Concering the FairTax

[cryhavoc]

As promised, I stated I would riposte on this medium. The fact is that corporations tend to merge towards a state called 'Laissez Faire' (Capitalism without constraints of any kind). Theodore Roosevelt was responsible for laying down the first regulations to delimit this sort of behaviour. I am a type of Libertarian that ften is called a Minarchist and/or a Constitutionalist. The ideology of Minarchism is on the outset very simple: Government = Force. The least amopunt of force needed to effect a stated action is alwyas the best course. Thus, the LEAST amount of government needed to Govern, and the LEAST amount of Regulation to regulate. Now lets get to the current taxation system we have. It taxes labor and capital. The problem with this is manyfold. The 16th Amendment was passed in 1913. It was a miscegenated piece of garbage foisted on the people by Democrat and Republican alike. It was never ratified by the states;in that means, technically it is illegal. Withholding came about ( and the precursor to the IRS) around WWII. Let the government take out what taxes you owe, and maybe at the end of the year, we will give you back some of what we stole! Thats a Good Deal! I also have some desert property in Miami,FL too. Add to this the release of Social Security Payins to the Politicians in 1967 ( Thank You LBJ!) and what you now currently have is a royal mess. Some examples:

- There is NO Social Security Lockbox! The money taken from the workers as FICA tax is spent as it is taken in. Since 1967, this has been used to pad the spending.

- Starting in 2011, the first baby boomers will be retiring. By 2025 (if we are lucky) the current system will be out of funds. This was ok as long as there were more workers then retirees, but soon that will not be the case. It is a brick wall waiting for a collision.

- NO Politician , be they Democrat or Republican, will do what needs to be done. The radical departure from the standard paradigm this would cause would be politicial suicide for the party daring to implement any real change. This includes sealingb the US/Mexico border! Why?

- Because the current morass of a tax system we now have allows the politicians in Congress to play political football with all the deductions. Both sides are busy catering to those who donate the most money. After all, they DID buy their politicians fair and square!!

I admit I was a skeptic at first. I bought a copy of the FairTax book and read it. It was only 230 pages or so...no big deal to me. I was aware of much they had to discuss in the book. Then...I read it again, figuring there was a catch. Then I read it a third time. The principle is very simpe. The ramifications are staggering!

The gist of it is this. Every step of the manufacturing process has imbedded costs in it passed on down the line until you buy the product. he proposal is simple: replace most all of this imbedded cost with a 23% National Sales tax on new goods and services. This would REPLACE the already imbedded compliance costs inherent in the products you buy. What would the people get in exchange for this?

- No More With holding
- No more Fica/Medicaid tax ( They would be funded from the federal consumption tax, NOT for thee dwindling supply of workers
- No more Capital Gains Tax
- No more 1040-A, 1040, etc etc
- No more Inheritance tax
- No more Marriage Penalty
- No More Alterniative Minimum Tax

There is more , though.To deal ith the issue of the poorer people, every Head of household that is a LEGAL US citizen would receive a prebate to cover the tax up to the poverty level. If you spent no more then that amount, you essentially pay no tax!

It is true you would no longer be able to deduct mortgage interest payments, but you also would no longer have with holding. If you sell your property for a profit, no Capital Gains tax on that profit. The same would go for any profit made with stocks and even bank account interest.

To deal with the one main objection I have heard so far, the Market Place is the controller of prices. Protectionism and stupid bullshit subsidies interfere with the free market ( An Example: if the USA would stop with the bullshit subsidies for the corn farmers to produce ethanol, we could get it from Brazil at a far lower cost then we could get by producing it ourselves). If a company wants to jack up their cost of goods by 23%, so be it; someone will come along and undercut their price. You already see this in play at Wal-Mart. Notice how a lot of goods are from China? They are a pervasive entity in the market place, but the end result is a lower cost product. Do not forget, corp. regulations are still in place. A corporations bottom line is profit versus the willingness of people to buy their product. If a balance is not achieved, they go bankrupt. Here is another example: The first CD was released in 1985 ( Dire Straits Album Money is for Nothing iirc). Within 4 years LP records were shoved out of the mainstream and replaced with CD media. Along with this went a gargantuan % of the overhead of producing the product. (A mechanical record pressing facility versus a few people and a CD duplicator array.) CD Prices DOUBLED in price over LP media despite this fall off in Production overhead. The buyers of this product could either pay the crappy prices for what many saw as sub par work.......or Rebel. I believe Napster was the clarion call to rebellion. Notice how the MPAA is using a more common sense approach. I can buy 3 new DVDs for the cost of one new CD......seems like the marketplace is working, isn't it? Under the fairtax..it would also work, and give us these benefits.

- Social Security and Medicaid would be funded directly from the tax. It would even be possible to wrest these funds away frm the politicians for good

- One tax stream replaces a multitude of taxes. This provides transparency to the process. We cna now see where the money is going

- The FairTax would have NO exemptions or favorites. No more Politicians using these as enticements for votes.

- The IRS would be removed, saving 10 billion dollars a year

- the Compliance costs under the courrent system would be no more then under the Fiartax. You have one and only one taxation level. Businesses will no longer have to consider tax liabilities upon expansion, because the only way they will pay more tax is if they sell more goods.

- With no more tax on Capital gains, Offshore Financial Center Monies will flow back into the infrastructure to be invested. This would result in more money available to loan and would probably result in the l;owering of interest rates.

- The black market would now be paying taxes. This would include the illegal aliens as well as the criminal element. ( I doubt they file tax returns now)

Perhaps this sounds too good to be true; the results stated above can be validated by using any book on macroeconomic theory. I would suggest reading the FairTax Book by John Linder and Neal Boortz to get a bettewr idea of what the Fairtax means: Power to the people, not to the federal government

CryHavoc ;D

Comments??? BRING IT ON!!!! www.fairtax.org thejadedbard.blogspot.com/

[michael]

"It was never ratified by the states;in that means, technically it is illegal."

www.gpoaccess.gov/constitution/html/conamt.html

The 16th Amendment was ratified by the respected legislatures of the states, as required by the US Constitution, so indeed it is legal.

On the debate of the "Fair Tax", I have here with me, a link to a site, which I read a long time ago on the Fair tax.

"The Fair Tax Fraud
By Laurence Vance
Posted on 5/18/2005
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Since my recent article on the evils of the withholding tax, I have been inundated with e-mails by supporters of the " FairTax," including a request that I endorse "The Fair Tax Act of 2005" currently pending in the Congress. But like the calls for "fair trade" instead of "free trade," the FairTax is a fraud because it is based on the fallacy that government theft (taxation) should be done in a "fair" manner instead of eliminated altogether.

FairTax proponents are correct in their assessment of the Internal Revenue Code:

The current U.S. income tax code is widely regarded by just about everyone as unfair, complex, wasteful, confusing, and costly. Businesses and other organizations spend more than six billion hours each year complying with the federal tax code. Estimated compliance costs conservatively top $225 billion annually—costs that are ultimately embedded in retail prices paid by consumers.

The Internal Revenue Code cannot simply be "fixed," which is amply demonstrated by more than 35 years of attempted tax code reform, each round resulting in yet more complexity and unrelenting, page-after-page, mind-numbing verbiage (now exceeding 54,000 pages containing more than 2.8 million words).

But could the cure they offer be worse than the disease?

The FairTax is a consumption tax in the form of a national retail sales tax on new goods and services. It is designed to replace "federal income taxes including, personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes." The FairTax would also abolish the IRS and repeal the 16th Amendment.

The elimination of the 16th Amendment, the IRS, and all those taxes sounds like a great idea that all free market economists and advocates of liberty could agree with. So if the FairTax is such a great thing, why would anyone in their right mind oppose it?

That is exactly what I have been hearing:

"What could you possibly have against the FairTax?"
"The FairTax is the only way to go."
"I find it weird that you would oppose the concept of the Fair Tax."
"The choice boils down to the Fair Tax (H.R. 25) or the current 'system.'"
Even Ludwig von Mises, I was told, "would approve the Fair Tax idea, as do dozens & dozens of rational economists."

Various consumption tax proposals were recently critiqued on this site in an article by Murray Rothbard. So rather than just repeat them and apply them to the current FairTax scheme, I will focus instead on problems with the FairTax proposal itself.

The Fair Tax Act of 2005 is H.R. 25 in the House (introduced on January 4) and the identical S. 25 in the Senate (introduced on January 24). FairTax proponents who complain about the complexity of the Internal Revenue Code are going to have a hard time convincing those of us who have actually read this bill (it came to 59 pages when I printed it out from my computer) that it will simplify the tax code when it contains language exactly like that which appears in the tax code:

(b) Rebate Defined- For purposes of subsection (a) (2), the term 'rebate' means so much of an abatement, credit, refund, or other payment, as was made on the ground that the tax imposed by chapter 41, 42, 43, or 44 was less than the excess of the amount specified in subsection (a)(1) over the rebates previously made.'.
Strangely absent from the list of co-sponsors of H.R. 25 is Congressman Ron Paul(R-TX). Representative Paul has consistently been named the "taxpayers' friend." If the FairTax proposal was as friendly to taxpayers as its proponents say it is, I would expect Congressman Paul's name to be first on the list of co-sponsors.

FairTax advocates claim that their plan would repeal of the 16th Amendment. However, all H.R. 25 does is repeal Subtitle A of the Internal Revenue Code of 1986 that relates to income taxes and self-employment taxes and Subtitle C that relates to payroll taxes and the withholding of income taxes. The only mention of the 16th Amendment in H.R. 25 is when it says: "Congress further finds that the 16th amendment to the United States Constitution should be repealed."

To repeal the 16th Amendment would require a constitutional amendment. Can Congress be relied on to pass a constitutional amendment that repeals the 16th amendment after a national sales tax has already been enacted? And even if Congress passed a constitutional amendment, it would still have to be approved by three-fourths of the states. Without the repeal of the 16th Amendment, what is to prevent an income tax from being imposed again after a national sales tax has been enacted?

Although the FairTax would eliminate the filing of all individual tax returns, the FairTax turns every business into a tax collector. Every small service business and every Internet business that does not currently collect state sales taxes will have to collect taxes for the federal government. Every doctor will now have to charge sales tax on his services. Where will this end? Will the neighborhood boy who mows lawns have to begin collecting federal sales tax on each lawn mowed? Will the neighborhood girl who baby sits have to do likewise?

The national retail sales tax rate under the FairTax plan is 23 percent. That is on top of state sales taxes that are currently collected by forty-five states. That is on top of the sales tax that many cities and counties also collect. That is on top of the special taxes that exist on hotel rooms in most areas of the country. I suppose that a national retail sales tax would also apply to gasoline. There is no mention of the federal gas tax anywhere in the Fair Tax Act of 2005. No list of taxes that are supposed to be eliminated under the FairTax includes the federal gas tax. Does this mean that there will be an additional 23 percent tax on each gallon of gasoline?

The FairTax will make it easier for Congress to raise taxes. The initial rate of 23 percent is supposed to begin in 2007. For years after 2007, "the rate of tax is the combined Federal tax rate percentage." This combined percentage is the total of three things: the general revenue rate (stated to be 14.91 percent); the old-age, survivors and disability insurance rate; and the hospital insurance rate. This is all but saying that the rate will be adjusted every year. And it will be very easy for Congress to do so. To raise several billion dollars of additional revenue, all that will be necessary is for Congress to raise the tax rate by one percentage point by small adjustments in one or more of the three items that make up the combined percentage rate. It will be sold to the American people as "a penny for progress," or some other deceitful scheme.

Under the FairTax system, there are no longer any Social Security and Medicare taxes. However, this does not mean that Social Security and Medicare will be eliminated. The inclusion in the combined percentage of the old-age, survivors and disability insurance and the hospital insurance rates means that the Ponzi scheme known as Social Security will continue as is—only the way it is funded will change.

The "underground economy" that income tax advocates complain about will certainly increase under the FairTax system. Even if the highly dubious claim that there will be an "average producer price reduction of 22 percent for goods and services in just the first year after the adoption of the FairTax" is true, not having to pay a 23 percent tax on an item is a tremendous incentive to make a purchase in the "underground economy."

The claim that the IRS will be eliminated under the FairTax is bogus. Although the national sales tax will be collected by the states from retailers, it is still a national sales tax, and as such, its collection will have to be overseen by some agency of the federal government. Just because the bureaucracy will no longer be called the IRS doesn't mean that it will be eliminated. According to The Fair Tax Act of 2005:

There shall be in the Department of the Treasury a Sales Tax Bureau to administer the national sales tax in those States where it is required pursuant to section 404, and to discharge other Federal duties and powers relating to the national sales tax (including those required by sections 402, 403, and 405). The Office of Revenue Allocation shall be within the Sales Tax Bureau.
Title II, chapter six, section 603 of The Fair Tax Act sets up the Problem Resolution Office and authorizes "problem resolution officers." There will still be tax courts according to title II, chapter six, section 602 and chapter nine, section 7451. Changing the phrase "Internal Revenue Service" to "Department of the Treasury" and "Commissioner of Internal Revenue" to "Secretary" doesn't eliminate the federal bureaucracy.

With the FairTax, the federal government will also be a tax collector in a new way: at the post office. There is no exemption of postal goods and services mentioned anywhere in the Fair Tax Act of 2005. I suppose this means that stamps, P.O. Box rental services, and package mailing services will be subject to the new 23 percent tax.

The FairTax is progressive. What could possibly be fair about a progressive tax where some people have to pay a higher percentage than others merely because they are deemed to be "rich"? How is the FairTax progressive? I thought it was a flat 23 percent on all new goods and services? It is and it isn't. Under the FairTax plan, everyone pays the 23 percent tax on everything, but "every household receives a rebate that is equal to the FairTax paid on essential goods and services." The rebate is given out each month, and is based on family size and the poverty level. But like the current tax code, the FairTax can also function as a tool for income redistribution because "the poor [will] actually pay less than zero-percent retail sales tax on their spending. Much like with the earned income tax credit of today, the rebate may give them more money than they actually spend on retail taxes."

The real problem with the FairTax is threefold. In " An Open Letter to the President, the Congress, and the American People Concerning Reform of the Federal Tax Code," which is posted on the FairTax website along with the endorsement of seventy-five "professional and university economists," we can see the trouble with the FairTax immediately:

We are not calling for elimination of federal taxation, which would be irresponsible and undesirable. Nor does our endorsement call for reduced federal spending. The tax reform plan we endorse is revenue neutral, collecting as much federal tax revenue as the current income tax code, including payroll withholding taxes.
There is only one word to describe the fact that the federal government now spends almost $3 trillion a year: obscene. At least 90 percent of what the federal government spends is unconstitutional, wasteful, or against the limited-government principles of the Founders. The only thing the FairTax does is change the way the state confiscates the wealth of its citizens. As Congressman Ron Paul says: "The real issue is total spending by government, not tax reform."

Because the FairTax is a consumption tax, Murray Rothbard's conclusion about consumption taxes is apropos:

The consumption tax, on the other hand, can only be regarded as a payment for permission-to-live. It implies that a man will not be allowed to advance or even sustain his own life, unless he pays, off the top, a fee to the State for permission to do so. The consumption tax does not strike me, in its philosophical implications, as one whit more noble, or less presumptuous, than the income tax.
The FairTax does nothing to tame the federal leviathan. The solution is nothing less than a drastic reduction or wholesale elimination of its revenue source. What is fair about allowing the government to confiscate 23 percent of the value of every new good and service? FairTax proponents may call it necessary legislation, but I call it highway robbery.

————————

Laurence M. Vance is a freelance writer and an adjunct instructor in accounting and economics at Pensacola Junior College in Pensacola, FL. See his Mises.org archive. [e-mail]. Comment on the Blog."*

*Obtained from www.mises.org/story/1814

[cryhavoc]

www.givemeliberty.org/features/taxes/remonstrance/

Nope, the amendment was declared ratified, but in actuality never was. The Democrats wanted to pass a tax bill, buit the GOP was dead set against it. Somehow, some factions in the GOPcame up with an idea of proposing a tax bill so as they could blame the mess on the Democrats. Before long, the bill was in the Senate, and the GOP had to exercise some spin control. hey stated they would only support this obscenity (which they proposed) if it was ratified by the states. It allegedly was...by a lame duck Secretary of State who left office shortly after.The current tax code is not repairable by any means. The only people that benefit from the current code are the politicians who can manipulate it for special interests to get votes, and those who have the wherewithall to legally hide their money in OFCs. The cessation of the IRS is in a separate bill I believe. The Fair Tax is as fair as it gets. Taxing consumption makes it so that those who consume mroe pay more in tax. Also, do not forget a valuable lesson in Economics 101: "Excessively high taxataion rates will choke economic growth" Europe is a shining example of that. As I stated before, I suggest that you read the book; it provides a full overview of the FairTax, and especially why it is even better then the flat tax. I noticed that you did not refer any longer to the companies getting greedy and raising the cost of goods by 23%. They can do that....sure...but then someone will come along and undercut their price. I believe that is what Wal-Mart did.

In other words, those who would consider a Consumption tax to be highway robbery...are probably those who benefit from the current system.

[michael]

Wal Mart would play good guy as long as there is competition, once that is gone. Wal Mart would control the market in that area. I still will attack the business part. I notice that you did not answer the fact that the Federal Government would still have to keep a tax enforcement agency, guaranteeing and enforcing the 23% increase.

So let me ask you this. If the fair tax goes into effect and 23% is raised on all goods, what about gas, that would mean a gallon of gas would go up 23%. In doing so, you guarantee that famlies shall freeze to death. You can say that the money you save shall fix that problem, but what if the company plays around and decides to raise it even more, at the point where the money saved wouldnt make a difference. What then, what can you say to the family that is freezing during winter? What can you say to the family that drove two cars, who now have to drive ones? What can you say if your the President of airline company, and you have to tell the everyone your laying off 10,000 employees? What do you say to the people that have five kids and need deductions to feed the mouths of their kids? Are you saving Americans money or are you forcing senior citizens to choose between prescribed drugs or food? How fair is this fair tax? What will keep the federal government from saying it needs to raise it to 30%, to 40%, to 50%?

Like Ive said before, I was an ardent supporter of the Fair Tax, but a wise "teacher" taught me that it only is effective if and only if one doesnt become greedy.

[winiki]

I don't understand. Could both of you give me a 4 sentence or less explanation of what "FairTax" is?

[michael]

Fair Tax is a proposed unit to replace the (Estate, Income-IRS, Gift, etc.) current tax system (Progressive) with a tax that would require only 23% on all goods. The Federal Government would collect the taxes and so on. In other words if you bought a soda for a dollar, it would cost, a dollar and twenty-three cents, if the fair tax was to be put in place. You supposedly would save money, since there would be no income tax or other taxes; assuming the corporations dont raise the price of goods more than 23% or Congress decides it needs 40% instead.

[cryhavoc]

I am glad that I logged on just now. This is what the FairTax comprises:

In exchange for a 23% federal sales tax on ALL new goods and services, the following taxes would become history:

All Individual Income Tax ( No more 104/1040-A/1040-EZ Blues)

The Alternative Minimum Tax ( a further obscenity)

Corporate and Business Income Taxes

Capital Gains Tax

Social Security Tax

Medicare Tax and other federal payroll taxes

Self-Employment Tax

Estate taxes

Gift Taxes

First, lets dispense with a major myth of the FairTax. I know it is a favorite scare tactic, but it is baseless. Under the fair tax, a loaf of bread would NOT cost $1.23 cents! Here is why. Every product you buy as an end user already has tax compliance costs built into the price. From the Farmer planting the crops and harvesting the crops to your local grocery store, the price you pay already represents btax compliance costs attached to the product down the line. Here is a better example:

I make widgets. They cost me $1.00 each to produce. For every widget that I sell, I will pay 22 cents tax. Of course, I will also have my tax department that I hire for the sole purpose of avoiding the tax. I proceed to purchase John McCain.....hehe. I sell to the widget distributors, but not for $1.00; they get my widgets for at least $1.22 apiece. Now they package my widgets. it costs them 79 cents to package a widget. Thier cost is now $2.01 and they will pay 44 cents in taxes for the sale of one widget. This does not take into effect their profit margins either. When you go to buy a widget at retail, you will pay $2.45 for that widget ( $1.79 in cost plus 66 cents in tax compliance costs. Under the fair tax, that 66 cents of compliance cost disappears, thus making the widget price in an ideal situation $1.79. As stated above the only tax levied is the 23% tax on new goods and services. The 66 cents of tax compliance cost would go away and be replaced by 69 cents of Federal Consumption tax. now the widget costs $2.48. Then you look at your paycheck. Notice how FICA Federal Income Tax With held and Medicare taxes are no longer deducted. The truth of the matter is the Federal Consumtion tax would not be IN ADDITION to the imbedded tax compliance costs but would REPLACE them. A company could cheerfully jack up its prices 23%; no rule stopping them from doing so....except the marketplace. The USA is the champion in fostering competition. If there is profit to be had, they will vome and build and produce. If Wal-Mart ever gets too expensive or inefficient, someone else will come along and cover the gap. The end result would be that prices might be 3-4% higher, NOT 23%. In exchange for this, businesses can plan for the maximum growth instead of wasting countless hours complying with the current tax code.

The IRS costs us 10 billion dollars a year just in bas salaries. The FairTax would drastically reduce who would have to file to pay tax; 95% of the IRS would no longer be needed. As for the poor little IRS grifters out of work....oh well. Also be advised that corporate regulation is still in effect; we no longer fucntion on the Laissez-Faire principle, a method of governance that would give my esteemed opponents objections credence.

The Myth of Corporate Taxes

"Elect me and I will make SURE that business entity pays its fair share of taxes!"

I know you have heard this one before; yeah he will make that business cough up more taxes.....right. Any tax cost accrued by any business in the proivate sector gets passed on to....guess...its not that hard.....yes! YOU PAY! You pay in the form of increased prices, lack of merchandise, merchandise discontinuance, etc. The concept of Corporate taxes is for the most part a myth; they will pass any cost increases down to the individual. If their tax burden is reduced, it follows that they still can make the same profit but reduce the price. As it goes now though, the primary concern of Corporations is "Whart will my tax liabilities be if I expand production?" If the tax cost negates any profit to be made, why bother expanding the business? Corporations must be for proit unless they are a non-profit Corporation. The main problem here is that the current taxation system falls on Capital and Labor; everyones Capital and labor, from the MickeyD's worker who has tax with held from his check, to the wealthy investor.

Offshore Financial Corporations (OFCs)

This is nothing new at all. It is perfectly leagal and even encouraged by our current tax system. Capital Gains tax about 28%; no big deal for the average taxpayer, but a big deal for an investor or the wealthy. Instead of paying that 28% tax, they go and place it in an offshore financial center. Why should they invest their capital into the US infrastructure if they will lose 28% of their risk to taxes on top of whatever other taxes they would have to pay? If they place the money in a OFC ( essentially out of circulation) , they can pay legally a tax rate as low as 5%. This is a much better deal for them, but it only benefits them. THe money is taken out of circulation and benefits no one else. Guess what...to make up for that leagl means of not paying taxes, the taxes will have to be collected from somewhere else...yes...thats right...you and I! We do not have the funds to invest in a OFC, so we are left holding the bag. More tax money is withheld from our paychecks and prices rise of goods we purchase all because of this perfectly legal loophole. Any time they speakof tax reform, be assured it will benefit those who can buy the politicians in Congress.

Now under the FairTax, Capital Gains tax is 0%. The investor will have to make a choice: Pay 5% on his OFC holdings, or invest the monies there and keep ALL the Capital Gains until they decide to spend it? Hard choice there! Investors make money by investing; they only use tax shelters to keep from having to pay tax. If there were no more capital gains tax, that OFC money oould be in the US infrastructure. The estimate at this time is that 11 Trillion dollars are being held in OFCs ( 11,000,000,000,000 ) This figure is only slightly less then the Gross Domestic Product of the USA ( ca. 13.5 trillion dollars.)That money would flow back into the USA as investment capital. With no tax on capital gains, sure..the rich will get richer...but so will everyone else. More money then people to borrow it means lower interest rates. More money available coupled with only a tax on new goods and cservices would allow companies to grow....and create many jobs.No Capital Gains tax will encourage saving. ( interest would not be taxed anymore either.) The investors rather be putting their moeny to work earning money then hiding it in a OFC. What effect would this have on Labor though? Well, no more with holding = more money in paycheck. The fairtax also would issue a PREBATE check to every legal american head of household. This would cover the tax up to the poverty level for that household. If you spend no more then that amount, you essentially pay no tax. Add to this no more with holding, this equals more money in your pocket. his gives YOU control over how much tax you wish to pay. Social Security solvency is no longer an issue, because it is funded from the consumption tax, not the laborers paycheck. Illegal aliens living in the USA would not get a prebate check, thus they would pay 100% of the tax on every purchase. The black market would also be taxable as well. The USA could become the new tax & investment haven.

Tax compliance costs in the USA are around 500 billion dollars total, from th man hours spent in completeing the paperwork to the money wasted hiring 'tax experts' who maythemselves not undertand the code. I recommend reading The FairTax book by Neal Boortz and Congressman John Linder

[michael]

All you are doing is saying what they fair tax is over and over. Nothing more, nothing less.

My question is what shall keep businesses from raising the prices even more than 23%? What if Wal Mart (who by the time the Fair Tax becomes law, eliminated all competition) decides to raise their goods by 40% instead?

Another problem by the Fair Tax is how long will this economic boost last us? Remember the word "PREDICTIONS", so will it even happen at all? What if its the opposite effect?

I say No to the Fair Tax, Progress is for America and America needs a Progressive Tax!

[cryhavoc]

If you read my earlier posts, the very market itself would stop Wal-Mart from doing so. If their prices get to ruinous, Ceiling-Mart will step in.

As the US economy grows, more outlets will need to be found for investing capital. Space already looks very promising; Spaceship2 will soon be launching suborbital flights. The current Xprize (www.xprize.org) is for a craft to make 5 orbits around the earth and land in one piece. In other words, if the capital is there, ways will be found to use it to its utmost advantage. Capital leveraged Columbus' voyage, the exploration of Africa and North America, the first Xprize winner. Further proof of leverage of capital in this modern age: www.iter.org

What you call a 'progressive' tax is in reality regressive, since it persists taxing capital and labor. Any such tax opens the door to political corruption ( Politicians using various tax loopholes to whore for votes) and bankruptcy of Social Security and Medicare. (Currently funded from the paychecks of a DWINDLING number of workers in comparison to the vast number of retiress due starting in 2011.)The FairTax is win/win. Spend your money and pay tax. Save your money and you contribute money to the infrastructure which will create more jobs for other people to take. Social Security and Medicare is funded out of the consumption tax. Under the Fair Tax, the USA will be the tax haven of the world. It essentially puts the power of taxation into the hands of the people versus the government. I look upon the Fairtax as only a start to reigning in government and having it work for the people verusus its own self interest.

[bishopm]

lol my head hurts! There has got to be more than just two types of taxes.