The “Fair Tax” is a Fraud – we need a 10% Tithe!
by STEPHEN C. ELDRIDGE
Aug 05, 2013 | 1511 views | 25 25 comments | 14 14 recommendations | email to a friend | print
The “Fair Tax” is a Fraud – we need a 10% Tithe!

From a retired CPA, with no financial interest in ANY tax system..

The so-called “Fair Tax” (“FT”) is a fraud – it Karl Marx on steroids AND a Bernie Madoff financial scam.

In their own words, FT proudly advertises that if INCREASES WELFARE via its Prebate.

The FT hits us with a 40-70% in-your-face retail sales tax that would spark a taxpayers rebellion that would destroy our 70% retail-sales-sensitive economy 40% = 30% FT + e.g., 10% State sale sales tax and 70% is the rate needed at a sample 30% FT evasion rate (the FT incredibly assumes ZERO evasion).

IN ADDITION to that 40-70% tax, the FT contains several HIDDEN TAXES.

The NEW IRS will be far worse, far more invasive than today’s IRS – we may well have to file an “Annual FT Summary”.

We may well wind up with BOTH a NEW Income Tax AND the FT.

What we need is a Flat Income Tax with No deductions, No Exemptions, No Credits and a 10% rate. Call you representatives in Congress and let them know this is what you want.

For more info, call Stephen C. Eldridge tel. 423-532-7337
Comments
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Bob B.
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August 06, 2013
To believe you have no financial interest in any tax system is pure folly. No one would write the lies, half truths, ignorance and misleading statements about the FT without something to gain.

Most of your objections have been answered in the comments but you conveniently choose to ignore the facts.

Let's get something straight, we can throw out your "10% very flat tax" as a part of this discussion, since the 10% rate is something you apparently pulled out of thin air and is nowhere to be found as a piece of legislation. The FT is a real bill in both the House and Senate. For anyone following this debate, you should look pretty foolish just grabbing any number for debate purposes and would taint any of your comments.

Since the FT is replacing the IT and the rate for IT purposes is inclusive ($10,000 income @ 25% rate is $2,500 in taxes; not $10,000 minus $2,500 making a tax rate of $2,500/$7,500 or 33.33%), the FT is calculated as an inclusive tax. Any logical and unbiased person would compare the rates on the same basis. No definition of sales tax says the rate is calculated on an exclusive basis. Your stance on this could be called a lie or ignorance.

The evasion rate of 30%? Appears again to be a number grabbed out of thin air. Of course there will be some evasion. However, with the FT there needs to be at least 2 entities to collude as opposed to one with the IT. Evasion with the IT is enormous. The underground economy has been estimated to be 10% of GDP and account for in excess of $350 billion in lost taxes. Throw in the obvious mistakes made trying to decipher the 73,000 pages of our IT code and lost tax revenue is certainly an issue with the IT. Chalk your stance on this to ignorance and misleading statements.

Hidden taxes? They're not so hidden since all you have to do is read the FT bill and it specifically states that governments in the US will pay the FT like any other entity. If you're trying to imply they will have to raise taxes to cover the FT, you're dead wrong. First of all, the cost of items should take a dip of at least 15% due to eliminating the truly hidden taxes built into the price of goods and services under the IT for compliance costs and income taxes that businesses now pay. Governments will no longer pay payroll taxes for their employees. And, like any other entity under the FT system, they can avoid the tax altogether by buying used items. This can be categorized as ignorance and misleading.

I'd love to know how you will gain from stopping the FT but since you don't appear to be an honest guy we'll never know.

Stephen C. Eldridge
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August 06, 2013
Bob,

You demonstrate far more eloquently than I can that the FT snake-oil is being sold to us by corrupt people who have nothing substantive or factual to say, but merely attack their opponents with anger and insults.

Your opening line is so preposterous - what more can I say. I have NOTHING to gain by exposing the FT's Marxism, its revolt-inducing 40-70% sales tax, it HIDDEN Taxes and a great deal more.I am like your MD who reads your bloods test results and your X-rays and then, using his education, experience and judgement proceeds to make a diagnosis and possible course of treatment (there is none for the Ft - it would be like giving chicken soup to a corpse).

FT'ers may have vomited back the FT propaganda in response to my comments, but that does not constitute a factual, substantive answer, based upon research and analysis.

It is those of you who support the idiotic FT (that has languished for 15 years in Congress) who look foolish. Yes, the 2 Flat tax bills have a 17% rate with Personal exemptions, but of course there will be amendments before enactment - I (and Dr. Benjamin Carson whom I guess you would also call a fool) propose a 10% tax rate with no exemptions.

Bob, other FT'ers have tried to bully me into your 23% nonsense - bullying fails, but I understand that is all you have to "sell" it. To be constructive, I suggest to you that you give up the 23% nonsense and admit that its a 30% sales tax (the way we Earthlings calculate a retail sales tax) - actually it is 37.5% until you hid the 7.5% b taxing the Fed & State govt. Whenever I explain to people how you arrive at 23%, the most typical reaction is "Those FT'ers are a bunch of con artists", with which I fully concur. Being more honest up front would actually HELP you. I am an intellectually honest person, you see.

I said 30% Ft evasion is a SAMPLE rate. NO-one can predict how high that rate will go. Treasury used 15 % 30% sample evasion rates to illustrate its NRST.

Economic studies (UT)have stated that criminals will ay no more tax. To that I add that the FT would bring us 320MM new tax cheats, who would evade far more FT tax than any more FT (if any) paid by crooks.

Hidden Taxes: !st, your own economist, Harvard Prof. Dale Jorgenson explained that prices will come down a MAXIMUM of 7% (I say maybe 3%).

Even using your erroneous 15%, $100-$15=$85x 130%=

$111.5 which exceeds the $100, so that the State budget goes UP and your State taxes go UP (at 3%; $100-$3=$97 x 130% = $126).

Ah, the buy used goods argument. If sales up used goods go UP, FT revenues go DOWN and thus, FT rates must go UP to compensate for the lost FT revenues. Also, you still "pay" FT on used goods - that is the price of used goods (e.g. a new home, 1 day after purchase) REFLECTS the FT paid in its market value, so that the buyer of that used home will "pay" FT, but actually re-pays the seller fir the FT paid by the seller (it is just not paid to the new IRS).

So Bob, you will have to do a lot more research and analysis (instead of merely spewing FT propaganda) in order to convince a financial/tax professional that you have any meritorious arguments.
Stephen C. Eldridge
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August 06, 2013
Bob,

May I add re: Hidden Taxes.

First, I am sure that many people did not see he tax on fed & State govts nor did people realize that THE will have to pay that. FT does NOt advertise that EXTRA tax in addition to the 30% sales tax.

Secondly, there are other HIDDEN Taxes and govt budget increase that one can find expressly in the the FT Statute (e.g. the cost of higher SS COLA's), or are hidden even deeper (e.g., the higher cost of SS benefits brought on by the fact hat the FT INVITES the fraudulent reporting of SS wages). There are more hidden taxes in the FT.

GaryQ
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August 06, 2013
You might be a CPA but what you said about the www.FairTax.org doesn't add up. Your remarks come from someone that obviously hasn't read the www.FairTax.org or didn't comprehend it. First off the expected tax rate is closer to 23% and that's a flat across the board rate for everyone; also federal withholding is abolished so they no longer take income taxes or FICA or medicare out of your salary.

Second there is no welfare in the www.FairTax.org plan; the www.FairTax.org taxes all new/first issue goods and services, there are no exceptions, including current non-taxed items like food. The prebate is simply returning that food tax cash to each head of household in the country no matter what their income is... it's fair. Used goods are never taxed so you can buy that pre-owned yacht tax free.

Third there are no hidden taxes in www.FairTax.org, since its a consumption tax its up to the retailer/service provider to collect the tax and send it to the U.S. Treasury. It is very similar to a sales tax only the percentage is the same for everyone. Also, the www.FairTax.org legislation abolishes the 16th amendment, the Internal Revenue code and the IRS so income taxes will become illegal.

Fourth, U.S. Corporations will not pay income taxes so they will lower their prices to consumers almost immediately which means the prices will be more or less the same as before the www.FairTax.org was initiated. If you recall your paycheck won't have any withholding so you will have more money in your pocket to buy the same stuff at the same price.

Fifth, foreign products currently undercut our products and sell for far less than their American competitors, but the www.FairTax.org will add the sales/consumption tax onto their retail prices which will help level the playing field. There's much more, go to www.FairTax.org and study.

The flat tax or any other income tax still requires reporting your income to the government in the way we currently do, but that is not necessary with the www.FairTax.org solution because income is no longer a factor in the taxing process.

Stephen C. Eldridge
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August 06, 2013
Gary,

With a constructive intent,for you to say that I have not read the FT should be embarrassing to you, because I have studied the FT for hundreds of hours.

1st Para. there is no "expected" rate. Th FT Statute specifically tells us that the starting rate is 23% (of the total including the FT - which to those of us who live on the planet Earth calculate as a 30% sales tax). That rate will have to rise as FT revenue come in short of expectations due to FT evasion which FT economist merely "ASSUME" will be ZERO (not on this planet).



2nd Para. If you had truly studied the FT as I did, you would understand that the Prebate DELIBERATELY gives the poor MORE DOLLARS than they will pay in FT on their poverty level purchases (WELFARE) and also gives the working poor SS/Medicare benefits WITHOUT PAYING ANYTHING for it while the rest of us still pay for them (WELFARE). I did thy required analysis needed to understand that (you need to be somewhat financially astute to see that).

3rd Para. For 2 out of several HIDDEN TAXES, the FT obviously wound up with a 37.5% tax rate which they considered to be too high and so they hid 7.5 % of that by taxing State & federal purchase (other than teacher salaries). The State will have to tax its citizens to get the money to pay its FT. The fed govt will impose a stealth tax of inflation - they will likely just print more money, or borrow and make your grandchildren pay, or lastly they would raise the FT rate. THERE ARE OTHER HIDDEN TAXES. Perhaps now you begin to understand.

3rd Para. Gary, you have been fooled. The Ft CANNOT repeal the 16th Amend. A future Congress can and will easily repeal the FT's Sunset Clause and I would bet that we would wind up with the FT AND a NEW IT. The FT alone will give us a NEW IRS which will be far worse than the OLD IRS (you need to understand how taxes/auditing really work).

4th & 5th Para. The FT-Paid economist who 1st said prices will come down 22%, later explained that 2/3 of that reduction will NOT happen, leaving a maximum POTENTIAL decline of only 7%. I would guess that reduction would not exceed 3% - then ADD on 30% for FT.Thus, we pick up very little on our foreign competitors.

Yes, there is a lot more at the FT website, but its just a lot more snake-oil.

Lastly, while you don't report Income, it is easy to foresee (if you understand taxes, auditing) that you will eventually be required to file an "Annual FT Summary" in which you would disclose ALL of your cash inflows and outflows and document all of it INCLUDING receipts for every dollar of FT you paid.

So you see Gary, after a great deal of analysis

(which you have not performed)I conclude that it is the FT WHICH DOES NOT ADD UP.

Stephen C. Eldridge
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August 06, 2013
Gary,

I would like to add that many people like you read the FT sales-hype propaganda and simply accept and just "believe" it.

People like me (financial professionals and others) read in-depth and ANALYZE what people are trying to SELL us. Such analysis reveals truths that are not obvious and that are hidden by mere propaganda.

Jim R
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August 05, 2013
Hi Steve,

I respect your views and qualifications. I thought it might help to inject a few comments on this (obviously emotional) issue.

On principle, a National Retail Sales Tax (retail level only, exclusive of *any* income and/or VAT tax as exists in Europe), makes a lot of sense and is actually FAR less "Marxist" than a tax on income.

Please hear me out on this. Here are a few of the more fundamental principles and natural laws at work which I believe warrant something like the FairTax:

1) That which is rewarded and validated *increases.* A tax on income is the exact reverse of this principle. It *penalizes* production, savings and investment. Anyone with children is familiar with this natural law. What do you get more of when you reward a tantrum a child throws in a public place? That’s right—more tantrums!



2) Conversely, that which is penalized *decreases* (or at the very least has a suppressive effect upon it). Again, an income tax penalizes production, savings and investment—creating a suppressive effect on these 3 factors, which are so vital to a healthy economy and a happy, prosperous population.

The result is a negative feed-back loop where a sense of discouragement sets in and a consequent “restraint” is placed on production, savings and investment. This has an insidious and expansive, negative consequence that isn’t necessarily visible.



It is the “suppressive effect” I refer to above, and from which we ALL ultimately suffer economically to one degree or another. Thus, part of what makes it so destructive is the *hidden* nature of its actual effects. This refers to what *isn’t* there (or doesn’t exist) that *could* be there (could exist) if this suppressive influence were removed.



3) The fact that we are still as prosperous and successful as a nation that we are, is actually a tribute to the irrepressible *entrepreneurial spirit* of the people of this country, who yet create wealth and prosperity through their innovative nature and pure ambition DESPITE the suppressive, negative effects of the income tax. This is especially true of the small business sector. Therefore, imagine how much more prosperous and successful we could be without it!



4) The income tax (and IRS tax code) is a quagmire-nightmare of arbitrary rules and laws that even the Internal Revenue Service now admits is impossible to understand.



5) Under an income tax you are not granted the justice standard we operate with under the U.S. Justice System—i.e., a “presumption of innocence.” Under the income tax and its collection/enforcement policies you are “presumed guilty until proven innocent” and the burden of proof of innocence is on the *taxpayer.*

This is inherently unjust, unreasonable and oppressive. It violates the principles of jurisprudence of an enlightened age. It is thus regressive to less enlightened times.

Abusive and unconstitutional actions on the part of IRS have been well known and documented for a very long time, and have only increased in recent years. Noting this current trend, do you honestly believe it will diminish on its own with no external intervention? "A trend in motion..."



6) Under the income tax we constantly have our attention stuck in the *past.* Unfortunately for the taxpayer, the taxable year does NOT end with the taxable year’s end date of April 15th. We are subject to subsequent audit and "arrearage" penalties and interest that can go back years into the past. This keeps us forever looking backward and wondering if we will “clear inspection” from the IRS’s arbitrary audit/penalty policies for taxable years past. Even a bankruptcy doesn’t relieve you from the previous 3 taxable years with the IRS (which it does for any other creditor).



Keeping our attention stuck this way in the past is almost certainly preventing a lot of otherwise creative planning and productive work that could potentially benefit all of us one way or another.



7) The primary purpose of an income tax is not (contrary to popular belief) about collecting the revenue a government “needs” to operate and function with. Its true purpose is “population control” – it provides a tool for rewarding “desirable” behaviors while penalizing “undesirable” behaviors. Proof of this is that we did quite well financially prior to 1913 when the 16th Amendment ushering in the income tax was enacted. (There is quite a story behind this if you'd like to hear it).

8) A "flat tax" is still just another variation of a tax on INCOME, along all of its economically negative effects.



The most basic financial problem a government invariably has (empirical and historical) doesn’t involve the *income* side anyway—the true source of the trouble inevitably and unfailingly comes from the *spending* side. In other words, overspending relative to income, with a de facto zero restraint on the spending obligations incurred, and in which we who PAY the tax, have no truly effective voice in the matter.



Congress: “You say we’ve hit our lawful spending ceiling—no problem, let’s just vote for a higher ceiling!” And so they do. Were you given a vote in the matter the last time it was raised? Neither was I.

How would you feel if someone came to your place of business and decided how your money would be spent with zero input from you? Well...

This is a classic example of utterly irresponsible money management. OUR money to boot! That the source of the problem is the *spending* side seems to either elude their understanding (unlikely)—or it doesn’t matter to them, i.e., they don’t care. They’re in it for a short time and will get a nice fat pension and lifetime perks regardless of what stupid or destructive things they do with our money.



9) On that note, there is a very brutal truth involved with governments and government spending that I feel isn’t understood well enough. It’s simply the fact that when there are no effective external restraints in place on *spending* then this “natural law” comes into play:

Under an income tax system...

THERE IS NO GOVERNMENT ON EARTH THAT WILL EVER HAVE "ENOUGH" MONEY TO MAINTAIN SOLVENCY INDEFINITELY.

This is empirical and observable natural law. Name ONE that has (with honest figures, not "cooked"). They will ALWAYS "need more." Examine history.

In short, lasting solvency will never occur under the type of system we have now where the taxpayer is the “fall guy” for covering the incompetent, the dishonest and the criminal elements of government and the corporate world.

Thus, there will always be a “need” for more money (higher taxes) under the current system. Always!



This is especially true where there is no built-in restraining force against never-ending spending increases. There needs to be such a device in place that keeps our elected representatives and other career politician’s infamous financial irresponsibility and avarice in check!

That’s what I believe the FairTax (in principle) has a good shot at doing.



10) The philosophic principle underlying the income tax is Marxist in nature. Among other of his writings, it was advocated in principle by Karl Marx in his 1875 “Critique of the Gotha Program” with the line, “From each according to his ability, to each according to his needs.”



That may sound “reasonable” or "humanitarian" on the surface to some, “justifying” a *progressive* taxation system, but it raises the burning question of just who should be the one(s) to decide what the “needs” and “abilities” are? I guarantee you it isn’t the productive taxpayer! The proper translation should probably be, “From each according to his gullibility…”

"The idea of borrowing from Peter to pay Paul will always have the support of Paul."



It may not be perfect (things can always be worked on and improved), but again in *principle,* as long as it exists exclusive of *any* income or VAT tax, I see the FairTax as a good candidate for the built-in restraint device on spending mentioned above (in addition to the other benefits also covered).

Thanks for your attention and consideration.

Stephen C. Eldridge
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August 05, 2013
Jim,

Thank you for your thoughtful post. I will try to answer it in parts.

In your items 1-3, you make cuss a reward-punishment argument. While I agree in general with your argument, I don't agree that it is appropriate here.

For one, a very flat tax - especially my 10% tax with NO deductions, Exemptions or Credits - people will be happy to work again because 90% of every dollar they earn will be their's to keep and enjoy (except of course that they must pay for their SS/Medicare benefits, and appropriately so. Compare to the punishment that work suffers today, people's energies will be released in an explosion of activity.

Religion, preaches tithing 10% of your INCOME to charity. I do not believe religion intends to PUNISH work and many Christians believe deeply in such tithing.
Stephen C. Eldridge
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August 05, 2013
Jim,

4) I agree FULLY with this comment. My Flat Tax (10% rate, NO Deductions, Exemptions, Credits)eliminates virtually ALL of those problems.

5) You are not GUILTY. Yes, You must prove that you are entitle to a deduction or credit. That wold be ELIMINATED by my Flat Tax.

6) There must always be a retrospective on paying auditing tax systems - this cannot be avoided. The same would be true of the FT.

7) the TRUE purpose of having a tax system was to fund the Constitutional functions of the Fed Govt.

Sadly is has become a TOOL of redistributing wealth, rewarding those who lobby, punish the evil rich, etc. My Flat Tax ELIMINATES virtually ALL of those invalid uses of the tax code.

Stephen C. Eldridge
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August 05, 2013
8)Jim, I really don't want to tax INCOME at all - my ideal tax won't tax INCOME, but my ideal tax will not happen in my lifetime.

A Consumption Tax like the FT just won't work. In the words of FT-paid Harvard Economics Professor Dale Jorgenson, Trying to replace 3 taxes,is too heavy a burden for the FT to carry".

My Flat Tax is a PRACTICAL answer that solves 90% of the problems with today's IT. Reality and maturity tell me that's a GREAT answer.
Stephen C. Eldridge
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August 05, 2013
9) I think you are saying that as long as we tax Income, Congress will never be reigned in.

Congress' greed to steal our money to buy votes from poor people KNOWS NO LIMITS - not our income, sending, wealth, whatever.

Congress would find the way to collect more FT, they will easily enact a NEW Income Tax and/or many other hidden taxes.
Stephen C. Eldridge
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August 05, 2013
10) A PROGRESSIVE It is Marxist. My Flat tax is NOT PROGRESSIVE (it is in the broad sense that the rich pay more $ of tax.

Again, I see NO RESTRAINT in the FT.

After hundreds of hours of professional analysis on the FT;

I see the FT ADDING TO WELFARE.

I see an revolution-producing 40-70% sales tax,

that would destroy our 70%-retail-sales-

sensitive economy.

I see SEVERAL HIDDEN taxes on top of that.

I see an IRS & Compliance that is MORE INVASIVE

than today.

When I compare these to the benefits of my flat income tax, it is a very easy decision to make.

Again, I thank you for making the effort to express your thoughts and by doing so civilly.
Bev4FairTax
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August 05, 2013
A little knowledge is a dangerous thing, and you sir, have very little knowledge about HR25 S122, The FairTax. Your rubbish is dangerous because at this time in our country's history, the American people are finding out how very dangerous the IRS is to individual freedom. They need the truth about the one tax system that ends the tyranny of the IRS and grows the economy. Your diatribe is meant to dissuade people from investigating this legislation. Since its inception, the income tax has been used for one reason only: to create and maintain a powerful, wealthy subset of citizens who can increase their power and wealth by selling the income tax code. It is a good business. Sell loopholes and exemptions in exchange for votes and donations. It is based on the principal that the government has first claim on your wealth and it will tell you how much you will be allowed to keep. A flat tax keeps the need for an income tax and the IRS - both of which are evil because they destroy incentive to work and to take risks. I have read the other comments below and so won't address the false claims you made. I will address the evil of this system. It controls personal and business decisions through fear - fear of audit, fear of being in violation of an incomprehensible 73,000 tax code. If Americans had to fill out their own tax returns rather than turning that odious job over to tax consultants, they would never tolerate the waste of time nor endure the frustration of trying to figure out what they owed. The FairTax is not difficult to understand. The research behind the FairTax as well as current economic assessments show that the FairTax raises more revenues than the income tax and it cost less to enforce. I am not writing this to convince you to change your mind. I have read rubbish such as yours many times and know that writers who do not research before spouting off don't care about truth. I am writing to encourage anyone who has any qualms or doubts about the FairTax to do their own homework. Go to www.fairtax.org or get Ken Hoagland's The FairTax Solution. And sir, if you are going to quote figures and stats, be responsible and give your source.
Stephen C. Eldridge
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August 05, 2013
Bev, I challenge you to a debate where we can prove to the audience, exactly which one of us has very little knowledge.

No Bev, I don't want to dissuade people from investigating the FT - I WANT THEM TO INVESTIGATE IT AS MUCH AS I HAVE - I offer to help them get there in less time than it took me.

My Flat Tax NEUTERS the IRS - the FT makes the NEW IRS worse than today's IRS.

My Flat Tax GREATLY simplifies tax filing - it could be done on 1 page.

The FT's "research" proves NOTHING! economics can predict NOTHING for sure. The FT's phone economics "assume" there will be ZERO FT avoidance (not on this planet).

All you have to offer (aside from snake-oil) is to insult my work,without understanding my research.

I offer anyone who wants more in-depth understanding of the FT to call me at 423-532-7337. I will explain all of the sales-hype fed to you by the FT'ers.

Paul B
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August 05, 2013
HR25 makes sense. Right now, if your follow the money, all taxes come from the buying of retail goods and services. That is, if retail purchases stopped, everything would stop. Wouldn't it reduce several layers of complexity if we simply tax at the point of retail sale?
Stephen C. Eldridge
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August 05, 2013
No Paul,

Most all taxes do NOT come from buying retail goods.

We could eliminate many layers of complexity with my very flat Income Tax - 10% no exemption, no deductions, no credits.

Jim Bennett
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August 05, 2013
The writer does not state a basis for claiming that the FairTax(R) would require a 40-70% rate. Even William Gale at the American Enterprise Institute does not put the rate that high.

But suppose the rate indeed does need to be 40-70% to replace Subtitles A, B and C of the Internal Revenue Code? That epiphany means nothing more than Subtitles A, B and C are weighing down the economy by that much already. The FairTax merely shifts the tax burden away from productive behavior to consumption without burdening consumption.
Stephen C. Eldridge
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August 05, 2013
Jim,

You did not READ my post (what a shock).

I said the lowest rate of 40% is the sum of the FT's 30% tax and a sample 10% State & Local sales tax rate. I wrote that the 70% is the combined rate needed if FT evasion is a sample 30% (the FT incredibly assumes ZERO evasion)- on what planet Jim, certainly not on ours.

This shift to a 40-70% in-your-face tax would destroy our economy.
Jim D
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August 05, 2013
Lies, Lies and more lies. "The FT hits us with a 40-70% retail sales tax" No, if you compare it to a sales tax, a 30% tax but it ELIMINATES your income tax which if you are in a 25% tax bracket is really a 33% tax if we are comparing apples to apples. You don't mention that... You also CONVENIENTLY don't tell people that every product you buy is already marked up by 22 % because of the cost of corporate taxes and compliance costs.

"The New IRS" comment is complete rubbish. The IRS is defunded by the FairTax bill and the responsibility for validating information for the prebate is handled by the social security administration.

"We may end up with Both..." If we pass a 10% flat tax we may end up with a 50% income tax and a VAT. Congress can do anything they want. It is up to the PEOPLE to keep them in check. The FairTax dismantles the IRS and income tax record keeping. It calls for the repeal of the 16th Amendment within 7 years or the FairTax dies. If you think you can keep a 10% income tax in place you better have a Constitutional Amendment for that. And, oh, by the way - You talk about a 10% flat income tax as if it is a bill before Congress. It's NOT. HR1040 is a 19% Flat Tax.

An income tax also DISCOURAGES people from working, captures NO TAX from the 1-2 TRILLION dollar black market economy and is easily manipulated by our elected officials.

I'll take the FairTax any day over your "flat tax" proposal.
Stephen C. Eldridge
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August 05, 2013
Jim,

Your confusion is common to FT'ers - as is your phony claim that I lied.

Comrade Jim, first you never tried to explain your Marxist ADDITIONAL WEALTH REDISTRIBUTION - all you did was feed us phony economics.

Whatever taxes are already in the product today

(only maybe 5% will disappear) and no matter what current income taxes you pay today, when you buy anything, you will be hit in the face with a fed State 40-70% sales tax that will cause a taxpayer revolt!.

Where in this universe do you get your info that the SS admin will handle the FT? The FT will be handled by the new STAA which is what I am calling informally "the NEW IRS" which my practical professional experience tells me will be more invasive than today's IRS.

So what that 10% is not before Congress today. H.R. 1040 which is before Congress uses 19% for the 1st 2 years and 17% thereafter. I propose dropping its rate to 10% and eliminating its Personal Exemptions.

Either tax can be amended (manipulated) by a future Congress so they are EQUALLY exposed.

A 10% tax on labor which lets you keep 90% of what you earn (with no Estate Tax) will spark a boom of optimism and labor.

The underground economy will NOT pay more tax (2 UT professor's wrote a paper saying so) and the FT will create a nation of 320 million tax cheaters.

Glen Terrell
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August 05, 2013
The author of this piece is terribly miss-informed or a plain ol garden variety bold faced liar.

The FairTax is not a fraud. It's the most transparent tax system possible. The whole FairTax Act written in legal talk is fewer than 135 double-spaced pages!

There are no HIDDEN TAXES.

The FairTax will require nothing like an IRS.

Adoption of the FairTax leads to the repeal of the 16th amendment making an income tax unconstitutional.

Go to fairtax.org to get the TRUTH about the fairtax.

If lies and deception were a crime in this country this guy would likely get "life without parole."

Glen Terrell
F. Walker
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August 05, 2013
Glen, thanks for calling Mr. Eldridge out on HR:25 The Fair Tax. His statements prove with out a doubt that he has never read the Bill. His bogus comments are false at best! To call the Bill a “fraud” or “Karl Marx on steroids” shows he doesn't know anything about HR:25. He fails to understand Marx or the Communist manifesto which requires a heavily graduated Income Tax to take wealth away from those that have and give it to those that have less. It has nothing to do with supporting Government. HR:25 is a consumption based tax that totally removes and makes illegal any form of Income Tax by repealing the 16th Amendment. He falsely states HR:25 increases welfare. HR:25 will reduce welfare because its passage will result in a huge increase in employment do the the influx of business that return from off shore and the money that is currently off shore that will be repatriated. His assumption that the prebate increases welfare is also wrong because the prebate is based on (1) Citizen head of house hold. His statement that HR:25 contains “several hidden taxes” is also false! HR:25 is very simple and straight forward nothing is hidden! He also shows his ignorance when he states that we need a “Flat Tax” our current failed Federal Income Tax is based and built on a “Federal Flat Tax on the top 1% Income earners” We have over 100 years of failed Federal Income Taxes that are positive proof that any Income Tax will not work and will be manipulated by unscrupulous Representatives and Senators! The statement that “the New IRS” “may well have to file a “Annual FT Summary” is pure unsubstantiated B.S! HR:25 will substantially reduce the size of the IRS! The facts are, that under HR:25 there are no more Individual or Family Income Tax forms or fillings needed. No more April 15th filling deadline. No more record keeping related to Federal Income Tax filling. It reduces the printing cost and overhead paperwork. It removes the needed IRS employee head count to oversee the current unmanageable Income Tax. Mr Eldridge needs to read the simple HR:25 The Fair Tax Bill! Read the truth for yourselves at www.fairtax.org. F. Walker, N.C.
Stephen C. Eldridge
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August 05, 2013
Comrade Glen,you too do not try to justify your Marxist ADDED WEALTH REDISTRIBUTION which the FT is very proud of.

I am not mis-informed nor a liar. You are a typical FT snake-oil salesman and a fraud.

I read the Statute and analyzed it. I challenge you to a public debate on the subject.

There are SEVERAL hidden taxes (over and above the outrageous 40-70% sales tax). Here are just 2 of them. States must pay FT on all purchases (other than teachers' salaries). Where is your State going to get the money to pay its share (answer: from us in the form of higher State taxes). The federal govt also must pay FT - it can tax us by stealth by just printing more money which taxes us by inflation. FT did this to hide the fact that it needed a 37.5% sales tax which it believed to be too high for people swallow so it had to lower it via this very deceptive indirect HIDDEN tax.

The FT requires SOME AGENCY to audit all of us to insure collection of the FT. The "NEW IRS" will be more invasive than the old IRS.

The FT WILL NOT repeal the 16th Amendment. Congress will repeal its "Sunset Clause- I would bet a fortune on that. If you don't see that coming, i feel sorry for you.

All you've got are insults and fraud - give it up.
To: F. Walker
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August 05, 2013
have studied the FT more than I should have - certainly more than its worth.

FT certainly increases welfare in several ways that cannot fully explain here. However, here are 2 aspects of this. 1st,the FT ELIMINATES the SS/Medi tax on the working poor.They now receive SS/Medi FIR FREE (that's MORE WELFARE). 2nd, via several specific methods, he Prebate INSURES that the poor will receive a larger Prebate check than they will ever pay in FT = MORE WELFARE. There is more. It is yo who don't understand how the FT works. You have been fooled by the FT's SIMPLICITY.

I have addressed above your issues about exposure to future Congressional changes to either system as well as the NEW IRS. You can bury your head in the sand but an "Annual FT Summary" filing would eventually have to be required in order to protect the FT revenue (similar to your State & Local USE TAX.

I have read the bill YOU need to read it. Read Sec 101(d)which requires YOU to keep receipts for the the FT you pay (and for any Ft paid by a erson who sold you USE goods) - how do you like them apples?

Does that sound like less record-keeping to you/
Stephen C. Eldridge
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August 05, 2013
To: F. Walker,

To add, senior FT'er ADMIT FREELY that the FT DELIBERATELY INCREASES WELFARE (you need to be more up to speed on the official FT baloney).

They go on to try to slide by us the Marxist baloney

of WHY that's the right thing to do - like SOCIAL JUSTICE, Blah, Blah, Blah. NO SALE COMRADE.