Comment

Comment by David Miller on February 27, 2013 at 12:38pm

This is sort of a general comment but also in part directed to John Gaver.  After being somewhat hounded to complete my post of my fair tax calculator I posted it, along with some supporting documents on how I see the fair tax works.  John in particular pressed me to complete my post which I did 2/13/13 @10:58pm and since it has been two full weeks without a word, I thought I would check in.  I have not heard anything, good, bad, ugly...nothing.

Comment by John Gaver on February 14, 2013 at 4:11am

Thanks, David. This will be a good exercise.

I'm in the middle of playing catch-up on the TEA Party Insights WebTV program, so It may take a day or two for me to really dig into it. But I'm sure that there will be others who are just as well versed in the FairTax and who know how to read a spreadsheet, who will jump on this right away.

Well, I've got to get back to work now. I just re-shot the "About Us" program this evening and it's in post production (backgrounds and slides are being added) and I'll be shooting the first one or two regular programs tomorrow. I think that after upgrading both our microphone system and our camera, we have all the kinks worked out.

The focus of the series will be tax and economy.

You might also want to check out my articles on Examiner.com

I'll get back to you in a few days on your calculator. Thanks.

Comment by David Miller on February 13, 2013 at 10:58pm

Well, I told John that I would put the spreadsheet up for peer review the middle of this week and it will be attached to this post.  Since most here are proponents of the fair tax (your words not mine) I don't know how many are aware of S173, the latest in the barrage of other tax proposals, this one in the vein of a flat tax.  The text of the legislation is significantly more complex than the fair tax, but the calculations are significantly easier.  S173 relies on several sections of the existing tax code to identify which types of income primarily from retirement distributions that it will include in its' calculation of your income.  That said, for myself, assuming again that I have not made some glaring error in my assumptions of how that tax will work, I would pay significantly less basing the calculations on my income for 2012 using the flat tax.  I have always said that everyone's viewpoint of taxes is that it is basically ok to tax someone else but don't tax me and the reverse of that is just as true in that it is ok to take someone else's deductions and exemptions away but don't touch mine.

All that said, the last thing I will add before throwing myself on the sacrificial alter is, since there is a new tax proposal out, I have included a version of how I understand that tax to function in the fair tax spreadsheet.

Ya'll have fun now!

FairTaxCalculator003.xls

Fair%20Tax%20Calculation%20Theory.doc

FairTax%20Hand%20Calculation.doc

Comment by John Gaver on February 8, 2013 at 3:05am

Thanks, David. I'm sure that there are several people out there who will be interested in critiquing it for you. I've put some of my stuff out, in the past and regardless of how diligent I have been, someone always finds something that I missed. More eyes on anything means more chance of someone finding something that you missed. It just bugs me when that happens, since it shatters my delusions of being perfect. 8^)

Comment by David Miller on February 7, 2013 at 8:19am

John, Yes it has been two weeks and I was hoping I would hear more from those I sent it out to by now.  I don't for a moment doubt that a significant amount of time and money has been put into the crafting of the fair tax proposal.  I will promise you this, that regardless of how many responses I have received, I will post my spreadsheet and accompanying comments by the middle of next week.  I will say, you should probably send a followup comment around that time to remind me to do so.

Comment by John Gaver on February 3, 2013 at 7:17pm

Well David, it's been almost two weeks and we still haven't seen your spreadsheet.

Others, who have created spreadsheets or done some sort of research have posted it here, for review. I've done so, myself. Sometimes, people validate the work of others and sometimes they shoot holes in it. That's why we put it out for everyone to see.

The FairTax supporters and the income tax supporters are analogous to open software and Microsoft. Under open software, developers tell us that their product is secure and put their source code out there to prove it. Code junkies punch a few holes in it and they get patched before the product is released. Microsoft tells us that Windows is secure, but when we ask how do we know it's secure, Microsoft says, "Trust us. We tested it." So the new release comes out and they end up releasing 6 security patches in 7 days.

If you have something that you think proves a point — any point, then put it out for all to see. If it stands up to criticism, then you get kudos. If not, you get a lot of good suggestions to take back to the drawing board.

Just keep in mind that more than $23 million has been spent on researching and developing the FairTax and a lot of that money went to hire the best economists on the planet. Furthermore, those economists weren't told to develop a national retail sales tax plan. They were told to identify the problems with our current system and come up with a plan that would address those issues and that the public would accept. The FairTax was the result of that $23+ million in research.

So what this boils down to is that if you think that you've found a problem that wasn't found in all that research, you probably just need to do some more reading. That's what I did when I first came to the FairTax. It took me almost 2 years to wade through enough that I was convinced. I have since read most of the rest of it. It's dry, but thorough.

Comment by David Miller on January 22, 2013 at 4:03pm

John,

From the contents of your post I must assume you did not read my last post.  I indicated once I received feedback from completely impartial individuals, I would either post the spreadsheet or accept that I was mistaken from the outset. 

That said, I will address your individual points you most recently listed.

1) and 2) My spreadsheet does not even look at the old FICA, Medicare, Medicaid taxes.  All it does is calculate what a family could expect to pay based on a simple set of mostly closely know criteria, total income, retirement withdrawals, savings, donations and state and local taxes. It calculates the estimated fair taxes that a family would pay.  It is then up to the family to compare those results to their most recent tax return using as much of the same data as fits. Also, since you brought it up, I am well aware of the employee/employer contribution to FICA which makes FICA amount to 15.3%since both the employee and the employer contribute based on the employee salary.  The fair tax is based a base rate or 14.91% plus the old age and survivors disability plus the hospital insurance rate.  The last two make up the FICA tax which is as pointed out in reference to the employee's wages is 15.3%  if you add 15.3% and 14.91% you get 30.21% which would seem to be the correct starting point for the fair tax since it is all inclusive of the income and FICA taxes.

2b?) Your argument here is one of the reasons I initially was a strong proponent of the fair tax. And I still think one of the strongest arguments in that it to the degree the structure of the tax and the realistic income levels and income utilization across the nation five this argument a small amount of validity. A huge segment of our society utilizes every last dollar of their income to survive and will not have the ability to choose how much tax they will pay.  It will pretty much be carved in stone.

3) This particular argument I find somewhat almost amusing as it seems to suggest that through the passage of the fair tax, the cost of goods and services will be reduced even possibly significantly.  As for the possibility of this occurring, I will keep investing in my other retirement source (the Lotto) and see which one happens first.

And as to your last implication of here say, if you read my previous post, I stated and will state again that once I have received a couple of unbiased feedbacks,  I will either post the spreadsheet or admit my mistake and attempt to make amends.  I will not be badgered into submitting something that someone other than myself has had a chance to look at and evaluate.  Patience is a virtue and you will have to look for some until I can move forward.  If you are a moderator and wish to remove my post so be it.  As I have said, I will post results and or the spreadsheet once I have more data.  At that time as you put it, throw it the ones that are against it and let them have a chew.

One last statement.  Until I either hear the people I forwarded the spreadsheet to as to whether they will participate or not I do not intend to comment further on this.  But at that point I will.

Comment by John Gaver on January 22, 2013 at 12:57pm

David, since you didn't post your spreadsheet, as an attachment to your post, I have just a few questions.

1) Does your spreadsheet take into consideration both the employee and employer contribution to the payroll tax? Remember that employers simply pass on the cost of the payroll tax as just another cost that goes into determining the retail price of their product or service. In the end we individuals pay all of the costs of payroll taxes, either directly or indirectly.

2) Does your spreadsheet take into account FICA taxes that you currently pay? Remember that the FairTax replaces FICA, as well as the income tax. Furthermore, due to the FICA cap, it affects lower income groups more than upper income groups.

2) Does your spreadsheet take into account the 12 to 20 percent of the cost of all new retail spending at every level of income that represents embedded corporate taxes. Those embedded taxes are paid by everyone from the poorest bum, who buys a bottle of MD-20-20, to the richest billionaire, who buys a Gulfstream V jet and everything in between, including things like rent and electricity.

3) Does your spreadsheet consider the 4 to 15 percent of the cost of every retail purchase, new or used, that represents income tax compliance costs. Compliance costs are directly affected by the length of the manufacturing and distribution chain. The more links in the chain, the more compliance costs there will be. A baseball bat will have very little in compliance costs (a timber company, the manufacturer, some transportation costs and the retailer). A car, by contrast, will have an enormous amount of compliance costs, from the iron and bauxite mines (steel and aluminum), to the ranchers (leather), to the oil drilling companies (plastic), to the gas and coal companies (heat for the steel mills and electricity production to run all of the companies in the chain), along with numerous transportation companies to move components and the final product, and so on. If you have not included compliance costs, then you have left out a major cost factor in the income tax. Based on which economists you listen to, compliance costs add between $350 billion and $450 billion to the overall costs of our current tax system; all ultimately paid by individuals.

If you will post the spreadsheet here, I'm sure that a number of people would like to see it. Call it peer review. It's the same thing that economists do, before making a final report. They have others look over their findings and point out possible errors. When I do some of my own research, which I do often, I post my preliminary findings on a site that disagrees with my findings, so as to allow those with a bone to pick, to try to disassemble my findings. If they are successful, I start over. If they can't, then I finalize my work and put it in a book.

Give us a chance to examine your spreadsheet. Just use the paperclip icon, above and attach it here. Without that, it all just hearsay.

Comment by John Wesley Nobles on January 22, 2013 at 12:20pm

David, we invite you, John Gaver, Marv, and all others to discuss the pros and cons of Fair Tax on Fair Tax Time Radio.  We believe getting opposing views out in the open is a good way to get people that have not heard about Fair Tax (a very large percentage of Americans) engaged in our movement.  Call in and ask questions and share your opinions.

Comment by David Miller on January 22, 2013 at 10:56am

To Everyone on this forum has shown an interest in my comment.  First I appreciate the interest it has stirred. Second I just wrote to one of the first to comment on my comment explaining a couple of things.  First here is that I am going to come clean and admit that I posted my comment without THOROUGHLY testing the spreadsheet ( I have since forwarded it to some additional people in different statuses to test the validity of the spreadsheet).  Once I get feedback from those individuals I will post the results regardless of whether my spreadsheet is valid or not.  The last thing I wish to do is to mislead anyone.  My only goal in my comment is I want everyone to be able to see for themselves how the Fair Tax Act of 2013 will affect them and not try to assume where they may fall in a chart.

As I said in my original comment, I was (and am still willing to be re-convinced to be) a strong proponent of the fair tax.  However, as I believe I stated originally, based on my understanding of the fair tax as currently proposed would cause my own tax to increase 2.5 times.  I do feel I am squarely in the lower middle class to middle class in my income level which would seem to indicate that is how this tax should affect the majority of people.  That said, I am retired and after careful consideration, I believe that in itself could a great part of why my tax obligation will go up.

Bottom line here is that while I appreciate any discussion based on my assumptions, I feel any additional comments should be held until I post a follow up to my attempt to validate the spreadsheet across a wider spectrum. At that time I will be happy to discuss my position or accept any chastisement the forum feels necessary.

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