More On The Fair Tax (pt 1)
Some of you might remember my post awhile back talking about some of the main FairTax points and the normal arguments. During the discussion a poster named Hank Van Geisen attempted to spam questions designed to detract from the argument.
Those questions were above my head so I contacted some of my local Fair Tax promoters including Gary Nolan, Dr. Colin Malaker and Ken Hoagland in Houston. I found out a few things in addition to arguments for those points that I thought I should share with you.
Hank Van Geisen is famous as a Fair Tax denier and though I gave him benefit of the doubt, his talking points have been blown away.
(1) HR25 proposes that the federal government tax State and Local purchases of new goods, and tax all State and Local employee payrolls as representative of services provided. This would be inappropriate, if not unconstitutional, under our republic form of government. And, if allowed by the Courts, 12% of the revenue raised by the Fairtax would be hidden in higher State/Local taxes. That is hardly the transparent tax that Fairtaxers claim.
HR 25 proposes to levy a 23% consumption tax on all NEW purchases of goods and services. ANY AND ALL payroll taxes would be eliminated. This is someone who obviously has done no research and has not educated themselves on the facts. Unless he can point to the specific part of the bill that proposes this, he is just blowing smoke based on assumptions.
(2) By including payroll contributions (FICA, the 3rd rail of politics) on the list of taxes to be replaced, retirees would be forced to resume paying for their hard earned pension and health care benefits with their sales tax dollars. Hardly fair!
Retirees contribute right now whenever they pay for some new product or service because the tax is included in those items they are buying. They have been dupped by the federal Government into thinking they are getting the services for “free”. Nothing is free. In addition the 23% tax they would pay on NEW items is still far less than they would likely have paid in taxes had they saved rather than invested in tax deferred programs.
The whole point of a tax-deferred retirement investment is that you pay taxes on your income bracket as a retiree which is almost always much lower than while you were earning. If you retire and draw a small enough income that you would get all of your taxes back at the end of the year then you would qualify for the Prebate program anyway!
(3) Everyone’s after tax savings accumulated under current law would be double taxed when spent under the Fairtax. Is that fair?
Under current law, you are taxed AS SOON AS YOU MAKE YOUR INCOME. It does not matter how you make it, you pay Uncle Sam first, then whatever is left over, you get to keep. Ah, but wait….you want to invest that money and make it grow??/ BAM, when you take profit, you get taxed again.
Under FairTax, you pay the tax when you purchase something….PERIOD. You keep all of your hard earned income and do with it as you please. Invest it in currencies and make a million from 100,000 … now you keep all of it!!!! You ONLY get taxes when you purchase a new product or service. If you put money away tax free, well, you get it back tax free. If you put it away ad paid the tax, you STILL are paying the tax, but it is embedded in the cost of the object.
Basically, FairTax ELIMINATES the double, triple and quadruple tax as it exists today.
There are more points to cover, but no need to overwelm people in a single post. I look forward to discussion and debate. And am keeping an eye out for Hank to come back. More to come.
