RoR: Forum

http://www.fairtax.org/PDF/FairTaxPrebateExplained2007.pdf

Post 21

Monday, June 1, 2009 - 7:19pm

Ted,

The third item on the FAQ page is, "How does the prebate work?" It gets into the actual numbers.

I agree that the lobbyists will try to game ANYTHING, and EVERYTHING.... Personally, I'd go with either approach... I see them as temporary (say 5 to 10 years) and both serving the same purpose - making it politically palatable. It has to be temporary because it will otherwise be the lever to get back into big taxes and time is the risk.

Post 22

Monday, June 1, 2009 - 10:33pm

Thanks. That prebate is still nonsense. It would require a bureacracy as big as the IRS to administer, dead people would get it, the homelss would get it in three counties, a total mess. Best just to exempt fresh food, and to exempt rent or mortgage under a certain amount from the sales tax.

Post 23

Tuesday, June 2, 2009 - 9:47am

Oh by the way it is NOT 23% that is a mathematical lie. It is 30%

You buy something for $1 and pay $1.30 = 30%

We need LOWER taxes, not different ways of paying them. LOWER them is the key

Post 24

Tuesday, June 2, 2009 - 11:28am

$.30 divided by $1.30 = 23%

What part of the purchase price ($1.30), is the sales tax ($.30)? It is 23%.

Kurt, it isn't a lie, it is the most flattering way of describing it.

And the amount was chosen specifically to be revenue neutral. The amount is adjustable. But, you can not pass a change in tax type without making it revenue neutral. To do otherwise, would require a new budget at the same time and a set of spending cuts. This is not going to happen. Those Objectivists that want to have a perfect little world, and to have it given to them, all at once and who won't accept the necessity of moving step by step will never get what they want. It isn't reasonable.

And the reasons for changing to this type of tax are many, and have been explained else where. The current system is NOT just too high, it is ALSO bad for the economy, unfair in it's distribution, just to name two of the many ways in which it is toxic to this nation. But the most important reason for moving to this type of tax is that it will be a powerful motivator for the electorate to become forceful in making the representatives lower the taxes. The current system costs us MORE but it is hidden, so no one sees the actual costs, no one feels the pain, so no one acts.

Post 25

Tuesday, June 2, 2009 - 12:02pm

No, Steve, it's a flat out lie. There is no scientific or accepted accounting practice where 30 compared to 100 is described as 23%. A tax is not a percentage of itself.

Who the hell among the Republicans is supporting this BS? They might as well change to Socialist Party affiliation.

Post 26

Tuesday, June 2, 2009 - 1:23pm

Socialist? Ted, that isn't even intelligible as a criticism! It is revenue neutral - it is a different way to tax and there is nothing about it that resembles socialism.
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I don't care if people call it 30% - I don't care if it had to be 60% in order to bring in the revenues needed to match our current system. Everybody gets themselves tied into passionate knots, leaps on some fucking soap box, and damns the proposal like it was a motion to reinstitute slavery!

Nothing in the FairTax proposal brings in one penny more in taxes than is coming in now. And the taxes are apportioned far more fairly and are visible and apply to consumption instead of investing, saving and producing. They let us compete in a global economy. They give us much more control as an electorate to reduce taxes - one visible, painful point of focus.

All of the criticisms miss these points. The current system is massively toxic to our economy, morally and legally flawed, and has evolved to allow special favors, encourage lobbying, and to hide the enormous drain of our productive efforts - our very lives - into wasteful government sinkholes, without our even sensing the magnitude.

Can you tell me what percentage of a $1.00 spent on a McDonalds burger represents the taxes that McDonalds pays (employer payroll taxes, real estate taxes, income taxes, gas taxes, etc.) and what part of that burger's price represents the cost added by their lettuce supplier to cover all of his taxes and to cover what he had to pay the shipping company that trucks in his lettuce (the taxes part of that), and to cover the tax part of what the farmer's co-op charged, and so on and so forth with the entire supply chain of all of the equipment, condiments, potatoes, uniforms, etc.?

We can totally fail to reverse our current trend and end up a pathetic nation that finally slides all the way into totalitarianism, or we can start turning things around. But if anyone thinks we can ever have any success at that by asking for everything to be perfect to start with... well, they better get used to the idea of the downward slide (they can bitch all the way, so it will at least feel familiar). It appears to be a lot easier to tear something down with a short post than it does to find something that will work, and fight for it,

Sometimes when I think of going on strike, it isn't just because of what the government is doing, or its supporters, or the great unwashed masses... but rather it is what those from whom the changes need to come are doing or not doing.

Post 27

Tuesday, June 2, 2009 - 1:41pm

Um, I didn't realize you were so invested in this specific plan.

I don't oppose a flat tax, I oppose this specific dishonest compromising hash of a flat tax.

Post 28

Tuesday, June 2, 2009 - 4:56pm

Ted,

Sorry to sound bitchy and be sharp with you.

I am invested in this proposal - I'm building a web site to focus on this and a couple other proposals... tied to the 2010 elections and worming pledges out of all candidates (or putting them in the position of refusing to consider this - or a related proposal).

We may slide into a depression if we don't do something radical about the economy and this is the only thing I can think of that would guarantee escape from a depression and might be politically possible after a success in 2010 with putting in a fiscally conservative congress. A flat tax doesn't even start to do what we need to do to let us compete in the global market.

Post 29

Tuesday, June 2, 2009 - 6:31pm

Well, if the question were, the FairTax with no possibility of gaming, or reestablishment of other taxes, (i.e., an amendment barring other taxes) and some automatic ratcheting down, I would support it. Given a choice, I might vote for it in a referendum. And I don't think you're wasting your time working toward it. I won't repeat my misgivings, since I think they're clear.

I think the best hope is an end to bailouts and an aggressive program of deregulation and investment in the energy industry - drill more and build new nukes.

Post 30

Tuesday, June 2, 2009 - 8:21pm

I have to agree that some exemptions make sense - food, housing being basic necessities. Certainly argument can still be made that there is basic food (Ted suggested "unprocessed" food), and there is "convenience packaged" food. Should highly processed and marketed foods be exempt? They package convenience. I presume this issue is what the 'prebate' is supposed to resolve.

jt

Post 31

Tuesday, June 2, 2009 - 11:03pm

Ted,

I certainly agree with ending the bail outs and I suspect that battle might be won with the 2010 elections, but like everything in politics, it is just a guess. I also hope to see massive deregulation, but I think that is further off - that will require the election of a fair number of politicians with a solid grasp of Capitalism - and that is hard to imagine happening soon. I think that intelligent approaches to energy are likely to start in 2010... if the Tea Party ground swell does as I hope it is going to.

Jay,

Yes, the prebate is to let the poor pay for the necessities without getting into exemptions which would be gamed, lobbied, etc. Everyone would clamor to have other necessities exempted: medicine, education, clothing, basic transportation, etc., etc. Can't you hear McDonalds scream if the deli in Safeway can offer a sandwich free of the tax and they couldn't? What about the candy and potato chips and such at the 7/11? If you exempt a life-saving drug, then why not a herbal medicine that is claimed to improve cardiovascular condition? If you exempt mortgages up to a point, what about a second house? And isn't a hotel a place to live?

All of that is the only reason I prefer the prebate - but I would push hard to get the prebate decreased year by year till it was gone and at the same time work hard to get the tax rate decreased by a percent or two a year.

Post 32

Wednesday, June 3, 2009 - 12:17am

Primary residence, and unprocessed food - i.e., food without multiple ingredients, such as meat, fruit, vegetables, milk, eggs, oil, nuts, truffles and caviar.

Post 33

Wednesday, June 3, 2009 - 6:56am

Steve,

I can see your point, but can't say if I agree or disagree just yet. Apparently, you have given this much more thought. It is certainly a simple, elegant approach, but the "prebates" give me pause. People, as Ted mentioned, will game anything.

jt

Post 34

Wednesday, June 3, 2009 - 1:06pm

Politically, getting politicians to drop any existing tax and substituting a new tax seems a non-starter. When has the federal government ever completely abolished an existing tax (as opposed to dropping the level of taxation)? What we'd almost certainly get is this new tax used as a revenue enhancer on top of existing taxes.

The fewer ways of collecting revenue, the more apparent the theft becomes. That's why politicians love to nickel and dime you with a host of tiny taxes on top of the big revenue raisers.
(Edited by Jim Henshaw on 6/03, 1:08pm)

Post 35

Wednesday, June 3, 2009 - 3:27pm