Replace All Federal Taxes on Income with the Fair Tax Act , HR 25
From Nealz Nuze today
This has been making the rounds on the internet. It may be fictitious, but the point made is real and needs to be understood by everyone.
To All My Valued Employees,
There have been some rumblings around the office about the future of this company, and more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. However, the good news is this: The economy doesn't pose a threat to your job. What does threaten your job however, is the changing political landscape in this country.
However, let me tell you some little tidbits of fact which might help you decide what is in your best interests.
First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a back story. This back story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Mercedes outside. You've seen my big home at last years Christmas party. I'm sure; all these flashy icons of luxury conjure up some idealized thoughts about my life.
However, what you don't see is the back story.
I started this company 28 years ago. At that time, I lived in a 300 square foot studio apartment for 3 years. My entire living apartment was converted into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you.
My diet consisted of Ramen Pride noodles because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a defective transmission. I didn't have time to date. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business -- hard work, discipline, and sacrifice.
Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting the Nordstrom's for the latest hot fashion item, I was trolling through the Goodwill store extracting any clothing item that didn't look like it was birthed in the 70's. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business with a vision that eventually, some day, I too, will be able to afford these luxuries my friends supposedly had.
So, while you physically arrive at the office at 9am, mentally check in at about noon, and then leave at 5pm, I don't. There is no "off" button for me. When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have the freedom. I eat, and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a 1 year old special-needs child. You, of course, only see the fruits of that garden -- the nice house, the Mercedes, the vacations... You never realize the back story and the sacrifices I've made.
Now, the economy is falling apart and I, the guy that made all the right decisions and saved his money, have to bail-out all the people who didn't. The people that overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for.
Yes, business ownership has is benefits but the price I've paid is steep and not without wounds.
Unfortunately, the cost of running this business, and employing you, is starting to eclipse the threshold of marginal benefit and let me tell you why:
I am being taxed to death and the government thinks I don't pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes. Payroll taxes. Workers compensation taxes. Unemployment taxes. Taxes on taxes. I have to hire a tax man to manage all these taxes and then guess what? I have to pay taxes for employing him. Government mandates and regulations and all the accounting that goes with it, now occupy most of my time. On Oct 15th, I wrote a check to the US Treasury for $288,000 for quarterly taxes. You know what my "stimulus" check was? Zero. Nada. Zilch.
The question I have is this: Who is stimulating the economy? Me, the guy who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business? Or, the single mother sitting at home pregnant with her fourth child waiting for her next welfare check? Obviously, government feels the latter is the economic stimulus of this country.
The fact is, if I deducted (Read: Stole) 50% of your paycheck you'd quit and you wouldn't work here. I mean, why should you? That's nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree which is why your job is in jeopardy.
Here is what many of you don't understand ... to stimulate the economy you need to stimulate what runs the economy. Had suddenly government mandated to me that I didn't need to pay taxes, guess what? Instead of depositing that $288,000 into the Washington black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.
When you have a comatose man on the verge of death, you don't defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart? Business is at the heart of America and always has been. To restart it, you must stimulate it, not kill it. Suddenly, the power brokers in Washington believe the poor of America are the essential drivers of the American economic engine. Nothing could be further from the truth and this is the type of change you can keep.
So where am I going with all this?
It's quite simple.
If any new taxes are levied on me, or my company, my reaction will be swift and simple. I fire you. I fire your co-workers. You can then plead with the government to pay for your mortgage, your SUV, and your child's future. Frankly, it isn't my problem any more.
Then, I will close this company down, move to another country, and retire. You see, I'm done. I'm done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, will be my citizenship.
If you lose your job, it won't be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steamrolled the constitution, and will have changed its landscape forever. If that happens, you can find me sitting on a beach, retired, and with no employees to worry about....
Signed,
Your boss
To All My Valued Employees,
There have been some rumblings around the office about the future of this company, and more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. However, the good news is this: The economy doesn't pose a threat to your job. What does threaten your job however, is the changing political landscape in this country.
However, let me tell you some little tidbits of fact which might help you decide what is in your best interests.
First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a back story. This back story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Mercedes outside. You've seen my big home at last years Christmas party. I'm sure; all these flashy icons of luxury conjure up some idealized thoughts about my life.
However, what you don't see is the back story.
I started this company 28 years ago. At that time, I lived in a 300 square foot studio apartment for 3 years. My entire living apartment was converted into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you.
My diet consisted of Ramen Pride noodles because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a defective transmission. I didn't have time to date. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business -- hard work, discipline, and sacrifice.
Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting the Nordstrom's for the latest hot fashion item, I was trolling through the Goodwill store extracting any clothing item that didn't look like it was birthed in the 70's. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business with a vision that eventually, some day, I too, will be able to afford these luxuries my friends supposedly had.
So, while you physically arrive at the office at 9am, mentally check in at about noon, and then leave at 5pm, I don't. There is no "off" button for me. When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have the freedom. I eat, and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a 1 year old special-needs child. You, of course, only see the fruits of that garden -- the nice house, the Mercedes, the vacations... You never realize the back story and the sacrifices I've made.
Now, the economy is falling apart and I, the guy that made all the right decisions and saved his money, have to bail-out all the people who didn't. The people that overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for.
Yes, business ownership has is benefits but the price I've paid is steep and not without wounds.
Unfortunately, the cost of running this business, and employing you, is starting to eclipse the threshold of marginal benefit and let me tell you why:
I am being taxed to death and the government thinks I don't pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes. Payroll taxes. Workers compensation taxes. Unemployment taxes. Taxes on taxes. I have to hire a tax man to manage all these taxes and then guess what? I have to pay taxes for employing him. Government mandates and regulations and all the accounting that goes with it, now occupy most of my time. On Oct 15th, I wrote a check to the US Treasury for $288,000 for quarterly taxes. You know what my "stimulus" check was? Zero. Nada. Zilch.
The question I have is this: Who is stimulating the economy? Me, the guy who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business? Or, the single mother sitting at home pregnant with her fourth child waiting for her next welfare check? Obviously, government feels the latter is the economic stimulus of this country.
The fact is, if I deducted (Read: Stole) 50% of your paycheck you'd quit and you wouldn't work here. I mean, why should you? That's nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree which is why your job is in jeopardy.
Here is what many of you don't understand ... to stimulate the economy you need to stimulate what runs the economy. Had suddenly government mandated to me that I didn't need to pay taxes, guess what? Instead of depositing that $288,000 into the Washington black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.
When you have a comatose man on the verge of death, you don't defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart? Business is at the heart of America and always has been. To restart it, you must stimulate it, not kill it. Suddenly, the power brokers in Washington believe the poor of America are the essential drivers of the American economic engine. Nothing could be further from the truth and this is the type of change you can keep.
So where am I going with all this?
It's quite simple.
If any new taxes are levied on me, or my company, my reaction will be swift and simple. I fire you. I fire your co-workers. You can then plead with the government to pay for your mortgage, your SUV, and your child's future. Frankly, it isn't my problem any more.
Then, I will close this company down, move to another country, and retire. You see, I'm done. I'm done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, will be my citizenship.
If you lose your job, it won't be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steamrolled the constitution, and will have changed its landscape forever. If that happens, you can find me sitting on a beach, retired, and with no employees to worry about....
Signed,
Your boss
Replies to This Discussion
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Permalink Reply by Jim Tomasik on
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I've seen this... It's great.
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Permalink Reply by RC Woodworth on
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Most excellent read.
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I did something similar this year when distributing Christmas bonuses. I understand this persons frustrations, but the "back story" is a little harsh. Here's what I included with each employee's Christmas bonus check:
Merry Christmas and Happy Holidays
2008 has been a good year for . Revenues were up almost 15% and, although we won’t know for sure until sometime after the first of the year, it looks like our net income will be solid.
As most of you know, we try to provide a Christmas bonus each year to each employee and have done so every year we have been in business, even when we have not been profitable. The amount each person receives is based on how many months the person has been employed during the year, not on whether you have been naughty or nice. The total amount we allocate to Christmas bonuses primarily depends upon how good a year we have had and what we think will be left over after taxes and other expenses.
This year we will be allocating a little more than $32,000. What this means is we can allocate $1,335 for each person who has been employed for the full year. Of that amount, we will be paying $135 to Federal and State governments in the form of payroll taxes leaving $1,200 for each of you. Of course, you will also be paying your own FICA, Medicare, and withholding taxes on the $1,200 Christmas bonus so your actual check will around $1,000.
There are several other factors that affect the amount of our annual Christmas bonus. One of the most important is that fact that the Federal government takes 35% of our working capital in the form of a corporate income tax. If our working capital were not taxed at that rate, it is likely we would distribute 35% more each year. This year that would have made the allocation for Christmas bonuses roughly $43,000 ($1,600 per person).
I am including this information with your bonus as my way of spreading the word on the detrimental effects of the current tax system. Now for the commercial: one tax reform idea that has been proposed is the FairTax. It is a nonpartisan, revenue neutral approach to taxes that would replace all other taxes, including payroll taxes and the income tax, with a national sales tax levied only on purchases for new items (used items are not taxed). Furthermore, the first $20,800 worth of purchases per two-person household each year (adjusted upward for larger households) would be exempt from the tax.
The bottom line is that if the FairTax were in place instead of our current tax system, your bonus check would be $1,600 instead of the roughly $1,000 you are receiving.
For more information, google FairTax.org.
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Oh Wow! That was perfectly handled. I hope Houston looks at this!
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Permalink Reply by Carol Adams McLean on
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Can you send this to Neal Boortz? It's great!
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I did send it to Neal awhile back, but he typically looks for things that are a little more hyperbolic. I think it would be good for every business owner to include something like this with every paycheck. I'm working on something that will be included with regular paychecks. Something like this:
Total allocated for your paycheck: $3,000
Amount of payroll taxes paid by company: (250)
Amount set aside for corporate income tax: (150)
Your payroll: $2,650
FICA (164)
Medicare ( 38)
Income Tax Withholding (485)
Net Pay $1,963
With the FairTax, your pay would be $3,000
Plus the prebate 268
Total $3,268
Net Increase with the FairTax $1,695
It needs work, but including a Year To Date column would really hammer home the benefit of the FairTax.
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Surely this can be used on a broad base to make the point! I wish I knew where to take it from here. It's brilliant!
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Maybe we can talk FairTax.org into putting up a calculator using this approach similar to the FairTax Calculator they currently have on their site. It's a bit complex.
http://www.fairtax.org/site/PageServer?pagename=calculator
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Pat,
Send me an email so I can give you my number. I think we can do a little better about putting this on the front page.
Jim
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The calculator is very nice and a lot of work went into it. The problem I have with it is that it calculates a comparison between current and nrst purchasing power WITHOUT ANY DROP in prices.
If you want to include a pre-nrst price reduction, you have to
a) know that this option exists
b) be able to find it
c) be willing to change the assumption
d) know what kind of reduction makes sense
e) hit yet another button verifying you want the change in assumption
f) go back to the "results" page to view the new results.
People new to the nrst aren't going to go thru this. They will go thru the calculator without adjusting for a pre-nrst price reduction and see that very little change takes place [without a pre-nrst price reduction.]
The default should be that the calculator includes a reasonable pre-nrst price reduction. Of course the option can still exist to remove it ... but the default needs to include a reduction.
I would even like it to include a 10% reduction in year 1, 12% in year 2, 15% in year 3, 18% in year 4, and 21% in year 5. Just my two cents. :)
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Permalink Reply by Tony on
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I have a paystub and store receipt graphic I threw together to aid in comparisons from the current to the FairTax system.
A little too big to post here so I uploaded them to my photos.
Let me know if you want/need them.
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I really like your paystub. I'm going to try to incorporate something like this with the paycheks we send out. It would be great if we could get thousands of companies including a FairTax paystub.
Maybe we could talk ADP or Paychex or some other service like that into offering an option to include a simple FairTax paystub along with their normal service. Anyone know a FairTax supporter who is either a big user of a payroll service (or an exec of a payroll service)?
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