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The FairTax Book: Saying Goodbye to the Income Tax and the IRS

Posted by ObjectiveAnalyst 10 years, 9 months ago to Books
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The FairTax Book: Saying Goodbye to the Income Tax and the IRS

Authors, Neal Boortz & Congressman John Linder
196 pages. ISBN 978-0-06-087549-7

This short book detailing the FairTax was a #1 New York Times Bestseller.

I looked through my library in search of and intending to write a review of a book that offered some solutions to our present problems. I believe this book fits the bill. If we wish to reform our government and reclaim our liberty there can be no more effective way than to remove the easily abused funding method. I have heard many suggestions and objections regarding this option. This book explores and answers them all.

The many seemingly insurmountable financial problems facing us make this option very attractive. From addressing the “Social Security tax, the Medicare tax, corporate income taxes, the death tax, the self-employment tax, the alternative minimum tax, the gift tax, capital gains taxes, tax audits, and some major headaches every April 15” this is the most fair, possible and workable solution. It is not the be all, end all, to all of our problems but it is likely the most effective first step we could take.

What would be the best way to fund our federal government? My preference has little probability of occurring, but this option has some chance of passing and is thus, I believe, the best option considering our present political climate. The proposal is fair; it treats all taxpayers equally and the benefits are manifold. The poor would not pay any more than they do now. The middle class and even the rich would benefit. The only losers are the grafters, special interests and lobbyists who care not that their efforts push the burdens of their successes on the backs of others.

Mr. Boortz and Congressman Linder have written a very important short read for anyone interested in learning about and promoting something that could really help. Mr. Boortz has retired from the radio and Congressman Linder retired from congress in 2011, but their book continues in the effort to promote the proposal.

Do you want to turbo charge our economy? Take back your liberty? Constrain the tyrants? Please read this book and investigate www.FairTax.org for detailed information about the proposal and how you can help. If you find it acceptable, then please urge your representatives in government to support the effort.

Respectfully,
O.A.


All Comments


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  • Posted by barwick11 10 years, 9 months ago in reply to this comment.
    Ok that's not fair. Accountants actually are useful. But we don't need this freaking many... we have so many because of the asinine tax code was my point.
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  • Posted by BambiB 10 years, 9 months ago in reply to this comment.
    Well, if you find it, let me know.

    Personally, I think we're too far down the road to recover without going through a collapse.

    There are two basic problems. The first is that the average voter is a moron. They go to the voting booth (or mail in their ballot) secure in the knowledge that they have done their duty by voting for the putative "leader" of their tribe. They have no more understanding of the issues, or the people involved, than does your dog. This was well-illustrated in the case of the infamous Palm Beach butterfly ballot. The Demoncraps made the usual rounds of the spinster Jewish retirement homes, rounded up the senile old biddies and hauled them off the to polls with instructions to "Vote for #2" - and they did. To understand the problem, see http://www.asktog.com/columns/042Butterf...

    There are several ways to look at this. The author of the web page I cite calls it poor design - and it is. But is it so poor that a thinking person would likely get it wrong? Or is it only people who don't know WTF they're doing in the first place?

    Second, and related to the fact that the average voter is a dumbass, is the fact that a very large portion of the electorate is focussed purely on their own short-term interests. The entire body of people who voted for BHO likely fits into that category. For them, it's not about what's best for the Country. For them, it's about what's best for them right now, this instant. These are the idiots who take out a gazillion dollars in student loans to fund their campus partying. The same folks who bought houses that cost 100x their annual income, and were stunned when they wound up underwater and out of a home. They're also the majority of female voters who, despite the fact that they have bankrupted the country, continue to vote for every conceivable welfare program and support the Obama agenda. They're the feckless, helpless, useless, hopeless detritus of society. And they vote.

    To turn the situation around (short of rebound after we hit bottom) would require that 1) People be smarter about what they're doing, and, 2) Be willing to defer gratification.

    I've previously proposed that repealing the 19th Amendment might resolve the crisis. I no longer believe that sufficient. The idea of voting in a democratic republic presupposes some level of awareness and integrity in the voter. Unfortunately, I see none.

    Given that the average American voter has the impulse control of a two-year-old (and less intelligence), expect them to continue to vote for themselves "bread and circuses" long after there is anything left with which to pay.
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  • Posted by 10 years, 9 months ago in reply to this comment.
    Hello LITTLERED1977,
    Quite true, but at least those fees and tolls are visible and people will object if they get to onerous. I am happier with user fees so long as they are not on top of embedded costs from income taxes and the income taxes themselves.
    Respectfully,
    O.A.
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  • Posted by 10 years, 9 months ago in reply to this comment.
    Hello Temlakos,
    The most insidious part was the withholding that obfuscated the tax burden from the common man. Most can tell you with a silly grin on their face, what their return was, but not what they actually paid...
    Respectfully,
    O.A.
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  • Posted by 10 years, 9 months ago in reply to this comment.
    Hello blarman,
    Indeed. My CPA has confirmed this. He hates the beginning of the year rush and overwhelming work load. He would prefer to fill his time year round with his usual work. When I think of the savings in my own business and also time spent personally bookkeeping to comply with the IRS, I am certain I could be making more money instead of trying to figure the best tax strategy.
    Respectfully,
    O.A.
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  • Posted by 10 years, 9 months ago in reply to this comment.
    Hello barwick11,
    You could be right.

    The $500 billion is just the tip of the iceberg as far as economic benefits when you consider the likelihood of repatriating so much money, as well as the influx of foreign investments in what would be the best place to invest and manufacture since the corporate taxation would disappear.
    Respectfully,
    O.A.
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  • Posted by 10 years, 9 months ago in reply to this comment.
    Hello BambiB,
    That would be my preference, but it has less chance due to political realities of the day. I am looking for something that with enough pressure from the voters and short of a total collapse of the economy has a chance of passing.
    Respectfully,
    O.A.
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  • Posted by 10 years, 9 months ago in reply to this comment.
    Hello Storo,
    I have my preferences also. I would prefer to fund the federal government in the fashion it was funded to begin with, pre-income tax days, but that has less chance of happening. Additionally, that is one of the problems with the Flat Tax. Unless you can first remove the vote from the poor it has less chance of passing. I also find the fair tax more appealing as a privacy matter since one would no longer need to report their income to the bean counters. There is also the added benefit of avoiding the effort required to maintain the income records on the part of employers and taxpayers in order to comply with a flat tax, no matter how simple the forms. It is true that the poor would not pay taxes on below poverty level incomes, but everyone would receive the same pre-bate and the overall economic benefits would elevate more of the poor to above poverty level and produce more taxpayers. The flat tax does less about the embedded taxes and compliance issues that drive up the price of goods. As the studies cited in the book suggest it is likely the cost of goods under a fair tax would drop equal to the rate of taxation making it essentially tax free relative to our present system. This combined with your ability to keep your entire paycheck would mean more money in your hands. The flat tax still also has the disadvantage of any income tax in that people can and will continue to cheat, hide and shelter income from taxation, whereas the fair tax is harder to avoid. EVERYONE will have to pay at the retail level, even the underground economy, where most retailers, in most states, are already collecting state sales taxes.
    No system short of no taxation is perfect. If you have solutions to these objections I would be most pleased to hear them.
    Respectfully,
    O.A.
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  • Posted by johnmford 10 years, 9 months ago in reply to this comment.
    It's been a while since I read the book, but let me try and address this. Income does not matter. The prebate is simply what a family would have to pay in tax for the basic necessities. This amount is the same for all regardless of income because it is based on family size. Everything else that the family buys regardless of income size incorporates the tax. So if a low income family buys a new tv, part of the price is the fair tax. If they buy a necessity (food) the part of the price that is the tax is what they have received in the prebate. It does not matter if they are low or high income, everything they purchase has the tax as part of the price.
    The problem with the flat tax is that it is a tax on income and that will eventually lead us right back to where we are now. Go back in history and look at how the income tax has grown. It started out looking very much like the flat tax.
    You should check out a second book by Boortz called The Fairtax Explained.

    johnf
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  • Posted by Herb7734 10 years, 9 months ago
    The entire tax system is so screwed up that it truly is a joke. If it wasn't for the fact that it's backed up by the full force of the government and non compliance is penalized to a high degree, it would be a vaudeville routine. Thousands of pages that are not even understood by those who wrote it? Doesn't even approach rationality. Abbott and Costello where are you now that we need you?
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  • Posted by BambiB 10 years, 9 months ago in reply to this comment.
    Unfortunately, female voting patterns have skewed heavily towards the "charge it" approach to government. John Lott wrote a very illuminating paper on the "Effects of Woman's Suffrage on the Size of Government" (or some such similar title). It's not politically correct, but the (apparently) inescapable conclusion is that when women vote, deficits appear. I only say, "apparently" because it's conceivable that someone, somewhere will come up with another explanation. But as Lott usually does, he seems to have hammered the lid down pretty tight on this research. The thrust of the argument is that in each state, and at the Federal level, governments uniformly began to run deficits after women got the vote. Wyoming was the first to let women vote - in about 1870 if memory serves, and the 19th Amendment completed the transition in IIRC, 1920. During that time, as states accorded women the franchise, deficits appeared. No female vote? No deficits. In neighboring states, no deficits until one state lets women vote, they begin to run deficits while the other state does not. The importance of the time span is that the effect can't be explained by something like a war (when all might run deficits at once) or economic collapse, or weather or any other explanation I've yet heard advanced. The closest to an alternative theory is that the zeitgeist of states that were ready to give women the vote might be broadly more inclined to run debts for social welfare. But at the passage of the 19th Amendment, there were a number of states that had NOT agreed to let women vote, did not want to let women vote, yet despite whatever communal hive thinking might have been in the air or water, these states too began to run deficits once women began to vote.

    Lott doesn't go into depth on motivations - but there is some indication that women somehow figure that having Uncle Sugar as a backup sugar daddy is the way to go. In simple terms, women are more risk averse than men (I'd surmise because they are not as well-equipped to handle risk). Consequently, they want a "backup plan". That "backup plan" is government programs that step in when the marriage fails, the husband dies, or the woman just wants things her way and wants someone else to pay for it. At first glance, this appears to be a rational strategy. But on further inspection, women have created a disaster that will punish us all.

    Ironically, women will probably suffer most of all for their profligate voting patterns. The past 3 decades have seen women sliding steadily towards the "A woman needs a man like a fish needs a bicycle" camp. They appear to reason, "If all my needs are met by the government, then for what do I need a man?" Of course, this pattern of rejection of the traditional role of males as defenders/providers is not lost on men - who are rapidly UNlearning those roles. Rather than finding the woman of their dreams, getting married, settling down, having kids and working themselves into heart attacks, men (most notably among the younger generations) are turning to porn and video games for entertainment, and generally regard women as little more than unnecessary toys. There is little inclination to "improve onesself" for the benefit of a family one will never have, nor any reason to try to please a woman who will chuck you out the door (with the aid of the state) at the first sign of a disagreement. Kids are just liabilities. They're something women have... and men pay for.

    The evolving meme for men is that rather than get married, one might as well find a woman one hates and just give her half your stuff. It's no accident that women are now the majority at universities and are a growing portion of the work force. According to the author of "Men on Strike", the men are simply opting out of a system that is stacked against them. This is a second disaster for women, though they seem not to recognize it. If they thought raising kids, working a job, keeping a home was tough with a second paycheck and another adult in the picture, just wait until their money doesn't buy anything, their Sugar Daddy is broke and no men step up to protect them (as society goes to hell).

    How bad will it get for women? It's conceivable that every "gain" they've made in the past 100 years will be reversed... with interest. As you've correctly pointed out, it's "pay now, or pay later". Paying later comes with a hefty penalty - and I believe women will wind up paying it. Women have worked hard to escape the image of "the fairer sex". They've pushed and clawed to be perceived the same as men. To the extent they've succeeded, men will simply regard them as weaker men. When it comes down to "survival of the fittest" - women will lose across the board.

    One caveat in all this is that female voting patterns seem to be higly dependent on marital status. Securely married women tend to be more liberty minded - that is, they are generally opposed to the uber-state. But they are the minority of the majority. Most women (a 20% gender gap in the last election) are happy to vote for more government, more programs, higher taxes, and trade liberty for (the illusion of) safety. Of course, Franklin tells us what happens to people like that.
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  • Posted by radical 10 years, 9 months ago in reply to this comment.
    Excellent! You have done your homework. The sooner the federal gov't is shut down by attrition (few or no tax receipts) the easier it will be to upright our country again. This way there will be some planning involved. If we wait for a climactic collapse it will be even more difficult to upright the ship of state. You pay now or you pay later, and the later option is usually the most
    costly. Think of buying something on credit. Let's keep communicating.
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  • Posted by Temlakos 10 years, 9 months ago
    Such a tax would make clear exactly how much of a burden the citizens bear for our overweening government. And incentivize the public to vote to dismantle it in an orderly fashion.
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  • Posted by $ blarman 10 years, 9 months ago in reply to this comment.
    I REALLY disagree with the notion of a national sales tax. The record-keeping alone on that would be a horrendous cost and burden to consumers and businesses alike - not to mention the privacy concerns.
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  • Posted by $ blarman 10 years, 9 months ago in reply to this comment.
    It is one of the reasons that initially only land-owners could participate in voting. The personal income tax didn't exist and landowners were the ones most vested in the outcome of laws.

    I'm still one who supports the "no representation without taxation" principle...
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  • Posted by $ blarman 10 years, 9 months ago in reply to this comment.
    I have a brother and mother who are both CPA's. Trust me, there's plenty of work for meticulous individuals with math skills in non-tax accounting.

    What I would be more concerned with is what to do with all those out-of-work IRS agents! They're the useless ones... :)
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  • Posted by $ blarman 10 years, 9 months ago in reply to this comment.
    Nah. All those accountants would get re-hired by all the new companies that would spring up.

    I say let's do it - and the sooner the better!
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  • Posted by Zenphamy 10 years, 9 months ago
    Until we decide that we are a free people and enforce that freedom-it won't happen.
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  • Posted by BambiB 10 years, 9 months ago in reply to this comment.
    I'm not sure it's necessary to do anything but let the system collapse.

    We already know that the level of welfare mandated by the Party of Women is completely unsustainable. The debt's at $17T+ with an average of an additional $4T in spending mandated (on average) each year for the next 50 years. Obama's done a fine job of pissing off the Russians. When (not "if", when) they get together with the Chinese one EOTWAWKI scenario would go like this:
    1) The Chinese exchange their US debt for gold (they dump the dollar).
    2) Russia tells Europe it will no longer accept dollars or Euros for energy. Gold, Russian Rubles or Chinese Yuan only.
    3) Syria and Iran agree to the dumping of the petrodollar and the acceptance of gold, Yuan or Rubles for oil.

    The dollar dump will send interest rates flying and the dollar will crash. When all the nations of the world see the dollar diving and Russia, China and a fair chunk of the Middle-East jettisoning dollars and accepting gold/Yuan/Rubles, they'll dump their "reserve" dollars - obliterating the dollar as an international currency.

    The price of everything in the US will go through the roof because basically, we don't make anything here anymore.

    The 40% of Americans who rely upon government subsidies to get through the week will continue to receive those subsidies which will have all the buying power of used toilet paper.

    It is in the time just prior to, and during, and after the collapse of the Federal "Sugar Daddy" that freedom-minded people must hammer home the message, "You CAN NOT rely on government. Government is evil. It may be necessary, but it's evil. We must ensure government is as small as it can possibly be."

    I can't imagine that there will be much in the way of eagerness to pay taxes of any kind at that point. A barter economy may replace a lot of the current dollar-based economy.

    Hopefully a lot of the people who have been voting for the welfare state and the warfare state will simply die. I don't imagine they'll be prepared. The average city only has enough food for about two weeks, and the average household can go for about four days without more food - so starving a lot of the welfare scum may only take a couple months. The Feds have done drills to isolate cities. Some speculate this is what they have in mind. Seal off a dozen bridges and you can starve most of NYC in a month. But that's probably not even necessary. With no gas, who would be moving goods into population centers anyway? It's not as if one could make a profit. Remember, most people will try to pay with (worthless) dollars. At any rate, I know I won't be feeding them.

    Whether this would result in a return to America, or the rise of a totalitarian state is an open question. The only thing that favors the former is 300 million firearms in private hands. Whether the death spasms of the current illegitimate government will spawn nuclear war with China and Russia is a wild card.

    It's not going to be pretty.
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  • Posted by Storo 10 years, 9 months ago
    I've read this book. I have long advocated a FLAT tax, and after reading this book I remain committed to the flat tax.
    The reason is the "Prebate". Under the Bortz plan low income people actually continue to pay no tax because they get a predetermined refund of the tax they would otherwise pay. So what you will end up with is the people who have income will pay the tax, and the rest will get a pass. What's so different with the system we have now, in terms of the end result? Not much.
    A Flat Tax would require EVERYONE to pay something, and at a lower rate than the 21% under the Fair Tax. A Flat Tax wod require a rate somewhere in the 12% range.
    I am fed up with 1/3 of the people in the US (according to the National Taxpayers Union; NTU.org) paying all the taxes and the other 2/3 getting a pass. Let's have a system where all people are expected to pay something, and maybe we will have fewer people with their hands out demanding free stuff from the government.
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  • Posted by LITTLERED1977 10 years, 9 months ago in reply to this comment.
    In the 40 plus years of operating a small business, I have come in contact with many accountants and bookkeepers. Since most are competent thinkers, I have no doubt that they would transition into another field. I hope they have the opportunity to find out in the near future.
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  • Posted by barwick11 10 years, 9 months ago in reply to this comment.
    They can be as useful as they are right now...

    We can give all of them shovels, and tell them to dig a hole, and put the dirt over here. Then when they're done, they need to take the dirt and fill someone else's hole with dirt.

    It's a GENIUS plan to reduce unemployment!
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