More Fair Tax Talk
April 15th, 2005 | by Dr. Forbush |Thanks to Sally for the information.
If you go here they tell you a few of the details. But, what they don’t tell you is that the tax needs to be 33% on retail items to take in enough money to pay the current government bill. This would effectively raise the price of every thing by 33%. People in favor of this bill are acting like used car salesmen when they talk about this bill. They are trying to complicate the issue by saying things like: "A 33% tax increase is the same thing as paying 23% of the purchase price toward taxes."
This is the type of talk which is only meant to confuse the issue. Especially the rates mentioned in the bill is mentioned as 23%. So, the bate and switch goes like this:
First they tell you the truth, a tax of 32% is needed to break even with the current spending of the government.
Then they tell you that this is the same as paying 23 cents out of every dollar toward taxes. This is because 23/77 equals 30%. So, they are cutting the amount of money taken in which means that programs will need to be cut to compensate for this.
But, if you look at the fair tax proposal they mention a tax rate of 23%. Suddenly taxes are cut again in a blink of an eye. So, revenue is cut by 28% by using rhetoric, and programs will need to be cut to compensate. The goal of the Republicans to cut programs happens without the fight to cut programs.
I just hate when politicians use deceit and lies to get what they want. They must be afraid that if they told they truth and told us that they were going to cut programs by 28% people would be up in arms about it before it got out the door. This way everyone will wonder why individual programs have been cut, and why there is no money to pay for them.
Another thing that they don’t tell you is that when the price of everything suddenly increases either by 33% or by 23% people will suddenly find things to be more expensive. They tell you that the amount of money you will get back from the withholding will give you more money to spend. But this is not true at all. But just look at your paycheck and see if you will fall into the category of making out or not. I found out that the cancellation of my withholding would give me 8% more money. That is a far cry from either the 23% proposed, or the 33% needed to cover costs. In fact, if you look at the amount of money that is being withheld from your paycheck it is most likely that the amount being withheld is less than either 23% or 33%. This means that the economy will slow down as people don’t have as much money to spend. The economy slowing down will cause unemployment and lower wages and perhaps recession.
2 Responses to “More Fair Tax Talk”
By The Cranky Liberal on Apr 15, 2005 | Reply
Now there is a counter arguement that says the costs of goods and services will fall because market pressure will force them lower. They can fall because companies will no longer pay the tax they pay now and those hidden costs will not be passed on to the consumer.
They also claim that jobs will be more secure because business would not need to export them overseas to make money.
They claim interests rates will fall because the tax portion of interests rates will go away and competition will force it lower.
They claim that business will use the influx of capitol that comes with increased savings (yet people are still consuming at the same rate or higher - so we are both spending and saving??) to build more capacity and higher more workers. The capacity needed for the increased demand that we will have from all that spending\savings.
And we will add jobs.
And raise wages.
Because businesses will make more money.
Notice the use of may or can? No guarantee that extra money doesn’t go right into the CEO’s escalating salary (now nearly 250 times the average hourly workers!!)
So we pay at minimum 30% more for every new good or service purchased - including your car and home (now a 200,000 house is 260,000 and that extra 60,000 will be financed over 30 years at the current interest rate costing you a few hundred thousand extra for fun - oh and you cant deduct that) so that we can have all these wonderful things because (and here is the good part)
A bunch of economist assure us this is the case.
If you go to the fairtax.org web site you will ee the FAQ replete with phrases like Leading economist from Harvard project, assume, indicate and my favorite meaningless phrase “will save up to x percent” which means it could be anywhere from a that number to a cost increase. I will give you UP TO a 20% raise this year Bob, but don’t count on it.
Now I’m not anti Sales Tax. I live in Florida where our economy is based on it. When it works well its great not paying State taxes. When people buy less, it stinks because needed services and projects (roads, water plants, education to name a few) get postponed or cancelled.
One question for all you advocates though - how come you believe a bunch of economist, whose very job is best described as the “Science of Guessing” when they tell you this, but when a team of scients sit and tell you there is a problem with the environment you scoff?
By tax liens on Jan 11, 2007 | Reply
Its is true that This is the type of talk which is only meant to confuse the issue.