I am very committed to the FTP but there are two concerns I have about how we are promoting it. I'll address one of them here.
Ken Hoagland's recent book "The FairTax Solution" chapter 4, page 52, discusses how taxpayers can control how much tax they pay, and how they can have a real say in our nation's fiscal decisions. I find this to be a real stretch of the imagination.
Do we really suppose that folks will spend less to control the amount of tax revenue the government gets? Or the direct knowledge (at the time of every new purchase for personal consumption ) of how much we are taxed (at the 23% inclusive rate) will cause us to take action to stop the rampant spending that has gone under both major parties for so long?
Rather we need to elect representatives and executive branch leaders who will make the hard choices, balance the budget, and start paying down the debt.
I urge us to stick with the certain advantages of the FTP: tax simplification!, eliminating or lowering taxes on low and lower-middle income persons and families, stopping double taxation, encouraging savings and investment, eliminating special favors obtained by so many lobbyists, etc.
Looking forward to hearing your thoughts,
FTP Community Coordinator
People will spend less if Congress were to raise the tax rate beyond a point which makes the cost of a good or service too expensive.
You make a good point.
Yet, how will it work, will the 'government' propose new spending, then raise the tax to try to receive the money to pay for it? Then when not enough folks spend enough on discretionary goods, the revenues do not accrue, and the proposal dies for lack of funding?
Definitely will require keeping to a strict budget, and no borrowing. But how will that be stopped?
It seems the FTP does not address the issue of deficit spending, or allocating the revenue (social programs, military, highways, national parks, health research, space program, EPA)
That's why I advocate selling the plan based on it's definite positives as stated in my initial post, and not raising the issues of human behaviour and attitude.
Thinking Spring in the chilly northeast,
Very interesting and helpful information, Cary.
I am hoping you and others will respond to my questions, too. They are not rhetorical, and very practical ones, if we are to get out of this financial/economic hole we have dug for ourselves.
Can we "sell" the FTP strictly on the practical grounds I cite or do we need to convince lawmakers of the philosophical reasons (transparency, people's intolerance to paying more tax and thus spending less on extras)?
Thanks for taking the time to respond, and I hope you and others respond to the specific questions in my two postings.
I also share your concerns about the ease in which the Sales Rate could be changed. Pages 19 & 20, of the Fair Tax Act of 2011 (HR-25), "CHAPTER 1, Sec.101, (b) Rate ... indicates that the 23 percent rate will only be guaranteed for year 2013. After 2013 the rate will depend upon: General Revenue Rate (14.91%) + the old-age, survivors and disability insurance rate + the hospital insurance rate.
I have yet to find out who and how the Social Security and Medicare rate are determined, but this Bill leaves the rate easily changed without the general public being aware, until after the fact. And we all know how hard it is to make a correction at that point.
I have written to Representative Robert Woodall, Feb. 22, 2011, proposing the following two amendments to HR-25. But, after studying the section referred to above, I am not sure these amendments would correct the problem. I have yet to hear from Rep. Woodall.
Bill KrietemeyerAuburn, Alabama