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nemethnm

Fair Tax

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This double-taxation problem already exists between countries. It even occurs within this country (corporations are taxed on their earnings, and then shareholders are taxed again on the dividends the corporations pay them out of their earnings). There is no solution to the problem of double-taxation - or even to the problem of taxation - except no taxation. Egalitarian taxation isn't the solution.

I understand that double taxation already exists, but how can you say it is impossible to eliminate without eliminating taxes? What double taxation occurs in the NST plan? I think a direct tax would be a great step towards voluntary taxation, but it won't be accepted unless questions like these can be answered.

A tax rebate to consumers from other states might work, although that would mean extra work on part of retail stores to keep track of sales from non-state customers.

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... the (faulty) justification of which is that we need a well-funded government to protect the rest of our individual rights.

It is not clear what you find faulty. Is it the proposition that government is required to secure individual rights? Is it that such a government needs to be well-funded? Or, both? Or, are you implying that a well-funded government does not necessitate taxation?

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It's a faulty justification for taxation because it does not justify taxation.

It justifies, in the name of and for the purpose of protecting our individual rights, violating its own purpose.

We need a well-funded government to protect all of our individual rights. But this cannot serve as justification for abridging some of our rights and imposing taxes.

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Also, no one is forced to pay a one time sales tax on new items. It is voluntary, just don't buy it. I know, people have to eat and purchase, but short of ending all taxes ( which I'd love, btw), the Fair Tax Initiative is preferable to income taxes.

Then the sales tax is no more "voluntary" than the income tax. After all, there's no reason why we couldn't all become self-sufficient farmers. No income, no tax.

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Yes, I did. But I don't have time now to properly respond to it. You threw a lot of ideas at me, and it will take some time for me to digest and consider the notion that a NST will lower costs and grow the economy. I am not an economist. So, right now I'm not even sure whether what you say is true or not.

I have some urgent work to get done before I can start thinking about this in more depth. I will try to re-engage within a week.

I appreciate that.

Currently I'm not trying to publish it anywhere else. The Limbaugh paper is the first in a series of papers that I am writing on the religious threat to this nation, and I don't plan to focus on publishing/circulating it elsewhere until the whole series is finished. My primary goal now is to complete the series as quickly as possible and put together my full picture of the threat of religious democracy. If I'm going to finish the series this year, which is my plan, I need to do a lot more painful reading of books by popular religious and political figures. That's what I'm devoting my free time to.

There will be approximately 5-6 papers in the series. I am putting the finishing touches on the 2nd and 3rd papers right now. I hope to publish the 2nd one here within a month. Its working title is Sean Hannity and the Tactics of the Enemy.

Hi Mr. Swig,

Any time frame as to when your next article in your series is going to be posted? I just saw Pat Robertson the other day on CSPAN. Listening to him ponticate makes one realize that true liberty, the seperation of religion and government, and individual thought and choice are under assault as we speak. YOu alluded to this in your article, and it is an argument I use all the time against these self-righteous, sanctimonious, and deluded fanatics - US laws and jurisprudence is Biblically based and grounded in the Ten Commandments, and they use this shallow argument as justification for posting these edicts in courthouses and public places. Every civilized society, even those that pre-dated the Bible, had laws against murder, stealing, and making fraudulent accusations against people. These are principles grounded in natural law. Hell, in the Soviet Union it was against the law to murder and steal, as it is against the law in every civilized - or even uncivilized society. It is beyond arrogance and presumption to claim that people would not know any better, or be less moral without a codified set of 'laws' penned by the Hand of God.(nonsense) Keep up the good work, Mr. Swig.

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Some of you may have heard of this book coming out by Neal Boortz and some Congressman (don't know which one). It's all about eliminating the IRS and instituting a national sales tax.

What do some of you know about this? Is it a step in the right direction?

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I am strongly in favor of eliminating the IRS. However, a national sales tax in a growing economy simply guarantees an ever-increasing revenue stream to the government, which is not what we need.

Spending (the inappropriate sort) is the problem, not taxation.

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Spending (the inappropriate sort) is the problem, not taxation.

I merely glanced over this topic and am interested. Is there another topic on this?

Michael, is the context with which you refer to taxation include today's taxing methods? I think that your statement is reversed. If we changed the way people were taxed, as in presenting a voluntary system, the way we spend it would solve itself because the government having money in this case would depend on the people agreeing with the way it is spent.

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I am strongly in favor of eliminating the IRS.  However, a national sales tax in a growing economy simply guarantees an ever-increasing revenue stream to the government, which is not what we need. 

Spending (the inappropriate sort) is the problem, not taxation.

As long as taxation goes down, which it would under the fair tax, I don't see why increasing government revenue is a bad thing. The government having high revenue is not the problem, and I say that if it can make more money by stealing less from me, go for it.

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Paden, I use the term "taxation" to refer to the involuntary, coercive collection of revenue by the state.

There is a thread HERE that discusses many options for voluntary financing.

I agree that government financing should be voluntary. What sort of system are you proposing?

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As long as taxation goes down, which it would under the fair tax, I don't see why increasing government revenue is a bad thing.  The government having high revenue is not the problem, and I say that if it can make more money by stealing less from me, go for it.

But then it has to be stealing more from someone else, does it not?

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Yeah, the people who have been getting a free ride on the backs of the wealthy. I agree that all taxes are crap. But as long there are taxes, it is exceedingly unfair that some people get a free ride while others have to pay their share. People on welfare and people who do not pay taxes are, morally speaking, indebted to the rich. They have a debt which should be paid back, because they use services which are paid for by extorted money from the rich. A national sales tax is a consumption tax. If the poor buy anything, which we all know they do, they will be paying back a portion of what they have unjustly been given in the past.

If someone steals my car and gives it to a man named Bob, while Bob knows fully well that the car was stolen from me, I have every right to take it back. Same principle here. The poor know that roads, welfare, etc. are funded by people who pay taxes, yet they still take advantage of such services. So initiating taxation on the poor, by means of a consumption tax, is not stealing anymore than it is stealing for me to walk into Bob's driveway with my own set of car keys, and take my car back to my own garage.

Edited by Moose

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Well, Moose, as possibly the most opinionated person on the planet, I confess to being in the unusual position of not knowing exactly where I stand on this issue.

I am a high income taxpayer. I’m in the highest bracket. I am paying approximately 5 times as much tax as the average citizen. My emotional reaction to your post is total agreement. I am sick of paying for my neighbor’s healthcare, his retirement and his children’s education; I am sick of subsidizing farmers and other businesses – no one ever subsidized mine – and I am thoroughly sick of clowns like Hillary Clinton who declare that anyone and everyone has a right to healthcare no matter how much it cost me.

When I hear an utterly worthless scoundrel like Ted Kennedy – who, as far as I know, has never produced anything except a dead young lady at Chappaquiddick – when I hear him drone on and on about the need to educate minorities – damn few of which will ever express any gratitude toward those of us who pay their way – I have the urge to shove one final biscuit down the bloated bastard’s throat, then stand back and watch him finally pop like a water balloon hitting the pavement.

My reward for developing a new business and creating employment is to be choked by regulations and bled by taxes. So, yes, I am plenty sick of it.

However, if a gang of criminals were breaking into people’s homes and stealing their property, and those criminals were concentrating on the richest homes because they have the most booty, it would not be proper to respond by demanding that they break into everyone’s home equally, would it?

I concede your point that the situation is complicated by the fact that a portion, a small portion, of the stolen property is making its way back to those whose homes are not being robbed. And I agree that those not being robbed should refuse to accept that stolen property, or should make every effort not to use the stolen property – and I concede that the vast majority make no such effort. (Let’s see, is there anything I have not conceded?)

I recently put together some numbers (which you can see HERE in post 10.) that show that only about 16.9% of our tax dollars (at the most) go toward valid functions of government. So, under current conditions, forcing any significant amount of taxation on those who are currently paying little or none is almost certain to go beyond making them pay for the government services they use; it is almost certain to involve a violation of their rights. So here is my problem: Do we really want to take the position that, by god, if we are going to violate some people’s rights, we should violate everyone’s rights?

Do we want to establish the principle that coercive taxation is “fair” as long as it is equally applied?

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However, if a gang of criminals were breaking into people’s homes and stealing their property, and those criminals were concentrating on the richest homes because they have the most booty, it would not be proper to respond by demanding that they break into everyone’s home equally, would it?

I don't think this is the same situation, unless the person who owns house A stole something from the person who owns house B. In any case, the robbers are just taking stuff from both houses for themselves.

A parallel to the fair tax sitution would be this: The man who owns house A steals something from the man who owns house B. Robbers enter house A, steal back the property that was taken from house B, and returns it to its rightful owner.

This is how taxing the poor works...taking back a portion of what they have been complicit in stealing from the rich over the years, and giving it back to those who produced it. Although I just heard Boortz explain it and apparently, somehow, the poor still wind up not paying any taxes. At any rate, it reduces the tax burden on everybody.

The book came out today. I plan on buying it after I'm done with my current book (The Case for Israel) and getting Neal Boortz to sign it when he comes to Houston on August 25th.

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I can't imagine why you wouldn't support a step toward freedom. Do you really expect to unwind the welfare state in a single massive piece of legislation? You seem to understand that a national sales tax would be better than an income tax - and I agree - yet you refuse to support it because it isn't ideal. Tell me, did you vote this last election?

What's the rationale for voting? One vote really does not make a difference. It is mystical nonsense to say that by voting one is participating in a larger collective purpose. And none of the available candidates is appropriate, even if your vote could make a difference to which gets elected. That aside, any tax scheme that makes it more acceptable to fund government is a step backwards, not forward.

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It doesn't make the concept of taxes any more acceptable. All it does is recognize the fact that some forms of taxation are not as objectionable as others. Do you honestly believe that a 2% sales tax is as objectionable as a 50% income tax?

I realize that isn't the exact situation as this, but I thought I'd stretch the numbers a little bit to make the point more effectively.

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Do you ... believe that a 2% sales tax is as objectionable as a 50% income tax?
Here is a counter question: Do you believe a 49% income tax is better than a 50% income tax? If yes, then why are the proponents not proposing such a simple change, instead of trying to create a new kind of tax?

They would say: because when it is in the form of a sales tax, it is more "efficient"; that such a tax stifles the economy less.

So, let's grant them that. Let's assume some numbers (completely theoretical):

- existing theoretical situation: income tax marginal rate of 40%

- let's assume the same amount of tax could be collected by (say) a 15% sales tax

(the exact percents do not matter for this example)

- let's also assume, to cede the point of the advocates of such a tax, that the 15% ST will be less stifling than the 40% IT

- one would have to assume that there is some rate of ST at which it becomes equally stifling. Let's assume that is a 25% ST

Assume I vote for this and the 40% IT is replaced by a 15% ST. On the face of it, it looks like a good idea. However, there is a major assumption that is being made here; it is an assumption that goes unspoken. The unstated assumption is this: that the majority of government spending is for legitimate purposes and that the amount of tax collected by the government is based on these services it needs to perform.

This assumption is false. The amount of tax collected and the amount of stifling done by the government is based on the amouint of pain the voters are willing to bear before they rebel (e.g. California Tax 'rebellion' of the 70's). Even if you disagree, stay with this for a minute, and consider: if you assume that politicians will try to get away with what the voters will bear, what conclusion does that lead to?

It leads me to conclude that while we might "enjoy" a few years of 15% ST, the politicians will soon be able to convince the voters that the hospital really needs a new clinic, that the roads are really horrible, etc. Would 16% be too far off --- and everyone is still better off than the 40% IT (a veritable free lunch). Why will the rate not finally tend toward 25% ST (which we assumed would be equally painful to a 40% IT)?

There are finer points to this (e.g., while "pain" would be equal, the government will be spending more), but those don't affect the main argument: if one form of pain is replaced by another, I assume that the politicians will finally increase the pain back to a politically- acceptable level. Indeed, I would expect that they will somehow find a way to give us a bit of each pain.

That is why, I'd rather just see 50% IT go to 49% IT, thank you very much.

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I just finished the book, and I have to say I'm impressed. Assuming that all the research in the book is correct (and it was conducted by actual economists, not just a radio talkshow host), there will be no more income taxes, payroll taxes, social security taxes, medicare taxes, corporate taxes, death taxes, etc. and they will all be replaced by a 23% sales tax. The book does a great job at explaining how this sales tax will actually manage to NOT increase the price of goods, by eliminating embedded taxes that come about as a result the current tax system.

So, although there is a 23% sales tax, we pay approximately the same price for all goods and services that we do now, while keeping 100% of our paychecks. Also, with the benefit to the American economy and businesses moving their headquarters back to America, the government doesn't lose any revenue, because people will be making more money, there will be more jobs and, thus, voluntarily spending more.

I know, I know, all taxes suck. I do not support taxation in any form, but I will be writing my congressmen and ask them to support this bill, because it is exponentially better than the current system. I highly recommend this book. I also recommend that you visit www.fairtax.org. I know that many Objectivists have this tendency to not support any intermediary steps between where we are now and a state of pure Capitalism. While pure Capitalism would be nice, it's just not going to happen without some intermediary steps. You can want this bill to pass without supporting the idea of taxation.

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While pure Capitalism would be nice, it's just not going to happen without some intermediary steps.
This is a strawman. This so-called fair tax is not going to take us a step closer to capitalism. The most it can offer is a few years of respite, and greater opportunities to tax us in the future. I explained why in my post, just above. I'll only repeat one line: "I'd rather just see 50% IT go to 49% IT"

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How is the abolition of the income tax and introduction of a consumption tax not a step closer to Capitalism? Leave out the other economic benefits for a moment. Purely in terms of taxes, it will eliminate the income tax and it will NOT raise consumer prices. How is this a bad thing?

Yeah, they could always raise the tax rate, but they can and DO do that now.

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Well, Moose, I don't know what I can say that is not in my post above. I understand where you are coming from -- that's something I said in my post too. Perhaps it is a different evaluation about the medium-to-long-term result that we disagree on.

Let me ask you a single question: do you think that the the amount of tax collected today is based on the the services the people think the govenment need to perform? In other words, do you think the causation starts with "what are the services we need?" and then proceeds to "what taxes do we need to collect?"

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I'm not entirely sure what you're asking. I think you're suggesting that, rather than moving to the FairTax, a better idea would be to reduce the government to its necessary functions. Well, I agree completely, but that can't happen overnight. The FairTax can (and if it passes, WILL) happen overnight. Decreasing the size of the government is a long, arduous process that will probably not be accomplished in our lifetime. The authors of this book made it clear that they are opposed to Social Security and Medicare, but also state that the funding for such programs will not be reduced under the FairTax. They make this concession, because they realize (and explicitly state) that those are fights for another day, and by adding to the bill measures that would eliminate those programs, the bill would stand no chance of passing. That's why I say we should just take it a step at a time.

I agree when you say that politicians will try to increase the pain back to what it was. Boortz and Linder mention this as well and they state that that's why we have to remain vigilant, and watch our politicians. One thing, to me, seems certain: while this system, just like any other, can be abused by politicians, there is no reason to believe that it would be abused any worse than the current one is. In fact, I do not believe it would ever be abused nearly as bad as the current one.

Even if, as you say, it would merely provide with a few years of respite, before it gets back to being as bad as it was, I still say that's better than getting NO years of respite. I believe the system will be permanently better, but would be willing to take a few years over no years.

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Assuming that all the research in the book is correct (and it was conducted by actual economists, not just a radio talkshow host), there will be no more income taxes, payroll taxes, social security taxes, medicare taxes, corporate taxes, death taxes, etc. and they will all be replaced by a 23% sales tax.
I just cannot see how anyone could believe that. What is to prevent a 23% sales tax plus a 10% income tax. The latter figure is, of course, subject to upwards revision, bit by bit. It is never good to create new kinds of taxes.

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The bill would repeal the 16th Amendment. That would prevent the income tax from returning.

Anyone who has questions should read the book. It's actually a pretty entertaining read, for a book about tax reform, and is only about 180 pages. It only took me a few hours to read it.

Edited by Moose

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