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Sticky: Re: Re: Ask Me Questions!! -- Fair Tax Plan |
| Name: |
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Terry |
| Date Posted: |
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Aug 20, 06 - 11:03 PM |
| Email: |
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TBMisc@BAeBiz.com |
| Website: |
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http://www.WorkBootPlanet.com |
| Message: |
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James,
I appreciate (and I'm sure many more do as well) your willingness to study this tough topic. However, I further challenge you to keep an open mind until you have the time to gather ALL the facts and study the ramifications of different scenarios. By the way, I strongly encourage this approach on any and all issues that you don't possess deep knowledge. When you do that, your responses will then be from a position of knowledge and strength. Your arguments will carry weight and persuasively change the thinking of your audience because you really know your subject.
In my frank opinion, your responses on this topic so far, demonstrate that you are operating from a limited perspective. You have yet to understand the big picture and all the ramifications. However, I am confident that with your willingness to study further (hopefully with an open mind) and a sincere heart (I believe you have a sincere heart) you will begin to see the bigger picture.
Many of your points seems to assume that the Fair Tax plan will increase costs to people thereby making it harder on those people. That is just not so and that very assumption underlines the fact that you have yet to understand how the plan will work. In fact, the Fair Tax Plan just collects taxes differently, not increase them.
The fact is that everything we spend money on today (even items not currently taxed) already contains an embedded cost that ultimately supports the tax system. You are paying the tax anyway. We may not think of it as a tax, but in reality it is. Whether obvious such as payroll taxes, or the not so obvious such as lost productivity due to energy and resources expended to plan for and account for the tax impact on operations. Even less obvious is the lost positive impact on GDP due to business decisions made because of the tax impact. Instead of making decisions to be competitive and successful in the marketplace, the decisions are reached because of the tax effect. This happens in mom & pop businesses as well as large corporations.
I'm going to try to take each of your items and comment on them:
1. Adding 23% to TN current 9.5% just plain hurts. -- Again this assumes (as stated above) the cost increases. The Fair Tax Plan is not a tax increase; neither is it a tax cut. It is neutral. It just collects taxes differently.
2. The rich will get richer. -- I would like to hear your expanded logic on this. Why do you believe this is so and how this relates to the Fair Tax Plan? I think that the current system does far more to enable this than the Fair Tax plan will.
3. Economists that say workers will benefit when payroll taxes and corporate taxes are removed from businesses, need to get a real job. I have worked for at least 15 different companies, some Mom & Pop some much larger, out of these companies maybe 2 would give anything to their employees when tax relief is given. Greed is very, very powerful. In a perfect world we would like to think it will trickle down but in the real world I see less than 25%. -- Yes, greed is real and exists in the marketplace. There are those who will step on anyone for their own benefit. I've experienced it myself. But we have designed a tax system that deliberately creates loopholes that provide outs for those can find and take advantage of them. Yes, the wealthy are more likely to be able to take advantage of them. In fact, it is not that hard for the wealthy to arrange their affairs such as to minimize their taxes. But if you redesign the tax system that starts over and creates a uniform approach, then everyone, pays the tax; no one escapes.
There is also another way to look at this. Your statement appears to rely on the individual business owner (or corporate officers) to be magnanimous to pass on such savings. As you point out, many will not. However, market forces will also bring pressure on these businesses to make these adjustments. If they don't they will be less competitive in the job market and be less likely to succeed.
Also, let's not lose sight of the fact that the reason for a business to exist is for the owners (whether a sole proprietorship or a corporation with many owners (shareholders)) to make a profit. As both a small business owner and a shareholder of other companies, I desire to make a profit off the risk I am willing to take. And when businesses succeed, jobs are created and then others within the reach of that business benefit as well; not just the new employees, but the grocery stores, clothing stores, etc (and their employees) when these new employees spend money to support their own life. We are all in a closed system and are interconnected in ways that we usually don't even think about.
4. Foreign tourists coming to America, think about it. -- I'm not sure what you are referring to here. I was referencing corporations moving HQ and some operations to this country when the tax environment becomes favorable. When this happens, their US employees, the local economy and the entire US economy benefits.
5. Tax for mostly the poor on Rental properties. Under current tax laws we pay the poor to be poor, this Fair tax plans seems to repeal some of that. -- I'm not sure I understand what you meant here, but I'll give it a go. Yes, all goods and services (including rental property) will be taxed. It doesn't matter what you income level is, you will pay the tax.
"Under current tax laws we pay the poor to be poor, this Fair tax plans seems to repeal some of that." -- Jesus said that the poor will always be with us and that we should help the poor. Over the past 80 or so years, the responsibility for "helping the poor" has largely transferred from us as individuals and our local charitable organizations to the federal and state governments. I believe this approach is flawed and has resulted in an entire population of people (to the 3rd and 4th generation) who now believe that the government should provide for them. Personal responsibility has been lost to many of these people. IMHO, this is not good for these people or our society in general. Clearly there are people who are deserving of help and I try to support them where I can and support local charitable organizations who also help needful people. However, in general, we should create an environment that helps people to take responsibility for their own lives and equips them to succeed, thereby providing for their own (and their family's) welfare.
Also, don't forget that everyone gets a prebate on basic necessities (up to the poverty level) that will largely cover the taxes on food, shelter, medicine, etc.
6. Less tips for your hairstylist, 23% plus eventually, I believe, the states will just attempt to piggyback on everything the Feds tax. -- That's one view. But since the bottom line costs won't go up for me (or anybody), I anticipate that my tips will stay about the same. As far as the states piggybacking on the Fed tax - that is possible. But the Fair Tax doesn't (and shouldn't) try to control what the states do. We, as state residents have the responsibility to keep our state in control in such matters. Just as the residents of TN have successfully resisted a state income tax despite the powerful politicians who tried to push it through. That is up to us.
7.There will be tax on your mortgage. -- I'll quote from "The Fair Tax Treatment of Housing". Read more at http://www.fairtax.org/pdfs/TreatmentOFhousing.pdf. "Under the FairTax, potential home buyers can save for the purchase of a home faster, which increases and accelerates the volume of all home sales. The current tax system takes three bites out of the savings apple. First, it taxes wages and salary income from which savings are generated. Second, it taxes the income earned from savings as that income is generated. Third, if the investment (a stock, bond, real property interest) is sold for more than it cost, the capital gain is taxed again. Under the FairTax, a family can save for a down payment without fighting against cascading taxes on savings. Home buyers can qualify more quickly to move up to a new home or purchase their first home."
8. The Internet will be taxed all the way to 32.5% here in TN!!!!! -- As an Internet retailer, this is a topic that I'm very sensitive about. Sure, I don't want to see my products go up by 23% or 32.5% (I already collect and pay the 9.5%). But under the Fair Tax Plan, the price won't go up; it will stay basically the same. And when I consider all the broad reaching positive results from the Fair Tax Plan, I'm ready to do it. It can't be any worse than what I'm already dealing with.
9. There will always be a hidden economy, please do not kid yourself (see reference to perfect world) -- Of course there will, but when you can design to make it harder for a hidden economy to operate effectively, then it will be less of a factor. The Fair Tax Plan does that. Instead of having to enforce tax collection on say 100 to 150 million individuals/families, you only have to enforce proper tax collection on about 25 million businesses. And the large retailers (Wal*Mart, Sears, Belks, etc) will not likely want to risk jail time, so they will be unlikely to be a serious problem. And the 20% of the retailers that constitute the large retailers will collect and remit about 80% of the taxes, then the enforcement problem is even smaller (maybe 5 million business) that need more detailed attention.
10. All services taxed, all food, everything!!! -- Again, same as above. The prices don't really go up. Also, the prebate offsets the federal taxes paid on basic necessities for everyone. BTW, I checked some of my recent grocery receipts and I paid tax on all of them; averaging about 8.6%. So what's different?
11. Tax on lottery tickets and gambling. -- And why is it that gambling should not be taxed? Is it just because it hasn't been taxed before?
12. All hotels , airfare arriving in America Taxed MORE. -- Again, not taxed MORE, just differently. I encourage you to understand how the Fair Tax Plan really works. Understand the real impact, not the imagined or hyped impact.
13. Of course Corporations will come here, it is the Greed!!! -- Yes, there are greedy people and some corporations will operate that way. But that doesn't mean that you don't design to get the maximum value out of their participation in the marketplace. They don't have to have all the value. We as a country and as individuals can benefit indirectly (and sometimes directly) if we design to get that benefit. The Fair Tax Plan goes a long way to accomplish that.
"Some things I find hard to find, will there be tax on?" -- You can find a lot of answers on http://fairtax.org/.
1. Doctor and Hospital bills? -- Yes. Again, not taxed MORE, just differently. See above.
2. Lawyers? -- Yes. Again, not taxed MORE, just differently. See above.
3 Insurance policies? -- As far as I know. I haven't studied this particular area. Here is a link to an article on "The impact of the Fair Tax on Health Care" http://www.fairtax.org/pdfs/health_care.pdf.
4. GAS!!!? -- Yes. Again, not taxed MORE, just differently. See above.
James, I hope all of this dialogue is a help to you and others. I've invested this time because I think you are listening and I belief that individuals such as yourself can make a difference to improve our future.
God bless you. |
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