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Monday, June 20, 2005

Leading Illinois Down the FairTax Path

The Illinois Leader recently published a letter from a Dr. Waters in Georgia, objecting to the FairTax. The good doctor, unfortunately, had not done his homework. The following is my response to his mis-statements:

Dear Editor;

Let's cast a little light of truth on Dr. Rick Waters's objections to the FairTax> He wrote:

"The "Fair Tax" has several harmful elements. It will: 1. Tax already-taxed monies when you spend them (Roth IRA)."
Not if you don't spend them. Say you have $5000 in a little Roth account when the FairTax goes into affect. Say you continue to add to that amount over the years -- at a faster rate when you're rid of the income tax and can spend or save or invest ALL your money. Say when you retire you have $160,000 in that account. Say you transfer $105,000 to an interest-bearing payout account and spend the other $55,000. Only the portion you spend on new goods and services will be taxed. Meanwhile the original $5,000 is in that interest-bearing account, untaxed.

"2. Tax promised tax-free monies (certain disability benefits, pensions, insurance proceeds, etc.)."
Again, those will be taxed only if the recipient buys new goods and services, and only if s/he has already spent past the poverty level. The FairTax provides a monthly stipend to everyone to assure that no one pays tax up to the poverty level.

"3. Kill the economy by driving purchasers from 30+%* (*23% federal sales tax plus any related state and local sales taxes) taxed new items to buying used (the "Fair Tax" only taxes new items)."
This argument assumes that the wealthy will suddenly decide to forego buying Vera Wang and Versace gowns, limousines and Jaguars, two or three mansions, Rolex watches and dining at Le Cirque and suddenly patronize WalMart, buy their clothes at Lerner's and ride around in Kias. I don't think so. The wealthy will pay more in taxes because they buy more luxurious goods.

"4. When added to Social Security's 7.5% tax and state income taxes, everyone could end up in essentially a 30-40% tax bracket. "
AHAH -- Gotcha! Dr. Waters didn't do his homework, and speaks what he knows not of! The FairTax REPEALS the income tax, social security taxes, employee taxes, corporate taxes and more. But because it taxes a broader spectrum of the economy (the $6 TRILLION crime industry, for example, plus illegal immigrants, drug and porn dealers, tax evaders -- the IRS says that's an additional $350 BILLION -- and 40 million foreign tourists annually), the economy will grow -- and that's good for us all.

Dr. Waters needs to check his facts at www.fairtax.org so he can write more accurately.

Sincerely,
Sunnye Tiedemann

6 Comments:

Anonymous Anonymous said...

Tiedemann's comments are humorous to me. His responses (IN ALL CAPS) to what I said often make no sense. My *rebuttals* follow his COMMENTS. See if you can discern what I mean:

"The "Fair Tax" has several harmful elements. It will:
1. Tax already-taxed monies when you spend them (Roth IRA)."
NOT IF YOU DON'T SPEND THEM.
*Duh. . .okay. But if I DO spend them, they are taxed at the 30% rate. Thanks…

"2. Tax promised tax-free monies (certain disability benefits, pensions, insurance proceeds, etc.)."
AGAIN, THOSE WILL BE TAXED ONLY IF THE RECIPIENT BUYS NEW GOODS AND SERVICES, AND ONLY IF S/HE HAS ALREADY SPENT PAST THE POVERTY LEVEL.
*Duh. . .he agrees again…Actually, recipients of insurance monies do quite well, since they’re entitled to a 23% rebate from either the insurer or the government, in addition to the insurance proceeds. Coupled with #3 below (buy used stuff), they’ll make out like bandits!

"3. Kill the economy by driving purchasers from 30+%* (*23% federal sales tax plus any related state and local sales taxes) taxed new items to buying used (the "Fair Tax" only taxes new items)."
THIS ARGUMENT ASSUMES THAT THE WEALTHY WILL SUDDENLY DECIDE TO FOREGO BUYING. . .AND SUDDENLY PATRONIZE WALMART, BUY THEIR CLOTHES AT LERNER'S AND RIDE AROUND IN KIAS. I DON'T THINK SO. THE WEALTHY WILL PAY MORE IN TAXES BECAUSE THEY BUY MORE LUXURIOUS GOODS.
*The NON-wealthy will pay more taxes too. They spend waaaay more money than the wealthy. When they figure out that they can live 100% tax-free by buying recycled materials (used cars, used homes, cash vegetables from farmer Glen, etc), its impact will be felt…no question about it.

"4. When added to Social Security's 7.5% tax and state income taxes, everyone could end up in essentially a 30-40% tax bracket."
AHAH -- GOTCHA! DR. WATERS DIDN'T DO HIS HOMEWORK, AND SPEAKS WHAT HE KNOWS NOT OF! THE FAIRTAX REPEALS THE INCOME TAX, SOCIAL SECURITY TAXES, EMPLOYEE TAXES, CORPORATE TAXES AND MORE. BUT BECAUSE IT TAXES A BROADER SPECTRUM OF THE ECONOMY (THE $6 TRILLION CRIME INDUSTRY, FOR EXAMPLE, PLUS ILLEGAL IMMIGRANTS, DRUG AND PORN DEALERS, TAX EVADERS -- THE IRS SAYS THAT'S AN ADDITIONAL $350 BILLION -- AND 40 MILLION FOREIGN TOURISTS ANNUALLY), THE ECONOMY WILL GROW -- AND THAT'S GOOD FOR US ALL.
*He’s right…I should have said ‘WOULD’ instead of ‘COULD.’ Regarding the illegal immigrants, this Fair Tax is SUPER fair to them. With no more withholdings of ANY kind (Yes, they use fake social security numbers and have money withheld), they get to send even more than ten billion dollars a year home to Mexico. Why, it’s their 2nd greatest export: illegal aliens. PLUS, this will just give the black market MORE reason to thrive. If a heavy-handed IRS couldn’t stop it, now who will?!?

Wednesday, August 03, 2005 1:37:00 PM

 
Blogger Sunnye T said...

Tiedemann's comments are humorous to me. His responses (IN ALL CAPS) to what I said often make no sense. My *rebuttals* follow his COMMENTS. See if you can discern what I mean:>>

I am delighted that you are amused. However, Tiedemann is a SHE, not a he.

1. Tax already-taxed monies when you spend them (Roth IRA)."
NOT IF YOU DON'T SPEND THEM.
*Duh. . .okay. But if I DO spend them, they are taxed at the 30% rate. Thanks¦
Sorry...you're still wrong. The point here is that, unlike the present tax system (which, I can safely presume, you are eager to keep), each person has a choice of whether or not to pay a tax. He has only to save, invest, or buy previously-owned goods to keep from paying any tax at all. With the present system, we are all paying a 30% tax on EVERYTHING we buy.

Actually, recipients of insurance monies do quite well, since they're entitled to a 23% rebate from either the insurer or the government, in addition to the insurance proceeds. Coupled with #3 below (buy used stuff), they'll make out like bandits!

But with the present system, Duh-ie, the person receiving those monies is paying a 30% tax no matter HOW he or she spends it. (Businesses pass their all tax costs along to customers in their prices.) With the FairTax, the customer has a CHOICE.

I should have said ˜WOULD™ instead of ˜COULD.™ Regarding the illegal immigrants, this Fair Tax is SUPER fair to them. With no more withholdings of ANY kind (Yes, they use fake social security numbers and have money withheld), they get to send even more than ten billion dollars a year home to Mexico. Why, it's their 2nd greatest export: illegal aliens. PLUS, this will just give the black market MORE reason to thrive. If a heavy-handed IRS couldn't stop it, now who will?!?

They have to eat, pay rent and buy clothes, don't they? AND the catch here is VALID social security card. There will be checks built into the system to STOP illegal immigrants from continuing (notice the word continuing) their present cheating of the system.

As for black markets, since prices will go down the same amount that is charged by FairTax (and that on new goods only) so that everyone pays what they are paying now, there's no more need for black markets than there is now. It's a stand-off on that issue.

How anyone with any intelligence can believe for one minute that the system we have now should be retained is beyond me. I suspect that has to do with the dumbing down of our education system in this country. I am a lady, Sir, and twice your age, to boot. Please try to remember your manners if you have any, in referring to me. And -- hiding behind anonymity is cowardly.

Sunnye Tiedemann
(Mrs. Herbert A. Tiedemann, Sr.)

Thursday, August 04, 2005 9:13:00 AM

 
Blogger James Kleitz said...

Your comment that people will all of a sudden go out and buy recycled goods is extremely flawed. The prices of goods will stay virtually the same, new and used. (Refer to Flea Market blog). What makes you think that people are trying to pay less taxes instead of less money? Money is money. Prices will not change much. You have to remember that fact.

Thursday, August 18, 2005 6:55:00 PM

 
Anonymous Anonymous said...

[YAWN] Folks..., it's not going to happen...

Friday, May 02, 2008 2:19:00 PM

 
Anonymous Anonymous said...

It's sad how paid legislators are wasting time and money pursuing this charade!

Sunday, April 19, 2009 4:30:00 PM

 
Anonymous Anonymous said...

"anonymous" is right... here it is 3/29/11 and it's not happened. I'll check back in after 6 more years!!!

Tuesday, March 29, 2011 7:02:00 PM

 

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