BLACKS HAVE SEPARATED THEMSELVES FROM AMERICA

Maybe I should say, "Some" blacks have separated themselves from America.  Or, "Most" blacks have separated themselves from America.  This is an opinion blog with some research and facts thrown in with my personal experiences.  I am reflecting on two events of the last couple of weeks, one being my high school class reunion and the other being Glenn Beck's incredible rally.  That being said, I also have a dream.  My dream resembles Glenn Beck's dream of an America united around the founding principles.  Failures aside, the dream of the founding principles is the goal and always has been, at least to me.  This is why I believe Glenn Beck is finding so much support from mainstream Americans who believe in and strive for that dream.

Whatever else Martin Luther King had on his agenda, his words of "judging the content of character, not the color on one's skin," resonated with all Americans in his day and today.  Those words sum up the entire perception I had of his struggle for rights.  Those words are what I thought the struggle was about.  It was later, as the years have gone on, that I have realized those words are not what the majority of blacks in America were wanting or heard.  Evidently.  I say that because those words are not what blacks have attempted to achieve.  The goal post shifted from those words.  King's march and speech became a platform for angry blacks to achieve reparations and elevated status far more divisive than uniting.  The words we thought were so inspiring to bring us together became an avenue for blackmailing the country into a guilt complex and a chip on the shoulder of every black in the country who views himself or herself as a victim of white Americans.  Equal justice has been twisted into social justice or racial justice.  Equal opportunity has become racial quotas.  Equal opportunity has become affirmative action.  Pursuit of happiness has become a perverted government guarantee of something, anything, just name it.

I just returned from my high school class reunion.  I grew up in the 50's and 60's in a small town in Ohio.  I went to an integrated school.  There were middle class blacks all through school who were from most walks of life.   My black classmates shared the same education as I, shared the same access to everything in town, shared in every available activity.  No one was barred from anything.  I don't remember black classmates walking around with a chip on their shoulders expecting whites to feel guilty and bow down to them for their victim-hood.  As people tend to do, people gathered in groups of friends who had things in common.  And as with any town in any place there were cliques of people, if you classify people into groups.  It was in the 50's I did notice social barriers of a sort regarding marriage between races, but other than this, I can not think of any other perceived restrictions.  And in fairness to even that, those social barriers were put in place by generations of both blacks and whites.  It wasn't a one way street.  There were very likable and friendly middle class blacks we saw every day. 

Sadly, by the middle of the 1960's with the race riots going on in the South, the attitudes were beginning to change with our black classmates and the blacks in town.  Now here is the rub:  we were in the North, and our area was known as a conduit for the underground railroad during the Civil War.  Our area was full of abolitionist history  It was always a point of pride as I grew up and reminders of that from our teachers were part of our education.  But, by the 1960's, the oppression and subsequent riots of blacks in the South was permeating the attitude of the blacks in the North.  Blacks were beginning to look at whites as the enemy, no matter where in the country they lived.  The controversies of the day did not escape our little town.

So I went back to this reunion thinking our black classmates would be there.  One in particular, who was always in my homeroom, was a girl I always liked.  I was looking forward to catching up with her and finding out how her life had been going.  No show.  Not one black classmate showed up.  Not one.  The great divide has happened and they no longer believe they are part of what was once an integrated and fully functioning, united society.  The town I grew up in was not the oppressive South, but yet the attitudes of all blacks in America have now been tainted and spoiled by a victim mentality that didn't previously exist in that town.  We had a reunion.  They didn't show up.

I've seen the good and the bad and the ugly regarding race in this country over my lifetime.  Apparently the bad and the ugly has triumphed over the good.  There are websites and media outlets making some kind of big deal that there were few blacks at Glenn Beck's rally.  But blacks were invited.  All could go and relish the messages there just as white people could.  There were no exclusionary rules.  For some reason, a majority of blacks don't choose to participate in the American dream of unity in the founding principles.  They are on a conflicting mission, one that does not fit into the American dream.  Their mission is the Obama message of social justice, the Sharpton message, the Congressional Black Caucus message, or the reparations message, or the affirmative action message, or whatever it is they are hearing from the Marxist left.  

Race has become a worse divider of America than it was, under the victim mentality indoctrinated into the black population.  That is why, if you disagree with some Marxist black political agenda, you are called a racist.   It doesn't have to be this way.   And in one town in the North where I grew up, it didn't used to be this way.  This is my lament.

LAST THOUGHTS ON THE FAIR TAX

Since I am being slammed for my opinions on the Fair Tax, I think the best avenue here for me is to reprint an article written by an accounting and economics instructor reviewing the Fair Tax proposal.  I am not the only person who thinks the Fair Tax is not only a bad idea, but a much worse than bad idea.  The commentors on this subject here on my blog have gone ballistic that someone, such as myself,  doesn't bow down and genuflect to the Fair Tax plan.  Read the article below please.

Here is the website: There is No Such Thing as the Fair Tax by Laurence M. Vance

Mises Daily: Monday, December 12, 2005 by Laurence M. Vance

Review of The FairTax Book, by Neal Boortz and John Linder (Regan Books, 2005).

Syndicated talk show host Neal Boortz and Congressman John Linder (R-GA) have joined forces to write a book on the FairTax Plan—a proposal to replace the current system of federal income taxes, corporate taxes, Social Security and Medicare taxes, capital gains taxes, gift taxes, and estate taxes with a national sales tax on new goods and services that does not reduce the government's overall tax revenue.
They have never been so right and never been so wrong.
Former attorney Boortz is the well-known Atlanta-based "libertarian" talk show host who, like Rush Limbaugh and Sean Hannity, spends an inordinate amount of time on the evils of liberalism, the Left, and the Democratic Party while turning a blind eye to big government Republicans and supporting Bush's "War on Terror." Boortz has drawn fire from Christians for his support of abortion and gay rights. He has also offended Southerners (he himself was born in Pennsylvania but was raised throughout the country as a "Marine brat") because of his negative comments about the Confederate flag.
Former dentist Linder represents Georgia's Seventh District, which includes the highly gerrymandered parts of five counties. He has been a member of the House of Representatives since 1992. Although Linder has received the designations "Hero of the Taxpayer," from Americans for Tax Reform, "Taxpayer Hero," from the Council for Citizens Against Government Waste, and "Tax Fighter," from the National Tax Limitation Committee, he is ranked by Congressional Quarterly as "among Bush's strongest supporters." Linder's claim to fame is that he is "the primary sponsor of the FairTax." He actually introduced the first FairTax bill in Congress back in July of 1999. It is interesting to note that his rating on The New American magazine's "Conservative Index" for his term in the 108th Congress was 45. For this same period, the universally acknowledged "taxpayer's friend," Ron Paul (R-TX), scored a perfect 100.
Since Boortz has previous writing experience, and his name appears in larger letters on the book's cover, I will refer to Boortz as the author of The FairTax Book. This is not, of course, meant to imply that Linder had no hand in writing the book. Linder himself says in "A Word from Congressman John Linder" that "the inflammatory and rude references come from Neal" while he "provided the intellectual backdrop that allows him to be outrageous."
The Evils of the Federal Tax System
Boortz is certainly right when he describes the evils of our current tax system:

Our current tax system is one that punishes the behaviors Americans value and rewards the behaviors we abhor. Those in our society who work hard and achieve are punished with taxes that approach confiscatory levels.
Politicians have managed to mold our tax code into an instrument designed not so much for raising revenue to fund the legitimate operations of government, as to control the behavior of individual Americans and corporations, and to give politicians levers to pull and buttons to push to buy votes when reelection time comes around.

The FairTax Book contains whole chapters on the hidden evils of the withholding tax ("Politicians love withholding because it gives them a chance to grab their 'share' of your earnings before you even see your paycheck."), corporate taxes ("Business and corporations merely collect the taxes from individuals and pass them on to the government."), the cost of compliance with the tax code ("In 2002 individuals, businesses, and nonprofits spent 5.8 billion hours complying with the tax code — an effort that cost an estimated $194 billion."), the embedded costs of taxes in all consumer goods and services ("When you buy that loaf of bread, you're paying a portion of all of the bills, including tax bills, of every person or business entity that had anything to do with that bread."), and corporations moving offshore ("They're moving for one simple reason: to escape a punishing tax structure here at home.").
The abuses of the IRS merit not only a full chapter, but are mentioned throughout the book. Indeed, one of the continually stated purposes of the FairTax proposal is to eliminate the IRS altogether. However, whether this would actually be the case remains to be seen.
But rather than just calling for the elimination of Social Security and Medicare taxes, withholding taxes, corporate taxes, gift taxes, estate taxes, capital gains taxes, and personal income taxes, Boortz proposes to replace all of these taxes with the FairTax.
The FairTax Plan
The FairTax Plan is currently pending in Congress under the name of "The Fair Tax Act of 2005." It is a consumption tax in the form of a national sales tax of 23 percent on new goods and services. Although it would "not be imposed on used or previously owned items," it would apply to all new goods and services: medical procedures, haircuts, new cars, new homes, gasoline, food, medicine, Internet purchases, and electricity.
The taxes currently imposed by the states would be unaffected by the FairTax Plan. Thus, states that impose a state income tax or a state sales tax would continue to collect those taxes.
The FairTax Plan would be administered through the states. However, this doesn't mean that individual businesses would not be dealing with the federal government. For acting as a tax collector for the federal government, both the states and the businesses that initially collect the national sales tax will be paid one quarter of 1 percent of what they collect.
But not only will all businesses receive a check from the federal government, so will all households. The FairTax plan includes a monthly check from the government called a "prebate" that reimburses each household for the taxes paid on "the basic necessities of life." These checks, which are based on "the government's published poverty levels for various-sized households," do not just go to the poor, they are "paid to everyone, rich and poor alike." Boortz cites as an example a married couple with two children receiving a monthly check for $492—regardless of their income.
Although the FairTax Plan would eliminate Social Security and Medicare taxes, it would not eliminate the programs. Boortz correctly explains that "under our current tax code, these programs can be maintained only by increasing the tax on those who work, reducing benefits for those who have retired, or by increasing the age of retirement." The FairTax Plan solves this problem because it would fund Social Security and Medicare out of general revenues.
So, instead of calling for the elimination of the various federal programs that feed off tax dollars, Boortz wants to merely change the way they are funded.
The Goals of the FairTax
Boortz tells us that the FairTax idea originated with the group Americans for Fair Taxation (AFFT). He says that "the goal of AFFT was to develop a system that would raise the same amount of revenue for the government as our current income tax system, but which would be less intrusive, abusive, coercive, and corrosive." This means that the FairTax idea should have been discarded at the very beginning, for instead of saying that it was not fair that the government confiscate 10, 20, 30, or 40 percent of a man's income, the FairTax proponents did not even begin to tackle the root of the problem: the welfare/warfare state that drives the federal leviathan's insatiable lust for the taxpayer's money.
Over and over again, Boortz emphasizes that the FairTax is "revenue neutral." The rate will be set "to ensure that the federal government—and all the programs within it, including Social Security and Medicare—will receive from the national retail sales tax exactly what they had been receiving under the current tax system." The FairTax is "simply a new and equitable method for raising the same amount of money our old and complicated code does today." It "isn't about cutting spending or changing government benefits. It's simply a plan to change the way Americans fund their federal government."
The FairTax is designed to simplify the tax code, increase compliance, and make the government more efficient at collecting taxes. It is not about reducing the overall tax burden one cent. The book should therefore be discarded upon reading this line on page two: "This book isn't about saving us a penny in taxes." Boortz has the proverbial cart before the horse. He wants to fight for "a simpler, clearer way to fund our federal government" before he fights for "tax cuts and lower government."
Boortz laments that tax evaders, tax avoiders, participants in the underground and shadow economies, and users of offshore financial centers aren't paying their fair share of taxes. He rejoices that the FairTax will eliminate the "cap on earnings subject to the levy for Social Security," thus forcing "the wealthy" to contribute their fair share. The FairTax will "recapture" the billions currently lost "from Internet and catalog sales."
We know that governments are notoriously inefficient at everything they do. But is this always a bad thing? Why would anyone want to make the government more efficient at collecting taxes? We want the government to be just as inefficient as possible when it comes to tax collections. Just like we want the government to be just as inefficient as possible when it comes to launching an aggressive war, violating the Bill of Rights, or punishing dissent.
The Claims of the FairTax
Boortz makes a lot of dubious, unsubstantiated claims for the FairTax that greatly exaggerate its benefits. He all but states that the FairTax will usher in the millennium.
The FairTax will not just increase economic growth, it will "send the American economy into warp drive." It will "bring a period of transformation and economic growth to America such as has never been seen before." "Millions of new jobs will be created." The FairTax will "double the size of the economy in the first fifteen years." After its implementation, "capital investment will increase quickly by a staggering 76 percent," "interest rates will decline by almost 30 percent," and "the economy will grow by 10.5 percent."
Although he disparages "soak the rich" sentiments and "economic class warfare," Boortz appeals to the poor and middle class. He contends that the FairTax will "create a financial bonanza for the poor and the middle class." It will "all but eliminate the tax burden on the middle class." The FairTax "would give the average income worker a 50 percent increase in take-home pay." The lowest income earners should support the FairTax because "for them it's all benefit and no burden." Correct, thanks to the prebate. For even though the purpose of the "prebate" is to cover "the basic necessities of life," Boortz acknowledges that there will be "money left over" for the poor "to invest in their own futures." The trouble with this is that the "money left over" belongs to someone else—"the rich" who will pay most of the taxes just like they do now.
Based on an unnamed study by Harvard economics professor Dale Jorgenson , Boortz maintains that the current price of consumer products includes embedded taxes of about 22 percent. Under the FairTax, these prices will "go down by roughly the same amount as the proposed FairTax rate of 23 percent." Consumers will be paying "at least 20 percent less for virtually everything they buy." A new home, even with the FairTax added to the price "may cost less than that home would have cost under our current tax structure." Everything will nearly be a wash, declares Boortz the economist. But not only does this ignore the basic laws of supply and demand, it is based on the fallacy that the costs of inputs in the production of a good determine the price of the output they produce.
The FairTax Plan is so good that even the states will want to adopt some form of it. The state governors that Boortz talked with said that under a national FairTax system, "They'd be very likely to eliminate state income taxes." Boortz's unnamed governors would also "welcome a move to taxing all goods and services with no exclusions or exemptions." Why, of course they would. They would welcome that right now, but could never get away with it. Naturally, Boortz maintains that with the addition of a tax on services, and with no exclusions or exemptions on any good or service, states would be able to reduce their sales tax rate "without losing a dime in revenue."
And then there are the "global implications of the FairTax." After the adoption of the FairTax, "foreign corporations will be compelled to build new plants in America" to remain competitive. Boortz envisions "the forward-thinking nations of the world" adopting "their own version of the FairTax," which will "spread freedom across the globe."
Is there any problem in the world that won't be fixed with the adoption of the FairTax?
The Lies of the FairTax
In addition to the unsubstantiated claims that Boortz makes for the FairTax, there are three ridiculous lies of the FairTax Plan.
Lie #1: taxes would be voluntary under the FairTax. In his discussion of the origins of the FairTax, Boortz says that the AFFT sought "a method of taxation that would be totally voluntary, that would allow all citizens to pay what they choose, when they choose, by how they choose to spend their money." Boortz has the audacity to say that "there is nothing coercive about the FairTax." It is "a truly voluntary tax system." The government should allow you to "keep your money in an investment account of some kind, earning interest for you, until you decide to pay taxes to the federal government." The FairTax would allow people to "judge for themselves when and how they're comfortable making taxable purchases."
Well, if the FairTax system is voluntary, and allows everyone to pay what they choose and when they choose, what happens if someone decides that they don't want to pay any taxes to the federal government? The same thing that happens now: fines and imprisonment. The FairTax is not a voluntary tax at all. The whole idea is a contradiction in terms. Boortz's statement about people keeping their money until "they're comfortable making taxable purchases" is ludicrous. There is no way to avoid buying new items. One can buy a used car, a used house, and used clothes, but one cannot purchase used food. One could argue that our present tax system is also voluntary: Don't earn any income and you won't have to pay any income taxes.
Lie #2:the FairTax rate would be 23 percent. Throughout the book, Boortz gives the FairTax rate as 23 percent. It is not until near the end of the book—in the chapter, "Questions and Objections"—that he admits it is really 30 percent. But even then he still insists it is 23 percent.
Those of us who were skeptical from the beginning noticed this when we got to page 84. There Boortz used the example of a single mother with two children spending $45 a week on groceries. He claims that the removal of the taxes currently embedded in the price would lower the cost of the groceries to $35.10 (a dubious proposition). But then he says: "Add the FairTax, and the groceries would cost $45.58. I learned in the sixth grade that if an item cost $35.10, and I add to it $10.48 in sales tax, then I paid a tax rate of almost 30 percent—not 23 percent. Boortz says in the "Questions and Objections" chapter that "critics of the FairTax have a way of dwelling on this 30 percent figure." I wonder why? Although Boortz explains that he is using an exclusive rate rather than an inclusive rate to figure the percentage, his "mathematical equivalent of a game of semantics" still results in a FairTax rate of 30 percent. This is why Boortz prefers the national sales tax to be included in the price of each item—so the consumer doesn't realize that he is really paying an extra 30 percent in sales tax, not Boortz's new math amount of 23 percent.
Lie #3: the FairTax would abolish the IRS. Boortz claims that his book is about transforming the nation by sending "one of its most hated institutions," the IRS, to "that place in the government guano heap of history." The goal of the FairTax is to "eliminate the IRS." Boortz even jokes about IRS agents working at a fast food restaurant after the FairTax is implemented.
Calling the IRS by another name doesn't mean that its functions will be eliminated. Just as the income tax will be replaced by the FairTax, so the IRS will be replaced by some other federal bureaucracy to oversee the collection of the FairTax. It should not be forgotten that the FairTax is a national sales tax. 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.

The Fair Tax Act also sets up a "Problem Resolution Office" and authorizes "problem resolution officers." There will even still be tax courts. Boortz himself also states: "We envision a department of the Treasury to deal with Internet and catalog sales, with stiff penalties for those selling into our communities who do not abide by the law." The FairTax will abolish the IRS in the same way that it will abolish the income tax—by replacing it with something else.
The Problems of the FairTax
Besides the fact that it doesn't lower the amount of taxes seized from the taxpayers by the federal government and is based on unsubstantiated claims and ridiculous lies, the FairTax is fraught with other problems. In his Introduction, Boortz says that this book will explain the FairTax in detail. He will walk us "through the plan step by step, detailing both the good and the bad." Since Boortz never gets to the bad, I here present seventeen problems with the FairTax.
Problem #1:The FairTax hides the amount of sales tax being paid. Boortz explains how "the FairTax was designed as what's called an 'inclusive' tax—that is, the tax is included in the list price of the product." He reasons that "since our current income taxes are figured on an inclusive basis—that is, they are taken out of our paychecks, not added to them—it was decided to handle the sales tax in exactly the same manner." How could someone write a whole chapter on the evils of the withholding tax and then turn around and recommend a hidden tax like the FairTax? Boortz even has the audacity to claim that with the FairTax the "consumer is completely aware of what he is paying." Really? Suppose the FairTax is implemented next year. Go stand in front of a store and ask the typical American how much federal sales tax he paid on the item he just bought for $139? Give him a calculator and ask him again. Unless he is familiar with figuring percentages, the average American will not be able to tell you how much sales tax he just paid.
Problem #2:The FairTax is progressive. Boortz correctly identifies a progressive income tax with Karl Marx. Yet, because of the prebate, the FairTax sets up a progressive tax system like we have now. Millions of Americans will pay no taxes at all. Others will have some of their taxes offset by the prebate. "The rich" will still be paying the majority of the taxes—something Boortz says he considers "class warfare."
Problem #3: The FairTax is an income redistribution scheme. Boortz calls the Earned Income Tax Credit "a prime conduit for income redistribution from high-income earners to the poor and middle class." Why, then, would he promote a FairTax Plan with a prebate that in essence allows the majority of citizens to not only pay no taxes, but in many cases gives them money over and above that which they paid in sales tax? What's fair about making "the rich" subsidize the poor and the middle class? Boortz calls Social Security an "income redistribution and welfare program." But under the FairTax Plan, Social Security is even worse. At least now it is funded by payroll tax contributions that are independent of deductions for federal income tax. Thanks to the prebate, many people will receive a free retirement program via Social Security who never contributed a dime towards their retirement, or as Boortz says: "All benefit and no burden."
Problem #4:The FairTax creates new tax collectors. From doctors and lawyers to garbage collectors and tree trimmers—multitudes of individuals and businesses that never collected taxes before will be turned into tax collectors for the federal government. Will a teenage babysitter be required to collect the FairTax from her neighbors?
Problem #5:The FairTax creates new taxes. All Internet purchases will be subject to the national sales tax. So will heart surgeries, kidney transplants, and appendectomies—plus the drugs prescribed by the doctors doing the procedures. Want to attend a baseball, football, or basketball game? Better save up a little extra to take care of the FairTax that will be imposed on your tickets.
Problem #6: The FairTax creates new taxpayers. If there are no exceptions and no exemptions then churches and other non-profits will be forced to pay a national sales tax on every purchase. The FairTax will basically do away with not-for-profit entities. The FairTax would also count as taxable the purchases made by federal, state, and local governments. This means the government will be using taxpayer money to pay taxes to itself.
Problem #7: The FairTax makes it easier for the federal government to raise taxes. All Congress has to do is slightly increase the initial 23 percent rate. A penny here, a penny there; a quarter of a cent now, a half of a cent later. Just a little at a time, of course. It might be to compensate for inflation, to give seniors a cost of living raise, or to pay for some manufactured crisis like bird flu . Since the federal budget goes up every year, and the FairTax is supposed to be "revenue neutral," the FairTax rate will have to go up right along with the federal budget. You can count on an increase every year, for if government budgets are not under control now, why should we expect Congress to magically become fiscally responsible just because the FairTax is adopted?
Furthermore, since Social Security and Medicare would be funded out of general revenues the FairTax rate would also have to go up to fund the ever-increasing cost of these programs. Then there are the escalating costs of the new prescription drug plan. And if the amount of the prebate "is updated every year to keep up with inflation," the FairTax rate will have to be raised in like manner. How can Boortz recognize that "there is absolutely no limit to the government's desire for your money" and then express hope that the FairTax rate "will go down in the future" if "Congress can keep government spending down"?
Problem #8: The FairTax makes it easier for state governments to raise taxes. In the name of simplicity and efficiency, the states would be inclined to follow the lead of the federal government. States that currently have no sales tax could add one. States that have exemptions on certain items could get rid of the exemptions so as to match the federal government. States that have no sales tax on services could begin taxing services like the federal FairTax Plan would do.
Problem #9: The FairTax has unknown and potentially huge transition costs. Boortz asks a good question: "How will the switch to the FairTax be made?" But then he gives a very naïve answer: "Cold turkey!" He explains that "on January 1, we'll begin to get our gross pay with no deductions." Boortz gives one "transition rule": The value of any inventory on hand December 31 can be used as a credit against collecting taxes in the next year." This should get accountants to work figuring out how to value each company's inventory the highest. Will it be specific identification, average cost, FIFO, or LIFO? But what if a company's fiscal year does not end on December 31? This will cause massive accounting problems. And especially for the federal government since the government's fiscal year begins on October 1.
Problem #10:The FairTax makes certain exceptions while supposedly having none. After saying that there are "no exclusions or exemptions" under the FairTax, Boortz specifically mentions exemptions for Internet access services and tuition. Therefore, his complaint that "exempting certain items—such as food and prescription drugs—would again open the door to an entire battalion of lobbyists to argue that the portion of the industry that they represent is clearly an essential product" is unjustified for he has already opened the door to that very thing.
Problem #11: The FairTax has great potential for fraud. Boortz envisions the prebate amount being issued to a card "like your bank debit card." Since every head of household would have one of these cards, there would be a great chance of criminals preying on people for their cards. There is also the possibility of counterfeiting, resulting in massive theft from the taxpayers. And since the FairTax only applies to new items, there will also be a tremendous incentive for new items to be reclassified as used or previously owned. Businesses could offer a slight increase in the price of a reclassified item in exchange for not having to charge customers the 23 percent national sales tax that would be due if the item was considered new. Enforcement of the "proper" classification of items would require an army of federal bureaucrats that would rival the IRS.
Problem #12:The FairTax has the potential to turn thousands of law-abiding Americans into criminals. Since the FairTax contains no exemption for even the smallest business, anyone who does not collect the FairTax on any good he produces or services he provides is breaking the law. Mow a yard—collect the tax. Babysit—collect the tax. Repair a car—collect the tax. If you don't collect the FairTax then you are a criminal. Once again, the FairTax would have a terrible enforcement problem.
Problem #13: The FairTax does not repeal the Sixteenth Amendment. When FairTax advocates discuss their plan, they talk as though the FairTax would result in the repeal of the Sixteenth Amendment that gave us the income tax. To his credit, Boortz doesn't make that mistake, but when many people read about "saying goodbye to the income tax," that is what they think. The FairTax bill now pending in Congress ( H.R. 25 in the House and the identical S. 25 in the Senate), repeals 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 Sixteenth Amendment in H.R. 25 is when it reports: "Congress further finds that the 16th amendment to the United States Constitution should be repealed." But to repeal Sixteenth Amendment would require a constitutional amendment. Are we to believe that Congress would vote to repeal the Sixteenth Amendment after the passage of the FairTax? And even if Congress did so it would still have to be sent to the states for approval by three-fourths of them.
So, barring the repeal of the Sixteenth Amendment, what is there to prevent an income tax from being imposed again after a national sales tax has been enacted? And what is to prevent any of the other taxes replaced by the FairTax being re-imposed due to some unanticipated budget shortfall or "crisis"?
Is Boortz that naïve to think that Congress will be satisfied with just the FairTax? And even if the Sixteenth Amendment was repealed after the imposition of the FairTax, any previous tax not on income could be brought back. Can Congress be trusted to do anything else? I can easily envision Congress proposing to lower the rate of the national sales tax in exchange for the addition of a supplemental Social Security tax because we need more money to fund Social Security. Then, a few years later, the national sales tax rate would be right back up to where it was before the "exchange."
Problem #14: The FairTax does not eliminate all federal taxes. Although it is implied throughout the book that the FairTax will be a replacement for the various federal taxes, there are some federal taxes that will still be with us under the FairTax. Even Boortz slips up one time and says that the FairTax would "replace virtually all personal and corporate taxes." Two examples of federal taxes that will still be with us under the FairTax are the excise tax on gasoline and the various taxes that one pays when purchasing an airline ticket. 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, which adds 18.4 cents to the price of a gallon of gas. So under the FairTax, we would have added to each gallon of gas federal excise tax, state excise tax, and federal sales tax. This is just the minimum. The states could also begin applying their sales tax to gasoline. A recent airline ticket I purchased had added to its price a federal excise tax of $15.28, a federal segment tax of $12.80, and a September 11th security fee of $10.00. And what about federal taxes on tobacco and alcohol? The FairTax will merely replace one visible tax with another while leaving intact the invisible ones.
Problem #15: The FairTax is not at all about lowering the amount of taxes the government collects. Boortz terms the FairTax a "tax reform measure, not a government reform measure." It "changes the way revenues are raised for the legitimate operations of the federal government." But if the FairTax raises the same amount of revenue to fund the same federal programs, then what does Boortz think the federal government does that is illegitimate? Is there anything he considers to be illegitimate? If so, then why would he expend so much energy on changing the way the federal government collects taxes instead of changing the amount that the federal government collects in taxes? The fundamental problem is clearly taxation, not the tax code. What is wrong with the federal government's tax code is not that it is too complex, but that it makes possible the almost $3 trillion a year that the federal government spends. As the French laissez-faire economist Jean-Baptiste Say (1767–1832) once said: "The best tax is always the lightest." Or, as our modern-day Say in Congress, Ron Paul (R-TX), says: "The real issue is total spending by government, not tax reform."
Problem #16: The FairTax doesn't even begin to address the root of the problem. Boortz does refer to Frank Chodorov (1887–1966), reminding us that he "once observed that, by enacting the income tax, the American government was proclaiming that all wealth belonged to the government, and whatever wealth the government did not seize from the person who created it should be looked on as a concession—a gift from the government." But Boortz doesn't quote Chodorov, and he gives no source that he is referencing. He subtly seems to imply that Chodorov was opposed to the income tax because it was an income tax and that, therefore, he might be inclined to support the FairTax if he were alive. But this couldn't possibly be true because Chodorov considered taxation itself to be robbery . How is justifying the federal government spending almost $3 trillion a year of the taxpayers money, as long as it is collected "fairly," any different from the viewpoint that Chodorov condemns? While making the case for not allowing exemptions from the FairTax for food, Boortz, in using the example of a wedding reception, inadvertently shows his true colors: "Would it be fair to allow a multimillionaire to spend $20,000 on food for a large wedding reception at his estate, and not pay any sales tax on that purchase?" Why, of course it would. It would be fairer than forcing the American people to pay a 23 percent national sales tax on every good and service they purchase.
Problem #17: The FairTax makes welfare universal. Millions of people who never took a dime from other taxpayers in the form of food stamps, SSI, AFDC, Medicaid, WIC, or housing assistance will now be on the federal dole via the prebate. The FairTax is welfare for the masses. It makes us all wards of the state. Perhaps it would be best, in the interest of equity and efficiency, if all the money Americans earned was just paid to the state and then distributed to every American in a "fair" manner. The government could just keep what it needed, redistribute what's left, and do it all without the FairTax.
The Fraud of the FairTax
The FairTax is not the solution. And because it allows the federal government to confiscate the wealth of American citizens less intrusively and more efficiently, it will become part of the problem—the problem of the ever-increasing, ever-intruding, ever-destroying welfare/warfare state. The FairTax is a fraud. Yet Boortz ties rejection of the FairTax to believing that America is a great country because of its government, "as so many politicians do." Politicians who oppose the FairTax do so because they "thrive on dependency."
The antidote to the fraud of the FairTax is a good dose of the wisdom of Murray Rothbard: "There can be no such thing as 'fairness in taxation.' Taxation is nothing but organized theft, and the concept of a 'fair tax' is therefore every bit as absurd as that of 'fair theft.'"
Boortz believes that the abolition of the income tax will make the bad day of April 15 "just another beautiful spring day." With its unsubstantiated claims, ridiculous lies, and numerous problems, the FairTax will ensure that everyday is a bad day, not just April 15.

---

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 . Send him mail. Comment on the blog.

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FAIR TAX MISNOMER + MORE THOUGHTS ON IT

Hi all.  I never dreamed this Fair Tax movement had so many people jumping onto it like lemmings off the cliff.  What I am hearing is screaming vitriol against the income tax.  O.K. fine.  I get it that our income tax system is rife with problems, loopholes, and favortism.  I get it that people resent that.  What I don't get is why intelligent people are so desperate to grab onto another faulty, complicated scheme amounting to as many or more problems as the existing system we have now.   I know you all are not stupid, so take a deep breath and step back a bit to analyze this thing with open eyes.... and try to keep history in your mind while you do.

(Caveats here:  I am an artist by trade and this discussion is annoying me because I should be painting.  I know I'll get some really nasty comments on that revelation.  But, to raise my credentials here, my Dad owned a retail business all of his career and I owned a wholesale business for ten years. Because of those circumstances, I have had experiences in both areas.  I know the impact of taxes on consumers and on businesses having been on all sides of the spectrum. That being said, I am not an economist with ideas on social engineering / central planning a tax code. For this conversation, I am relying on my own experiences and research on the web.) 

Because I should be painting and have many other obligations today,  I am going to refer my readers here to the websites I found to be the most credible opposition to the Fair Tax.  This is assuming anyone will take the time to read some clear opposition and give it more thought.  

Jews for the Preservation of Firearms Ownership  Strange connection here, but their arguments against the Fair Tax make sense to me.
An answer to John who commented on my previous post from the JPFO.org site:
"We're likely to end up with both a national sales tax and an income tax. Even if legislation required abolition of the income tax (as HR 25 does), a “national crisis” would soon cause the income tax to be “temporarily re-instated” and the Internal Revenue Service would remain in our lives on an “emergency basis” that never ended.
Likelihood: High probability."

 
 My argument regarding manipulation by the bureaucrats is supported also by JFPO.org:
"The national sales tax is subject to manipulation in even more direct ways than the income tax has been. Let's say that Congress or some powerful regulatory agency decides that fatty foods or sugar or potato chips are bad for you – wham! Suddenly there might a 200 percent tax on those items.
Government won't have to ban firearms; they'll just place a 500 percent sales tax on them. Or a 1,000 percent sales tax on ammunition. Cigarettes? Imported clothing? “Gas-guzzling” SUVs? Given the wonders of the computer age, the eternal greed of government, and the unquenchable meddling of social engineers, we'll soon have custom tax levels for them all, constantly calculated and adjusted by computer.
FairTaxers talk about the tax being self-limiting; when it gets too high, people stop buying. While they praise the limiting effect that might have on government, they ignore the damage that a too-high tax might have on the unfortunate industries or individuals that get hit with it – a problem that's built into the tax even in its initial form, and which becomes Draconian once politicians realize they can use the sales tax as a club or a threat.
Likelihood: Probable." 

 
 Another article from 2007 which Unspins the Fair Tax is here: Fact Check.org

Earlier I said the Fair Tax is good for the rich and bad for the poor.  Fact Check.org finds that the Fair Tax is good for the rich and bad for the middle class.  If the poor come out better, then someone has to pay the difference.  According to the Fair Tax Chart and the Treasury Dept. Chart, it is the middle class who get hit. The explanation is shown here below:

The FairTax: Is It Regressive?

Sometimes sales taxes are called regressive, meaning that the poorest pay higher rates than the wealthy. Strictly speaking, sales taxes are flat, since everyone pays the same rate. But because the poor tend to spend a high percentage of their income on basic consumer goods such as food and clothing, sales taxes do require the poor to pay a higher percentage of their income in taxes.

The FairTax plan, however, helps to alleviate this difficulty by exempting sales taxes on all income up to the poverty level. Taxpayers would receive a "prebate," which Edwards calculates to be about $5,600 annually. The Treasury Department estimates that the prebate program would cost between $600 billion and $700 billion annually, making it the largest category of federal spending. Americans for Fair Taxation disputes the Treasury Department numbers, claiming that the actual cost would be closer to $485 billion per year. The Treasury Department has so far refused to release its methodology, making it difficult to determine whose estimate is correct.

Who Really Pays?

With the prebate program in effect, those earning less than $15,000 per year would see their share of the federal tax burden drop from -0.7 percent to -6.3 percent. Of course, if the poorest Americans are paying less under the FairTax plan, then someone else pays more. As it turns out, according to the Treasury Department, “someone else” is everybody earning between $15,000 and $200,000 per year. The chart below compares the share of the federal tax burden for different income groups under the current system and under the FairTax. Those in the highest and the lowest brackets will see their share decrease, while everyone else will see their share of taxes increase.

Americans for Fair Taxation rejects the Treasury Department analysis, objecting that Treasury considers only the income tax. By leaving out payroll taxes (which are actually regressive) Treasury’s chart makes the FairTax look worse by comparison. We found that including all the taxes that the FairTax would replace (income, payroll, corporate and estate taxes), those earning less than $24,156 per year would benefit. AFT’s Burton agreed that those earning more than $200,000 would see their share of the overall tax burden decrease, admitting that “probably those earning between $40[thousand] and $100,000” would see their percentage of the tax burden rise.

My take on the "prebate" idea.  The Fair Tax folks claim that the reporting burdens on the public will be alleviated by getting rid of the income tax.  However, under the Fair Tax, applications must be made to qualify and receive the prebate.  This amounts to at least as much reporting or more, so filing income tax forms may turn out to be a nostalgic dream after we get through figuring out the prebate forms.  The Fair Tax prebate is supposedly going to be handed out to every household in the U.S.  In effect, this puts every single household into a government entitlement program.  For those of you who are sick of "big government" and entitlement programs, welcome to hell.  We will all instantly be stuck into a dependency entitlement program.  I don't want government money.  I don't apply for grants.  I didn't go for the minority SBA loan when I owned my business.  You say....but wait, it is your money they are giving you back.   Since when does money laundering by the government work out for the taxpayers?  This does not take into account the administrative costs.  So if you get rid of the IRS, you immediately replace it with tax enforcers in just another bureaucracy to implement the Fair Tax.  All pain, no gain.

Those two sites are only two of many I found that counter the Fair Tax suppositions.  I urge you all to take the time to research this further and then decide if you still think the Fair Tax is all it is cracked up to be.  I have concluded it is not even close to the propaganda.

There are many ponderables and unintended consequences in the Fair Tax.  While proponents insist the Fair Tax covers all contingencies, I maintain it does not.  The biggest argument I am having with proponents is this:  They believe the Fair Tax cannot be manipulated or abused by consumers or by politicians.  I think this is a very naive perspective.  Any tax code implemented by government bureaucracies and politicians is going to be manipulated and abused. We have to have some way to fund the Federal government.  The question remains, what is the most efficient way to fund our government in the most equal way for all citizens?  The Fair Tax does not fit that need.

Get your noodles working and look beyond the sales pitch.  Don't take Neal Boortz at face value.  He has a dog in the fight.  Because he is in the upper wealth tier he stands to gain from the Fair Tax.  Frankly, I find him to be arrogant and condescending, but that is my personal take on him.

I hope this Fair Tax never happens.  And I hope you realize, after researching it, that what you want in tax reform is not in the Fair Tax.   We will find a better way. 

A FEW MORE THOUGHTS ON THE FAIR TAX

When things get really really bad, people are likely to start grasping at straws to fix what is wrong.  The people of the United States are fed up with the Feds.  We are watching elite politicians throw our country down the tubes, spending borrowed money on pay-back schemes, and turning the good people into a debtor nation on a scale unheard of in America.  We're sick of it.  We're mad.  We've had it.  And we have few options to stop this insanity.

So one of the floating ideas is that it must be the tax system that is at fault.  It follows that Congress has too much power to manipulate current tax policies to suit their own power and political agendas, thereby leaving the burden on the backs of the public.  This is true.  But do you fix that with another grand sweeping tax scheme?  If you use the "bad husband" analogy, as someone recently did while rebutting me, I do not recommend replacing a bad husband with a worse husband....or even an equally bad husband. 

Along comes the Fair Tax idea.  This is a worse or equally bad husband wanting to take advantage of an abused wife who is desperate to get out of the marriage to the first bad husband.  Be careful what you wish for, comes to mind. Wikipedia Fair Tax Explanation Here Per this article here is the tax rate described in the Fair Tax Bill:

Tax rate

The sales tax rate, as defined in the legislation for the first year, is 23 percent of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes). This would be equivalent to a 30 percent traditional U.S. sales tax ($23 on top of every $77 spent—$100 total, or $30 on top of every $100 spent—$130 total).^[5] After the first year of implementation, this rate is automatically adjusted annually using a predefined formula reflecting actual federal receipts in the previous fiscal year.

The effective tax rate for any household would be variable due to the fixed monthly tax rebates that are used to "untax" purchases up to the poverty level.^[4] The tax would be levied on all U.S. retail sales for personal consumption on new goods and services. Critics argue that the sales tax rate defined in the legislation would not be revenue neutral (that is, it would collect less for the government than the current tax system), and thus would increase the budget deficit, unless government spending were equally reduced.^[5]

^{Notice that "after the first year of implementation, this rate is automatically adjusted annually using a predefined formula reflecting actual federal receipts in the previous fiscal year."} 

^{So if you think that after passing the Fair Tax Bill you can breathe a sigh of relief that the rates are set in stone and all will be well in the world, realize that the beginning rate is what sales people call a "loss leader."  They get you in the door and then the other shoe drops with higher costs.  It's a "come on."  A "teaser" rate.  And notice that the ACTUAL rate is 30%, not 23%.  The bill is written and supported by politicians, so what would make anyone think this is more "fair" to the tax payers?}  

^{In all likelihood, as critics point out, the first year receipts from this plan will create deficits.  When that happens, what do you think will happen to the rate of taxation?  The Fair Tax Bill calls for annual assessments of the rates, opening the door to increasing the rates to meet the Federal spending sprees.  That 30% will be 50% before you can blink your eyes.  Do you suppose the Federal government will suddenly shrink to fit the receipts?  And if you think that, you must immediately go to have your head examined.  Post haste!}

^{Also in the article is this:} 

Personal services such as health care, legal services, financial services, haircuts, and auto repairs would be subject to the FairTax, as would renting apartments and other real property.^[5] In comparison, the current system taxes income prior to purchasing such personal services. State sales taxes generally exempt certain goods and services in an effort to reduce the tax burden on low-income families. The FairTax would use a monthly "prebate" system instead of the common state exclusions. The FairTax would apply to Internet purchases and would tax retail international purchases (such as a boat or car) that are imported to the United States (collected by the U.S. Customs and Border Protection).^[33]

 ^{So the Fair Tax will open internet sales to a Federal sales tax.  Which, using court precedents, will automatically open the door for State sales taxes on internet sales.  Another consequence of this so-called Fair Tax.}

^{The proponents of the Fair Tax say that their scheme will save us from the horrible ramifications we have been suffering under the income tax system.  They say that the income tax system will be eliminated and that will make you so rich that you will gladly pay all of these sales taxes. Since it is the rich who pay the bulk of the income taxes, who do you think will reap the most benefits from the Fair Tax.  If you said the rich, go to the head of the line.  Of course the Fair Tax people say they can fix that with a "prebate" program by sending rebate checks to every household in America.  This creates yet another entitlement program, in fact the largest in American history which includes the entire population.  Dependency anyone?}  

^{Replacing the income tax with a sales tax on everything you buy is their idea of 'freeing the people' from oppressive taxation.  They say the Fair Tax is just a voluntary tax, that if you don't want to pay the sales taxes you can just not buy anything.  Hmmmm....how does that work for a young family starting out who needs housing and goods for their growing families? By all means, let's punish those who are trying to buy a house, baby clothes, cribs and strollers, etc.  Make them pay more.}   

^{Another fall-out discussed on some sites is the pain the Fair Tax creates for retirees.  Sure those folks aren't buying as much, but if and when they do, they will be paying twice the taxes.  How?  Their incomes were already taxed under the current system.  Then they will be taxed again by paying the Fair Tax sales taxes if they purchase a new retirement home, or anything else.  Whammo....}

^{And, (if I am repeating myself forgive me) the worst part of all of this that I can envision is the Federal government tracking every purchase anyone makes in the United States.  When the Federal government decided last year that all of our health information is to be tracked in a Federal data base, where was the outrage?  Now people are saying let's go with this Fair Tax which wants to track every single purchase you make in your life.  Where is the outrage?  How many weapons are you going to give the government to manipulate you and control your life?} 

^{Bottom line:  The Fair Tax is anything but fair.  It is another convoluted boondoggle created by politicians and egghead economists who are just trying to squeeze more money for the government out of the American public and set up a power structure that Americans cannot over-come.  Why?  Because they can.  This Fair Tax is no better than Obamacare.  It is a misrepresented scheme brought to you by politicians who do not have the interest of the American people at heart....rather they are lying to get their hands on control over the American people.  They would say it is voluntary.  Just like Obama said you could keep your insurance policy.  The lies just keep coming....from BOTH sides of the aisle.}

^{What I purchase is no damn business of the Federal government.  What I buy to eat is no damn business of the Federal government.  What doctor I choose is no damn business of the Federal government.  What I do with my money is no damn business of the Federal government.  If  you want to know where we are headed, watch a movie called "Enemy of the State."}   

^{If you believe in freedom, do not swallow the propaganda of the Fair Tax.  If you want to have your entire life tracked by a Federal data base, you are not an American.}

IS THE "FAIR TAX" ALL IT'S CRACKED UP TO BE?

I'm happy to be having a discussion over at PUNDIT HOUSE about the Fair Tax currently being promoted around the country by Neal Boortz and others.  I do not have a Fair Tax book, but have listened to the sales pitches and read enough about it to know that I would not support it.  

A note to Frank, who wrote the original article.  This is not about going home to the same abusive drunk.  This is whether or not the replacement husband is any better than the first.  

My discussion is with Christian Hine who co-owns PUNDIT HOUSE who is a proponent of the Fair Tax.  He has given the Fair Tax Bill a great deal of study and thought.

Thank you Christian for your detailed reply.  I really do appreciate the time you took to answer the questions I posed and my skepticism.  So here we go with my counterpoints:

Christian: "The Flat Tax, however, retains the invasive income tax administration apparatus and can easily revert to a graduated, convoluted mess, as it has many times over many years.  It still requires individuals to file their income with the Federal government, a responsibility eliminated by the FairTax.  It also retains much of the cumbersome rules of the current tax code in order to determine what “income” actually is."  

Cheryl: You say there is "no perfect tax system."  I say there is.  Or at least close to perfect.  And that is a Flat Tax that is based on tithing.  If you want people to pay for the privilege of being a U.S. citizen, then 10% of each person's income would address that.  No matter what the income is, $3000.00 per year or $300,000.00 per year, each person would contribute their 10%.  Now that is what I would call "simple."  Using this Flat Tax, I would eliminate payroll taxes, business taxes, etal.  The Flat Tax would take the place of all other Federal taxes, as you say the Fair Tax would. 

Christian: "Furthermore, the Flat Tax eliminates neither payroll taxes nor business taxes, thus retaining a level of complexity as well as the hidden cost of business taxes in the prices of the products we buy.  Remember, businesses don’t pay taxes; they simply transfer taxes from the final customer to the government."

Cheryl: If I were queen,  would have eliminated the payroll and business taxes with the Flat Tax.  LOL

The points being sold by the Fair Tax people sound so great on the surface.  As usual with such a large and complicated tax system, the devil is in the details.  It is touted as "simple."  So simple that we will no longer have to go through the complicated federal tax forms and will no longer have to file income taxes. Yet, with the Fair Tax, every single purchase transaction in the U.S. would have to be tracked. (This is a bastard kin to every person's health information tracked by the Federal government.)  Every loaf of bread, every gallon of milk, every candy bar, every shirt, every shoe, every bottle of aspirin, every, every, everything would be tracked by the Feds.  Every cash register in the U.S. will be tied into a Federal data bank.  Every business bank account will be tracked to prove the reporting.  The Feds will not be content to have just businesses taking on this tracking responsibility.  When discrepancies occur in reporting, who is going to be held responsible?  The consumer.  In order to prove who bought what and where, the next obvious step is ID buying cards.  So while Sam's or your local grocery now keeps track of what you buy, with the Fair Tax, the Feds will track what you buy.  Now you can say...oh, that is not in the Fair Tax Bill.  But you have to look at how this is going to be implemented.

Christian: "You are correct.  The FairTax is a federal revenue collection bill.  You want state tax reform?  Elect good Governors and state legislators.  You want property tax reform?  Elect good Mayors, city council members, and county commissioners." 

Cheryl: My point there is that the Fair Tax is not lessening the tax burden on people, but rather just another way of collecting burdensome taxes in addition to all of the other taxes we are paying to States and localitites. In other words, it is not helping the over-taxed situation we have.  It is just shifting from income to consumption and handing the Federal government either the same amount or more. You point out that it is not a "tax cut" bill.  So IF the reasoning to change the tax system is to slow the growth of the Federal government, or to starve the beast, this bill doesn't get there.  The Fair Tax Bill just rearranges the source of revenue from income to consumption. 

Christian: "Yes, the mortgage interest deduction goes away, but who cares?  All that does is allow the interest to be paid with pretax dollars.  Under the FairTax, all purchases are paid with pretax dollars!"
Cheryl:  My view on the mortgage interest deduction is that it assists more people with property investment for the primary home.  When you say "who cares," I am hearing you say you think that "pretax" dollars saves so much money for people that this is at least a wash and maybe a boon to the home owner.  But as I stated before, the dollars we have are still taxed, just on consumption not on income.  So eliminating the mortgage interest deduction doesn't help anyone who has a mortgage with interest.  I am saying, there are no "pretax" dollars in the Fair Tax Bill unless you stick your money under a mattress somewhere and purchase nothing for the rest of your life.  Money is still taxed, just in a different way.

More on the subject of housing: The idea that only new home purchases will be taxed while "used" homes will not be subject to the Fair Tax will throw the new home housing industry into a collapse.  (All of the articles I've read on critiquing the Fair Tax say the sales tax number is more in the 30% range rather than the 20% or 23% touted by the proponents, but for our purposes we'll use the 23%. )

Here is one reason why I think this turns into a nightmare:  Lets say a builder wants to put a house on the market for $250,000.00.   Now the builder is selling a new house, so he has to charge sales tax on that house, so add another 23% to the purchase price.  We are now up to $$307,500.  That house sits next to a "used" house.  The "used" house which was built before all of this added tax is priced at $250,000.00.  Next comes the realtor who gets 6% commission on the sales.  But under the Fair Tax, the realtor's 6% commission is now subject to the Fair Tax and that is 23% of the 6%.  6% of $307,500.00 is $18,450.00.  But add 23% onto the 6% and you have a commission + taxes that is now $22963.50.  Add that to the $307,500.00 sales price and you now have a house price of $330,193.50.  The builder doesn't pay income tax.  The realtor doesn't pay income tax.  But the home buyer just got soaked.  A previously priced $250,000.00 home is now $330,193.50 with no negotiating or wiggle room.  The so-called Fair Tax  is $62,013.50that just went to the Federal government on the sale of one house. Why do we want to give the Federal government $62,013.50 on the sale of a house?  Unless of course the builder and realtor drop their prices to compete with the "used" houses, they have no negotiating room.  Do they lower their standard of living so they can sell a new house?  I could use cars as another example of the same scenario.  New cars and new homes will necessarily be out of reach for more people.  Plus, unless you are paying for a home outright, the mortgage you apply for will include interest on taxes you are paying to the Federal government.  How does that make things better for you?  Same applies if you are borrowing to buy a car.  As for rich people being the only ones buying new cars and new houses because they can afford to hand over this much more to the government, that remains to be seen.  Rich people I know are rich because they have been frugal and wise with their money.  I think the demand for "used" will go up which will cause the prices of "used" to go up...as in supply and demand.  


How about renovations.  You want a new faucet, pay the government 23% more for it.  You want a new roof, pay the government 23% more for it.  You need a new water heater?  I can see the greedy little politicians rubbing their hands together with glee.  You say this will be covered by not paying income taxes.  I think if you add 23% to everything you do in your life, you will be paying a heck of a lot more than the income taxes you were paying.  Add 23% to a plane trip, a cab ride, a night in a hotel, a meal at a restaurant, on and on and on.

Christian:"Quite the contrary.  Under the FairTax, because of the rebate I mentioned earlier, the marginal tax rate paid by those at poverty level is zero.  Those spending at twice the poverty level pay an effective tax of only 11.5 percent — a rate much lower than the income and payroll tax burden they bear today." 

Cheryl: I stick to my guns on this.  Good for the rich, bad for the poor.  Also, creating class differences in the tax system, which we have now...just another twist on it.  I'm referring to answers on this one from another site: Article on the Fair Tax

Instead of simply not taxing staple items like food, health care, transportation, or clothing, they want the federal government to send each of us a check every single month. Think of the dependence this would create. It's very hard to imagine a “limited government” -- which many of the FairTaxers say they want – buying the loyalty of every American household with a monthly government payment of $478.83 – or any other substantial amount.

The purpose of the rebate is to make essential consumption (as measured by spending up to the poverty level) exempt from the tax. We do not want to tax the poor. This is similar to the earned income credit (in the income tax) that doesn't tax income below a certain level. Only the poor will not have to pay a tax preparer to fill out a complicated form in order to qualify for it. many have paid $200 to file that return.

But the “rebate” isn't similar to the earned income tax credit because it's intended to go, month after month, to every American household. If the intent was really to avoid taxing essential spending to place less burden on the poor, one could simply not levy the sales tax on stable items like food, medicine, school supplies, or clothing. 

Finally, Christian....this is a shell game where you throw money into the Federal government and after they spend it on God knows what else it will turn into yet another ponzi scheme, just like we have now.  I trust it about as far as I can throw a 350lb. linebacker.....NOT.  I cannot see anything better and I can see a whole lot worse with the Fair Tax.  There are as many or more complications in the Fair Tax as there are in the current income tax policies we have today.

As you say, there a many facets of the Fair Tax  that would take days to go through. That is one of the reasons I say it is NOT simple and it is going to be yet another convoluted failed tax scheme that needs to go into the dumpster.  My opinion, Christian.  No offense intended toward you.  There are a lot of people jumping onto this bandwagon.  I'm just not one of them.

THE OBAMA BASIS FOR FRAUD AGAINST AMERICA - RICO, ANYONE?

I don't know what happened to RICO.  Maybe there are just too many fraudulent organizations and culprits to charge.   Also, when the culprits are in charge of the Justice Department, it's unlikely that they will charge themselves.  Organized crime in government is rampant, yet we don't hear of RICO charges against organized fraud against the public with regard to environmentalism.  For instance, Al Gore has participated in fraudulent advertising for his scam by distributing his "Inconvenient Truth" movie throughout the public education system.  Now that we know the movie is for the most part a lie, or at best unfounded speculations by so-called scientists on the take, and that Gore was disseminating this information to benefit his own investments in carbon exchange schemes, where are the Feds?  I mean really, if we are going to bring 24 counts against Rod Blagojevich for supposedly trying to sell a seat in congress, then why aren't we going after Gore for lying to congress under oath in order to sell them on Cap and Trade? 

Cap and Trade is exactly the same mechanism promoted by Enron for which Ken Lay was convicted of fraud and conspiracy.  Source  One common fraud is this:  benefit fraud, committing fraud to get government benefits. Others are: deceptions   confidence tricks   charlatanism   false advertising 

Source Remember Enron? Did you know Enron had stuffed the pockets of politicians full of money, hoping to get the U.S. to sign the Kyoto Treaty? From the Washington Post, Jan. 13, 2002 (emphasis added):

On Aug. 4, 1997, Lay and seven other energy executives met with Clinton, Gore, Rubin and other top officials at the White House to discuss ... global warming ... there was broad consensus in favor of an emissions-trading system.
An internal memo said the Kyoto agreement, if implemented, would "do more to promote Enron's business than almost any other regulatory initiative outside of restructuring the energy and natural gas industries in Europe and the United States.

Ken Lay was convicted of doing exactly what Al Gore is doing.  Yet our government officials not only pat Gore on the back, but give him a legal pass on fraud.  

Since Cap and Trade legislation got placed on the back-burner temporarily, Obama has gone round the bush and directed his EPA Dept. to declare CO2 a pollutant.  By doing this, he is laying the groundwork for Cap and Trade legislation before he loses the majority in congress.  Lame duck session, anyone?  The point is that he can use the "CO2 is a pollutant" lie as the convincing argument to pass Cap and Trade.  The point is also that even without Cap and Trade, the government can regulate industries, fine them, and generally make life miserable for everyone involved in creating energy for our country.  Further, this makes life miserable for consumers who are going to pay through the nose to keep their refrigerators in use. This is FRAUD.  And it has little or nothing to do with protecting the environment, but everything to do with using our tax dollars, Federal money and force, to pay back lobbyists and emission trading companies who paid politicians to pass Cap and Trade.  Al Gore for one.  They can make life so difficult through regulations that industries will be begging for Cap and Trade just to find some way to pay off the extortionists in the Federal government.  This will cause higher energy costs to the consumers who will ultimately pay for the schemes.  That's you and me, folks. 

So we come to find out that Obama and his friends have set up an Enron-like organization in Chicago called the Chicago Climate Exchange.  Should Obama pick up his pen to sign Cap and Trade into law, the RICO enforcers should step in and nab him right then and there.  If only...

Source here:

Congress is now considering a bill submitted by California Rep. Henry Waxman and Massachusetts Rep. Edward Markey that would use a cap-and-trade scheme to cut carbon emissions by 20 percent from their 2005 levels by 2020 and 83 percent by 2050. So far, the bill avoids the hard questions of how offset credits would be issued as well as how gas emission would be measured. But it does establish that credits and offsets be traded. If it is imposed, the Chicago Climate Exchange, the only carbon trading market in the nation, could be a major beneficiary because of its expertise on putting a value on carbon and its offsets.

Source here:

Here are the players and their roles:
Joyce Foundation – A group founded in 1948 that took a sharp turn to the left after it's founder, Beatrice Joyce Kean died in 1972.
Barack Obama – President of the United States and one time Board member of the Joyce Foundation. Largely responsible for creating the Chicago Climate Exchange by funneling money to it from the Joyce Foundation.
Chicago Climate Exchange (CCX) – An exchange dealing exclusively with Cap and Trade passes, techonology, etc. It was formed largely due to Obama's role as Board member on Joyce Foundation. Obama oversaw the funneling of money from that foundation to the CCX as well as to an entity headed by Bill Ayers' brother.
Valerie Jarrett – Senior advisor to Barack Obama and current Board member on the Joyce Foundation.
Al Gore – Founder of London-based Generation Investment Management (GIM). London also happens to be in the same country where climategate broke. GIM owns 10% of the CCX.
Goldman Sachs – Banking giant that, like Gore, owns 10% of the CCX. Also worthy of note is that at least six former Goldman Sachs executives work inside the Obama administration while Congress puts on a dog and pony show, publicly chastising other Goldman execs about their supposed complicity in the financial crisis.
Franklin Raines – Former head of Fannie Mae. While there, Raines used taxpayer dollars from Fannie Mae to purchase cap and trade technology.

(Note: the Cap and Trade technology that Franklin Raines bought with our money is Smart Meters, the gadgets the Federal government is planning to put on your house and mine to control our individual energy usage.  Don't you love it when they use our own money against us?) 

In fact, since we know that "CO2 is a pollutant" is a total lie, why can't we nab Carol Browner, the Climate and Energy Czarina, Lisa Jackson, the EPA Czar, Obama and his buddies in this cute little enterprise and put them under lock and key for about, oh say, 75 years apiece?  After all, are they not defrauding the public to throw our tax dollars at the Chicago Climate Exchange, their carbon trading Enron-like machine?  Ken Lay must be screaming from his grave.  I wonder if he just didn't have enough money to buy off the government.  The Joyce Foundation, Goldman Sachs, Fannie Mae and Freddie Mac have a lot more money than Ken Lay ever dreamed of.  C'mon, Elliot Ness.  Where are you?

Watch out for the lame duck session because payback is still in the works.  Cap and Trade, i.e. Kneecap and Tax, has not gone away.  It will cripple the United States even further than the Obama administration has already.  The "mob" doesn't go away.  It just looks for an opportunity to hit the "mark."  We're the "mark." They have not given up on this scheme to defraud the public.  RICO anyone?