Hometown America Must Save the Nation

[Tom Adams]

The following was penned by Ken Hoagland of the FairTax organization. Regardless of whether you support the FairTax or not, there is some seriously good commentary in his piece that I personally feel ALL OF US should chew on and digest. Right now, if I had $10M I would spend every last cent trying to reach the minds of every person in this country in an effort to make them realize that the enemy is not necessarily the Taliban or big oil or illegal aliens - no.....the enemy is our Imperial Federal Goverment (IFG). Case in point.....

We simple Americans who do our very best to live within our means and generally have no idea of all those fancy financial ideas & concepts, told our elected leadership NO on the bailout. They did what they wanted anyway. The next day....the market tanks. The IFG starts talking about spending more on other things starting to fail and what happens? The market continues to decline. How come everyone - us & investors - get it and the IFG doesn't? I'll tell you why. BECAUSE THEY DON'T CARE. Anyhow......enough of my rant. Here's what I said I'd post.

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At the heart of the financial meltdown now bedeviling Americans is a simple and profoundly ignored fact that does not require an advanced degree in economics to understand: Our government spends more than it takes in—a lot more.

Sure, regulators could have done a better job but, in truth, politicians at every level have frustrated attempts to blow the whistle on bad loans, bad reporting and bad ethics. Why? Because politicians have been buying our votes with our money—and our future earnings—for a long time. And they don't want any interference from those they are "helping."

It's not just the naked bribes represented by "earmarks" for hometown voters; it is new entitlement programs like the prescription drug benefit, new rules governing the behavior of favored banks and investment houses and a headlong rush to buy the votes of the poor by guaranteeing home ownership, irrespective of one's financial ability to repay a loan. Lest we forget, let's also add up all the special tax breaks for favored contributors that have bloated income tax code rules to 67,500 pages. It's a bi-partisan betrayal of our future cloaked as concern for the common good.

Although our nation was founded on the principle that the citizen was sovereign, government spending increases and more and more taxes taken from our earnings, savings and investments have effectively transformed the American citizen into a serf working another's land for the privilege of taking a fraction of the fruits of his or her own labor.

Just Trust Us

"Trust us," we are told. "We have the best interests of the nation at heart." Citizens are now left with no rational choice to protect savings, college plans, and investments but to accept the new aristocracies' trillion dollar picking of our pockets to prop up institutions that must function. It is not the first time in recent years that we have accepted the grasping hand of the federal government in our wallets to avert a disaster not of our making.

In 1983 a "Blue Ribbon" panel of similar leaders including Alan Greenspan, Daniel Patrick Moynihan and others "saved" Social Security from another big collapse by dramatically raising taxes on earnings of up to $97,500 annually. The promise, then, was that Baby Boomers would actually "pre-fund" their own retirement with astoundingly increased taxes, decades ahead of time. It was also promised as relief to the coming generations so they would be free of crippling taxes. Sounded good.

Lo and behold, the trillions of dollars taken in since then—far exceeding promised payments to senior citizens—have since been spent on everything else. Turns out, that it was nothing more than a new tax levied on those with earnings below $97,500 a year so executive and legislative branch office holders could have more of our money to spend extravagantly on "us" so they could win new terms in office. The FICA payroll tax has become a major factor in keeping the poor that way, retarding new business growth and keeping middle-class earners from moving up. Worst, it also turns out that our children and grandchildren will, in fact, still be burdened an ever-growing and mind-numbing national debt AND unbelievably high FICA taxes to support their parents.

In yet another example of playing fast and loose with politics and our money, 1986 saw Congress reject the tax policies of the Reagan administration and as consequence, the Savings and Loan industry collapsed. Turns out the definition of the tax value of real estate holdings had been changed overnight by the House Ways and Means Committee and banks no longer met liquidity rules. That politically inspired cat fight cost American taxpayers hundreds of billions of dollars. And worse, we didn't learn.

It is past time--way past time--for hometown America to save America from our well-intentioned but criminally incompetent, at best, and cynically corrupted , at worst, national leadership. Do we have a moment to lose? Do we really need any more examples of how the new aristocracy can—and will—destroy the pursuit of happiness?

The reform that can save the nation and restore our identity as citizens who have empowered and limited government (instead of the other way around) is called the FairTax.

Because the FairTax allows every American to take home everything that is earned without any federal withholding, millions of distressed homeowners could actually afford home mortgage payments. The elimination of FICA taxes eliminates the highly regressive Social Security and Medicate tax but the FairTax provides a far broader stream of revenue into these faltering programs. Because the FairTax eliminates all exemptions, gimmicks and loopholes, Congress would be removed from the ability to buy votes with tax giveaways and billionaires pay taxes when they spend money. Because the FairTax makes nearly all federal government taxes entirely transparent, the sovereign citizen can know the score and put the brakes on extravagant new spending. Because the FairTax eliminates the price advantage now enjoyed by overseas producers, American jobs won't be leaving our shores. In fact, because the FairTax makes the USA the most favorable tax environment in the world, we can expect trillions of dollars of investment rushing into the US economy. With the FairTax, our money is ours first and only secondly devoted to government. Savings growth, investments and business decisions are guided by opportunity and real progress instead of tax avoidance tactics.

We've lost more than $2 trillion of our retirement savings in a week's time and our kid's future at college is in serious jeopardy. This didn't happen by accident but at the hands of the very same people who have given the FairTax a cold shoulder. Those candidates and incumbents of either party who would spend our future earnings to stay in office and who reject the FairTax for similarly self-interested reasons now need a strong reminder from voters about whose offices they occupy. Please pay attention to our voting guide and send that message.

Finally, our campaign needs your help—as always. We never have enough to do the job right. Send us a contribution if you can, even in these hard times. It may turn out to be the best investment you ever made. If you can't afford a donation, then help us by recruiting two new supporters. And keep your cards, letters, phone calls, faxes and e-mails going to incumbents and candidates.

The plain fact is, we either now save ourselves from our new aristocracy or suffer the consequences as modern day serfs in a nation never contemplated by our Founding Fathers.

[Zen Traveler]

..We simple Americans who do our very best to live within our means and generally have no idea of all those fancy financial ideas & concepts, told our elected leadership NO on the bailout. ------------------------------------------------------------------------------------------------------------------------

At the heart of the financial meltdown now bedeviling Americans is a simple and profoundly ignored fact that does not require an advanced degree in economics to understand: Our government spends more than it takes in—a lot more.

.... Send us a contribution if you can, even in these hard times. It may turn out to be the best investment you ever made. If you can't afford a donation, then help us by recruiting two new supporters. And keep your cards, letters, phone calls, faxes and e-mails going to incumbents and candidates.

Propaganda that has no basis in current reality, imho. [bs]

[BigStewMan]

..We simple Americans who do our very best to live within our means and generally have no idea of all those fancy financial ideas & concepts, told our elected leadership NO on the bailout. ------------------------------------------------------------------------------------------------------------------------

At the heart of the financial meltdown now bedeviling Americans is a simple and profoundly ignored fact that does not require an advanced degree in economics to understand: Our government spends more than it takes in—a lot more.

.... Send us a contribution if you can, even in these hard times. It may turn out to be the best investment you ever made. If you can't afford a donation, then help us by recruiting two new supporters. And keep your cards, letters, phone calls, faxes and e-mails going to incumbents and candidates.

Propaganda that has no basis in current reality, imho.

for a country of people trying their best to "live within our means" there sure is a lot of credit card debt.

[sputnik]

..We simple Americans who do our very best to live within our means and generally have no idea of all those fancy financial ideas & concepts, told our elected leadership NO on the bailout. ------------------------------------------------------------------------------------------------------------------------

At the heart of the financial meltdown now bedeviling Americans is a simple and profoundly ignored fact that does not require an advanced degree in economics to understand: Our government spends more than it takes in—a lot more.

.... Send us a contribution if you can, even in these hard times. It may turn out to be the best investment you ever made. If you can't afford a donation, then help us by recruiting two new supporters. And keep your cards, letters, phone calls, faxes and e-mails going to incumbents and candidates.

Propaganda that has no basis in current reality, imho.

Looks like a nice little pyramid scheme to scam a bunch of outraged fringe types. "Send me some cash and send this message on to both of your friends so we can overcome the tyranny of the Imperial Federal Government."

[BigStewMan]

the Imperial Federal Government...sounds like that was from either Star Trek or Star Wars.

Barak Obiden McPalin, Chief Republicrat of the Imperial Federal Government.

[Amy]

Not pointing fingers here, but a general reminder...

While discussing the economy is important and very relevant, I must yet again stress to keep partisan politics out of the conversation. If that cannot be done, then these discussions cannot take place.

Thanks

[Tom Adams]

I'd advise reading up carefully on the factchecking of this "FairTax" idea. Yet another scheme for the super rich to avoid taxes.

And I would advise you to actually read and digest HR25 instead of some axe-to-grind website. I believe it was you who once responded to Jeff Mathews (IIRC) in a sarcastic tone that if it was published on the internet it MUST be true.

That website's position is COMPLETELY NOT TRUE. That argument has been made so many times and answered/disputed so many times it's not funny. Again - read the darn bill. The tax is imbedded in the price - NOT added to the price of the goods. IOW, the price you see is the price you pay. When the cash register rings it doesn't ADD more tax. And FWIW....folks in this country have an issue about some folks who pay little to no tax because their income level allows them to shelter money. Then there's the drug dealers who pay for everything in cash. And finally, there's the folks living in this country who pay no taxes due to them being here for diplomatic/government/student/research/whatever reasons, yet they drive on roads and use water and other infrastructure things that the taxes you & I pay go to. Under the FairTax, none of those folks get a free ride anymore. And then there's the prebate that essentially makes lower income folks come out better than they do today! But don't take my word for it or bother to read HR25 or any of the various books that dispell every criticism ever leveled with HARD NUMBERS FACTS......no, just believe what you read on the internet. Sheesh.......

My point of this post was NOT to tout the notion of the FairTax and I believe I said that in so many words in my original post. And in hindsight I wish I'd edited out the part concerning sending a donation for it diverted attention away from the point I was trying to make. So that's my bad. My point was that until we get mad enough or have enough liberties taken away, our government is gonna continue to mis-managed this nation into the ground IMHO.

Tom

ps: Thanks for not calling me any names. LOL

[bluesboy]

Mark, have you read the book?

[Zen Traveler]

Mark, have you read the book?

Uh, which book?

Uh oh. Here it comes....

[bluesboy]

The Fair Tax Book by Congressman John Linder and Neal Boortz. It was a New York Times best seller. I suggest you read it before spouting off opinions about something that you obviously don't know shit about.

[bluesboy]

You have never listened to Neal Boortz. If you had you could not have come to such absurd conclusions. Again read the text or shut the hell up.

[bluesboy]

Again, you have not listened to Neal Boortz and you have not read the Fair Tax Book by Congressman John Linder . Therefore your opinions on on the Fair Tax are based on ignorance. You are getting your information from some crazed left wing site.

[djk]

http://www.fff.org/freedom/0996f.asp

http://www.teamlaw.org/VoteScam.htm

[Amy]

Let's steer this away from personal attacks, please, I really don't want to close it.

Thanks

[Tom Adams]

Good lord Mark.....gimme a break. I just logged on today. I'm up to my you-know-what! It's Monday you know. LOL

Anyhow.....I'll answer your question, but right now my wife just called and wants to take me to lunch. Sorry - you loose. LOL

Back shortly.

Tom

[Tom Adams]

Mark – I’ll try to make this as brief as possible only because the actual answer can be rather complicated.

First though, the FairTax book was principally written by one of the co-authors of HR25 and that being Congressman Linder. Neal Bootz’s involvement was to aid in the writing of the book and if you were to read the book and not know, you would not draw a relationship between Neals’ writing and his talk show. Personally, I’m not 100% in lockstep with Neal, however I doubt you or I have the ability to call him a racist just because he pops-off about someone. Sadly, the word racist gets flung around way too much. If I don’t like someone and they just happen to be black or Asian or Hispanic doesn’t automatically make me a racist. Yet that’s where this moniker has been reduced to. Anyhow……

HR25 isn’t some half-baked concept derived by folks with little to no knowledge of economics. If you were to read the list of people that contributed to the concept, I think you’d realize that HR25 appeals to an incredible broad range of folks not just from the U.S., but from other countries around the world. BTW – as is pointed out in the FairTax book, the U.S. is almost the last major country in the world to have a progressive tax system. HR25 was derived after 5+ years of research at a cost of several million dollars and a lot of that effort was on folks’ own dime. Every penny of profit from the FairTax book and the follow-up book “FairTax: The Truth: Answering the Critics” has gone back to fund the FairTax initiative. I’m sure the cynics will say otherwise, but I chose to believe that folks don’t volunteer their time or give up their money unless they believe in their heart that they are fighting the good fight. Sorry for the tangent……

In simple terms, because HR25 eliminates all federal taxes – and I mean ALL – the price of a good or service will go down. Why? Well, it’s possible that when the taxes go away, Bob decides to keep his price at $10 in order to really make a killing on his widget that only costs him $5 to make. Problem is, ACME decides that a 25% profit margin on their widgets will allow them to corner the market and run Bob outta business. So, Bob responds to market pressure & competition and lowers his costs. This is an incredibly over simplification so don’t shoot me.

Now, the FairTax says that out of the cost for those goods & services identified in HR25, 23% will be sent to the Feds. Where did 23% come from? Well, that again gets a bit complicated, but in essence that number was arrived at with the goal in mind of making the income to Uncle Sam being revenue neutral once all federal income taxes were eliminated. If memory serves me, just about everyone who’s studied the issue of embedded taxes has concluded that some where around 38% to 45% of the price of a good or service goes to cover all the embedded taxes on that product. These embedded taxes go away under HR25 and the cost of the product therefore comes down.

Let me also point out that HR25 will prebate each month to every household an amount to cover the FairTax portion in basic necessities of life products. This prebate is based on a formula that I won’t go into here for I’d be typing all day and my boss would get pissed.

Another thing I’d like to mention is that every year, we have trillions of dollars going overseas in either investments or jobs and there is little dispute that it’s because other nations have tax laws more favorable than the U.S. Eliminate the Federal Income tax and what do you think would happen?

And consider this….the current U.S. tax code is over 64,000 pages and compliance with that code costs tax payers, individuals & companies, thousand of hours and billions of dollars every year. How much more productive would companies be if that cost could eliminated? And what about the cost of the products?

And what about the concept that what you make is yours? It doesn’t belong to your neighbor. It doesn’t belong to your Mom & Dad who put you through college (well….I guess you could make an argument for that LOL…). And it darn sure doesn’t belong to the Government. So why shouldn’t we be allowed to keep 100% of what we earn and the Government derive its income off what we spend? Is that concept too radical for folks to wrap their heads around? He!!, HR25 might just foster in a new era where folks actually start saving their money!

Again, I am trying to give you a simple answer to a rather complicated question. My hope is that from what I know of you, that you will educate yourself and then pontificate to your hearts content. I was skeptical at first, but I read and did some research and I’ve concluded on my own that HR25 is the shot in the arm this country needs. And one of the best parts is that they left politics out of it and did what you & do in our daily lives – we solve problems based on fact and data.

I hope I’ve helped. If not, send me your mailing address and I’ll send you a copy of the FairTax book. []

Tom

[LarryC]

Tom -- FactCheck.org has come up with the table below of tax redistribution under the Fair Tax vs. the current tax code. See http://www.factcheck.org/taxes/unspinning_the_fairtax.html

The FT ("Full Replacement Retail Sales Tax" below) shifts tax payments, presumably including the refundable tax credits, to middle income folks, from the very poor and the well-to-do. What is the purpose and presumed benefit of doing this? This question is central to why we should try to carry out such a politically contentious, difficult change. There is only so much political energy lying around, and I think the Congress is going to have its hands full with the changes being proposed now by Obama and McCain, including changes in the existing tax code. Not much room left to add this very big item.

Edit: Note that, if FactCheck's calc's are right, typical taxpayers might pay more tax under the FT proposal (green bars, which are higher for most income ranges). This is logical, since the current tax structure is progressive, i.e., higher incomes pay proportionally more, and the well-off carry a lot of the burden.

Also, will financial transactions (purchase of bonds, stocks, mutual funds, etc.) be taxed?

Thanks -- Larry

[bluesboy]

All of Boortz's procedes from the book went to charities. Mark, pm me with your address and I'll send you a copy. You will not have to worry about contributing money to anybody.

[Tom Adams]

Mark -

I'm sorry if my explanation wasn't what you were wanting to hear or wasn't good enough or whatever. I'm just an egg-head engineer and obviously not as smart as you financial or statistical types. I did the best I could with what I have and I never professed to be a FairTax guru. So......

At the risk of sounding like a wise guy, I only have this to offer. Since you seem to have some very good points and seem to be sincerely interested, maybe your answer lies not here, but should be posed to the FairTax writers/creators/whatever. Honestly, I'd be interested in how they respond to your arguments.

Again, sorry.

Tom

[Tom Mayer]

I would love to have the problems of a 250 Thousand a year tax
payer. Yes Maybe they are being unfaily taxed by the numbers, but If
you are wealthy you have a much better life than some poor saps that
have had some bad breaks ( maybe thier fault maybe not)

<> In
my town we have a guy who owns a business ( batting Cages) who
has made a fortune but is always complainings about his taxes.

I told him I will gladly pay his taxes if I also have his income.

But I agree with Amy on this one. Best to keep this forum about Speakers.