What do you think of Neal Boortz

[Debbie42]

And his grass roots attempts to get rid of all taxes? Has any one read his book? The fair Tax Book, I haven't but I plan to as soon as I can find it.

[WhaddaDeal006]

Who is Neal Boortz? LOL

I don't think it would be possible to eliminate all taxes, would it be? A fair, flat tax would be fair and make sense.

[Debbie42]

Do you really not know who he is? One of his ideals is a prebate check I really have to find that book.

[mrbowler]

I have not read book, but did a little search about it-some highlights

23 percent retail sales tax on new goods and services. I have some concerns regarding capital gains on Housing, Stocks, and I personally would still favor Estate taxes over a certain amount. How would this work with charities & churchs? You would think that valuable data would be lost if the government did not have a idea of what was happening on a household level-ie are income levels rising, falling, staying the same? What information from tax forms might be needed?

[WhaddaDeal006]

Nope, never heard of him. LOL I did pull him up and just looked at the links' descriptions.


And what??? "23 percent retail sales tax on new goods and services."
That's insane! LOL Even if you don't have to pay ANY income tax or anything, that still sounds pretty steep? Not sure what income % tax actually is, but I think I normally net 75-80% of my paycheck after all taxes, soc sec, etc...So, I dunno. If you take away the 5-8% sales tax already out there, that'd leave just over 15% extra tax on everything...is that about what we pay now for income tax? That would have to hurt spending, which leads to a recession, no?

LOL...they'd have to drop all the Dollar Stores and come up with a bunch of 81 cents stores (which would be dollar, after the tax).

[mrbowler]

Explanation of Embedded taxes:

[Only registered and activated users can see links. Either login above or Register Now]

If a path to true tax transparency is one of the goals of this committee and these hearings, then the solution already exists in the form of The FairTax Act (H.R. 25, S 25) This legislation, first proposed by Georgia Republican Congressman John Linder, eliminates most of the taxes that so confound and confuse both individuals and businesses today.

"The thought of a 23% retail sales tax on all consumer goods and services would sound horrifying to those in our lower income quintiles.

First, we must remember that the sales tax merely replaces the imbedded tax already present in these goods and services.

Secondly, the FairTax relieves all households of the responsibility for paying sales taxes on the basic necessities of life through a rebate system. Nobody pays federal taxes on the basic necessities of life"

[Only registered and activated users can see links. Either login above or Register Now]

[Debbie42]

So Mrbowler are you saying that his ideals may be good??? From what I do understand we pay so many hidden taxes now that it is unreal.

[mrbowler]

Originally Posted by Debbie42

So Mrbowler are you saying that his ideals may be good??? From what I do understand we pay so many hidden taxes now that it is unreal.

Generally speaking I would tend to not be in favor-although I do like some aspects such as more transparency, and less IRS involvement. The more you read about this topic the more complex the issue becomes. My thinking is that adjustments to current tax systems with reform of election funding reform. Although I'm always open to listening to combining different choices.
I do like the notion of having some form of consumption tax if it is done during the correct time during a economic cycle, but needs to be renewed every time frame(1-2 years). I pasted highlights pro's/cons of tax change idea based on author opinion.


Who might lose under a national sales tax?
Seniors. People do not earn income at a steady rate during their lifetime. The bulk of most people's earnings occur before the age of 65. People over the age of 65 have vastly reduced incomes and live off the savings they earned while employed. A switch to a sales tax will be in effect taxing them twice. They've already paid a lifetime of income taxes and now they have the opportunity to live off of their savings and consume, they'll be taxed on that consumption. Unless special consideration is given to the current generation of seniors, they will end up paying a disproportionate share of taxes.
The Poor Generally the working poor pay very little (if any) income tax. However everybody needs to consume to survive. The poor get hit twice under such a scheme. Currently the poor pay little tax, where now they'll have to pay taxes on their consumption, so their total tax bill will rise dramatically. The poor also spend a larger proportion of their income on consumption goods to survive, so they'll pay a larger percentage of their income in taxes than wealthier individuals. The FairTax advocates realize this, so their plan includes sending each American family a rebate or "pre-bate" check each month to cover the necessities of life. The size of the checks will be designed so that a family right at the poverty line would not pay a cent in taxes. Of course, the higher the allowance made for the poor, the higher the tax rate everyone else will pay in order to cover federal spending.
Economist William G. Gale at the Brookings Institute has determined that most low income families will pay more taxes. "Under the Americans for Fair Taxation proposal, taxes would rise for households in the bottom 90 percent of the income distribution, while households in the top 1 percent would receive an average tax cut of over $75,000."
Families Currently the income tax has all sorts of deductions for small families such as earned income credits and child care credits. These would disappear with the elimination of the income tax. A sales tax, other than for purposes of the rebate, would not distinguish between families and individuals. Gale states that the "enactment of a broad-based, flat-rate consumption tax like the sales tax ... would hurt families with incomes less than $200,000, because of the loss of tax preferences, but would help families with income above $200,000, due to the dramatic reduction in the top tax rate." Given that the rebates are given based on the poverty line, and the poverty line does not dramatically increase between a one-person and two-person family, this is not surprising.

Who might win under a national sales tax?

People who are inclined to save A consumption tax can be avoided by not consuming. So it makes sense that people who do not consume a lot will benefit from the plan. Gale admits that there are savings for a large portion of the population, stating "If households are classified by consumption level, a somewhat different pattern emerges. Households in the bottom two-thirds of the distribution would pay less than currently, households in the top third would pay more. Still households at the very top would pay much less, again receiving a tax cut of about $75,000".

People who can shop in other countriesThis includes people who take a lot of overseas vacations and Americans living near either the Canadian or Mexican border who can do their shopping in those countries to avoid taxes.

People who own businessesThe sales tax will only be charged on goods bought by individuals and not by firms. Owning a business gives you an advantage as you can buy some goods for personal use and claim that they are for business use.

The wealthiest one percent As stated they will see an average tax cut of $75,000 per person.
The ability to get such a tax plan implemented will depend on the political power these different groups hold. It also may not be political feasible because of some flaws in the proposal. There are a few basic flaws with the FairTax proposal:

The 23 percent tax rate quoted is a tax-inclusive rate. However tax rates are normally quoted as a tax-exclusive rate. The FairTax plan has a tax-exclusive rate of over 30 percent, which may be difficult to sell to voters.

The ease of tax-avoidance and tax-evasion Since consumers can either make their purchases in another country, or claim their purchases as business expenses, the tax may not generate the necessary amount of revenue.

The desire for exemptions Many desirable goods would be subject to the FairTax. Health insurance is one such good. It is likely that various political interests would suggest that certain goods not be taxed. It is likely that some of these appeals would be successful. If they are successful however, the tax rate would have to be raised even higher, or large deficits would occur.

The possibility of having both an income tax and a sales tax The national sales tax is desirable because it replaces income taxation. However there is nothing restricting the government from having both a nation sales tax and an income tax. Repeal of the 16th amendment would make income taxes illegal, but repeal seems incredibly unlikely. If the government was able to tax income, they probably would.

[Freedom Lover]

Originally Posted by WhaddaDeal006

If you take away the 5-8% sales tax already out there, that'd leave just over 15% extra tax on everything...is that about what we pay now for income tax? That would have to hurt spending, which leads to a recession, no?
.

This type of logic should only be used by conservitive talk show hosts. Remember when the current administration was spying on US citizens? El Rushbo, Savage etc were screaming that the US government would have to wait three days to get a warrant before listening and that was unfair. The real truth was the administration could go ahead and do wiretaping, they just had three days to go before the judge afterward. But the talk show hosts could not be bothered with that tiny little detail.

Well anyway, back to your logic. The current sales tax (not to be confused with the Federal Excise Tax) is collected by the State and States would be hard pressed to do away with it. So you would ADD the 20 something percent, not subtract. In reality, it would be a 28-30% tax on all goods sold.

And No, the Federal Government cannot eliminate State sales tax.

[LBSO]

If you bought a new car say $20K then add 23% cash on it (plus the state tax to boot). That's $4600 plus the down payment as well.
Pretty hefty payment.

I imagine many would blow that prebate check in a couple of weeks or pay off a bill or two, then they'd be stuck paying 23% on everything the rest of the year.

Would they add 23% to a car repair or a dental crown? You can control the consumption on the small ticket items, dinners, movies, snacks etc.. but you'd be stuck on the big ticket items.

Assume they took out $10k in Federal Tax out of your paycheck a year, you'd get an extra $192.30 a week. Could you make that work?