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Ok, I'm reading this now..
http://geekpolitics.com/10-pros-and-cons-of-the-fair-tax/
Now what do you think of this comment? He makes some valid points, because we still have a lot of bills to pay, and it seems like the wealthiest will pay less taxes, so how do we pay for the wars, and the DOD? I admit that the Fair Tax does take a whole new radical approach. Not sure though if that "priced in" 22% would work like that either, and if our goods would cost the same..and the lowest wage earners already have these exemptions and entitlements ... I'm going to try to stay a little more objective, and read some more, while you find a moderator...it is interesting to read about and learn
A reader's Comment to above article
I’ve read a number of articles on the so called “fair tax” and it seems to me that there is an aggresive and vocal minority putting the most optimistic spin on a plan that would actually amount to a tax INCREASE for anyone making $25,000 to $1,000,000. That’s me and almost everyone I know. Also, it doesn’t address current deficit spending and where Clinton did balance budgets - Pres. Bush reversed course which makes this all the harder to implement. Deficit spending is not going away under Pres. Obama either. Then you have the expansion of taxable goods and services which would include rent, legal fees, utilities, Doctor bills, etc. under the fair tax’s proposed 100% base. Tough sale.
It’s an interesting theory that I was initially in favor of but upon further inspection it’s a free lunch for the poor and a handout to the super rich - all of whom will be able to live tax free as a percentage of their income. Also, never underestimate the ability of citizens to avoid paying taxes! Eventually people will end up paying a higher sales tax rate to make up for the shortfalls in avoided taxes and optimistic spending projections that may not occur. Given the roller coaster ride the nation has been on a the fuel pump in the last 12 months the pain at the pump would’ve been made worse by the massive tax increase the fair tax would impose on consumers. There is too much instabity in the market for the fair tax to work. I think for any fair tax plan to really work it would still need to include some income tax for the highest incomes and some market controls that most would rightly oppose out of principle. Like the saying goes, if it sounds too good to be true it probably is.
I agree we can do better. I think the fair tax is/was the answer to that.It's dead made to much sense to me for any political leaders to grab onto it. Corporate as well as the Unions are killing this country. I don't vote down the line. Neither party will lead this country back but the media won't give fair coverage to the independents( Yes Fox news is more imparcial then the lib networks). I support the teaparty though I don't always agree with it's leadership. This country needs them believe it or not they are the backbone of this country. They don't vote down the line either.
The poor built this country and deserve more. But the liberal policies aren't going to get them above poverty. I know several people that live below the poverty level. They could make a better living working for themselves. The tax system is to hard for them to understand. It's a great deterrant to starting your own business That's why the illegals have it so much easier. They can come over here and make more cutting grass then the typical factory worker. Pay no taxes and don't have to worry about the irs taking everything. The fact that the fairtax would have done away with the irs would have been a great stimulus to this country.
I only ran opinions on the fair tax because this board was dead..OK, I will concede that you know more about it than me..and I ran other opinions, and mine isn't completely formed, maybe to cause a stir. OK, I concede that also. I just like the idea of fairer taxes for those on the bottom, more demand in this country.. and the Country needs revenues no matter what. I mean this is the USA, we can do a helluva lot better, but we still have big plans, we are the leader of the free world. Trickle down is DOA, has been for a decade. It sounded like you wanted the teachers to take pay cuts...maybe all that blood money at the top has to take a cut..call me a lib, and say it like you really hate everyone to the left of you(if it feels good) but it's morally wrong to be at war for 9 years, and have it all on a Chinese credit card, while the wealth of the top 2% has more than tripled since 2004 and it wasn't Social Security's fault either (and that is the working man's main tax). It's been running surpluses for years, and also has had these surpluses raided annually. BTW, Union guys pay the most SS tax..and Aunt Mildred appreciates it!
TRY and answer a question. You replied to a year old post of mine. Apparently you wanted discussion. Yet all you do is spew half truths and make false accusations about me. No I didn't read the bill I skimmed it. I never claimed to be an expert on the bill. All I said about it where teachers got raises and food stamps got cut. Anything wrong about those statements. Hell no. They are in the bill. Everything you said about the fairtax was wrong dead wrong. Read it!!!!!!!!!!! You made false allegations about the fair tax. I called you on it and you have tried to change the subject. Tried to put words in my mouth. You SIR have done everything but tell lies. you should be admitting you had no idea what you were talking about when you spewed about the fairtax. Reasoning the apple doesn't fall far from the tree it pains me to now you came from a family of teachers. Good day. You obviously have nothing else to say about the fair tax!
I think nurse, truckdrivers and construction drivers do deserve better salaries. Where did you come up with that one? I know for a FACT that the wealth in this country was distributed from the middle class, and not to it. I pay regressive and a progressive taxes everyday. I could be objective without denigrating and stir debate by showing other arguments without labeling you either. The excesses of Capitalism cut in and reared it's ugly head pal, and the biggest chunks of fat lies at the top of the barrell..agreed?
deficit neutral..isn't that what you wanted? More money to educate our young. More teachers, smaller classrooms. Stimulates the economy. Personally, I wouldn't of cut the food stamps, because they stimulate the economy better,but there are bluedog Democrats in Congress. How about that corporate loophole part? Here's some highlights, looks like some people valuet these jobs, and others don't.
http://www.google.com/hostednews/ap/article/ALeqM5ibkvUXhJ5N4Gt8aysY7y8S62PyFwD9HGQGH00
The legislation provides $10 billion to school districts to rehire laid-off teachers or ensure that more teachers won't be let go before the new school year begins. The money could keep more than 160,000 teachers, including 16,000 in California and 14,000 in Texas, on the job, according to Education Department estimates
The other half of the bill has $16 billion for six more months of increased Medicaid payments to the states. That would free up money for states to meet other budget priorities, including keeping more than 150,000 police officers and other public workers on the payroll. Some three-fifths of states have already factored in the federal money in drawing up their budgets for the current fiscal year.
Finding ways to keep the border security bill budget neutral also held up action. Republicans sought to take unused money from the economic stimulus act, an idea rejected by Democrats, who eventually prevailed with a plan to raise fees for companies that import foreign workers into the United States by obtaining H-1B and other visas for highly skilled workers
The $600 million border security bill includes money to deploy 1,500 new enforcement agents along the border and make greater use of unmanned aerial drones for surveillance. Because of rules that revenue bills must originate in the House, the bill might have to go back to the Senate before being sent to Obama for his signature
Don't give me your lib trash-talkin' loudmouth unaccountable BULLSHIT either Mister..You think just because you can spout off your canned crap that I have to resort to your disrespectful nonsense..I will if you want to ..yeah you didn't read the bill to begin with, it's deficit neutral, yes you took the LOSER position on it. YES teachers would of been laid off, Fireman would have been laid off. I come from a family of teachers myself. Just don't give me your "anti-government I hate the working man crap" canned lines either. You come off exactly that way, because you categorize and blame others , but you don't have anything to blame me for. At least I was for balanced budgets in 2001, and paid for wars. I knew about every crisis coming ten years ago. I'm sure you were just as loud and wrong that time as well. What the hell have you been right about?
Why put words in my mouth? Is it because that's what libs do rather then answer questions? Where did I say I have anything against teachers. I sure don't have anything against my wife of 15 years who has taught for 18. I for damn sure never said I'm for the corporate Ceo getting rich at the expense of the rest of us. Let me ask you this. Why is the ZERO administration letting all these companies use depressed appraisals to steal the companies from shareholders. Never mind you won't answer and we all know he'll blame someone else.
I never said nor did I imply I wanted less teachers, fireman or police. You said I did. That's what libs with no valid arguement do. They "LIE". You lied.
Please try and answer a question instead of just trying to twist my words. Why do you think teachers, fireman, and police officers deserve more while nurses, truck drivers, and construction workers don't. Is it because ZERO said so. Perhaps you'ld rather take his word for then think for yourself.
Where is that? What country are you talking about? You mean if they sleep in their car, and have no family? Or live in their parent's basement? But if they have 3-4 children, what about food, diapers, school supplies, cough syrup, and medical supplies? So families should be taxed more than single persons? Traditional low to middle income married couples, where the wife raises the children, would then have to pay the most taxes.
What country is that? Right here in what used to be the good old USA. Neighbor makes 22k a year I would say she gets another 6k or a little more in child support as she is a single mother. She has $600 mortgage and $300 car payment. She gets by O.K Thanks to friends and family. She would get by much better if the fair tax was passed. The fair tax would give her an extra $2700 a year just in savings for those two non taxed bills. Not even mentioning the refunds issued monthly for the staples. READ what has been proposed in the fairtax. You're running your mouth about something you have no clue about. Once again read the proposed fairtax. Very clear not 13k pages of benefits for cronies in it. THe poor will not be taxed more. Read the fairtax and then try real hard to run the numbers. Stop listening to what the media and your art degree colleagues have to say and do the work yourself.
What do you have against teachers? You don't consider them as worthy as Corporate CEOs perhaps, and you want to drive down their salaries further? Many teachers in underprivileged schools pay for some school supplies, and books out of their own pocket. So the bill that was passed also kept on the job thousands of first responders. How much of a pay cut should these folks that you consider unworthy take? Or should we just terminate the cops and fireman in your neighborhood? The bill recently passed, did not add to the deficit, indeed a large part of it was paid for by closing a major corporate incentive to ship American jobs overseas. So you would have preferred having less teachers, or pushing them closer to poverty, and half the police and fireman, and then putting them on food stamps? And continue shipping more jobs overseas! Wow, that's amazing! Last I heard, the middle class 401Ks were raided by Corporate bigwigs, and their disposable income has declined significantly, while the gap between executive salaries, and blue collar workers has increased by 70 X! But then again, Marie Antoinette put your idea perfectly into words, shortly before she was beheaded, "Let them eat cake!" Looks like the wealth was already distributed upward to the highest 10% from every major study and observation.
no stocks says....Pretty nice of your hero the zero to cut food stamps to pay for more teachers. Why cann't they take a paycut like the rest of the country? Share the wealth right? Oh that's right the libs get campaign donations from the unions. Tell me how do the working poor like paying 30% of their income on a vehicle to drive to work. What when the people making them are no more skilled then they are but make 3-5 times as much annually. Why don't the libs spread the wealth????????????
"Chances are a person making 30k a year has 8k-16k going towards housing or car payments, Which are not taxed and wouldn't be under the "FAIR" tax. That's $2.5 -5k more to invest then they have now." --nostocks
Where is that? What country are you talking about? You mean if they sleep in their car, and have no family? Or live in their parent's basement? But if they have 3-4 children, what about food, diapers, school supplies, cough syrup, and medical supplies? So families should be taxed more than single persons? Traditional low to middle income married couples, where the wife raises the children, would then have to pay the most taxes.
The richest people that pay 5% of their income on housing would be exempt then from paying income taxes on all their properties and real estate investments, as well as all capital gains taxes? Then they are free to spend the money they want overseas instead to avoid further taxes. This plan doesn't sound like the prescription to a healthy US economy. It would only lead to even lower wages, and a further decline in American middle class wages.
By the way, we don't stereotype or assume anyone as typical on this board. We can assume people have the ability to think for themselves. I know it's harder to communicate, if you prefer to sound like a dittohead, but please try to do your best. Thanks
Typical lib response when faced with the facts.
As most libs you are very misguided. Read up on the fairtax before you start spouting off.
Tax credits will be issued for every wage earner up to 20k rather spent or not. You mention nothing about that. Most of the poor have no disposible income because they are in debt. Credit card bills car payments and mortgages are not taxed. Imagine how fast the poor could get out of debt(if they wished) with an extra 30% to put on their bills. The fair tax had it been taken seriously by the liberals. Could have been the stimulus needed to get this country going. Stop beleiving everything the libs tell you. Try thinking for yourself and doing a little research.
Chances are a person making 30k a year has 8k-16k going towards housing or car payments, Which are not taxed and wouldn't be under the "FAIR" tax. That's $2.5 -5k more to invest then they have now.
Pretty nice of your hero the zero to cut food stamps to pay for more teachers. Why cann't they take a paycut like the rest of the country? Share the wealth right? Oh that's right the libs get campaign donations from the unions. Tell me how do the working poor like paying 30% of their income on a vehicle to drive to work. What when the people making them are no more skilled then they are but make 3-5 times as much annually. Why don't the libs spread the wealth????????????
[b1. Working poor person - earns $30,000 a year - works paycheck to paycheck - spends it all on necessities - has 0% to invest tax-free under FairTax.
2. Middle class person - earns $70,000 a year - spends 80 percent on necessities - has 20% to invest tax-free under FairTax.
3. Rich person - earns $10,000,000 a year - spends 5 percent on necessities - has 95% to invest tax-free under FairTax. ]
U.S. Is Bankrupt and We Don't Even Know It: Laurence Kotlikoff
"......
Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”
But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: “The U.S. fiscal gap associated with today’s federal fiscal policy is huge for plausible discount rates.” It adds that “closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.”
The fiscal gap is the value today (the present value) of the difference between projected spending (including servicing official debt) and projected revenue in all future years."
http://www.bloomberg.com/news/2010-08-11/u-s-is-bankrupt-and-we-don-t-even-know-commentary-by-laurence-kotlikoff.html
Syndicated talk show host Neal Boortz and Congressman John Linder (R-GA) have joined forces to write a book on the FairTax Plan—a proposal to replace the current system of federal income taxes, corporate taxes, Social Security and Medicare taxes, capital gains taxes, gift taxes, and estate taxes with a national sales tax on new goods and services that does not reduce the government's overall tax revenue.
They have never been so right and never been so wrong.
Former attorney Boortz is the well-known Atlanta-based "libertarian" talk show host who, like Rush Limbaugh and Sean Hannity, spends an inordinate amount of time on the evils of liberalism, the Left, and the Democratic Party while turning a blind eye to big government Republicans and supporting Bush's "War on Terror." Boortz has drawn fire from Christians for his support of abortion and gay rights. He has also offended Southerners (he himself was born in Pennsylvania but was raised throughout the country as a "Marine brat") because of his negative comments about the Confederate flag.
Former dentist Linder represents Georgia's Seventh District, which includes the highly gerrymandered parts of five counties. He has been a member of the House of Representatives since 1992. Although Linder has received the designations "Hero of the Taxpayer," from Americans for Tax Reform, "Taxpayer Hero," from the Council for Citizens Against Government Waste, and "Tax Fighter," from the National Tax Limitation Committee, he is ranked by Congressional Quarterly as "among Bush's strongest supporters." Linder's claim to fame is that he is "the primary sponsor of the FairTax." He actually introduced the first FairTax bill in Congress back in July of 1999. It is interesting to note that his rating on The New American magazine's "Conservative Index" for his term in the 108th Congress was 45. For this same period, the universally acknowledged "taxpayer's friend," Ron Paul (R-TX), scored a perfect 100.
Since Boortz has previous writing experience, and his name appears in larger letters on the book's cover, I will refer to Boortz as the author of The FairTax Book. This is not, of course, meant to imply that Linder had no hand in writing the book. Linder himself says in "A Word from Congressman John Linder" that "the inflammatory and rude references come from Neal" while he "provided the intellectual backdrop that allows him to be outrageous."
The Evils of the Federal Tax System
Boortz is certainly right when he describes the evils of our current tax system:
Our current tax system is one that punishes the behaviors Americans value and rewards the behaviors we abhor. Those in our society who work hard and achieve are punished with taxes that approach confiscatory levels.
Politicians have managed to mold our tax code into an instrument designed not so much for raising revenue to fund the legitimate operations of government, as to control the behavior of individual Americans and corporations, and to give politicians levers to pull and buttons to push to buy votes when reelection time comes around.
The FairTax Book contains whole chapters on the hidden evils of the withholding tax ("Politicians love withholding because it gives them a chance to grab their 'share' of your earnings before you even see your paycheck."), corporate taxes ("Business and corporations merely collect the taxes from individuals and pass them on to the government."), the cost of compliance with the tax code ("In 2002 individuals, businesses, and nonprofits spent 5.8 billion hours complying with the tax code — an effort that cost an estimated $194 billion."), the embedded costs of taxes in all consumer goods and services ("When you buy that loaf of bread, you're paying a portion of all of the bills, including tax bills, of every person or business entity that had anything to do with that bread."), and corporations moving offshore ("They're moving for one simple reason: to escape a punishing tax structure here at home.").
The abuses of the IRS merit not only a full chapter, but are mentioned throughout the book. Indeed, one of the continually stated purposes of the FairTax proposal is to eliminate the IRS altogether. However, whether this would actually be the case remains to be seen.
But rather than just calling for the elimination of Social Security and Medicare taxes, withholding taxes, corporate taxes, gift taxes, estate taxes, capital gains taxes, and personal income taxes, Boortz proposes to replace all of these taxes with the FairTax.
The FairTax Plan
The FairTax Plan is currently pending in Congress under the name of "The Fair Tax Act of 2005." It is a consumption tax in the form of a national sales tax of 23 percent on new goods and services. Although it would "not be imposed on used or previously owned items," it would apply to all new goods and services: medical procedures, haircuts, new cars, new homes, gasoline, food, medicine, Internet purchases, and electricity.
The taxes currently imposed by the states would be unaffected by the FairTax Plan. Thus, states that impose a state income tax or a state sales tax would continue to collect those taxes.
The FairTax Plan would be administered through the states. However, this doesn't mean that individual businesses would not be dealing with the federal government. For acting as a tax collector for the federal government, both the states and the businesses that initially collect the national sales tax will be paid one quarter of 1 percent of what they collect.
But not only will all businesses receive a check from the federal government, so will all households. The FairTax plan includes a monthly check from the government called a "prebate" that reimburses each household for the taxes paid on "the basic necessities of life." These checks, which are based on "the government's published poverty levels for various-sized households," do not just go to the poor, they are "paid to everyone, rich and poor alike." Boortz cites as an example a married couple with two children receiving a monthly check for $492—regardless of their income.
Although the FairTax Plan would eliminate Social Security and Medicare taxes, it would not eliminate the programs. Boortz correctly explains that "under our current tax code, these programs can be maintained only by increasing the tax on those who work, reducing benefits for those who have retired, or by increasing the age of retirement." The FairTax Plan solves this problem because it would fund Social Security and Medicare out of general revenues.
So, instead of calling for the elimination of the various federal programs that feed off tax dollars, Boortz wants to merely change the way they are funded.
The Goals of the FairTax
Boortz tells us that the FairTax idea originated with the group Americans for Fair Taxation (AFFT). He says that "the goal of AFFT was to develop a system that would raise the same amount of revenue for the government as our current income tax system, but which would be less intrusive, abusive, coercive, and corrosive." This means that the FairTax idea should have been discarded at the very beginning, for instead of saying that it was not fair that the government confiscate 10, 20, 30, or 40 percent of a man's income, the FairTax proponents did not even begin to tackle the root of the problem: the welfare/warfare state that drives the federal leviathan's insatiable lust for the taxpayer's money.
Over and over again, Boortz emphasizes that the FairTax is "revenue neutral." The rate will be set "to ensure that the federal government—and all the programs within it, including Social Security and Medicare—will receive from the national retail sales tax exactly what they had been receiving under the current tax system." The FairTax is "simply a new and equitable method for raising the same amount of money our old and complicated code does today." It "isn't about cutting spending or changing government benefits. It's simply a plan to change the way Americans fund their federal government."
The FairTax is designed to simplify the tax code, increase compliance, and make the government more efficient at collecting taxes. It is not about reducing the overall tax burden one cent. The book should therefore be discarded upon reading this line on page two: "This book isn't about saving us a penny in taxes." Boortz has the proverbial cart before the horse. He wants to fight for "a simpler, clearer way to fund our federal government" before he fights for "tax cuts and lower government."
Boortz laments that tax evaders, tax avoiders, participants in the underground and shadow economies, and users of offshore financial centers aren't paying their fair share of taxes. He rejoices that the FairTax will eliminate the "cap on earnings subject to the levy for Social Security," thus forcing "the wealthy" to contribute their fair share. The FairTax will "recapture" the billions currently lost "from Internet and catalog sales."
We know that governments are notoriously inefficient at everything they do. But is this always a bad thing? Why would anyone want to make the government more efficient at collecting taxes? We want the government to be just as inefficient as possible when it comes to tax collections. Just like we want the government to be just as inefficient as possible when it comes to launching an aggressive war, violating the Bill of Rights, or punishing dissent.
The Claims of the FairTax
Boortz makes a lot of dubious, unsubstantiated claims for the FairTax that greatly exaggerate its benefits. He all but states that the FairTax will usher in the millennium.
The FairTax will not just increase economic growth, it will "send the American economy into warp drive." It will "bring a period of transformation and economic growth to America such as has never been seen before." "Millions of new jobs will be created." The FairTax will "double the size of the economy in the first fifteen years." After its implementation, "capital investment will increase quickly by a staggering 76 percent," "interest rates will decline by almost 30 percent," and "the economy will grow by 10.5 percent."
Although he disparages "soak the rich" sentiments and "economic class warfare," Boortz appeals to the poor and middle class. He contends that the FairTax will "create a financial bonanza for the poor and the middle class." It will "all but eliminate the tax burden on the middle class." The FairTax "would give the average income worker a 50 percent increase in take-home pay." The lowest income earners should support the FairTax because "for them it's all benefit and no burden." Correct, thanks to the prebate. For even though the purpose of the "prebate" is to cover "the basic necessities of life," Boortz acknowledges that there will be "money left over" for the poor "to invest in their own futures." The trouble with this is that the "money left over" belongs to someone else—"the rich" who will pay most of the taxes just like they do now.
Based on an unnamed study by Harvard economics professor Dale Jorgenson , Boortz maintains that the current price of consumer products includes embedded taxes of about 22 percent. Under the FairTax, these prices will "go down by roughly the same amount as the proposed FairTax rate of 23 percent." Consumers will be paying "at least 20 percent less for virtually everything they buy." A new home, even with the FairTax added to the price "may cost less than that home would have cost under our current tax structure." Everything will nearly be a wash, declares Boortz the economist. But not only does this ignore the basic laws of supply and demand, it is based on the fallacy that the costs of inputs in the production of a good determine the price of the output they produce.
The FairTax Plan is so good that even the states will want to adopt some form of it. The state governors that Boortz talked with said that under a national FairTax system, "They'd be very likely to eliminate state income taxes." Boortz's unnamed governors would also "welcome a move to taxing all goods and services with no exclusions or exemptions." Why, of course they would. They would welcome that right now, but could never get away with it. Naturally, Boortz maintains that with the addition of a tax on services, and with no exclusions or exemptions on any good or service, states would be able to reduce their sales tax rate "without losing a dime in revenue."
And then there are the "global implications of the FairTax." After the adoption of the FairTax, "foreign corporations will be compelled to build new plants in America" to remain competitive. Boortz envisions "the forward-thinking nations of the world" adopting "their own version of the FairTax," which will "spread freedom across the globe."
Is there any problem in the world that won't be fixed with the adoption of the FairTax?
The Lies of the FairTax
In addition to the unsubstantiated claims that Boortz makes for the FairTax, there are three ridiculous lies of the FairTax Plan.
Lie #1: taxes would be voluntary under the FairTax. In his discussion of the origins of the FairTax, Boortz says that the AFFT sought "a method of taxation that would be totally voluntary, that would allow all citizens to pay what they choose, when they choose, by how they choose to spend their money." Boortz has the audacity to say that "there is nothing coercive about the FairTax." It is "a truly voluntary tax system." The government should allow you to "keep your money in an investment account of some kind, earning interest for you, until you decide to pay taxes to the federal government." The FairTax would allow people to "judge for themselves when and how they're comfortable making taxable purchases."
Well, if the FairTax system is voluntary, and allows everyone to pay what they choose and when they choose, what happens if someone decides that they don't want to pay any taxes to the federal government? The same thing that happens now: fines and imprisonment. The FairTax is not a voluntary tax at all. The whole idea is a contradiction in terms. Boortz's statement about people keeping their money until "they're comfortable making taxable purchases" is ludicrous. There is no way to avoid buying new items. One can buy a used car, a used house, and used clothes, but one cannot purchase used food. One could argue that our present tax system is also voluntary: Don't earn any income and you won't have to pay any income taxes.
Lie #2:the FairTax rate would be 23 percent. Throughout the book, Boortz gives the FairTax rate as 23 percent. It is not until near the end of the book—in the chapter, "Questions and Objections"—that he admits it is really 30 percent. But even then he still insists it is 23 percent.
Those of us who were skeptical from the beginning noticed this when we got to page 84. There Boortz used the example of a single mother with two children spending $45 a week on groceries. He claims that the removal of the taxes currently embedded in the price would lower the cost of the groceries to $35.10 (a dubious proposition). But then he says: "Add the FairTax, and the groceries would cost $45.58. I learned in the sixth grade that if an item cost $35.10, and I add to it $10.48 in sales tax, then I paid a tax rate of almost 30 percent—not 23 percent. Boortz says in the "Questions and Objections" chapter that "critics of the FairTax have a way of dwelling on this 30 percent figure." I wonder why? Although Boortz explains that he is using an exclusive rate rather than an inclusive rate to figure the percentage, his "mathematical equivalent of a game of semantics" still results in a FairTax rate of 30 percent. This is why Boortz prefers the national sales tax to be included in the price of each item—so the consumer doesn't realize that he is really paying an extra 30 percent in sales tax, not Boortz's new math amount of 23 percent.
Lie #3: the FairTax would abolish the IRS. Boortz claims that his book is about transforming the nation by sending "one of its most hated institutions," the IRS, to "that place in the government guano heap of history." The goal of the FairTax is to "eliminate the IRS." Boortz even jokes about IRS agents working at a fast food restaurant after the FairTax is implemented.
Calling the IRS by another name doesn't mean that its functions will be eliminated. Just as the income tax will be replaced by the FairTax, so the IRS will be replaced by some other federal bureaucracy to oversee the collection of the FairTax. It should not be forgotten that the FairTax is a national sales tax. According to The Fair Tax Act of 2005:
There shall be in the Department of the Treasury a Sales Tax Bureau to administer the national sales tax in those States where it is required pursuant to section 404, and to discharge other Federal duties and powers relating to the national sales tax (including those required by sections 402, 403, and 405). The Office of Revenue Allocation shall be within the Sales Tax Bureau.
The Fair Tax Act also sets up a "Problem Resolution Office" and authorizes "problem resolution officers." There will even still be tax courts. Boortz himself also states: "We envision a department of the Treasury to deal with Internet and catalog sales, with stiff penalties for those selling into our communities who do not abide by the law." The FairTax will abolish the IRS in the same way that it will abolish the income tax—by replacing it with something else.
The Problems of the FairTax
Besides the fact that it doesn't lower the amount of taxes seized from the taxpayers by the federal government and is based on unsubstantiated claims and ridiculous lies, the FairTax is fraught with other problems. In his Introduction, Boortz says that this book will explain the FairTax in detail. He will walk us "through the plan step by step, detailing both the good and the bad." Since Boortz never gets to the bad, I here present seventeen problems with the FairTax.
Problem #1:The FairTax hides the amount of sales tax being paid. Boortz explains how "the FairTax was designed as what's called an 'inclusive' tax—that is, the tax is included in the list price of the product." He reasons that "since our current income taxes are figured on an inclusive basis—that is, they are taken out of our paychecks, not added to them—it was decided to handle the sales tax in exactly the same manner." How could someone write a whole chapter on the evils of the withholding tax and then turn around and recommend a hidden tax like the FairTax? Boortz even has the audacity to claim that with the FairTax the "consumer is completely aware of what he is paying." Really? Suppose the FairTax is implemented next year. Go stand in front of a store and ask the typical American how much federal sales tax he paid on the item he just bought for $139? Give him a calculator and ask him again. Unless he is familiar with figuring percentages, the average American will not be able to tell you how much sales tax he just paid.
Problem #2:The FairTax is progressive. Boortz correctly identifies a progressive income tax with Karl Marx. Yet, because of the prebate, the FairTax sets up a progressive tax system like we have now. Millions of Americans will pay no taxes at all. Others will have some of their taxes offset by the prebate. "The rich" will still be paying the majority of the taxes—something Boortz says he considers "class warfare."
Problem #3: The FairTax is an income redistribution scheme. Boortz calls the Earned Income Tax Credit "a prime conduit for income redistribution from high-income earners to the poor and middle class." Why, then, would he promote a FairTax Plan with a prebate that in essence allows the majority of citizens to not only pay no taxes, but in many cases gives them money over and above that which they paid in sales tax? What's fair about making "the rich" subsidize the poor and the middle class? Boortz calls Social Security an "income redistribution and welfare program." But under the FairTax Plan, Social Security is even worse. At least now it is funded by payroll tax contributions that are independent of deductions for federal income tax. Thanks to the prebate, many people will receive a free retirement program via Social Security who never contributed a dime towards their retirement, or as Boortz says: "All benefit and no burden."
Problem #4:The FairTax creates new tax collectors. From doctors and lawyers to garbage collectors and tree trimmers—multitudes of individuals and businesses that never collected taxes before will be turned into tax collectors for the federal government. Will a teenage babysitter be required to collect the FairTax from her neighbors?
Problem #5:The FairTax creates new taxes. All Internet purchases will be subject to the national sales tax. So will heart surgeries, kidney transplants, and appendectomies—plus the drugs prescribed by the doctors doing the procedures. Want to attend a baseball, football, or basketball game? Better save up a little extra to take care of the FairTax that will be imposed on your tickets.
Problem #6: The FairTax creates new taxpayers. If there are no exceptions and no exemptions then churches and other non-profits will be forced to pay a national sales tax on every purchase. The FairTax will basically do away with not-for-profit entities. The FairTax would also count as taxable the purchases made by federal, state, and local governments. This means the government will be using taxpayer money to pay taxes to itself.
Problem #7: The FairTax makes it easier for the federal government to raise taxes. All Congress has to do is slightly increase the initial 23 percent rate. A penny here, a penny there; a quarter of a cent now, a half of a cent later. Just a little at a time, of course. It might be to compensate for inflation, to give seniors a cost of living raise, or to pay for some manufactured crisis like bird flu . Since the federal budget goes up every year, and the FairTax is supposed to be "revenue neutral," the FairTax rate will have to go up right along with the federal budget. You can count on an increase every year, for if government budgets are not under control now, why should we expect Congress to magically become fiscally responsible just because the FairTax is adopted?
Furthermore, since Social Security and Medicare would be funded out of general revenues the FairTax rate would also have to go up to fund the ever-increasing cost of these programs. Then there are the escalating costs of the new prescription drug plan. And if the amount of the prebate "is updated every year to keep up with inflation," the FairTax rate will have to be raised in like manner. How can Boortz recognize that "there is absolutely no limit to the government's desire for your money" and then express hope that the FairTax rate "will go down in the future" if "Congress can keep government spending down"?
Problem #8: The FairTax makes it easier for state governments to raise taxes. In the name of simplicity and efficiency, the states would be inclined to follow the lead of the federal government. States that currently have no sales tax could add one. States that have exemptions on certain items could get rid of the exemptions so as to match the federal government. States that have no sales tax on services could begin taxing services like the federal FairTax Plan would do.
Problem #9: The FairTax has unknown and potentially huge transition costs. Boortz asks a good question: "How will the switch to the FairTax be made?" But then he gives a very naïve answer: "Cold turkey!" He explains that "on January 1, we'll begin to get our gross pay with no deductions." Boortz gives one "transition rule": The value of any inventory on hand December 31 can be used as a credit against collecting taxes in the next year." This should get accountants to work figuring out how to value each company's inventory the highest. Will it be specific identification, average cost, FIFO, or LIFO? But what if a company's fiscal year does not end on December 31? This will cause massive accounting problems. And especially for the federal government since the government's fiscal year begins on October 1.
Problem #10:The FairTax makes certain exceptions while supposedly having none. After saying that there are "no exclusions or exemptions" under the FairTax, Boortz specifically mentions exemptions for Internet access services and tuition. Therefore, his complaint that "exempting certain items—such as food and prescription drugs—would again open the door to an entire battalion of lobbyists to argue that the portion of the industry that they represent is clearly an essential product" is unjustified for he has already opened the door to that very thing.
Problem #11: The FairTax has great potential for fraud. Boortz envisions the prebate amount being issued to a card "like your bank debit card." Since every head of household would have one of these cards, there would be a great chance of criminals preying on people for their cards. There is also the possibility of counterfeiting, resulting in massive theft from the taxpayers. And since the FairTax only applies to new items, there will also be a tremendous incentive for new items to be reclassified as used or previously owned. Businesses could offer a slight increase in the price of a reclassified item in exchange for not having to charge customers the 23 percent national sales tax that would be due if the item was considered new. Enforcement of the "proper" classification of items would require an army of federal bureaucrats that would rival the IRS.
Problem #12:The FairTax has the potential to turn thousands of law-abiding Americans into criminals. Since the FairTax contains no exemption for even the smallest business, anyone who does not collect the FairTax on any good he produces or services he provides is breaking the law. Mow a yard—collect the tax. Babysit—collect the tax. Repair a car—collect the tax. If you don't collect the FairTax then you are a criminal. Once again, the FairTax would have a terrible enforcement problem.
Problem #13: The FairTax does not repeal the Sixteenth Amendment. When FairTax advocates discuss their plan, they talk as though the FairTax would result in the repeal of the Sixteenth Amendment that gave us the income tax. To his credit, Boortz doesn't make that mistake, but when many people read about "saying goodbye to the income tax," that is what they think. The FairTax bill now pending in Congress ( H.R. 25 in the House and the identical S. 25 in the Senate), repeals Subtitle A of the Internal Revenue Code of 1986 that relates to income taxes and self-employment taxes and Subtitle C that relates to payroll taxes and the withholding of income taxes.
The only mention of the Sixteenth Amendment in H.R. 25 is when it reports: "Congress further finds that the 16th amendment to the United States Constitution should be repealed." But to repeal Sixteenth Amendment would require a constitutional amendment. Are we to believe that Congress would vote to repeal the Sixteenth Amendment after the passage of the FairTax? And even if Congress did so it would still have to be sent to the states for approval by three-fourths of them.
So, barring the repeal of the Sixteenth Amendment, what is there to prevent an income tax from being imposed again after a national sales tax has been enacted? And what is to prevent any of the other taxes replaced by the FairTax being re-imposed due to some unanticipated budget shortfall or "crisis"?
Is Boortz that naïve to think that Congress will be satisfied with just the FairTax? And even if the Sixteenth Amendment was repealed after the imposition of the FairTax, any previous tax not on income could be brought back. Can Congress be trusted to do anything else? I can easily envision Congress proposing to lower the rate of the national sales tax in exchange for the addition of a supplemental Social Security tax because we need more money to fund Social Security. Then, a few years later, the national sales tax rate would be right back up to where it was before the "exchange."
Problem #14: The FairTax does not eliminate all federal taxes. Although it is implied throughout the book that the FairTax will be a replacement for the various federal taxes, there are some federal taxes that will still be with us under the FairTax. Even Boortz slips up one time and says that the FairTax would "replace virtually all personal and corporate taxes." Two examples of federal taxes that will still be with us under the FairTax are the excise tax on gasoline and the various taxes that one pays when purchasing an airline ticket. There is no mention of the federal gas tax anywhere in the Fair Tax Act of 2005. No list of taxes that are supposed to be eliminated under the FairTax includes the federal gas tax, which adds 18.4 cents to the price of a gallon of gas. So under the FairTax, we would have added to each gallon of gas federal excise tax, state excise tax, and federal sales tax. This is just the minimum. The states could also begin applying their sales tax to gasoline. A recent airline ticket I purchased had added to its price a federal excise tax of $15.28, a federal segment tax of $12.80, and a September 11th security fee of $10.00. And what about federal taxes on tobacco and alcohol? The FairTax will merely replace one visible tax with another while leaving intact the invisible ones.
Problem #15: The FairTax is not at all about lowering the amount of taxes the government collects. Boortz terms the FairTax a "tax reform measure, not a government reform measure." It "changes the way revenues are raised for the legitimate operations of the federal government." But if the FairTax raises the same amount of revenue to fund the same federal programs, then what does Boortz think the federal government does that is illegitimate? Is there anything he considers to be illegitimate? If so, then why would he expend so much energy on changing the way the federal government collects taxes instead of changing the amount that the federal government collects in taxes? The fundamental problem is clearly taxation, not the tax code. What is wrong with the federal government's tax code is not that it is too complex, but that it makes possible the almost $3 trillion a year that the federal government spends. As the French laissez-faire economist Jean-Baptiste Say (1767–1832) once said: "The best tax is always the lightest." Or, as our modern-day Say in Congress, Ron Paul (R-TX), says: "The real issue is total spending by government, not tax reform."
Problem #16: The FairTax doesn't even begin to address the root of the problem. Boortz does refer to Frank Chodorov (1887–1966), reminding us that he "once observed that, by enacting the income tax, the American government was proclaiming that all wealth belonged to the government, and whatever wealth the government did not seize from the person who created it should be looked on as a concession—a gift from the government." But Boortz doesn't quote Chodorov, and he gives no source that he is referencing. He subtly seems to imply that Chodorov was opposed to the income tax because it was an income tax and that, therefore, he might be inclined to support the FairTax if he were alive. But this couldn't possibly be true because Chodorov considered taxation itself to be robbery . How is justifying the federal government spending almost $3 trillion a year of the taxpayers money, as long as it is collected "fairly," any different from the viewpoint that Chodorov condemns? While making the case for not allowing exemptions from the FairTax for food, Boortz, in using the example of a wedding reception, inadvertently shows his true colors: "Would it be fair to allow a multimillionaire to spend $20,000 on food for a large wedding reception at his estate, and not pay any sales tax on that purchase?" Why, of course it would. It would be fairer than forcing the American people to pay a 23 percent national sales tax on every good and service they purchase.
Problem #17: The FairTax makes welfare universal. Millions of people who never took a dime from other taxpayers in the form of food stamps, SSI, AFDC, Medicaid, WIC, or housing assistance will now be on the federal dole via the prebate. The FairTax is welfare for the masses. It makes us all wards of the state. Perhaps it would be best, in the interest of equity and efficiency, if all the money Americans earned was just paid to the state and then distributed to every American in a "fair" manner. The government could just keep what it needed, redistribute what's left, and do it all without the FairTax.
The Fraud of the FairTax
The FairTax is not the solution. And because it allows the federal government to confiscate the wealth of American citizens less intrusively and more efficiently, it will become part of the problem—the problem of the ever-increasing, ever-intruding, ever-destroying welfare/warfare state. The FairTax is a fraud. Yet Boortz ties rejection of the FairTax to believing that America is a great country because of its government, "as so many politicians do." Politicians who oppose the FairTax do so because they "thrive on dependency."
The antidote to the fraud of the FairTax is a good dose of the wisdom of Murray Rothbard: "There can be no such thing as 'fairness in taxation.' Taxation is nothing but organized theft, and the concept of a 'fair tax' is therefore every bit as absurd as that of 'fair theft.'"
Boortz believes that the abolition of the income tax will make the bad day of April 15 "just another beautiful spring day." With its unsubstantiated claims, ridiculous lies, and numerous problems, the FairTax will ensure that everyday is a bad day, not just April 15.
http://mises.org/daily/1975
Monday, December 12, 2005 by Laurence M. Vance
I'm not going to waste my time with you. Go follow someone else around the hub. You bore me. Your information on subjects are wrong also taken from idiots who have no understanding of the facts. That bores me even more.
Have the last word.
I know how that makes you feel so right and important.
Life is to short for people like you.
Fair is Not Simple
Progressive & Regressive taxes describe taxes; not morals or political opinion. In a progressive tax, the more you earn, the higher your tax rate. In a regressive tax, the less you earn, the higher your tax rate. The classical progressive tax is income tax. The classical regressive tax is sales tax. Progressive taxes generally favor the poor, regressive taxes generally favor the rich.
Disposable income is the amount of an individual's total income left after taxes. This income is available to be "disposed of" as either spending or saving.
Discretionary income is equal to disposable income minus the cost of the fixed expenses of life (such as rent/mortgage, food, car payments, insurance, etc.) This is what is left over after you pay all your bills.
The working poor have no discretionary income. They buy the cheapest products available and there is no latitude in quality of goods purchased or services used. They usually live paycheck to paycheck with no savings. They pay 100 percent of their income just to earn a basic living but they don't pay much in taxes. That isn't fair but that's life.
Middle class people have some disposable income. If they live very cheaply, buy used products, and save, they can save discretionary income. They can buy things they wanted rather than just what they needed (better quality, larger, more expensive goods and services). The middle class pays 80 to 100 percent of their incomes for necessities plus they pay a modest amount of taxes. That isn't fair but that's life.
Wealthy people usually have much more than they need, and most of what they want, and are not suffering any kind of financial burdens. While it is possible for a billionaire to spend all his income on food and shelter, the top one percent of rich people spend only 5 to 10 percent of their incomes on living expenses. This leaves 90 to 95 percent of their money free for whatever purpose they can think of. They also pay a higher amount of taxes. That's not fair but that's life.
The clever but dishonest presentations of the FairTax Book never tell the reader that there are two tax rates that the FairTax is proposing. Under the old income tax, your individual tax rate varied but covered everyone's income (100 percent) minus deductions. Under the FairTax we have two tax rates: 1. A sales tax rate of 30 percent for everyone. 2. An income tax rate that depends entirely on how much you consume.
The fact is that the FairTax is a huge burden for the working poor (who are much above poverty but living paycheck to paycheck). Because they are living paycheck to paycheck, they consume 100 percent of what they earn to survive and have no money left over for tax-free investments so they are literally in the 100% tax bracket. Because all of their earnings are used to pay bills (consumption) they are taxed by the FairTax at 100 percent. However the FairTax is a huge burden for the middle-class because they spend 80 percent of what they make in consumption (and have about 20 percent or less for tax-free investing), so they are literally in the 80 percent tax bracket. As you might have guessed, the FairTax is only a nuisance for the top one percent. Since they save and invest most of what they get, and can invest all of it tax-free under the FairTax, and also transfer wealth tax-free under the FairTax, they are literally in the 5% tax bracket.
Virtually all mainstream economists will tell you that consumption taxes are the most regressive taxes and hurt the working poor and the middle classes.
Notice that we didn't bring up the whole prebate thing. We are talking about what percentage of consumption is taxed, not individual dollar amounts. We are concerned with what percentage is left over and can be tax free. We are not going to distort this moment of clarity. The working poor, the middle class and the rich all get exactly $187 as a prebate so they all cancel each other out in this comparison. Maybe if we use dollar amounts and the prebate, this unfairness can be illustrated with sparkling clarity.
BREAKDOWN OF FAIRTAX RATES INCLUDING PREBATE
1. Working poor person - earns $30,000 a year - works paycheck to paycheck - spends it all on necessities - has 0% to invest tax-free under FairTax.
2. Middle class person - earns $70,000 a year - spends 80 percent on necessities - has 20% to invest tax-free under FairTax.
3. Rich person - earns $10,000,000 a year - spends 5 percent on necessities - has 95% to invest tax-free under FairTax.
(INCOME plus PREBATE X 12 minus NECESSITIES) divided by INCOME mult by 100 equals PERCENT LEFT TAX RATE
1. ($30,000 + 187 x 12 - $30,000) / 30,000 X 100 = 7.5 92.5% working poor
2. ($70,000 + 187 X 12 - $56,000) / 70,000 X 100 = 23 77% middle
3. ($10M + 187 X 12 - $500,000) / 10M X 100 = 95 5% rich
But how can that be? I thought the tax rate was 23% (inclusive) for everyone. This is the little trick that the fair tax writers use to confuse you.
The generic exclusive tax rate is 30% on all consumption (sales tax) under the FairTax. The sales tax is the tax agent - not the income tax rate. The rate of consumption is vastly different among the working poor (100%), middle class (80%), and rich (5%). The FairTax proponents would have you believe that, in the above example, the tax was only 30% of $30,000 consumption ($9000) for the working poor person, and 30% of $500,000 consumption ($150000) and that's perfectly fair in their opinion. Even if you look at it like this the tax rate is 1% of the INCOME for the rich and the max (30%) of the INCOME for the working poor. They try to further blur the situation by subtracting (not adding like they should) prebates for monster sized families. That's why we kept it to one individual and not a large family. Mathematically speaking: The tax on a working poor person is "30 percent of 100 percent of their income." The tax on the rich is "30 percent of just 5 percent of their income." There isn't anything remotely equal or fair about that.
Even if you don't understand the entire concept presented, just take away one simple thing: The working poor spend everything they earn to live so they are taxed on everything they earn under the FairTax (and most would say "everything they earn" means 100 percent). The rich spend only a fraction of their income on consumption so that are taxed on very little of what they earn. In other words, under the FairTax the poor will pay taxes on 100 percent and the rich are taxed on only 5 percent (or less). Interpret that however you wish to.
Like the title of this section says, "Fair is Not Simple." One can clearly see, even with the deception and diversion of a so-called prebate, the tax shift to the working poor and middle class is crystal clear. Even worse, because the FairTax cuts the estate taxes, gift taxes, and capital gains taxes the $700 BILLION that will be lost to the treasury will still have to be made up. This can be done by borrowing, raising taxes, cutting social programs, cutting social security, or cutting the military. Since the amount is so huge, there will probably have to be a tax on top of the FairTax to fix things.
Don't be confused by Fair Tax supporters who use logic like this:
A poor family making $12,000 a year with seven kids VS a "rich" family making $75,000 a year with two kids. They both spend 30 percent on necessities. So in the end, with the prebates, the poor family with a bunch of kids actually pays less taxes. Here's what is wrong with that logic. Now if a family making $12,000 a year spent just 30% on necessities that means they spent just $3600 per year or $300 per month for all necessities. Will $300 per month cover rent + heat + electricity + phone + food + clothes + transportation for any family? Not only NO, but HELL NO. Many examples listed on pro-FairTax web sites completely neglect to tell you that the family of 4 living on $20,000 a year was also getting $15,000 in welfare payments. They arbitrarily set the poverty level too low because they fail to take into account that no person on earth can live at that level and still eat, pay rent, buy clothes, and go to the doctor, and they fail to take into account that the majority of people at the poverty level are on some kind of government assistance.
Here's the above example in real life: A poor family making $12,000 a year with seven kids. The poor person is living on welfare, getting food stamps, heating credits, free diapers and formula, free healthcare for the kids, and paying only $100 per month on rent in a low rent apartment complex. The person spends the entire $12,000 on consumption and pays (12,000 X 30 percent = 3600 in taxes). They receive a prebate for $3600 which the government immediately confiscates to offset the welfare payments. So in effect, they got no tax money back from their $12,000 and paid at the 100% tax level.
Here's an example of the No-Tax Plan that we propose: A poor person making $30,000 a year VS a middle class person making $75,000 per year VS a billionaire making $500,000,000 per year. The poor person pays zero in tax his whole life, The middle class person pays zero in tax his whole life. The billionaire pays zero in tax his whole life. Simple isn't it. Then when they die the poor person's heirs pay a 50 percent tax on what they inherit, the middle class person's heirs pay a 50 percent tax on what they inherit, and the billionaire's heirs pay a 50 percent tax on what they inherit. Fair and simple. Much better than the FairTax.
TIP: Be suspicious of any example the FairTax people give where the family is unusually poor and the circumstances don't fit with reality. Use an income like $30,000 where a working poor family is not accepting welfare or supplementing their income illegally to show the real effects of the FairTax. Also, $75,000 is not rich by any means. To really illustrate the nature of this horrible tax bill compare a middle class person to a billionaire to see how un-fair it actually is.
Why should the rich pay more?
As I said before, to be fair we should pay only for the amount of "government" we actually use. By far the primary users of the Department of Defense and Homeland Security are the rich. There isn't a terrorist in the world who would be interested in going after poor people or their assets. Cattle Ranchers feed their cattle off of public land for free. Timber companies harvest trees from public land for free. Oil companies extract oil from under American land for free. Miners dig minerals and ore from Americas mountains for free. Businessmen are allowed the privilege of owning a corporation and protection from liability as a free gift from the American people. Most people don't realize that corporations (as a form of business) are not a right - they are a privilege - and can be taken away. Power companies pollute our air. Paper companies pollute our water. Developers destroy the environment and wipe out the homes of many species. Factories pump carbon dioxide into the air and warm the planet. Other factories dump CFC's into the air and destroy the ozone in the atmosphere. Some companies have dumped and buried hazardous waste in the ground polluting the groundwater. Private cable companies string their lines over private property, private phone companies put their poles on private land and trim trees they don't own.
Is this all bad? Not entirely. It puts people to work, makes products cheaper, and helps the economy. No sane person would deny this. But it very clearly illustrates that the wealthy use a lot more than their fair share of Earth's resources, and should pay a proportional share for the wear and tear on America's land and resources. That translates into a higher share of taxes.
Wealth does have it's privileges too. Wealthy people have better representation in congress, better legal representation (how many rich people are in prison?), better access to the media, better access to health care, better access to opportunity, better access to education, perks from government (non-bid contracts, huge government contracts), perks from private industry (golden parachutes, wages 85 times higher than working class), use of public land, use of public airwaves, use of American natural resources. They can take advantage of tax-free investments that most Americans can't afford the minimum investment required.
There is implied power too. People that hire employees in America have an enormous amount of power compared to business owners in other advanced countries. In America, and a select few third world countries, employers are allowed to legally hire and fire for no reason, drug test, strip search, tap phones, and spy on employees. In America, there is nothing wrong [legally] with promoting someone for having sex with you, or firing someone because they are fat or have different political views. This kind of power and privilege doesn't exist in other advanced countries.
There are two types of wealth - new money and old money. New money comes from hard working entrepreneurs with great new ideas. They start businesses and put people to work. They earned their money with hard work and deserve to spend everything they make without any taxes. They are the true Americans - the leaders - the patriots.
Old money is money that has been passed on to the idle descendants of self-made people. This is free money. This is money the spoiled heirs didn't work for, didn't earn, didn't take risks for, didn't sacrifice for, and don't deserve. But because of some quirk in the law, they are allowed to simply "take over" these massive fortunes much like winning the lottery. Much of the really big fortunes that have been passed from generation to generation were created through slavery on huge plantations, or from the industrial robber barons who controlled giant monopolies and used their power, violence, deception, and dishonesty to manipulate markets and amass huge fortunes. This legacy of "blood money" and dishonesty is one force behind the crooked political push to eliminate the Estate Tax.
New money rich people will come out ahead no matter what tax system they happen to be under. It's because of how they think. They solve problems, they provide services, the fill needs. Self-made people will be rich no matter how progressive the tax system is. Old money rich people will lose under progressive tax systems. Those old-money idle rich who have no jobs and have been drawing money from bank accounts since they were very young will inevitably fail under anything but a protectionist (communist) system where the ruling class gets free money without paying taxes. America is not here to shore up the old money freeloaders and estate welfare queens. They need to get off their butts and work instead of spending all their time protecting their fortunes. The hard workers and big thinkers deserve to prosper, not the lazy whiners who spend their lives kissing ass so they get their chunk of money when their parents die.
How does one justify passing power, property and fortunes like an aristocracy of nobles? It's obviously anti-capitalistic and eliminates the free hand of competition. It also creates a societal problem of entitlement and greed. The people think they are entitled to money and power that someone else earned. They think that the world not only owes them a living, but that everyone owes them respect; respect that they didn't earn. These are the same whiners that call into conservative talk radio and whine about how the government is robbing them of something they didn't work for. These are the same little bastards that inherit a company from daddy and walk around with their noses in the air like they had something to do with the creation of the business. The look down at the intelligent poor who didn't have rich daddies and whine about taxes as if they are really hurting. We have no sympathy for their ilk.
When you tax the working poor you are hurting their ability to feed and clothe themselves. When you tax the middle class you are hurting their ability to educate and medicate themselves. When you tax the rich it just slows down their plans.
When you tax new goods and make used goods tax-free you hurt the economy. Why? Because big ticket used goods like houses, yachts, land, buildings, show cars, machinery, and equipment have very very long life spans. Houses can be used and viable for 200 years. Prime used land is viable forever. These big ticket items (owned mostly by the wealthy) will never be taxed again leaving a huge hole in the governments revenue.
Who Really Pays the Most Taxes. OR The Great Boortz, Hannity, and Limbaugh Mega-Lie.
Rush Limbaugh started the lie on his radio program many years ago and many hate radio disc jockeys have joined in since. What is this huge lie that seems to propagate on hate radio without any critical discussion or analysis? - Answer: It's the lie that the rich pay their fair share.
From time to time a caller to one of the right wing talk radio shows will make the observation that the rich don't pay their fair share or that the rich are getting richer while the poor are getting poorer. This usually results in the host pulling a chart of statistics and reading them like a script and then verbally abusing the person who called for making such a sacrilegious statement in the first place. A few ditto-heads will call in immediately following this and confirm that the host is right and that anybody that questions him is obviously a moron. There has never been a serious discussion of this topic on any show - radio or television. If you're lucky you'll hear the name of the chart - "US Individual Income Taxes Paid from Wages, Tips and Other Compensation" followed by the year. It was part of a series of propaganda charts ordered by the Bush administration in 2001 to justify his tax cuts to the wealthy. He has since ordered the Office of Budget and Management to publish these charts every year so that the conservative talk show hosts and his cronies will have something to point to when they make ridiculous claims about who pays their fair share.
This US government chart displays taxes paid on income from wages, salaries, and tips. It does NOT show interest income or taxes paid on interest income, trusts, and other major sources of wealth. Since the rich typically live off all-interest incomes, they don't even show up on the chart. With this information put into proper context, the chart clearly shows that the upper middle class, not the rich, pay the most taxes.
To add to the confusion, other charts (Bush's own OMB charts, charts from think tanks like the conservative Heritage Foundation or right-wing CATO Institute) break down the taxpayer into groups of quintiles based on income taxes paid (but not by the percentage of total income paid). This is like taking 100 people making 25,000 a year (each paying $5000 in taxes) and comparing them to 20 people making a million dollars a year (each paying $100,000 in taxes). See chart at left. If you add up what the poor people paid in taxes you get (100 x 5000) = $500,000. If you add up what the rich paid you get (20 x 100000) = $2,000.000. Added together they make a total of $2,500,000. So Hannity and Limbaugh will say that the top 16 percent (20 out of 120) pay 80 percent of all the tax money that was received ($2,000,000 out of $2,500,000)! Wholly Moses! The poor people are really getting away with something!!!! However, if you look at the income tax rate paid there is a different story. The poor person pays $5000 out of a total income of $25,000 so his tax rate is 20 PERCENT!!!! The rich guys pay 100,000 out of a total income of $1,000,000 making the rich persons tax rate only 10 PERCENT!!!! THIS IS HOW THE RICH DON'T PAY THEIR FAIR SHARE!
The real measure of fairness and "fair share" is the percentage that they pay of their income - not the percentage of everyone's taxes all rolled into a bunch. In this example the poor pay twice as much as a percentage of their income but the rich can still say they pay a higher percentage of the total of all taxes rolled together. So what does that statistic say in real life?
In real life, the tiny handful of MEGA-RICH pay a larger total amount when added all together - BUT they pay a much smaller percentage of their income and that is unfair. The rich typically pay between 5-11 percent of their income in taxes and the middle class and poor pay 15-35 percent (mainly because the rich have tax free investments, tax attorneys, tax lawyers, trusts, and tax shelters and the poor don't). The only thing that statistic shows is the huge difference between the rich and poor. If just one percent of the population paying only 10 percent of their income still eclipses all the other taxpayers combined, this just means the rich are getting ungodly rich and the poor are becoming miserably poor. You could easily demonstrate this at Walmart - all the taxes paid on all the paychecks of all the store workers of all the Walmart stores didn't add up to the taxes paid by Sam Walton (when he was alive) because he made so much more then they did all added together - even though he paid about 10 percent of his income in taxes. (Sam was in the top 1 percent of Income in America).
The only real statistic: The larger the difference in the total taxes paid by the top few percent and everyone else, the larger the difference between the haves and the have-nots. The poor are still paying a larger share of their meager incomes than the rich, but the difference in income is so unbelievably inconceivably huge that even small taxes on the still rich add up to more money than large taxes on the poor.
You can see how confusing it can be to determine who is paying what when you see chart like the one on the left that show all taxpayers contributions as a percentage of the whole without regard to what each is actually paying as a percentage of their income. On the left is a familiar chart put out by the Bush administration that lumps all income into selected groups as a percentage of the whole. On the right is the same chart with the incomes taken out to $500,000,000 dollars that shows the current system in blue and the FairTax in red. While all the money the rich pay in taxes added together make an impressive pot, they still pay a lot less under the FairTax. (Chart assumes a maximum tax rate of 35 percent for current system and is very conservative on how much the FairTax will really cost to make up for the gigantic losses in estate tax and capital gains taxes and what the actual tax rate will be to fully fund the government.)
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Proportional Tax / Proportional Justice
Let's do a little thought experiment and assume that everyone should pay an equal percentage for everything. So in this hypothetical world the poor, the middle class and the rich all pay the same 23 percent sales tax. However, to be fair, other things have to be adjusted too. If a poor man gets a speeding ticket and it costs him a weeks salary (say $150), then the same speeding ticket should cost a rich man the same percentage (say $15,000). If tickets to a ball game cost the poor man a day's wages then the rich man should pay accordingly (just to be fair). If an unexpected surgery costs a poor man 90 percent of his wealth (sell off his home etc) then the rich man who needs an operation should pay the same percentage. -IT'S ONLY FAIR! So be very careful when you talk about a percentage being the only fair way to tax people. This already is happening in Europe and it's great.
Maybe justice should be made proportional to the number of people you hurt or damaged. Would that mean that all the Enron management should be publicly beheaded because of the massive suffering they caused thousands of people? Maybe the management of publicly held corporations should be made answerable to each person that lost a job if they screwed up and had to lay off people. There are countless recent examples of corporate officers raiding pension funds.
--------------------------------------------------------------------------------
What did the Rich do with all Those Massive Tax Breaks from Reagan, Bush Sr. and Bush Jr.?
Did they invest the money in building American jobs for a better tomorrow? Did they make America a better place to live? Did they modernize existing factories to compete with foreigners? NOPE! They did exactly what Ross Perot said they would do. The took the money and ran to other countries. They used the money to move the factories and jobs to Mexico, China, and India where they could get prison labor and third-world wages totaling mere cents per hour for hard work which no American could work for. Ross Perot was dead-on about the "great sucking sound." Wealth knows no loyalty or patriotism in America. Nothing but a bunch of lousy traitors left America for the almighty buck.
Why did they go? Was it because of unfair taxes? NOPE. They left because labor was drastically cheaper - simple and straight to the point. You don't fix that with a sales tax like the FairTax. You fix that by taxing wealth (real property in America that can't be picked up and moved to a foreign country) and by creating (positive AND negative) incentives not to move businesses to foreign countries.
Paul Seigel said it best in his article in watchblog.com. You can see the bias towards capital up front in HR25 Section 2, Congressional Findings, where it lists reasons for the new bill. In addition to the usual fairness, raising standard of living and other innocuous reasons, it lists:
* will promote savings and investment
* will promote economic growth
* will increase investment
* will enhance productivity and international competitiveness
Nowhere does it say anything about workers. You'll notice, however, that "investment" is mentioned twice. This means capital. Economic growth, productivity and competitiveness are all related to capital, as well. So the purpose of the legislation is to enhance "capital formation," which corporate lobbyists have been promoting for years. They say that capital formation will lead to wage increases. Not necessarily. The more capital you have, the more automation you may buy to replace workers. The more capital you have, the more plants you may establish and downgrade employee benefits. The more capital you have, the more deals you may make with foreign countries to outsource your labor.
What about the generous rich / benefactors?
Yes, there are generous rich people that give large sums of money. The most generous Philanthropists in the world - are (according to NewsWeek) Bill Gates, Gordon and Betty Moore, and George Sorros. In fact, the top fifty list of the most generous philanthropists is full of people that are self made millionaires but the list is surprisingly short of people with inherited wealth. Warren Buffet wasn't mentioned but he was a great philanthropist also.
According to the Boston Foundation Report the most generous states are New York, Utah, California, Connecticut, Maryland, New Jersey, Georgia, Massachusetts, Hawaii and South Carolina. There you have it - pretty much split among the red and blue states. The most generous philanthropists all have something in common - a sense that money has responsibility and a love for their fellow man.
The love of money, which the bible calls the root of all evil, is exactly why bad people try to manipulate the law so that more money goes to rich people who don't need it and less money goes to the poor who actually need it. There is nothing wrong with working hard and being rich. There is something terribly wrong with getting free welfare money via inheritance or gifts and manipulating the laws to keep that money in the family. There is also something terribly wrong with pseudo-philanthropy. That is, if you didn't earn it, you are not being generous when you give small amounts of money away. To be generous, a heir should be willing to part with a substantial portion of his ill gotten gains. It's too bad that most will not.
When a wealthy person offers a scholarship to a poor kid, a blind kid, or disabled person they are being generous. When a wealthy person offers a scholarship under a condition of taking a certain curriculum, or belonging to a specific group they are not generous. When a man gives money to a college to have his name on a building, that is not generosity. When a group of people give food to starving Africans in exchange for them converting to a particular religion, that is not charity. True philanthropy requires no quid pro quo.
--------------------------------------------------------------------------------
Isn't this just a bunch of "rich envy"?
We have anticipated that some right-wing, bible-thumping, NASCAR-watching Boortz conservative right out of the movie "Deliverance" would make that statement. That's why we are going to break it down just for them into nice easy chunks.
Question: Should a person who has a good idea, starts a company, puts people to work, works hard, and makes a lot of money be able to keep it and pay no taxes?
Answer: Hell Yes.
Now pay close attention to the next question.
Question: Should the spoiled, pampered offspring of a self-made man be allowed to get his parent's money and property, totally tax free without ever working for it or earning it just because he was ripped out of the right crotch at birth? (and maybe even run for president some day?)
Answer: Hell NO.
It never ceases to amaze how many right wing sheep equate anything that has to do with providing money for the common good with communism. These mindless drones parrot this talking point without thinking and after years of conditioning by right wing media. If things like public healthcare, social security, public roads, etc. are all under the banner of "communism" because they pool public funds to support the public good, then the biggest "communist" organization in America is the US military. Following this same logic, all public corporations are "communist" because citizens give up the right to go after personal assets for the public good. No, the real "communism" is giving people control of property, businesses, and money not because they worked for it, but because they fell out of the right crotch at birth.
It's not about playing Robin Hood and taking from the rich and giving to the poor. It's not about redistributing the wealth, communism, jealously, or any other reason only greedy people can understand. This movement and the NO TAX PLAN is all about justice. It is about social and economic justice. It's about righting wrongs, and halting mindless traditions that do not make economic sense. What is the purpose of keeping America as a country? Answer: To do justice to the potential of all of it's citizens. This justice may take the form of correcting past misdeeds, creating an America where people get the freedom to use everything they earn on their own potentials rather than working to protect the foreign assets of those who would repress them, and creating an America that says to those who would promote violence and war, you must now pay for it from your own pocket.
As you will see in our Tax Alternatives section. It's not fair to tax money that is earned and worked hard for (like the FairTax does). But it is absolutely fair to tax money that isn't earned and isn't worked for.
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The Myth of the Death Tax
The term "Death Tax" is a slogan born in the halls of the conservative think tanks. A better name might be "Paris Hilton Tax" or "Unearned Free Money Tax" or even "Billionaire Tax". It's unfortunate that so many in the conservative media are using the term "death tax" as a clever distortion to the true nature of the Estate Tax. The tax is actually paid by less than 12 thousand millionaires and billionaires out of over 300 million hard working Americans. It accounts for approximately $750 billion dollars in revenue annually. I guess death is a scary term and the Conservatives are good at scaring people.
A few anti-estate-tax dimwits insist that a tax has already been paid and that the recently deceased is being taxed twice. The flaw in this argument is obvious - the person receiving the thing of value is being taxed - not the giver. The anti-estate-tax fanatics are implying that there is some kind of liability for the giver. The estate tax is no different than having to pay taxes on prizes or lottery winnings. Having to pay taxes on a car you won on a game show is not the equivalent of double taxation on the TV show producers. Sorry, there's no taxation without respiration.
The estate tax does not "take money from the dead" nor does it "take money from young children". It simply makes older adult heirs pay a small amount of taxes on large windfalls of money they are getting as a free gift. An estate has to be gigantic for the estate tax to even kick in. This money that the estate provides is income; this is an indisputable fact. Some wealthy people think they shouldn't have to pay income taxes like the working poor do. Who do these people think they are -- Leona Helmsley? No matter where the money comes from it is still income and it should be taxed. The estate tax is 35% for amounts over 2.2 million.
Another common myth about the estate tax is it's effect on small farmers. Many a conservative pundit has been called on the carpet for uttering this myth. The first response is usually "name a farmer that lost his farm to the estate tax." None have ever been able to. The image that they want to portray is the one made famous in the PBS documentary "The Farmers Wife" where a farmer had almost lost his farm, almost lost his marriage, and had to sell most of his farm equipment because of crop failure and bad markets. Luckily, they lived happily ever after. The fact is that the vast majority of us small farmers don't buy $100,000 equipment - they rent it during planting and harvesting. Anyone who can afford a $100,000 combine is definitely NOT a small farmer. A small farmer by the most common definition is one who farms under 300 acres. Only large scale corporations own farms larger than that.
Most small "Mom and Pop" business are also too small for the estate tax to kick in. When anti-estate-tax lobbyists talk about "Mom and Pop" business they usually mean large family held corporations like Coors Beer, Mars candy, Fidelity investments, Gulf Oil, Warner Music, etc. These companies are passed from generation to generation and have no resemblance to a "Mom and Pop" shop.
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The Myth of the Underground Economy
The so-called Underground Economy where cash transactions take place will not be cured by the FairTax Plan. The thinking becomes muddled when you don't look at the big picture. It's a fact that drug dealers, prostitutes, and other assorted criminal types do a lot of cash-based transactions, but contrary to popular belief, this does not take place in a vacuum. When a criminal eats at McDonalds he still pay sales taxes. When a gang-banger wants some new bling or the latest shoes he pays taxes. When a prostitute rents an apartment she pays a portion of the property taxes. Is this going to change under the fair tax? No. The drug lord will still buy a Lexus and the shady car dealer will still pay the FairTax for him (or not collect it). If the drug lord buys a used Caddy then the point is moot because there is no tax on used goods. Money for cocaine will still be redirected out of the country and laundered through American banks. Nothing changes.
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The Myth of Revenue Neutral Taxing
The FairTax supporters will always point to the FairTax Book and tell you that all the facts, figures, arguments, evidence, and financial data needed to make the FairTax viable were all worked out in a $23 million dollar study done by respected economists, and college professors, and this information is as plain as the nose on your face. However, none of these studies have been published!! Considering the right-wing think tanks and other hand selected professors that supposedly did these studies are very biased to begin with, then where the hell is the data to say this plan will work? It should have been fairly easy to come up with volumes of data with everyone in the room agreeing with each other. For $23 million there should be millions of pages of data but they refuse to show their work. Most people on the other side of the FairTax believe that either the studies were never done or the methodologies and reasoning wouldn't stand up to unbiased review. In fact, the US government's own study of retail sales taxes says national sales taxes don't work and would have to be nearly 50% to make up for our current system. One has to pick and choose what facts to believe.
Ask yourself the following:
1. Who came up with the idea? Three greedy billionaires wanting to cancel all taxes on wealth - inheritance, gifts, capital gains.
2. Who promoted the idea and wrote the book? A right-wing disc jockey - part of hate radio.
3. Who came up with the bill? A conservative bigoted congressman.
4. Who came up with the details? Right-wing think tanks.
5. Where's the proof it will work? Supposedly in a secret unpublished study.
6. What is the only thing we know for sure? It won't cut taxes and it's extremely regressive..
7. How is the 700 billion in estate, gift, and capital gains taxes going to be made up? The middle class.
8. What if people just keep buying used? Taxes will have to go up.
The FairTax supporters, without the aid of a published study or evidence to back them up, have said that the Federal Government collected $1.6 trillion in tax revenue in 2003 from the income tax. So, in order to be revenue neutral, the FairTax would simply have to raise $1.6 trillion. Given that, what should the FairTax tax rate be? According to FairTax proponents, the US economy produced goods and services equivalent to $11 Trillion that year, and consumption was $9.5 trillion. So, in order to get the revenue neutral amount, simply divide the $1.6 trillion by the $9.5 trillion. You will come up with 0.175, or 17.6%. You factor in the rebate, and the tax rate is 23%.
What's wrong with that thinking? In 2003 we had a deficit of around $375 billion, the highest in history up to that time. Saying that we could match revenue for that year by using a 23% rate means that by definition the rate is too low to fund the government and would result in another $375 billion in borrowing. The deficit for 2004 was $477 billion, and the deficit for 2005 was as high as $760 billion. The FairTax doesn't address the huge debt spending or the prospect of actually paying off some of the federal debt. To be revenue neutral as a replacement for the current system it would have to include the normal debt spending. The FairTax is not real tax reform. Real tax reform must start with a balanced budget.
The FairTax as written would only lead to a huge budget deficit. This can only be dismissed by cutting benefits, borrowing, printing money, or raising taxes.
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The Myth of Big Government
Another claim of the FairTax proponents is that the FairTax plan will somehow end Big Government. Conveniently however, they fail to define exactly what "big government" is, what makes it big, and exactly what's wrong with being big.
As far as federal workforce is concerned, the US government is at a fifty year low in the number of full time federal employees. It is, however, at an all time high for government contractors. After the cold war ended the government started massive privatization of any function that wasn’t inherently governmental, awarding private contracts for everything from janitorial services to security guards, to computer programmers, to contracting out security clearance investigation services. The number of federal workers has shrunk and the average age of a federal employee as of 2006 is 49 years old. The number of contractors is way up at nearly fifty percent of the workforce. Since politicians only count federal employees, they are implying that the government has shrunk by half since the mid eighties and take credit for it at every opportunity.
Is big government bad? It depends on who you talk to. Good big government inspects our meat, our water, our medicine so that we aren’t harmed by businesses that want to cut corners. Good big government defends us, and allows us to settle our grievances with each other via a legal system rather than shooting it out in the street.
Does the government (big or little) rob the average American? Yes. Bad government robs us through subsidies, mandates, targeted tax breaks, prohibitions, eminent domain takings, bailouts, loans and loan forgiveness, as well as regulations. It robs us of our freedom and liberty when we are forced to endure anti-terrorism restrictions, body searches, loss of privacy, and wire-tapping, for an event that has less chance of happening that an asteroid hitting the Earth. It robs us of our core American values and identity as peace-loving, freedom-loving people when our own government kidnaps and tortures innocent human beings. And each time it happens, we all sacrifice a little bit of our freedom.
The FairTax Plan does nothing to cure any of this robbing of liberty, freedom, and income. In fact, The FairTax encourages give-backs to the wealthiest and corporate welfare. What is wrong with corporate welfare, exactly? To begin with, corporate welfare allocates resources according to political favor, while free markets allocate resources according to individual choice. Second, corporate welfare creates power for politicians, giving them control over our liberty and property makes them targets for bribery. The FairTax firmly hands over power and money to the wealthiest creating a permanent ruling class a permanent poverty among the poorest.
http://fairtaxfraud.com/fair.asp
Still getting emails about it now and then. Lets face it though it's going to be hard to change.
The people who keep blocking it, calling it wrong and other ignorant words are the ones more then likely who love the loop holes or to cheat on their taxes thus the opposition to the most fair way to tax people ever.
Here in Washington State even after the voters said no to new taxes without a vote the criminal Governor we have here said it was an emergency and had to tax us some more.
She forgot the part about her and the cartel she is a part of their lack of stewardship of our tax $$$. In fact we are one of only a few states that don't collect taxes from the Indian casinos. Of course they give her and her cartel quite the election payoff every year. yet we continue to be taxed to death.
most people found out that the fair tax was an ignorant idea.
Hey what ever happened to the fair tax? Just noticed the board tonight. Last I heard the Mo. house had passed it June/July maybe. Hadn't seen anything on it for awhile.
Dear FairTax supporter,
I'm pleased to report we have a powerful new feature available on the FairTax.org site: An Internet toolbar that automatically generates funds for the FairTax cause at no cost to you! The toolbar will appear on your Web browser and every time you use it to search the Internet or make an online purchase, it will generate money for the FairTax cause.
Download our new toolbar at www.fairtax.org/toolbar and start raising money today for the FairTax!
With the FairTax.org toolbar, you will also receive breaking FairTax news, updates, and messages. You can even directly link back to the site for more information on how to take additional actions such as contacting Congress to support our critical fight for the FairTax.
The FairTax.org toolbar is completely free to use, and is designed to help you support the cause quickly and easily. All you need to do is download and install the toolbar--which takes just two minutes--to your Internet Explorer or Firefox browser and immediately you will begin raising money without opening your wallet. It's that simple.
So thank you in advance for downloading the toolbar at www.fairtax.org/toolbar and helping to support the FairTax, the real and permanent economic stimulus that we need now more than ever.
Sincerely,
Ken Hoagland
National Director
Pelosi's Swamp - The American people need to awaken, quickly, to the unpleasant reality
that a majority of those who claim to "represent" them before the government
of the United States on election day don't even try to
represent them.
They actively represent the big money donors who are allowed
to actually write legislation that benefits them and
obligates the taxpayers to foot the bill.
(Legislation, by the way, that the donor paid for "at the door" with his contributions to
the campaign coffers of the politicians whose name graces the bill,
or who was the primary sponsor of the legislation.).......
http://www.newswithviews.com/Ryter/jon286.htm
by Jon Christian Ryter
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=38170827
The More that I look into this, the more I like it. Seems Fair to me. Nice board here...
Where Frank McEnulty stands on the Issues:
Frank McEnulty stands behind his beliefs and challenges all other candidates for the Presidency to state where they stand so that the voting public can clearly see what the other candidates believe in.
I believe we pay enough in taxes and need to better manage our money and simplify the tax system.
I believe people should take responsibility for their own actions and their own lives.
I believe that that we need comprehensive immigration reform based on strict enforcement of the immigration laws currently in place.
I believe the United States should not try to be the world’s savior, but has the moral obligation to "help" where and when it can do so at the request of the local people.
I believe in God, family and country and that they belong together.
I believe that the President of the United States should put America - not his or her political party - first. The President is an American before a Republican or Democrat.
I believe that our military should never be used for political purposes, political gain or to advance an agenda.
I believe that all people are created equal and that all people should be able to be equal in all things.
I believe in a strong separation between the branches of the Federal Government and in strong state’s rights.
I believe that judges should be judges and leave the passing and changing of laws to the politicians we have elected to do those jobs.
I believe that people are truly entitled to life, liberty and the pursuit of happiness, but that no one is entitled to much beyond that unless they work to earn it themselves.
I believe that political correctness is a real threat to open and honest dialogue.
I believe “Anything is Possible in America” and if we all work together for the common good it will continue to be that way.
As I continue down my campaign path I will expand further on the above and other beliefs. It’s hard to actually believe based on the reporting in the news media, but the election is still over 18 months away and a lot can happen in that period of time. I am encouraged every day by the people I hear from that tell me I am on the right track and I strongly believe that if everyone continues to help me get the word out we can and will make a difference in the next election.
A lot of the political talking-heads claim that the final Presidential candidates may be people that aren’t even on the national consciousness just yet. With continued effort and your help, there’s a good chance they will be talking about my campaign in the next year on the major news outlets.
Thanks
Frank McEnulty
frank@frankforpresident.org
www.frankforpresident.org
repeal of the 16th Amendment?? Why would you want to repeal something that was never legally passed to begin with... the 16th amendment was NEVER ratified.
to get out of the grand old Hoax need to do some homework
http://patriotnetwork.info/
all those think tanks in your Page are part of the banksters system, why would you go to them when they help continue the fraud against the American People.
My name is Frank McEnulty and I am running as an independent candidate for President of the United States in 2008. Crazy right? Well maybe, but I am just way too fed up with how the two major parties are running (or should I say ruining) politics in this country and I feel the need to try and do something about it.
Please visit my website at www.frankforpresident.org
I’ve noticed over the past several years that most of the political ads are pushing a party, rather than ideas or an individual. “Vote for me, I’m a Republican” or “Vote for me, I’m a Democrat” is all one seems to hear any more. What do these people stand for? Nothing until the party tells them to or else they get cut off from the fountain of money.
Do these candidates have independent thoughts? Maybe, but they never voice them in public because it might not be in line with party doctrine.
Do they ever vote for a bill, law or policy because it is the right thing to do for the country? Only if the party tells them it is okay to do so.
Usually, if a Republican introduces a piece of legislation it must be wrong per the Democrats because the Democrats didn’t come up with it.
Usually, if a Democrat introduces a piece of legislation it must be wrong per the Republicans because the Republicans didn’t come up with it.
What’s wrong with just working together to do what is right for the country regardless of what party you are affiliated with?
If you’re as disillusioned with how the political process seems to be working as I am let’s get together and make them see how upset we are. None of us can do it by ourselves, but if enough of us band together we can and will make them sit up and take notice.
Please visit my website and pass this email along to all your family members and friends, co-workers and everyone else you know.
Together we will make a difference because:
“ANYTHING IS POSSIBLE IN AMERICA”
Sincerely,
Frank McEnulty
Presidential Candidate
www.frankforpresident.org
To 'bartermania' on 'Americans for Fair Taxation' -
Democrats seize control of House
Guests cheer as early election results
are announced at the Democratic
Congressional Campaign Committee election
night party in Washington -
The Democrats are celebrating gains
in the House and Senate
Key winners
Democrats have won control of the US House
of Representatives in mid-term polls,
for the first time in 12 years.
But the majority in the Senate now rests
on two states where the race is too close to call -
in one, Montana, the Democrats lead by only 1,700 votes.
http://news.bbc.co.uk/2/hi/americas/6127216.stm
Israeli city hit by rocket fire -
Palestinians view a destroyed mosque -
in Beit Hanoun -
Palestinians said the Israeli operation -
was their "tsunami" -
Suspected Palestinian militants -
from northern Gaza have launched -
at least four rockets into the Israeli -
coastal city of Ashkelon, the army says -
No-one was hurt in the blasts -
which came hours after Israeli troops -
pulled out of the nearby town of Beit Hanoun -
following a six-day operation there -
The operation was launched to stop Palestinian -
rocket attacks into Israel -
http://news.bbc.co.uk/2/hi/middle_east/6126282.stm
Iranian Shahab-3 missile displayed at military parade -
The Shahab-3 is thought capable of striking Israel -
Iran's military has fired dozens of missiles -
during a military exercise in central Iran -
state-run TV reported -
The missiles included the Shahab-3 -
which has a 2,000km (1,240 mile) range -
and the Shahab-2 -
which can carry cluster bombs -
the report said -
Analysts say the Shahab-3 is capable of hitting Israel -
and US military bases in the Gulf -
The missile tests come at the start of 10 days -
of military manoeuvres planned across the country -
http://news.bbc.co.uk/2/hi/middle_east/6108696.stm
Interest Time Bomb - for fiat$$ -
The numbers for fiscal 2006 -
are in and the bleak prospects of our exponentially
escalating interest expense bodes particularly ill
toward any hopes of balancing any future budgets -
Interest expense on our debt for fiscal 2006 -
totaled 405 billion -
blowing away the next highest interest expense
total in 1998 of 363 billion -
At 405 billion, interest expense for 2006 -
composed a whopping 70% of our total on-budget deficit -
for the fiscal year -
What will happen to this debt -
now that higher average interest rates are required -
to service our national debt to the banksters -
following 14 consecutive Fed rate hikes? -
Average issued debt maturity is just 55 months -
(and getting time shorter) -
http://www.babylontoday.com/#interest_time_bomb
http://www.babylontoday.com/4e0f4730.png
With total U.S. debt at 8.506 trillion dollars -
this resulted in an on-budget deficit for 2006 -
of 574 billion -
the second largest in our nation's history -
just 22 billion under the all time record deficit -
set in 2004 -
The very next reported day -
the first day of the new fiscal year
(October 2, 2006) -
U.S. debt increased by over 42 billion dollars -
If this had been added to the reporting day before -
the total deficit for 2006 would have shot up to 616 billion -
blowing away the former all time record deficit of 2004 -
by 20 billion dollars -
Banking cartel cabals info -
(biggest scams in the history) -
http://www.netcastdaily.com/broadcast/fsn2006-1028-2b.m3u
http://www.babylontoday.com/4dd82ae0.png
Here is a chart of monthly banksters debt increase -
Hyperinflation will soon wipe out our fiat$$ -
a billionen maybe bought a loaf of bread -
the same banks printing the fiat$$ today -
http://econc10.bu.edu/Ec341_money/Papers/Hubbard_paper.htm
history often repeat itself -
What is the REAL Value of Gold? -
Shouldn't there be A LOT more Gold than this? -
See below or go to
http://www.fms.treas.gov/gold/current.html
Are they hiding it? -
If this is "all" the Gold there is in -
The Dept of Treasury -
some 11 billion "dollars" worth -
wouldn't the TRUE value of an ounce of Gold -
be calculated by establishing - the Ratio of Gold -
to FRNs and then determining how many ounces of Gold
should be equal to an FRN? -
In other words, we're not interested in knowing -
how many so-called "dollars" each ounce of Gold -
is "worth" but how many ounces of Gold -
there are out there FOR each fiat FRN -
in existence -
Using the below data,
this would be calculated by:
261,498,899 Oz / $11,041,058,821 = 2.61 X 10 ^ 8 / 1.10 X 10 ^10 = 2.37 X 10 ^ -2 Oz per FRN
Thus each FRN in the US -
is really only worth .0237 fine troy ounces of silver.
Once we get the number of FRNs
and other cash equivalents in circulation in the US -
we should be able to calculate the REAL value of Gold -
- not the bogus value foisted upon us by
gov propaganda agencies.
It's a simple step to then extrapolate this date
to the WW scene, no?
James Jaeger
Missing 7 Trillion Dollar -
Bubble Man: Alan Greenspan and the Missing 7 Trillion Dollars
Former Federal Reserve chairman Alan Greenspan's famous 1996
pronouncement that an "irrational exuberance" had gripped
the American stock market was premature;
the markets continued to climb, reaching an exceptional peak
in March 2000 before sliding into a $7.8 trillion collapse -
Banking cartel cabals info -
(biggest scams in the history) -
http://www.netcastdaily.com/broadcast/fsn2006-1028-2b.m3u
Gold - UCOI - US pennyplay -
Unico, Inc. *** NEWS *** Photo Gallery of the Mill -
and Processing Facility at
The Deer Trail Mine - of Recent Reconstruction -
-
http://www.unicomining.com/news/othermedia.php
http://www.investorshub.com/boards/board.asp?board_id=6582
with a level playingfield and
a more fair price -
without nss 666 manipulations -
--------------------------------
FYI. -
The anti-American and anti-Canada -
watch the nightmarish full movie here.....
http://www.projectblack.com/index.php?optionfiltered=content&task=view&id=19
911 Eyewitness -
http://video.google.com/videoplay?docid=-3762231166802308548
http://www.moneyfiles.org/
God Bless
http://www.888c.com/
>
REMINDER to VOTE today folks!
That is no lie. Great joke. LMFAO
A little boy wanted $100.00 very badly and prayed for weeks, but nothing happened.
~ Then he decided to write God a letter requesting the $100.00.
~ When The postal authorities received the letter to God , USA , they decided to send it to the President.
~ The president was so amused that he instructed his secretary to send the little boy a $5.00 bill.
~ The president thought this would appear to be a lot of money to a little boy.
~ The little boy was delighted with the $5.00 bill and sat down to write a thank-you note to God, which read:
Dear God:
Thank you very much for sending the money.
However, I noticed that for some reason you sent it through
Washington, DC., and those #$#@#$$ deducted $95.00 in taxes.
Here's a much better publicly available version of Aaron Russo's work (Aaron has made his film public and free...so good folks, the American people in particular, can learn and hopefully create positive change[s] here.)....
America Freedom to Fascism Authorized version (vol.1) 1hr 49mins 28secs http://video.google.com/videoplay?docid=-4312730277175242198&q=america+freedom+to+fascism&hl....
Thank you, bartermania
There's little I can add to what you've posted. I'm familiar with books about the conspiracy that concerns you. They describe the way financiers have pursued their evil intent since the 1700's or so. Unfortunately, they ignore the much more important questions of how and why these evil schemes work, particularly in our supposedly democratic nation.
I think it should be obvious to even the most casual observer that corruption reqires two sides ... corrupters and corruptees.
In this instance, we can do nothing about the corrupters. They are too well entrenched, too powerful, and far too devious to be brought down by the indignation of the few people who even understand the problem.
We can, however, do something. We can close the conduits of corruption that are the root of the problem. We can devise a way to select more virtuous representatives than we have at present. Until we do that, protesting the outrages of bankers is (in my opinion) futile.
Fred
For those interested in Aaron Russo (his views and experiences) and his new film...a post from another iHub member:
Posted by: easymoney101
In reply to: None Date:11/4/2006 12:02:22 AM
Post #of 2790
Outside the Box #71 (Featuring Aaron Russo)
http://video.google.com/videoplay?docid=8109198571721765865&hl=en
The money trust is a conspiracy and very likely the most heinous one. It may very well be that from which many or most of the other very real conspiracies arise/are spawned. The Fed. Bank, both in it's founding/creation (it was put together in secret on Jeykll Island off the coast of Georgia in 1912 and fraudulently pushed through Congress on Dec 23, 1913...there's much more corruption involved in it's passage also) and the intention of those who benefit from it, to not let the truth about the monopoly and what our so called money really is get out to the people in general. Our ridiculous tax situation and enormous debt both public and private are the direct result of the money trust's scam.
Our money, since the Fed. Bank got control of it, is now only issued as debt plus interest due and payable to it's creator the Fed. Bank and their member banks. This creates a situation where there is never enough money in circulation to pay off the principal plus the interest due. This creates a situation where we must continuously borrow/take-out more money/debt-notes just to pay the interest. This forces growth to occur not because people want growth but, largely just because constant growth is needed otherwise our system collapses and our "money" which only represents debt will disappear. For if, folks tried to pay off all their debts at once...not only would this be impossible (because the "money" to pay the interest on their debts has not yet been created/issued) all the money in circulation would disappear/be removed/cancelled...and we would no longer have any legal tender in circulation. That's how corrupt/harmful and destructive our current monetary system is. This along with the banksters fractionalization scam (on money loaned/created and in our markets) is why they hide the truth. This then, also becomes a conspiracy. Self-interest or not...the American people continue to lied to constantly. Truth is stranger than fiction. We are being screwed and made debt-slaves by our so called "money" and those who perpetuate this fraud/theft upon us.
The Banks create wealth from nothing (via bank checks and ledger/computer entries...and essentially all the wealth they take from us goes to themselves. They pay the US treasury around .02 cents per note printed...regardless of the denomination of the bill. They pocket the difference, plus they will earn interest from the government bonds they buy with this "money" and on the loans member banks issue to borrowers both public and corporate.
Here's a good book and an except from it. Though the author is talking about the UK, he talks about the US situation much more later, the same destructive dynamics are a work here too and in almost all other countries around the globe. :
BOOK REVIEW...modern money, debt slavery and destructive economics
________________
JOSEPH GLYNN
The Grip Of Death
Michael Rowbotham
Jon Carpenter Publishing,
ISBN 1897766408, £15 in UK
'Fascinating'...'lucid and original'...'an essential self-education tool'...'well researched'...'one of the best' are some of the very favourable comments this book has already received from people like Herman E Daly, Richard Douthwaite, Bryan Gould and Ed Mayo. Their views should be enough to persuade anyone interested in creating a better world that it is essential reading. As David Korten puts it, Rowbotham 'fearlessly reveals deeply disturbing truths about our debt-based money system that befuddle bankers, economists and politicians'.
So don't let the title, the grim cover illustration, the reference to debt-slavery or even the price put you off. This is a very relevant, informative and well-written book and asking your library to obtain a copy would be a service to your local community.
The truths it reveals are at times shocking. For example, it is frightening to learn the extent to which our collective indebtedness has grown in recent years. The book also explodes more than a few widely accepted myths. However, it is not just a powerful indictment of bankers, economists and the money system. The Grip of Death is arguably the best book ever written on how we can move towards a money system for a sustainable and inclusive world.
First, Rowbotham shows the reader how our present type of money is created almost entirely by private banks and other lending institutions. Although the power to issue, manage and control the supply of something so vital to us all as money should be under democratic or government control, unfortunately it's not.
In the UK for example, 1997 Bank of England statistics show that the total amount of money created by the Treasury on behalf of the UK government is a mere £25 billion in notes and coins. Banks and building societies created the remaining £655 billion (97% of all money in use in the UK.) by lending it into existence in the form of mortgages, personal loans and overdrafts. Consequently, borrowed money makes up almost the entire UK money stock. The same is true elsewhere. In the US well over 90% of the money supply has been lent into existence..
Traditionally, the amount of money banks could create and lend into circulation was controlled by governments setting liquidity and reserve/asset ratios for the institutions to meet. By the 1980s, however, the liquidity ratio had become functionally meaningless because, as Rowbotham explains, the banking system had found ways around it by investing in short-term government securities.
The reserve/asset ratio governed the amount of their own money banks were required to set aside as a standby in case large numbers of depositors wanted to withdrawal their money simultaneously. A reserve/asset ratio of 10% meant that if a bank made a loan of £10,000,000 it must have £1,000,000 of its own capital in cash or on deposit in the central bank to back it. This ratio has since been replaced by the capital adequacy ratio, which also links a bank's lending to the amount of its own capital it has. It is set at 8% by international agreement. However, instead of being an effective restriction on banking and money creation, Rowbotham shows in practice it helps perpetuate the problem of escalating debt and forced growth.
Rowbotham contends that conventional banking theory and these supposed restraints allow economists to present the institutionalised usury of the system as something that operates under control. He then shows emphatically that these controls are inadequate.
In regard to the ownership of money, bankers and economists claim that it is created as a 'service to the borrower'. Like the myth that banks are merely lending out their depositor's money, this suggestion is false. Rowbotham shows that bankers create money for themselves, because as borrowers repay the loans which created the money initially, their payments are accounted as assets of the bank.
On monetary policy, the author shows that raising interest rates, the economist's standard response to inflation, certainly works but in much the same way as a lump-hammer works to carve a chicken. Higher rates do curtail new borrowing, but previous borrowers suffer too by having to pay extra interest. As a result, debt escalates, businesses go bankrupt, homes are repossessed and millions of workers are laid off as the economy sinks into recession
The term mortgage refers to the medieval 'death pledge', a form of borrowing where the owner pledges his house to another 'until death'. This form of usury was forbidden under Christian law. The book's title derives from that term and the evidence Rowbotham outlines justifies his use of the similarly grim term debt slavery. The distinguishing characteristic of a slave he argues is not that he is badly treated. Rather, it is that he has no say over important aspects of his life.
The statistics presented on British and American mortgage borrowing are indeed shocking. He reports that in 1996 the total value of the UK housing stock was approximately £1100 billion, against which mortgages totalling £409 billion (i.e.; 37%) were registered. In the US in 1997, a massive $4.2 trillion, (i.e. c.IR£3,500 billion) was outstanding on mortgages, equivalent to 48% of the value of the all US residential property.
Rising indebtedness has also been highlighted by some of the contrarian market analysts in recent years. One of them, Robert Prechter, estimated the total debt registered against US citizens, companies and agencies was close to $20 trillion. Certainly, if US citizens stopped buying what they cannot afford, the economy would collapse.
Rowbotham illustrates clearly the central role played by bank credit in economic life and how debt-based money is at the root of destructive economic trends. He shows why most people, businesses and governments get so heavily into debt. Exploring the broad impact of debt he shows the pronounced bias it engenders toward unsustainable growth.
By analysing money in action, the flows and tensions, he enables the reader to see the role and responsibility of the financial system for the nature of modern growth. Forced economic growth is shown to derive from intense competition for money, lack of purchasing power and near total wage dependency. Demonstrating these in action he demolishes the suggestion that growth is responsive to the aggregate desires of people either as consumers or workers. His analysis is revealing and complements Herman Daly's perspective on decadent growth and Douthwaite's 'growth illusion' which enriches the few, impoverishes the many and endangers the planet.
It is not consumers, but the debt-based financial system which makes a techno-marvel, disposable, wasteful, junk-product 'consumer' economy inevitable, he states. The consumer is 'completely subordinated to the process.' Industry and consumers are also completely subservient to the regular booms and slumps of the business cycle which he contends is entirely monetary in origin, shape and effect.
Historically both the landed and financial aristocracies have wielded formidable power but Rowbotham does not acknowledge the central role of inequitable land distribution in determining socio-economic evolution. Land still provides the collateral for the largest portion of lending and neither could succeed to the same extent without the partnership of the other. He could perhaps have included landlessness, homelessness, and housing/rent inflation among the factors contributing to forced economic growth.
Although the role of land and property speculation is omitted from his explanation of the boom-bust cycle, his analysis is full of insights and does not seem incompatible with this reviewer's neo-Georgist viewpoint. Land/property owners and banks each benefit greatly from the rampant land price inflation and spatial squeeze so characteristic of the 'boom' economy. It was Winston Churchill who described land as the greatest monopoly, a perennial monopoly and the mother of all other monopolies.
Rowbotham's exposé of the debt-based financial system offers us original and valuable perspectives upon agriculture, centralisation, export trade and the competitive inefficiency of food distribution. He argues that the financial system so dominated agriculture and food production that it forced them to supply people with what they expressly do not want. Transport has become a competitive device which he shows has led to futile waste.
However, the most appalling effects of our debt-based financial system are, he contends, felt in the Third World. The success of the multinationals he attributes not to their efficiency but to the conditions, advantages and pressures created by the debt-based financial system. Countries are locked in trade warfare, desperate to secure the export revenues to service loans which Rowbotham insists are of a fraudulent nature; 'The full horror and iniquity of Third World debt is that the under-developed and indebted countries of the world are acting as part of the money supply to developed nations'. He shows how this money is created as debt registered to impoverished nations but bound up in the economies of the wealthy nations.
Rowbotham talks about disarming the financial system, about the 'temporary tigers' and the manipulated consensus. He considers in detail the suppressed alternatives put forward by Abraham Lincoln , CH Douglas and others. Lincoln's Monetary Policy, a literary gem, is included in full. Thus the author more than amply covers the ground before outlining his prescription.
In the final chapters Rowbotham shows that the opportunity for evolutionary, as opposed to revolutionary change, is within reach. He outlines a 'spectrum of opportunity' available through the creation and phased introduction of government-issued debt-free money. This 'compensating money supply' is part of a cautious and realistic strategy of reform. Its key objective, it would appear, is to attempt to find the right balance between a stable debt-free money supply and a useful level of bank credit. He provides an outline and statistics on how this strategy could be implemented over two decades in the UK.
The author concludes by stressing that monetary reform is not primarily a technical matter but a political one. He shows convincingly that bank-produced money is neither a neutral nor accurate medium and that money should be created instead by governments answerable to their peoples to whom the right to issue it belongs.
By producing an excellent book which has already been the catalyst for public debate on money and debt-finance, Rowbotham has done us all a service. This is a book which deserves a very wide readership.
------------------------
Joe Glynn is a market research consultant and land tax advocate. He campaigned actively with Raymond Crotty in the 1980s, then with the Green Party and more recently with various environmental campaign groups.
________________________________________________________
This book review is from the first Feasta Review, a 204-page large format book. Copies of the book are available for £9.95 from Green Books.
Continue to review by Lothar Lüken of The Ecology Of Money
___________________________________
Link to this article: http://www.feasta.org/documents/feastareview/glynn.htm
ps. And let's not forget about fractionation of currencies, stocks, commodity prices and so on...derivatives/so called "leveraging"...this is a major part of the problem/scam that is killing/enslaving/destroying us all. (bartermania/kdp)
http://www.investorshub.com/boards/read_msg.asp?Message_id=14090562&txt2find=grip
Hi, Merci
Among the problems of taxation is the matter "use" taxes. A huge percentage of the taxes laid on the people are to support various special interests. Among these are "developers". Here's a letter I sent to the Star-Ledger in Newark, NJ about a year ago:
To the editor,
One way to lower the tax load on New Jerseyans is to make new development pay the costs it imposes on our communities and our state. Unrestrained development is intolerable. It has flooded our schools and made our highways impassible. Development is sold to us as "growth" but its enormous costs are ignored.
We need a flat-rate tax of $100,000 on each new residence and $25,000 per parking space for each new commercial development. These taxes will not cover all the costs new development piles on New Jersey taxpayers, but they will slow the growing inequity our people must bear.
The tax must be earmarked solely for infrastructure maintenance and divided between the state and the communities in the vicinity of the development, with 25% going to the state and 75% to the local communities.
You won't be surprised to learn that the letter did not generate a flood of passionate responses.
Fred
Hi, bartermania
I agree that "Nothing will change for the better unless good people are made aware of what is currently wrong with our government ..." I stop there because our monetary system is a creature of our government, albeit a private enterprise franchised by the government. Furthermore, our monetary system is not the only thing wrong with our government. Taxes, which are the topic of this board, are another.
I would drop the word "controlled" from your assertion that "Most (people) believe the illusions presented to them through the media" because the control is not overt. Instead, I'd say the media is manipulated, It is manipulated by our government ... "Weapons of Mass Destruction" is a good example ... and it is manipulated by the businesses who write and produce the "stories" we see and hear. The media simply cut and paste the "stories" to fill their air time, papers and magazines ... and, to further simplify their task, buy their competitors out so they only have to do the cutting and pasting once for vast markets.
You state the problem very well when you say:
"Those who govern now seem to be part of the problem. They appear
to have been bought and paid for. They've been corrupted by the
money trust. Dig deeper and see how pervasive the corruption
really is. IMO, it's so bad at the Federal level that the vast
majority of office holders must go. It is the current system (ie.
the rampant secret corruption) that must change and be rooted
out. Until such is done, I don't see any representatives who get
elected making any difference. Education/awareness comes
first ... then, depending on the quality of the people
involved/interested/concerned ... then perhaps, positive change
will result."
Good question. Nothing will change for the better unless good people are made aware of what is currently wrong with our government and monetary system. Most believe the illusions presented to them through the controlled media.
Those who govern now seem to be part of the problem. They appear to have been bought and paid for. They've been corrupted by the money trust. Dig deeper and see how pervasive the corruption really is. IMO, it's so bad at the Federal level that the vast majority of office holders must go. It is the current system (ie. the rampant secret corruption) that must change and be rooted out. Until such is done, I don't see any representatives who get elected making any difference. Education/awareness comes first...then, depending on the quality of the people involved/interested/concerned...then perhaps, positive change will result.
People must first perceive the true State. Then, people can set about finding ways to fix their Republic/representative Democracy. The way things are going now...the direction...I see this as a very difficult problem to overcome. The Executive branch is becoming dictatorial. Habeus corpus seems to be dead. Also, the Constitution & Bill of Rights appear to have been gutted by the "terrorist" threat.
"Any society that would give up a little liberty to gain a little security will deserve neither and loose both." Ben Franklin
Rothschild, a London Banker, wrote a letter saying "It (Central Bank ) gives the National Bank almost complete control of national finance. The few who understand the system will either be so interested in its profits, or so dependent on its favours, that there will be no opposition from that class... The great body of the people, mentally incapable of comprehending, will bear its burden without complaint, and perhaps without even suspecting that the system is inimical (contrary) to their interests." [The bankers created the legislation for the FED] (Link to the rest of this long article)
http://www.worldnewsstand.net/today/articles/fedprivatelyowned.htm
Permit me to issue and control the money of a nation, and I care not who makes its laws.
Mayer Amschel Rothschild
Link: http://www.brainyquote.com/quotes/authors/m/mayer_amschel_rothschild.html
"Give me the power of the money and it will not matter
any more who is commanding"
- Mayer Amschel Rothschild - (Illuminati)
Link: http://www.illuminati-news.com/quotes.htm
"Whoever controls the volume of money in any country is the master of all its legislation and commerce."
- President James Garfield (1880)
"Fascism will come to America in the guise of National Security"
- Jim Garrison (Atty. General of New Orleans)
Hi, bartermania
I'm not sure how to respond to your post. Your antipathy for the Federal Reserve System is obvious, but anger at perceived wrongs usually leads to excesses. My question was, and is, how you feel we can eliminate the Federal Reserve without finding a way to select people we can trust to protect our interests as our representatives in government?
Fred
Unfortunately, things are much worse than you seem to be aware of...ie. and they're also much worse than what just about everyone else thinks...except for those (in the know) on the inside of the system.
For instance...it is a fact that the U.S. is bankrupt (actually this was done intentionally by the Fed. Bank from 1913-1930-'33...ie. in essence bankrupting itself while the US government/treasury was liable).
Some intentionally buried history by the Globalists/NWO'ers/Banksters:
On May 23, 1933, Congressman, Louis T. McFadden, brought formal charges against the Board of Governors of the Federal Reserve Bank system, The Comptroller of the Currency and the Secretary of United States Treasury for numerous criminal acts, including but not limited to, CONSPIRACY, FRAUD, UNLAWFUL CONVERSION, AND TREASON.
The petition for Articles of Impeachment was thereafter referred to the Judiciary Committee and has YET TO BE ACTED ON.
Link: http://www.investorshub.com/boards/read_msg.asp?message_id=12045238
Congressman McFadden's Speech
On the Federal Reserve Corporation
Quotations from several speeches made on the Floor of the House of Representatives by the Honorable Louis T. McFadden of Pennsylvania. Mr. McFadden, due to his having served as Chairman of the Banking and Currency Committee for more than 10 years, was the best posted man on these matters in America and was in a position to speak with authority of the vast ramifications of this gigantic private credit monopoly. As Representative of a State which was among the first to declare its freedom from foreign money tyrants it is fitting that Pennsylvania, the cradle of liberty, be again given the credit for producing a son that was not afraid to hurl defiance in the face of the money-bund. Whereas Mr. McFadden was elected to the high office on both the Democratic and Republican tickets, there can be no accusation of partisanship lodged against him. Because these speeches are set out in full in the Congressional Record, they carry weight that no amount of condemnation on the part of private individuals could hope to carry.
The Federal Reserve-A Corrupt Institution.................................................. http://www.bnp.org.uk/shopping/excalibur/item.php?id=52
"Mr. Chairman, we have in this Country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks, hereinafter called the Fed. The Fed has cheated the Government of these United States and the people of the United States out of enough money to pay the Nation's debt. The depredations and iniquities of the Fed has cost enough money to pay the National debt several times over."
"This evil institution has impoverished and ruined the people of these United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Fed and through the corrupt practices of the moneyed vultures who control it."
"Some people think the Federal Reserve Banks are United States Government institutions. They are not Government institutions, departments, or agencies. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lender. In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislatures; there are those who maintain International propaganda for the purpose of deceiving us into granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime."
http://home.hiwaay.net/~becraft/mcfadden.html
http://www.investorshub.com/boards/read_msg.asp?message_id=9483782 Looks like some of the words get mispelled in copying and so on. In all cases, the original version...unedited should be sought...with all of these documents on this board.)->bk & photo of/about L.T.M. http://www.investorshub.com/boards/read_msg.asp?Message_id=12057556&txt2find=louis
The Bankruptcy of The United States
United States Congressional Record, March 17, 1993 Vol. 33, page H-1303
Speaker-Rep. James Traficant, Jr. (Ohio) addressing the House:
"Mr. Speaker, we are here now in chapter 11.. Members of Congress are official trustees presiding over the greatest reorganization of any Bankrupt entity in world history, the U.S. Government. We are setting forth hopefully, a blueprint for our future. There are some who say it is a coroner’s report that will lead to our demise.
It is an established fact that the United States Federal Government has been dissolved by the Emergency Banking Act, March 9, 1933, 48 Stat. 1, Public Law 89-719; declared by President Roosevelt, being bankrupt and insolvent. H.J.R. 192, 73rd Congress m session June 5, 1933 - Joint Resolution To Suspend The Gold Standard and Abrogate The Gold Clause dissolved the Sovereign Authority of the United States and the official capacities of all United States Governmental Offices, Officers, and Departments and is further evidence that the United States Federal Government exists today in name only.
IN ESSENCE: A GOOD & SHORT EXPLANATION OF THE EVENTS THAT LED UP TO THE U.S. BANKRUPTCY AND OUR RESULTING ENSLAVEMENT....[Excerpts] Plus, my list of typo's and mistakes for the following are listed below: http://www.investorshub.com/boards/read_msg.asp?message_id=12415201 http://www.investorshub.com/boards/read_msg.asp?message_id=11746629 Link to full article: http://www.investorshub.com/boards/read_msg.asp?message_id=11745265
Link to my board on this subject for anyone wishing to study further: http://www.investorshub.com/boards/board.asp?board_id=3319
Thanks, Merci
If you think I'm right, you're one of the few.
Fred
I suspect you are right about central banks. The public rape inherent in the Savings and Loan disaster and Long Term Capital Management are minor examples. However, since our Federal Reserve was created by our politicians, I'm not sure how you think we can get rid of them without changing the structure of our political system.
* Our politicians passed the law allowing banks to deny us access to our own money for several days after deposit.
* Our politicians revoked our usury laws.
* Our politicians gutted the banking laws enacted in the wake of the depression.
* Our politicians changed our bankruptcy laws to the disadvantage of our citizens.
As long as our political parties control our politicians and use them to enact anti-human laws for the advantage of their large donors ... like the banking industry ... how can we eliminate the evils of which you speak?
Fred
Central bankers own and control almost all of the societies of the world right now...by lies, fraud and force.
"Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money." - Sir Josiah Stamp, Director of the Bank of England (in the 1920s); reputed to be the 2nd wealthiest man in England at that time.
Link: http://www.investorshub.com/boards/board.asp?board_id=3319
The personal income tax was created to pay the interest on the principal owed to the Fed Bank by the US gov. The IRS was created to collect these "tributes" and they will apparently use any means necessary to do this...including lying...which is the foundation upon which modern decivilization is based...and from which it was formed/created/sprung.
good points fred - i am afraid you are right kiddo..
Yeah ... but that's the point!!!!!! No politician would touch this with a 10-foot-pole. Their bread and butter are the huge corporations that have taken control of our country. Folks like me are nothing more than horse-flies to be swatted.
I would like to find people willing to examine this idea and others in detail. I'm as unhappy as anyone, but I spend my time trying to figure out a way to improve our country. After a lifetime of thought, I've come to the conclusion that the only answer is to change the way we select those who represent us ... but most folks are so sure we have the best government in the world that they don't want to consider any other possibility.
Fred
I sure don't mean to knock it, Merci. We certainly need to do something.
Fred
i'd like thank all of you here for your thoughts.. you represent yourself and what you believe in -
if anyone here that supports fair tax would like to be a board assistant please let me know..
it would nice to have someone set up a survery
~ those for fair tax those against it.. etc..
i've done it before on our other board but it takes me forever to figure out how things work here on the hub :(
putting our heads together and chatting about this, more than likely will not make much of an impact on the way this are or on the way things will turn out but .. it's better to STAND FOR SOMETHING THAN IT IS TO FALL FOR ANYTHING ;)
did you send this to anyone? if you feel this passionate about this you should write your congress rep in your area.
i am just tried of being taxed and re-taxed
most things that get started - get started with good in mind.. (keyword most) more than likely most taxes started off with good intent... but it's out of hand - we are taxes on our earnings.. then taxed on our buys.. to many taxes bottom line!
how can we change it? maybe the fair tax program is the answer dunno .. but it the best thing i've seen so far..
Hi, Merci
This is something I wrote a few years ago on the topic of taxation. Its purpose is, primarily, to describe a way of looking at a specific tax.
THE CITIZENSHIP TAX
There are, in my view, three fundamental ways we can improve our system of government; the way we select our representatives, the way we maintain our laws, and the way we tax. The weaknesses in these areas exist because our institutions reflect our natures. If we wish to improve them, we must learn to harness our natural tendencies in ways that make them useful. What I write here will focus on one trait, the pursuit of self-interest. I will describe a simple, direct way of harnessing that trait, and changing it from a destructive force to a productive one.
a) the pursuit of self-interest is a human trait.
b) people pursue self-interest with varying degrees of intensity.
c) people who are thought to pursue self-interest excessively are called selfish.
We can not make additional factual assertions about the pursuit of self-interest because the attribution of selfishness is subjective. It is a perception. It is impossible to control characteristics whose goodness or badness are subjective because the characterizations are opinions.
Our society has no penalty for selfishness, nor do I believe one is possible. If it is an evil, it is not one we can address objectively. If we are to control it, we must do so indirectly. I believe we can harness our tendency to pursue our self-interest and make it work for us.
What is wrong with the pursuit of self-interest?
There is nothing wrong with it ... until it is carried to excess.
A part of self-interest is self-preservation. We are told that "Self-preservation is the first law of nature". I believe that to be true, and I also believe it applies to all organisms, living or corporate. The methods of self-preservation vary, and are generally applauded as "survival of the fittest". However, it can be shown that, carried to extremes, self-preservation is destructive of the preserved entity's environment. Beneficial though Darwinism may be in a purely theoretical sense, if our society is the environment being destroyed, we must do what we can to prevent it.
Societies restrain undesireable characteristics by a variety of forces. They initially deal with excesses by parental guidance, disapproval, peer pressure, appeal to conscience, excommunication and other non-physical methods. If these fail, it condemns the act by mandate and authorizes a force to control it. A central feature of the process is identification of the characteristic to be restrained.
These mechanisms work until a rogue is able to influence the forces society creates to control it. Since I'm discussing our tendency to pursue our own self-interest, I'll focus on the rogues who carry that pursuit to extremes.
By far, a rogues' most effective means of evading control is by influencing those who make the rules intended to control them, to render legislation ineffective or to divert its impact. Evidence of the abuses assault us daily. We constantly get fresh examples of the manipulation of our governing and regulatory bodies. Our subdued reaction to such events may be due to our recognition that they are simply additional evidence of our natural venality. In any case, we accept them without considering whether there is a way to make them less productive for their purveyors and less destructive for us.
While one may recognize the existence of rogues after they have achieved rogue stature, we have no mechanism for penalizing them or inhibiting their greed before it becomes intolerable. However much we are offended by what we perceive as greed, the basis of our complaint is always subjective.
Our traditional way of dealing with rogues in society requires that they be identified, so the lack of an objective measure, the inability to point a finger and say so-and-so is a rogue, seems to present an insoluble problem. That's not true. We may not be able to point a finger at a specific target, but we can certainly recognize the characteristics rogues share and the circumstances under which they thrive.
One quality the most destructive rogues have in common is great size. This, too, seems to present a paradox: The achievement of great size springs from the best of human capabilities. Size is attained by talent and can't be criticised simply because it reaches some specific extent. It is the result of a natural pursuit of self-interest, which, over time, becomes synonymous with self-preservation.
Thus we have a conflict: Size is achieved through ability but the beneficial effect of the enterprise evaporates when growth is unfettered. As entities grow into rogues they believe their best interests are attained at the expense of the community rather than in harmony with it. As they grow, they target the wealth of communities, and suck it out, leaving an empty husk.
Our attempts to control cancerous growth fail because we try to outlaw identifiable evils. Such laws are easily subverted. The larger the enterprise, the greater the pool of talent available to devise the methods of subversion. The result is behemoths which have a vacuum cleaner effect, sucking up resources to the detriment of our communities and our citizens.
To summarize, we know that rogues exist and we know they are injurious to the humans among us. Yet, after carefully looking at the matter, we find that the entities we call rogues started out by being very good at what they do. If we had their pool of talent, we might evolve the same way ourselves.
Hence, the conflict: On the one hand, we seek excellence and applaud success. On the other, these conditions, unrestrained, breed rogues. How can we resolve this? How can we constrain the rogue while encouraging excellence and success? The most direct way is to make excessive size a burden.
When we think about preventing excessive size, we run into the fact that some businesses must be large. Public utilities, for example, require a huge infrastructure and great gobs of capital. Hence, although all rogues have great size, great size may not identify a rogue. So, our solution to the problem must focus on unwarranted size. It must not injure large entities whose size is dictated by necessity.
Growth requires nutrients on which to feed. For corporate growth, the nutrients are the availability of physical and human resources and an environment conducive to growth. In the United States, the resources are a wealth of raw materials and human assets; the environment is provided by our government. The use, or exploitation, of these assets is what allows inordinate corporate growth.
Viewed in this light, we can see that growth flows from citizenship. If an entity is to grow, the society in which it functions must allow growth, so we can say that entities grow as a direct result of their citizenship.
We have seen that growth is, by definition, exploitive. This is not to say that exploitation is an evil. It only becomes an evil when it is excessive. Entities grow by exploiting the nutrients in its environment. That is precisely the goal our society seeks to attain. It can not be condemned simply because it exploits the environment. However, unrestrained exploitation results in excesses. If we are to control the excesses, we must have a means to discriminate between justifiable size and unwarranted growth.
Fortunately, we have a simple, readily available measuring stick. The best measure of size is the total revenue an entity receives in a specified period of time. (I use the term "revenue" to mean the annual gross receipts of an entity, without reserve or allowance, less amounts paid to external vendors in which the entity has no managerial, directorial or financial interest of any amount or kind.) We can say, objectively, that the more revenue an entity generates, the larger it is. This is not a subjective opinion, it is a verifiable fact.
To recap, we assert that
1) Growth is a quality we seek, applaud and reward.
2) Growth entails exploitation of the available resources.
3) At some indefinable point, an entity's growth, if unchecked, becomes a detriment to the society which spawned it.
4) The only guide we have to measure the extent to which an entity exploits our resources is its revenue.
Thus, it is appropriate to levy a progressive charge, based on revenue, for an entity's use of our resources. We can call this progressive charge "A Citizenship Tax".
The Citizenship Tax is a levy assessed on the revenue of an entity, cited in terms of annual receipts. The progressive nature of the tax requires a standard base. We will use the gross receipts (revenue) of the entity, annualized, to provide that base.
The Citizenship Tax does not concern itself with the source of an enterprise's revenue. The tax applies whether the revenue results from the operation of the entity or the sale of its assets. The only criteria is that the enterprise receive the revenue (or its equivalent, as in the case of a swap). If an entity has extensive assets in cash, real estate, equity, or in any other form, the Citizenship Tax does not concern itself with the value of those assets. However, when an asset is disposed of, in whatever manner or form, the value of the asset is part of the entity's revenue for the period.
The Citizenship Tax is not concerned with the profitability of the enterprise. It is a fee we levy for affording our citizens the right to use our resources. The charge is for the extent of the exploitation, not for the degree of success an entity has in doing so. Whether or not the enterprise is profitable does not change the amount of resources it exploits in its operation.
The Citizenship Tax is progressive. As revenue increases, the tax rate increases. As will be seen in the tax table below, the tax is insignificant for small entities. As an enterprise grows, its tax load increases, but the load only becomes burdensome for rogues.
Taxes are an expense of doing business. They increase the cost of doing business, and that cost is added to all other costs to determine the price of the enterprise's goods and services. In other words, taxes are always passed on to the consumer. When a rogue attains an unwarranted size by manipulating the rules in its own favor or dominating its competitors to the detriment of the public, The Citizenship Tax adds a cost to its operation.
The wonderful thing about The Citizenship Tax is that it is utterly and completely objective. It makes no judgment about the goodness or badness of the taxed entity. It simply charges all enterprises for their use of society's resources.
If, by the nature of its business, an enterprise must be large, it is not injured by The Citizenship Tax because all competing businesses must attain a similar size. However, when a rogue grows beyond an economically justifiable size, the tax acts to protect the public interest without additional regulation.
Corporate growth is good, and healthy, and desireable. We want to give our entrepreneurs the freedom to grow. That is the way they enrich our lives. The Citizenship Tax supports this goal because it is absolutely even-handed. It makes no judgment about the excesses of an enterprise. It is absolutely and totally objective in its application, and in its effect.
If an entity grows to a size that exceeds its value to the society, The Citizenship Tax acts as an umbrella, increasing the rogue's cost of operation and giving its competitors a cost advantage which prevents their suffocation. In fact, The Citizenship Tax would enhance the viability of competition, immeasurably.
Even at inception, the effect of The Citizenship Tax is gentle in its effect. Each entity can meet the tax in its own way. Some (like those which have subsumed suppliers or competitors) may elect to spin those entities off, to resize their operations to a smaller tax base. The option is theirs.
Brief Recap To This Point:
1) An entity exists in an environment and may be said to be a
citizen of that environment.
2) The size of an entity is evidence of the extent to which that
entity exploits the environment in which it exists.
3) Entities are dynamic and exist in a dynamic environment. (They
expand and contract in response to internal pressures and the
expansion and contraction of their environment)
4) I have postulated that excessive size is bad, but, because of
the dynamic nature of the entities and their environment, it
is not possible to make a judgment that a given size is good
or bad. Stated another way, size is a method of description.
In itself, it is neither good nor bad.
5) I believe in free enterprise. I believe (to paraphrase Adam
Hamilton of ZEAL) that entities, acting in their own self-
interest, make decisions of how and where they will spend
their resources, and these virtually infinite individual
decisions collectively become a free-market economy.
6) I do not believe that self-interest, exercised without regard
for the welfare of the environment which nurtures it,
constitutes a free market. On the contrary, carried to its
logical extreme, self-interest protects and extends itself by
dominating its environment ... the antithesis of a free
market.
7) The most readily available device we have for measuring the
size of an entity is the total number of dollars it takes in
by reason of its existence (i.e., its gross receipts)
8) Since size denotes the extent to which an entity exploits our
resources, it is appropriate to levy a charge for that
exploitation. Such a charge is the only practical way to
identify and restrain excessive size. The charge must
accommodate the concept that size, per se, is not an evil.
Tax Rate Annual Gross Receipts
2% $10
4% $100
6% $1,000
8% $10,000
10% $100,000
12% $1,000,000
14% $10,000,000
16% $100,000,000
18% $1,000,000,000
20% $10,000,000,000
22% $100,000,000,000
24% $1,000,000,000,000
26% $10,000,000,000,000
28% $100,000,000,000,000
30% $1,000,000,000,000,000
32% $10,000,000,000,000,000
34% $100,000,000,000,000,000
36% $1,000,000,000,000,000,000
38% $10,000,000,000,000,000,000
40% $100,000,000,000,000,000,000
You're right, Merci ... we need to look at what happened. It's easy to see that our tax code is monstrous, but it's not as easy to see how that came about or how it can be changed.
Who imposed the taxes? It wasn't some intangible like "the government". It was us ... it was our representatives who enacted these tax laws. The people we elect represent us in our government went to the P. T. Barnum School of Self-Promotion ... they are experts at hokum and misdirection. While they entertained us with hoopla about trivialities, they used our money to entrench themselves and pass laws that favor their friends and "contributors".
We want to believe that those we elect to public office have our best interests at heart ... we are slow on the uptake ... it takes us a long time to accept the fact that ... They don't!!!
Those willing to look at the situation honestly and directly can see that they do not, and never did, represent us ... and that's the thing we need to change. Until we change the way we select our representatives we will continue to have the profoundly anti-human government we presently endure.
Fred
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Gaps Between Very Rich and Everyone Else More Than Tripled In Last Three Decades, New Data Show
June 25, 2010
The gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007 (the period for which these data are available), according to data the Congressional Budget Office (CBO) issued last week. Taken together with prior research, the new data suggest greater income concentration at the top of the income scale than at any time since 1928.
While the recession that began in December 2007 likely reduced the income of the wealthiest Americans substantially and may thereby shrink the income gap between rich and poor households, a similar development that occurred around the bursting of the dot.com bubble and the 2001 recession turned out to be just a speed bump. Incomes at the top more than made up the lost ground from 2003 to 2005.
The new CBO data — the most comprehensive data available on changes in incomes and taxes for different income groups — also show the following:
The gap in income between the wealthiest Americans and all others has grown strikingly in recent decades, the CBO data show. In 1979, when the data begin, the average after-tax incomes of the top 1 percent of households were 7.9 times higher than those of the middle fifth of households. By 2007, top incomes were 23.9 times higher than those of the middle fifth — a more than tripling of the income gap.
The gap between the top 1 percent and the poorest fifth of Americans widened even more sharply. In 1979, the incomes of the top 1 percent were 22.7 times higher than those of the bottom fifth. By 2007, top incomes were 74.6 times higher than those at the bottom — more than tripling the rich-poor gap in 28 years (see Figure 2).
The CBO data shown in Table 1 also show that between 1979 and 2007:
The CBO figures show that the nation’s income has grown substantially since 1979; if this growth had been shared more broadly, most groups would have seen much larger gains. For the nation as a whole, after-tax household income increased 55 percent from 1979 to 2007, adjusted for inflation. If all groups’ incomes had grown by 55 percent, the average income of the bottom fifth of households would have been $23,710 in 2007 (rather than $17,700) and the average income of the middle fifth would have been $68,342 (rather than $55,300).
Instead, the wealthiest households reaped a sharply growing share of the nation’s income, while the share going to middle- and lower-income households shrank (see Figure 3). Between 1979 and 2007:
In 2007, the top 1 percent received a larger share of the nation’s after-tax income than the middle 20 percent of the population. This represents a significant change from 1979, when the middle fifth received more than twice as much of the nation’s income as the top 1 percent (16.5 percent versus 7.5 percent).
Table 1: Average After-Tax Income by Income Group 1979 - 2007 (in 2007 dollars) | ||||
Income Category | 1979 | 2007 | Percent Change 1979-2007 | Dollar Change 1979-2007 |
Lowest fifth | $15,300 | $17,700 | 16% | $2,400 |
Second fifth | $31,000 | $38,000 | 23% | $7,000 |
Middle fifth | $44,100 | $55,300 | 25% | $11,200 |
Fourth fifth | $57,700 | $77,700 | 35% | $20,000 |
Top fifth | $101,700 | $198,300 | 95% | $96,600 |
Top 1 Percent | $346,600 | $1,319,700 | 281% | $973,100 |
Source: Congressional Budget Office, Effective Federal Tax Rates: 1979-2007, June 2010. |
The CBO data only go back to 1979, but economists Thomas Piketty and Emmanuel Saez have used tax data to calculate the share of income going to wealthy Americans back to 1913. Taken together, the CBO data and the Piketty and Saez findings suggest greater income concentration at the top of the income scale than at any time since 1928.[3]
The new CBO data also show that income inequality widened significantly between 2006 and 2007. After-tax incomes rose faster among the top 1 percent of households than among any other income group, and more than twice as fast as among households in the middle fifth (see Table 2).
As a result, the share of the nation’s overall after-tax income going to the top 1 percent rose from 16.3 percent in 2006 to 17.1 percent in 2007. This increase amounts to approximately $71 billion in additional income for the top 1 percent.[4]
The CBO data do not show the effect of the recession that began in December 2007. The recession is likely to lower incomes for all income groups, but if the previous recession is any guide,
incomes may fall most sharply for the wealthiest households, due in large part to the severe drop in the stock market.
In the recession of 2001, the bursting of the dot-com bubble reduced inequality sharply. Real after-tax incomes fell by 30 percent among the top 1 percent of households between 2000 and 2002, while remaining close to flat for the middle and bottom fifths of the population, according to CBO. As a result, while in 2000 the top 1 percent had incomes 20.6 times higher than households in the middle, by 2002 their incomes were “just” 14.3 times higher. Subsequently, however, as the economy recovered, this narrowing of the income gap evaporated. By 2007, the income of the top 1 percent was 24 times higher than those of households in the middle fifth (see Figure 2).
Not all recessions reduce inequality even temporarily, however. Inequality continued rising throughout the back-to-back recessions of the early 1980s, the CBO data show. The short- and long-term effects of the most recent recession will depend on the course of the stock market, trends in the labor market (including decisions about executive compensation packages, bonuses, and wages) and in the economy more broadly, and public policy choices.
Legislation enacted under the Bush Administration provided taxpayers with about $1.7 trillion in tax cuts through 2008. Because high-income households received by far the largest tax cuts — not only in dollar terms but also as a percentage of income — the tax cuts have increased the concentration of after-tax income at the top of the spectrum.
The CBO data do not provide a direct measure of the impact of these tax policy changes because they also reflect the effects of changes in household incomes and other factors that influence tax payments. However, estimates by the Urban Institute-Brookings Institution Tax Policy Center that consider only the impact of the tax policy changes demonstrate that the tax cuts have widened income inequality. As a direct result of the tax cuts enacted since 2001, the Tax Policy Center found that in 2007: [5]
Table 2: Change in Real Average After-Tax Income, 2006 to 2007 (in 2007 dollars) | ||
Income Category | Dollar Change | Percent Change |
Lowest fifth | $800 | 4.7% |
Second fifth | $1,700 | 4.7% |
Middle fifth | $1,800 | 3.4% |
Fourth fifth | $1,800 | 2.4% |
Top fifth | $8,400 | 4.4% |
Top 1 Percent | $88,800 | 7.2% |
Source: Congressional Budget Office, Effective Federal Tax Rates: 1979-2007, June 2010. |
The bulk of the increase in after-tax income inequality since 1979 reflects changes in pre-tax incomes. The incomes of the top 1 percent rose 141 percent from 1979 to 2007 before taxes are considered, the CBO data show. The top 1 percent’s share of before-tax income (like its share of after-tax income) more than doubled from 1979 to 2007, from 9.3 percent to 19.4 percent.
By 2007, the top 1 percent had before-tax incomes that were 24 times higher than those of the middle fifth of Americans — a share that had nearly tripled since 1979.
The rapidly rising pre-tax incomes of the wealthy help to explain the notable rise in the percentage of total tax revenue collected from these households. CBO’s data show that the share of total federal taxes paid by the top 1 percent of households rose from 25.5 percent in 2000 to 28.1 percent in 2007, the second-highest share since 1979 (only 2006 was higher).
The increase in the share of taxes paid by the wealthy is often cited erroneously as evidence that their tax burden is rising. In reality, the effective federal tax rate for the top 1 percent of households — the percentage of their income that they pay in federal taxes — declined from 33.0 percent of income in 2000 to 29.5 percent in 2007.
The top 1 percent paid a growing share of total taxes chiefly because they received a growing share of total before-tax income: 19.4 percent in 2007, compared to 17.8 percent in 2000. Indeed, the effective tax rate of the top 1 percent of households was lower in 2007 than in any year since 1990, demonstrating beyond a doubt that their tax burdens were decreased, not increased.
These CBO data are the most comprehensive data available on changes in incomes and taxes for different income groups, capturing trends at the very top of the income scale that other data sources, such as Census data, do not show.
Census income data do not include significant amounts of income received by high-income households. For instance, they ignore earnings above $1 million in order to help preserve confidentiality. If an individual makes $10 million a year, the Census records those earnings as $1 million. (The Census data also do not include capital gains, which constitute a large share of the income of wealthy households.) Partly for this reason, the Census data do not break out trends among the top 1 percent of households, where income gains have been especially concentrated.
CBO compiles its data from a variety of sources, combining Census survey data with IRS data on the income of the very wealthy. CBO also considers a broader range of income sources than do official Census income figures, including capital gains, non-cash benefits, and employer-provided health benefits.[6]
[1] Figures throughout this paper were adjusted by CBO for inflation and are presented in 2007 dollars.
[2] In the CBO data, the income categories do not represent a fixed group of people from year to year but rather represent the people who fall into the various income categories in the year in question. As a result, the people in a given income category shift somewhat over time. This does not alter the findings of this paper. It simply means that the trends shown in the data do not necessarily match the income trajectories of individual households.
[3] Thomas Piketty and Emmanuel Saez, “Income Inequality in the United States, 1913-1998,” Quarterly Journal of Economics, 118, 2003. Piketty and Saez’s tables have been updated through 2007 at http://emlab.berkeley.edu/users/saez/. The Piketty and Saez data are discussed further in Avi Feller and Chad Stone, “Top 1 Percent of Americans Reaped Two-Thirds of Income Gains in Last Economic Expansion,” Center on Budget and Policy Priorities, September 9, 2009, http://www.cbpp.org/9-9-09pov.pdf.
[4] $71 billion represents the change in the top 1 percent’s share of national income between 2006 and 2007 (17.1 percent minus 16.3 percent) multiplied by aggregate after-tax income for all households in the country.
[5] See Tax Policy Center tables T06-0035 and T06-0036 at http://www.taxpolicycenter.org and Aviva Aron-Dine and Robert Greenstein, “Two High Income Tax Cuts Not Yet Fully in Effect Will Cost Billions Over the Next Five Years,” Center on Budget and Policy Priorities, February 1, 2007, http://www.cbpp.org/2-1-07tax.htm.
[6] CBO figures also account for household size. CBO constructs income categories by ranking households based on household income adjusted by the number of household members. In addition, each quintile, or fifth, contains an equal number of people (not households).
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