for them and contribute to their campaigns.


    To summarize the FT rate, it appears that FT required a 70-80% rate. AFFT simply “assumed” away 20-30% evasion/avoidance, hid 12% by taxing fed +S/L govts, reduced the rate by 5%, and ignored the FT-caused fed budget increases - to get the rate down to 30%. Then a clever AFFT lawyer deceptively twisted the statute to make 30% superficially appear to be “only” 23%.


    Seniors would start to pay for SS/Medicare again and some would pay a 2nd-3rd tax on their earnings. Many middle class seniors would pay more FT than they would have paid in Income Tax and many would lose purchasing power because of 1) the nearly 30% price increase, and 2) the higher S/L & federal taxes required because they must pay FT and can only get those funds from us, and 3) higher federal taxes due to nearly 30% higher SS & federal pension COLA’s and fraudulent SS benefits.


    FT promises grand economic benefits which are all entirely unpredictable - mere Hype & Change. FT employs marketing hype and hyperbole, making countless undeliverable claims.


    We need a very Flat Income Tax; No: Deductions/Exemptions/Credits, a 10% rate, business income taxed only once and on a very simple basis - IRS is neutered, 1 page tax filing, everyone pays, more evolutionary. See, A Very Flat Income Tax, http://sceldridge.wixsite.com/sceldridge#!page-2/cjg9 Let your representatives in Congress know that this is what you want
     
  4. dogtowner

    dogtowner Moderator Staff Member

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    Re Walters post...

    Fair tax never intended to do more than replace the current taxing methodology from a convoluted and largely invisible one to a very transparent one.

    It doesn't address entitlements li k e SS and Medicare, just revenue that hits the general fund.

    By making it transparent you tie the hands of Congress to fund vote buying with hidden or targeted taxes against small populations that can't lobby against it. This is why it will never pass despite being submitted every year.

    The author clearly has an agenda (flat tax) which is fine but he goes pretty far out of his way to try and make it appear to be something it isnt.

    Note in my first response it said it looked like the Fair Tax that's been submitted for a few decades now. Their are other flavors.

    Oh and his note about constitutionality ignores that the first step required by the original FT is a constitutional amendment.
     
  5. Wag more

    Wag more Member

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    If Ford didn't have to pay worker's SS and Corporate income tax (35%) do you think they could sell a Ford a lot cheaper? Do you think they might make more parts in the US ?
    Do you think that selling Fords for 20% less might give them a big sales edge over Kia and Toyota?Do you think we might export more cars and improve our trade balance? Imagine a new Fusion selling in Japan for 20% less than the same Camry.
    I vote for fair tax.
     
  6. Stephen Eldridge

    Stephen Eldridge New Member

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    Wag More,

    What you fail to understand is that Ford truck will now cost 30% MORE than it does today AND the FAIRtax (FT) also hides another 20% in taxes AND the FT will result in a NEW Income Tax to replace all the tax revenue that will be lost to evasion and (legal) avoidance.

    Some FT’ers still market the old FT lie that we get a big raise (no Income & P/R taxes) AND FT prices would be the same as today’s - that just cannot be true. FT is merely supposed to change the method of paying the same total tax dollars we pay today, so if you get a big raise, prices must go up by the same total dollar amount (except for minor savings in compliance costs). Retail prices would rise by nearly the full 30%. Even the AFFT, and an economist it engaged, now admit that prices would rise substantially, and perhaps the full 30% - see http://sceldridge.wixsite.com/sceldridge/ft-will-increase-prices-by-nearly-30

    This results in a combined fed+S/L 30-45% initial in-your-face sales tax that would spark a

    taxpayer revolt that would destroy our retail-sales-sensitive economy - that’s 30% FT (not 23%) plus 0-15% S/L. Those rates might go up to (say) 60-75 at an illustrative 30% evasion/avoidance rate (incredibly, FT “assumes “zero evasion, zero intentional reduction in spending and zero migration from new to used goods – instead of increasing the FT rates, the $600-$900B shortfall will more likely result in a new Income tax, see below).


    The FT’s 30% rate is really closer to 50%. FT hides another appx. 20% in taxes (but FT’ers deceptively say “the FT is fully transparent - just look at your receipt and you will see all of the FT you will pay”). 1) 12+% is hidden by having fed + S/L govts pay FT (which is likely unconstitutional) – ultimately, they must get that money from us, 2) The fed budget will rise for a) SS & all fed pension COLA’s caused by FT’s 30% price increase, and for b) fraudulent new SS benefits “invited” by FT’s removal of the tax cost for reporting SS Wages (as noted by other authors ), 3) FT economists have admitted that the FT is 5% short.

    It is a myth that “IRS is Abolished.” FT’s new IRS (i.e., STAA) may be more invasive than today’s IRS - the buyer is liable to pay FT and receive/show a receipt and so STAA may audit consumers – see Sec 101(d). Also we may well have to file an “Annual FT Summary”. See http://sceldridge.wixsite.com/sceldridge#!the-myth-that-the-irs-is-abolished-/c1tu0


    As also noted by Cato Institute (see https://danieljmitchell.wordpress.com/2012/08/11/a-primer-on-the-flat-tax-and-fundamental-tax-reform/), FT leaves us more vulnerable to winding up with both a NEW Income Tax and FT (instead of adding 20-30% on top of the FT’s already high explicit 30% rate). Congress would surely repeal FT’s laughable Sunset Clause and (with the 16th Amendment surely still firmly in place) would use the excuse of the large revenue shortfall from evasion/avoidance to (in lieu of raising the already high FT rate) enact a new Income Tax which I believe is Congress’ true ultimate objective – i.e., to be able to grab even more of our money to redistribute to those who will vote for them and contribute to their campaigns.


    To summarize the FT rate, it appears that FT required a 70-80% rate. AFFT simply “assumed” away 20-30% evasion/avoidance, hid 12% by taxing fed +S/L govts, reduced the rate by 5%, and ignored the FT-caused fed budget increases - to get the rate down to 30%. Then a clever AFFT lawyer deceptively twisted the statute to make 30% superficially appear to be “only” 23%.
     
  7. dogtowner

    dogtowner Moderator Staff Member

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    You're both wrong.
    Fusions will cost the same.
    State and local exist now and would exist then, that's a wash.
    Instead of a hundred hidden taxes (SS and Medicare are not in the picture) in the form if excise and the like you get one.
    The one big plus is organized crime joins the tax base.
     
  8. Stephen Eldridge

    Stephen Eldridge New Member

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    WRONG!

    The 30% FAIRtax would be added to the cost of the Ford, while virtually none of today's SS & Income Taxes would come out of pricer.
    In order to understand, you must read http://sceldridge.wixsite.com/sceldridge/ft-will-increase-prices-by-nearly-30

    Today's State & Local sales taxes would remain and would likely conform to the FAIRtax base which taxes virtually EVERYTHING you buy.

    Also, 2 UT economists noted that criminal, etc., would pay no more in FAIRtax than they pay in Income Taxes or other "embedded taxers" today.
     
  9. Wag more

    Wag more Member

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    I'm going to stick with my numbers and support FT.
     
  10. Stephen Eldridge

    Stephen Eldridge New Member

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    My analyses are the result of many hours of professional study of the topic - ignore them at your peril.

    However, I will defend to the death your right to maintain your ignorance and stick your head in the sand.
     
  11. dogtowner

    dogtowner Moderator Staff Member

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    SS is not impacted.
    Organized crime pays little or no income tax but they do buy things, lots of things. UT or no UT it n akes no sense.
    There is no reason to think state and local would change but if they did then they would simply change the source not the amount.
    Try reading about Fair tax from fair tax instead of proponents of flat tax.
    I have no issue with flat tax. It seeks a more fair scheme so if you want to argue the name then fine. But it is what it is and that's not what you're saying.
     
  12. Stephen Eldridge

    Stephen Eldridge New Member

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    What do you mean "SS is not impacted?" Under FAIRtax the specific SS 'tax" goes away and the funding is replaced by a portion of FAIRtax receipts.

    Criminals etc, pay SOME Income Tax today (to justify their lifestyle). Like they do today, they will buy for cash and avoid paying FAIRtax.
    Once again, you refuse to consider what the 2 UT economists noted, in favor of what might make sense to you. Do you have any financial or tax background at all.

    I don't understand you comment "There is no reason to think state and local would change but if they did then they would simply change the source not the amount." The S/L tax BASE would likely conform to the FAIRtax base (i.e., taxing virtually ALL purchases) and those rates would likely stay unchanged after first declining in response to the base broadening but then increasing as States folded some of their other taxes into their SALES tax.

    I have read more official and unofficial FAIRtax propaganda garbage than I care to. I studied it (professionally) and have drawn my own observations and conclusions.

    In your last sentence, I think you switched back to the FAIRtax (but the previous sentence referred to the Flat Tax). While you may claim that FAIRtax seeks a 'fairer" scheme, my professional study and analyses show the FAIRtax to be "fair" only to the most Progressive Marxists and not to a Constitutional Conservative like me.

    I prefer a VERY Flat Income Tax, where everyone pays a low (10%) rate on ALL of their income.
     
  13. dogtowner

    dogtowner Moderator Staff Member

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    Buying in cash does not exempt you paying sales tax. And you can rest assured IRS will know if rax goes under the table because the vendor has to demonstrate that they are not the end of the chain.
    My mistake on SS &Medicare. But they benefit by including those not paying income taxes as well.
     
  14. Stephen Eldridge

    Stephen Eldridge New Member

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    Of course buying for cash does not exempt the sale from FAIRtax - obviously, retailers will simply not record those sales. Because I was a tax professional, I am resting assured that the FAIRtax's IRS (i.e., the STAA) will certainly NOT know because sellers will be MOST creative in avoiding the FAIRtax because their customers will be seeking madly to evade the outrageous FAIRtax.

    I don't understand what you mean by "But they benefit by including those not paying income taxes as well."
     
  15. dogtowner

    dogtowner Moderator Staff Member

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    Being a tax professional perhaps you could share some of these creative means of concealing sales?
    The underworld underpass SS as well as income tax. Not with FAIRtax.
     
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