I’m afraid that the “tax reform” in the works is not going to be the game changer needed, the FairTax. The politicians are not willingly going to give up the Tax Hammer. It gives them too much power and lines their pockets with campaign cash. It is up to we the people to demand it.
Enactment of the FairTax would be the greatest transfer of power from the government back to the people since the Declaration of Independence. Instead of paying 39% of what you earn, you’ll pay 23% of what you spend, and keep all that you earn. Because your gross pay will be your “take-home” pay, the FairTax will be an economic generator and job creator for people, big and small business. All the while still generating the same amount of money to fund the government and its programs.
Just how can the FairTax be revenue neutral compared to the current income tax? Simple really, when you consider that the tax base expands from just those lucky ones who have jobs to everybody within our borders who purchases any new good or service.
Glad you asked. Actually, a FB buddy, John Ingraham Berry said, and asked:
Burdensome on those families and individuals who have very little… have a little trouble grasping and seeing the fairness of this concept.
It’s really very easy, especially on the poor. Once you understand what’s in the bill, it’s like a ‘slap yourself in the head’ brilliant concept. For lack of any media excitement or mediocre coverage of the FairTax, getting people to learn what’s in the bill, as opposed to what the establishment says about it, which is pure demagoguery, is the biggest challenge.
Under every circumstance EXCEPT the FairTax, a consumption tax is regressive. By percentage of income, it hurts the poor the worst. The FairTax doesn’t do that. It is progressive in a way that benefits the poor the most, as you will see below.
Here’s the short version.
1.) Everything everyone (poor included) buys today is paying all the income and corporate tax, capital gains, gift, estate, alternative minimum, SS and Unemployment tax, and self-employment tax of everyone involved in bringing that item to market, from raw materials, to manufacturing, to transportation, and all the costs of a wholesaler and retailer to bring the item to you, the final consumer. Call that the “embedded” tax. Everyone pays it, it’s in the cost of the item. It just isn’t itemized on your receipt. It’s hidden in that way, but it is there. Under the FairTax, the amount of federal tax you pay will be printed on your receipt. Totally transparent.
Now imagine what the same item would cost if there were no embedded taxes, if that product could be made with none of the above taxes. After over $22 million of research, the percentage amounts to about 22 % less.
The research included, of course, finding out what people buy at all income levels. No small task. That done, for the FairTax to be ‘revenue neutral,’ the FairTax percentage comes in at 23%.
That doesn’t mean an item automatically costs 23% more under the FairTax than it does today. When you remove the 22% embedded tax, and replace it with a 23% sales tax, you see a 1% increase in price on a widget. This is an average, not an absolute. One method is swapped with the other, having a negligible effect on cost to consumer.
2.) Here’s what the critics don’t tell you, or don’t know about. There is NO TAX on used items, including a car, motorcycle, boat, or house sold that was not bought by the ORIGINAL owner. The sales tax is ONLY for NEW items purchased for the FIRST TIME. Fair thing is, this applies the same to everyone, at all income levels. Including tourists, diplomats and other non-citizens.
3.) Because it is a consumption tax, assessed to new items sold, everyone pays it. The tax base instantly expands to 320,000,000 people instead of only legal citizens who have a job. What we have now is an income tax. No income = no tax revenue. And a tax base less than half of that. And because of that dynamic, the FairTax is a more stable revenue source. Fair thing is, this applies the same to everyone, at all income levels. Including foreign tourists, diplomats and other non-citizens, legal or illegal. And that tax never exceeds 23%.
4.) This is the part that makes this consumption tax progressive, instead of regressive. The Prebate. Designed to be the same, aka fair. Everyone gets this prebate based on the number of people in the household. And the prebate is for legal U.S. citizens only.
Now a new term to learn, effective tax rate. Based on the consumer spending research mentioned above, the amount of the prebate is figured to offset the sales taxes that would be paid for the basic necessities that everyone buys up to the poverty level as determined by HHS. It is paid to the household every month. Taking the prebate into account, lower income people pay less than 23%. In fact, the prebate at the lowest income levels make the effective tax rate a negative number. An income stream.
5.) Absent all the embedded taxes, at the federal level, the term ‘take home pay’ becomes obsolete. Your gross pay is also your net pay. THAT makes a big difference for all people, especially the poor. Currently, for every job, and many people do have 2 or more jobs, they pay those embedded taxes. Can’t get more regressive than that. Imagine the effect when they are not taxed every time they get another job. Purchasing power goes up for everyone, only greater for the poor. The rich pay the maximum 23%. But since “the rich” also buy more, they pay more taxes in dollars, obviously, than the poor, when they buy their yachts, cars, planes and other high-end toys. That’s how it affects families of all income levels, on the personal level.
6.) No more income taxes to file. And because of that, there is no compliance cost incurred to pay them. No tax preparers, accountants, or tax lawyers to pay. In total, a saving of over $400 billion. And, the IRS is effectively gone.
7.) On the national, macro level, absent the income tax, the $10-15 trillion that U.S. companies have sheltered overseas will come back to be invested here, since there will not be a tax obligation to shelter it from. Then, with the absence of an income tax, foreign business will come here and open up shop. The U.S. will become a global magnet for businesses. The U.S. will become the “offshore tax haven.” There will be a job for anyone who wants to work. Maybe more jobs than people. And competition between employers to get employees will do what? Increase wages. We will experience real economic growth on a personal and national level. And none of it government subsidized, adding to the national debt.
How the politicians spend that is another matter. The FairTax is only to be the replacement source for funding the government. It has nothing to do with how that money is spent or where it is allocated.
You can read the text of the bill HERE. It’s not 75,000 pages like the current IRS code. H.R. 25 is a whopping 132 pages long. And more information is available at the link at the upper right-hand corner of your screen.
What’s not in the news today, but should be? What we are witnessing here is a Democrat/Media attack on Trump like they did to Mitt Romney four years ago. Harry Reid alleged that Romney didn’t pay is taxes (when he did), and his dog on vacation fiasco. That was front page, above the fold for weeks. Nothing illegal, like Trump, but an attempt to take down the candidate and dispirit his supporters from voting. In the latter, it’s not just to attack Trump, this includes half of America along with him. The “irredeemable deplorables.”
Let’s begin with the illegal publication of Donald Trump’s tax return. No one is accusing Trump of anything illegal. Trump followed the tax law by writing off a business loss.
You can’t find a word about the illegality of the IRS, or whoever else, for leaking the information.
You can’t find a word about the New York Times breaking the law by publishing it.
And, you won’t hear a peep from Obama’s Justice Department to be the least bit curious in enforcing equal protection under the law. To the contrary, his record consists of using the IRS as a weapon against political opponents.
You won’t find one article examining how Hillary Clinton made $22 million by giving speeches to donors on Wall Street, for speeches she won’t release the transcripts of.
Trump had a business loss in his Atlantic City casinos in 1995. That’s when the casino industry in Atlantic City started taking a dive. From which it has never fully recovered. Consequently, his corporation lost $916 million. Hillary Clinton uses that to denigrate Trump’s business acumen. She hasn’t a clue. Trump is among a small league of business leaders who can take a $916 million loss as a bump in the road.
Current tax law allows you to carryover a large loss over however many years the size of the loss dictates. Trump lost $916 million of his own money. Only so much per year is allowed to be written off. In this case, it took 18 years.
So what has Hillary Clinton lost?
Four Americans including an Ambassador.
33,000 incriminating e-mails
Broken laws on national security
Destroyed evidence under subpoena
$6 Billion of taxpayers’ money while Secretary of State
If a carryover write-off would be available for that, Hillary Clinton wouldn’t have to pay taxes for five generations.
Bottom line, know what you’re seeing and don’t let it work on you. Staying home this election is not an option.
What an opportune time to talk about tax reform, thanks to the Clinton campaign and their publicist, the New York Times. Accusing Trump for not paying “his fair share.” To chastise Trump for having to hire a team of accountants and lawyers just to file his taxes, shows what an abortion of tax code Americans are saddled with. For example . .
The top 1 percent of earners (incomes in excess of $615,000) are paying nearly half — 45.7 percent — of individual income taxes for tax year 2014.
The top 20 percent, with incomes above $134,300, pay nearly 84 percent of all federal income taxes for tax year 2014.
The growing complexity of the U.S. tax code has led to large compliance costs for households and businesses.
Americans will spend more than 8.9 billion hours complying with IRS tax filing requirements in 2016.
Put in dollar terms, the 8.9 billion hours needed to comply with the tax code computes to $409 billion each year in lost productivity, or greater than the gross product of 36 states.
That’s not how much taxes were paid. That’s how much it cost us, as a country, just to comply with the tax laws to file our taxes.
Under the FairTax plan, that’s $409 Billion per year that stays in our pocket, FOR FREE. Under the FairTax, you don’t “file” your taxes any more. There’s nothing to file under a consumption-based tax system. And April 15th is just another day.
So Hillary and her lemmings want to paint Trump as a tax cheat when he follows the tax law. Legally spreading a single loss in 1995 of $916 million dollars over 18 years. (Must be nice to have a loss like that to be just a bump in the road.) Unlike Al Sharpton, Trump did not break the tax law. They are great at name-calling on phony accusations.
Well guess what? Come to find out, the New York Times didn’t pay any taxes either, for 2014! And on top of that, got a “tax refund” of $3.5 million (of taxpayer money), even though they had a pre-tax profit of $29.9 million. How do you like the tax code now?
But when it comes to one of their own, like Rev. Al Sharpton, who in fact did not pay his income and payroll taxes, who has tax liens on him for over $3 million, well, he’s a frequent VIP in The White House. Go figure!
Nowadays, Bill Clinton and Al Sharpton will tell you the hot money seems to be made in Charities and Foundations. They don’t pay taxes, especially when you can donate to yourself. Two different worlds, two different standards.
China approves far-reaching counter terrorism law. Virtual control and access to all internet and electronic communications, to be able to get terrorists who use encryption.
The term, according to Xinhua, is “defined as any proposition or activity — that, by means of violence, sabotage or threat, generates social panic, undermines public security, infringes on personal and property rights, and menaces government organs and international organizations — with the aim to realize certain political and ideological purposes.”
“However, some analysts feel that the purpose of the bill is aimed at control of the Chinese population, rather than curbing domestic and international terrorism.”
BINGO! Well, it’s a twofer.
I tell you. This is the kind of stuff that makes Obama envious. He and Hugo Chavez (Venezuela) were soul brothers. That is, in a political sense. Watch for China’s president, Xi Jinping, to be visiting The White House. Oh wait, Xi Jinping was there in September, 2015.
It’s pretty obvious that China wants a part of everything their people do. And sets the standard for what “terrorism” is, to include un-friendly sectors of the country. Like the (ethnic minorities) Muslim sectors.
In the U.S., it would be an Obama wet dream, to have government-mandated access to watch what you do. Especially those bitter clingers you know. IRS, DOJ, EPA . . . imagine the thrill of government intimidation by a visit from some of those letters of the Executive branch. Xi Jinping and Obama have a lot in common in their idea of government and its role. China doesn’t have a Constitution and Obama will not follow the Constitution. Going by China’s definition, it’s not a stretch.
Actually, Obama already uses those letters to intimidate political opponents. Using China’s definition of what terrorism is would make it more fun (from his perspective) and easier to do.
Know what burns my ass? That so many people believe the crap Obama is feeding us about illegal aliens getting amnesty and then “paying their taxes” like everyone else.
Why? Because unless they are drug dealers or human traffickers and stupid enough to declare that income, none of them make enough money to actually pay any taxes.
But the IRS code will allow them to file for, get this, “Earned” Income Tax credit, and the Per Child Tax credit, for all their kids, real or imagined.
The reality is, them paying taxes amounts to just more redistribution of wealth via the tax code, from you to them. That started under Clinton when The Taxpayer Relief Act of 1997 morphed the tax code into a vehicle for spending programs.
So when Obama sticks his nose in the air at you while he says they’ll be paying taxes, what the slime ball really means is that he’s going to give them thousands of dollars for being here illegally.
Charles Schumer (D-NY), No. 3 leader in the Senate’s Democratic majority, is working on a tax provision designed to discourage companies from moving their tax domiciles overseas, where the tax liability is lower than the U.S., that has the highest corporate tax rate in the world.
Which is exactly what is wrong with the current IRS tax code. It is used by politicians as a tax hammer to either reward or punish economic activity. In this case, Schumer is upgrading to a sledge-hammer, by attempting to grab business profits retroactive to 1994. It’s the Democrat’s version of an Occupy Wall Streeter’s wet dream. And would most certainly fire up the wealth-envy part of their party’s base.
The proposal would cut the amount of deductible interest for inverted companies to 25 percent of U.S. taxable income from 50 percent, according to a draft obtained by Bloomberg News.
There is only one tax code that is economically stimulative. Not just for business, but for the middle class and the poor. It’s called the FairTax. And it does not have tax hammers. If fact, the FairTax can not be manipulated by politicians to pick winners or losers. On the contrary, it couldn’t be more open and transparent, or fair. And instead of being an incentive to move out of the country, the FairTax would be the incentive for corporations to being their assets back home and be put to work here. And the only employment problem we would then have is finding enough people to fill the jobs that would be created by the economic recovery that would result in all sectors of the economy.
Doing what they do best, the DNC begins their campaign to take down all possible republican challengers for the 2016 presidential campaign. Casting the “Christie administration” as the demon.
“Gridlock,” the ad begins, according to a transcript.
“That’s what happened one year ago in Fort Lee, when the Christie administration shut down lanes to the George Washington Bridge. But it’s also what Chris Christie has brought to New Jersey — wrecking our economy and losing our trust.”
Of course, you can see the similar attacks brought against the “Obama administration” so what’s the big deal?
What’s the difference?
As far as is known, Christie was not responsible for the traffic slowdown that “wrecked” NJ’s economy, losing “our trust.” Obama IS responsible for wrecking the nation’s economy, and his habitual lying to the American people speaks for itself about trust.
The traffic study initially cited by the Port Authority of New York and New Jersey as the reason for the lane closures proved a bogus explanation amid media probes. Exactly like the Obama administration’s bogus explanation of the IRS scandal blaming a few rouge agents in Missouri. But, a trove of leaked emails indicated an official in Christie’s administration (not Christie) along with one of his Port Authority appointees had ordered the shutdown as retribution against Fort Lee Mayor Mark Sokolich, who refused to endorse Christie’s re-election campaign. They didn’t lose their emails. Months after the IRS “investigation” started, testimony brought the blame to Washington, to IRS official Lois (I pled the Fifth) Lerner. Her emails, and the emails of 6 other people involved, have somehow magically disappeared.
Christie fired the aide and her supervisor, and the scandal led to the ouster of several Christie appointees at the Port Authority. President Obama has fired no one at the IRS. His story continues to be there wasn’t a smidgen of corruption. And he’s sticking to it.
The campaign tactic of marginalizing your opponent to the point of eliminated them is what the leader of the Democrat party, President Obama, does. It is all he knows. That’s what is unfolding in this ad targeted at Christie today. Don’t be distracted by it. You can bet that Christy won’t.
British Prime Minister Cameron says the ISIS threat is “a poisonous ideology of Islamic extremism”. Clueless Pres. Obama says it’s political.
Why would President Obama deny that ISIS, alQaeda, all those cowardice cave men clinging to their guns and religion, is political and therefore requires a political solution? That there is no military solution and, btw, we don’t have a plan on how to deal with (terrorism) them. If that isn’t music to the terrorists’ ears, I don’t know what is.
Great Britain is learning what an open door Politically Correct driven immigration policy is getting them. Suicide bombers, citizens being decapitated in broad daylight. Unfortunately, President Obama is likewise genuflecting to the Islamic goons by ignoring border security here. Which begs another question. Do you think Obama has weighed the benefit of millions of undocumented democrats against the terror threat that exists? To put it another way, do you think Obama thinks that the sacrificing of untold number of Americans to terrorist attacks is worth the price for the perpetual Democrat control of government?
From the frame of mind of someone who wrote the book “Dreams from my (Communist) father,” I have no doubt that he thinks it is worth it.
As an aside, and not totally unrelated to Obama and terrorism, let’s review his actions of late.
Illegally sends reinforcements to the Taliban, ostensibly after spending a year in Qatar, by trading five of their top generals for one deserter.
Gives further aide and comfort to the enemy (that’s also illegal) by announcing that the US has no plan to deal with them.
I don’t know about you, but I’m not feeling confident that this president knows what is best for America.
Somebody tell me, what happened to, “We are the ones we’ve been waiting for”? (h/t to Rush Limbaugh for that one)