More awesome stupidity
Aug. 3rd, 2005 01:36 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
forsythThe second on the list of Amazon's Best-sellers, right behind Harry Potter, is The Fair Tax Book. Allow me to quote from the description.
Wouldn't you love to abolish the IRS ...
Keep all the money in your paycheck ...
Pay taxes on what you spend, not what you earn ...
And eliminate all the fraud, hassle, and waste of our current system?
Then the FairTax is for you. In the face of the outlandish American tax burden, talk-radio firebrand Neal Boortz and Congressman John Linder are leading the charge to phase out our current, unfair system and enact the FairTax Plan, replacing the federal income tax and withholding system with a simple 23 percent retail sales tax on new goods and services. This dramatic revision of the current system, which would eliminate the reviled IRS, has already caught fire in the American heartland, with more than six hundred thousand taxpayers signing on in support of the plan.
It's a book by a talk show host, who's written books like "The Terrible Truth About Liberals". And this congresscritter. That's raw talent there. But that's not even the most ludicrous part. (Okay, the most ludicrous part is probably some of the comments, like "The book is right. As a business owner, I will admit that I pad all my pricing to make sure that I get a certain amount of money after taxes. I hate doing it, but that's the way it is. Under the Fairtax, I could drop my prices anywhere from 20%-30%, and still make the same amount of money." Okay...so... you're telling me that businesspeople price their products so they can make enough money to stay open and live on? *GASP* That's not padding. For the love of monkeys.)
No, the most ludicrous part of the whole thing is the basic idea. Chuck the IRS and current tax code, and replace it with a 23% sales tax. This is the "fair tax". Well, no, it's not. It's about as unfair a tax as you can get. It's simple, and has that going for it, and it SEEMS fair at first glance, "Oh, everyone pays the same amount!" Well, no.
For starters, the devil is in the details. Would business to business sales be taxed? If so, that's gonna raise prices. If not, then expect to see anybody who can manage it buy their car/house/home entertainment system for "business". Second, does it include necessities like food and shelter? If so, who decides what's necessary? If not, I really doubt that prices would drop 2some% to make them even stay the same as they are now under the so-called "fair tax". Or does it have some kind of "rebate" for the first $X,000 you spend each year, tied to the poverty level? (That wouldn't suck, really, but there's other flaws with the tax). The biggest flaw is the simplest. A consumption tax like this is regressive as hell. It's only taxes on money spent, so it obviously affects people who spend their money than it does people who save it. Who can save money? The rich, generally. This wouldn't affect investment income, dividends, or even just interest on savings accounts. So somebody who doesn't spend all of their money pays a lesser percentage of taxes.
But, of course, if they implement some form of rebate for the first $X,000, then it won't hit the poor as hard. So, if the poor wouldn't be paying it, and the rich wouldn't be paying it, who does that leave paying most of the taxes? The middle class. This is just another of the Republican Party's ongoing efforts to shift taxes off of wealth and onto people doing actual work. I think there's a name for that. What is it...ah, yes. Class warfare.
Okay, so what about their other claimed benefits from their so-called "fair tax"?
* Make America's tax code truly voluntary, without reducing revenue
Baloney, as I explained above. And their claims about "not reducing revenue" are probably wrong, which means the sales tax would have to be higher than 23%. (Not to mention state and local sales taxes, income taxes, property taxes, and so on, which would still exist.)
* Replace today's indecipherable tax code with one simple sales tax
True, but. The indecipherable-ness of the tax code has nothing to do with the fact that it's an income tax, or that it's (slightly) progressive, it has to do with generations of exemptions, deductions, rebates, and other modifications, pushed by anyone with an agenda. It wouldn't be very difficult to set up a simple, progressive income tax structure. And it'd probably be a good idea, the current tax code is a mess.
* Protect lower-income Americans by covering the tax on basic necessities
See above. Can you say "soak the middle class"?
* Eliminate billions of dollars in embedded taxes we don't even know we're paying
By replacing them with an equally large number of embedded sales taxes. (Plus state and local income, sales, and property taxes)
* Bring offshore corporate dollars back into the U.S. economy
Maybe, sorta, kinda, not really. Okay, so companies might reincorporate in the US, rather than having a PO box and a single telephone at their "head office' in the Cayman Islands, but it wouldn't bring the corporate money back "into" the tax structure, since they plan to eliminate corporate taxes. (See above about questions about business to business sales)
Okay, let's think about what would happen if this were implemented. Tomorrow, there's a 23% sales tax on everything. Would prices drop 23% overnight to compensate? Probably not. What reason would the companies have to drop their prices 23%, instead of just pocketing the extra cash? "Oh, well, the free market would take care of that, one company would do it, and the rest would have to follow suit." Maybe, but I'm doubtful. What if they only dropped their prices, say, 10%? Everything still just went up. And the companies would just shrug and go "Don't blame us, blame the 23% government tax." And if they dropped prices lower, do you really think the money would come out of profits, or do you think they'd claim they have to cut salaries for workers, or health insurance, or other benefits (while still giving billions of dollars of bonuses to management and CEOs)?
Now, I realize that this is boring, wonky, economics, but sometimes, it's the boring, wonky parts that are important, and you can't let people just push stuff by because people are too bored to see the badness in it.
Technorati Tags: Politics, Rants, Economics, Crazies
Wouldn't you love to abolish the IRS ...
Keep all the money in your paycheck ...
Pay taxes on what you spend, not what you earn ...
And eliminate all the fraud, hassle, and waste of our current system?
Then the FairTax is for you. In the face of the outlandish American tax burden, talk-radio firebrand Neal Boortz and Congressman John Linder are leading the charge to phase out our current, unfair system and enact the FairTax Plan, replacing the federal income tax and withholding system with a simple 23 percent retail sales tax on new goods and services. This dramatic revision of the current system, which would eliminate the reviled IRS, has already caught fire in the American heartland, with more than six hundred thousand taxpayers signing on in support of the plan.
It's a book by a talk show host, who's written books like "The Terrible Truth About Liberals". And this congresscritter. That's raw talent there. But that's not even the most ludicrous part. (Okay, the most ludicrous part is probably some of the comments, like "The book is right. As a business owner, I will admit that I pad all my pricing to make sure that I get a certain amount of money after taxes. I hate doing it, but that's the way it is. Under the Fairtax, I could drop my prices anywhere from 20%-30%, and still make the same amount of money." Okay...so... you're telling me that businesspeople price their products so they can make enough money to stay open and live on? *GASP* That's not padding. For the love of monkeys.)
No, the most ludicrous part of the whole thing is the basic idea. Chuck the IRS and current tax code, and replace it with a 23% sales tax. This is the "fair tax". Well, no, it's not. It's about as unfair a tax as you can get. It's simple, and has that going for it, and it SEEMS fair at first glance, "Oh, everyone pays the same amount!" Well, no.
For starters, the devil is in the details. Would business to business sales be taxed? If so, that's gonna raise prices. If not, then expect to see anybody who can manage it buy their car/house/home entertainment system for "business". Second, does it include necessities like food and shelter? If so, who decides what's necessary? If not, I really doubt that prices would drop 2some% to make them even stay the same as they are now under the so-called "fair tax". Or does it have some kind of "rebate" for the first $X,000 you spend each year, tied to the poverty level? (That wouldn't suck, really, but there's other flaws with the tax). The biggest flaw is the simplest. A consumption tax like this is regressive as hell. It's only taxes on money spent, so it obviously affects people who spend their money than it does people who save it. Who can save money? The rich, generally. This wouldn't affect investment income, dividends, or even just interest on savings accounts. So somebody who doesn't spend all of their money pays a lesser percentage of taxes.
But, of course, if they implement some form of rebate for the first $X,000, then it won't hit the poor as hard. So, if the poor wouldn't be paying it, and the rich wouldn't be paying it, who does that leave paying most of the taxes? The middle class. This is just another of the Republican Party's ongoing efforts to shift taxes off of wealth and onto people doing actual work. I think there's a name for that. What is it...ah, yes. Class warfare.
Okay, so what about their other claimed benefits from their so-called "fair tax"?
* Make America's tax code truly voluntary, without reducing revenue
Baloney, as I explained above. And their claims about "not reducing revenue" are probably wrong, which means the sales tax would have to be higher than 23%. (Not to mention state and local sales taxes, income taxes, property taxes, and so on, which would still exist.)
* Replace today's indecipherable tax code with one simple sales tax
True, but. The indecipherable-ness of the tax code has nothing to do with the fact that it's an income tax, or that it's (slightly) progressive, it has to do with generations of exemptions, deductions, rebates, and other modifications, pushed by anyone with an agenda. It wouldn't be very difficult to set up a simple, progressive income tax structure. And it'd probably be a good idea, the current tax code is a mess.
* Protect lower-income Americans by covering the tax on basic necessities
See above. Can you say "soak the middle class"?
* Eliminate billions of dollars in embedded taxes we don't even know we're paying
By replacing them with an equally large number of embedded sales taxes. (Plus state and local income, sales, and property taxes)
* Bring offshore corporate dollars back into the U.S. economy
Maybe, sorta, kinda, not really. Okay, so companies might reincorporate in the US, rather than having a PO box and a single telephone at their "head office' in the Cayman Islands, but it wouldn't bring the corporate money back "into" the tax structure, since they plan to eliminate corporate taxes. (See above about questions about business to business sales)
Okay, let's think about what would happen if this were implemented. Tomorrow, there's a 23% sales tax on everything. Would prices drop 23% overnight to compensate? Probably not. What reason would the companies have to drop their prices 23%, instead of just pocketing the extra cash? "Oh, well, the free market would take care of that, one company would do it, and the rest would have to follow suit." Maybe, but I'm doubtful. What if they only dropped their prices, say, 10%? Everything still just went up. And the companies would just shrug and go "Don't blame us, blame the 23% government tax." And if they dropped prices lower, do you really think the money would come out of profits, or do you think they'd claim they have to cut salaries for workers, or health insurance, or other benefits (while still giving billions of dollars of bonuses to management and CEOs)?
Now, I realize that this is boring, wonky, economics, but sometimes, it's the boring, wonky parts that are important, and you can't let people just push stuff by because people are too bored to see the badness in it.
Technorati Tags: Politics, Rants, Economics, Crazies
