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South Carolinians Take the Lead on Tax Reform

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  • Don
    What is this? South Carolinians Take the Lead on Tax Reform Last week South Carolina s two GOP Senators, Jim DeMint and Lindsey Graham, introduced a tax reform
    Message 1 of 5 , Oct 31, 2005
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      What is this?

      South Carolinians Take the Lead on Tax Reform

      Last week South Carolina's two GOP Senators, Jim DeMint and Lindsey
      Graham, introduced a tax reform plan that would completely eliminate
      the personal income tax and replace it with a national consumption
      tax. But unlike a national sales tax plan, which imposes the tax at
      the retail level of sales, the DeMint-Graham plan cuts the tax
      equally in two. Half would be paid by businesses on the value-added
      they produce, and half paid by consumers at the cash register.

      The plan in effect replaces the personal income tax with a national
      sales tax and the corporate income tax with a value added tax. The
      sales tax rate is 8.5%, which is comfortably below the 10% pain
      threshold for most Americans when it comes to sales taxes. The
      business VAT would also be 8.5%. Sen. DeMint had once proposed a
      single 23% national sales tax, but during his 2004 Senate campaign
      he paid a price in the polls for suggesting such a high rate.

      One of the plan's chief architects, economist Bill Helming of
      Kansas, says the Graham-DeMint plan is "explosively pro-growth
      because it exempts from the tax all capital purchases by businesses
      and all exports. This is a pro-business and pro-jobs bill." What
      sold Sen. Graham, who has supported a tariff against Chinese goods,
      is that it puts U.S. and Chinese goods on equal footing in a way
      that is legal under WTO rules. "Now the Chinese goods would have to
      be charged the consumption tax just as American-made products would
      be," he says.

      Mr. DeMint emphasizes that the business tax would be "very visible
      to the final end-use consumer. The taxes paid by businesses would
      show up as a line on the final receipt." This is important because
      VAT opponents have often complained that this tax is undesirable
      because it is hidden from the consumer.

      Mr. DeMint says the duo are introducing the tax plan now because
      he's "disappointed in the President's Tax Reform Panel, which isn't
      a bold enough proposal." He believes the idea of
      essentially "getting the IRS out of people's lives is the key to
      getting Americans fired up about tax reform."

      Under the DeMint-Graham consumption tax, there would be no more
      taxes on capital gains, no more taxes on death, no more taxes on
      Social Security benefits, and 130 million tax filers could forget
      about April 15. To guard against regressivity of a sales tax, the
      plan would provide a universal rebate to all Americans for sales
      taxes paid on consumption up to the poverty level. This rebate would
      be applied to every worker's payroll tax, reducing the largest tax
      most Americans pay.

      Consumption tax opponents, such as Grover Norquist of Americans for
      Tax Reform, worry that the VAT could become an add-on tax rather
      than a substitute for the income tax. This could be what he
      calls "the worst of all worlds." Still, Messrs. DeMint and Graham's
      8.5% tax plan will test the political waters for how much support
      there is, especially among grassroots conservatives, for sticking a
      stake through the heart of the income tax and starting all over.
    • Don
      Has anyone heard of this? Are they affiliated with fairtax? It is a slightly difference plan, but more palatable to the people since it makes it appear as
      Message 2 of 5 , Nov 1, 2005
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        Has anyone heard of this? Are they affiliated with fairtax? It is
        a slightly difference plan, but more palatable to the people since
        it makes it appear as though the business are actually paying half
        of the tax.
        (I thought that I posted this yesterday, but it didn't seem to post.
        Here is a second try.)



        South Carolinians Take the Lead on Tax Reform

        Last week South Carolina's two GOP Senators, Jim DeMint and Lindsey
        Graham, introduced a tax reform plan that would completely eliminate
        the personal income tax and replace it with a national consumption
        tax. But unlike a national sales tax plan, which imposes the tax at
        the retail level of sales, the DeMint-Graham plan cuts the tax
        equally in two. Half would be paid by businesses on the value-added
        they produce, and half paid by consumers at the cash register.

        The plan in effect replaces the personal income tax with a national
        sales tax and the corporate income tax with a value added tax. The
        sales tax rate is 8.5%, which is comfortably below the 10% pain
        threshold for most Americans when it comes to sales taxes. The
        business VAT would also be 8.5%. Sen. DeMint had once proposed a
        single 23% national sales tax, but during his 2004 Senate campaign
        he paid a price in the polls for suggesting such a high rate.

        One of the plan's chief architects, economist Bill Helming of
        Kansas, says the Graham-DeMint plan is "explosively pro-growth
        because it exempts from the tax all capital purchases by businesses
        and all exports. This is a pro-business and pro-jobs bill." What
        sold Sen. Graham, who has supported a tariff against Chinese goods,
        is that it puts U.S. and Chinese goods on equal footing in a way
        that is legal under WTO rules. "Now the Chinese goods would have to
        be charged the consumption tax just as American-made products would
        be," he says.

        Mr. DeMint emphasizes that the business tax would be "very visible
        to the final end-use consumer. The taxes paid by businesses would
        show up as a line on the final receipt." This is important because
        VAT opponents have often complained that this tax is undesirable
        because it is hidden from the consumer.

        Mr. DeMint says the duo are introducing the tax plan now because
        he's "disappointed in the President's Tax Reform Panel, which isn't
        a bold enough proposal." He believes the idea of
        essentially "getting the IRS out of people's lives is the key to
        getting Americans fired up about tax reform."

        Under the DeMint-Graham consumption tax, there would be no more
        taxes on capital gains, no more taxes on death, no more taxes on
        Social Security benefits, and 130 million tax filers could forget
        about April 15. To guard against regressivity of a sales tax, the
        plan would provide a universal rebate to all Americans for sales
        taxes paid on consumption up to the poverty level. This rebate would
        be applied to every worker's payroll tax, reducing the largest tax
        most Americans pay.

        Consumption tax opponents, such as Grover Norquist of Americans for
        Tax Reform, worry that the VAT could become an add-on tax rather
        than a substitute for the income tax. This could be what he
        calls "the worst of all worlds." Still, Messrs. DeMint and Graham's
        8.5% tax plan will test the political waters for how much support
        there is, especially among grassroots conservatives, for sticking a
        stake through the heart of the income tax and starting all over.

        -- Stephen Moore
      • wvquest4edm
        Don, This plan also keeps the payroll tax. So in addition to a Value Added Tax, we d have a National Retail Sales Tax, employees paying an INCOME withholding
        Message 3 of 5 , Nov 1, 2005
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          Don,

          This plan also keeps the payroll tax. So in addition to a Value
          Added Tax, we'd have a National Retail Sales Tax, employees paying
          an INCOME withholding 7.65% payroll tax and employers matching that
          withholding with another 7.65%. Payroll taxes are sent along to the
          IRS right along with income taxes. So long as there is withholding
          or demands for tax revenue based on income, there will be a
          confiscatory agency to monitor every working American's income. But
          under the BEST plan, they'd also have two other systems to
          manipulate.

          The greatest advantage of the FairTax in my mind is its visibility.
          That is also what politicians most fear about it.

          Bill

          --- In njfairtax@yahoogroups.com, "Don" <paufin@h...> wrote:

          Has anyone heard of this? Are they affiliated with fairtax? It is
          a slightly difference plan, but more palatable to the people since
          it makes it appear as though the business are actually paying half
          of the tax. (I thought that I posted this yesterday, but it didn't
          seem to post. Here is a second try.)

          South Carolinians Take the Lead on Tax Reform

          Last week South Carolina's two GOP Senators, Jim DeMint and Lindsey
          Graham, introduced a tax reform plan that would completely eliminate
          the personal income tax and replace it with a national consumption
          tax. But unlike a national sales tax plan, which imposes the tax at
          the retail level of sales, the DeMint-Graham plan cuts the tax
          equally in two. Half would be paid by businesses on the value-added
          they produce, and half paid by consumers at the cash register.

          The plan in effect replaces the personal income tax with a national
          sales tax and the corporate income tax with a value added tax. The
          sales tax rate is 8.5%, which is comfortably below the 10% pain
          threshold for most Americans when it comes to sales taxes. The
          business VAT would also be 8.5%. Sen. DeMint had once proposed a
          single 23% national sales tax, but during his 2004 Senate campaign
          he paid a price in the polls for suggesting such a high rate.

          One of the plan's chief architects, economist Bill Helming of
          Kansas, says the Graham-DeMint plan is "explosively pro-growth
          because it exempts from the tax all capital purchases by businesses
          and all exports. This is a pro-business and pro-jobs bill." What
          sold Sen. Graham, who has supported a tariff against Chinese goods,
          is that it puts U.S. and Chinese goods on equal footing in a way
          that is legal under WTO rules. "Now the Chinese goods would have to
          be charged the consumption tax just as American-made products would
          be," he says.

          Mr. DeMint emphasizes that the business tax would be "very visible
          to the final end-use consumer. The taxes paid by businesses would
          show up as a line on the final receipt." This is important because
          VAT opponents have often complained that this tax is undesirable
          because it is hidden from the consumer.

          Mr. DeMint says the duo are introducing the tax plan now because
          he's "disappointed in the President's Tax Reform Panel, which isn't
          a bold enough proposal." He believes the idea of
          essentially "getting the IRS out of people's lives is the key to
          getting Americans fired up about tax reform."

          Under the DeMint-Graham consumption tax, there would be no more
          taxes on capital gains, no more taxes on death, no more taxes on
          Social Security benefits, and 130 million tax filers could forget
          about April 15. To guard against regressivity of a sales tax, the
          plan would provide a universal rebate to all Americans for sales
          taxes paid on consumption up to the poverty level. This rebate would
          be applied to every worker's payroll tax, reducing the largest tax
          most Americans pay.

          Consumption tax opponents, such as Grover Norquist of Americans for
          Tax Reform, worry that the VAT could become an add-on tax rather
          than a substitute for the income tax. This could be what he
          calls "the worst of all worlds." Still, Messrs. DeMint and Graham's
          8.5% tax plan will test the political waters for how much support
          there is, especially among grassroots conservatives, for sticking a
          stake through the heart of the income tax and starting all over.

          -- Stephen Moore
        • cpklapper
          That would kill it for me, since the only reason I am in favor of the fair tax is that it kills off one of our value taxes, making it easier to kill off the
          Message 4 of 5 , Nov 1, 2005
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            That would kill it for me, since the only reason I am in favor of the fair tax is that it kills off one of our value taxes, making it easier to kill off the other two, sales and property.  I would cut to the chase and suggest replacing the income tax, sales and property taxes with waste and resource taxes, like I did the last time I ran for public office some fifteen years ago.

            C. P. Klapper

            PS: I have been, as time allows, releasing my earlier copyrighted, but unpublished works as eBooks.  Probably perversely, as far as this audience is concerned, I have started with my poem cycle, The Washington Poems, but the next earlier work I will bring into this computer publishing world will be Popular Capitalism (sorry the link does not work yet, just save it for future reference) which I will be updating for this 2005 second edition.


            --- In njfairtax@yahoogroups.com, "wvquest4edm" <wvquest@m...> wrote:
            >
            > Don,
            >
            > This plan also keeps the payroll tax. So in addition to a Value
            > Added Tax, we'd have a National Retail Sales Tax, employees paying
            > an INCOME withholding 7.65% payroll tax and employers matching that
            > withholding with another 7.65%. Payroll taxes are sent along to the
            > IRS right along with income taxes. So long as there is withholding
            > or demands for tax revenue based on income, there will be a
            > confiscatory agency to monitor every working American's income. But
            > under the BEST plan, they'd also have two other systems to
            > manipulate.
            >
            > The greatest advantage of the FairTax in my mind is its visibility.
            > That is also what politicians most fear about it.
            >
            > Bill
            >
            > --- In njfairtax@yahoogroups.com, "Don" paufin@h... wrote:
            >
            > Has anyone heard of this? Are they affiliated with fairtax? It is
            > a slightly difference plan, but more palatable to the people since
            > it makes it appear as though the business are actually paying half
            > of the tax. (I thought that I posted this yesterday, but it didn't
            > seem to post. Here is a second try.)
            >
            > South Carolinians Take the Lead on Tax Reform
            >
            > Last week South Carolina's two GOP Senators, Jim DeMint and Lindsey
            > Graham, introduced a tax reform plan that would completely eliminate
            > the personal income tax and replace it with a national consumption
            > tax. But unlike a national sales tax plan, which imposes the tax at
            > the retail level of sales, the DeMint-Graham plan cuts the tax
            > equally in two. Half would be paid by businesses on the value-added
            > they produce, and half paid by consumers at the cash register.
            >
            > The plan in effect replaces the personal income tax with a national
            > sales tax and the corporate income tax with a value added tax. The
            > sales tax rate is 8.5%, which is comfortably below the 10% pain
            > threshold for most Americans when it comes to sales taxes. The
            > business VAT would also be 8.5%. Sen. DeMint had once proposed a
            > single 23% national sales tax, but during his 2004 Senate campaign
            > he paid a price in the polls for suggesting such a high rate.
            >
            > One of the plan's chief architects, economist Bill Helming of
            > Kansas, says the Graham-DeMint plan is "explosively pro-growth
            > because it exempts from the tax all capital purchases by businesses
            > and all exports. This is a pro-business and pro-jobs bill." What
            > sold Sen. Graham, who has supported a tariff against Chinese goods,
            > is that it puts U.S. and Chinese goods on equal footing in a way
            > that is legal under WTO rules. "Now the Chinese goods would have to
            > be charged the consumption tax just as American-made products would
            > be," he says.
            >
            > Mr. DeMint emphasizes that the business tax would be "very visible
            > to the final end-use consumer. The taxes paid by businesses would
            > show up as a line on the final receipt." This is important because
            > VAT opponents have often complained that this tax is undesirable
            > because it is hidden from the consumer.
            >
            > Mr. DeMint says the duo are introducing the tax plan now because
            > he's "disappointed in the President's Tax Reform Panel, which isn't
            > a bold enough proposal." He believes the idea of
            > essentially "getting the IRS out of people's lives is the key to
            > getting Americans fired up about tax reform."
            >
            > Under the DeMint-Graham consumption tax, there would be no more
            > taxes on capital gains, no more taxes on death, no more taxes on
            > Social Security benefits, and 130 million tax filers could forget
            > about April 15. To guard against regressivity of a sales tax, the
            > plan would provide a universal rebate to all Americans for sales
            > taxes paid on consumption up to the poverty level. This rebate would
            > be applied to every worker's payroll tax, reducing the largest tax
            > most Americans pay.
            >
            > Consumption tax opponents, such as Grover Norquist of Americans for
            > Tax Reform, worry that the VAT could become an add-on tax rather
            > than a substitute for the income tax. This could be what he
            > calls "the worst of all worlds." Still, Messrs. DeMint and Graham's
            > 8.5% tax plan will test the political waters for how much support
            > there is, especially among grassroots conservatives, for sticking a
            > stake through the heart of the income tax and starting all over.
            >
            > -- Stephen Moore
            >

          • cpklapper
            That would kill it for me, since the only reason I am in favor of the fair tax is that it kills off one of our value taxes, making it easier to kill off the
            Message 5 of 5 , Nov 1, 2005
            • 0 Attachment

              That would kill it for me, since the only reason I am in favor of the fair tax is that it kills off one of our value taxes, making it easier to kill off the other two, sales and property.  I would cut to the chase and suggest replacing the income tax, sales and property taxes with waste and resource taxes, like I did the last time I ran for public office some fifteen years ago.

              C. P. Klapper

              PS: I have been, as time allows, releasing my earlier copyrighted, but unpublished works as eBooks.  Probably perversely, as far as this audience is concerned, I have started with my poem cycle, The Washington Poems, but the next earlier work I will bring into this computer publishing world will be Popular Capitalism (sorry the link does not work yet, just save it for future reference) which I will be updating for this 2005 second edition.


              --- In njfairtax@yahoogroups.com, "wvquest4edm" <wvquest@m...> wrote:
              ...
              > This plan also keeps the payroll tax. So in addition to a Value
              > Added Tax, we'd have a National Retail Sales Tax, employees paying
              > an INCOME withholding 7.65% payroll tax and employers matching that
              > withholding with another 7.65%. Payroll taxes are sent along to the
              > IRS right along with income taxes. So long as there is withholding
              > or demands for tax revenue based on income, there will be a
              > confiscatory agency to monitor every working American's income. But
              > under the BEST plan, they'd also have two other systems to
              > manipulate.
              ...
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