Dixie - In Memoriam
New member
I've been listening to Bortz talk about the fair tax lately, because my local station took Laura Ingraham off and put Bortz in her place... I don't really like Bortz too much, he is a pinhead most of the time... but he i sa big fan of the Fair Tax, and that's pretty much what he stays on most of the time.
He got me to thinking about it, and I really do think it could benefit our struggling economy tremendously. Here's how it would work...
Currently, our tax system is production-based, it relies on people working, producing good and services, the more you work, the more money you make, the more tax you pay. This system inherently causes a demotivated base of production, people simply aren't motivated to work more when they know half of what they make will go to pay the tax man. The Fair Tax system is consumer-based, it relies on people spending their money, buying goods and services. The more we buy and spend, the more tax revenue we generate. The same principles of de-motivation don't apply, because people reap a tangible benefit from spending, something they can hold in their hand, something to show for the cash they spent. Plus, there is no mandate to spend, you are free to not spend if you don't want to, but you have to work, you have to produce, you have no choice in that matter.
Fair Tax would be a national sales tax, and estimates are, it would need to be about 23% to cover current expenditures of the Federal budget. This means, everything consumable would increase in price by 23%... but... it wouldn't stay there, because of competition and free enterprise. The same thing that makes a clothing store sell suits for $199.99 would still be in play, competition would still drive consumer pricing, Fast food outlets discovered that the average consumer will spend $5 for a complete meal, and this wouldn't change, so the businesses would simply adjust to the 23% increase and absorb the extra in their consumer pricing of goods and services. Things would go up a little, but not 23%, because someone would always be trying to tap into the business and find a way to lure customers to their product or service, even if it meant a little less profit.
Now here is the huge upside to this system. No income tax, no corporate tax, no capital gains tax! You would immediately be bringing home more on your paycheck, corporations would immediately be making more profit because of less corporate tax, and the incentive to make money is restored. Foreign business would flock to America, where there was no corporate or cap gains taxation, and jobs would spring up by the hundreds of thousands. Investors and entrepreneurs would be enthusiastic about spending money to make more money, without the burden of taxation, investment in new ventures would be wide open. Unemployment would drop to near zero, and then we would see something amazing begin to happen with regard to personal incomes and salaries, the jobs in high demand would be paying much more to get qualified people, and average household incomes would rise dramatically as companies begged for new employees, offering all kinds of incentives and signing bonuses.
Of course, there will be some bleeding heart liberals who will cry... but what about the low income people who can't afford this extra sales tax? Well, the Fair Tax plan Bortz is talking about, takes this into consideration, and here is the idea. We calculate how much money it takes to survive, to live a modest lifestyle with the basic necessities of life, housing, food, clothing, medical, etc. Each year, we cut a check to low income families for 23% of that amount. Let's say we establish the "poverty line" amount at $20k... each year, the low income family would get a check for $4,600.00 to offset the sales tax on consumer goods. So those who pay no tax now, would still pay no tax under the Fair Tax system.
With this plan, we would completely eliminate the IRS, as well as all the tax cheats and tax fraud currently happening in America. People who currently earn illegal incomes and pay no tax, would no longer be able to skate the system, they would automatically be contributing to the system whenever they buy anything. There is literally no telling how much extra tax revenue this might generate, and the great thing about it is, the sky would be the limit in terms of how much money could be generated, because it is based on consumerism instead of production.
I don't agree with Bortz on a lot of stuff, but I think he's right on with this idea!
He got me to thinking about it, and I really do think it could benefit our struggling economy tremendously. Here's how it would work...
Currently, our tax system is production-based, it relies on people working, producing good and services, the more you work, the more money you make, the more tax you pay. This system inherently causes a demotivated base of production, people simply aren't motivated to work more when they know half of what they make will go to pay the tax man. The Fair Tax system is consumer-based, it relies on people spending their money, buying goods and services. The more we buy and spend, the more tax revenue we generate. The same principles of de-motivation don't apply, because people reap a tangible benefit from spending, something they can hold in their hand, something to show for the cash they spent. Plus, there is no mandate to spend, you are free to not spend if you don't want to, but you have to work, you have to produce, you have no choice in that matter.
Fair Tax would be a national sales tax, and estimates are, it would need to be about 23% to cover current expenditures of the Federal budget. This means, everything consumable would increase in price by 23%... but... it wouldn't stay there, because of competition and free enterprise. The same thing that makes a clothing store sell suits for $199.99 would still be in play, competition would still drive consumer pricing, Fast food outlets discovered that the average consumer will spend $5 for a complete meal, and this wouldn't change, so the businesses would simply adjust to the 23% increase and absorb the extra in their consumer pricing of goods and services. Things would go up a little, but not 23%, because someone would always be trying to tap into the business and find a way to lure customers to their product or service, even if it meant a little less profit.
Now here is the huge upside to this system. No income tax, no corporate tax, no capital gains tax! You would immediately be bringing home more on your paycheck, corporations would immediately be making more profit because of less corporate tax, and the incentive to make money is restored. Foreign business would flock to America, where there was no corporate or cap gains taxation, and jobs would spring up by the hundreds of thousands. Investors and entrepreneurs would be enthusiastic about spending money to make more money, without the burden of taxation, investment in new ventures would be wide open. Unemployment would drop to near zero, and then we would see something amazing begin to happen with regard to personal incomes and salaries, the jobs in high demand would be paying much more to get qualified people, and average household incomes would rise dramatically as companies begged for new employees, offering all kinds of incentives and signing bonuses.
Of course, there will be some bleeding heart liberals who will cry... but what about the low income people who can't afford this extra sales tax? Well, the Fair Tax plan Bortz is talking about, takes this into consideration, and here is the idea. We calculate how much money it takes to survive, to live a modest lifestyle with the basic necessities of life, housing, food, clothing, medical, etc. Each year, we cut a check to low income families for 23% of that amount. Let's say we establish the "poverty line" amount at $20k... each year, the low income family would get a check for $4,600.00 to offset the sales tax on consumer goods. So those who pay no tax now, would still pay no tax under the Fair Tax system.
With this plan, we would completely eliminate the IRS, as well as all the tax cheats and tax fraud currently happening in America. People who currently earn illegal incomes and pay no tax, would no longer be able to skate the system, they would automatically be contributing to the system whenever they buy anything. There is literally no telling how much extra tax revenue this might generate, and the great thing about it is, the sky would be the limit in terms of how much money could be generated, because it is based on consumerism instead of production.
I don't agree with Bortz on a lot of stuff, but I think he's right on with this idea!
