Consumption Tax


Suppose that every day, ten men go out for beer and the bill for
all ten comes to $100. If they paid their bill the way we pay our taxes,
it would go something like this: 

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the
arrangement, until one day, the owner threw them a curve. “Since you are
all such good customers,” he said, “I’m going to reduce the cost of your
daily beer by $20.”  Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes
so the first four men were unaffected. They would still drink for free.
But what about the other six men – the paying customers? How could they
divide the $20 windfall so that everyone would get his ‘fair share?’

They realized that $20 divided by six is $3.33. But if they subtracted that
from everybody’s share, then the fifth man and the sixth man would each end
up being paid to drink his beer. So, the bar owner suggested that it would
be fair to reduce each man’s bill by roughly the same amount, and he
proceeded to work out the amounts each should pay.

And so…

– The fifth man, like the first four, now paid nothing (100% savings).
– The sixth now paid $2 instead of $3 (33%savings).
– The seventh now pay $5 instead of $7 (28%savings).
– The eighth now paid $9 instead of $12 (25% savings).
– The ninth now paid $14 instead of $18 (22% savings).
– The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four
continued to drink for free. But once outside the restaurant, the men
began to compare their savings.

“I only got a dollar out of the $20,” declared the sixth man. He
pointed to the tenth man,” but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a
dollar, too. It’s unfair that he got ten times more than I!”

“That’s true!!” shouted the seventh man. “Why should he get $10
back when I got only two? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison. “We didn’t
get anything at all. The system exploits the poor!”

So…the nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine
sat down and had beers without him. But when it came time to pay the
bill, they discovered something important. They didn’t have enough money
between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is
how our tax system works. The people who pay the highest taxes get the
most benefit from a tax reduction. Tax them too much, attack them for
being wealthy, and they just may not show up anymore. In fact, they might
start drinking overseas where the atmosphere is somewhat friendlier.

THIS IS WHY WE ABSOLUTELY NEED AN IMPARTIAL TAX CODE!

WE NEED THE “FAIR TAX” THAT CONGRESS IS SITTING ON RIGHT NOW!

___________________________________________

 

For those who understand, no explanation is needed. For those who
do not understand, no explanation is possible.


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Had I known that the major prerequisite for Iowans considering whom to vote for (president of the United States) was to simply be a pastor, preacher, or evengelical freakazoid then I would have become ordained through an on-line surrogate and ran for office myself!  The mere fact that Governor Huckabee is using the predisposed bigotry of evengelical Christians is shameful enough for me to consider voting for myself as a write-in candidate or for the Independent or Libertarian candidate if he is eventually chosen as the GOP nominee! 

“I’d like to ask that same person who voted for Huckabee if they would have still voted for him if he were a Mormon.  I’m guessing that the answer to that question would incredibly easy to figure out…thus proving my assumption of religious manipulation and bigotry.”  – Nostromos, 2008

Did any of the Iowan pinheads consider Huckabee’s past record as a moderate conservative…at best?  Did any of them even care to realize how lenient he has been on giving away tax dollars to illegal immigrants?  I’m not proposing myself as an expert in all political matters, but it seems to me that by giving tuition assistance to illegal immigrants while making blue collar Americans pay for theirs is not only ridiculous, but downright offensive in the highest degree!  I’m also not too sure about how responsible it is to give illegal immigrants access to driving licenses especially since the advent of globalized terrorism aimed squarely at our front door!

Another thing that has rarely been discussed and is doubtful that the masses of home-schooled evengelical bigots even considered before casting their vote for the Huckster is the enormous black-eye Mike Huckabee cast upon himself as a man and his administration as a leader is the disgusting reality that he pardoned hundreds of convicts during his time as Governor of the state of Arkansas.  One of the people he personally sought after to pardon (by personally administering massive amounts of pressure to the parole board) was a convicted rapist and murderer.  After he pardoned him, the sick S.O.B. headed west to Kansas City and murdered a newly wed couple.  Two people who had just took the plunge to begin their lives together anew were snuffed out of existence simply because of the wreckless act of Gov. Huckabee.  This is inexcuseable for any leader we trust to protect us.  It is more than inexcuseable.  It is disgusting and highly aggrivating…but I guess the “Christian” voters of the great state of Iowa didn’t care about that.  How many convicts did Romney pardon after his governorship?  The answer: NONE!  Now, that speaks volumes about the type of man Romney is especially when compared to the type of man Huckabee is. (more…)

Americans For Fair Taxation - About the FairTax

 

 Is there enough motivation in your soul to make a difference in something that you feel is an important issue?  I wonder if many of us would sit back and allow the rocks of life to pummel us without reaction or if we’d stand up against them and find a way to improve the situation?  My best guess is that most of us would do what we could to rectify any situation we were at all uncomfortable with.  I believe this because of what the fabric of America is made of…hard work, relentless efforts, visions of betterment, and the classic American characteristics…innovation and achievement!  We have a long history of standing up to oppressors, fixing what is broken, and making our lives better and more efficient.  From expansionism to the pioneers; from slavery to the equal rights movement; from the Great Depression to the economic boom of the 1990’s, we have always been a nation where common sense prevailed and elbow grease garnered all of our efforts.  With such a rich and envious heritage tied to the lineage of nearly every American family today it is surprising to me that we have allowed ourselves to once again become oppressed by usurpers of power who have made it their career to look out for themselves and line their pockets by conducting “back room deals” far away from the American public and their constituency.  The career politicians we have grown accustomed to have been hitting us where it hurts since the 1940’s, yet rarely is there a voice raised in concern amongst us.  Rarely is there a vociferous moment conducted by the masses that illustrates our frustrations to those whom absolute power has corrupted absolutely.

 

Since the days of Franklin Delanno Roosevelt, we have been told what entitlements we will fund, what laws we will abide by, what bureaucracy we will have to deal with, and what amount of taxes we will have to pay.  In the society that we have allowed to be created right under our noses is dependent upon federal tax revenues, but never have we been asked just how much of our hard-earned monies we would be willing to submit for the better of the country.  Everything in our society is tied to taxes.  Everything includes the embarrassing and failed social security and medicare funds, which are multi-trillion dollar ideas built upon the backs of the American tax payer without his consent.  I wonder how much more responsible our career criminal politicians would be with our money if entitlement programs and tax rates were put to referendum?  It’s a great question, but sadly it’s a question that will have to remain rhetorical.  I doubt very highly that the fat cats we have put in
Washington D.C. would ever relinquish an ounce of power that they didn’t absolutely have to.  We have created this current financial mess out sheer laziness conducted by the average American because we have allowed ourselves to be so easily marketed to due to our reluctance to vote in mass numbers.  Roughly one-third of Americans over the age of 18 vote on a regular basis, which is embarrassing to think of the men and women who gave their lives in order for all of us to have the opportunity to vote in a free and democratic republic.  It is precisely because of this lack of interest that the American citizen is showing that we have become oppressed by the very government we have ignored.  Since the days of FDR’s “Great Society”, the American worker has been burdened with taxes on a federal, state, and local level never before seen in our land.

During the Civil War, Abraham Lincoln endorsed and implemented a roughly 2% income tax in order to fund the war effort.  I don’t believe there are too many Americans who can argue against such a measure because of what was at stake.  Americans have always been willing to open their hearts and wallets in order to help a cause, but what Abraham Lincoln did after the war was over is what made him the type of man who will go down in history as one of our nation’s best leaders of all time.  After the war was completed and after reconstruction efforts were in place, President Lincoln repealed the tax and allowed Americans to contribute on a personal and private basis if they so desired.  This, my fellow American citizen, is exactly what our founding father’s had in mind when they bled for the document currently enshrined in weather-proof glass at the National Archives Building in Washington D.C., the Constitution of the United States of America.  Aside from seeking religious freedoms, it was the oppressive government and laws of England that they were fleeing when the idea of “ America” became a reality.  It was the tax burdens that England forced upon the early colonies that was the straw that broke the camel’s back and sent us over the edge.  It was this issue that our founding father’s made sure was a vital part of the governing document they created in Philadelphia back in 1776.  So why have we turned a full 180 degrees from what was supposed to be to what we are being forced to deal with today?  What happened along the way that allowed the federal government to reach into our pockets and legally withhold a specified percentage of our wages?  How did we as a people so carelessly allow for this to happen when we’re supposed to be the nation who stands up to oppressors and rights that which has been wronged?  How on earth have we allowed an entire political party of modern times to build a platform around how much one group of society is taxed compared to how much another group is taxed?  When and why have we allowed our politicians to build a pulpit to preach their gospel from when everything that they are preaching is contrary to our best interests and the best interests of the Constitution?  Is it not clearly written in that God-inspired document that government oppression by any and all means is strictly forbidden and that states should be (and are expected to be) able to govern themselves?

Many can trace the roots of failed entitlements and the beginnings of taxation oppression back to FDR and his “Great Society” legislation.  It was no accident that his “Great Society” legislations were passed as constitutionally acceptable by the Supreme Court.  Few people actually know that FDR threatened to load the Supreme Court with two additional justices that would tip the balance in favor of his great socialistic ideals.  Due to this pressure from the executive branch, the Supreme Court caved in and granted constitutionality to FDR’s ideas.  From this blunder in American history we have been strapped with the social security and medicare fund, which currently are as close to bankruptcy as MC Hammer was after he wrote “2 Legit 2 Quit”!  Trillions and trillions of dollars have been taken out of the social security and medicare fund in order to pay for politician’s pork that have served no purpose other than to lift the ego of one or two individuals.  The idea of social security and medicare isn’t too bad because it helps Americans get by during times of uncertainty and/or grief (survivor’s benefits), but the fallacy of the “Great Society” is that no American was or has been able to choose for himself whether or not he wanted to take place in this attempt of American socialism.  It was either “pay the social security tax” or “go to jail”.  Simple as that.  What’s American about that?  Today, the “Great Society” has turned us into a fiscal nightmare and all of the money that today’s generation is pouring into these mandatory social funds will not be there for them.  With these massive problems starring us directly in the face there has still been NO solution posited by any of the career politicians we have sent to represent us in our nation’s capital…until today!  The Fair Tax Act (S.25/H.25) is exactly the type of legislation that we need to pass into law if we are to find a way out of the mess that FDR and his grandious visions of socialism have created.  Instead of taxing our businesses into oblivion, forcing our uber-rich citizens to place their wealth in foreign off-shore banks, enabling a massive shadow economy to exist right under our noses, or adding compliance costs of today’s tax code into consideration, the Fair Tax would alleviate these issues, give the money back to the wage earner, and FIX the fiscal problems we currently find ourselves in.  What is the Fair Tax Act, you ask?  Allow me to outline it as best I can!  [go to http://www.fairtax.org for additional information…] (more…)

Frequently Asked Questions about the FairTax

Click on the questions below to view the answers.
View/Download FAQ in a Printer Friendly Format (PDF)

  1. What is taxed?
  2. Exactly what taxes are abolished?
  3. How does the rebate work?
  4. Why not just exempt food and medicine from the tax? Wouldn’t that be fair and simple?
  5. Is the 23% FairTax higher or lower when compared to the income taxes people pay today?
  6. Does the FairTax rate need to be much higher to be revenue neutral?
  7. How is the Social Security system affected?
  8. How does the FairTax affect Social Security reform?
  9. Is consumption a reliable source of revenue?
  10. How is the tax collected?
  11. Why is the FairTax better than our current system?
  12. Is the FairTax fair?
  13. How does the FairTax protect low-income families and individuals and retirees on fixed incomes?
  14. Is it fair for rich people to get the exact same FairTax rebate from the federal government as the poorest person in America?
  15. What about senior citizens and retired people?
  16. Are seniors taxed twice on savings, once when they saved it, and now again when the spend it?
  17. How does the FairTax affect wages and prices?
  18. Why not just exempt necessities from the FairTax instead of providing for a rebate?
  19. Should the government tax services?
  20. How does the FairTax affect income tax preparers, accountants, and many government employees?
  21. What about the home mortgage deduction?
  22. What will happen to charitable giving?
  23. Will corporations get a windfall with the abolition of the corporate tax?
  24. Does the FairTax burden the retail industry?
  25. How are state tax systems affected, and can states adequately collect a federal sales tax?
  26. How will the plan affect economic growth?
  27. What economic changes come at the retail level with the FairTax?
  28. What happens to interest rates?
  29. What happens to the stock market, mutual funds, and retirement funds?
  30. What happens to tax-free bonds?
  31. How does this affect U.S. competitiveness in foreign trade?
  32. What about border issues?
  33. Does the FairTax improve compliance and reduce evasion when compared to the current income tax?
  34. Can the FairTax really be passed into law?
  35. What other significant economies use such a tax plan?
  36. What about the flat tax? Would it be better and easier to pass?
  37. Can Congress just simply raise the rate once the FairTax is passed into law?
  38. Could we end up with both the FairTax and an income tax?
  39. Is the FairTax just another conservative tax scheme? Or just another liberal tax scheme?
  40. What assumptions have been made about government spending?
  41. How does the FairTax affect government spending?
  42. Why is it necessary to have a constitutional amendment?
  43. How does the income tax affect our economy?
  44. How will this plan affect compliance costs?
  45. What about value-added taxes (VATs), like they have in Europe and Canada? Are they not consumption taxes?
  46. What will we experience in the transition from the income tax to the FairTax?
  47. I know the FairTax rate is 23 percent when compared to current income taxes. What will the rate of the sales tax be at the retail counter?
  48. Since business purchases are not taxable, how does the FairTax keep individuals from pretending to have a business so they can buy things tax free?
  49. Is the FairTax progressive? Do the rich pay more and the poor pay less as a percentage of their spending?
  50. Is there any provision in the FairTax bill to prevent both an income tax and a sales tax?

FEDERALIST PAPERS – Federalist No. 21

Other Defects of the Present Confederation [For the Independent Journal.]

Author: Alexander Hamilton

To the People of the State of New York:

HAVING in the three last numbers taken a summary review of the principal

circumstances and events which have depicted the genius and fate of other confederate

governments, I shall now proceed in the enumeration of the most important of those

defects which have hitherto disappointed our hopes from the system established among

ourselves. To form a safe and satisfactory judgment of the proper remedy, it is absolutely

necessary that we should be well acquainted with the extent and malignity of the disease.

The next most palpable defect of the subsisting Confederation, is the total want of a

SANCTION to its laws. The United States, as now composed, have no powers to exact

obedience, or punish disobedience to their resolutions, either by pecuniary mulcts, by a

suspension or divestiture of privileges, or by any other constitutional mode. There is no

express delegation of authority to them to use force against delinquent members; and if

such a right should be ascribed to the federal head, as resulting from the nature of the

social compact between the States, it must be by inference and construction, in the face of

that part of the second article, by which it is declared, “that each State shall retain every

power, jurisdiction, and right, not EXPRESSLY delegated to the United States in

Congress assembled.” There is, doubtless, a striking absurdity in supposing that a right of

this kind does not exist, but we are reduced to the dilemma either of embracing that

supposition, preposterous as it may seem, or of contravening or explaining away a

provision, which has been of late a repeated theme of the eulogies of those who oppose

the new Constitution; and the want of which, in that plan, has been the subject of much

plausible animadversion, and severe criticism. If we are unwilling to impair the force of

this applauded provision, we shall be obliged to conclude, that the United States afford

the extraordinary spectacle of a government destitute even of the shadow of constitutional

power to enforce the execution of its own laws. It will appear, from the specimens which

have been cited, that the American Confederacy, in this particular, stands discriminated

from every other institution of a similar kind, and exhibits a new and unexampled

phenomenon in the political world. (more…)