Neal Boortz Explaining Fair Tax

First off, a hat tip to Verbal Thermite, where I first saw this posted. I will preface this by saying I don’t believe the fair tax will solve every issue in the US. I do believe that consumption-based (as opposed to income-based) is a much less complex, less expensive, and (forgive the term) fair system.

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Posted under Economy

Written by admin on March 1, 2009

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14 Comments so far

  1. Wess Stewart March 1, 2009 3:14 pm

    Thanks for the pingback! While I haven’t read his book, everything I hear about the fair tax system seems to be quite good. I’m still not sure why Obama hasn’t picked up on this…it is the ‘fair’ tax…

    Boortz rocks, as does RWNJ!

  2. truth4uall March 1, 2009 3:44 pm

    Don’t Fall for it!!!
    Everyone do yourself a favor and go read the Plan English version of the bill so you don’t fall for this SCAM- http://www.fairtax.org/PDF/PlainEnglishSummary_TheFairTaxAct2007.pdf OR the Fair Tax Bill- http://www.govtrack.us/congress/billtext.xpd?bill=h109-25

    NO FAIRTAX.Most everyone fighting for it has never read the Bill, they just hear the sales pitch. Everyone needs to see the Bill and understand it so they don’t fall for it, because everything’s going to be taxed, RENT, FOOD, BANKING, EVEN FREE CHECKING, BABYSITTING, HEATH CARE, CAR+HOME INSURANCE, POWER+PNONE+CABLE BILLS, EVERY DOLLAR TOWARD GAS + HEATING OIL It even Taxes THE GOVERNMENTS- STATE & TOWN, EVEN GOV. EMPLOYEES, IT TAXES EVERYTHING, even your Childs LITTLE LEAGUE BALLGAME.

    IT’S A 30% TAX
    Do you realize its a 30% tax The fair tax is inclusive 23% out of a dollar, however if you figure it like currant state Sales Taxes which is on top of a dollar (Tax-exclusive) it’s 30%. Look its like this the store and services like plumbers, landscapers& babysitters will have to add 30% to get the gross rate of 23% Example- $500 + 30% = $650 then they will hand you a receipt that says $650-23%=500 but see the tax was $150 and that’s a 30% increase.

    EVERY 15TH BECOMES LIKE APRIL 15
    Why don’t you realize that small businesses and services will have to file taxes on the fairtax before EVERY 15TH OF EVERY MONTH.
    These services become tax collectors and have to do taxes before every 15th of every month. this includes plumbers, people who cut grass, baby setters, landscapers. roofers, exterminators, tree service, handyman, house painters, I do not think people are realizing all that is conceder services, NONE OF THESE HAS EVER COLLECTED A SALES TAX BEFORE!!!

  3. truth4uall March 1, 2009 3:47 pm

    not say “Why don’t you realize ” i’m talking to the guy on the youtube

  4. admin March 1, 2009 4:16 pm

    That’s only telling half the story. The other half of the story includes the elimination of all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes. That results in a reduction of the cost of goods and services by 20 to 30 percent. You also finally get to keep 100% of your paycheck and pension benefits (did you realize that your employer matches what you pay in FICA and Medicare? Yes, you actually pay double for FICA and Medicare what it shows on your payroll stub… talk about hiding taxes!).

    This is no scam, it is a balanced system that gets rid of the overhead of the IRS, exposes hidden taxes (consumers pay corporate taxes in higher prices for goods and services) and truly lets YOU know what you are paying the government. The reason it’s not gaining traction isn’t that it’s a scam, it is the simple fact that it exposes how much money comes out of your pocket and goes to the Government and it takes a key method of Government control of behavior away. It is unfortunate how few people realize how much they give out of their pocket to the Government (payroll taxes, income taxes, property taxes, sales taxes, hidden taxes, death taxes, gift taxes and so much more).

    As far as businesses being unable to collect these taxes, that’s a heck of a myth. All but five states currently have a state sales tax, meaning that they are already performing “taxman” responsibilities on a state level. The infrastructure is in place and the hardships are few (especially considering the benefits to the citizens of the country). It surely is much easier than expecting every single household in this country to comply with a code that is 67,204 pages long and includes 1,638 different tax forms.

    The IRS estimates that the average taxpayer needs 37 hours to complete the BASIC form, self-employed individuals take upwards of 80 hours. Warren Buffett has told interviewers that he pays less than 20 percent in taxes on his income of billions, while his receptionist pays about 30 percent. With an amazingly complicated tax system like we currently have, it is easier for the wealthy to (legally) pay less taxes by using lawyers and tax experts that less wealthy citizens cannot afford. I guess that’s what happens when the tax code is about as long as 112 copies of James Joyce’s Ulysses.

    I will agree that you should read the bill and educate yourself. However, be sure to read the ENTIRE bill so you understand not only the cost-side but the benefit side as well. If you only stop at the cost side you are missing half the picture!

  5. audaxetvigilans March 2, 2009 10:41 am

    “truth4uall” Now, there is a “nut job” if there ever was one. This person has made it his/her mission in life to “debunk” the FairTax, but this poor individual can’t seem to interpret English very well, and has a whole lot of trouble with arithmetic and logic.

    Although he states it as fact, which it’s not, his contention that proponents of the FT have never read the bill is just wrong. The difference is that others who have read the bill understand it, which is obviously not the case with “truth talker.”

  6. Robert March 2, 2009 5:08 pm

    I’ve seen “truth4uall” copy and paste that spelling-challenged rant on several sites. Apparently “truth4uall” doesn’t seem to have a problem with paying taxes blindly out of his or her income, but sees a problem with consumed goods and services being taxed.

  7. Bill Jones March 2, 2009 6:20 pm

    As bad as our current tax system is, the FairTax would be much worse. Virtually every independent study of the FairTax over the last decade has concluded that the tax rate would need to be at least 50%.

    Funny how Boortz never mentions that.

  8. admin March 2, 2009 9:02 pm

    Don’t be afraid to throw some links up of those studies.

  9. Bill Jones March 3, 2009 12:46 am

    Here’s the President’s Tax Reform Panel’s report on the National Retail Sales Tax (i.e., the FairTax.) Since the Panel only looked into what it would take to replace the income tax, andsince the income tax accounts for slightly less than half of federal revenues, you will need to double their 34% result to determine how high the FairTax rate would need to be to replace all of the other federal taxes as well. This is a very easy read.

    http://www.taxreformpanel.gov/final-report/TaxReform_Ch9.pdf

    The Congressional Joint Committee on Taxation did two reports, one in 1998 and one in 2000, which concluded the tax rate would need to be 55%-57%. These reports are only a few pages, but alas, I don’t have a link.

    More formal economic studies (both pro and con) can be found at http://www.fairtaxblog.com. Look for the William Gale study and the Zodrow study. The one study that sort-of supports a 30% (tax-exclusive) rate is the one done by Laurence Kotlikoff, et al. That rate was paid for by AFFT, so it’s hardly impartial, but it’s there if you want to read it.

    Warning: These studies are very difficult to wade through. The Gale study is easiest to follow. The others more or less use his methodology but get different results. The main factors for the different results are (a) what the expected rate of tax avoidance would be (the Kotlikoff study thought they had accounted for tax avoidance, but after the study was published they realized that they had not); and (b) what would be an acceptable budget defit. (The higher the deficit, the lower the tax rate would need to be.)

    Happy reading!

  10. Robert March 3, 2009 4:48 pm

    I’ll read your referenced sources this weekend, Bill Jones, but frankly, I would support a 50% RST over a 39% incremental income tax any day. When you back out the 22% cost of income taxes currently embedded in the price of retail goods & services, a 50% sales tax amounts to more like 28%, still less than what I currently pay in income taxes (and far more controllable since I can elect NOT to purchase things if I don’t want to). Furthermore, I can’t think of a better way to spread the burden of our bloated, wasteful and expensive government than to tax every living consumer that spends a buck in America, be they residents, illegals, unemployed, over-employed, underground employed or what-have-you. I’m sick of working my butt off earning a living, only to subsidize everyone else that doesn’t pay into the system with taxes on my hard-earned income.

  11. Bill Jones March 4, 2009 7:04 pm

    Robert — I’m sure a number of people, just like you, would support a 50% consumption tax over an income tax. That’s what we are supposed to do as citizens, look at various alternatives and support the one that we think is best. My only complaint is that the proponents of the FairTax will not admit the truth about it, and cling on to the “it’s only 23%” baloney.

    By the way, if you read the Kotlikoff study (which is pro-FairTax), you would see that the so-called embedded taxes would not go away under the FairTax, so prices would need to rise by the full tax-exclusive rate. Another thing Boortz and Linder generally fail to point out.

  12. Wess Stewart March 6, 2009 9:18 pm

    It’s not a 30% tax increase. It’s REPLACING the taxes already in place.

    Why don’t anti-Fair Tax people understand that concept?

  13. marbee November 18, 2009 5:58 pm

    “Barter transactions are taxed at the fair market value of the goods or services bartered. Example: A plumber fixes a toilet in a farmer’s residence, and the farmer offers to pay him with produce from the farm. As the seller of the service, the plumber is responsible for remitting the tax based on his normal charge for fixing a toilet. If he normally charges $100, then he owes tax on that amount.”
    THAT IS CRAZY!!!! The government has no business in bartering, period! What a bunch of greedy bastards!

  14. marbee November 18, 2009 6:07 pm

    What we really need to do is rein in the government so they don’t need over 10% of our money in the first place! Enough is enough! Even 20% is too much!

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