Comments on: As Huckabee rises, the FairTax follows http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/ Politics. Alabama Style. Wed, 17 Mar 2010 21:57:10 -0400 http://wordpress.org/?v=2.8.6 hourly 1 By: Chuck Bailey http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/comment-page-1/#comment-16578 Chuck Bailey Fri, 21 Dec 2007 01:58:10 +0000 http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/#comment-16578 Let’s not stray too far from the FairTax Bill regarding the 23% rate. A requirement of the bill is that 23 cents tax out of every dollar spent on new goods and services be collected at the point of sale. The income tax requires that every dollar earned has a percentage tax taken from it to satisfy the law. Both of those tax collection methods are considered inclusive. The tax is included in the total price or total wage. Apples to apples, so to speak. So, the 23 cents is contained in each dollar spent, resulting in the fact that 77 cents of every dollar is the cost of the product itself. Further, 23 cents is 23 % of each dollar spent. If you insist on calculating the tax exclusively, and thereby changing the requirement that the FairTax be inclusive, then you must use the cost of the product, 77 cents times 29.87 % to find the tax, which of course is 23 cents. Either way, the tax is 23 cents out of every dollar. And Brian, another way to explain gainers and losers is that everyone gets a break by not having to pay the embedded taxes cascaded into the price of everything we buy today. The folks with post-tax savings, etc., are the only ones that will lose anything, but they will be better off under the FairTax by not having to pay the embedded taxes. Those of us who saved pre-tax (another little tweak of the income tax law along the way) will receive a “windfall” break from taxes through HR 25 / S1025, depending on how much we’ve saved, of course! Let’s not stray too far from the FairTax Bill regarding the 23% rate. A requirement of the bill is that 23 cents tax out of every dollar spent on new goods and services be collected at the point of sale. The income tax requires that every dollar earned has a percentage tax taken from it to satisfy the law. Both of those tax collection methods are considered inclusive. The tax is included in the total price or total wage. Apples to apples, so to speak. So, the 23 cents is contained in each dollar spent, resulting in the fact that 77 cents of every dollar is the cost of the product itself. Further, 23 cents is 23 % of each dollar spent. If you insist on calculating the tax exclusively, and thereby changing the requirement that the FairTax be inclusive, then you must use the cost of the product, 77 cents times 29.87 % to find the tax, which of course is 23 cents. Either way, the tax is 23 cents out of every dollar.

And Brian, another way to explain gainers and losers is that everyone gets a break by not having to pay the embedded taxes cascaded into the price of everything we buy today. The folks with post-tax savings, etc., are the only ones that will lose anything, but they will be better off under the FairTax by not having to pay the embedded taxes. Those of us who saved pre-tax (another little tweak of the income tax law along the way) will receive a “windfall” break from taxes through HR 25 / S1025, depending on how much we’ve saved, of course!

]]> By: Brian http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/comment-page-1/#comment-16531 Brian Thu, 20 Dec 2007 01:20:14 +0000 http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/#comment-16531 As you know, Don, I am a Paul supporter. I like to tell people that he supports the Fair-est Tax - no income tax! I would abandon my plea for the FairTax immediately if Paul were to win and ditch the income tax, but I like to keep a couple of irons in the fire. As you know, Don, I am a Paul supporter. I like to tell people that he supports the Fair-est Tax – no income tax! I would abandon my plea for the FairTax immediately if Paul were to win and ditch the income tax, but I like to keep a couple of irons in the fire.

]]> By: Don http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/comment-page-1/#comment-16515 Don Wed, 19 Dec 2007 16:52:50 +0000 http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/#comment-16515 Freely admitting that I am not well-versed on how the Fair Tax would work and affect me and others, from what I do know about it I would guess that it would be a momentous improvement over our present income tax system. That said, I believe that an even better proposal is that put forth by presidential candidate, Texas Congressman Dr. Ron Paul, to just downsize our bloated government with all of its “Nanny State” appurtenances and do away with the IRS and the income tax altogether. Freely admitting that I am not well-versed on how the Fair Tax would work and affect me and others, from what I do know about it I would guess that it would be a momentous improvement over our present income tax system.

That said, I believe that an even better proposal is that put forth by presidential candidate, Texas Congressman Dr. Ron Paul, to just downsize our bloated government with all of its “Nanny State” appurtenances and do away with the IRS and the income tax altogether.

]]> By: Brian http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/comment-page-1/#comment-16474 Brian Tue, 18 Dec 2007 22:40:21 +0000 http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/#comment-16474 Agreed. They (they being the ones who started Americans for Fair Taxation) didn't ask me, though! Agreed. They (they being the ones who started Americans for Fair Taxation) didn’t ask me, though!

]]> By: Carson http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/comment-page-1/#comment-16471 Carson Tue, 18 Dec 2007 21:41:39 +0000 http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/#comment-16471 On the whole I'm a fan of the Fair Tax. At least I won't have to pay income tax on the earnings from my savings. But the advocates need to stop using the 77/23/100 example and calling it 23 percent; that's just dead wrong. On the whole I’m a fan of the Fair Tax. At least I won’t have to pay income tax on the earnings from my savings. But the advocates need to stop using the 77/23/100 example and calling it 23 percent; that’s just dead wrong.

]]> By: Brian http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/comment-page-1/#comment-16440 Brian Tue, 18 Dec 2007 03:19:50 +0000 http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/#comment-16440 Here's my problem with Taranto on this topic: He was in the audience a couple of years ago when Boortz debated a Yale tax professor at a NY university. He walked with Boortz to a restaurant and dined with him - talking about the FairTax all the while. Taranto knows the particulars of the FairTax. He is picking nits on how the rate is expressed (I actually agree with Taranto on the point) in order to denigrate Huckabee by disparaging the FairTax. The FairTax people choose to express the tax rate in the same manner as income taxes for comparison purposes: on an inclusive basis. Sales taxes are generally expressed on an exclusive basis. It is little more than semantics, but I believe that it looks deceptive even though knowledgeable advocates explain the rate in a forthright manner (they didn't ask me, though). Also, Taranto intentionally mis-characterized (remember, he knows better) the fact that the FairTax will ensnare participants in the underground economy. He put words into Huckabee's mouth by asking whether he really thought pimps and drug dealers would collect and remit taxes to the government for their illicit services. I don't know a single FairTax supporter who has ever suggested such a thing, but Taranto trumps it up as though it is a common belief. The fact is that those individuals will continue to purchase items and as such will finally start paying directly into federal coffers. Your last point is the most valid argument against the FairTax, but is only partially true. The FairTax will replace both personal income taxes, but also corporate taxes and payroll taxes. With the income tax you're still going to effectively pay those corporate and payroll taxes with your saved money when you purchase items. I personally believe that moeny in the bank on day one will have slightly diminished purchasing power due to the personal income taxes though. Like I said, this is the most valid complaint. I have some modest savings (I'm still a young fellow), but when I lay out the pros and cons of each system the extensive pros of the FairTax outweigh the equally extensive cons of the income tax. Here’s my problem with Taranto on this topic:

He was in the audience a couple of years ago when Boortz debated a Yale tax professor at a NY university. He walked with Boortz to a restaurant and dined with him – talking about the FairTax all the while. Taranto knows the particulars of the FairTax. He is picking nits on how the rate is expressed (I actually agree with Taranto on the point) in order to denigrate Huckabee by disparaging the FairTax. The FairTax people choose to express the tax rate in the same manner as income taxes for comparison purposes: on an inclusive basis. Sales taxes are generally expressed on an exclusive basis. It is little more than semantics, but I believe that it looks deceptive even though knowledgeable advocates explain the rate in a forthright manner (they didn’t ask me, though).

Also, Taranto intentionally mis-characterized (remember, he knows better) the fact that the FairTax will ensnare participants in the underground economy. He put words into Huckabee’s mouth by asking whether he really thought pimps and drug dealers would collect and remit taxes to the government for their illicit services. I don’t know a single FairTax supporter who has ever suggested such a thing, but Taranto trumps it up as though it is a common belief. The fact is that those individuals will continue to purchase items and as such will finally start paying directly into federal coffers.

Your last point is the most valid argument against the FairTax, but is only partially true. The FairTax will replace both personal income taxes, but also corporate taxes and payroll taxes. With the income tax you’re still going to effectively pay those corporate and payroll taxes with your saved money when you purchase items. I personally believe that moeny in the bank on day one will have slightly diminished purchasing power due to the personal income taxes though.

Like I said, this is the most valid complaint. I have some modest savings (I’m still a young fellow), but when I lay out the pros and cons of each system the extensive pros of the FairTax outweigh the equally extensive cons of the income tax.

]]> By: Carson http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/comment-page-1/#comment-16439 Carson Tue, 18 Dec 2007 02:54:58 +0000 http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/#comment-16439 I followed Taranto's critique of Boortz's explanation of how the Fair Tax works and it seems to me that he makes a valid point. If Boortz did indeed state that a one dollar price consists of 77 cents for the actual product and 23 cents for the fair tax, that is a 29.87 percent tax rate, not a 23 percent rate. I'm by no means an expert on the Fair Tax but it seems to me that, if the Fair Tax rate is 23 percent, it would be better to say that a $1.23 price consists of $1.00 for the product and 23 cents for the tax. Or, a $1.00 price consists of 81.3 cents for the product and 18.7 cents for the tax. A problem I have with the Fair Tax is this: I accumulated a significant amount of savings (for me) during my working years for which I have already payed income taxes. Now if we switch to the Fair Tax it looks like I will have to pay taxes on it again if I spend any of that money. I followed Taranto’s critique of Boortz’s explanation of how the Fair Tax works and it seems to me that he makes a valid point. If Boortz did indeed state that a one dollar price consists of 77 cents for the actual product and 23 cents for the fair tax, that is a 29.87 percent tax rate, not a 23 percent rate.

I’m by no means an expert on the Fair Tax but it seems to me that, if the Fair Tax rate is 23 percent, it would be better to say that a $1.23 price consists of $1.00 for the product and 23 cents for the tax. Or, a $1.00 price consists of 81.3 cents for the product and 18.7 cents for the tax.

A problem I have with the Fair Tax is this: I accumulated a significant amount of savings (for me) during my working years for which I have already payed income taxes. Now if we switch to the Fair Tax it looks like I will have to pay taxes on it again if I spend any of that money.

]]> By: matt http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/comment-page-1/#comment-16432 matt Tue, 18 Dec 2007 01:29:02 +0000 http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/#comment-16432 The Senator noticed my Fairtax sticker Saturday and commented "There is another fair taxer!". He didn't mention the button I had on right beside it though. haha The Senator noticed my Fairtax sticker Saturday and commented “There is another fair taxer!”.

He didn’t mention the button I had on right beside it though. haha

]]> By: The World Around You » Blog Archive » The “Fair Tax” Delusion http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/comment-page-1/#comment-16394 The World Around You » Blog Archive » The “Fair Tax” Delusion Mon, 17 Dec 2007 14:31:50 +0000 http://www.flashpointblog.com/2007/12/16/as-huckabee-rises-the-fairtax-follows/#comment-16394 [...] Flashpoint » Blog Archive » As Huckabee rises, the FairTax follows Posted Alabama Politics, National Politics on Monday, December 17th, 2007. [...] [...] Flashpoint » Blog Archive » As Huckabee rises, the FairTax follows Posted Alabama Politics, National Politics on Monday, December 17th, 2007. [...]

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