Atlanta blogs today: Turn left
July 10, 2007 at 11:48 am by Andisheh Nouraee in NewsIs the DOT broken?
-Erick at Peach Pundit on a recent spate of stories about the Georgia Department of Transportation’s general crappiness.
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However, along the way I’ve found something appealing and endearing in the legions of fans who faithfully follow one driver, one sponsor, one car manufacturer just as they go to the First Baptist Church because that’s where their daddy went and his daddy before. The simplicity of their loyalty has actually grown on me.
-Sara at Going Through The Motions on how she became a NASCAR fan and how Democratic politicians need to learn to relate to NASCAR fans.
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Also, when I pay rent I will be taxed at 30%, whereas the guy who owns the land will not be taxed at all. Yeah, thats a real fair tax.
-Aging Hipster has problems with the income tax elimination proposal known as the Fair Tax.
July 10th, 2007 at 1:19 pm
Andisheh,
You may occasionally want to cite a blog that has done some consistent fact finding homework on GDOT issues. Hat’s off to Dr Lindsay Holliday of Macon, Georgia:
www macon dash bibb dot com slash CAUTION
caution is in all cap
Good luck with your aghadd, (attention getting hyper active attention deficit disorder)
Vic
July 12th, 2007 at 12:54 pm
Apparently, Aging Hipster doesn’t realize that he is already paying the taxes. Property tax, just like other costs of providing a room to rent, is included by the landlord in the rent. Not to mention the fact that he would have a LOT more money to pay that rent.
July 12th, 2007 at 1:36 pm
What I think is funny about the whole Fair Tax debate is that some member of the D.C. Echelon said that the tax code would be easier to figure out and a lot simpler for the layman to understand. However, when you look at the proposed tax code, it makes as little sense as the current code.
Also, it takes away the states’ rights to procure their own taxes. This cuts down funding for education, municipal services, and local improvements. Are these to be taken over by the federal government as well?
I also laugh when I hear people say “Oh well it’ll eliminate the IRS!” No, it won’t. There will have to be a main headquarters for handling the taxes and the tax code enforcement being brought in when the Fair Tax turns every retail and commercial business into a tax collector. This repository is, in the current sense, the IRS. We may eliminate the acronym, but the bureaucracy will remain. It’ll simply have a newer, snazzier name.
It’s true, we may have more money in our paychecks if this cockamammy scheme comes to fruition. However, that surplus will quickly dry up when we have to face the realization that we’ll have to pay 30% in taxes on everything new we buy (cars, houses, etc.) It’ll have to be applied to grocery shopping as well, since we can’t sell used food. Tack on an extra 30% onto your food bill everytime you go grocery shopping, and that’s how much you’d pay if the Fair Tax was up and running now. That does not factor in inflation for the future prices in whatever timeframe this new tax comes about.
Tell me that it’ll help fuel Universal Healthcare, cleaner streets, better social programs, and rent control, and I might look at it differently. Right now, it sounds like the government’s way of raking in funds at whatever rate they please, with politicians of every moral ilk having the ability to set the tax rate. It also sounds more and more like Big Government, something that is (supposedly) anethema to the GOP.
July 12th, 2007 at 1:44 pm
My bad –
The original rate is tentatively set at 23%, not 30%.
July 13th, 2007 at 10:21 am
Ray,
I’ll make you a deal. I won’t talk about Vegetarian Cooking, and you should stop talking about the Fair Tax. I don’t understand Vegetarian Cooking, and you are obviously no better off in your understanding of the Fair Tax. Look up a few facts first.
But, I’ll help you…
1. It doesn’t take 60,000 pages of code to say that consumers will pay a 23% (inclusive) tax on all purchases of new goods and services.
2. It doesn’t cut out ANY states rights to collect taxes. I don’t even know where you came up with that little tidbit. I have to assume that your following thoughts were because you thought there would be no state taxes anymore. There still would be, so the things you are talking about would continue to be funded.
3. Every retail business in at least 46 states is already a tax collector. As I recall, there are 46 states with a state sales tax. In several of those, there is already no income tax, so the primary taxation is through sales taxes.
4. Not only will we have more money in out paychecks (remember, it will also remove FICA and other payroll taxes), but those we buy goods and services from will no longer be collecting indirect taxes (the income taxes they pay, payroll taxes, compliance costs, etc.). According to the $22M in research done by FairTax.org, that accounts for 20-22% of the current cost of goods and services. Finally, there is the pre-bate. It would give a check to every registered (legal) household in the country equal to the Fair Tax up to the poverty level.
5. Politicians WOULD still have the right to adjust the rate, but it would be pretty transparent. Right now, there are hundreds of taxes at different levels and for different groups. Compliance costs are also very high. Simply put, you have NO idea what the current tax code costs you. You don’t know what you pay in taxes. Most people don’t know what they pay in income taxes, much less in hidden and indirect taxes. Under the Fair Tax, if a politician raised taxes, you’d know EXACTLY how much, and you’d be reminded every time you went to the store.
Feel free to wander over the the http://www.FairTax.org website and look for yourself.
July 13th, 2007 at 2:19 pm
Ray – the cost of goods will not go up, but will level out because the taxes embedded in the current cost of the goods you purchase go away. Businesses currently include the taxes that they pay in the cost of goods sold, just as they include their payroll, utilities, insurance, etc etc Competition will prevent them from keeping their prices at the current level and retianing their old tax costs as profits.
The biggest problem that I have seen with selling the Fair tax is that the taxes we pay are so well hidden that we don’t notice them. Example? when you get your paycheck, do you consider the top line your pay or do you look at your “take home” as your pay? How about the “matching” funds that an employer has to send along with their FICA deductions? Who really pays that tax? the employeror the employee? Or the consumer fo teh good or service that business produces.
My point – taxes are so ingrained in our lives to not appear as taxes, that a revolutionary idea like The Fair Tax appears ludicrous.
To get a clear understanding of how insidious our tax code is, read “The Greedy Hand” by Amith Schlaes.
I will tell you that it MAY help pay for all those things you mentioned, because, unlike our current tax system, it will collect taxes from criminal activity and the ultra rich. When the drug dealer buys his Hummer or Paris Hilton buys a $ 20,000 purse, they pay the taxes under the Fair Tax. Under the IRS, the drug dealer uses tax free cash and Paris probalby gets her income from tax sheltered trusts. The rich have the means to limit their taxable income through trusts and corporations, but consume a tremendous amount of goods and services.
The Fair Tax fully taxes the rich, eliminates 100% of Federal taxes for lower income wage earners, simplifies our lives by making April 15th just another day and removes the corruption that comes from politicians manipulating tax policy to favor their buddies through tax breaks and incentives in the IRS tax code.
Politicians raising tax rates? they do it know, but they do it through stealth. The Fair tax requires a 60% vote to pass an increase and it would be so simple and transparent the politicians couldn’t wiggle out from under it with a voice vote or procedural cloak.
July 13th, 2007 at 3:33 pm
What makes the idea of the Fair Tax so ludicrous to people is that it’s being sold as a quick-fix to our nation’s revenue problems and tax collection nightmares.
- Yes, the current law is 60,000 pages. Yes, the Fair Tax law is only 59 pages. However, both languages are the same. It is no more easier to understand by a layperson as the current. We’ll all be just as confused, but for not as long.
Example:
“(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.’.”
- The idea of a prebate is fun for a while (who doesn’t like getting money!) but ultimately, it’s an income tax return but in reverse. That money comes from somewhere.
- In retail goods, like groceries, the embedded taxes are stripped away but the Fair Tax of 23% (or whatever it is at that moment) simply replaces them. No one’s saving money, and retail establishments can chalk up higher prices to other means rather than taxes. Plus, this will fuel
- Our paychecks may be tax-free? That’s assuming that there is no federal income tax. That relies on Congress repealing the 16th Amendment; simply instating the Fair Tax will not do that. I happen to trust our politicians enough to see that while this Fair Tax is an excellent scheme to rake in easy cash, having two federal taxes that do the same thing will be twice as nice.
- Politicians raising the Fair Tax rate can be done from the shadows as well. For the years after the proposed 2007 Fair Tax implementation, “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. All one would have to do is tweak one of these rates, and that could potentially equal a tax revenue spike. Essentially, we will have a national interest rate, not a tax.
- While it is being billed as a simple solution to the current tax nightmare, it is not fair on everyone. While everyone, rich and poor, pays 23% (or whatever) and everyone gets a prebate check, the prebate check is based on family size and poverty level. As a tool of income redistribution, this will equal out with those at poverty level paying less than 0% of retail sales tax. It’s just like the EIC – it pays them more money than they actually spent in taxes. This is not fair on everyone, so it really can’t be called a “Fair Tax”.
- It in no way seeks to lessen the tax burden on the public. As it’s written on the Fair Tax website, in ” An Open Letter to the President, the Congress, and the American People Concerning Reform of the Federal Tax Code,”
“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.”
The money simply gets funneled through different channels (hence why we’ll still have Medicare and SS but not pay for them out of our paycheck every week or so) and is collected by different means.
- The “underground economies” that many economists complain about will flourish, especially if people learn that through them, they won’t have to pay a 23% national retail tax.
- USPS goods and services are not exempt from the Fair tax, as well as the federal gasoline tax. Add 23% to your purchase of stamps, the payment on your P.O. box, and gas pump to fill up your car.
- Retail business charge you a state sales tax on goods, not a federal tax. This will change with the Fair Tax. True, you won’t have to fill out a 10-40, but you will have to pay 23% more at the doctor’s office and your monthly Internet domain charge.
July 13th, 2007 at 4:35 pm
Hi Ray
I believe first it is necessary to define what AFFT is about so you have understanding of the organzition. So let me state this first.
FairTax is a revenue neutral tax replacement for federal personal and corporate income taxes, estate, gift, capital gains, alternative minimum, Social Security, Medicare and self-employment taxes. Our members are involved with many other issues but the FairTax legislation does not address Congressional spending, the current system’s Constitutionality or end current government programs.
Basically, we are a single issue organization and don’t take an issue with the estate tax from a philosophical standpoint. We simply eliminate all income and payroll based taxes and switch to a totally pure, economically productive, final consumption tax.
Any income not spent initially will eventually fall under several different scenarios. It is either: 1. Saved, in which case, they or someone else will spend it at a future date and be taxed at that time, OR
2. Invested back into the economy, creating more jobs and wealth or
3 Donated to charity. All of these situations end in a fair tax treatment under the FairTax.
You are correct. There will have to be some government agency like the IRS to collect the Federal Sales Tax.
There is no perfect tax bill, but the FairTax bill is just miles ahead of what we have now.
Debate on the HR-25/ S-1025 is a good thing. As a volunteer for FairTax I welcome debate and discussion on this very important change to the way we pay our taxes. The American people will not accept this bill until they are satisfied that it is a change for the better and they are confident in its merits.
I know you have read The FairTax Book and I am sure that you have thoroughly done your research on this bill. If you have read the 133 pages of the bill, I am sure you found it a much easier read than the 16,843 pages [that change yearly] of Section 26 of the IRS tax code. I am sure you have been going to the web page at http://www.fairtax.org and have read the information on the FairTax FAQ’s, the FairTax Research White Papers, and the Ask the Experts pages on what the critics say and AFFT’s responses. That is what I did before I volunteered for AFFT.
I smile also when I hear people say it will completely eliminate the IRS. You are correct; there will be a form of the IRS to govern collection of the Federal Sales Tax. That is one reason you no longer see the red/slash “No IRS†at AFFT. Oh, you might still see a few T-shirts around, but they will soon fade away. What that red/slash “No IRS†really means is “No IRS in our personal lives.†The FairTax is not a perfect bill. Thank you for your criticism of the bill. I believe it will help stir the decision on the bill and spread the word. You say the FairTax is “cockamammy scheme.†I believe you mean to say cockamamie. We see your criticism. What we don’t see is, of coarse, any solutions. You either love the current Income Tax system or you have a better idea for a Federal Tax System. Which do you fall under?
Mike
July 16th, 2007 at 7:18 am
I neither love nor hate the current tax code. As Ben Franklin said, it is one of the two guaranteed things in life. To me, it’s a fact of life. My taxes are simple enough (no children, house, ROTH/IRA, Trust Fund, etc.), so I don’t devote much time to it. I do, however, recognize that it’s micro-managed to the point of redundancy.
I have visited FairTax.org, and I have read it’s research. However, I have a fundamental apprehension to trust any organization that critiques it’s own product. An independant review by a highly-respected, *nonpartisan*, economic research institute would seem a bit more credible, especially after the distrust this country has developed over the choices made by our “leaders” in Congress and the White House in the name of “bipartisanship”.
I empathize with your conviction on the Fair Tax and AFFT. I’m sure that, to you, it is a wonderful concept. I’m sure it is a great idea – in theory. Everything sounds good on paper, even socialism. The grain of salt that must be taken with any great idea is the human factor; socialism has failed because of human greed and hunger for power. It is with this grain of salt that I take any form of idea, even the Fair Tax. I am a naturally sceptical person, so I, by nature, do not trust those politicians that tout this as a fix-all for our tax woes.
I do want to thank you for the polite way you engaged me on this matter. My response to Lane was due to the fact that he equated “mistrust” with “misinformation”. It appeared that he believed me to be incompetent and ill-informed of the Fair Tax, hence why I didn’t jump on the bandwagon of hype that’s surrounded it since it’s inception. Thank you for recognizing that scepticism does not equal lack of information.
I was unsure on how to spell “cockamamie”. Thank you for that clarification. :-) I can’t wait to use it (properly spelled) in a sentence now!
July 17th, 2007 at 11:51 am
Ray – I’m confused. You said;
July 12th paragraph 4 – “we’ll have to pay 30% in taxes on everything new we buy (cars, houses, etc.) …Tack on an extra 30% onto your food bill everytime you go grocery”
and
July 13th paragraph 5 – “In retail goods, like groceries, the embedded taxes are stripped away but the Fair Tax of 23% (or whatever it is at that moment) simply replaces them. No one’s saving money, and retail establishments can chalk up higher prices to other means rather than taxes. …”
These appear to be contradictory statements.