These folks are indeed a cult. When I pointed out on one of their message boards that Linder said in a November 2005 CSpan interview that the FT rate was being rescored by Global Insights, with the (tax inclusive)rate coming in at “24 to 26%”, the cultists jumped on me with both feet, because 26% tax inclusive translates into 35% tax exclusive – consistent with the Presidential commission.

That Booknotes interview is available for purchase on CSpan. The interviewer was David Wessel.

The cultists simply went bananas and called me a liar, with several admitting that if the rate was that high, their support would be GONE.

Here and elsewhere they merrily post their talking points, as if they are incontrovertible.

Bottom line is this – no politician can run on a 30% tax on grandma’s nursing home care that gives Big Oil $10’s of billions in forgiveness for back taxes.

http://online.wsj.com/public/article/SB118756724732002330-vG_OfXlZ7argm3dF0qaoxFt_bnE_20080819.html?mod=rss_free

Here’s a link and an excerpt from an article from the Wall Street Journal article on the “FairTax” group and who started it: Billionaire right-wingers – no surprises there. But take a look at the graph included in the article. It shows the ONLY ones benefiting from the “FairTax” scheme are the ones with income levels greater than $200,000. Everyone else will pay more in taxes. With the one exception of those making less than $15k annually, then the “prebate” kicks in. Apparently, this prebate gimmick was tacked on to help blunt the argument that the FairTax would only benefit the rich. The FairTax is structured specifically to benefit the wealthy at the detriment of the middle class. Typical right-wing class warfare.

Boortz’s response to the article was a dodge. He gave his two-wrd assessment with no details whatsoever on his radio show after the article was published. Boortz said, “Oh, and that graph in the Wall Street Journal? It’s wrong.” Cut to commercial. BOORTZ!!!

By the way, the graph in question was cited in the Wall Street Journal as being from the Treasury Dept. via George W’s President’s Advisory Panel on Federal Tax Reform.

So, unless you’re dirt poor, or filthy rich, you lose in this tax scheme that was dreamed up by billionaire Texans, proposed in legislation by power-hungry politicians, and promoted by sycophantic millionaire right-wing radio pundits. 

The article (excerpts):
http://online.wsj.com/article/SB118756724732002330.html?mod=hpp_us_editors_picks

For more than a decade, a group started among friends at Houston’s River Oaks Country Club and led by construction magnate Leo Linbeck Jr. has pushed to scrap the federal income tax for a national sales tax…

The underdog’s finish [by Huckabee] in the Iowa straw poll behind winner Mr. Romney has raised his profile among party activists and donors — especially since he seemed to pull it off without paying for buses, barbecue and tickets for his voters to the extent Messrs. Romney and Brownback did. But FairTax.org paid for 10 buses and 550 of the $35 tickets to vote in the straw poll — and let supporters know that Mr. Huckabee was their ally.

The flat tax has been working remarkably well in Eastern Europe. Tax collections seem to shoot up.

I am not opposed to a national sales tax. I like it a LOT. The Fair????tax is another matter entirely, as it is nothing like our existing state sales tax. The damned thing was funded by big oil for capital intensive companies.

They brag on having spent $100 million and having several hundred thousand members. They are hiding behind 501 – 3c. I wanna know who is gushing forth all the cash hawking this!!!!

Yeah, flat tax will do….national sales tax will do….just don’t try to ram a con job like HR 25 and I am just fine.

Do you support the flat tax?

Exactly so.
Article I, section 8:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States
Ok. Maybe not exactly so. But the federal government is empowered by the Constitution “To lay and collect Taxes.”

1. The rate is 23%. ( As pointed out a 30 cents on the dollar tax is NOT 23%. How many folks say that the sales tax in most of GA is 6.542%?????)

2. The price on the retailer’s shelf will include tax. (The BILL requires pricing without tax, the tax and the total on receipt, there is no requirement for retailers to do otherwise with advertised prices, and why would theygo out of their way to make the price look higher?)

3. The retailer gets an allowance for collecting the tax. (The BILL caps this allowance at a nominal amount.)

4. You get 100% of your paycheck. (only if your employer keeps bearing better than 1/2 of the embedded tax claimed as a savings in another FTer claim.)

5. The rate is revenue neutral (It came a lot closer when there was a social security surplus being spent as fast as it came in back in the FT baseline year. This situation is gone by 2017 and a big part of the rate is for social security. YAY, they are cutting social security without saying so!!)

6. The FT org is grassroots (The trunk, the limbs, and the green stuff is a different matter. Ain’t 501-3C grand?)

7. The IRS goes away. (But the DOR takes its place, hires all RIFed agents, and they live happy double-dipping lives everafter.)

8. Individuals don’t have to keep receipts (Oh they most certainly DO, it is is the BILL.)

9. No more audits of your income (Yes, they are replaced by audits of your spending and property)

10. No more record keeping of vehicle use (Wrong. You owe the FT on the personal use of a company vehicle. It is in the BILL.)

It is the little unasked and unanswered things in life that kill.

One need only consider the Georgia legislature a few years ago beginning to exempt sales taxes on ice in connection with chilling poultry or vegetables and sales tax holidays for back to school, then this year beginning to exempt sales taxes on motor fuel in connection with swine production, to understand a national sales tax will be subject to the same exemptions and complications as the income tax.

Add say over 10% in state and local sales taxes (state income taxes are history if they can’t piggyback on federal income taxes) to the 30% national sales tax (if not a higher rate), and there’s strong incentive to evade sales taxes.

H.AMDT. 725 actually passed.

FYI

GAO Chief David Walker: Economic Disaster Looms

NM-AUSTIN, Texas – David M. Walker sure talks like he’s running for office. “This is about the future of our country, our kids and grandkids,” the comptroller general of the United States warns a packed hall at Austin’s historic Driskill Hotel. “We the people have to rise up to make sure things get changed.”

But Walker doesn’t want, or need, your vote this November. He already has a job as head of the Government Accountability Office, an investigative arm of Congress that audits and evaluates the performance of the federal government.

Basically, that makes Walker the nation’s accountant-in-chief. And the accountant-in-chief’s professional opinion is that the American public needs to tell Washington it’s time to steer the nation off the path to financial ruin.

READ MORE

http://controlcongress.com/uncategorized/gao-chief-david-walker-economic-disaster-looms

FYI

Nobel Prize-winning economist: Iraq war ’caused slowdown in the US’

This tell-us-something-we-don’t-already-know story from The Australian:

THE Iraq war has cost the US 50-60 times more than the Bush administration predicted and was a central cause of the sub-prime banking crisis threatening the world economy, according to Nobel Prize-winning economist Joseph Stiglitz. The former World Bank vice-president yesterday said the war had, so far, cost the US something like $US3trillion ($3.3 trillion) compared with the $US50-$US60-billion predicted in 2003.

Australia also faced a real bill much greater than the $2.2billion in military spending reported last week by Australian Defence Force chief Angus Houston, Professor Stiglitz said, pointing to higher oil prices and other indirect costs of the wars.

Professor Stiglitz told the Chatham House think tank in London that the Bush White House was currently estimating the cost of the war at about $US500 billion, but that figure massively understated things such as the medical and welfare costs of US military servicemen. The war was now the second-most expensive in US history after World War II and the second-longest after Vietnam, he said.

The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit. “The regulators were looking the other way and money was being lent to anybody this side of a life-support system,” he said.

That led to a housing bubble and a consumption boom, and the fallout was plunging the US economy into recession and saddling the next US president with the biggest budget deficit in history, he said.

http://www.gao.gov/cghome/d07226cg.pdf

The problem (if there is one) with Iraq is not economics.

We should never fight a war, or refuse to fight one, based upon econmic principals alone. Wars are expensive, there is no doubt about that. Wars should or should not be fought based on some sort of moral principal, to include self preservation.

While I happen to think that the current war in Iraq was inevitable for global political reasons, I do not think that it was prosecuted correctly. Neither of those things has to do with the economics. David Walker, former Comptroller General of the United Sates, often reported on the economic priority changes in the US. For example, in 1965, DOD spending was 43% of Federal spending, but by 2005, it had dropped to 20%.