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My thoughts on the "FairTax"

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  • Don Venardos
    First of what the FairTax is not. It is not a libertarian bill, it is a bipartisan bill with significant libertarian benefits that is designed to passable
    Message 1 of 6 , Sep 1, 2007
    • 0 Attachment
      First of what the FairTax is not. It is not a libertarian bill, it is a
      bipartisan bill with significant libertarian benefits that is designed to
      passable within the current political balance of powers (if the FairTax gets
      all the Republicans and Libertarians it still needs 10% of Democrats) . If
      Libertarians controlled congress we would write a bill with no prebate and a
      much lower tax rate that significantly restricts the spending power of the
      government. That being said, that does not mean that we should take what we
      have now because the bill isn't perfect. This is politics and politics
      requires compromise. One of the liberal critiques of the FairTax is that the
      goal is do just that, the tax rate is artificially low (can you believe that
      people actually think a rate comparable to a 23% income tax is low?) and
      that government spending will have to be drastically cut.



      The tax rate. Yes the marginal rate is 30% when expressed in the manner
      normally associated with sales taxes. There is a very clear explanation on
      the FairTax website (prominently displayed), it's not a secret. The 23% rate
      is used to compare to the income tax it is replacing. If you are in the 25%
      income tax bracket (tax inclusive) the marginal rate of 23% (tax inclusive)
      is lower than you currently pay. Due to the prebate the effective rate is
      much lower. See sample table:




      Married couple: Two children


      Percent of poverty level

      Spending

      FairTaxes paid

      Amount of rebate

      Net taxes paid

      Effective average

      tax rate


      25%

      $6,415

      $1,475

      $5,902

      ($4,427)

      -69.0%


      50%

      $12,830

      $2,951

      $5,902

      ($2,951)

      -23.0%


      100%

      $25,660

      $5,902

      $5,902

      $0

      0.0%


      150%

      $38,490

      $8,853

      $5,902

      $2,951

      7.7%


      200%

      $51,320

      $11,804

      $5,902

      $5,902

      11.5%


      300%

      $76,980

      $17,705

      $5,902

      $11,803

      15.3%


      400%

      $102,640

      $23,607

      $5,902

      $17,705

      17.2%



      The prebate. The prebate is absolutely necessary for passage. The Democrats
      already complain that a sales tax is regressive and that the FairTax is
      estimated to reduce tax on the "rich" by 1%. What they don't realize is that
      the rich don't pay taxes anyway. The rich own the tax code and have the
      attorneys and lawyers to make sure their tax burden is minimal. Warren
      Buffet's tax rate was famously lower than his secretaries and he said he
      could have legally avoided paying all taxes. How much did it come out that
      John Kerry paid in taxes, it wasn't much?

      The tax code already gives tax credits to the poor. They get back more in
      taxes than they pay. The current code, however, discourages work because
      often when the poor make more money their net income can actually decrease.
      The government and tax code is riddled with disincentives and the
      discouragement of saving. The prebate gives the same deal to every citizen,
      millionaire or skid row bum. If you have to have welfare that is a much
      better way to do it. Economists always prefer cash payments over inefficient
      programs. I think we would be better off if we did away with all welfare
      programs, eliminate them totally and pay cash. Now if someone thinks that we
      can eliminate all welfare in the current environment, I will back him 100%
      (Ron Paul), but if it doesn't work out this is an efficient plan. I also
      don't buy the argument that it is a massive expansion of government welfare.
      By that same logic April 15 is a massive government give away when everyone
      gets their tax refund. How is a refund of your taxes a welfare program ,
      apparently it is only not welfare when the government gets the interest on
      your money for a year? And the people for whom it is actually welfare are
      already getting tax welfare.



      Okay, now the good stuff.



      The IRS. Why should the government know how much money I make? Why should
      the government know how I make my money? Why do I have to be the accountant
      for the government? I am a computer programmer and starting working as an
      independent contractor last year. I have a lot more flexibility and it works
      out great for me. I pay all my taxes, which includes the employee portion of
      the social security tax (self employment tax), but the IRS doesn't like guys
      like me. They think I should really be an employee (I am being exploited or
      something) and if I don't claim any expenses they are likely to classify me
      as an employee. So I have to figure out all these IRS business accounting
      rules. I work from home and run a cheap show. I could just as easily say the
      hell with the expenses, but since that red flags me I have to do it. Since I
      work at home I am actually supposed to log the personal time that I use my
      computer. Check my personal email log it, check my calendar log it, etc. You
      know what, I work hard and when I am not working, I don't want to work.
      There is also this thing called "common practice". This translates into,
      even though the rules say you are supposed to keep your books one way,
      common practice dictates that you do it a different way. This is accepted
      and expected by the IRS. Hell, I'm not an accountant and it isn't necessary
      for me to run my business. My Federal and State tax returns and worksheets
      were 66 pages and you had better believe that I have absolutely no clue if
      they are really correct. I am a smart guy, I did the best I could, but I
      don't really know if they are correct. What does the flat tax do for me and
      every other guy or girl that wants to run a business? We still have to deal
      with all this crap before we can even get to the tax rate. Under the
      FairTax, most Americans don't even have to file a federal tax return (good
      luck with 43 states and their income tax when they can't rely on the federal
      government doing most of the work for them).



      Business Taxes. There is no such thing as a business tax. All business taxes
      are embedded into the cost of goods or services. This directly effects the
      supply curve and results in higher prices and lower quantity of goods
      produced, so it is really the consumer that is paying the taxes. Business
      taxes make our exported goods more expensive and or domestic goods less
      competitive with foreign producers. This will have a huge economic impact, I
      don't think I need to spend much time on this, the implications should be
      self-evident.



      Investment. I sold my starter house due to a divorce. I can't afford another
      house in my area on one income with the market run up, but I do have money
      to invest for a future house if I move or the housing market really crashes.
      Cost basis, this can really be a pain for certain type of investments. I
      have to take into consideration the tax consequences of the investments I
      make. Some are better for retirement accounts, some have serious drawbacks
      in retirement accounts. I should be able to make an investment based on the
      opportunity that gives me the best return and not have to figure out what
      the tax implications are of each type of investment. Plus, I am being taxed
      on capital gains and dividends even though I am not spending the money. The
      FairTax eliminates all this nonsense and actually encourages investment.
      Investment is a wealth builder and makes people less reliant on their job
      and government programs (e.g. social security and welfare) and makes them
      more likely to take risks and be innovative. The current tax code actually
      breeds dependence on the government.



      Those are the big three for me. We can wait until Libertarians have a
      majority (Wayne Allen Root says he is running a 12-16 year campaign), or we
      can make a difference today. Everyone (except those that use it to their
      benefit) hates the tax code and momentum is building. As libertarians we can
      either benefit from this growing movement or argue that it isn't perfect and
      doesn't go far enough. The Democrats make the opposing argument, so that
      tells me it is a workable compromise that can benefit everyone.



      Regards,

      Don Venardos





      [Non-text portions of this message have been removed]
    • Devon Showley
      Don, in principle I agree. However, please define a prebate . Also below there is a long column of meaningless numbers, with no explanation? Best, D Don
      Message 2 of 6 , Sep 1, 2007
      • 0 Attachment
        Don, in principle I agree. However, please define a "prebate".
        Also below there is a long column of meaningless numbers, with no explanation?
        Best, D

        Don Venardos <dvenardos@...> wrote:
        First of what the FairTax is not. It is not a libertarian bill, it is a
        bipartisan bill with significant libertarian benefits that is designed to
        passable within the current political balance of powers (if the FairTax gets
        all the Republicans and Libertarians it still needs 10% of Democrats) . If
        Libertarians controlled congress we would write a bill with no prebate and a
        much lower tax rate that significantly restricts the spending power of the
        government. That being said, that does not mean that we should take what we
        have now because the bill isn't perfect. This is politics and politics
        requires compromise. One of the liberal critiques of the FairTax is that the
        goal is do just that, the tax rate is artificially low (can you believe that
        people actually think a rate comparable to a 23% income tax is low?) and
        that government spending will have to be drastically cut.

        The tax rate. Yes the marginal rate is 30% when expressed in the manner
        normally associated with sales taxes. There is a very clear explanation on
        the FairTax website (prominently displayed), it's not a secret. The 23% rate
        is used to compare to the income tax it is replacing. If you are in the 25%
        income tax bracket (tax inclusive) the marginal rate of 23% (tax inclusive)
        is lower than you currently pay. Due to the prebate the effective rate is
        much lower. See sample table:

        Married couple: Two children

        Percent of poverty level

        Spending

        FairTaxes paid

        Amount of rebate

        Net taxes paid

        Effective average

        tax rate

        25%

        $6,415

        $1,475

        $5,902

        ($4,427)

        -69.0%

        50%

        $12,830

        $2,951

        $5,902

        ($2,951)

        -23.0%

        100%

        $25,660

        $5,902

        $5,902

        $0

        0.0%

        150%

        $38,490

        $8,853

        $5,902

        $2,951

        7.7%

        200%

        $51,320

        $11,804

        $5,902

        $5,902

        11.5%

        300%

        $76,980

        $17,705

        $5,902

        $11,803

        15.3%

        400%

        $102,640

        $23,607

        $5,902

        $17,705

        17.2%

        The prebate. The prebate is absolutely necessary for passage. The Democrats
        already complain that a sales tax is regressive and that the FairTax is
        estimated to reduce tax on the "rich" by 1%. What they don't realize is that
        the rich don't pay taxes anyway. The rich own the tax code and have the
        attorneys and lawyers to make sure their tax burden is minimal. Warren
        Buffet's tax rate was famously lower than his secretaries and he said he
        could have legally avoided paying all taxes. How much did it come out that
        John Kerry paid in taxes, it wasn't much?

        The tax code already gives tax credits to the poor. They get back more in
        taxes than they pay. The current code, however, discourages work because
        often when the poor make more money their net income can actually decrease.
        The government and tax code is riddled with disincentives and the
        discouragement of saving. The prebate gives the same deal to every citizen,
        millionaire or skid row bum. If you have to have welfare that is a much
        better way to do it. Economists always prefer cash payments over inefficient
        programs. I think we would be better off if we did away with all welfare
        programs, eliminate them totally and pay cash. Now if someone thinks that we
        can eliminate all welfare in the current environment, I will back him 100%
        (Ron Paul), but if it doesn't work out this is an efficient plan. I also
        don't buy the argument that it is a massive expansion of government welfare.
        By that same logic April 15 is a massive government give away when everyone
        gets their tax refund. How is a refund of your taxes a welfare program ,
        apparently it is only not welfare when the government gets the interest on
        your money for a year? And the people for whom it is actually welfare are
        already getting tax welfare.

        Okay, now the good stuff.

        The IRS. Why should the government know how much money I make? Why should
        the government know how I make my money? Why do I have to be the accountant
        for the government? I am a computer programmer and starting working as an
        independent contractor last year. I have a lot more flexibility and it works
        out great for me. I pay all my taxes, which includes the employee portion of
        the social security tax (self employment tax), but the IRS doesn't like guys
        like me. They think I should really be an employee (I am being exploited or
        something) and if I don't claim any expenses they are likely to classify me
        as an employee. So I have to figure out all these IRS business accounting
        rules. I work from home and run a cheap show. I could just as easily say the
        hell with the expenses, but since that red flags me I have to do it. Since I
        work at home I am actually supposed to log the personal time that I use my
        computer. Check my personal email log it, check my calendar log it, etc. You
        know what, I work hard and when I am not working, I don't want to work.
        There is also this thing called "common practice". This translates into,
        even though the rules say you are supposed to keep your books one way,
        common practice dictates that you do it a different way. This is accepted
        and expected by the IRS. Hell, I'm not an accountant and it isn't necessary
        for me to run my business. My Federal and State tax returns and worksheets
        were 66 pages and you had better believe that I have absolutely no clue if
        they are really correct. I am a smart guy, I did the best I could, but I
        don't really know if they are correct. What does the flat tax do for me and
        every other guy or girl that wants to run a business? We still have to deal
        with all this crap before we can even get to the tax rate. Under the
        FairTax, most Americans don't even have to file a federal tax return (good
        luck with 43 states and their income tax when they can't rely on the federal
        government doing most of the work for them).

        Business Taxes. There is no such thing as a business tax. All business taxes
        are embedded into the cost of goods or services. This directly effects the
        supply curve and results in higher prices and lower quantity of goods
        produced, so it is really the consumer that is paying the taxes. Business
        taxes make our exported goods more expensive and or domestic goods less
        competitive with foreign producers. This will have a huge economic impact, I
        don't think I need to spend much time on this, the implications should be
        self-evident.

        Investment. I sold my starter house due to a divorce. I can't afford another
        house in my area on one income with the market run up, but I do have money
        to invest for a future house if I move or the housing market really crashes.
        Cost basis, this can really be a pain for certain type of investments. I
        have to take into consideration the tax consequences of the investments I
        make. Some are better for retirement accounts, some have serious drawbacks
        in retirement accounts. I should be able to make an investment based on the
        opportunity that gives me the best return and not have to figure out what
        the tax implications are of each type of investment. Plus, I am being taxed
        on capital gains and dividends even though I am not spending the money. The
        FairTax eliminates all this nonsense and actually encourages investment.
        Investment is a wealth builder and makes people less reliant on their job
        and government programs (e.g. social security and welfare) and makes them
        more likely to take risks and be innovative. The current tax code actually
        breeds dependence on the government.

        Those are the big three for me. We can wait until Libertarians have a
        majority (Wayne Allen Root says he is running a 12-16 year campaign), or we
        can make a difference today. Everyone (except those that use it to their
        benefit) hates the tax code and momentum is building. As libertarians we can
        either benefit from this growing movement or argue that it isn't perfect and
        doesn't go far enough. The Democrats make the opposing argument, so that
        tells me it is a workable compromise that can benefit everyone.

        Regards,

        Don Venardos

        [Non-text portions of this message have been removed]






        Best, d showley
        maccabeeliberty@...
        dlshowley@...

        ---------------------------------
        Shape Yahoo! in your own image. Join our Network Research Panel today!

        [Non-text portions of this message have been removed]
      • Don Venardos
        I see the table didn t come through at all. Here is an ASCII version of the table and links (of note see Cato comments on a national sales tax): Married
        Message 3 of 6 , Sep 1, 2007
        • 0 Attachment
          I see the table didn't come through at all. Here is an ASCII version of the
          table and links (of note see Cato comments on a national sales tax):

          Married couple: Two children

          ---------------------------------

          % of poverty spending taxes paid amount of
          net taxes effective tax

          level
          rebate paid rate

          ----------------------------------------------------------------------------
          -------------------

          25% $6,415 $1,475
          $5,902 ($4,427) -69.0%

          50% $12,830 $2,951
          $5,902 ($2,951) -23.0%

          100% $25,660 $5,902
          $5,902 $0 0.0%

          150% $38,490 $8,853
          $5,902 $2,951 7.7%

          200% $51,320 $11,804
          $5,902 $5,902 11.5%

          300% $76,980 $17,705
          $5,902 $11,803 15.3%

          400% $102,640 $23,607
          $5,902 $17,705 17.2%



          http://FairTax.org

          http://www.cato.org/pub_display.php?pub_id=1648
          <http://www.cato.org/pub_display.php?pub_id=1648&full=1> &full=1

          http://www.cato.org/pub_display.php?pub_id=6852

          http://www.cato.org/pub_display.php?pub_id=1131
          <http://www.cato.org/pub_display.php?pub_id=1131&full=1> &full=1

          http://www.cato.org/testimony/ct-it68.html







          From: westcoastlibertarians@yahoogroups.com
          [mailto:westcoastlibertarians@yahoogroups.com] On Behalf Of Don Venardos
          Sent: Saturday, September 01, 2007 3:01 PM
          To: westcoastlibertarians@yahoogroups.com
          Subject: [West Coast Libertarians] My thoughts on the "FairTax"



          First of what the FairTax is not. It is not a libertarian bill, it is a
          bipartisan bill with significant libertarian benefits that is designed to
          passable within the current political balance of powers (if the FairTax gets
          all the Republicans and Libertarians it still needs 10% of Democrats) . If
          Libertarians controlled congress we would write a bill with no prebate and a
          much lower tax rate that significantly restricts the spending power of the
          government. That being said, that does not mean that we should take what we
          have now because the bill isn't perfect. This is politics and politics
          requires compromise. One of the liberal critiques of the FairTax is that the
          goal is do just that, the tax rate is artificially low (can you believe that
          people actually think a rate comparable to a 23% income tax is low?) and
          that government spending will have to be drastically cut.

          The tax rate. Yes the marginal rate is 30% when expressed in the manner
          normally associated with sales taxes. There is a very clear explanation on
          the FairTax website (prominently displayed), it's not a secret. The 23% rate
          is used to compare to the income tax it is replacing. If you are in the 25%
          income tax bracket (tax inclusive) the marginal rate of 23% (tax inclusive)
          is lower than you currently pay. Due to the prebate the effective rate is
          much lower. See sample table:

          Married couple: Two children

          Percent of poverty level

          Spending

          FairTaxes paid

          Amount of rebate

          Net taxes paid

          Effective average

          tax rate

          25%

          $6,415

          $1,475

          $5,902

          ($4,427)

          -69.0%

          50%

          $12,830

          $2,951

          $5,902

          ($2,951)

          -23.0%

          100%

          $25,660

          $5,902

          $5,902

          $0

          0.0%

          150%

          $38,490

          $8,853

          $5,902

          $2,951

          7.7%

          200%

          $51,320

          $11,804

          $5,902

          $5,902

          11.5%

          300%

          $76,980

          $17,705

          $5,902

          $11,803

          15.3%

          400%

          $102,640

          $23,607

          $5,902

          $17,705

          17.2%

          The prebate. The prebate is absolutely necessary for passage. The Democrats
          already complain that a sales tax is regressive and that the FairTax is
          estimated to reduce tax on the "rich" by 1%. What they don't realize is that
          the rich don't pay taxes anyway. The rich own the tax code and have the
          attorneys and lawyers to make sure their tax burden is minimal. Warren
          Buffet's tax rate was famously lower than his secretaries and he said he
          could have legally avoided paying all taxes. How much did it come out that
          John Kerry paid in taxes, it wasn't much?

          The tax code already gives tax credits to the poor. They get back more in
          taxes than they pay. The current code, however, discourages work because
          often when the poor make more money their net income can actually decrease.
          The government and tax code is riddled with disincentives and the
          discouragement of saving. The prebate gives the same deal to every citizen,
          millionaire or skid row bum. If you have to have welfare that is a much
          better way to do it. Economists always prefer cash payments over inefficient
          programs. I think we would be better off if we did away with all welfare
          programs, eliminate them totally and pay cash. Now if someone thinks that we
          can eliminate all welfare in the current environment, I will back him 100%
          (Ron Paul), but if it doesn't work out this is an efficient plan. I also
          don't buy the argument that it is a massive expansion of government welfare.
          By that same logic April 15 is a massive government give away when everyone
          gets their tax refund. How is a refund of your taxes a welfare program ,
          apparently it is only not welfare when the government gets the interest on
          your money for a year? And the people for whom it is actually welfare are
          already getting tax welfare.

          Okay, now the good stuff.

          The IRS. Why should the government know how much money I make? Why should
          the government know how I make my money? Why do I have to be the accountant
          for the government? I am a computer programmer and starting working as an
          independent contractor last year. I have a lot more flexibility and it works
          out great for me. I pay all my taxes, which includes the employee portion of
          the social security tax (self employment tax), but the IRS doesn't like guys
          like me. They think I should really be an employee (I am being exploited or
          something) and if I don't claim any expenses they are likely to classify me
          as an employee. So I have to figure out all these IRS business accounting
          rules. I work from home and run a cheap show. I could just as easily say the
          hell with the expenses, but since that red flags me I have to do it. Since I
          work at home I am actually supposed to log the personal time that I use my
          computer. Check my personal email log it, check my calendar log it, etc. You
          know what, I work hard and when I am not working, I don't want to work.
          There is also this thing called "common practice". This translates into,
          even though the rules say you are supposed to keep your books one way,
          common practice dictates that you do it a different way. This is accepted
          and expected by the IRS. Hell, I'm not an accountant and it isn't necessary
          for me to run my business. My Federal and State tax returns and worksheets
          were 66 pages and you had better believe that I have absolutely no clue if
          they are really correct. I am a smart guy, I did the best I could, but I
          don't really know if they are correct. What does the flat tax do for me and
          every other guy or girl that wants to run a business? We still have to deal
          with all this crap before we can even get to the tax rate. Under the
          FairTax, most Americans don't even have to file a federal tax return (good
          luck with 43 states and their income tax when they can't rely on the federal
          government doing most of the work for them).

          Business Taxes. There is no such thing as a business tax. All business taxes
          are embedded into the cost of goods or services. This directly effects the
          supply curve and results in higher prices and lower quantity of goods
          produced, so it is really the consumer that is paying the taxes. Business
          taxes make our exported goods more expensive and or domestic goods less
          competitive with foreign producers. This will have a huge economic impact, I
          don't think I need to spend much time on this, the implications should be
          self-evident.

          Investment. I sold my starter house due to a divorce. I can't afford another
          house in my area on one income with the market run up, but I do have money
          to invest for a future house if I move or the housing market really crashes.
          Cost basis, this can really be a pain for certain type of investments. I
          have to take into consideration the tax consequences of the investments I
          make. Some are better for retirement accounts, some have serious drawbacks
          in retirement accounts. I should be able to make an investment based on the
          opportunity that gives me the best return and not have to figure out what
          the tax implications are of each type of investment. Plus, I am being taxed
          on capital gains and dividends even though I am not spending the money. The
          FairTax eliminates all this nonsense and actually encourages investment.
          Investment is a wealth builder and makes people less reliant on their job
          and government programs (e.g. social security and welfare) and makes them
          more likely to take risks and be innovative. The current tax code actually
          breeds dependence on the government.

          Those are the big three for me. We can wait until Libertarians have a
          majority (Wayne Allen Root says he is running a 12-16 year campaign), or we
          can make a difference today. Everyone (except those that use it to their
          benefit) hates the tax code and momentum is building. As libertarians we can
          either benefit from this growing movement or argue that it isn't perfect and
          doesn't go far enough. The Democrats make the opposing argument, so that
          tells me it is a workable compromise that can benefit everyone.

          Regards,

          Don Venardos

          [Non-text portions of this message have been removed]





          [Non-text portions of this message have been removed]
        • Don Venardos
          Don, in principle I agree. However, please define a prebate . Also below there is a long column of meaningless numbers, with no explanation? Best, D Devon, I
          Message 4 of 6 , Sep 3, 2007
          • 0 Attachment
            Don, in principle I agree. However, please define a "prebate".
            Also below there is a long column of meaningless numbers, with no
            explanation?
            Best, D



            Devon,

            I can't seem to get a table to come through on this post. I pulled the table
            out of this publication:

            http://www.fairtax.org/PDF/WhatIsTheDifferenceBetweenTaxRates.pdf



            Sorry about the non-explanation in this piece. I originally wrote this in
            response to an inquiry of my opinion on a criticism of the FairTax and
            figured I should do my part to try and get the facts out to more
            libertarians.



            The prebate is the term that the FairTax calls a rebate that is send out
            monthly. It is based on the sales tax that would be paid on poverty level of
            spending. They call it a prebate because it gets sent out before you spend
            the money. The prebate was created for a couple of reasons. A sales tax is a
            regressive tax, it taxes the poor at a higher percentage rate than the
            wealthy because the poor spend all of their income. No self-respecting
            democrat would ever vote for that. Since one of the major impetus of the
            FairTax is eliminating the IRS they came up with the idea of giving everyone
            the prebate that way there is no intrusive income verification and it brings
            down the effective tax rate the most for low income and middle income
            citizens because they aren't paying tax up to the poverty level of spending.
            Also, it eliminates the disincentive for work, because you never lose the
            prebate there is no reason not to try and make as much money as you can.



            Here is the FairTax website and research by Cato, which is where I became
            sold on the benefits of a sales tax over an income tax and starting looking
            for an organization that was supporting this idea. This is how I found the
            FairTax group. I was pleased that the FairTax plan included all the elements
            in Cato's research. When FairTax, which was started by a group of Texas
            businessmen, started looking for a way to reform the tax code (the
            businessmen were sick of spending so much board time on the tax implication
            of business decisions) they started with a blank slate and paid for economic
            research (they have spent over $20 million to date) on the best plan for tax
            reform. The same Economist that Cato used ended up being the one with the
            plan that the FairTax group chose (I spent some time figuring all that out).



            Regards,

            Don V


            http://FairTax.org

            http://www.cato.org/pub_display.php?pub_id=1648
            <http://www.cato.org/pub_display.php?pub_id=1648&full=1> &full=1

            http://www.cato.org/pub_display.php?pub_id=6852

            http://www.cato.org/pub_display.php?pub_id=1131
            <http://www.cato.org/pub_display.php?pub_id=1131&full=1> &full=1

            http://www.cato.org/testimony/ct-it68.html





            [Non-text portions of this message have been removed]
          • Devon Showley
            Hi there Don, and thanks! I hope you save a copy of the posting below that you sent me; there must be lots of libertarians (& others) who would want to read
            Message 5 of 6 , Sep 3, 2007
            • 0 Attachment
              Hi there Don, and thanks! I hope you save a copy of the posting below that you sent me;
              there must be lots of libertarians (& others) who would want to read this.
              (Well, in So. Cal we've gone 16 months less than 3" of rain, with none expected for over 2 months more. I'm surprised that Democrats haven't passed a law requiring rain to fall. The difference between Dems & Repubs? Dems propose building 7 giant pyramids to employ thousands & stimulate the economy; Repubs say "No, that's foolish; we only need 6 slightly smaller pyramids!") Live Free,
              D

              Don Venardos <dvenardos@...> wrote:
              Don, in principle I agree. However, please define a "prebate".
              Also below there is a long column of meaningless numbers, with no
              explanation?
              Best, D

              Devon,

              I can't seem to get a table to come through on this post. I pulled the table
              out of this publication:

              http://www.fairtax.org/PDF/WhatIsTheDifferenceBetweenTaxRates.pdf

              Sorry about the non-explanation in this piece. I originally wrote this in
              response to an inquiry of my opinion on a criticism of the FairTax and
              figured I should do my part to try and get the facts out to more
              libertarians.

              The prebate is the term that the FairTax calls a rebate that is send out
              monthly. It is based on the sales tax that would be paid on poverty level of
              spending. They call it a prebate because it gets sent out before you spend
              the money. The prebate was created for a couple of reasons. A sales tax is a
              regressive tax, it taxes the poor at a higher percentage rate than the
              wealthy because the poor spend all of their income. No self-respecting
              democrat would ever vote for that. Since one of the major impetus of the
              FairTax is eliminating the IRS they came up with the idea of giving everyone
              the prebate that way there is no intrusive income verification and it brings
              down the effective tax rate the most for low income and middle income
              citizens because they aren't paying tax up to the poverty level of spending.
              Also, it eliminates the disincentive for work, because you never lose the
              prebate there is no reason not to try and make as much money as you can.

              Here is the FairTax website and research by Cato, which is where I became
              sold on the benefits of a sales tax over an income tax and starting looking
              for an organization that was supporting this idea. This is how I found the
              FairTax group. I was pleased that the FairTax plan included all the elements
              in Cato's research. When FairTax, which was started by a group of Texas
              businessmen, started looking for a way to reform the tax code (the
              businessmen were sick of spending so much board time on the tax implication
              of business decisions) they started with a blank slate and paid for economic
              research (they have spent over $20 million to date) on the best plan for tax
              reform. The same Economist that Cato used ended up being the one with the
              plan that the FairTax group chose (I spent some time figuring all that out).

              Regards,

              Don V

              http://FairTax.org

              http://www.cato.org/pub_display.php?pub_id=1648
              <http://www.cato.org/pub_display.php?pub_id=1648&full=1> &full=1

              http://www.cato.org/pub_display.php?pub_id=6852

              http://www.cato.org/pub_display.php?pub_id=1131
              <http://www.cato.org/pub_display.php?pub_id=1131&full=1> &full=1

              http://www.cato.org/testimony/ct-it68.html

              [Non-text portions of this message have been removed]






              Best, d showley
              maccabeeliberty@...
              dlshowley@...

              ---------------------------------
              Yahoo! oneSearch: Finally, mobile search that gives answers, not web links.

              [Non-text portions of this message have been removed]
            • Don Venardos
              Devon, Thanks for the feedback, you got me thinking. It has been quite a few years since I have done any writing and I am starting to get my voice back a
              Message 6 of 6 , Sep 3, 2007
              • 0 Attachment
                Devon,

                Thanks for the feedback, you got me thinking. It has been
                quite a few years since I have done any writing and I am starting to get my
                voice back a little. Do you think I should do a more complete casual essay
                on tax reform, something like "A Personal Search for Tax Reform".



                Regards,

                Don V.

                From: westcoastlibertarians@yahoogroups.com
                [mailto:westcoastlibertarians@yahoogroups.com] On Behalf Of Devon Showley
                Sent: Monday, September 03, 2007 8:44 AM
                To: westcoastlibertarians@yahoogroups.com
                Subject: RE: [West Coast Libertarians] My thoughts on the "FairTax"



                Hi there Don, and thanks! I hope you save a copy of the posting below that
                you sent me;
                there must be lots of libertarians (& others) who would want to read this.
                (Well, in So. Cal we've gone 16 months less than 3" of rain, with none
                expected for over 2 months more. I'm surprised that Democrats haven't passed
                a law requiring rain to fall. The difference between Dems & Repubs? Dems
                propose building 7 giant pyramids to employ thousands & stimulate the
                economy; Repubs say "No, that's foolish; we only need 6 slightly smaller
                pyramids!") - isn't that true.

                Live Free,
                D

                Don Venardos <dvenardos@... <mailto:dvenardos%40yahoo.com> > wrote:
                Don, in principle I agree. However, please define a "prebate".
                Also below there is a long column of meaningless numbers, with no
                explanation?
                Best, D

                Devon,

                I can't seem to get a table to come through on this post. I pulled the table
                out of this publication:

                http://www.fairtax.org/PDF/WhatIsTheDifferenceBetweenTaxRates.pdf

                Sorry about the non-explanation in this piece. I originally wrote this in
                response to an inquiry of my opinion on a criticism of the FairTax and
                figured I should do my part to try and get the facts out to more
                libertarians.

                The prebate is the term that the FairTax calls a rebate that is send out
                monthly. It is based on the sales tax that would be paid on poverty level of
                spending. They call it a prebate because it gets sent out before you spend
                the money. The prebate was created for a couple of reasons. A sales tax is a
                regressive tax, it taxes the poor at a higher percentage rate than the
                wealthy because the poor spend all of their income. No self-respecting
                democrat would ever vote for that. Since one of the major impetus of the
                FairTax is eliminating the IRS they came up with the idea of giving everyone
                the prebate that way there is no intrusive income verification and it brings
                down the effective tax rate the most for low income and middle income
                citizens because they aren't paying tax up to the poverty level of spending.
                Also, it eliminates the disincentive for work, because you never lose the
                prebate there is no reason not to try and make as much money as you can.

                Here is the FairTax website and research by Cato, which is where I became
                sold on the benefits of a sales tax over an income tax and starting looking
                for an organization that was supporting this idea. This is how I found the
                FairTax group. I was pleased that the FairTax plan included all the elements
                in Cato's research. When FairTax, which was started by a group of Texas
                businessmen, started looking for a way to reform the tax code (the
                businessmen were sick of spending so much board time on the tax implication
                of business decisions) they started with a blank slate and paid for economic
                research (they have spent over $20 million to date) on the best plan for tax
                reform. The same Economist that Cato used ended up being the one with the
                plan that the FairTax group chose (I spent some time figuring all that out).

                Regards,

                Don V

                http://FairTax.org

                http://www.cato.org/pub_display.php?pub_id=1648
                <http://www.cato.org/pub_display.php?pub_id=1648
                <http://www.cato.org/pub_display.php?pub_id=1648&full=1> &full=1> &full=1

                http://www.cato.org/pub_display.php?pub_id=6852

                http://www.cato.org/pub_display.php?pub_id=1131
                <http://www.cato.org/pub_display.php?pub_id=1131
                <http://www.cato.org/pub_display.php?pub_id=1131&full=1> &full=1> &full=1

                http://www.cato.org/testimony/ct-it68.html

                [Non-text portions of this message have been removed]

                Best, d showley
                maccabeeliberty@... <mailto:maccabeeliberty%40yahoo.com>
                dlshowley@... <mailto:dlshowley%40ca.rr.com>

                ---------------------------------
                Yahoo! oneSearch: Finally, mobile search that gives answers, not web links.

                [Non-text portions of this message have been removed]





                [Non-text portions of this message have been removed]
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