Fair Tax Nation

Replace All Federal Taxes on Income with the Fair Tax Act , HR 25

The meeting will come to order!

The purpose of this meeting is to propose a new tax system. It has become apparent to most of us that our political leaders have become far to corrupt and bought off by special interests to remedy the impending collapse of our economy and many of us believe that the root of the corruption is our current system of taxation and the corrupting influence it has on our Political Leaders. Under the current system of taxing labor and therefore productivity we are losing the ability to grow our economy, and in fact we are losing past advances we have made due to our current system, the “Infernal Redundant System” “IRS” we spend massive amounts of what is collected to fund a nationwide force of tax collectors that number in excess of 140,000 ( a workforce larger than IBM) at a cost of about three hundred to five hundred billion annually, and in the process damage business and future growth by requiring businesses to spend limited resources, forcing them to be our record keepers and partner with the Federal Government (IRS) in the collection of taxes. In an effort to collect more taxes Washington is proposing a new tax called a “value added tax” (VAT) which is a hidden tax, a “compounded tax” on top of the taxes we already have on our labors (the income tax). This “value added tax” (VAT) would be imbedded in the goods and services we buy and would raise prices, but would not be obvious, and has the potential to become as convoluted and destructive as the current income tax system.

We are here to support the “Fairtax” proposal HR25 that would implement a national sales tax (consumption tax) on “new items only”. Used items would be exempt from further taxation. The “Infernal Redundant System” (IRS) would be eliminated. There would be a prebate up to the poverty level for everyone too assure that no one pays taxes on the necessities of life. Everyone would take home 100% of their pay check; no longer would there be any deductions. The employer would no longer be an unpaid tax collector for the Federal Government (involuntary servitude). The resources currently wasted by the outdated “Infernal Robbery System” (IRS) could be used for modernization and growth by businesses, therefore growing our economy.

Now I will open the meeting to the floor and try to answer your questions on the subject. The Chair Recognizes Joe Plummer: So, under this “Fairtax” would it fund the entire Federal Government, and completely eliminate Social Security (FICA deductions), income tax, and all other federal taxes? Chair: Yes, under the “Fairtax” all other federal government taxes would be replaced by the “Fairtax” and would go away. Joe Plumber: Then under the “Fairtax” people on the lower end of the economic scale who could least afford it, after a monthly prebate they wouldn’t pay taxes at all, so it would really be fair, not regressive, it would be more progressive than our current system! Chair: That’s right, but remember that due to the prebate no one would pay taxes on the necessities of life, and unlike the current “Infernal Redundant System’ (IRS) that in reality works to hinder economic growth, the “Fairtax” would lift the burden from business, and as common sense and logic tells us lower income people would benefit by increased opportunities as freed up resources are used to grow business. “A rising tide raises all ships.” JFK. The chair recognizes Jim Craftsman. Jim Craftsman: I operate a small furniture manufacturing business, and I have two people employed just to keep records for the “Infernal Robbery Service” (IRS) and under the “Fairtax” I could add them to my marketing department, is that right? Chair: Yes, employees that you are currently paying to do the “Infernal Redundant System” (IRS) work can be transferred to other areas, to tasks that will increase your productivity. And with the savings your company could become even more profitable and increase production, grow, expand and hire more employees.

The chair recognizes Jill Nanny. Jill Nanny: I have a struggling day care center, so under the “Fairtax” I could save a lot of “Infernal Redundant System” (IRS) expenses such as filing fees, tax preparers’ fees, late fees and penalties when money is tight?
Chair: That’s right; you could use the increased resources to hire more staff and take on more clients and increase your business. You would also be in a position to increase your employees pay and raise moral, that’s always good for business!

The chair recognizes Jack Sailor. Jack Sailor: I have a boat manufacturing company and I currently have 200 employees and business is way down, I may have to lay off some workers. My concern would be that currently when I buy new equipment I can write it off over a period of years, a benefit that I like.
Chair: That’s right, but how would that equate against the “Infernal Redundant System” (IRS) being eliminated and no longer having to pay staff to keep “Infernal Redundant System” (IRS) records, paying “Social Security Payroll Taxes.” etc. Or, fearing an “Infernal Redundant System” (IRS) audit where you could be penalized with fines and fees for what is essentially an honest mistake and if you are not paying an income tax (no IRS) a deduction becomes irrelevant.

Jack Sailor: Boats are a luxury item and I’m not sure how the “Fairtax” a tax on new items would affect my business. Chair: Look at it this way, under the “Fairtax your employees will take home their entire paycheck, all workers in all industries will take home their entire paycheck, now, wouldn’t more money in people’s pockets mean more people could afford a boat, something they have wanted for a long time? I go back to the premise that a rising tide raises all boats, pun intended! Jack Sailor: Change is always scary, even when we know that it’s necessary, but I see your point. The current system is just as scary, or even scarier, something has to be done!

The chair recognizes Trixie Hooker. Trixie Hooker: I’m a prostitute and my husband is my pimp. We have some girls who work for us, and we make a lot of money. Under the current “Infernal Redundant System” (IRS) we don’t pay any taxes, so why would we want a “Fairtax” system that would tax us when we spend our money? Don’t tax us tax the other guy! Leave the current “Infernal Redundant System” in place, let business and their employees pay the taxes. We have a new car and by the way a new boat, I have furs, clothes, and we have a nice stash of cash, all tax free! Now you want us to pay taxes when we spend our money? Chair: Yes, under the present “Infernal redundant System” (IRS) honest people who earn their living the right way by labor or honest commerce pay the taxes, while those who earn money by illegitimate means by necessity hide their income and so do not pay any taxes. Those who operate outside the law with ill-gotten gains are taking a free ride I can understand why you would object to the fairtax!

The chair recognizes Don D. Dealer. Don D. Dealer: I Sell drugs through a network of street pushers that I have built over time and I have amassed a fortune. Most of my money is safe and well hidden. I know of others who deal in stolen autos, some who are fencing goods for burglar rings, some who facilitate illegal gambling, and they are making a lot of money. If this “Fairtax” is adopted won’t it take a bite out of our profits? Won’t I end up paying taxes when I buy my sports cars, my other expensive toys? Chair: Of course, however those who earn a living by honest labor and business dealings will gain since the tax burden they are carrying for you will no longer be needed. With you paying some of the bill “your tax burden”, the necessity for them to pay more because of you will become less. I believe the correct term would be to make taxpayers out of criminals. Under the current “Infernal Redundant System” (IRS) criminal gains are by their nature hidden. Under the current “Infernal Redundant System” (IRS) honest people can be criminalized, punished, even imprisoned. Circumstances that are beyond their control can cost them their homes, their livelihood and their families. Common sense should tell us, it’s better to make taxpayers out of criminals, instead of making criminals out of taxpayers.

The Chair recognizes Slick Politician. Slick Politician: If we abolish the current system, won’t it make it harder for me to get re-elected? I have been using the tax code for over twenty years to reward my constituents by manipulating the tax code in their favor? Chair: I can see how this may create a dilemma for you, but wouldn’t we all be better served by a more fair tax system? Slick Politician: This would turn my life and the life of my peers on its Ear. We have been using class warfare to pit all of the different ethnic groups and socio-economic interests against each other in order to govern for almost a century, and without the Income Tax we will become almost impotent! We will lose billions from the Income Tax Lobby, there goes my vacation home in Martyha's Vineyard! The Chair: Well I guess you will have to learn to deal with it!

The Chair recognizes Ima Pennypincher: Ima Pennypincher, if a sales tax was added to every new item that I purchase wouldn’t it drive up the price? Chair: Not necessarily! All goods and services we purchase under the current system have embedded taxes contained in them, we just don’t see them. Here is a good example: Let’s assume the item is a house and one major component of a house is lumber. The company that cut down the trees invested resources into tax collection, the lumber company that milled the lumber invested resources into tax collection, the lumber retailer invested resources into tax collection, and the builder that built the home invested resources into tax collection. This amounts to a series of embedded taxes that you paid when you bought the home, you just didn’t see them! According to Dr. Dale Jorgensen Professor of Economics at Harvard University the price you pay could actually go down, not up!

The Chair recognizes Ben A. Beancounter. Thank you Mr. Chairman. I am the lead accountant for a major international corporation and we spend an enormous amount of money on tax avoidance. My company is forced to maintain several off shore subsidiaries in the Caribbean in order to remain competitive in the world market because the U.S has one of the highest corporate income taxes in the world. I have heard it estimated that up to twenty trillion dollars is sitting offshore by U.S corporations. If we were to eliminate the IRS and implement the fairtax, all of that capital could come back into our economy and would save companies like mine an absolute fortune, is this correct? The Chairman: Yes Mr. Beancounter that is correct! Mr. Beancounter: Mr. Chairman over the years I have witnessed vast amounts of capital diverted too many investments that were not necessarily the wisest choice for the company, but these decisions were made in order to survive the tax code as written! The Chairman, that is correct, almost every person and company in America is forced to make financial decisions based on the tax code rather than sound financial decisions that would best serve them.

The Chair recognizes Mr. IB Doubtful: Mr. Doubtful, My friend who is the smartest man on earth, I know because he told me so, said that a consumption tax would be a problem when the economy is sluggish because tax revenue would go down. He said that if it wasn’t for that he would support the Fairtax! The Chair, that theory has been proven to be erroneous because tax revenue always drops during an economic slowdown. When the economy slows it is generally because of a decrease in consumer spending, or a reduction in employment, or a combination of many factors! Tax revenue will always decrease under any tax system during an economic slowdown, other than some forms of direct taxation or a poll tax which are both forbidden by the U. S. Constitution!

The Chair recognizes I. M. Confused: Mr. Chairman how would the Fairtax be collected? And why would it cost less for the government? The Chair, since there would not be an IRS any longer interfering in our lives the collection of taxes would be the responsibility of the States of the Republic. The Fairtax allows a ¼% of the revenues collected to remain with the States for their collection expenses, and since every state already collects taxes at the state level this would be very easy for the state to implement! Furthermore, the collection of taxes would be at the retail point of sale and much easier to police for fraud, since the agency in charge of collecting the taxes would only have to deal with businesses and their books, fraud would be much easier to police and enforce. There will always be a black market in any society, but the Fairtax would encourage less of this activity than the currently broken and corrupt system.

The Chair recognizes Mr. John Cardealer: My concern is that there will not be a tax on used items. If a used Car is tax exempt won’t it encourage people to buy used cars instead of new ones? The Chair: not necessarily. Markets have a way of finding a medium of balance. Used goods may possibly become more desirable for their tax exempt position, but that would only move the price up marginally for the same reason. Besides most people buy new cars, or new electronics, based on the fact that they want new stuff. Most large ticket items are financed and the tax issue would be a very minor deterrent for most people.

Are there any other question or comments? No? The meeting is therefore adjourned.

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Comment by Harold Pack on November 1, 2009 at 12:18pm
Good job: Anyone should be able to understand it.

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