We can be rid of the IRS

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The Real Hawkeye

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Congressman, I urge you to vigorously support Congressman John Linder's proposed bill, "The Fair Tax Bill" (H.R. 25). This is perhaps the most important bill to come along since 1913. It will restore the right of privacy to the American people, stolen by the passage of the National Income Tax nearly a century ago, by replacing the current system of reporting to the IRS with a National Sales Tax. Additionally, it will eliminate the intrusive IRS, and tax fraud entirely. For once, the criminal class will find it impossible to avoid paying Federal taxes on the billions that they illegally generate each year. This will help solve multiple problems, not the least of which is the national debt. I will take notice whether or not you support his bill, and will keep my neighbors apprised of my observations. Thank you.
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P.S. Since ALL Federal funding will be accomplished through the Fair Tax, there will no longer be any special tax on class three weapons, and thus the word Firearms would have to be removed from the BATF, not to mention Alcohol and Tobacco.

You may write your Rep via the hyperlink below.

http://www.house.gov/htbin/wrep_findrep

You may read about Congressman John Linder's Bill at http://linder.house.gov/index.cfm?Fuseaction=Resources.Home&Resource_id=1
 
Dream on. There is virtually no way congress will give up the power of micromanaging behaviour, rewarding friends, and punishing enemies by way of the tax code as enforced by the IRS.
 
It is interesting, I am reading a ton about it from the site.

One problem I have is that it could discourage the economy a little by making it so that people do not buy stuff, because of the higher price. Even though they have more money, few americans can make the connection.

It does make sense from what I see, but I would love hear from some detractors, to see if the bad points are worth it.
 
Keaner, the prices won't increase.

The price of an item, let's use a gun for our discussions, includes some built in taxes. Those are the taxes that the manufacturer pays to but the raw goods to build a gun, and the taxes a manufacturer pays as income taxes, and any other taxes required by law.

The FairTax removes all those imbeded taxes which amounts to about 20% of a gun's price. Take those out and then add a 20% to 23% sales tax on top of the new, lower price and you get back to where you started.

Also, since there would be no imcome tax taken from your paycheck, you have more disposible income to spend as you wish.
 
You cant reduce the tax burden unless you reduce the spending. All these new tax schemes just rearrange the deck chairs and dont address the water streaming in through the boiler room.
 
beerslurpy,

Under the FairTax plan, net revenue to the government will not change which menas government spending need not be decreased. It is revenue neutral as Boortz says.

I would love to see government spending reduced, but this plan is solely concentrating on changing the way the government gets money.

Under our current income tax one really has no choice about paying into the system. Taxes are withheld from one's paycheck. At the end of the year, if one qualifies, that money is returned without interest.

Under the FairTax, one pays taxes only when one chooses to by buying something that is taxed. There will be many items that are not taxed, or one may be exempt from paying the sales tax based on income.
 
Beerslurpy, have you read what the Congressman says about it? There are tremendous advantages to it over the present system. Once we get rid of the impossibly complicated system we have, we will save money due to the elimination of the cost of filling out our taxes each year, which should lower the total tax burden (Forcing organized crime to pay their fair share will also do that), but after it is simplified, we can then more successfully lobby to decrease the size of government. It's not an either or proposition.
 
Other benefits includs such things as getting rid of tax-exempt organizations. Think on that one for a second.

The NRA has huge amounts of money, but doesn't spend much on lobbying. Why? Because it's tax-exempt, and thus restricted on what it can say. The NRA-ILA isn't limited that way, because it's not tax-exempt, but has much smaller coffers (in no small part becauce very few people have even heard of it).

I don't think it's in the book (I've just started reading it), but the FairTax would get rid of a lot of unconstitutional restrictions on free speech.

BTW, the FairTax is getting a lot of interest from a lot of people. Boortz has related stories of everybody from Waffle House waitresses and truckers discussing the plan, to the President himself apparently reading the book:
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It's time to start calling your Congressmen.
 
I agree with R.H. Lee:

There is virtually no way congress will give up the power of micromanaging behaviour, rewarding friends, and punishing enemies by way of the tax code as enforced by the IRS.
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The IRS is one of the many reasons that many American's who might otherwise "raise a stink" somehow don't - because they'll be slapped down by the IRS.

It's their little Stalin-bulldog on a leash.
 
The price of an item, let's use a gun for our discussions, includes some built in taxes. Those are the taxes that the manufacturer pays to but the raw goods to build a gun, and the taxes a manufacturer pays as income taxes, and any other taxes required by law.

The FairTax removes all those imbeded taxes which amounts to about 20% of a gun's price. Take those out and then add a 20% to 23% sales tax on top of the new, lower price and you get back to where you started.
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Fly,
This is the part I just don't get. If the Fair Tax is revenue neutral and the Gov't already collects the 20% imbedded tax on your gun then when I pay the 20% Fair Tax they get the same money as before from the product. Manufacture's tax vs Fair Tax. Yet, they're not getting the thousands of dollars they currently collect from me in income tax. It just doesn't add up. There's no free lunch here, prices have to rise and anyone whose's saved any money after taxes all these years has the value of their savings cut by some amount. This may be offset somewhat by tax free investing. Don't get me wrong, I'd love to get rid of the IRS but can't undeerstand how this could work.

Steve
 
Steve, just read the material provided by the Congressman. He explains it in depth. Cost of running government will be reduced due to the elimination of the IRS and their enforcement wings. A huge burden will be lifted from commerce, do to simplified taxation. The only ones who will lose with this deal are the people profiting off the current system, such as organized crime and the Statists.
 
Shifting the tax to the poor doesnt make it any less bad. I understand FairTax and I do not think it addresses the central problem. It is just like countless other tax "reforms."

I am not interested in a "federal sales tax" where the burden of proof for its payment rests with the owner of the item. Ever have an NFA tax stamp lost in a fire? Ever declare something on a tax return that you couldnt provide a receipt for? This is going to end up being a bigger pain in the ass than the current system. There will be massive dodging of this tax and massive witchhunting to find tax evaders. A lot of innocent people are going to be burned.

What if I mow some guys lawn and he welds up an intake manifold for me?
What if I buy a crate of ammo for cash off some guy at a gun show?
What if I buy a TV in 2003 and dont have the receipt for it in 2008 when the IRS audits my possessions for sales tax payment?
 
Beerslurpy, do you think it's fair that, for example, restaurant owners (and other cash businesses) pay only a small fraction of their correct tax burden, while those who receive a pay check each week get burned?
 
I dont think that this fixes the current unfairness of the system because all the same bastards will be extracting all the same money out of our pockets. Calling a wolf a dog doesnt stop it from eating your sheep.

This system is going to be even more adversarial and just as unpleasant as the previous system. They are betteing that this system will produce greater revenue than the current one. What happens when they realize how many transactions are cash-only and decide to crack down? What happens when posessing marijuana becomes a federal tax evasion offence?

There is a special rate for old age, pensioner and disability, not to mention hospital. This will lead to problems when grandmothers buy cars for their sons as gifts, but the IRS still wants the full cut.

As I read more of the bill (which is still fairly long) I will post more criticisms. You guys are fooling yourselves taht you are fixing anything.
 
What happens when they realize how many transactions are cash-only and decide to crack down?
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That's the beauty of it. Even if an occasional "cash deal" is arranged to avoid sales tax, the person who profited from it will still have to pay his fair share of tax when he goes to the grocery store, or buys his next yacht. It is MUCH harder to evade taxes this way, which will have the effect of flooding the treasury, which will result in a lower tax burden in general, so long as we keep them from growing government to match the new supplies of revenue.
 
Keaner; read the book.

Do not think for one moment that the Fair tax will eliminate the 200$ TAX stamp for Class III weapons.

But that does raise a question: Will all permits fees, registration fees, etc... be gotten rid of? You can bet they won't, remember the purpose of the fair tax is to replace income generated by the Income Tax, not user fees.

Might need to write Linder or Boortz about this.
 
stevesmith7,

I'll try to explain it, but I'm no expert, and I don't have a copy of the book in front of me for reference.

I'll start with the prices. They won't rise and here's why: when the FairTax plan is implemented there will no longer be income tax. No income tax means that Colt, for example, does not have to collect income tax from it's employees (withhold it from the paychecks) and send it to the IRS. Since Colt is no longer collecting the taxes for it's employees, Colt can save money by reducing it's payroll/accounting staff.

Since there is no income tax, Colt can reduce it's CPA/lawyer staff that tells Colt the best way to reduce it's corporate tax burden.

Since there is no income tax, Colt's suppliers will also be able to reduce their costs, and through the competitive market, pass on those savings to Colt. That's a lot of suppliers and business partners.

All of those little savings eventually allow Colt to lower the price of their 1911s by about 20%. In case you're thinking that Colt won't lower their prices, that they will just keep the extra profit, you're wrong. Because if Colt doesn't lower their prices, Kimber will lower their prices and gain market share in the process eventually driving Colt out of business.

So now Colt's 1911 price went from $700 retail to $560 retail. But since Colt's costs are also lower, their operating profit is the same.

As it stands now, revenue to the IRS has been decreased (basically to zero) due to the income tax being canceled.

Since their is no income tax, no Social Security tax, no Welfare tax, and all the rest, your paycheck just increased by 20%. Amazingly enough, you actually get to keep what you've earned. :what:

So here we are: about 20% more money in your pocket, with goods and services costing about 20% less. (Basically a 40% gain for you) So, now you're rich. At least you have much more money in your pocket to do with as you wish.

You still gotta eat. You still gotta put gas in the car, ammo in the gun, and clothes on your back. So you gotta spend some of that money in your pocket. So, go down to Coal Creek Armory and buy that new Colt you've always wanted. The price is $560. Add in the 20% sales tax and you get the Colt for $700. Back where we started you say? Not exactly. You're still getting the gun for $700 out-the-door (without any additional sales tax), but you haven't had any taxes taken from your paycheck. That sounds better to me.

Now, if absolutely no one in the country buys anything that can be taxed, then no tax money will go to the government. That could be bad. But if no one buys anything, then all businesses go belly-up. That is bad. As we all know, we Americans will spend our money. More money in our pockets mean more LCD TVs on our walls, more SUVs in the garage, and of course more Kimbers in the safe. Yes, go get a safe, you've got the money now.

As a bonus, the IRS will no longer be necessary. At least not in it's current gargantuan form. Some form will be left to make sure the businesses that collect the tax actually forward it to the government. To cover the minimal cost of collecting and forwarding the tax money, every business will keep a very small portion of the tax, say 1/10 of 1%.

That, as best as I can remember, is how it works.

More to follow.
 
Hawkeye, revenue will be greatly reduced. People will go out of their way to save 30 percent on the price of the big ticket items.

If this happens, I will cut my expenses nearly to zero and just accumulate money. I will then start a rental business and begin accumulating property for business use. If I wish to use it, I will simply pay my corporation rent.

The way out of tax in this system is just like the way out in the current system. The key words are "business" and "incorporation."
 
Beerslurpy, but even Sonny Corleone, when he wanted to buy a new Rolex, paid State sales tax on it. Now Sonny will be paying his Federal taxes that way too.
 
Shifting the tax to the poor doesnt make it any less bad. I understand FairTax and I do not think it addresses the central problem. It is just like countless other tax "reforms."
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I don't know why you think the poor will be burdened, but they won't. The FairTax has a provision to give a monthly credit to people below a defined income level.

Each month, according to the plan, people below a certain income level, and other criteria, will get an actual check from the government to cover their basic costs, such as food. IIRC, it's about $600 per month for a family of four. Now, I do not like this part of the system, but I need to get more information about it.

As for the central problem, I don't understand what you mean. My central problem with the current system is that I'm taxed on my income. If I earn less money, either by choice or circumstance, then I pay fewer taxes. More income = more taxes. Why? Just because I am richer or poorer does that mean I use proportionally more or less government services?

Not to mention the fact that our esteemed legislators in DC can mold the tax system to reward or punish who they choose. There seem to be lots of tax breaks to corporations that just happen to be big contributors to politicians and PACs. Must be a coincidence. I'd be much happier if our representatives didn't have that power.

I much prefer a user fee type system. Or in this case a user tax system. If I choose to buy a new gun, then I pay into the tax sytem. If I choose to stuff all my money in my mattress and never spend a dime, that's my choice.

Also, other taxes such as the death tax and taxes on investments are removed. More bonus points.

I am not interested in a "federal sales tax" where the burden of proof for its payment rests with the owner of the item.
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The burden of proof will rest with the business owner, who is the tax collector. It happens at the point of sale. When you buy a gun from Coal Creek Armory they add in the 20% sales tax, then forward 19.9% of that sales tax to the IRS. You have no responsibility to prove that you paid the tax just like you have no responsibility to prove that you paid any sales tax this year.

You won't need any receipts for tax purposes, because you won't be allowed any deductions. There won't be any forms to fill out and mail in by April 15th. No quarterly taxes to pay. NO PAPERWORK.

As for private sales... more power to you. But just as a seller is required to report income today, a seller will be required to report a sale under the new plan, if it is a business. What constitutes a business? Ask a lawyer.

There will be people working the loopholes under FairTax just as there are people avoiding income tax today. In the end, it will all be a wash.
 
This is a great idea. We should all write our reps. asking them to sign on to it. The IRS is the biggest enemy of freedom in the US.

As others have pointed out, this proposal is revenue-neutral, so it has no impact on the budget or spending.

As others have pointed out, it means no more tax returns. It means no more of them snooping in our lives. Only businesses that do sales would have to hassle with this, and it's not a big hassle because most businesses already have everything in place for sales tax (except in a few states that don't have sales tax). It would have a beneficial effect on the economy. It's more fair, because it's very hard to evade a sales tax, and it gets tax from everyone, including criminals, and including rich people who can afford fantastic tax lawyers and tax schemes. They won't escape from paying their fair share.

And as others have pointed out, the Federal government exists mainly to micromanage our lives. Congress loves the ability to give out tax credits, tax exemptions, that kind of thing. And a lot of private citizens who might support the idea of the Fair Tax are afraid to get involved, such is the power of the IRS over individuals.

Let's put it this way: the IRS knows more about our lives than our family members and closest friends do. A group of beaurocrats who view us as their farm animals are more intimate with us than our most trusted friends.

So we should all support the Fair Tax, and realize that it's going to be slow going. This proposal has been out there for several years now. It may take several more years for it to get some momentum.

One bright spot is that there are serious rumblings about a serious tax overhaul. This was one of the Bush priorities for the second term. Unfortunately it has been sidetracked by an Iraq war gone astray and a hurricane. But there still are a lot of people (voters like me, and politicians) who want to do something serious about the tax code. The tax code has become a cancer and some are waking up to the idea that the best thing to do is to slay the beast. A national sales tax is the best way, due to its simplicity, fairness, and the fact that only certain business owners would even have to mess with it.
 
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