H.R.25 – Fair Tax Act of 2013

H.R. 25 – Fair Tax Act of 2013

The House Ways and Means Committee may soon vote on H.R. 25 “The FairTax Act of 2013.” If approved, it may then go to the House for debate and possibly a vote. Tom Reed, who is a member of the Ways and Means Committee, is not among the 71 cosponsors, but he is known to favor proposals of this sort.

Fair tax is fair in name only. HR 25 would replace the current graduated income tax and estate tax with a national sales tax.  The certain effect of this would be to make the rich richer and the poor poorer at a rapid rate.  This might be a good time to write to Tom about this.

CRS Summary of HR 25:

  • Repeals the income tax, employment tax, and estate and gift tax. Redesignates the Internal Revenue Code of 1986 as the Internal Revenue Code of 2013.
  • Imposes a national sales tax on the use or consumption in the United States of taxable property or services. Sets the sales tax rate at 23% in 2015, with adjustments to the rate in subsequent years. Allows exemptions from the tax for property or services purchased for business, export, or investment purposes, and for state government functions.
  • Sets forth rules relating to: (1) the collection and remittance of the sales tax, and (2) credits and refunds. Allows a monthly sales tax rebate for families meeting certain size and income requirements.
  • Grants states the primary authority for the collection of sales tax revenues and the remittance of such revenues to the Treasury. Sets forth administrative provisions relating to: (1) the filing of monthly reports and payments of tax; (2) accounting methods; (3) registration of sellers of goods and services responsible for reporting sales; (4) penalties for noncompliance; and (5) collections, appeals, and taxpayer rights.
  • Directs the Secretary of the Treasury to allocate sales tax revenues among: (1) the general revenue, (2) the old-age and survivors insurance trust fund, (3) the disability insurance trust fund, (4) the hospital insurance trust fund, and (5) the federal supplementary medical insurance trust fund.
  • Prohibits the funding of the Internal Revenue Service (IRS) after FY2017. Establishes in the Department of the Treasury: (1) an Excise Tax Bureau to administer excise taxes not administered by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF); and (2) a Sales Tax Bureau to administer the national sales tax.
  • Terminates the sales tax imposed by this Act if the Sixteenth Amendment to the U.S. Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this Act.

http://beta.congress.gov/bill/113th/house-bill/25

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48 Responses to H.R.25 – Fair Tax Act of 2013

  1. Deb Meeker says:

    Oh No! Not another tax plan! I was just happy when the IRS stopped farming out collections to private agencies, in 2009.

  2. Stephen C. Eldridge says:

    The “Fair Tax” is a Fraud – we need a 10% Tithe!

    I am a retired CPA, with no financial interest in ANY tax system. I can support every comment I make with much detail.

    The so-called “Fair Tax” (“FT”) is a fraud – it is Karl Marx on steroids AND a Bernie Madoff financial scam.

    In their own words, FT proudly advertises that it INCREASES WELFARE.

    The Prebate is advertised as merely repaying the poor for any FT they pay, but actually would pay them far more than any FT they might pay and also gives the working poor free SS/Medi.
    The FT hits us with a 40-70% in-your-face retail sales tax that would spark a taxpayer rebellion that would destroy our 70% retail-sales-sensitive economy. 40% = 30% FT + e.g., 10% State sale sales tax and 70% is the rate needed at a sample 30% FT evasion rate (the FT incredibly assumes ZERO evasion and ZERO intentional reduction in spending).

    IN ADDITION to that 40-70% tax, the FT contains several HIDDEN TAXES. FT’s 30% rate is really 42+%; the 12+% is hidden by having fed + S/L govts paying FT – they must get that money from you. The initial 30% rate is 1-5% short and that plus any other revenue shortfall will have to be made up by raising more FT (or a NEW Income Tax), the fed budget for SS will rise because of the FT – SS COLA of almost 30% and fraudulent new SS benefits – and more FT (or a NEW Income Tax) we be required to fund these.

    The NEW IRS will be far worse, far more invasive than today’s IRS – we may well have to file an “Annual FT Summary”.

    We may well wind up with BOTH a NEW Income Tax AND the FT.

    What we need is a Flat Income Tax with No Deductions, No Exemptions, No Credits and a 10% rate.

    Call your representatives in Congress and let them know that this is what you want.
    For supporting details, call Stephen C. Eldridge tel. 423-532-7337

  3. whungerford says:

    Stephen, thank you for your comments. Can you justify your belief that a Flat Income Tax with No Deductions, No Exemptions, and No Credits is a good idea? Would a 10% rate generate more revenue or less than today’s income tax?

  4. Hank Van Gieson says:

    whungerford,

    I haven’t checked but if the CRS actually makes those claims, they are badly mistaken. (1) the 23% sales tax rate is actually 30% in terms all Americans understand. (2) Investment and debt instruments may have an implicit service charge (tax) added depending on the going Treasury rate. See Sec. 801-806, HR25. (3) State operations are not exempt. And in an example of total idiocy, the Federal government has to tax itself! (4) the Prebate goes to all families who apply regardless of income. (5) While HR25 may “grant authority” to the States to act as the Federal tax collector, the States were never asked if they wanted to assume that role. Stay tuned!

  5. whungerford says:

    Hank, thank you for your comment. I believe the CRS summarizes the bill as it is written without evaluating it.

  6. ChuckB says:

    The prevoius comments are filled with total disinformation, which requires clarification.  There are a couple of FairTax detractors who hide in the shadows of the internet spewing this disinformation which must be refuted with the truth.  This will not be a long disertation, just a few references that completely explain what the truth is regarding the comments.  They are easy to read and contain the truth. The reader can decide if there are any misleading details hidden in the documents.

    Beginning with The Fair Tax Act of 2013, HR 25, you can read the complete bill at: http://www.gpo.gov/fdsys/pkg/BILLS-113hr25ih/pdf/BILLS-113hr25ih.pdf.  It is a total of 131 pages, double spaced and replaces over 75,000 pages of income tax law.  For the Thumbnail Sketch, see: http://www.fairtax.org/PDF/FairTaxThumbnailSketch.pdf.  For an explanation of the Prebate, see: http://www.fairtax.org/PDF/PrebateExplained.pdf.  Also see Dr. Karen Walby’s white papers, briefs and summaries of the different aspects of the FairTax at http://www.flfairtax.org.  You can watch the video or skip to the page containing the papers.  

    So, before you are fooled into believing the disinformation submitted in the previous comments, please read these articles and decide for yourself what the truth is regarding the FairTax.  For more information, see http://www.fairtax.org.

  7. Stephen C. Eldridge says:

    Thank you.

    First, my friend and economist, Hank Van Giesen, confirms my rough calculation that 10% will replace current INCOME TAX (and the tiny Estate & Gift Tax) revenues (my Flat tax would NOT replace he SS/Medi taxes). If it is little short the 1st year, then so be it – I truly believe that it will encourage more economic activity and revenues will grow rapidly – my goal is not to given the rascals in Congress more revenue so perhaps we can demand that any revenues in excess of current level must be returned to the people.

    Here are the BENEFITS (my 2 slides)

    IRS is neutered – it has very little to do
    Compliance time, energy, costs minimized – 1 pager
    10% is Biblical and popular – Dr. Ben Carson advocates it
    10% is low – no more planning life around Income/Estate Tax
    Less tax avoidance or evasion with only 10% rate
    More freedom – keep 90%, no hassle/cost
    Revenue neutral – see above
    It’s Fairer;
    No loopholes for the “rich” or corp’s
    We ALL pay for govt “services”
    We ALL have an interest in what Congress does
    Least impractical , least traumatic, evolutionary giant step in the right direction –
    LESS resistance from Congress
    In sum, This Flat Tax delivers all the benefits claimed by the Fair Tax, but which the Fair Tax will NOT deliver

    Please let me know if you would like any clarification or expansion.

  8. whungerford says:

    Fair tax like all sales tax proposals is inherently regressive; the prebate helps those with low income, but doesn’t prevent the fair tax proposal from being a rich gift to the wealthy.

  9. Stephen C. Eldridge says:

    Readers;

    Notice that Chuck B. begins with the typical FT Saul Alinsky tactic of denigrating your opposition.

    Next, notice that all he has to offer is to refer you to the complete FT bill, which he knows well that you will not read – only certain people like me , a retired tax lawyer/CPA would bother reading it. He expects you to be overwhelmed and impressed with the mere volume of the bill.

    He next merely refers you to the FT propaganda – e.g. the Prebate. While they tell you the half-truths about the Prebate, My in depth analysis exposes the other half (i.e., that r increase welafare) in detail.

    He refers you to Karen Walby’s paid-for defense of the FT – so what, it’s only FT propaganda NOT independent truth.

    If after reading any of the propaganda to which Chuck B. refers you, you have any questions, comments or things you think you like about the Ft, call me (423-532-7337) and I will expose the truth behind the FT’s claims (I must have heard all of them).

  10. Stephen C. Eldridge says:

    The Prebate helps the poor way too much. While the FT’ers claim it is necessary to protect the poor from paying any FT (heaven forbid the poor should pay anything for govt services or even for their own pension), it goes well beyond that and insures that every poor person gets a big WELFARE Check AND pay no SS/Medi tax

    That is, via several not-obvious devices (which I can detail), the Prebate guarantees that the poor get many more $ than they will ever pay in FT.

    The rich will be punished heavily by the FT – someone must pay fr the ADDED WELFARE
    that is being transferred to the poor.

    .

  11. Stephen C. Eldridge says:

    To correct my typos in the last line of the 3rd paragraph:

    My in-depth analysis reveals the other half of the truth that the FT’ers won’t tell you, i.e., that the Prebate INCREASES WELFARE – i.e., if pays the poor many more $ than they will ever pay in taxes (supporting details available upon request) AND gives the poor FREE SS/Medi.

  12. Stephen C. Eldridge says:

    If you merely accept something WITHOUT EVALUATING IT, you expose yourself to being taken in by someone trying to “sell” you something or someone who is not fully honest and independent or someone just wrong. You may not understand the basis for their opinion, or the economic or other “assumptions” they make.

    May I suggest to you that we must evaluate everything for ourselves, even if they proceed from a usually reliable source.

  13. Fred Walker says:

    Mr. Eldridge states:
    “Fair Tax is a fraud”
    Fraud is defined as: wrongful or criminal deception intended to result in financial or personal gain. Federal Tax Bills and legislation are not fraudulent documents. Nothing is hidden from public view in House Bill HR:25 The Fair Tax.

    “Karl Marx on steroids and a Bernie Madoff financial scam”
    From (MIA: Marxists: Marx & Engels: Library: 1848: Manifesto of the Communist Party: Chapter 2: [German Original] )
    Nevertheless, in most advanced countries, the following will be pretty generally applicable.
    1. Abolition of property in land and application of all rents of land to public purposes.
    2. A heavy progressive or graduated income tax.
    3. Abolition of all rights of inheritance.
    Fact: HR:25 Fair Tax is a polar opposite to any of Marx or Engels ideology.
    From: Wikipidia web site:
    The Madoff investment scandal broke in December 2008, when former NASDAQ Chairman Bernard Madoff admitted that the wealth management arm of his business was an elaborate Ponzi scheme.
    A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.
    Fact: HR:25 bears no resemblance to a Ponzi scheme. HR:25 is a simple sales tax which most Citizens of the United States are familiar with. Taxes are not investments, Taxes pay for Government!

    “The FairTax hits us with a 40 to 70 percent in-your-face retail sales tax”
    From HR:25, page; 19, Sec. 10. Imposition of sales tax.
    8 ‘‘(a) IN GENERAL.—There is hereby imposed a tax
    9 on the use or consumption in the United States of taxable
    10 property or services.
    11 ‘‘(b) RATE.—
    12 ‘‘(1) FOR 2015.—In the calendar year 2015, the
    13 rate of tax is 23 percent of the gross payments for
    14 the taxable property or service.
    Fact: HR:25 has a tax rate of 23%.

    “fair tax evasion rate “
    Evasion is covered in ‘‘SEC. 504. PENALTIES.
    15 ‘‘(a) FAILURE TO REGISTER.—Each person who is
    16 required to register pursuant to section 502 but fails to
    17 do so prior to notification by the sales tax administering
    18 authority shall be liable for a penalty of $500.
    Fact: If there is evasion under HR:25 The Fair Tax it is punished by appropriate law. Tax evasion under HR:25 should be less. It will require two people to be complicate to evade the tax, one seeking to not pay the tax, another not collecting the tax. The vast majority of sales taxes are computed at the register therefor tax evasion will be much harder.

    “FairTax contains several hidden taxes”
    Fact: Assumptions that Federal, State and Local taxes can or will be compounded or added together under HR:25 are speculative at best. No Tax Law can be written that is immune to improper application, the question is will the improper use stand up to Judaical Challenge? There are no hidden taxes in HR:25. If there are Mr. Eldridge should list them.

    “far more invasive than today’s IRS”
    No tax receipts to keep, No filing dead line unless you are a service / sales provider. No special soft ware needed for filing. No questions from IRS unless you are a service / sales provider, I/e entity responsible for collecting the tax. The IRS will not even interact with the average Citizens who simply purchases goods and services. How is this more invasive?
    Fact: HR:25 is much less invasive than the current failed Federal Income Tax.

    “we may well have to file an annual fair tax summary”
    Search HR:25 the Fair Tax Bill. There is no intent or use of the words “annual fair tax summary”
    Fact: HR:25 does not contain any statement resembling a summary of any kind.

    “We may well wind up with both a new income tax and the fair tax.”
    HR:25 Sunset requirement page, 131;
    11 SEC. 401. ELIMINATION OF SALES TAX IF SIXTEENTH 13 AMENDMENT NOT REPEALED.
    13 If the Sixteenth Amendment to the Constitution of
    14 the United States is not repealed before the end of the
    15 7-year period beginning on the date of the enactment of
    16 this Act, then all provisions of, and amendments made by,
    17 this Act shall not apply to any use or consumption in any
    18 year beginning after December 31 of the calendar year
    19 in which or with which such period ends, except that the
    20 Sales Tax Bureau of the Department of the Treasury shall
    21 not be terminated until 6 months after such December 31.

    Fact: HR:25 requires elimination of the current Federal Income Tax..
    Fact : HR:25 will not apply unless the 16th Amendment to the U.S. Constitution is repealed
    Fact: HR:25 can not be applied in conjunction with the Federal Income Tax.

    “What we need is a flat income tax with no deductions, no exemptions, no credits and a 10 percent rate.”
    From; http://www.loc.gov/rr/business/hottopic/irs_history.html
    “The origin of the income tax on individuals is generally cited as the passage of the 16th Amendment, passed by Congress on July 2, 1909, and ratified February 3, 1913; however, its history actually goes back even further. During the Civil War Congress passed the Revenue Act of 1861 which included a tax on personal incomes to help pay war expenses. The tax was repealed ten years later. However, in 1894 Congress enacted a flat rate Federal income tax, which was ruled unconstitutional the following year by the U.S. Supreme Court because it was a direct tax not apportioned according to the population of each state. The 16th amendment, ratified in 1913, removed this objection by allowing the Federal government to tax the income of individuals without regard to the population of each State. For additional information on taxation in the United States, see the section on taxes on the web site of the U.S. Department of the Treasury.”
    From: http://en.wikipedia.org/wiki/Revenue_Act_of_1913 Please read the history of the Federal Income Tax failure.
    “The incomes of couples exceeding $4,000, as well as those of single persons earning $3,000 or more, were subject to a one percent federal tax. Further, the measure provided a progressive tax structure. meaning that high income earners were required to pay at higher rates.
    It would require only a few years for the federal income tax to become the chief source of income for the government, far outdistancing tariff revenues.
    Less than 1% of the population paid federal income tax at the time.
    2. The act was applicable to incomes for 1913, 1914, and 1915”
    3.
    Fact: Our 200 years of history with a corrupt failed Federal Income Tax has proven what any Income Tax, flat or not will become. Without the restriction included in the original language in the U.S. Constitution that required “uniform” taxes which was destroyed by the 16th Amendment any Income Tax will grow into another plague on the Citizens of the United States!
    I agree with Mr. Eldridge that a 10% rate should be more than sufficient to support Government but that is about all. (Hopefully) when HR:25 is enacted the rate will be reduced over time.
    In summery; From http://www.fairtax.org
    The FairTax eliminates the entire federal income tax code. No more income, business, corporate, gift, inheritance, interest, dividend, and capital gains taxes. No more record keeping and reporting of income. Make as much money as you can and report not a dime of it to the federal government. All taxes on income are replaced with one national retail sales tax on new goods and services. There is no tax on used goods. Business-to-business transactions are not taxed. Instead of hundreds of millions of filers and hundreds of forms, only tens of millions of businesses file a one page report each month with one question – how much did you sell retail?…

  14. Stephen C. Eldridge says:

    Notice Walker’s tactics. He offers only volumes of Statutory language with no analysis or discussion to overwhelm with volume , NOT with substance, in order to distract you from the core issue. That’s because the FT marketing can only deliver superficiality and attempt to deceive the reader.

    Walker starts off playing lawyer distracting the jury by harping on irrelevant details.. The fact that the sponsors may or may not benefit financially them selves is NOT relevant to the IMPORTANT matter in that it DEFRAUD THE PUBLIC.

    Walker continues to try to deceive readers with literal arguments, by quoting Marxist doctrine. My point is that Marxism’s core principle is to REDISTRIBUTE WEALTH – the FT does exactly that.

    To my 40-70% rate, Walker merely quotes the FT Statute which deceptively states its a 23% sales tax (the way those on Planet FT calculate sales taxes) – the way we Earthlings calculate sales taxes its a 30% sales tax. When adding 10% for S/L sales taxes that brings the MINIMUM sales tax rate to 40%.

    To my 70% rate (if evasion is 30%), Walker merely quotes the statutes penalties, etc. I and the rest of the world expect a lot of Ft evasion AND we also expect a lot of voluntary spending reductions in response to the outrageously high sales tax rate.

    To my comment that FT contains “several HIDDEN Taxes”, Walker addresses the least relevant of all (it must mean that he has learned that the several others are all valid – even one of his fellow senior FT salesman had to grudging admit to one big HIDDEN TAX (that the FT rate is really 42+% because the FT hides 12+% by making fed + S/L govts pay FT and they can only get the the $ to pay it from YOU.

    To my claim of the IRS being far more invasive than today, Walker spews the Ft nonsense including “No receipts to keep”. Fred obviously can copy and paste the Statute but he can’t READ it. Sec. 101(d), just like any S/L USE tax makes the BUYER liable for the FT unless he paid it and RECEIVED a receipt. Apparently Walker expect the NEW IRS to simply TRUST that the BUYER “received” a receipt. It is obvious to me (a retired tax practitioner) that the NEW IRS MUST ask you
    to PRODUCE that receipt. Walker says “No reporting” – true a first, but don’t be surprised if we later have to file an “Annual FT Summary” – you would if I were the Commissioner of the NEW IRS, because that’s the ONLy way to hold down (not stop) evasion. There is another point here. This is valid ONLY if the govt wants the FT to be revenue neutral. That is, they may NOT – they may want there to be a shortfall so they can enact a NEW Income Tax to complement the FT.

    Walker ignorantly argues there can’t be both an Income Tax + FT. He does not comprehend that Congress can easily repeal Sec. 401, the Sunset Clause and enact a NEW Income Tax (don’t hold your breath for the repeal of the 16th Amendment.

    To my 10% Flat Income Tax, all Walker can offer is the same old tired complaint about today’s Income Tax – I agree it is terrible. What Walker refuses to understand is that Congress can
    make ANY tax system worse (Flat or Fair) – its up to us to watch and stop them.

    In sum, Walker offers nothing more than volumes of superficiality with no substance.

  15. Harold VDB says:

    The FairTax is a national sales tax on the final retail sale of a product. The rate is 23 cents of every dollar spent on new products and services, used products are not taxed. The FairTax eliminates the IRS code, social security tax, medicare tax, inheritance tax, business tax, AMT, investment tax, and capital gains tax. So that means no income tax, social security tax, or medicare tax is taken out of your paycheck before you receive it! The FairTax is not based on your income, and it is not an increase in welfare! In fact the cost of the prebate is half of the money spent on current income tax breaks such as Earned Income Credit…etc. After a thorough study of the FairTax, 80 economists signed on to the FairTax (letter on file at FairTax.org). The FairTax has 72 congressional co-sponsors! The Income Tax is over 70,000 pages. The FairTax is 131 pages. The FairTax is a single rate that everyone pays. The more you buy, the more you pay, How does that benefit rich people more? The states are not required to collect the FairTax, but if they do they will get a quarter of one percent for doing so. The FairTax website has a list of FairTax supporters in your area that can answer any questions you have about the FairTax.

  16. Stephen C. Eldridge says:

    My 10% Flat Income Tax:

    10% rate (No deductions, exemptions credits)
    – business income taxed to owners on very simplified method
    IRS neutered – it has very little to do
    Compliance time, energy, costs minimized – 1 pager
    10% is Biblical and popular – Dr. Ben Carson
    10% is low – no more planning life around Income/Estate Tax
    Less tax avoidance or evasion with only 10% rate
    More freedom – keep 90%, no hassle/cost
    Revenue neutral to positive
    Fairer;
    No loopholes for the “rich” or corp’s
    We ALL pay for govt “services”
    We ALL have an interest in what Congress does
    Least impractical , least traumatic, evolutionary giant step in the right direction
    LESS resistance from Congress

    In sum, This Flat Tax delivers all the benefits claimed by the Fair Tax, but which the Fair Tax will NOT deliver

  17. whungerford says:

    The more you buy, the more you pay, How does that benefit rich people more? That’s easy — the higher a person’s income the smaller the percentage spent on taxable goods and services.

  18. Thomas Jefferson says:

    Thank you Fred for that extensive pin point rebuttal necessary to refute those misrepresentations made by detractors who claim they are “experts:.” But by their comments their claiming to be “experts” is exposed as the real “fraud”: here.
    You don’t have to be a CPA, a Tax accountant, or a Tax lawyer to read and understand the Fairtax in plain language of only 36 pages that totally refute their fraudulent claims and misrepresentations above. You can down load it and read it here: Here is the entire tax code of the “Fairtax” HR-25/s-13 in plain English. 36 pages compared to 75,000 pages in the current IRS income tax code.0http://www.fairtax.org/PDF/PlainEnglishSummary_TheFairTaxAct2007.pdf
    And you are wrong Mr. whugerford or whoever you are…..millions of ordinary Americans are taking the time everyday, (I first did in 2006, many others long before that to research honestly and found it easy to find the TRUTH about the FAIRTAX. Many of us are sharing that information at civic club meetings, conservative club meetings, some democrat groups even,, writing letters and editorials in newspapers across this country. and we are growing our numbers. We are winning! Here’s what Frank and whugerford want to keep in place inhttps://www.youtube.com/watch?feature=player_embedded&v=FkLKMB6Fcc8#t=19
    order for Obama to rule over us:
    Once we ordinary tax payers understand its simplicity and efficacy, we demand the FAIRTAX be implemented to replace the current EVIL and enslaving IRS/INCOME TAX and Repeal the 16th Amendment which authorized it. Detractors like those above are being exposed for the LIARS that they are by the simple Truth of the Fairtax, everyday. And our numbers are growing rapidly. Any true liberty loving American immediately sees the freedom the FAIRTAX would bring back to American citizens, and how it would be rocket fuel to our economy. It’s amazing the lengths some will go to, to keep the status quo in place that only rewards corrupt politicians, lobbyists, and the politically well connected.. The FAIRTAX returns power to the people, reclaiming it from the corrupt D.C.meca of political prostitution. Only some one with an axe to grind, who is totally biased and bent on misrepresentation makes the kind of claims made like the ones under the name of Frank and Whungerford above. They are same lies repeated on every blog I read opposing the FAIRTAX. They can’t handle the TRUTH, SO THEY LIE.

  19. whungerford says:

    I would like to read a comment on the subject of concentration of wealth in the hands of a few — the one percent. HR 25 would move America more and more toward oligarchy in my opinion.

  20. Thomas Jefferson says:

    Thank you Fred for that extensive pin point rebuttal necessary to refute those misrepresentations made by detractors who claim they are “experts:.” But by their comments their claiming to be “experts” is exposed as the real “fraud”: here.
    You don’t have to be a CPA, a Tax accountant, or a Tax lawyer to read and understand the Fairtax in plain language of only 36 pages that totally refute their fraudulent claims and misrepresentations above. You can down load it and read it here: Here is the entire tax code of the “Fairtax” HR-25/s-13 in plain English. 36 pages compared to 75,000 pages in the current IRS income tax code.0http://www.fairtax.org/PDF/PlainEnglishSummary_TheFairTaxAct2007.pdf
    And you are wrong Mr. whugerford or whoever you are…..millions of ordinary Americans are taking the time everyday, (I first did in 2006, many others long before that to research honestly and found it easy to find the TRUTH about the FAIRTAX. Many of us are sharing that information at civic club meetings, conservative club meetings, some democrat groups even,, writing letters and editorials in newspapers across this country. and we are growing our numbers. We are winning! Here’s what Frank and whugerford want to keep in place inhttps://www.youtube.com/watch?feature=player_embedded&v=FkLKMB6Fcc8#t=19
    order for Obama to rule over us:
    Once we ordinary tax payers understand its simplicity and efficacy, we demand the FAIRTAX be implemented to replace the current EVIL and enslaving IRS/INCOME TAX and Repeal the 16th Amendment which authorized it. Detractors like those above are being exposed for the LIARS that they are by the simple Truth of the Fairtax, everyday. And our numbers are growing rapidly. Any true liberty loving American immediately sees the freedom the FAIRTAX would bring back to American citizens, and how it would be rocket fuel to our economy. It’s amazing the lengths some will go to, to keep the status quo in place that only rewards corrupt politicians, lobbyists, and the politically well connected.. The FAIRTAX returns power to the people, reclaiming it from the corrupt D.C.meca of political prostitution. Only some one with an axe to grind, who is totally biased and bent on misrepresentation makes the kind of claims made like the ones under the name of Frank and Whungerford above. They are same lies repeated on every blog I read opposing the FAIRTAX. They can’t handle the TRUTH, SO THEY LIE.

  21. Thomas Jefferson says:

    What do care about that. You statist use that trick to say the rich aren’t paying their fair share which is a lie. The Lord set the example for raising revenue. one rate for all poor, middle earners, and the rich all paying the same %. He didn’t say the poor should pay zero, and he middle pay 5 or 10% and the rich pay 50%…that’s a Karl Marx communist statist philosophy not a fair and equatable one. The rich will spend millions to my hundreds, me being a poor person compared to the rich. I don’t begrudge the rich for being successful. But I do resent the government taking control over what little I make through an income tax, under the guise of getting even with the rich who do not report earned income since most of their income is sheltered, and only pay captiol gains tax which is much less a percentage of their income than the FAIRTAX CONSUMPTION TAX would be since they are spending MILLIONS TO MY HUNDREDS. You are using deceit and trickery here not the Fairtax supporters.

  22. Thomas Jefferson says:

    The Flat Tax is nothing more than a diversion to muddy the waters so that the Fairtax can be distracted from and smeared with lies. The IRS INcome tax is a “rapist” that rapes you 50 times a year…you idea of a flat tax says ok rapist, now show some compassion and only rape us 10 or 15 or 20 times a year….rape is still rape…the rapist is till immoral, and my and your rights and protection are still being usurped and denied. Let’s expel of the rapist from our community, period. Why are you being so willing to aid and abet the rapist?

  23. Thomas Jefferson says:

    Wrong…the wealthy would be paying a much larger share of the taxes than they are current in real dollars…you play the game of deceit in mixing in percentages when its to your advantage, and dollars when it is to you advantage. Stay consistent…under the Fairtyax in percentages…those on poverty would pay essentially zero in taxes..for example a family of 4 making 30.thousand per year would end up paying less than a thousand in taxes. or 1% or less… A family of 4 making 50 thousand would pay more dollars, at a net % of about 13%…You have to be making over 100 thousand a year before the full 23% net kicks in. That’s comprised of 15% to replace income taxes, and 8% to replace social security medicare taxes which is now 7.5% Social Security and about 1.5% medicare…currently any income earners making over 100 thousand a year pay no social security or medicare tax on anything over that 100%/ Under the Fairtax they would pay the 15% that replaces the income tax, and the 8% that replaces the Social Security and Medicare tax on EVERYTHING THEY SPEND…EVEN IF IT’S 10 MILLION, 20 MILLION, A HUNDRED MILLION….YOU GUYS ARE LYING AND MISREPRESENTING THE FACTS..STOP IT NOW!!

  24. whungerford says:

    The Lord set the example for raising revenue. one rate for all poor, middle earners, and the rich all paying the same %? When did she do that?

  25. whungerford says:

    I’ll make my concern concrete: If Mitt Romney spends 5% of his 20 million dollar income on taxable goods and services paying tax at a 23% rate, then the effective tax rate on his income is 23% times 5% or 1.15%. Whether fair or unfair, it would be a very good deal for Mitt.

  26. Stephen C. Eldridge says:

    To; Thomas Jefferson,

    I see why you don’t understand the FT – you read only 36 pages but it has over 100 pages.

    You didn’t say a thing substantive.

    You claim our “lies” are being exposed every day – be specific, name 1.

    All you have to offer is more FT sales hype, not substance.

  27. Stephen C. Eldridge says:

    Harold,

    If you add $30 sales tax to a $100 pre-sales-tax price and the total is $130, what is the rate of sales tax on your Planet? On mine its 30%, NOT 23%.

    You say “not an increase in welfare”. What do you call giving all the poor free SS/Medi and a big Prebate check that will greatly EXCEED any FT they pay on your Planet? On mine, we call it a WELFARE INCREASE. The fact that we pay welfare (fraudulently) via the RTC’s today is no excuse to keep doing it AND the FT DOUBLES down on that welfare in that the Prebate expands the RTC’s from today where it is paid ONLY to those who work to now ALL NO MATTER WHETHER THEY WORK OR NOT!

    A salesman’s lie. I spoke with many of those 80 (as did a friend). One guy said he had no idea what was in it, he just signed the letter because a friend asked him to. Many others told me they listened to a brief explanation and they, as many economists, like the idea of a consumption tax – they did NOT do any independent study.

    You have swallowed far too much FT Kool-Aid.

    For those who want real answers from someone who is NOT trying to sell you this snakle-oil call me 423-532-7337

  28. Stephen C. Eldridge says:

    I think you are getting your tax policy and resentment of the wealthy confused.

    The middle and upper classes will have to shoulder even more of our tax burden to make up for the added welfare given to the poor.

  29. Stephen C. Eldridge says:

    to: Thomas Jefferson

    Your figures are wrong! That family of 4 earning $31,020 gets a Prebate of $7,135 and will pay several thousands of dollars LESS THAN $7,135 and so they will pay NEGATIVE TAXES, AND they n longer pay $2,373 in SS/Medi taxes. How in the world did you calculate that they PAY $1,000.

    SS is 6.2% (not 7.5%) and Medi is 1.45%.

    The SS tax base for 2013 is $113,700 and THERE IS NO CAP ON TE MEDICARE TAX.

    I will ignore the rest of your figures.

    You need to calm down, get some facts and respond with facts and substance.

  30. Stephen C. Eldridge says:

    To: Thomas Jefferson

    You ranting madly undermines the credibility you are seeking.

    You cannot cover up the FT’s Progressive added redistribution of wealth by screaming “rape”.

    Passion is not an acceptable substitute for rational thought.

  31. Stephen C. Eldridge says:

    To: Thomas Jefferson,

    What was so wonderful about Fred’s “point by point” quoting statutes without saying anything relevant that was SUBSTANTIVE AND ANALYTICAL? Did you not read my point-by-point response to Fred’s empty words.

  32. Deb Meeker says:

    A big hug for that one. It’s like reading Sally on steroids. You have great patience, William, and I think that develops from being correct.

  33. NVRDC says:

    Reblogged this on Nevada Rural Democratic Caucus and commented:
    pystew gives a great summary of HR25, the purported “Fair Tax Act of 2013”

  34. Ward Atcher says:

    Whungerford:
    I am curious why you take a position attacking the FairTax, HR 25? In attacking HR 25, you are defending the 16th Amendment authorized income based tax system and the Internal Revenue Service, Treasury’s enforcement agency. You are defending the “status quo”. Would you kindly list the top 7 things about the Income Tax that you are defending? Why the campaign of misinformation/dis-information about FairTax? In your comments on FairTax you list 7 points. In each you point out a truth about some point on FairTax and then twist it into disinformation yielding an untruth masked as a fact.

    Point 1. Yes, HR 25 is 133 double spaced pages. Read it here: http://thomas.loc.gov/cgi-bin/query/C?c113:./temp/~c113qnaAij These 133 pages replace the full 70,000 plus pages of the income tax code, and yes, on implementation it does repeal all federal deductions on income. This vastly de-complicates tax collection. Please note, Whungerford fails to mention that with HR 25 you receive all of your income with not deductions. YOU GET YOUR FULL PAY CHECK!

    Item 2. Yes, HR 25 implements a 23% federal sales tax on all new goods and services. This is what replaces the previously paid, now lost, income tax revenue. On purchases the tax is imbedded in the price and itemized on every purchase receipt. A new $100 toaster oven would be priced at $100 and the receipt would list Oven $77, FairTax $23. Every consumer will see the tax paid on each transaction which is the control to prevent congress from increasing the rate. Everyone who consumes pays and sees what they pay. Regarding exemptions, there are none. There is however, no tax on used items. Without income tax, there is no income tax to be exempt from, thus exemptions are irrelevant.

    Item 3. Yes, the states do collect the tax at the point of sale, just like they already do and each state’s revenue department, on a schedule, forwards the federal FairTax collections directly to the Treasury. No IRS needed. There is a very minor adjustment to state’s tax collection system/s. And, yes the monthly rebate, pre-bate, [enough to pay the FairTax on all items up to the poverty income level] is received by every legal household, thus un-taxing the poor.

    Item 4. Yes, the states are charged with collection of FairTax and it is done with a straight 23% of retail transactions.

    Item 5. FairTax addresses revenue collection only and does not address allocation aka spending. This was, is and remains a Congressional function. FairTax vastly simplifies the tax collection process.

    Items 6 and 7. Last item on the 133 page bill is here verbatim:
    TITLE IV–SUNSET OF SALES TAX IF SIXTEENTH AMENDMENT NOT REPEALED
    SEC. 401. ELIMINATION OF SALES TAX IF SIXTEENTH AMENDMENT NOT REPEALED.
    If the Sixteenth Amendment to the Constitution of the United States is not repealed before the end of the 7-year period beginning on the date of the enactment of this Act, then all provisions of, and amendments made by, this Act shall not apply to any use or consumption in any year beginning after December 31 of the calendar year in which or with which such period ends, except that the Sales Tax Bureau of the Department of the Treasury shall not be terminated until 6 months after such December 31.

    Yes, repeal of FairTax is dictated if you, we the citizen and taxpayers, fail to timely repeal the 16th Amendment. Hard to imagine Americans wanting income taxes back after a taste of life without them.

    Ward Atcher
    Decatur, Alabama

  35. Stephen C. Eldridge says:

    Your Intro; You make a number of invalid accusations attempting to bully William. Being sufficiently intelligent to reject the FT does not mean one favors the status quo, etc.

    You point 1. You use false logic to try o fool people. We all agree the 70,000 pages are way too much -(even though 133 pages is better than 70,000) that does NOT mean that THE FT”S 133 pages are the BEST answer .

    Your Point 2. Lie # 1 – a $30 FT on a $100 pre-FT-price (total $130) is a 30% sales tax on our Planet – its 23% only on Planet FT. Lie # 2 – EVERYONE DOES NOT pay tax – the poor pay ZERO
    FT, ZERO SS/Medi Tax and in fact the Prebate gives them MORE $ than aany FT they pay so they are NEGATIVE taxpayers.

    Your point 3. NOT TRUE. The NEW IRS (i.e., the STAA) will be in total control of all the FT rules and regulations and the State examiners all over the country who will report to the (federal) STAA.

    Your Point 4.NOT TRUE. The States have the OPTION of collecting FT.

    Your Point 5. True, FT does not change spending (e.g. Welfare), but it does INCREASE WELFARE itself.

    Your Point # 6-7. That is deceptive beyond words. FT’ers must know that a future Congress can easily repeal Sec. 401, and don’t hold your breath awaiting the repeal of the 16th Amendment.
    The obvious leading probability is that we will thus wind up with BOTH the FT AND a NEW Income Tax – welcome to reality.

  36. Stephen C. Eldridge says:

    Who or what is pystew?

  37. Ute says:

    I feel woefully ignorant of the way our economy works, but for some reason, I think that in our service driven economy, with such a high sales tax, prices on goods and services would skyrocket which wouldn’t help anybody. Can anyone explain to me why I am wrong? I can see us “pensioners” without toothpaste, soap powder, and missing the basic necessities of life.

  38. Ute says:

    Mr. Atcher,
    *Per your Items 6 and 7:
    From: http://en.wikipedia.org/wiki/FairTax

    If the FairTax bill were passed, permanent elimination of income taxation would not be guaranteed; the FairTax bill would repeal much of the existing tax code, but the Sixteenth Amendment would remain in place. Preventing new legislation from reintroducing income taxation would require a repeal of the Sixteenth Amendment to the United States Constitution with a separate provision expressly prohibiting a federal income tax.[58] This is referred to as an “aggressive repeal”.

    Separate income taxes enforced by individual states would be unaffected by the federal repeal…The President’s Advisory Panel for Federal Tax Reform reported that if the federal government were to cease taxing income, states might choose to shift their revenue-raising to income.[8]

    Passing the FairTax would require only a simple majority in each house of the United States Congress along with the signature of the President, whereas enactment of a constitutional amendment must be approved by two thirds of each house of the Congress, and three-quarters of the individual U.S. states. It is therefore possible that passage of the FairTax bill would simply add another taxation system. If a new income tax bill were passed after the FairTax passage, a hybrid system could develop; albeit, there is nothing preventing a bill for a hybrid system today. To address this issue and preclude that possibility, in the 111th Congress John Linder introduced a contingent sunset provision in H.R. 25. It would require the repeal of the Sixteenth Amendment within 8 years after the implementation of the FairTax or, failing that, the FairTax would expire.[75] Critics have also argued that a tax on state government consumption could be unconstitutional.[66]

    **That could mean 8 years of some hybrid tax system…not a happy thought!**

    During the transition, many or most of the employees of the IRS (105,978 in 2005)[67] would face loss of employment.[42] The Beacon Hill Institute estimate is that the federal government would be able to cut $8 billion from the IRS budget of $11.01 billion (in 2007), reducing the size of federal tax administration by 73%.[42] In addition, income tax preparers (many seasonal), tax lawyers, tax compliance staff in medium-to-large businesses, and software companies which sell tax preparation software could face significant drops, changes, or loss of employment. The bill would maintain the IRS for three years after implementation before completely decommissioning the agency, providing employees time to find other employment.[16]…and establish an Excise Tax Bureau and a Sales Tax Bureau in the Department of the Treasury.[16]

    *Per your Items 3, 4 and 5:
    …The states are granted the primary authority for the collection of sales tax revenues and the remittance of such revenues to the Treasury….Economists from the University of Tennessee concluded that while there would be many desirable macroeconomic effects, adoption of a national retail sales tax would also have serious effects on state and local government finances.[92] Economist Bruce Bartlett stated that if the states did not conform to the FairTax, they would have massive confusion and complication as to what is taxed by the state and what is taxed by the federal government.[35] In addition, sales taxes have long exempted all but a few services because of the enormous difficulty in taxing intangibles—Bartlett suggests that the state may not have sufficient incentive to enforce the tax.[40] University of Michigan economist Joel Slemrod argues that states would face significant issues in enforcing the tax. “Even at an average rate of around five percent, state sales taxes are difficult to administer.”[93] University of Virginia School of Law professor George Yin states that the FairTax could have evasion issues with export and import transactions.[36]

    **Simplifies the tax collection process for the Feds but not the state. As already stated: “While HR25 may “grant authority” (translation: gives States the option…)to the States to act as the Federal tax collector, the States were never asked if they wanted to assume that role…” I do not see this as a “very minor adjustment to state’s tax collection system/s.” States may not have sufficient resources to enforce and/or administer the collection of the tax without adding a surcharge (new tax) to defray the costs. As an example: in Arizona – All income earned or received while you are a resident (if taxable to the federal government) is taxable to Arizona with few exceptions. So Arizona WILL need to make up that lost revenue somehow/somewhere! If, and it’s a BIG IF, the FairTax plan was enacted, I can see a new surge in communal living and multiple generational living circumstances. And who/how will be tasked to verify/enforce compliance with the ‘household’ portion of this new act.**

    *Per your Items 1 and 2:
    The FairTax’s effect on the distribution of taxation or tax incidence (the effect on the distribution of economic welfare) is a point of dispute. The plan’s supporters argue that the tax would broaden the tax base, that it would be progressive, and that it would decrease tax burdens and start taxing wealth (reducing the economic gap).[9][52]

    Opponents argue that a national sales tax would be inherently regressive and would decrease tax burdens paid by high-income individuals.[4][53] A person earning $2 million a year could live well spending $1 million, and as a result pay a mere 11% of that year’s income in taxes.[4] Households at the lower end of the income scale spend almost all their income, while households at the higher end are more likely to devote a portion of income to saving. Therefore, according to economist William G. Gale, the percentage of income taxed is regressive at higher income levels (as consumption falls as a percentage of income)

    Your contention is that “with HR 25 you receive all of your income with no deductions. YOU GET YOUR FULL PAY CHECK!” Until you add on the hybrid income tax needed to defray the cost of the Prebate and the cost of your State to hire the laid-off IRS agents to administer the new “FairTax.” And what happens when prices sky rocket and the average citizen, regardless of his Prebate amount, can no longer afford basic goods and services because, at heart, most corporations are greedy; looking for the fast buck and to Heck with tomorrow! This is a FairyTax plan-not a mistype! I’m not a tax lawyer or even an expert on financial/tax matters. But I have lived long enough to know a bit about human nature and to recognize human frailty and greed (which includes those who would receive the Prebate, working or not)! And when I look at my husband’s paycheck (he’s a federal employee who hasn’t had a raise in more than 3 years!)…it’s not the Federal/SS/Medicare taxes that eat up his miserable pay check, it’s the cost of health/life insurance for our family!
    As Mr. Eldridge so eloquently stated: Welcome to reality.

  39. Stephen C. Eldridge says:

    UTE,

    Thank you for a great post.

    On the hybrid system – I did not see Wikipedia add that Congress can easily repeal Sec. 401, th e Sunset Clause that would leave us with a PERMANENT hybrid (or dual) system.

  40. solodm says:

    Sorry, you were going along just fine, but when you had to throw in “Sal Alinsky”, you lost credibility. Further, it is quite obvious to me at least, from your comments about ” heaven forbid the poor….” you may well close minds that consider the working poor as equals.

  41. Reply to solodm,

    I see that you are unhappy that I poibt out to readers, that Vhuck B empl,oys Saul Alinsky tactics of dengration, etc. Now he did exactly that, so exavtly what is your objection to my pointing that out to readers?

    Your words are Alinsky double-speak. I AM trying to treat the poor more like EQUALS – if the rest of us are paying tax, so should they. Dr. Ben Carson agrees with my 10% Flat Tax with NO dedecutions/Exemptions – he said, we should treat then like everyone else (i.e., closer to being EQUAL). It appears to me that YOU want them to be EQUAL in life’s outcomes rather than our Constitution’s attempt to guarante OPPORTUNITIES by eliminating improper obstacles.

    Today, the poor pay zero or negative taxes – under the FT, it would get much WORSE.

  42. solodm says:

    Actually I don’t think you pointed out anything except your apparent contempt for the working poor. You say you are treating them as equals by demanding for them to be taxed, but you add no qualifying claims that they should be paid a living wage with which to do so.
    That doesn’t sound like “fair tax” to me. Here let me pay you just enough to need government assistance to live, and then I want to tax you 10% of that?

  43. You jumble unrelated conceots into confusion.

    We are discusiing a TAX Plan, and equality requires all people to be treated EQUALLY.

    You go far broader into what people should be PAID for their labors, which is totally UNRELATED to the tax system. What people should be paid is what a willing employer is willing to pay for the servuces that are rendered to them, which depends upon the value and skills delivered by the employee – that is the way the free market works and the govt’s job is NOT to force employers to pay more for labor, but to insure that no American is unlawfully denied the right to PERSUE LIFE & LIBERTY.

    No let me NOT pay you just enough to live – you need to EARN as much as you care to and if you want more, then study and imporove the value of the skills that you deliver to a wiling employer. Again, this has NOTHING to do with the tax system.

  44. I would add that you twist TRUE concern for the poor into the Progressive language “contempt for the poor”..

    I would like to see the poor rise up ineconomic status, but by means of their own efforts. This country offers everyone the OPPORTUNITY to succeed (it does not GUARANTEE success) – all welfare has done is to enslaved the poor/ and robbed them of their initiative.

    We ae NOT a Socialist society (although sadly we are getting more Progressive over time) and the govt should not interferee with the free markets (by, among other things, setting minimum wages) – that is a formula for disaster.

  45. Let’s see Thomas Jefferson, if anyone criticizes the FairTax (even if they do so with profesional analyses), then they are LYING, but if you praise it (with superficial propaganda and hide the facts) you are telling the truth. OK, now I get it (just kidding).

  46. Deb Meeker says:

    Mr. Eldridge, sorry, you say “I would like to see the poor rise up in economic status, but by means of their own efforts.” That sounds a lot like my Congressman, who believes we should “help the poor and working poor” by cutting their benefits, not their taxes. and by creating even lower paying jobs ” to help them try harder to succeed”. Really?
    Sir, you can have all the math and background in tax vernacular and experience, but until you can see things on the level of what Americans have already lost through the schemes of well meaning “authorities” you will never convince those of us who see the whole picture.

  47. Deb,

    The govt DOES NOT create “lower p[aying jibs” or ANY job – the private sector creates jobs (actually the govt artificially creartes govt jibs that pay many people for jobs that do not add value to our society, as an aletrnative form of welfare.

    We do need to cut welfare benfits because the Progressive welfare state is a fraud – it does nothing but enslave the poor , while at the same time bankruping the nation – Cloward & Piven taught that Progressives should overwhelm the welfare system to colllapsethe economy.

    Helping/urging people to fend for themselves may seem harsh in the SHORT TERM, but in the LONG TERM, will do immensely more good for the poor.

    In sum, I am sorry to say that your Progressive mentaility jumbles up a lot of un releated thoughts and comes up with the same old wrong answer – i.e., just keep giving the poor more of our menoey until they are incentivized to get out of poverty (do you hear how ridiculous that sounds?).

    People are not fooled by Progressive rhetoric that appeals to our emotions and to our Judeo-Christian charity. I favor prograns that will actually help the poor, in the all important LONG TERM.

  48. Pingback: Historic first vote on the FairTax, Kill IRS | Xero QuickBooks Blog

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