Fair Tax Book

[Billy Clyde Puckett]

Has anyone read this book? I have not verified any of the numbers, but it makes a pretty compelling argument for a national consumption tax replacing all current federal taxes. If you have read it I would like to hear your thoughts.

PLEASE THIS HAS NOTHING TO DO WITH REPUBLICANS AND DEMOCRATS OR LIBERALS AND CONSERVATIVES. IT IS SIMPLY AN ALTERNATIVE METHOD OF COLLECTING THE TAXES NECESSARY TO RUN THE COUNTRY. PLEASE DON'T COMMENT IF YOU HAVE NOT READ THE BOOK OR CANNOT CONFINE YOURSELF TO THE TOPIC.

[bendog]

no. Is that the actual title? I might take a gander on amazon sometime if I have an order.

[Bronco_Beerslug]

Originally Posted by Big Guy

Has anyone read this book? I have not verified any of the numbers, but it makes a pretty compelling argument for a national consumption tax replacing all current federal taxes. If you have read it I would like to hear your thoughts.

PLEASE THIS HAS NOTHING TO DO WITH REPUBLICANS AND DEMOCRATS OR LIBERALS AND CONSERVATIVES. IT IS SIMPLY AN ALTERNATIVE METHOD OF COLLECTING THE TAXES NECESSARY TO RUN THE COUNTRY. PLEASE DON'T COMMENT IF YOU HAVE NOT READ THE BOOK OR CANNOT CONFINE YOURSELF TO THE TOPIC.

I read the review and their number (23%) doesn't work for a flat tax on goods. The actual number has to be in the low 30s most experts agree (which would crush the lower wage earners). The Bush tax commission just released their recommendations (scroll down for the thread) and all they could come up with was reducing or eliminating mortgage deductions and healthcare deductions for 70% of Americans.

EDIT: Most experts also agree if you exempt things like food, clothing and medical items the tax would have to be raised to well over 50%.

[W*GS]

Originally Posted by Bronco_Beerslug

EDIT: Most experts also agree if you exempt things like food, clothing and medical items the tax would have to be raised to well over 50%.

That assumes that all current expenditures remain in place.

[Bronco_Beerslug]

Originally Posted by W*GS

That assumes that all current expenditures remain in place.

Used as a replacement of current revenues generated by payroll taxes.
State income taxes and real estate taxes would remain. If they were to be eliminated also, the rate approaches 80%.

[W*GS]

Originally Posted by Bronco_Beerslug

Used as a replacement of current revenues generated by payroll taxes.

As well as the other hidden taxes we pay.

Originally Posted by Bronco_Beerslug

State income taxes and real estate taxes would remain. If they were to be eliminated also, the rate approaches 80%.

That assumes that all current expenditures remain in place.

Perhaps a consumption tax rate of 80% would get people to realize just how insidiously pervasive taxes are, and just how much government costs us.

[elsid13]

No I haven't read the book, but I check it out thanks for bring it to my attention.

Is there any talk of revising mineral and or water rights or does just deal with single revenue source. One of the biggest crimes is the ability of companines (domestic and foriegn) to pay absloute nothing for the rights because of 1800's laws.

[Billy Clyde Puckett]

Yes that is the title of the book. Yes it would replace all payroll and social security taxes. They have plenty of nationally recognized economists who believe it would be revenue neutral for the government. The rate they propose is 23% on all good and services. Their premise is that there is 22% imbedded taxes in all goods and services which would offset the consumption tax. They deal with the Issue of necessities by providing a "prebate" to everyone which would pay each household the average amount of tax the low income people would normally pay on food, medicine, etc. The authors make a good argument that it would bring back jobs and export to the US as well as domestic investment. It would also eliminate the fact that many illegal activities pay no taxes.

[Bronco_Beerslug]

Originally Posted by Big Guy

Yes that is the title of the book. Yes it would replace all payroll and social security taxes. They have plenty of nationally recognized economists who believe it would be revenue neutral for the government. The rate they propose is 23% on all good and services. Their premise is that there is 22% imbedded taxes in all goods and services which would offset the consumption tax. They deal with the Issue of necessities by providing a "prebate" to everyone which would pay each household the average amount of tax the low income people would normally pay on food, medicine, etc. The authors make a good argument that it would bring back jobs and export to the US as well as domestic investment. It would also eliminate the fact that many illegal activities pay no taxes.

Flat tax, national sales tax and a value-added tax are debated by Wall Street all the time. I've listened to the "experts" debate them for years. Like I posted earlier the numbers don't work unless the percentage is at least in the 30s (and that only includes replacing taxes on wages).
Individual state tax structures are a huge obstacle to these ideas also.
People would lose their mortgage and healthcare deductions adding thousands in most cases of lost overall income every year.


Bush's tax commission just came to basically the same conclusion.

A good read on a national sales tax here that gives insight with the different problems in different areas.
http://tinyurl.com/9c9ck

[Billy Clyde Puckett]

Originally Posted by Bronco_Beerslug

Flat tax, national sales tax and a value-added tax are debated by Wall Street all the time. I've listened to the "experts" debate them for years. Like I posted earlier the numbers don't work unless the percentage is at least in the 30s (and that only includes replacing taxes on wages).
Individual state tax structures are a huge obstacle to these ideas also.
People would lose their mortgage and healthcare deductions adding thousands in most cases of lost overall income every year.


Bush's tax commission just came to basically the same conclusion.

A good read on a national sales tax here that gives insight with the different problems in different areas.
http://tinyurl.com/9c9ck

State taxes are left out of the mix in the presentation. The "loss of the mortgage deduction and healthcare deductions are irelevent and would not be lost income, but income never spent on taxe according to their argument.

If you are interested, you can check out www.fairtax.org which has many of the arguments presented in the book.

[Bronco_Beerslug]

Originally Posted by Big Guy

State taxes are left out of the mix in the presentation. The "loss of the mortgage deduction and healthcare deductions are irelevent and would not be lost income, but income never spent on taxe according to their argument.

If you are interested, you can check out www.fairtax.org which has many of the arguments presented in the book.

Yeah, I been to their site. The link I posted addresses many of their ideas.
The problem with the different state tax structures and their connection to the federal tax code is addressed in detail at the site I posted.

Their argument on mortage deductions assumes that rates would drop to 2-3%? Charities and non-profit organizations would especially be hit hard with the wealthy losing incentive to donate.

I've listened and watched the "experts" debate H.R.25 Fair Tax Act of 2003 for 2 years now. If you don't want to spend money on the book you can find out everything about the bill at the link I posted.

By the way, the bill has zero chance of passing.

[Billy Clyde Puckett]

I realize that this has almost zero chance of passing, however, please give me your suggestion for tax reform. I don't believe very many people would tell you the current system is not absurd. I wasted 20 years of my career as an accountant, so I am pretty familiar with many of these issues.

Their rate of 23% on all spending would raise more tax money than the current income tax system because of all of the special interest expemptions, avoidance and fraud. Joe Smith can sell cocaine and make a million per year and never pay a cent of federal tax, Under this proposal, he would pay 23% on his purchases of bling bling.

The current employee pays roughly 33% on average of their paycheck directly as income and SS taxes plus another 8% indirectly that is charged to the employer. If the company did not have to pay that 8% it would increase wages and/or reduce prices. In light of that number 23% on money spent, not saved, sounds like a bargain.

The Tax Foundation estimates that in 2002, Individuals, business and non profits spent 5.8 billion hours complying with the current code. This translates into $194 Billion in lost productivity and that does not include the cost of tax planning, audits and litigation.

The IRS has an annual budget for wages of $10 Billion. I can sell you an upgrade to a retail sales tax system that will cost a large multi site department store about $500.

Tax Foundation estimates that American Individuals lose $24 Billion in opportunity cost (interest) on their withholding taxes.

Congressional Budget Office (who would be motivated to underestimate) estimates that businesses making decisions based on tax consequences rather than sound economic and business reasoning cost $200 Billion per year in lost GDP. And we all know increases in GDP means increased in employment and wages.

So what if the States cost to collect their taxes goes up if they insist on staying with the income tax concept. They have been piggy backing on the Feds all this time, let them pay their own way or find a more economical way of collecting revenue.

I am not attacking you Slug, I am just asking for answers of how you or anyone else thinks we can improve the current situation.

[enjolras]

I think tax reform HAS to start with spending reform. Let the government get its spending under control and then we can devise a tax system that meets the needs of reduced government.

[Bronco_Beerslug]

Originally Posted by Big Guy

I realize that this has almost zero chance of passing, however, please give me your suggestion for tax reform. I don't believe very many people would tell you the current system is not absurd. I wasted 20 years of my career as an accountant, so I am pretty familiar with many of these issues.

.

The current system is a mess! Maybe not fixable, I don't know. I've listened to all these experts and analysts (on CNBC and Bloomberg) for years and years and they can't agree on what should be done. Yesterday, I listened to the AICPA's suggestions which were that the current code can be simplified and made workable.

I've listened to many of them say that the percentage has to be at least in the 30s for any kind of consumption tax to work which would then create such a burden on society that the economy would tank.

Like enjolras said, our budget is so huge that trying to fix taxes to pay for it may not be possible until we get control of it.

[Billy Clyde Puckett]

Originally Posted by Bronco_Beerslug

The current system is a mess! Maybe not fixable, I don't know. I've listened to all these experts and analysts (on CNBC and Bloomberg) for years and years and they can't agree on what should be done. Yesterday, I listened to the AICPA's suggestions which were that the current code can be simplified and made workable.

I've listened to many of them say that the percentage has to be at least in the 30s for any kind of consumption tax to work which would then create such a burden on society that the economy would tank.

Like enjolras said, our budget is so huge that trying to fix taxes to pay for it may not be possible until we get control of it.

I agree that spending is out of control and the current system is a mess., but niether problem will be fixed until we put the pressure on congress to solve them. Right now most people are sitting back and waiting for it to magically happen.

[Bronco_Beerslug]

Originally Posted by Big Guy

I agree that spending is out of control and the current system is a mess., but niether problem will be fixed until we put the pressure on congress to solve them. Right now most people are sitting back and waiting for it to magically happen.

I don't believe most people in this country don't really care enough to demand change, do you?

The wealthy are doing fine (especially with the new tax cuts in place for them).
The poor don't believe or care that their voices can make a difference.
The rest of the country is working so hard and or so many hours to make ends meet they don't have the time or energy.

[Billy Clyde Puckett]

Originally Posted by Bronco_Beerslug

I don't believe most people in this country don't really care enough to demand change, do you?

The wealthy are doing fine (especially with the new tax cuts in place for them).
The poor don't believe or care that their voices can make a difference.
The rest of the country is working so hard and or so many hours to make ends meet they don't have the time or energy.

All groups would benefit by reforming out tax structure except IRS employees and the lobbyists who make their living on keeping the code complicated. I think people care, but they need a rallying point to create some focus. So the question becomes - how do we create that rallying point?