The Observation Deck

"I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I travelled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer. "

When you contribute to your local charities, you must give $1.10 for every $1 that is to be spent in good works. County welfare sees an increase in this overhead to where $1.23 must be raised for every $1 actually spent on welfare. At the state level it takes $1.49 and the federal government must raise $2.10 for every dollar it will spend on the recipients of federal welfare a $1.10 overhead for each $1.
--Ronald Reagan, 1961

now we are told that 9.3 million families in this country are poverty-stricken on the basis of earning less than $3,000 a year. Welfare spending is 10 times greater than in the dark depths of the Depression. We are spending $45 billion on welfare. Now do a little arithmetic, and you will find that if we divided the $45 billion up equally among those 9 million poor families, we would be able to give each family $4,600 a year, and this added to their present income should eliminate poverty! Direct aid to the poor, however, is running only about $600 per family. It would seem that someplace there must be some overhead.
--Ronald Reagan, 1964

Thealexa Becker wrote:.

1) If Fair Tax Legislation is passed, how on earth are you going to pay for SS?

2) Fair Tax Legislation would be so unbelievably regressive you would damage all the lower and middle income families. Please explain to me how this is a good thing. At least Obama and Romney don't want to explicitly raise taxes on the poor.

Will Brown wrote:

Thealexa Becker wrote:.

1) If Fair Tax Legislation is passed, how on earth are you going to pay for SS?

2) Fair Tax Legislation would be so unbelievably regressive you would damage all the lower and middle income families. Please explain to me how this is a good thing. At least Obama and Romney don't want to explicitly raise taxes on the poor.

Fair Tax Legislation is set forth as a replacement for the income tax. SS is not funded by the income tax, at least not yet. When we have exhausted the trust funds, it is very possible that the politicians will choose to use income tax revenues. I'm surprised that a high school graduate would think the income tax funds SS.

Much of Europe already has a VAT, an alternative similar to the fair tax proposal, in that purchase of necessities often not taxed, but purchase of "luxuries" is taxed. If you really don't want to pay the tax, you just don't but the Lexus. It doesn't appear that the VAT has destroyed the European middle class. I think the term regressive is calculatedly emotional. A tax that would hit a rich man who buys a yacht, but misses me because I don't buy a yacht, hardly seems to hurt me, nor to be regressive.

Sorry, I know how economists have an aversion to facts, as they tend to disprove their theories. Every time an economist gets egg on his face, he blames faulty data.

Roy Pitchford wrote:1. Economist Art Laffer says that everything the government does can be funded by a...18% personal income tax and an 18% corporate income tax. I assume he included social security in it.

2. Why not abolish the sales tax then? Those unfortunate people are paying a higher tax rate compared to their income than I am when they get their smokes.

Someone on the campaign trail keeps talking about "fair share." Well, let me ask, for someone who uses the government as a backstop for their home, has the government pay for their food, medicine and cell phone, shouldn't they be asked to put a little something in? They use the same roads, the same city services, went to the same schools as I do/did. In a world where common sense is common, usually you pay MORE for getting more, not less.

3. A massive amount of the Department of Education's budget goes right back to the states and individuals. Why collect it at all? Let the states or cities handle it. Same for HUD, Dept. of Labor, Dept. of Energy, Dept. of Transportation and Dept. of HHS. Money can be spent more effectively through smaller bureaucracies.

Do things need to be cut? As long as tax dollars are used studying how different kinds of music effects the mating habits of river otters, there's stuff that needs to be cut.

4. For me to get into healthcare would mean I could be writing for a while (and you reading for a while) so I'll leave that alone.

5. Here is where I will disagree most with just about every pure libertarian. We cannot simply abandon the rest of the world, militarily and economically. Should we cut some things back, yes, but complete isolationism, no.

If you want to be unbiased, you have to admit that not everything that happens under a presidency is bad. In your case, you are just so anti-Obama that you lose some objectivity.

7.How is the Social Security system affected?

Like all federal spending programs, Social Security operates exactly as it does today, except that its funds come from a broad, progressive sales tax, rather than a narrow, regressive payroll tax. Employers continue to report wages for each employee, though, to the Social Security Administration for the determination of benefits. The transition to a reformed Social Security system is eased while ensuring there is sufficient funding to continue promised benefits.

Meanwhile, Social Security/Medicare funds are no longer triple-taxed as under the current system: 1) when payroll taxes are initially withheld; 2) when those withheld payroll taxes are counted as part of the taxable base for income tax purposes; and 3) when the promised benefits are finally received.


Back to FAQ Index



8.How does the FairTax affect Social Security reform?

FairTax.org is a one-issue organization: Tax replacement. However, its proposal does benefit any Social Security reform proposal. The FairTax.org plan does not change Social Security benefits or the structure of the Social Security system. All it does is replace the current revenue source (narrow, regressive payroll taxes) with a new revenue source (broad, progressive sales taxes paid by all consumers).

Additionally, research shows that consumption is a more stable revenue source than income. If Social Security is reformed or privatized in a way that reduces the government’s need for revenue, then the FairTax rate can be reduced. For example, if a mandatory private savings program is implemented where people must save ten percent of their income and Social Security benefits are curtailed, then the FairTax rate can be reduced just as payroll taxes would be reduced.

Stephen Eisel wrote:

If you want to be unbiased, you have to admit that not everything that happens under a presidency is bad. In your case, you are just so anti-Obama that you lose some objectivity.

If pointing out the facts makes me biased then I am guilty as charged. You may not be old enough to remember but the two biggest issues in 2008 were deficit spending and the wars in Iraq and Afghanistan.. Hope and Change promised to end the wars and cut the deficit in half. He (Obama) absolutely had no plan for either in 2008. And now, we are no better off then we were in 2008.. More war.. More deficit spending...

Stephen Eisel wrote:http://www.fairtax.org/site/PageServer?pagename=about_faq_answers

7.How is the Social Security system affected?

Like all federal spending programs, Social Security operates exactly as it does today, except that its funds come from a broad, progressive sales tax, rather than a narrow, regressive payroll tax. Employers continue to report wages for each employee, though, to the Social Security Administration for the determination of benefits. The transition to a reformed Social Security system is eased while ensuring there is sufficient funding to continue promised benefits.

Meanwhile, Social Security/Medicare funds are no longer triple-taxed as under the current system: 1) when payroll taxes are initially withheld; 2) when those withheld payroll taxes are counted as part of the taxable base for income tax purposes; and 3) when the promised benefits are finally received.


Back to FAQ Index



8.How does the FairTax affect Social Security reform?

FairTax.org is a one-issue organization: Tax replacement. However, its proposal does benefit any Social Security reform proposal. The FairTax.org plan does not change Social Security benefits or the structure of the Social Security system. All it does is replace the current revenue source (narrow, regressive payroll taxes) with a new revenue source (broad, progressive sales taxes paid by all consumers).

Additionally, research shows that consumption is a more stable revenue source than income. If Social Security is reformed or privatized in a way that reduces the government’s need for revenue, then the FairTax rate can be reduced. For example, if a mandatory private savings program is implemented where people must save ten percent of their income and Social Security benefits are curtailed, then the FairTax rate can be reduced just as payroll taxes would be reduced.

You can point out facts, my issue with you is that you aren't doing the same for Romney, therefore, you are biased.

So you mean to tell me, that Johnson, who you favor, doesn't see the need to reform SS? Even the basic reforms that almost all economists agree on that don't involve an overhaul or privatization? And he wants to be taken seriously? Ok. I like him less than either Obama or Romney.

So I ask again, as a current college student studying the tax system and entitlement programs, how are you supposed to fund SS without a payroll tax?

7.How is the Social Security system affected?

Like all federal spending programs, Social Security operates exactly as it does today, except that its funds come from a broad, progressive sales tax, rather than a narrow, regressive payroll tax. Employers continue to report wages for each employee, though, to the Social Security Administration for the determination of benefits. The transition to a reformed Social Security system is eased while ensuring there is sufficient funding to continue promised benefits.

Meanwhile, Social Security/Medicare funds are no longer triple-taxed as under the current system: 1) when payroll taxes are initially withheld; 2) when those withheld payroll taxes are counted as part of the taxable base for income tax purposes; and 3) when the promised benefits are finally received.


Back to FAQ Index



8.How does the FairTax affect Social Security reform?

FairTax.org is a one-issue organization: Tax replacement. However, its proposal does benefit any Social Security reform proposal. The FairTax.org plan does not change Social Security benefits or the structure of the Social Security system. All it does is replace the current revenue source (narrow, regressive payroll taxes) with a new revenue source (broad, progressive sales taxes paid by all consumers).

Additionally, research shows that consumption is a more stable revenue source than income. If Social Security is reformed or privatized in a way that reduces the government’s need for revenue, then the FairTax rate can be reduced. For example, if a mandatory private savings program is implemented where people must save ten percent of their income and Social Security benefits are curtailed, then the FairTax rate can be reduced just as payroll taxes would be reduced.

So you mean to tell me, that Johnson, who you favor, doesn't see the need to reform SS?

Research says consumption is a more stable revenue source than income?

Gross Domestic Product (GDP) would increase 10.5% in the first year and level off in succeeding years at approximately 5% annually. (Dr. Dale Jorgenson of Harvard University)
Consumer prices would decrease 20 to 30 percent by eliminating the nearly 250 billion dollars in annual compliance costs, and eliminating the taxes on corporate profits and labor (payroll taxes), which are imbedded in what we pay for goods and services. (Dr. Dale Jorgenson and other economists)
A single national sales tax rate on all new goods and services of approximately 24% (to be revenue-neutral) would replace the 1.7 trillion dollars of taxes on income.
Annual uncollected taxes of 210 billion dollars (IRS estimates) would not escape The FairTax. This amount grows by 12 billion dollars each year.
Taxes of 35 billion dollars on expenditures by non-residents would be collected.
Taxes from the “underground” economy would be a bonus to the federal treasury.
Imported goods would be treated the same as domestically produced goods. This means US businesses would be much less likely to locate their plants overseas.
All taxpayers would have an equal voice, not just people who can afford tax lobbyists and skilled tax accountants.

You assume or you know? Huge difference.

I assume you are referring to his article saying that Herman Cain's tax plan wasn't that insane (yes it really really was, by the way).

http://www.nysun.com/national/art-laffe ... ter/87524/

But I can't find anywhere anything that supports this 18% personal income tax and 18% corporate tax. Do you have a citation for this information?

And my comment about the taxation is not to abolish sales tax, it is saying that I don't understand why we need to dump all taxation on a regressive tax. Because, technically, it is not a flat tax since a person making 50k a year pays more percentage wise of his income than does someone making 100k a year. That's the classic example of a regressive tax.

Do you have evidence to support this claim? I do not believe this to be the case, especially not for Transportation or Energy or Labor or HUD. We can have an argument about Education if you want, because that is not as clear cut and involved different elements than the others, but we are a huge country, not 50 little ones, there needs to be some Federal involvement in these areas.

Roy Pitchford wrote:

You assume or you know? Huge difference.

I assume you are referring to his article saying that Herman Cain's tax plan wasn't that insane (yes it really really was, by the way).

http://www.nysun.com/national/art-laffe ... ter/87524/

But I can't find anywhere anything that supports this 18% personal income tax and 18% corporate tax. Do you have a citation for this information?

That's not the article...I'm looking for it. I think I have a video clip, but I can't listen to it at the moment, and so I'm not sure. Art was on a few different times.
You'll hoot and holler that is from the Glenn Beck show, but that's where I saw it. He said either 17% or 18% would do the trick.

And my comment about the taxation is not to abolish sales tax, it is saying that I don't understand why we need to dump all taxation on a regressive tax. Because, technically, it is not a flat tax since a person making 50k a year pays more percentage wise of his income than does someone making 100k a year. That's the classic example of a regressive tax.

Ok. I think I see where there's some confusion. I sometimes get fair tax and flat tax mixed up.

My point was a sales tax is the same percentage for everyone. If you're poor, you're still paying 7.75% to the county.
Do we want to talk about percentages or dollar amounts?

I'll have more time to look at those theories later. I'll come back to them.

Do you have evidence to support this claim? I do not believe this to be the case, especially not for Transportation or Energy or Labor or HUD. We can have an argument about Education if you want, because that is not as clear cut and involved different elements than the others, but we are a huge country, not 50 little ones, there needs to be some Federal involvement in these areas.

Why? Why does there have to be federal involvement?

Stephen Eisel wrote:http://www.salestax.org/library/cain_5-9-02.html

Stephen Eisel wrote:

Research says consumption is a more stable revenue source than income?

http://pafairtax.org/resrcs/govt.pdf


http://www.fairtaxplan.org/faq_item.php?id=49

Stephen Eisel wrote:

You can point out facts, my issue with you is that you aren't doing the same for Romney, therefore, you are biased.

Ummm.. Romney has never been president.. just sayin...