Political Book Summaries, Reviews and Opinions

Political Book Summaries, Reviews and Opinions

Category Archives: FairTax

FairTax reforms Immigration


So I finished the FairTax book and have just finished reading a new book “What Sex is Republican” by Terri McCormick. That summary will come soon (been meaning to do it the past two or three weeks, sorry) but here’s one last little thought about the FairTax. Read more of this post

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Fairtax The Truth: Book Summary (chapters 1-3)


FairTax: The Truth

By: Neal Boortz and Congressman John Linder with Rob Woodall

Chapters 1-3

Chapters 4-6

Chapters 7-9

Chapter 10

Chapters 11-12

Reviews

I have been a fan of the fair tax for a long time. There are certain weaknesses, possible fraud being high on the list, the potential unforeseen dangers of putting all our “tax eggs” in one basket being a bit higher. That said, I wanted to be clear and upfront that I am a full fledged supporter of the FairTax and probably any future versions. That said, I still intend for the summary part to remain non-biased.

Read more of this post

FairTax: The Political Silver Bullet


There is a legend about a man who is bitten by a monster. That monster is half man, half wolf, and he is cursed. He started life as a normal man, but he was bitten and infected with evil. Whence the moon grows full, the man dies and the beast hunts. Now, whosoever he bites, but doesn’t kill, they themselves become cursed. This beast, this monster, is unkillable. No man strong enough, no one fast enough, no blade sharp enough. There is but a single weapon on the surface of the earth that can bare this beast to the ground and leave him beast no more. That is a silver bullet. Read more of this post

Media vs. Fairtax


I’m starting a new book today. A book written by Neal Boortz, Congressman John Linder and Rob Woodall titled “FairTax: The Truth.” To get all you people (all 2 of my loyal readers) as excited as I am (and I am exited) I’ve decided to kick it off with a few posts about the FairTax from others. Here goes post 1!

It’s from FairTax.Org. Read more of this post

Why the flat tax would be better


The threshold for taxing family health plans will be raised from $23,000 to $24,000, and dental and vision benefits won’t be counted toward that amount after 2014, AFL-CIO President Richard Trumka told reporters. Health plans covered by union contracts would not be subject to the tax until 2018, and the threshold for taxing other plans will be adjusted by 1 percent above the annual rate of inflation, he said.

Union leaders don’t like the idea of the so-called Cadillac tax. That tax will tax extra high employer provided health care benefits. The Senate wants it to pay for the reform. Obama wants it because (again, I’m a bit surprised) he understands supply side economics and doesn’t want those high end health care plans to lift everyone’s healthcare costs. Union leaders don’t want it because lots of employees have traded higher wages for better benefits, thus House Democrats don’t want it because they want to keep friendly with their donors and activists.

What’s not said is that the root of the problem is that the Government created this problem by making all healthcare plan un-taxable. It seems like a nice idea, don’t tax good things, let people have cheaper healthcare. But government intervention always has unforeseen side affects. By not taxing healthcare, the entire systems moves to play in those rules and Unions for more un-taxable benefits for their people. This results in expensive healthcare plans that drive the cost of healthcare for everyone (at least according to the Administration). What would be better is taxing everything the same, get the government out of deciding what people should buy and how much of it.

What is completely ignored, is that the whole thing is a disgusting display of Federal power run amok. Read some of that stuff.

The changes will reduce the $150 billion expected to be raised over 10 years by about $60 billion, he said.

How does that happen? It happens because Unions are an important base of the Democratic party. It happens because the Democrats need Union money to get elected. Now, I’m not accusing corruption and bribery, but the system itself is corrupt. Each party needs money to get elected, they each have their donor bases, and once in power, they need to take care of their donors. It’s that simple. The Republicans have to take care of Halliburton, the Democrats take care of the Unions. The system is the problem.
Here’s some more tax discussion:

“…5.4 percent income tax surcharge on incomes higher than $500,000 for individuals or $1 million for couples.”

How are those numbers decided?

By the winners of the election taxing the losers. That’s what our Democracy has broken down to. The winners get to decide how to tax the losers. The results? About Our tax code has at least 67,506 pages. Here’s a PDF to scare you a bit.

This is what happens when you let politicians play with the tax code, instead of raising taxes, they use the tax code to punish those they don’t like and reward those they do. Seven decades of political maneuvering have resulted in a tax code that benefits only those with power (in this case, the Unions).

We need a flat tax. Be it the fair tax, or Ron Paul’s 1% tax. Or the Laffer Flat tax. Whatever method we choose, we need something that Politicians, be they Democrat or Republican can’t manipulate our taxes for their political goals.
 
From CNN: Union leaders: Deal reached on taxing ‘Cadillac’ health care

Videos on Laffer Curve and Fair Tax


Here are some interesting videos a reader left in a comment. They are about the Laffer curve and explain it really well. I agreed with most of what was in there. They’re worth watching. One of the videos makes a (bad) mistake when it shows specific numbers for the Laffer Curve. An important thing to understand is that no one knows where point “B” is. Is the point of highest revenue at 20%? 25%? 33%? 75%? Finding rock-solid evidence of exactly where point B is would be like finding the pot of gold at the end of the rainbow. Plus I’d personally buy you a cookie. So watch, enjoy. It’s not a very fancy video, I’ll give it a C- in quality of production, but the information is pretty good, so an solid B+.

Additionally, there are some campy cutaway scenes to politicians the video creater doesn’t like and some name calling. I found it very unproductive and unhelpful to the video or the debate. There was no argument made about the people in the pictures, just a random insinuation these are bad people. That’s no way to win an argument, it just makes the guy making the attacks look desperate.

The discussion of Dynamic vs. Static scoring in the end is really good. I’ve heard the story example before, but it’s always amusing. This senator asked the what would happen if you increased taxes to 100%, and the answer was a giant revenue increase, which is silly.

Additionally, though I like the Laffer Curve and agree with it in concept, I do disagree with a key tennet. Even at 100% taxation, there would still be some collection. My example would be slavery. I don’t mean that as a joke, but that’s what 100% taxation looks like. You still get revenue, but the people are slaves. Another example would be a powerful Communist Nation where everyone works for free, but is then provided food and shelter by the government. That’s also 100% taxation. So on a “nit-picky” level I say Arthur Laffer was wrong, you can tax people 100% and continue to get revenue, but that would require a country none of us would call free.

I’ll throw inanother one, it’s a rather fair discussion on the FairTax, somewhat related to the three previous videos. Now I am a very strong supporter of the fairtax and as such I find several things in this video annoying, like when he says it’s a 30% addition to everything. So I’ll clear it up a bit. There are two acceptable ways to look at what percentage of your money is taxed, inclusive and exclusive.

When talking about income taxes, people use the inclusve method. If  the income tax is 25%, and you earn $100, you give the government $25 and keep $75.

When talking about sales taxes, people use the exclusive method. If the sales tax is 33% and you have $100, you can buy something with a price of $75.

So though the 25% income tax has a lower number than the 33% income tax, either way, you have $75 dollars to spend. So yes, in the Fairtax the number seems high, but you have to compare apples to apples. Since you’re replacing the income tax, and that is generally spoken about in inclusive numbers, then you should use inclusive numbers when talking about the FairTax. In which case the tax doesn’t seem so high. (Wow, didn’t mean to write so much.) Anyway, like I said, it’s a pretty fair

Fairtax: Weekly reason #2– Removing the payroll taxes


Right now, today, you pay 7.65% tax on your income as a payroll tax. That is a straight tax taken from your check.

Your company pays an additional 7.65% tax. This is a hidden tax to everyone as it drives the cost of business. And products up. It is also an obstacle to employment, an extra cost and additional reason not to hire someone.

Payroll taxes are capped 90,000 a year . Which means someone earning $180,000 a year is only paying 3.8%. A guy earning $50,000 a year pays 7.65%, Brad Pitt pays less than 1%. This is called a regressive tax, the more money you earn, the lower the percent you have to pay.

Illegal immigrants working in restaurants don’t pay any payroll taxes, and neither do their employers. Meaning they can work cheaper, and bring home more cash.

Criminals don’t pay this tax. Any money earned “under the table” is hidden from the current tax, meaning law abiding citizens have to pay more.

Neither do millionare tycoons paid in dividends not pay checks.

If we get rid of the regressive payroll tax and replace it with a flat sales tax, we’ll be able to replace it with a much lower tax rate, remove an obstacle to employment, remove a tax incentive to hire illegals, and add people who are currently evading paying this tax.

St. Augustine Unfairly trashes the FairTax


Why do both Barack Obama and Fred Silva of the St. Augustine Record hate the FairTax? I actually like the idea of a real low, real simple flat tax that removes corporate and other anti-growth taxes. I love the idea of getting rid of the IRS. I love the idea removing loopholes from the wealthy. In a debate between FairTax and the flat tax, the only losers are high priced tax lawyers and backroom dealing lobbyists and politicians. The American tax payer wins either way.

Taxation is a horribly complicated political football. The simplist and most honest summary of our current tax system is that it cripples us. I’ve read several books on taxation, no one, not one single person anywhere argues that the current system is good. Most people, like Barack Obama, agree it’s a mess and then offer really obnoxious Band-Aids like raising the top marginal income rate about 5%. Others think we need a flat income tax, others a flat sales tax, others the FairTax. I think the FairTax is best. In this post, I’ll focus on just the specific attacks leveled against it by Mr. Fred Silva.

 


 

 

* We’ll have a black market like other Third World countries, probably new business opportunities for drug dealers.

Drug dealers already have an entire black market. But when they take their money out of the black market and go to WalMart or KFC or BMW to spend their drug money, through the FairTax (which is a consumption tax) they will be taxed their fair share.

* It’s regressive.

Absolutely not. The Payroll taxes are regressive. Sales tax is regressive. Loopholes, tax lawyers, tax shelters, off-shore bank accounts and lobbyists are regressive. The FairTax (with prebate) is the most progressive thing around.

* We are in a depression and it will discourage purchases.

It will encourage employment and savings. It will remove disincentives to investment and entrepreneurship. It will put more money in the hands of everyone, and then it will pull us out of the recession.

* It’s great for super rich, more money to spend overseas on vacation. Why would they buy anything here?

Firstly, prices will not go up as high as you imagine they will. By removing all corporate, dividend , capital gains, and property taxes, US companies will be able to compete better and drop their prices. Second, the super-rich already spend vacations overseas.

Should help Canada and Mexico. Everything should be cheaper there.

Actually, it’ll hurt them because our products will be more competitive than theirs because they’re companies pay higher taxes and have to charge more to cover those taxes. Our exports will go through the roof.

* Why would anyone vacation here? It will kill Florida tourism.

Why would anyone stop? But for every vacation dollar we lose, we’ll get back 10 times that in money from people who work here illegally and fail to pay any income or payroll taxes at present.

* Foreign workers can send more money to South America, the Mideast or wherever, tax free.

They already do. Only now, illegal immigrant/foreign workers will pay their fair share of taxes before that money leaves the country.

“I get to pay tax again if I spend my savings I already paid tax on. That sounds like double taxing to me. Great for the retired.”

This is the only charge that is somewhat legitimate. I don’t know how this will be handled. With all the extra time the IRS will have on their hands, I’m sure an accounting method can be discovered to handle this temporary and one-time problem. But don’t let the “double taxing” thing scare you, we are already double, and triple taxed or more.

 


 

 

The big question to consider is, do we tax income or consumption. A Flat Tax (which would be vastly superior to our current system) punishes people for working. The FairTax punishes people for spending. That’s the big difference. Now yes, on the surface, if everyone stopped spending it’d be bad, but really, think that one through. Will everyone stop buying stuff? That’s ridiculous. Even when people are out of work they buy stuff. It is absolutely silly to think people will stop buying stuff. Moreover, any decrease in the desire to spend will be remedied by the increase in take-home money.

I’ll make a simple ending point, if you are a fiscal conservative, if you think Reagan saved our economy, if you agree with the Laffer Curve, then you have to agree that a tax rate must be as low as possible and as broad as possible. A consumption tax is the broadest tax base possible, thus it can be the lowest one possible. That is Supply-Side economics.

Read the original article here.