Fair Tax Rally

Here’s an email I received from Herman Cain:

U.S. Sen. Saxby Chambliss (R-GA), U.S. Rep. John Linder (R-GA), U.S. Rep. Tom Price (R-GA) and Ken Hoagland of Americans for FairTaxation will hold a news conference and rally tomorrow , Tuesday, April 3, at 10:30 am Eastern Time to anncounce that they have re-introduced the FairTax in both the U.S. Senate and U.S. House.

Join us Tuesday, April 3 at 10:30 am in Atlanta for this exciting FairTax rally!

FairTax News Conference and Rally

Tuesday, April 3, 10:30 am Eastern Time

Georgia Freight Depot

65 Martin Luther King, Jr. Drive
Atlanta, GA 30334

30 comments

  1. StevePerkins says:

    Short of buying Neil Boortz’s book and reading all 200-300 pages, is there a good overview out there for wrapping your arms around what exactly the FairTax is supposed to work?

    All I hear is that it’s supposed to be revenue-neutral, and yet everyone thinks they’re it would give them a tax cut. It seems like SOMEBODY’S gotta be wrong. I mean, I guess you would collect some taxes that you’re not currently collecting (such as from $10/hr day laborers when they buy chalupas)… but I’m not sure that would cover the shortfall of everybody’s magical tax cut. Also, all the hoopla about “disbanding the IRS!” makes me scratch my head. Are you kidding? There will always be some government bureaucracy in charge in tax revenue… someone would have to collect the FairTax.

    I don’t know that I’m necessarily for-or-against the FairTax… I just think it’s been sold very well thus far. Too much hype and too little substance, and what little substance I have heard does not compute.

  2. Will Hinton says:

    Ah…smart thinking….re-introduce it now that the primary supporters are out of power. FairTax supporters never helped themselves in the first place by having Boortz as an albatross and now aren’t helping themselves with a pointless political maneuver.

  3. Icarus says:

    Bull Moose,

    more cracks like that and I won’t be able to post “FREE BULL MOOSE” any more.

  4. Bull Moose says:

    Icarus, thanks, but I don’t think that the national sales tax is the best approach to comprehensive tax reform.

    I think that a flat tax is our best bet for real, practical, and meaningful tax reform.

  5. Icarus says:

    Bull,

    The income tax started out as a flat tax. All a flat tax would accomplish is to reset the clock by about 90 years.

    The FairTax, on the other hand, changes the value of our labor vs. world markets, as well as would increase our national savings rate, which has been negative as of late.

  6. shep1975 says:

    I would support a flat tax if there was a corresponding constituitonal amendment making sure it was always flat. But it does set the clock back only to when the income tax was first passed.

    Consumption is more stable towards fluxes in the ecomony than income. Also, a comsumption tax taxes the underground economy.

  7. Icarus says:

    Chris,

    The idea isn’t that the initial “underground” transaction is taxed, but that the money that is exchanged in the transaction will ultimately be consumed on taxable goods.

    I.e., the drug dealer won’t declare a sales tax return for selling a bag of weed, but will then use his profits to buy groceries, cars, or whatever.

    Under the current system, the same person probably isn’t paying income tax on his profit, and only pays state sales taxes on the secondary transactions. Still won’t be a perfect system, but should have more people “participating” in the full tax system.

  8. JasonW says:

    The Flat Tax? What good does thtat really do? I mean, Illegals stlil won’t pay, neither will the rich people that buy everything and can write it all off, and will equate to disproportional tax increases and decreases.

  9. Mad Dog says:

    Bull Moose!

    Free the Bull!

    The Fair Tax is misnamed and dishonest.

    Worst idea ever hatched.

    No amount of spin will ever move it past what it really is.

    Racist Southern Ideology with the goal of destroying the Federal Government.

    I’m willing to loan Perkins the book.

    MD

  10. IndyInjun says:

    The “Fair” tax has all of the elements of a con job.

    It accomplishes almost none of its ballyhooed benefits, and does quite the opposite with most of them.

    The Russians showed that a flat tax is highly effective at raising revenue.

  11. jsm says:

    “The Russians showed that a flat tax is highly effective at raising revenue.”

    Good point, Indy. Didn’t they try a consumption tax until 1998, before changing to a flat tax?

    I think a flat tax can work, if a nationwide popular vote is required to change the rate or allow a break for any particular group. Good luck getting something like this made into law.

    Also, ‘prebate’ checks are a BAD idea.

  12. Federalist says:

    All of these fair tax/flat tax plans are legitmately bad ideas. Sure there are good points made by the plans, but study groups and congressional commitees have shown that the plan just will not work. Just after the 2004 Elections Connie Mack, a Repulican mind you, on behalf of a Republican conference that held their own investigation concluded that under the “Fair Tax” the sales tax rate would need to be around 68% if the government were to raise enough revenue to function. Remember Linder and Boortz are not tax experts, but their idea does deserve an “E” effort. The problem with sales taxes, call them inclusive taxes if you want to sell the idea, is that they are regressive, and are naturally unfair. Everybody may be taxed at an equal rate, but the total percentage of income paid in taxes ends up being much higher for people with little money. The Fair tax is a lie.

  13. Chuck Eaton says:

    “Remember Linder and Boortz are not tax experts”

    Isn’t Linder on the House Ways and Means Committee?

  14. IndyInjun says:

    Chuck Eaton wrote:

    “Isn’t Linder on the House Ways and Means Committee?”

    I have a couple of more questions about Linder that are germane. One, Didn’t Linder endorse the Contract with America and the GOP promise of fiscal responsibility? Two, Didn’t Linder vote for the Medicare Drug Bill, an unfunded liability of $8 trillion or more than $25,000 for every US citizen?

    Linder’s mad spending habits swamp the ability of ANY tax system to raise sufficient revenue to run the government.

    This is why Boortz dodges the issue of cutting spending first. Pushing the hot button of removing a crushing tax burden makes the people fail to question by the load is crushing to begin with.

    Linder is about as credible as a fiscal conservative as Bozo the Clown.

    And he as true to principle as Bill Clinton.

  15. CobbGOPer says:

    “Didn’t they try a consumption tax until 1998, before changing to a flat tax?”

    Um, no, Russia doesn’t have the retail infrastructure to impose a consumption tax. Just wouldn’t work when the vast majority of your retail outlets are still using ancient adding-machines as opposed to sophisticated cash registers and credit-card machines.

  16. We started a small business this year. While previously I had supported the fair tax, I now see the full value of it. Good Lord, government has it’s tentacles in every aspect. The fair tax would release a huge burden on small business. We’ve got payroll taxes, inventory taxes, all manner of fees. This would make life much simpler. I would imagine the CPA’s would hate it though.

  17. Federalist says:

    Linder is on the Ways and Means Committe, but that does not in anyway make him an expert on tax policy, it means that he was connected enough to get on the committee. The fair tax is just a bad policy, plain and simple. It may release a burden on some small businesses, but it would impose a huge burden on many players in the service industry, as well as medical and legal practices. These fair tax, flat tax, nat. sales tax, etc only put plug one of the holes in the dam, and make others bigger from the build up of pressure.

  18. How could this place an unfair burden on any industry? It eliminates all other revenue sources which are seemingly endless.

    From my perspective, we operate a small service business, this would make things so much simpler and far more cost effective.

  19. IndyInjun says:

    Maurice:

    Most ‘Fair????’ taxers ignore the impact on business of an environment in which customers face horrendous tax rates upon goods and services. The tax exclusive rate is 30% and the certain conversion of state taxes would take the total ‘Fair????’ tax rate to well over 40%. Coupled with the fact that consumers will be surprised to find that the “Fair????” tax applies to medical services, energy, and services that have been increasing at double digit annual rates, while said consumer incomes have been rising in the low single digits, these high rates will CRUSH sales and drive many businesses OUT OF BUSINESS.

    The ’embedded’ taxes offset this some as they are about 15%. If you use the 22% used by the ‘Fair????’ taxers, then you must disclose that the employees only get 93% of their paychecks and THAT is only if the employer is not providing health insurance, taxable under the ‘Fair????’ tax.

    Furthermore, service providers will have to file sales tax returns and keep up with exemption certificates on every customer.

    Just last week in the Wall Street Journal, economist Alan Blinder, formerly a cheerleader for free trade, estimates that 40 million US jobs (that sounds high to me, but Blinder is highly regarded) are in danger of outsourcing. Outsourcing services offshore creates the SAME inability to collect a US consumption tax as the states are having collecting their existing sales taxes. Switching to a 40% combined Federal and State tax puts a HUGE INCENTIVE to outsource offshore, thereby avoiding the tax.

    Of course, these issues can be solved by hiring several hundred thousand sales tax auditors to audit business and individuals rigorously. They have the power under the ‘Fair????” tax to audit and have very intrusive powers under existing sales tax laws, with which business will become intimately familiar upon passage.

    Mama used to advise against jumping out of a frying pan into the fire……..

  20. Mad Dog says:

    Indy,

    I forgot to mention the worst part of having the Fair????tax mandated on an unsuspecting public.

    How do you cut the ‘costs’ in a business by 25% without cutting employment by 25%?

    Certain items are fixed costs by contract.
    Rents, Mortgages, being two.

    Neither rent nor mortgage payments will fall immediately EVEN IF the bone heads making up stats are right about prices falling back to exactly the same level after this tax rev VO lution.

    So no fixed cost contract will change.

    But, employment will fall as duties supposedly dissappear.

    So with a cut of 25% for employment, i.e. unemployment rises to 30%, where is the miracle growth in the economy?

    Imaginary….

  21. Doug Deal says:

    IndyInjun,

    You don’t think those taxes aren’t already paid by each individual already? How naive.

    Also, you have absolutely no understanding as to why jobs are being outsourced. One of the major reasons is the current income tax system, as American goods are double taxed when sold overseas, while overseas goods are often times not taxed at all.

  22. IndyInjun says:

    Mad Dog.

    In addition to doing sales tax work in 17 states for 9 Fortune 500 companes, a very large portion of my work since the early 80’s was in analyzing contract overcharges, many of which featured compounding for multiple tiers of contracts.

    For the first couple of years I was in favor of this CONCEPT, until I went to the fair????taxers web site and read the ABSURD claim that embedded taxes and compliance costs were 25%.

    The answer is that YOU CAN’T get that high as Boortz confirmed in his little dance around getting 100% of paycheck versus the 25% claim.

    The only way it is 25% is to count the employee SS portion that is in his salary and to cut said portion of salary as an employer cost AND to eliminate the employer MARKUP for overhead and profit.

    NOBODY at Fair????? tax organ has published that Biz gives up overhead and profit allocations applicable to tax cost.

    And NOBODY seems to pay attention that competition that is counted on to drive embedded tax and attendant profit markups out of product costs is largely eliminated in corporate America.

    There is damned little competition in oligarchies or monopolies.

    Georgia Power has raised rates by something like 17% over less than 3 years. WHO is in competition with them to squeeze out the ’embedded’ taxes?

  23. IndyInjun says:

    Doug,

    In a competitive environment, business pays taxes out of hard won profits from sound business practices. After all the root word for corporation is ‘body’ so that a corporation CHOSES to be treated as a distinct entity. When profits are made, taxes are paid, when losses are incurred no tax is paid and the loss is carried back to prior years, resulting in refunds.

    Saying that only people pay taxes is like saying the Good LORD pays taxes, because he is the beginning and end of all.

    I worked for a corp once that did an LBO and got $600 million in tax refunds and I can ASSURE YOU that the customers did not see one thin dime, because management saw the competition was holding the price structure firm. If customers pay the tax, would they not have gotten a price reduction from the HUGE tax refund??????

    I am probably the most conservative blogger here, but I don’t buy the ‘only people pay taxes’ crap.

    As far as outsourcing, the largest reason is the LABOR COST differential, only one component of which is tax. To the extent that a pure labor differential exists after the FT passes, that labor savings would be magnified by a multiplier of 1.40.

    Once the combined 40% combined state and federal rate is in place, the consumers will be so overwhelmed by the taxes they are paying on necessities, that ANY cost savings will be pursued with a vengeance.

    A stockbroker in Lahore, India is certainly less costly than the Goldman-Sachs crowd with their $16 billion in bonuses, the trades will be over the internet, and there will be no way for the USA to claim tax jurisdiction over the Indian stockbroker. The only way to get the “fair??????” tax revenue would be to audit the US consumer, who BTW is told by the fair taxers that he is in no danger of being audited.

    Naive, no, for I see the power of this flim-flam job on the stressed out US worker. It might very well pass. I can assure you that I have a whole bunch of techniques to take advantage of it in the event that it passes. You will never read THOSE here.

    YOU on the other hand are naive for believing this FT legend built on $millions in contributions from Big Oil to a bunch of prostituted ‘experts’ Big Oil gets an immediate $60 billion gift to the bottom line, while Grandma gets a 40% tax on nursing home care.

    If only Orwell were here to read about the “fair????” tax!

  24. Mad Dog says:

    Indy,

    Your data seems very good and your reasoning sound.

    The Fair????tax is no different than eliminationg all personal taxes and taxing only corporations.

    The taxes are added into the price.

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