FairTax: Fire Up Our Economic Engine

August 15, 2012  ·  Filed under: AFFT Updates, Videos

New Video from FairTax.org

In this unforgettable video saga, we chronicle how the Federal income tax system has eroded the American economy and outline a brilliant, yet simple plan for total tax replacement.

Posted by Morph  ·  Trackback URL  ·  Link
 
16 Responses to “FairTax: Fire Up Our Economic Engine”
  1. Decent video – though the engine at the end sounded weak to me. Expected to hear it fire up like a 500 hp pony car. So it left the finally lacking with what sounded like a wounded prop plane.

    Morphh  ·  Aug 15, 2012 at 6:20 pm  ·  Permalink
  2. The engine sound effect was from a monster truck.

    Bob  ·  Aug 15, 2012 at 9:26 pm  ·  Permalink
  3. Ah, Ya I can hear it now. Guess it was just the idling that threw me off – expected to hear a little throttle in there.. haha

    Morphh  ·  Aug 15, 2012 at 9:49 pm  ·  Permalink
  4. Unforgettable? I don’t think so! What the heck do “Silent Cal”, MLK, Reagan, and John Glenn have to do with the Fairtax scheme? I don’t get it.

    Does anyone really believe that that clip will energize 3000 activists in each Congressional District? That has been the AFFT goal for as long as I can remember. What AFFT really wants is a million believers to pay $5.00 per month to fund a dying operation.

    The Linbeck letter claims that the Fairtax is “fair, simple, and transparent with the broadest base of any known tax scheme. Well, the Fairtax is not fair to middle class seniors as I have shown. It isn’t transparent due to the inappropriate federal taxation of State and Local government operations. And, the base is far too broad if world wide experience is any indicator. Taxing all services is a big mistake in my view. Six nations have tried similar tax plans, failed and switched to a consumption tax on goods only.

    Good luck!

    Hank Van Gieson  ·  Aug 18, 2012 at 12:52 am  ·  Permalink
  5. Correction Hank, you didn’t show that the FairTax was unfair to middle class seniors. You showed that it would, in many cases, increase their tax burden. Fairness is relative and it can certainly be argued that said seniors are engaged in generational theft, robbing their children blind and gaining a much larger return than what they paid in.

    So this brings up the question.. does any tax increase represent unfairness, or is it just seniors, just middle class, lower income.. only is it only fair if the taxes are raised on the rich? What is the proper fairness between workers and retirees if the burden on the workers is significantly greater? Is the current tax structure fair and any change to alter tax allocations unfair? Certainly a good sound bite, if that’s the goal.

    Perhaps you’re just exploiting the neologism that is the term “fair” tax… Fairness is always a moving target – anyway, sorry, I’ve had a few drinks tonight.. haha

    Morphh  ·  Aug 18, 2012 at 4:33 am  ·  Permalink
  6. Maybe you should change your brand of scotch?? – haha. I showed that ALL middle class retirees would see an increase in their federal tax burden. Is that fair? I also stated that everyone’s current after tax savings would be double taxed when spent. Is that fair? (and don’t give me that embedded tax malarkey argument to prove that we are double taxed today. Even Larry K believes that the embedded tax concept is being abused.) And, it certainly isn’t fair to all seniors to force them to resume paying into the Trust Funds with their sales tax dollars. The current SS concept would be destroyed under the Fairtax. Think about it!

    You asked about the fairness of the burden on workers being greater. Just not true. I have shown that tens of millions of lower paid workers would pay no net federal tax due to the prebate, yet would still receive benefits when retired. How on earth is that fair? At least under current tax law, all workers pay for their government retirement benefits.

    Getting back to the video clip, would you please educate me on how we can get that young man back to work by adopting a change in how we collect taxes? Tearing down that wall, Mr Gorby, sure isn’t going to do it?

    Cheers!

    Hank Van Gieson  ·  Aug 18, 2012 at 12:07 pm  ·  Permalink
  7. My point was that you can’t “prove” something as abstract and relative as “tax fairness”. You can argue it and make a point about it. You can prove that it increases a burden here or decreases a burden there. But what is fair to me, fair to you, fair to the Occupy Wall Street protestor, or the Tea Party patriot is all different. Any tax change is going to cause some group to claim unfairness. Even the Romney plan that attempts to reduce all marginal taxes will hear one side saying.. those guys are getting off better.

    Also, you didn’t show “ALL”. The middle class retirees are a large bracket and there are many factors based on age / income / savings / investment. You showed what has been shown before in Kotlikoff’s research (albeit in a limited and selected way) – the FairTax taxes wealth, which middle class retirees hold the majority of. So many would see an increase as they often pay extremely low taxes on spendable income compared with their working middle class counterparts due to prior taxation (savings) and low tax investments.

    So, do I believe it is fair to increase the share of taxes on seniors to pay for their under-funded entitlements, instead of passing the massive bill onto their children and grandchildren? Yes I do. Problem is, seniors believe they’ve paid for it, when they haven’t really (it’s been raided). They’ve been lied to by the shop keeper (or are in ignorant bliss), who took the balance and put it on Jr’s bill. So if someone takes something that’s half paid for, who’s the thief in the exchange? Grandma walks out of the store with her hands full (is that Medicare D in her basket) and Jr. is left paying the other half of the bill, plus his goods, with a pat on his 8yr old daughter’s shoulder to pay for the truckload in the back. Hold up Grandma, you need to pay the rest of your bill – don’t leave your kids this massive debt. Fiscal child abuse as Kotlikoff calls it. It is a proven generational shift in wealth, so forgive if I don’t consider that fair.

    Personally, I think we need to reduce the spending. I’d rather see Grandma accept that she hasn’t paid for all the goods she was given (promised) – and honorably put some back as not to burden her children. Otherwise, as I stated, I think they should have to pay more. As Paul Ryan states, we should leave the next generation better of, not worse. Of course, neither situation will likely happen with our political will – who would touch poor old Granny. She’ll unwittingly stick it to her kids and cry foul if anyone suggests otherwise. Such is the nature of entitlements and government dependency.

    Anyway, again – my point was about “proving” fairness, not that my view or your view is fair. We could debate for days about what is fair. As for getting someone back to work by changing tax policy, surely you don’t believe we have an efficient system that reduces economic disturbance in the market and rewards investment and work? Whether the FairTax is the best solution for that, you know there are numerous ways that the tax code, even a revenue neutral one, can effect economic growth. Mr Gorby… guess they were going for monumental changes that effect the course of history. I agree that’s a far stretch, even if all their estimates hold true.

    Morphh  ·  Aug 18, 2012 at 4:43 pm  ·  Permalink
  8. I’m trying hard to keep my Dutch temper in check, but you, Jim Bennett and maybe Larry K keep harping on this generational child abuse nonsense which I don’t agree with at all.

    During my work career, my wife and I paid at a 50% marginal tax rate. Have you ever paid at anything like that rate? In constant year dollars, I still haven’t collected as much as I paid in to the SS Trust Funds, even at age 79. And I paid for your education with my property taxes, and am still paying for your kids education. I’m not bothered at all that you are paying something for my support in my declining years with your FICA contributions. Fair is fair!

    My study on middle class retirees assumed that middle class meant $30,000 to $100,000 spendable income from SS, pensions, and accumulated wealth/investments. In all cases assuming average SS payments, both single and married retired seniors paid less federal tax than would be the case under the Fairtax, even if only 75% of their gross was spent on new goods and all services. Check it out!

    One thing we are in violent agreement about is that the problem facing everyone today is an out of control federal government that is spending a trillion or so more than they take in. I’m all for fixing the federal budget at 18% of GDP and taxing everyone a little something. The Fairtax doesn’t do that.

    Chjeers!

    Hank Van Gieson  ·  Aug 18, 2012 at 6:40 pm  ·  Permalink
  9. Certainly retirees have fallen into different brackets as they work throughout their life – low, middle, high income contributing differently relative to their generation. However, as a generation, it has accrued a large debt due to growing costs of entitlement programs. As a generation, the liabilities are under-funded and the burden required to cover them increasing. My generation is doing it as well, so I’m not blaming you any more than myself. However, I don’t absolve myself of the responsibility of what my generation is doing to the next. I feel we’re screwing our kids with massive debt, which we can’t afford to fulfill for promises we realistically can’t keep. Your generation is guilty of this, as is mine.. mine even greater, but until we take responsibility for it and own it, what are we leaving for the future?

    Morphh  ·  Aug 18, 2012 at 7:00 pm  ·  Permalink
  10. I think we are coming close to being on the same page. But the current debt resulting from raiding the Trust Funds plus profligate overspending by our federal government benefited all generations, not just yours or mine, and not just entitlements. As a Fairtax advocate, I would think you might reconsider promoting generational warfare in order to defend the indefensible Fairtax scheme? All of the pictures of Fairtax gatherings I have seen seem to have a whole lot of silver hairs in attendance. And, they vote!

    Peace!

    Hank Van Gieson  ·  Aug 18, 2012 at 9:18 pm  ·  Permalink
  11. I’m not a spokesmen for the FairTax and have no role in AFFT, so I don’t have to worry about promoting anything. Just a researcher like you looking for good solutions and mouthing off on a blog. ;-)

    In fact, I’d be fine with your FairTax lite or Hayden’s plan – a hybrid approach would be fine with me (income/sales or income/vat), if… if we were able to pass a constitutional amendment that caped tax revenue to GDP (with limited flexibility in times of war when constitutionally declared by congress). That would greatly reduce my fear of two increasing tax streams like we’ve seen overseas. As you said, 18% of GDP would work. Given this, I think a very economically efficient tax could be created that offers a low amount of risk, tax shift, and evasion. Such a tax cap would probably be passed more easily that eliminating the 16th Amendment. Cut, Cap, Balance!

    Morphh  ·  Aug 18, 2012 at 10:50 pm  ·  Permalink
  12. CCB!!! Has a nice ring to it. But how about adding an “R” for retire, as in retire our huge national debt? Execute a CCBR plan and our grandchildren are safer.

    Cheers!

    Hank Van Gieson  ·  Aug 19, 2012 at 12:54 am  ·  Permalink
  13. A fundamental principle of tax reform should be that no retiree’s taxes should ever go up except Hanks!

    I’m at the tail end of the baby-boom. Since the early 80′s, I’ve been over-paying for social security and Medicare, thanks to the “reform” that Reagan and the then-Congress put into place then. In other words, I’ve been both paying for Hank’s retirmement benefits AND paying into the so-called trust fund, which, of course, has been raided by every administration since it was first created. In addition, I’ve had to pay for my own health insurance (premiiums for which are much higher today than during Hank’s working years) as well as fund my own retirement, since there’s no longer any pensions (unless you work for the government).

    So, I would be doubly-upset under the FairTax where I would have to continue paying taxes after I retired even if I was living off the assets I’d accumulated and paid taxes on during my working years. However, in reality, I wouldn’t be paying those taxes becasue I’d simply move to Thailand or Costa Rica after I retired and let Morph and his fellow FairTax lemmings pay for my Social Security and Medicare benefits through the enormous tax rates that would be required under the FairTax. And, alas, he wouldn’t have any money left over to fund his own retirement, and, by the time he needed to retire, Social Security and Medicare will definitely be broke.

    So, for Morph’s sake, tt’s a good thing there’s no chance that the FairTax will ever pass! (Of course, the current Republican proposals are almost as bad, but that’s for another blog.)

    Hayden Kepner  ·  Aug 20, 2012 at 6:34 pm  ·  Permalink
  14. Morphh,

    We cannot begin any discussion of “fairness” without each person’s definition.

    What is your definition of “fairness” in 1) funding future annual budgets and 2) cleaning up current debt (both on and off the books).

    Stephen C. Eldridge  ·  Aug 22, 2012 at 9:48 pm  ·  Permalink
  15. I could only get the 1st 1:50 to play.

    Since they made a movie, it must be true the FT will solve all our economic worries, give everyone a high-paying job with fewer hours, free medical,retire at 50, etc., etc., etc. and the 1% will pay ALL the taxes AND give us a PREBATE, to boot. Where do I sign up — NOT.

    Have you FT supporters no shame?

    Stephen C. Eldridge  ·  Aug 22, 2012 at 10:27 pm  ·  Permalink
  16. >So, do I believe it is fair to increase the share of taxes on seniors to pay for their under-funded entitlements, instead of passing the massive bill onto their children and grandchildren?
    >>>>>>>>>>>>>>>>>>>>>>
    The situation is a bit trickier than that. Social Security and Medicare are Middle/upper middle to poor transfer programs. Yes, low income earners get a windfall from SS and medicare. For example, folks can come to the US at an advanced age, work a few years-and retire to Mexico with what are by Mexican standards _lavish_ benefits.

    Personally, I think
    we need to cease all transfers
    from non-citizens to citizens
    from from existing citizens to recently naturalized citizens
    Those groups need to be clearly self-funding.

    Furthermore, the transfers to the least wealthy citizens really should come not from the strapped middle class, but from the Americans making the biggest gains the last 30 years-and likely to make the biggest gains if something like fairtax is introduced(i.e. those families with more than $1-5 Million in assets).

    There is a LOT to be said for eliminating payroll withholding requirements-and the overhead of income tax collection. Milton Friedman was ashamed he played a role in their creation(it was one of his first jobs as a young man). The question is how do we do this without huge trickle up effects like we have seen the last 30 years?

    Randall Burns  ·  Sep 29, 2012 at 5:11 pm  ·  Permalink

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