The Fairtax Book...

[Jwrussell]

Allan, Please check out the book, PLEASE. Even the FAQ on the web site should start you in the right direction. Once you really understand the ins and outs of the plan I don't think you'll feel the same way. The very wealthy spend more than everyone else, hence they will pay more taxes than everyone else. This is exactly why the plan calls for a "prebate" of necessity purchases up to the poverty level instead of exempting such things as food. The poor family is going to spend a heck of a lot less on food than the rich will. The tax on that bulk package of ground beef is going to be heck of a lot less than that package of sirloins, ya know? Plus, with the prebate, no one gets taxed up to the poverty level. :thumbsup:

As to how the taxes are spent? That's a whole other fight my friend. This is strictly a way to change how we fund the government. We still have to make sure they spend the money wisely. But like I said, another argument, for another thread...or three...or thirty! :wink:

 

[Jwrussell]

Again Allan, you have the prebate to cover necessities AND the Rich spend more on more expensive items than do the poor. Yes they are both paying the same percentage per DOLLAR, but as a percentage of earnings they are spending a heck of alot more.

 

[Wasch_24]

As I said, I need to look into this more. But a flat tax , based on purchases seems bad...Why should someone who is living below the poverty level have to pay the same tax on something(clothes, household goods) as someone who makes a hundred times as much? It ends up being a huge percentage relative to their income/net worth....

In the end, after the prebate, they don't pay the same percentage.

Honestly, have you taken the time to read the entire FAQ link?

 

[allanf]

In the end, after the prebate, they don't pay the same percentage.

Honestly, have you taken the time to read the entire FAQ link?

For the THIRD time :bigeyes:
, I have to look into this more. :hammersma

 

[Wasch_24]

Haha, sorry man. Just try not to go into with any preconceived notions.


From the FAQ:
" Is it fair for rich people to get the exact same FairTax rebate from the federal government as the poorest person in America? Let’s look at a billionaire under the FairTax – if he spends $10,000,000 dollars he pays a tax of $2,300,000 and gets a rebate of $4,283 (assuming he is married and has no children). His effective tax rate is 22.96 percent.

Now, let’s look at a middle-income married couple, under the FairTax, with no children – if they spend $40,000, they pay $4,917 net of their rebate for an effective tax rate of 12.3 percent. The effective tax rate increases as spending increases, but never exceeds 23 percent! "

 

[tubaman]

Hey allan, why don't you look into this more?? :wink:

Just Kidding!!!!

 

[Wasch_24]

:rofl: @ Kevin!

 

[Jwrussell]

I'm just glad to see you taking an interest Allan. I honestly believe anyone really studying this plan will have a hard time finding a reason to be against it. ESPECIALLY when looked at vs the current plan.

And once you DO start believing in it, let me know what your zip+4 is so I can get you in touch with your representative. All them slackers in NJ are on the "Will Not Commit" column except for two. :wink:

 

[geoffrie]

DISCLAIMER: I hereby swear to acquire the book and even read it.

A quick question for those who have read the book. In the FAQ page, I found this in item#21:
With the FairTax, mortgage interest rates fall by about 25 percent (about 1.75 points) as bank overhead falls; this is a huge savings for consumers.

I'm usually suspicious of claims of savings due to reducing overhead. Are these savings further detailed in the book (which I will hereby swear to acquire and read).

Not the mathematical savings as represented in the FAQ - but how the overhead is guarenteed to be reduce. Mortgage rates are not legislated, per se.

 

[Jwrussell]

Hmmm...I'll have to see if I can find more information on that Geoffrie. I think by "overhead" they are talking mainly the same thing that EVERY company will no longer have to deal with, which is the payroll taxes. Add to that a much reduced need for tax lawyers, etc. Beyond that, I can't say I really know what they are talking about.

 

[allanf]

BTW...I have a very GOOD accountant! Or rather did, he retired this past year :-( So its HR BLOCK for me.

 

[Jwrussell]

And wouldn't you rather not have to HAVE an accountant anymore? :wink:

 

[Wasch_24]

DISCLAIMER: I hereby swear to acquire the book and even read it.

A quick question for those who have read the book. In the FAQ page, I found this in item#21:
With the FairTax, mortgage interest rates fall by about 25 percent (about 1.75 points) as bank overhead falls; this is a huge savings for consumers.

I'm usually suspicious of claims of savings due to reducing overhead. Are these savings further detailed in the book (which I will hereby swear to acquire and read).

Not the mathematical savings as represented in the FAQ - but how the overhead is guarenteed to be reduce. Mortgage rates are not legislated, per se.

I'm through chapter five and the overhead drop they guarantee relates to all the current embedded costs of taxes and the costs involved with adhereing to the current tax code and regulations. The over head dropping is guaranteed.

Passing that on is not IMO.

The only thing I have read so far that descirbes why they feel they can guarantee things, i.e. prices, rates, etc., will drop is economic studies of competitive marketplaces and a recent real world example.

The example they give is when the congress inadvertantly let an air travel tax lapse. At first the airlines drove on like nothing had changed. Within a week, I think...don't have the book with me, one small air line decided they would try and drop their prices to gain an increased marketshare. Well, it worked for a couple days but within one week EVERY other airline in the country followed suit and the advantage was lost. In the end, every airline in the nation had dropped it's prices by the amount of the tax break in less than a month.

 

[allanf]

I'm through chapter five and the overhead drop they guarantee relates to all the current embedded costs of taxes and the costs involved with adhereing to the current tax code and regulations. The over head dropping is guaranteed.

Passing that on is not IMO.

The only thing I have read so far that descirbes why they feel they can guarantee things, i.e. prices, rates, etc., will drop is economic studies of competitive marketplaces and a recent real world example.

The example they give is when the congress inadvertantly let an air travel tax lapse. At first the airlines drove on like nothing had changed. Within a week, I think...don't have the book with me, one small air line decided they would try and drop their prices to gain an increased marketshare. Well, it worked for a couple days but within one week EVERY other airline in the country followed suit and the advantage was lost. In the end, every airline in the nation had dropped it's prices by the amount of the tax break in less than a month.

And we all know how the airline industry are model examples of fiscal responsibility... :razz:

 

[Jwrussell]

Methinks you are missing the point Allan. :wink: :razz:


Seriously, I'm pretty convinced they are correct about that. There are just far too many companies out there wanting any and every edge they can get to let something this big go. Think about the recent auto sales with the "employee pricing". One automaker started it, and quickly enough, every body else had jumped on the bandwagon. It's just too good of an advertising tool to pass up:

"SUNDAY, sunday SUNDAY! Come over to Wacky Auto Sales tomorrow! The FairTax goes into affect tomorrow and we will be the only Dealer with prices that ALREADY reflect the 22% decrease in prices!"

or

"Come into Wacky Todd's Auto sales tomorrow and we'll pay the new FairTax FOR YOU! You'll still pay exactly what you would have payed BEFORE the new tax!" (which of course would simply mean that they are already selling at a cost reflecting the 22% reduction).

 

[allanf]

I think we need a higher tax on corporate profits...There is a lot of "uncollected" money out there...As I said(4th time) i need to read more about this when i have time. I just got back into work after being out for a week.

 

[Wasch_24]

Hey, WTF is "Whacky Todd's"?!? :hysterica

The more and more I read in the book the more I started to acknowledge it is very likely as well.

 

[Wasch_24]

I think we need a higher tax on corporate profits...There is a lot of "uncollected" money out there...As I said(4th time) i need to read more about this when i have time. I just got back into work after being out for a week.

He he, when you read the book you will discover that it doesn't matter how much the Goverment taxes the corporate world...it all falls on the shoulder of the individual...the employee, the shareholder, the consumer...doesn't matter. None of it affects the the corporation, none of it.

 

[Jwrussell]

As Todd said, the book deals with everything you've brought up Allan, and I really think you'll be doing alot of "Oh's" and "Aaaaaaaaaahhhh's" and "Damn!'s" while reading it. It's alot of stuff that really is sitting there staring you in the face but until it's brought out in front, seperated from all the crap hiding it, is hard to see.

 

[tobby4]

hey allan read the damn book.....

HA

Looks interesting to me... i might just have to read it..