Fair Tax Backers Take Issue With Nunn

The tax reform proposal known as the Fair Tax came up in Sunday night’s U.S. Senate debate. Republican David Perdue and Libertarian Amanda Swafford expressed support for the national sales tax proposal introduced in the Congress by Georgia Republican Rob Woodall of the 7th district.

Democrat Michelle Nunn expressed opposition to the plan saying it was “unfair.” Nunn also has a Fair Tax “fact check” page on her website.

Congressman Woodall issued this statement:

“It shouldn’t surprise anyone that the Democrat in this race is critical of the only tax plan that shifts power away from Washington and back to Georgia. David Perdue wants create jobs, he wants to put more money in the pockets of middle class families, and most importantly, he wants to provide freedom for his neighbors from a burdensome and costly tax code, and he knows that the FairTax bill is the only bill that can accomplish these goals. I’m proud to have him as a partner on this issue, and I know a lot of other Georgians are as well.”

Georgians for Fair Taxation issued a press release saying they had tried to meet with Nunn but were unsuccessful:

Georgia For FairTax attempted on two different occasions to meet with Ms. Nunn during the course of this campaign to make sure that she had good information with which to form her position on this vitally important issue. We have yet to even get the courtesy of a response. It is obvious that Ms. Nunn is getting information on the FairTax from unreliable sources. However, she refuses to hear our side. This does not speak well for a candidate who claims she is running to try and bridge the partisan divide and she intends to work with all sides in solving problems for the people of Georgia.

Neal Boortz weighed in from Hawaii to dispute Nunn’s statements about the Fair Tax and challenge her to a debate (wouldn’t that be fun?!?):

Now there’s not much time left before the vote next Tuesday. I’m out of town. In fact — rather far away in Hawaii. As I type these notes I can hear the surf crashing on the waves below. But I do have a working telephone – and I make this challenge to Michelle Nunn. You chose the venue. You chose the radio talk show – the news program – the press conference – and you allow me to patch in by telephone so that you and I can debate the FairTax. Think you can handle that Michelle? Think you could survive in that debate without your Democrat/Obama talking points?Let’s give it a try.

You people know how to reach me.

The full press release from Georgians For Fair Taxation is below the fold.

Michelle Nunn distorts the FairTax and misleads voters for political gain

During the Georgia Senatorial Debate on Oct. 26, Michelle Nunn used the public event to launch an attack against the FairTax with misleading and half-true information in an attempt to mislead voters to try to gain political advantage.

Her comments implied that the FairTax would add consumption taxes on top of taxes already being paid by the citizens. In fact, the FairTax would replace the existing income taxes, Social Security and Medicare taxes, and death and gift taxes with a single rate consumption tax. She failed to mention that the prebate feature would untax people on their basic needs and significantly reduce the tax liability on poor and middle income Americans.

Georgia For FairTax attempted on two different occasions to meet with Ms. Nunn during the course of this campaign to make sure that she had good information with which to form her position on this vitally important issue. We have yet to even get the courtesy of a response. It is obvious that Ms. Nunn is getting information on the FairTax from unreliable sources. However, she refuses to hear our side. This does not speak well for a candidate who claims she is running to try and bridge the partisan divide and she intends to work with all sides in solving problems for the people of Georgia.

Ms. Nunn is, in effect, defending a tax system that is almost universally hated by the American people. If she believes that our job killing current tax system is the best that we can do, she should be honest enough to communicate that to the voting public.

For a more detailed discussion on this subject, go to www.GaFairTax.org.

106 comments

  1. objective says:

    dialogue abt tax reform is ncssry. and my hunch is that the fair tax folks would not be interested in dialogue regarding current tax loopholes or perhaps other issues. the dialogue should be as “fair” as the tax.
    that sd, she could have easily addressed, and dismissed, the fair tax proposals. transferring power from fed to states means bulging state departments of revenue with inconsistent and unpredictable exercises of powers, yet a poor ability to enforce compliance or prevent an underground economy… along with likely identical costs for administration and enforcement (albeit now state costs instead of fed costs). and lots not forget the extremely regressive nature of the tax. prebates at the poverty level? the poverty level is woefully poor as a measure of real poverty. plus the prebates will again be taxed anywys. VATs are similar but much more consistent in application and enforcement. where is the dialogue abt VATs?

    • Phil_will01 says:

      “……..my hunch is that the fair tax folks would not be interested in dialogue regarding current tax loopholes or perhaps other issues.”

      Your “hunch” would be wrong. FairTaxers strongly object to the corrupt practice of trading tax preferences for campaign cash facilitated by an army of lobbyists making seven figures trading influence. The problem is that you are not going to do anything meaningful if you attempt to win these battles individually. The career politicians can replace these carve-outs faster than the reformers can get rid of them. That is the lesson of the 1986 TRA (Tax Reform Act). We have a tax system today that is far worse than the one that was reformed back in Reagan’s term of office.

      However, the need for a 21st century tax system is far more acute because the level of global competition is so much greater. For example, many nations around the world have reduced their corporate tax rate since 1986. The US has so far resisted this trend and we now stand as the nation with the world’s highest corporate tax rate as a result. Japan was #1 and we were #2 until they reduced theirs about a year and a half ago.

      These are all huge issues affecting the growth of our economy and our ability to compete in the 21st century; FairTaxers are more than happy to debate them at any time.

      We have young college graduates moving back in with their parents because the jobs just are not there. We have millions of people out of work, underemployed or working part-time. This is all so unneccessary. The USA CAN compete in the global economy of the 21st century. We have a number of competitive advantages that are unlikely to be duplicated by any country in the near term, but we cannot compete with the worst tax system on the planet. BTW, I am speaking of the structure of our tax system, NOT the overall level of taxation, which is a totally separate subject.

      • objective says:

        i empathize. unfortunately, volatile rhetoric (whether by Boortz or otherwise) can kill the possibility of rational discussions.

  2. My organization analyzed the last halfway serious flat tax bill in Congress, which was proposed by former Sen. Arlen Specter of Pennsylvania, in 2010. We concluded his 20 percent flat tax plan would cut taxes for the richest 1 percent of taxpayers by over $200,000 on average, cut taxes for the next richest 4 percent by $5,800 on average, and raise taxes for everyone else by thousands of dollars each.

    Don’t believe us? Then read the 1983 book, Low Tax, Simple Tax, Flat Tax, which is the basis for all these proposals. Authors Robert Hall and Alvin Rabushka wrote that the flat tax “will be a tremendous boon to the economic elite” and that “it is an obvious mathematical law that lower taxes on the successful will have to be made up by higher taxes on average people.”
    http://www.usnews.com/debate-club/is-a-flat-tax-a-good-idea/flat-tax-will-benefit-only-the-rich

    Math don’t tax jingo, guys. You ought to know by now that the GOP is only going to float ideas that either will never happen, or if they do, they benefit the 1% more than the rest of us combined.

    “It shouldn’t surprise anyone that the Democrat in this race is critical of the only tax plan that shifts power away from Washington and back to Georgia. How? By creating a national tax that is collected nationally and then doled back to the states at the whim of the Federal Government? By ignoring unrealistic GOP loving dreams? What if she said she would support such a tax? How would you spin it then? Let me guess..a flip flopper. Pardon me while I forcefully empty the contents of my stomach.

    Ah..better…now where were we…

    Georgia For FairTax attempted on two different occasions to meet with Ms. Nunn during the course of this campaign to make sure that she had good information with which to form her position on this vitally important issue. We have yet to even get the courtesy of a response. Join the club, snowflakes. You are not the only one she didn’t take time for. Peachtree NORML, GA Care, GA right to illegal abortions, all us fringe groups didn’t get a response either. Wait until she is elected, then ask her about major systemic changes to global cash flow. After all, that concept is not only flawed, it takes a bit more time to digest than your average dessert menu. So quit beating your chest, Caesar. get in line with the rest of us chimps.

    This does not speak well for a candidate who claims she is running to try and bridge the partisan divide and she intends to work with all sides in solving problems for the people of Georgia. Just because you have an idea that is not well fleshed out does not mean she, or anyone else is willing to use it in the spirit of bipartisanship. That word does not mean, “here use my idea because I want you to and although I oppose 99% of what you do in the spirit of bipartisanship do this one thing. No I won’t support you on anything else but my cause”

    Seriously, even if Nunn had supported the idea, would Fair Tax had endorsed her and not Perdue? You set up a lose/lose and then call her the loser. Clas-sy, white guys!

    Don’t you find it ironic that Boortz is a rich white male with a place in Hawaii, incensed that Nunn won’t debate him on a subject he helped foment, yet can’t care enough to get off his fat duff long enough to do more than have his housekeeper dial a phone for him? So he could bicker with a woman and get away with saying anything while editors in the background gleefully cut Nun snippets out of context for the next round of Obamahatespew?

    The benefit of that ‘debate’ (note to doofus: you have a specific format for debate, and judging your body language is part of it. The phone is for the bellicose. Oh and Talk Radio, dominated by conservative listeners is not a neutral ground for debate, FOOL) would only benefit the GOP. His air is so hot he could be used to cool that lava flow.

    Debate *snort* I am beginning to run out of non profane adjectives to describe the GOPs tactics and how they make rational people feel.
    tl;dr – “Hey you, go walk into that lions pen. No. What’s a matter, Chicken?”

    • Phil_will01 says:

      The republican establishment continually tries to interject “the flat tax” into the tax reform debate for one simple reason. A flat income tax keeps Washington’s political establishment (half of which is republican) in the corrupt business of trading tax preferences for campaign cash. This is what the “political ruling class” thinks of as the primary criteria for a tax system. Never mind that we have the most globally uncompetitive tax system on the planet at a time when global competition is increasing throughout the world.

      FairTaxers are just as strongly opposed to “the flat tax” as they are to the present corrupt system. I know that the public often confuses the two, but they are completely different in terms of their economic impact and in terms of their impact on the illicit trade in tax preferences for campaign cash that has (unfortunately) become SOP in Washington.

      BTW, I put “the flat tax” in quotes because there is no such thing. By that I mean that a flat income tax is a form of taxation, just as a VAT, a sales tax or a graduated income tax is. The problem is that if you ask five flat taxers what version they support, you are likely to get five different answers. The Specter version that you referred to never had more than 1 or 2 co-sponsors in the senate, if that, for example. This is in contrast to the FairTax, which is a complete bill in both houses and has more co-sponsors than all of the other tax reform proposals combined.

      That was a nice straw man argument, though.

      • ahh the FAIR tax position. I had to study that…

        Businesses would be required to submit monthly or quarterly reports (depending on sales volume) of taxable sales and sales tax collected on their monthly sales tax return. During audits, the business would have to produce invoices for the “business purchases” that they did not pay sales tax on, and would have to be able to show that they were genuine business expenses.[40] Advocates state the significant 86% reduction in collection points would greatly increase the likelihood of business audits, making tax evasion behavior much more risky.[52] Additionally, the FairTax legislation has several fines and penalties for non-compliance, and authorizes a mechanism for reporting tax cheats to obtain a reward.[40] To prevent businesses from purchasing everything for their employees, in a family business for example, goods and services bought by the business for the employees that are not strictly for business use would be taxable.[40] Health insurance or medical expenses would be an example where the business would have to pay the FairTax on these purchases. Taxable property and services purchased by a qualified non-profit or religious organization “for business purposes” would not be taxable.[95]

        Son, have you ever owned a business? Can you imagine the overhead created for even the smallest business to purchase special accounting software and a department of compliance to manage EVERY SINGLE purchase to be entered, classified, paper trailed and stored for 6 years under penalty of stiff fines? That does not sound fair to me, nor will it save anyone a penny because those costs will be passed on to the consumer WHO THEN PAYS A DAMN TAX on the thing! Do you think that prices will remain the same once people’s immediate purchase power increases?

        Do you think any business other than a large corporation would survive under this new code?

        Can you imagine the massive bureaucracy created? The bigger the bureaucracy, the more likely there will be graft and mismanagement. You, a conservative, want a bigger government, just so you don’t have to do math once a year?

        At least my strawman is not stuffed with socialism.

        Oh and who gets to decide who is tax exempt if you dump the current tax code? *smh*

        • Phil_will01 says:

          “Son, have you ever owned a business?”

          No, but I have a masters degree in accounting, CPA certificate and spent 20+ years of my life in financial management, including posts as controller, VP-Finance and CFO.

          “Can you imagine the overhead created for even the smallest business to purchase special accounting software and a department of compliance to manage EVERY SINGLE purchase to be entered, classified, paper trailed and stored for 6 years under penalty of stiff fines? That does not sound fair to me, nor will it save anyone a penny because those costs will be passed on to the consumer WHO THEN PAYS A DAMN TAX on the thing! Do you think that prices will remain the same once people’s immediate purchase power increases?”

          That’s quite a rant there. If you will stop hyperventilating for a minute and use your head, you will see that your paranoia is irrational and unjustified. We aren’t talking about special software. Every business today has to track individual sales transactions. With virtually every cash register being a computer, we clearly have the capability of computing, collecting and maintaining data on a sales tax that is quite simple and straightforward. after all, many businesses today collect sales taxes for various states having very different rates in different jurisdictions, with different exemptions, etc. If you tell me as a retailer that I no longer have to worry about corporate income or payroll taxes and I have to add a line or two to the sales tax form I am already completing, I would say “sign me up!”

          Are you seriously defending the current 73,000+ page system that no one understands based on its ease of administration and efficiency? You have GOT to be kidding.

          BTW, I never said that prices would remain the same.

          • John Konop says:

            Phil,

            I am old school….jumping out of your boat with a leak into shark infested waters is not a great solution. I would rather think it through an examine all my options first.

      • Baker says:

        Phil: “A flat income tax keeps Washington’s political establishment (half of which is republican) in the corrupt business of trading tax preferences for campaign cash”

        Then it’s not really a flat tax. And so what if you are likely to get five different answers about what version of flat tax people support? Get them on the floor, debate them, go with one, and then have a full Senate/House debate about flat vs fair vs status quo vs some-other-thing-thats-worse-than-status-quo-because-it-would-inevitably-be-more-carveouts. Why cant we do that?

    • GALisa says:

      Georgians for Fair Taxation has not endorsed Perdue or any other candidate. And I’m pretty sure that Boortz is just visiting Hawaii on his way home from New Zealand…or do you claim that he has a house there, too?

      • must be nice to globe hop for vacations. So Woodall is not a Fair Taxer, as they are called? I understand you have not endorsed anyone because as a political non profit, you are forbidden by, ahem, current tax code. But I betcha none of you will vote for Nunn 😀

        What is going to happen to those type of designations once there is no more Tax code or deductions? What is the rationale for even having ‘tax exempt’ organizations? Throwing the Church™ a bone for supporting the cause? I can think of no other reason.

    • Phil_will01 says:

      “Seriously, even if Nunn had supported the idea, would Fair Tax had endorsed her and not Perdue? You set up a lose/lose and then call her the loser.”

      I think you missed the point I was trying to make; let me try again. As GALisa pointed out, Georgians for Fair Taxation did not endorse David Perdue nor any other candidate in this, or any other race. We were happy to meet with him and go over how the FairTax would actually operate and why it is economically superior to the flat tax (which he originally supported). He was willing to listen and learn.

      We made the same offer to Ms. Nunn and failed to get the courtesy of a response. She apparently preferred to have a staffer do a google search on “FairTax” and do a copy and paste position paper. That sure beats actually thinking about something that is as important as our economic future, doesn’t it?

      Georgia For FairTax has been as bi-partisan as possible because we firmly believe that the FairTax represents the best alternative for all Georgians and all Americans to see our economy realize its true potential. We have met with numerous Democratic members of Congress and Democratic Congressional candidates. We have a very good relationship with most of these.

      In a recent NBC/WSJ poll, 76% of Americans now believe that the next generation will have a lower quality of life than the generation that preceded it. That number is up significantly from a similar Fox poll that was taken in 2010. If that expectation turns out to be true, ours will be the first generation in U. S. history to have failed so miserably. (I am a baby boomer) Isn’t that enough for people like Ms. Nunn to set aside their partisanship and look at any and all possible approaches to address this looming calamity objectively? That is all we were asking and I do not think it was too much to ask of someone who claims that they want to represent all Georgians.

      • OK. I can accept that explanation. I used to be on board the Fair Tax train when it was first floated around, but then, as my business grew, I realized what an initial shift would burden our business with. As I delved more into the accounting and financial side, I realized what a paperwork nightmare compliance would be. There is more chance of an audit. Audits take time and money from the business that can never be recovered.

        The other thing I thought is “OK, on Jan 1, the new tax system goes on line. Now my $3 beer will be $6 because I have to add tax, and cover the overhead of record keeping.

        I’m glad to hear that you work on a bi partisan level; we need more of this! Maybe Bootz is not the best media darling for you to use in order to get skeptics to look deeper. (Image issue). He’s the godfather you have, not the godfather you deserve.

        • trialkat says:

          90% of the retail sales of new consumer goods are point of sale computerized sales by 1 of a group of about 500 national or regional sellers. That leaves 10% roughly will need occasional or regular compliance checks and many of those by computer. Compliance costs vs current 122,000,000 returns are a savings of billions of dollars. Businesses get paid to collect FairTax® As do states.

    • trialkat says:

      The fact that you write about a flat income tax makes it obvious you are not to be taken seriously and have no idea what HR-25 is, says or does. It has nothing to do with taxing income. It removes payroll taxes completely and they hurt low income wage earners the most. Spend more pay more. Spend under $34,00 for a family of 4 your EFFECTIVE tax rate is 0%.

  3. Jon Lester says:

    I voted for Amanda Swafford because of foreign policy, and most certainly not because of her enthusiasm for the “fair tax” fantasy. As I’ve said here before, there are four states with no sales tax whatsoever, so of course they’ll all say “hell no” to adopting a federal sales tax, as will most of us who have ever been retailers.

    • Phil_will01 says:

      As a matter of fact, the Comptroller of one of those states (TX) has stated that the 1/4% that would be paid to the states to collect the FairTax would be more than enough to adequately compensate for their costs and he is in support of the proposal.

      Don’t let the facts get in the way of your conjecture, though.

      • Phil_will01 says:

        Most retailers would welcome the addition of a line or two on the sales tax form they are already filling out if it meant getting rid of corporate income and payroll taxes.

        BTW, I misread the comment initially and was thinking of states that do not have an income tax. Texas has a sales tax, but no income tax.

      • gcp says:

        Delaware, Oregon, New Hampshire, Montana, Alaska have no state sales tax however several have local option sales taxes

  4. Harry says:

    Fair tax and flat tax will never fly. The only practical thing we can do is fight to reform the IRS and corrupt system and simplify the broken income tax law.

    • Phil_will01 says:

      The “practical thing” is to keep doing the same thing we have been trying to do for the last 101 years with disastrous results? Seriously?

      The other problem with that approach is that our tax system is totally uncompetitive in the 21st century. That is one of the reasons that we have the largest trade deficits in human history and we have growing numbers of “corporate inversions.” Nothing less than a complete restructuring is going to address that.

      • benevolus says:

        I am curious as to what you mean when you say “disastrous results”?

        I would think the trade deficit has a lot to do with the fact that China can make things for about 1/3 of what we can. Seems like the tax issue is pretty marginal.

  5. saltycracker says:

    IMO we must change to a fair or flat tax to abate the abuses and feelings of unfairness in the tax code and for the benefit to society.

    Both ends of the bell curve of income have sophisticated or fraudulent exclusions or paybacks greater than taxes paid. Suspect neither the poor or the rich will like the idea of a flat tax with all the available tax tricks, shelters and end runs.

    The stone wall will be legislators will fight for exclusions, exemptions and rebates for their interests in the fair or flat final version.

    So with demographics shifting to a population retiring on 401ks, good paying public pensions and all those middle class households with easy to audit 1099’s and W2′ s, the fair tax should look good and the flat tax, a distant second choice.

    For the poor and rich or those with clever deductions, the current “codefog” system might be the choice.

    • Harry says:

      Any approach taken to collect tax by whatever name will be complex, inequitable and unfair. The only real solution is a bottom-up society where the government burden is largely eliminated.

      • saltycracker says:

        Not being an anarchist, government does have community responsibilities. The current system may not be good for society but, at the end of the day, you and I can probably navigate just fine in the BS system we have.

        • Phil_will01 says:

          We may be able to navigate the current system as individuals, but as a nation we are totally out of step with what is going on around the world. The current system is clearly among the world’s worst in terms of global competitiveness and if there is anything about the future that is certain, it is that the level of global competition is going to continue to increase. The longer we stick with an antiquated, inefficient and structurally unsound system, the more it will drag down our economic growth.

          • saltycracker says:

            Correct, and we should be just as concerned with its (the current) corrosive effect on our society.

        • Harry says:

          Tribal societies are the norm in human experience, and are decentralized. There is no central government. The tribal members and elders elect their leaders. The leaders form confederations with other tribes.

  6. objective says:

    also: “Ms. Nunn is, in effect, defending a tax system…”

    totally misrepresents concept of cause and effect… and takes absence of evidence as evidence of absence…poor politics, and poorer logic. actually not even logic.

    • Phil_will01 says:

      Your post makes no sense. The fact is that a vast majority of those who wish to perpetuate a job killing, unfair and horribly inefficient system would not dare to admit it because they recognize how unpopular that position is. Instead, they attack alternatives that come along and exaggerate defects (real and imagined), rather than attempt to defend the indefensible.

      Ms. Nunn appears to be the latest of that ilk. Please help me to understand why that is not so. Her approach of supporting vague “revenue neutral” tax reform is a dodge and a disservice to the people of the state.

      • objective says:

        not engaging, or not attacking, is very different than defending. that’s pretty easy to understand. but you’re right, that means i don’t know what she is actually for. i m guessing “revenue neutral” means eliminating certain tax loopholes/expenditures, which ones are tbd. yes, neither exciting nor innovative. but endorsing boring and incremental reforms is neither an endorsement of the status quo.

        • Phil_will01 says:

          “……but endorsing boring and incremental reforms is neither an endorsement of the status quo.”

          Perhaps that was not her intent, but that is the net effect. “Boring and incremental reforms” is what we have been trying to do for decades now.

          “Our tax system is a disgrace! Loopholes must be plugged!”
          For America’s Third Century, Why Not the Best?
          Presidential Campaign Brochure, Jimmy Carter (1976)

          • Jon Lester says:

            So much of this conversation assumes that government outlays need to stay the same and aren’t in need of serious reform. It’s as if “they” want us to resign ourselves to the status quo, at the expense of our most pressing domestic needs.

    • Phil_will01 says:

      Please explain why Von Mises should be the ultimate authority on tax reform?

      I read what they had to say some time ago and found much of their criticisms to be based on speculation.

        • Phil_will01 says:

          Absolutely, the tax collection agency under the FairTax would be smaller and much less intrusive. The distribution of the rebate would not be administratively difficult, even though the dollar volume would be relatively large. That is what computers are for.

          We would be reducing a 73,000+ page system (according to CCH) to one that is currently less than 150 pages. That is about a 98 or 99% simplification. We would be reducing the number of points of collection/enforcement by more than 80%. Those are ENORMOUS economies of scale. Regardless of what level of resources you commit to enforcement, you are going to get far higher rates of compliance under the FairTax than under the current system because of these economies of scale.

            • gcp says:

              The strong point of a consumption tax is that it is impossible to totally avoid. While its true some small local business don’t pay a sales tax every individual at some time must purchase gas, groceries, medicine and other necessities.

              Large retailers present little problem in terms of sales tax compliance but yes there would be a compliance cost but that enforcement mechanism already in place in Ga. and most other states.

              • John Konop says:

                For the state not the FEDS and a real conflict of interest….Trust me I deal with it all the time….When someone falls behind it is usually both…mainly payroll on the FED level from what I have seen…. BTW I have never seen the state give back their sales tax to the FEDS….no matter who had first rights….adding this fair tax rate north of 30% would be a collection nightmare…. Hard enough just to get state sales tax and payroll with local taxes….This would be rough….

                • gcp says:

                  The only current large federal consumption tax is the gas tax and I am not aware of any major problems with the feds collecting that tax. Why would it be a problem for the feds to collect sales tax at other retailers?

                  • John Konop says:

                    They have a hard enough time just getting payroll taxes….The state and the Feds working together is a large conflict of interest…Both sides just want their money…

                    • gcp says:

                      You failed to answer my question. If Kroger can collect a fed and state tax at their gas pumps, why can’t they do the same at the cash register inside the store?

                      The strength of a consumption tax is that its easy to collect and individuals can’t avoid it.

                    • John Konop says:

                      I have said the issue has nothing to do with complication of taxes…The problem is getting the business to send the money to the government….The state and Feds have a conflict of interest….

                    • John Konop says:

                      GCP,

                      I am talking about the difficulty the State and Feds have in collecting sales tax, payroll taxes….in general. It is not software related, complexity….it is the business guy not sending the money.

                    • gcp says:

                      Ok. I guess we just disagree. I see consumption tax as easiest to implement, easiest to collect and the most difficult to evade/avoid and you don’t agree.

            • Phil_will01 says:

              The administration of state sales taxes is fairly complex for retailers doing business across multiple state and other taxing jurisdiction lines. That is because different tax jurisdictions have (a) different rates, (b) different items being taxed, and (c) other complications.

              Under the FairTax, all items and services for personal consumption are taxed at the same rate. So the administration of the NRST (National Retail Sales Tax) would be much simpler than that of current state sales taxes.

              In addition, we believe that states would quickly move to “harmonize” their sales taxes to the FairTax design fairly quickly. In fact, there are a number of states already moving in that direction (including Georgia). We believe that the passage of the FairTax on the national level would create enormous political pressure on states to follow suit. For example, can you imagine the political pressure brought on by voters who say “I don’t have to go through the annual hassle of filing a personal income tax return for the federal government, why is my state still requiring me to do it?” There is also a separate and unrelated movement going on already to standardize state sales taxes. We would expect the FairTax to accelerate that trend.

              Simplifying state sales taxes is not a primary objective of the FairTax, but we do believe that it is a by-product.

          • Jon Lester says:

            We already have one of the highest rates of compliance in the developed world.

            Anyway, let’s say I accept all that at face value. How do you propose to convince retailers to gladly assume this new burden? And what would you say to residents of those four states that have no sales tax and don’t want that to change?

            • John Konop says:

              Why would they want to collect sales tax for the FEDS when they have their own problem statewide? I would tell them no problem but I get my money first, another idea not well thought-out….

            • Phil_will01 says:

              “We already have one of the highest rates of compliance in the developed world.”

              I would love to see some data on that claim because I seriously doubt that it is true. The IRS has admitted that there is about a $450 billion per year “tax gap”. I am going from memory, but I think that’s about right. That is a huge number relative to the taxes collected.

              “Anyway, let’s say I accept all that at face value. How do you propose to convince retailers to gladly assume this new burden?”

              The FairTax has a provision in which retailers and states serving as collection agents get to keep 1/4% (each) of the taxes they collect. That is 1/2% committed to the collection chain.

              So we are saying to retailers – look, you get to eliminate corporate income and payroll taxes (both of which are HUGE headaches), neither of which does the federal government defray the costs of. In their place, you add a couple of lines for the NRST to the state sales tax forms you are already filing. Plus we pay you 1/4% to defray any administrative costs you may incur.

              That is an EASY sell. That is a net positive for any retailer and I doubt there will be many who cannot understand that.

              Most people think of income taxes as a hassle, but fail to recognize how difficult payroll taxes are to administer. That is why payroll services have been such a huge growth industry over the last decade or two.

            • trialkat says:

              I live in Fla. No income tax. We have minimal problems to my knowledge collecting sales taxes. Our tourist industry provides hundreds of millions in visitors paying sales taxes to Disney, Sea World, Universal and thousands of restaurant chains and retailers.

  7. gcp says:

    Woodall is probably the best spokesman for the Fair Tax. Realistically its not gonna happen in our current environment. A more acceptable choice would be a combo consumption/flat tax; and we need some one such as Rand Paul to push it.

    As for Nunn and taxes; well folks she won’ t change anything.

  8. saltycracker says:

    If fair involves rebates, exemptions, exceptions…….move on.
    How about the other side of the government coin, spending.
    We can’t agree on the method of revenue, so how about we go for spending as related to revenue (not GDP). Limit spending/debt to a percentage of revenue. Exception being war or extreme events. That’s how we run our households.
    Couldn’t do that too fast or the economy will crash.

    In reality our choice will be to go until we can’t, default, reorganize and go again.

    • John Konop says:

      The biggest drag on the economy is wages and jobs.70% of the economy is consumer spending. Spending is being dragged down by low wages and high debt, especially the student loan crisis. Which is why we need to correct a few moving parts.

      1) If students got job skills in high school before graduation connected to a skilled job ie better wages and NO DEBT! High level college students with high paying degree no issues is not the problem…it is drop outs, graduates with no job skills and college students with low wages and high debt.

      2) If we raised minimum wages above the poverty level and off set it with tax breaks against what we were paying for entitlements…It should increase spending…because low wage to middle class people spend at the highest ratio to income….and the tax break would off set the inflation.

      3) We need to invest to infrastructure….if done right it always pays off in the long run via the economic growth…ie railroads system that opened up the west, airport system, highway system, internet…….infrastructure investment leads to US production ie big fuel factor for economy…

      If we do the above it would fuel the economy….than we need your rational solution….not spend as fast as it comes in…just my 10 cents…

    • GALisa says:

      It is fair to have a prebate because people shouldn’t have to pay taxes on groceries or any other necessities. Americans should be allowed to take care of their own families before giving any of their money to the government.

      • saltycracker says:

        A prebate is a tax schedule administered by the govt. That has proven they can’t administer anything without tweaking it regularly. The better option would be to not tax foods. Then we can hire a legion of public workers to define what foods are eligible.

        It’s all entertainment for us to talk about….going nowhere….

    • Phil_will01 says:

      “If fair involves rebates, exemptions, exceptions…….move on.”

      The current system has something like 73,000+ pages of exceptions, carve-outs and exemptions, etc. “Move on” to me means accept what we have now. Is that what you are advocating – accept what we have now, even though it is an enormous job killer?

      I think we can see from this thread how we ended up with such a horrendous mess of a tax system. We have the professional politicians in Washington who just want to peddle tax preferences for campaign cash. They are extremely skillful at diverting attention by exploiting the enormous partisan divide in the nation. Then we have individual citizens who cannot evaluate any reform measure objectively on its merits because of their hyper-partisanship. That is true on the left and it is true on the right.

      So we end up with this monstrosity that seems to have a life of its own and grows more unintelligible and impedes our global competitiveness more with each passing year. Meanwhile, the level of global competition increases with each passing year. Meanwhile, our political leaders constantly and incessantly say they want simplification and tax reform. We hear this over and over and over and over and over again.

      Is it any wonder that we have young college graduates moving back in with Mom & Dad because the jobs just are not there?

      • saltycracker says:

        I believe my earlier post was clear, we need to change to a fair or flat or some combo.

        As for modifications in a simple, enforceable plan: Consistency and uniformity are key.
        Psychologists will tell us that compliance is a function of all involved feeling the system is the same for everyone.

        It is socially acceptable today to advantage the system to the legal limits and many times beyond. We then are angry/envious of those making out better than us. Look no further than massive fraud/abuses in disability, food stamps, farm subsidies, salestax exemption, social security, IRS refunds, Medicare, Medicaid, cash underground and our inability or intended lack of enforcement by government. As the admin says “we might hurt an innocent party.”

        If all of us were in the same boat, say 7% flat or 20% fair, it would not be cool to brag on how you screwed the system at your next cocktail party and I’d bet total revenues would increase.

        Personally I prefer the unfathomable mess and deductions we have today. And some very wealthy friends piss me off when I find I pay more taxes than they do with their personal financial planner, CPA and lobbyists.

    • saltycracker says:

      Flat tax nations – info a few years old
      Georgia (12% tax rate, 9.5% growth-est.)
      Russia (13% tax rate, 7.1% growth)
      Ukraine (13% tax rate, 12% growth-est.)
      Serbia (14% tax rate, 7% growth)
      Hong Kong (16% tax rate, 8.1% growth)
      Romania (16% tax rate, 8.1% growth-est.)
      Slovakia (19% tax rate, 5.3% growth-est.)
      Estonia (24% tax rate, 6% growth-est.)
      Latvia (25% tax rate, 7.6% growth-est.)
      Lithuania (33% tax rate, 6.6% growth-est.)

  9. Baker says:

    Did I miss anyone propose a “progressive” flat tax? The lowest would pay 10%. Middle 20%. Richest 30%. I don’t know what would define those but there would be no deductions (stop you’re screaming, they’d be phased out, you can keep your mortgage deduction) and all wealth would be taxed, not just salaried income, a la Warren Buffet’s big bugaboo. Boom. Fixed. And you still get all your arguments about nearly zero compliance costs, drastically reducing the IRS, etc etc.

    • Baker the problem is the actual monied backers of the Fair Tax don’t want to pay any taxes at all and they’ve tricked a bunch of idiots into being for the Fair Tax. While your plan (or see for example Jerry Brown’s postcard plan from 1992) makes a lot of sense, it conflicts with the actual aim of Fair Tax supporters.

      If you run all of your money through your business (Chris Huttman, LLC in this case), you pay no taxes under the Fair Tax.

      • Baker says:

        I agree with you there are plenty of problems with the Fair Tax and there are likely plenty of them who only care about their own bottom line (which isn’t necessarily so awful, it is awful if they are just flat out lying) but I do think plenty of them are trying to do best for the country. 6-7 billion man hours of compliance with the tax code is an insane waste of resources and we have to do something….

        Perhaps in a state that has a Republican majority and governor we might see some creative tax reform that would lead the way…wait, that could have been us but we did nothing except moving around car tax money…bold leadership from Deal.

        • If I were king for just one day, I’d probably do something like replace FICA with a VAT that applies to everyone, then have a single tax rate that applies to everyone and a millionaire’s surcharge. I would not make any distinction between earned income, investment income or corporate income. I’d do annual mark to market for investment income with an inflation credit for cost basis that would replace the long term capital gains tax.

          I would also eliminate most deductions and replace them with a more generous personal exemption for each person in your household, that you would get when you file your taxes. Actually I would assume that each person would get their own exemption, so let’s say the exemption is like $5,000/person, in that case…

          I would imagine the rates would be something like 10% VAT, 10% income tax rate for incomes 5,000 and above (taking into account your own exemption) and then a millionaire’s surcharge of like an additional 15-20%.

          This scheme would basically be just as easy to implement as the fair tax and infinitely more fair.

            • Harry says:

              VAT has been an additional complex, bureaucratic hurdle in Euro land. Along with income tax, it creates more economic inequality and tax burden on the middle class. The public sector becomes a monster, and personal freedom is minimized.

                • Harry says:

                  VAT (at least the Canadian-style VAT, i.e. GST) probably would work better here than it does in Europe, but the compliance is not simple. There are different classes of goods and services that require determination as to the tax rate or exempt status. Exporters have to deal with credit offsets, etc. In Europe the Russian mafia front companies and other mafia protected entities have made a successful cottage industry of evading VAT, and evidently they are smarter than the bureaucrats.

                  • John Konop says:

                    I agree it would need to be simplified….I want everything flat no bs..not a..policy based on lobbying….None of this mailing out rebate checks…Do we really want to give incentives for people to work less?

      • gcp says:

        So QT would give you a “business exemption” when you buy gas, Kroger would give you a business exemption when you buy groceries, CVS would give you a business exemption when you fill a prescription? Such a transaction would not be allowed under a consumption tax.

        • From the Fair Tax faq – I don’t know about you but if you hate the IRS you’ll probably hate the organization that they set up in its place to enforce this stuff…

          Since business purchases are not taxable, how does the FairTax keep individuals from pretending to have a business so they can buy things tax-free?

          The FairTax has several features that make it difficult and very risky for persons to have a scam business in order to purchase items tax free. First, in order for any person to purchase items tax free for business purposes, the business has to be a registered seller and possess a registered seller certificate issued by the state sales tax authority. Registered sellers are expected to file monthly or quarterly sales tax returns with the state (depending on sales volume). The certificate enables the business to purchase tax free from wholesale vendors, but the vendor must retain a copy of the registration certificate to justify not having collected tax on the sale. When a business purchases items for business use from a retail vendor, they have to pay the tax on the purchase and take a credit against the tax due on their monthly sales tax return. They must keep invoices/receipts to document what they purchased and the amount of the purchase. They might also make note of the purpose of the purchase on the invoice.

          Also, as registered sellers, they are subject to the possibility of being audited by the state. During such an audit, they will have to produce the invoices for all the “business purchases” that they did not pay sales tax on and will have to be able to show that they were bona fide business expenses. If they cannot prove this, then they will have to pay the taxes that should have been paid when the items were purchased, plus interest and penalties. The probability of being audited will be much greater than it is under the current system with its over 140 million tax filers. Under the FairTax, there will be less than 20 million businesses that will be filing sales tax returns and thus subject to the possibility of being audited. Thus, the probability of tax cheats getting caught will be much greater than it is today, making tax evasion riskier than it is today. Additionally, while the FairTax has much stronger taxpayer rights than does the current tax system, the FairTax legislation provides for a number of fines and penalties for noncompliance. It also authorizes a mechanism for reporting tax cheats and obtaining a reward. An example would be 1-800-TAX-CHET.

          Another potential scam would be to have a “fake” family business in order to buy things for family members tax free. The FairTax has a specific provision to prevent this. Although it does not prohibit businesses from providing taxable property or services as gifts, prizes, rewards, or as remuneration for employment, the gift, reward, etc. is considered to be the conversion of property or services from business use to personal use and is therefore taxable. Likewise, there is a similar provision to prevent abuse of employee discounts. Under the FairTax, employer-provided employee discounts over 20 percent are taxable. The term “employee discount” means an employer’s offer of taxable property or services for sale to its employees or their families for less than the offer of such taxable property or services to the general public. If the employee discount amount exceeds 20 percent of the price to the general public, then the sale of such taxable property or services by the employer to the employee is considered the conversion of property or services to personal use and is subject to tax. The taxable amount is the amount by which the discount exceeds 20 percent of the price to the general public.

      • John Konop says:

        Welfare rebate checks….paid by a system with collection problems…..Lol…We have a hard enough time collecting sales taxes and payroll taxes now…..your solution make it a larger amount….Lol….

        • trialkat says:

          Cite me a study which shows that sales taxes like a gas tax create “collection problems” greater than income taxes, investment taxes and death taxes. As for a “welfare rebate check…” How is a standard deduction of tax refunded to ALL CITIZENS a welfare check?

          • John Konop says:

            Lol….you obviously never looked at business credit….do you have any background in the financial service industry….other than reading a fair tax book?

    • trialkat says:

      Here is a quote from the linked study “The aim of this study was to determine what Americans think a fair state and local tax system would look like and use that information to rank the tax systems of the 50 states. ” It is referencing state taxes, local taxes not a federal tax. I realize you were probably government school educated but can’t you read?

      • John Konop says:

        Study this….In Pennsylvania alone they have over 130 THOUSAND state liens open now for over 1 BILLION dollars ….BTW this does not include county, city FED, liens resolved this year, liens not filed this year yet……Any rational person would not need a study to see adding a 30% sales tax on top of what is being collected would put this collection issue on steroids…LOL….

        ……..State tax liens have increased by 16 percent since last September, while the outstanding debts are up about 14 percent, according to the latest figures from the state Department of Revenue.

        There were 136,812 liens against businesses and individuals, totaling $1.1 billion, as of Aug. 1.

        A lien is the first step in pursuing tax enforcement against past-due taxes …….

        http://www.lvb.com/article/20140820/LVB01/140829985/State-tax-liens-up-16-percent-since-September

      • John Konop says:

        Did you study this issue on your rebate checks? This will be a mentoring nightmare.

        …….Under the FairTax, family households of lawful U.S. residents would be eligible to receive a “Family Consumption Allowance” (FCA) based on family size (regardless of income) that is equal to the estimated total FairTax paid on poverty level spending according to the poverty guidelines published by the U.S. Department of Health and Human Services.[1] The FCA is a tax rebate (known as a “prebate” as it would be an advance) paid in twelve monthly installments, adjusted for inflation. The rebate is meant to eliminate the taxation of household necessities and make the plan progressive.[4] Households would register once a year with their sales tax administering authority, providing the names and social security numbers of each household member.[1] The Social Security Administration would disburse the monthly rebate payments in the form of a paper check via U.S. Mail, an electronic funds transfer to a bank account, or a “smartcard” that can be used like a debit card.[1]

        Opponents of the plan criticize this tax rebate due to its costs. Economists at the Beacon Hill Institute estimated the overall rebate cost to be $489 billion (assuming 100% participation).[35] In addition, economist Bruce Bartlett has argued that the rebate would create a large opportunity for fraud,[36] treats children disparately, and would constitute a welfare payment regardless of need.[37]

        The President’s Advisory Panel for Federal Tax Reform cited the rebate as one of their chief concerns when analyzing their national sales tax, stating that it would be the largest entitlement program in American history, and contending that it would “make most American families dependent on monthly checks from the federal government”.[8][38] Estimated by the advisory panel at approximately $600 billion, “the Prebate program would cost more than all budgeted spending in 2006 on the Departments of Agriculture, Commerce, Defense, Education, Energy, Homeland Security, Housing and Urban Development, and Interior combined.”[8] Proponents point out that income tax deductions, tax preferences, loopholes, credits, etc. under the current system was estimated at $945 billion by the Joint Committee on Taxation.[35] They argue this is $456 billion more than the FairTax “entitlement” (tax refund) would spend to cover each person’s tax expenses up to the poverty level. In addition, it was estimated for 2005 that the Internal Revenue Service was already sending out $270 billion in refund checks.[35]…..

        http://en.wikipedia.org/wiki/FairTax

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