A blog entry on Facebook by Edward Glamkowski and my response to it. This gentleman is smart and has more education than I do but I did my best to refute his arguments. Any additional help on this would be appreciated. The Facebook Group is called "Neal Boortz Listeners."
"Mr. Edward Glamkowski's arguments against the Fair Tax and the refuted sections of HR25 "The Fair Tax."
First off, I must say I totally support the abolition of the income tax. In fact, you could eliminate the individual income tax, replace it with nothing, and it would support a budget the size of Clinton's last budget, which was already wacky huge, and still have a small surplus. That said, let's kill this Fair Tax non-sense here and now.
1) It does NOT abolish the income tax. Section 905 of the Fair Tax institutes an income tax against certain, targetted people. How trivial would it be for a liberal president with a liberal Congress (gee, like what we have now!) to expand the affected group, say, to the "evil rich"? Then to other unpopular groups? It would snowball fast (just like the original income tax did!) and then we'd have an income tax ON TOP of the sales tax. Brilliant!
Answer: Sections 905 does not institute an income tax: ‘‘SEC. 905. WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS." No mention is made in this section reconstituting an Income Tax! The same argument you use to speak of a liberal president and a liberal congress can be said of the president congress and president. That argument doesn't hold water.
2) Because the income tax is embedded in the Fair Tax, the 16th cannot be repealed, it would have to stay
Answer: There is no income tax embedded in the Fair Tax. With passage of HR 25 the Income Tax, Payroll Tax, Social Security Tax, etc. would be repealed. The 16th Amendment Establishing the legality of an income tax need not be repealed prior to the implementation of the Fair Tax. That will come later.
3) Anyways, amendments can't be repealed by law, and I figure the likelihood of the 16th ever going away is pretty much nil.
Answer: See Item 2 Above. It's not necessary to Repeal the 16th Amendment prior to passing HR 25!
4) Although HR25 does abolish the IRS, it creates a Sales Tax Bureau. The STB will perform basically the identical same functions as the IRS, but I'll get to that in a moment. Therefore, the politicians in DC, who may be evil but aren't stupid, won't literally abolish the IRS, they'll just change the nameplate on the office building. Same people, same office, same work, new name.
Answer: ‘‘SEC. 401 AUTHORITY FOR STATES TO COLLECT TAX. ‘‘(a) IN GENERAL.—The tax imposed by section 101 on gross payments for the use or consumption of taxable property or services within a State shall be administered, collected, and remitted to the United States Treasury by such State if the State is an administering State. ‘‘(b) ADMINISTERING STATE.—For purposes of this section, the term ‘administering State’ means any State—‘‘(1) which maintains a sales tax, and ‘‘(2) which enters into a cooperative agreement with the Secretary containing reasonable provisions governing the administration by such State of the taxes imposed by the subtitle and the remittance to the United States in a timely manner of taxes collected under this chapter.
5) Before getting back to the "do the identical work" thing, I would like to kill two birds with one stone: your financial privacy is NOT reclaimed, and employers do NOT have reduced compliance burdens. This is because all income must still be reported to the government. Alledgedly for administration of social security. It falls to employers to report your income to the government. Same reporting requirements as under the income tax.
Answer: So what? You're not taxed on that income reported to the Social Security Administration. What's the problem? Businesses do not pay tax on intermediate costs such as purchasing glass to make windows for resale. They would only pay tax on items they purchased for their own use. As the bill specifies, you only pay 1 time at the point of sale. If you purchase something used, you don't pay any sales tax at all.
6) The STB will indeed do the identical same work as the IRS. Since your income gets reported, it follows incomes will be audited. Same work for the STB as for the IRS under the income tax.
Answer: The Federal Income Tax consists of over 60,000 pages. If you think that kind of documentation is going to be required to provide the treasury with an accurate count on sales taxes received, you are sadly mistaken.
‘‘(d) TIMELY REMITTANCE OF TAX.—‘‘(1) IN GENERAL.—Administering States shall remit and pay over taxes collected under this subtitle on behalf of the United States (less the administration fee allowable under paragraph (2)) not later than 5 days after receipt. Interest at 150 percent of the Federal short-term rate shall be paid with respect to amounts remitted after the due date."
7) Since income needs to be reported under the Fair Tax, whether for social security or for payment of income taxes, that means income needs to be defined. HR25 does not adequately define income. That means virtually all of the income tax code that HR25 repeals will need to be immediately reimplemented. No point in throwing away 90+ years of refining the definition of income. Like I said - politicians are evil, not stupid. So the Fair Tax would explode right back up to the size of the current income tax law literally overnight.
Answer: THERE ARE NO INCOME TAXES TO BE PAID! This is a red herring.
I could go on and on all day - all the propaganda used to sell the Fair Tax is nothing less than a pack of lies and deceptions. Read the actual bill and understand what it means. You'll come to realize, as I have, that it is nothing at all even remotely like what Boortz and others try to peddle it as. It is a dangerous thing, and we should all be extremely thankful that the bill does NOT have sufficient support in DC to pass, and we should all hope and pray it never does.
I know, I know, y'all will respond with "We The People just need to make sure the politicians don't mangle the Fair Tax beyond its original scope!" I ask you this: how good of a job did the very self-same People do in keeping the income tax from getting blown way beyond its original scope (a 1% tax on only the richest of the rich)? Upon what basis do you have such faith in The People? There is NO basis for such faith that The People would not be superlative watchdogs of the government politicians. They don't do it now, and they won't do it under the Fair Tax.
Answer: I'm just wore out trying to understand your logic. I have read HR 25 and it is nothing like you portend it to be. Sorry bud but you're barking up the wrong tree. The Fair Tax would be the best thing that could ever happen to the United States and would bring back all those companies that have fled beyond U.S. jurisdiction.
When you consider how much we pay in income and payroll taxes alone, can you imagine what the American public could do with all that money. If you folks out there are reading this and saying to yourself, "I don't know who to believe," then I recommend you read Georgia Congressman John Linder and Neal Boortz book, The Fair Tax and the sequal to it. Then read the legislation HR 25. Believe me it would be the greatest legislation since sliced bread!