This makes me throw up a little in my throat

Via the AJC (thanks Mark)…

Several dozen people jeered when Giuliani, in response to a question, said he would not be in favor of what they call the fair tax.

“I have to study it some more,” the former New York City mayor said. “I don’t think a fair tax is realistic change for America. Our economy is dependent upon the way our tax system operates.”

Now, I am far from a Fair Tax evangelist, but I’m certainly intrigued by the work done around assessing a complete overhaul of our current tax system. I’ve personally be caught in some of the jettys that our current system contains, and they are repressive and repulsive to say the least.

It’s the “dependent” part of the above quote that scares the crap out of me. Quite frankly, taxes should be as lightweight as possible – and that is not necessarily synonymous with “as low as possible”.


  1. IndyInjun says:

    Giuliani was wise to punt on the Fair????tax.

    Sadly, he is right. For example, State and county governments get a 25 to 30% reduction in financing costs from the tax exemption for muni bond interest enjoyed by the bond holders. This would go away with the passage of the “Fair”???? tax and the government would thereby instantly confiscate the investment of said bondholders who would instantly possess an asset yielding a low interest rate as opposed to a competing corporate or US debt yielding a much higher rate. In terms of immediate marketability, the value of $100’s of billions in such bonds would instantly fall by 25% to 30%.

    What is worse for the states and locals is that any goods or services that they purchase for their own consumption will not be exempt under the FT, virtually forcing said governments to charge the citizenry in order to avoid the tax.

    What the combination of these factors does to state and local financial ratings cannot be good.

    I could go farther, but the forgoing shows that Giuliani is right about this deal needing a lot of further study.

    Any state or local official for the “Fair”????? tax is nuts.

    In the final analysis, the Fair?????tax is simply a diversion from the fact that Republicans have piled on so much debt that confiscation via taxation or inflation (they are adept at both, especially the later) is the only option this side of declaring bankruptcy.

    The people are being squeezed by real inflation rates in excess of 10% (recent estimates put money supply growth at above 12%) versus pay increases of 3 to 5%. This has them grasping foolishly for a Fair?????tax con job that makes matters worse by putting a tax on top of the inflation tax that they are already paying.

    V.I. Lenin said that the way to crush the middle class was to grind them between the millstones of inflation and taxation. John Linder’s tax manages to combine the two into a voracious monster who would CONSUME us all.

    We need a combination of spending cuts and tax reform , in the form of a flat tax at the same time.

  2. JasonW says:

    Drudge Report reports the same story, but says he opposed the Flat Tax not the fair tax. It goes on to say that even though he is opposed to the Flat Tax, Steve Forbes has endorsed him, blah blah blah. So was it a Flat Tax or Fair Tax that he was opposed to? *Jason is kicking himself for not going as it was only like 20 minutes from his house*

  3. IndyInjun says:

    As so often happens, Drudge made the mistake of confusing the flat tax with the Fair????tax.

    The public gets similarly confused, despite all of the Fair????tax propaganda.

    From reading the article linked, Giuliani was asked about the FAIR????tax.

  4. joe says:

    “I have to study it some more,” the former New York City mayor said. “I don’t think a fair tax is realistic change for America. Our economy is dependent upon the way our tax system operates.” AJC

    “I have to study it some more,” the former New York City mayor said. “I don’t think a flat tax is realistic change for America. Our economy is dependent upon the way our tax system operates.” Drudge/My Way News

    It appears to me from reading both quotes that the AJC probably modified the quote. Giuliani is more likely to have said “I don’t think the fair tax… or I don’t think a flat tax…”

    I tend to prefer fair over flat, and both over the current system, but what I really prefer is honest journalism.

  5. Inside_Man says:


    You’re not the only one that’s queasy. “Our economy is dependent upon the way our tax system operates.”?? A real reformer, this guy.

  6. Bill Simon says:

    I think better words would have been “Our economy is dependent ON an operating tax system.”

    Flat tax is easy enough to implement and operate…Fair Tax relies too much on discombobulated rules of what is taxed and what is not taxed.

    Like, the first time a house is sold after being built, sales tax is applied. After that, no sales tax on the re-sale…ever. Who the hell is going to be rushing to buy “new houses” to create a sales tax stream, eh?

    Probably the same number of (non) people who rushed out to buy a boat when the 10% “luxury tax” was implemented during Bush 1’s reign. talk about killing an industry, I don’t think Tampa-St. Pete has ever recovered.

  7. IndyInjun says:

    Funny, every time the Fair????tax comes up, its proponents post only a link to the FT propaganda site OR postulate “Read the Book!”

    I have read both extensively and gotten real hoots out of both.

    Lessee here, we should give credence to the “experts” who lend supporting analysis to the Fair????tax assumptions never minding that they were paid millions in funds anted up by Big Oil who just coincidentally gets $60 Billion in instant back tax foregiveness, while Grandma gets a new 30% (and that’s just for starters) tax on her nursing home services?

    Poland, Russia and nearly all of eastern Europe have adopted a FLAT tax with stunning results.

    Of course, under a FLAT tax Exxon Mobil and fellow oligarchs still have to pay their Tens of Billions in deferred tax liabilities. That would NEVER do, would it?

    The Fair????tax deception is the only tax reform acceptable to 10 out of 10 multinationals, so that is what they foist upon a gullible, inflation-stressed public.

    Downtown street walkers have more credibility than the Fair???taxers.

    They can easily prove me wrong by releasing their full list of contributors. THAT would be a link I would investigate.

    Those who would send the GOP down the FT path must realize that such linkage proves all of the detractors of the GOP as the party of big business absolutely right.

  8. JasonW says:

    The flat taxes fixes very little. It equates to a HUGE tax Increase on Some, and HUGE tax decrease for others. Illegals still don’t pay into it, Rich people still get out ’em, The IRS still functions, and it’s not as revenue neutral as some other systems.

  9. IndyInjun says:


    With the FT, the IRS is REPLACED by the existing state revenue departments, which will expand by hiring every one of the “woebegone” IRS agents who will be entirely too happy to draw TWO government pension. BTW, the FT requires that individuals keep receipts, file returns in more cases than advertised, and the rights of the EXISTING state revenue auditor extend to estimating one’s tax liability in the absense of said receipts. There is a GA Supreme Court ruling to that effect.

    So much for the abolition of the IRS and the elimination of audits.

    Yes, the FLAT tax has its negatives too. But if the objective is real tax reform that is acheiveable and means real simplification, a FLAT tax is the answer.

    Lets see now. Lawn care services who hire illegals now withhold no taxes so that they can offer lower rates. Somehow these same employers, with the same motives, are suddenly going to charge a 30% sales tax to customers? Come on now! The incentive to evade taxes is not measurably different under either system.

    Evading sales tax is child’s play.

  10. JasonW says:

    Er….Evading Sales Tax is childs play? Do tell. It’s nothing like evading Income Tax (even a flat one). You still didn’t address the extremely disproportional tax increases and decreases. With such a big decrease in upper level taxes, how will it remain revenue netural? I’m not saying the Fair Tax is the best thing in the world, but I AM saying that it’s better than the Flat Tax. I’d rather have a 30 percent sales tax and no income tax, than pay for illegal immigrants health care and education.

  11. JasonW says:

    er…add to the last sentence: “Without them contributing anything into it either.”

  12. liberator says:

    The flat tax isn’t the answer,the fair tax is. Don’t the flat tax folks listen to Boortz?

  13. IndyInjun says:

    I don’t listen to Boortz much. He does give excellent advice though – “Don’t believe anything you read on this web page, or, for that matter, anything you hear on The Neal Boortz Show, unless it is consistent with what you already know to be true, or unless you have taken the time to research the matter to prove its accuracy to your satisfaction. This is known as “doing your homework.”


    Jason, the FT is not revenue neutral either. The President’s commission on Tax Reform said it would take a 35% rate – AT A MINIMUM – to be revenue neutral. Linder slipped up and confirmed the higher rate on C-Span. So far they have not changed the tax inclusive rate in “the Bill” from 23% to 26 or 27%, which would result in the tax exclusive (the way sales taxes are alway figured) rate of 34 to 25%.

    There are some really loony things in the FT, like the government paying taxes to itself, the government charging the sales tax to the states and locals, and, worst of all, the UNFAIRness stemming from a blanket exemption of biz.

    Under the state sales taxes, there is no such differentiation, except for some manufacturing and resale exemptions. There are NO STATES, even the ones with no income taxes, that exempt all biz purchases. Not even the European VAT exempts business purchases where biz is the final consumer.

    Revenues EXPLODED under the FLAT tax systems implemented in Russia and elsewhere, so you are just parroting Boortz by dismissing the efficacy of a FLAT TAX.

    You DO have a point though, for Bill Thomas, when he was Ways and Means Chairman, explained to the GOP caucus that a FLAT tax would necessitate two rates – ala Reagan. At the same meeting he told the assembled GOP congresscrooks that the FAIR???tax was political suicide.

    Ron Paul has it right in explaining that tax reform is useless without spending reform.

    Curiously, John Linder voted for $trillions in unfunded liabilities that his FT creation makes no pretense of covering.

    In the sad state that is American Politics, no one has called Linder’s hand on it either. The best way to reduce crushing taxation is to throw the likes of Linder out. Pronto.

  14. Bull Moose says:

    I was at the event and Rudy said that the “Fair” tax was unrealistic and he said that he supported a flatter tax.

    Enough spin on the issue.

    I was glad that he didn’t pander and tow the line on the sales tax. It’s an UNREALISTIC solution and a sham.

  15. Bill Simon says:


    You’re asking “how can people avoid paying the sales tax?”

    Ever heard of this thing called The Black Market? Implement a federal sales tax, and all sorts of black markets will sprout-up to avoid paying sales taxes.

  16. Ian says:

    Lovely “status quo, non-simpleton” defenders like you, IndyInjun, rail against the FairTax plan (which becomes a de facto defense of the INCOME TAX), because they apparently believe:

  17. Rick Day says:

    Gules will never win. Neither will Romney. Why?

    They is Yankees.

    What was the last New England area President we had (that ran from a New England State, so the Bushes of Kennebunkport have to count as, ugh, Texans). That would be..Kennedy.

    The New South ™ has already Risen and most of us missed it!

    I’m just sayin’….

  18. IndyInjun says:


    You did not read my posts.

    I am for tax reform – a FLAT tax. It is achievable. It is proven. It truly taxes EVERYONE.

    The Fair????tax is a direct attack on workers by imposing a tax on inflation (long time defined as an increase in money supply)running at double digits, while income increases at 3%.

    The FT is a con job designed to free up $trillions in back taxes for the corps while putting a 30% tax (just for starters without the likely conversion of state taxes to a sales tax)on nursing home care and MY self paid health insurance premiums that go up 20 to 30% every year.

    Gas will soon be at $5 per gallon and I don;t really think paying another $1.50 in tax will help the people a whole lot. We import something like 15 to 20% of refined gas, that has no embedded tax savings, there is no embedded tax savings on the 65% of crude that is imported, and a cursory glance of the Form 10K’s of the oil companies show that their embedded taxes are less than 10%.

    Jim Jones seduced and charmed his followers into drinking the Kool Aid.

    I ain’t thirsty.

  19. IndyInjun says:

    Another thing that bugs me is how folks hawk the argument that only people pay taxes. This is akin to saving that the good Lord pays taxes, he being the creator.

    I visualize the Robber Barons rolling in their graves slapping their foreheads and saying “we were PEOPLE TOO….why didn’t WE think of that?”

    Under a model of market COMPETITION taxes are born out of company profits and are NOT simply tacked onto a price. Competition restricts prices received, including taxes.

    In the monopolistic/oligopolistic system we have now in so many industries (not coincidentally these industries feature sky-high deferred income tax liabilites from various tax avoidance schemes.) who can say that prices would be lowered after FT passage?

    Logically, it would seem that you would be calling for nationalization of these businesses so that “the PEOPLE” could enjoy the revenues/rewards, just as you call for the nationalization of their tax costs!

  20. FairTaxMan says:

    First the Associated Press (AP) incorrectly reported Giuliani as being against the flat tax. The FairTax organization had the AP correct that to the FairTax. Second, these many comments contain a lot of misconceptions and negative spin about the FairTax. I recommend to any of these individuals and those reading to learn the facts before passing judgment or personal assumptions as to the FairTax.

    I was always taught to go to the source if I wanted to learn the facts. That source is FairTax dot org. A wealth of research by professional scholars and economists as well as correct answers to many of these misconceptions posted here. There are many links as well.

    The FairTax system is already in place and proved working fine as state sales taxes. Why would not a national sales tax work as well?

    Illegal Aliens, criminals and foreign tourists to America would pay into the system under the FairTax when they do not now.

    Houses and all new goods and services will be taxed (once)…but research shows the cost of hidden taxes, even in new houses will cause the prices to fall up to 20%–nearly erasing the added 23% INCLUSIVE tax rate. No more double taxation on the purchase of used items. Do not let them scare you about paying 30% more. That figure is an exclusive figure and represents the same as 23% inclusively which is how most state and income taxes are figured and after the other tax eliminations and price reductions–you will end up paying about the same as you are today or slightly less.

    Nobody is telling you here of the other taxes that will be eliminated either! All Federal taxes including social security and Medicare deductions, the matching amounts your employer has to pay, all corporate tax, estate (death) taxes, capital gains tax, alternative-minimum taxes and self-employment taxes.

    They do not mention about the prebate all REGISTERED Legal Americans will receive to offset the cost of taxes on basic necessities up to the poverty level–effectively un-taxing the poor completely. They do not mention about the cost savings in the tax compliance elimination saving over $250 BILLION annually and the fact that the FairTax will put the control of taxation in Americans hands and not the hands of elected politicians.

    As far as the middle class brunting the cost, the research also shows that all income levels will benefit under the FairTax proposal. These comments of the individuals here are not being provided to you, the reader, with their facts and researched information–why is that? Go to the source, the horse

  21. IndyInjun says:

    “Going to the source” leads to works by ‘experts’ bought and paid for by corporations who have more than $1 trillion in back taxes that are forgiven the moment the Fair????tax passes.

    No thanks, that would be like asking a prostitute marriage advice.

  22. Phil_will1 says:

    I can’t help but wondering which flat tax version the flat taxers on this thread support. Is it the flat tax OPTION as embodied in the Burgess bill in the house and promoted by Steve Forbes? That seems to be the leading flat tax version at the present time.

    Of course, since it is an OPTION, it doesn’t get rid of a single line of the 60,000 + page mess we have now. Also, since only those saving taxes would elect the option, it isn’t revenue neutral, so it will never be seriously considered by congress.

    In addition, since it retains both the payroll tax and the corporate income tax, it does not address the disadvantage which our current atx system places on US produced goods in the global economy, nor the crisis in Social Security and Medicare. It also maintains the punitive treatment of savings and investment and therefore helps to ensure that our personal savings rate stays among the world’s lowest.

    IOW, the flat tax pretty much ignores the bulk of the economic problems that the current tax system exacerbates. “The Flat Tax” sounds good until you drill down into the details and find out more about it.

  23. IndyInjun says:

    Phil W,

    Tax reform cannot be optional.

    As for the defects of the FLAT tax, no tax is going to be perfect and is certain to be loathed.

    A true Flat tax would override a substantial portion of the tax code.

    I don’t have a problem with a national sales tax patterned after our existing state sales tax – low rates, unintrusive for the most part, broadly-based, and generally FAIR. The trouble with the HR 25 abomination is that it is the antithesis of these things.

    Some group proposed to the Commission on Tax reform a national gross receipts tax at single digit rates, to be collected through the banking system. It was closer to being a FAIR tax than Linder’s abomination.

    As for Social Security and Medicare, it means those in later working years or retired get to pay SS TWICE, for perusal of the FT rate shows a large component of it to fund SS and Medicare.

    As noted in a previous post, the FT destroys the financing and revenues of state and local governments.

    As for equity with other countries, they employ a VAT at pretty steep rates and said VAT applies to consumption by Biz, as does the sales taxation of the states.

    The corporate pushers of the FT are playing the usual Washington game of putting up a front group with a seductive scheme to pitch to JQ public.

    The problem is that too many of us are onto their game. We are all for tax reform that is INDEED FAIR, but don’t silently roll over for the trickery that is the Fair????tax.

    Big oil alone gets $10’s of billions in immediate tax foregiveness, while Grandma has to pay SS twice and pay a new 30% tax on her nursing home care.

    Call that ‘FAIR”?

    I don’t.

  24. Ian says:

    A business lesson for Indy:

    Businesses are IN business to make a profit. Profit = $$ above costs.
    Tax Code = business cost to pay/comply.
    Prices is where business gets its income.
    Costs go into prices.
    Higher compliance costs = higher prices.
    If business cannot compete with foreign producers (and pass thru costs because of price pressure), it simply goes off-shore, or out of business.

    Products or services are paid for ultimately by taxpayers, directly in end-user retail prices or in higher taxes where government consumes such products or services.

    Current compliance costs because of income tax compliance ranges anywhere from $250 bil to $500 bil – depending on whether one includes tax avoidance / tax planning (a complete take-away from research and development to make better products and services).

  25. IndyInjun says:


    You speak to the aspect that made me actually look into the Fair????tax malarkey in the first place.

    After doing contract audits for two decades for some of the largest corps in America and working very closely with their tax departments, I was mystified about the claims of the Fairtaxers about the 22% to 26% embedded taxes and compliance costs. Taken in conjunction with their simultaneous claims that one gets “100% of your paycheck” either the first claim or the second one had to be BOGUS.

    As it turns out I am 100% correct. The 22% to 25% embedded tax and compliance cost counted as savings includes the EMPLOYEE’S FICA and MEDICARE that is within his salary. The only way the EMPLOYEE share of taxes becomes a savings for his employer is for said employer to stop paying it as gross salary.

    BTW Boortz and Linder were forced to admit this inconsistency in their hawked claims.

    As for the rest, compliance costs, there is NOW WAY that corporations incur the balance as “compliance costs” Biz has to keep P&L and financial statements for bank loans, financial reporting, and cost reporting. Tax accounting requires adjustments to existing accounting systems. I suspect that the costs of maintaining all accounting for the entire entity has been misused to represent just the tax accounting increment and to overdramatize compliance costs.

    Once again, I do not think that nationalizing their tax costs is something the public should embrace unless we go socialist and nationalize the entire business.

    In FREE MARKET COMPETITION, taxes are born out of the price that the market will bear and is not something added on top, as the fairtaxers would have us believe.

    Yes, only people pay taxes. It is the distribution that is at issue here. Instead of the Soros and Gates of the world paying, under the FT everybody else gets to pick up their share and in so doing is crushed by the load.

    Under the exiting sales tax structure, biz pays sales taxes heavily on nongood inputs, especially in Florida and Texas, which have no income tax.

    Boortz and Linder hawk these states as being the examples of two places in which a sales tax is the primary revenue source, but they conveniently overlook the FACT that business is heavily taxed by sales and use tax, unlike their pet creation.

    For truth in advertising one best look somewhere else than to John Linder and the Fairtax guys.

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