Panel Recommends Major Tax Law Overhaul

Dear Fair Taxers

http://news.yahoo.com/s/ap/20051101/ap_on_go_pr_wh/tax_overhaul

This article, just posted on Yahoo news service, validates our concerns. The tax panel has recommended that the pig be dressed in a tuxedo.

It's still just a pig.

Best Regards

Robert Nathan

Demint's alternative tax proposal

Dear FairTaxers,

It's me again, with another rant.

This article about Senator DeMint's introduction of an alternative tax system says a lot.

It tells me that perhaps the money brokers have heard our cry, and are offering something that they think is middle ground. But I can see right off the bat that this proposal is totally flawed from the FairTax perspective.

First of all, I am highly suspect of it because it was apparently conceived and introduced in the "House of Lords" (The Senate). This means that it is most likely the collaborative product of business and government. Notice how there is a provision to hide part of the government's tax base in the cost of goods and services. This does not coincide with our goal of total transparency.

The worst part of it is that there would be two different taxes instead of just one. A friend of mine, who is an accountant, says that there is an unwritten rule of government that pronounces something to the effect that "tax schemes tend to multiply rather than shrink in number". This seems to be an indicator of that concept.

As long as taxes are hidden in the cost of business, there will always be the temptation of those with wealth and power to use their influence on government to tweak the tax rules in order to gain an advantage.

The prospect of starting a small business in America has become as intimidating as a hike up Mount Everest with all the regulations that one must abide by, let alone the tax compliance. And I'm not pointing the finger just at the Federal Government, although they are the main culprits, having hamstrung the States and local governments with their coercive distribution of Federal Funds; our tax monies.

We have seen, over the past century, the near extinction of family owned farms, slowly being replaced by the corporation. I dare say that the existence of the family owned business will go the same way, and we will all become employees of a corporation in the latter part of this century, if the tax advantage is not taken away from the corporate moguls. The States will soon follow, all dissolving into the "United Corporations of America".

We are not living in the America that I learned about as a child. Follow the money, and you will find out where the real power is in this country. America is no longer a concept of the people, by the people and for the people. The corporations, in their partnership with the government, have muscled their way into this position at the expense of our opportunity and freedom. And we, the people, have literally paid their way via taxes.

You can't blame the corporations for this, after all, its just business to them. But to us, the people, it's our lives and the lives of our children.

And this, my friends, is why the passage of HR25 is so critical to our future.

Best Regards

Robert Nathan

Equilibrium

Dear FairTaxers

In effect, what Mr. Doggett is admitting here, and what we have known all along, is that our current tax system extracts almost 60% of our dollars from us. It's just does it in such a convoluted way, that it's hard for the average man to follow or to notice.

Our representatives, the bureaucrats, and the special interest groups that support them, are all terrified of a tax system that is as transparent as the FairTax.

The demise of the Berlin wall was not a symbol of a victory of Democracy over Communism. It was a symbol that equilibrium had finally been achieved between the two opposing ideologies.

The real "wall" that needs to be torn down is the one that enslaves free men in a tax system, by controlling their social and economic behavior.

Robert Nathan

Findings from the Presidential Tax commisision

Dear FairTaxers

This revelation from the tax commission that they are not willing to change the status quo, while deeply disappointing, should not come as a surprise. As I have inferred before in this forum, the middle class only has the illusion that it is in control of the government. Real power comes from those who are outside of the walls that confine the rest of us.

Poor men, who are enslaved by the income tax system and the circumstances of their life, are too occupied with the unending task of survival to spend any time or effort in supporting an overthrow of that same tax system.

Middleclass and lower middleclass individuals, not only have to deal with the day-to-day problems of survival and promoting the survival and flourishing of their offspring, but are further burdened by compliance with the tax regulations that are impressed upon them by the government that they supposedly employ. To spend time educating themselves on tax reform, and in turn, rallying behind this reform,
is something of a luxury.

This is the way the "Lords" would have it. If their constituents are over worked but well fed, they will have little time or inclination to look past the walls of their enslavement and see the big picture.

While all the while, these same "Lords" have the luxury to employ lawyers, accountants, academics and lobbyists, and to buy off our elected officials, all in order to maintain the economic and social wall around us, the middleclass taxpayer. These efforts shed the "Lords" from the cost burden of supporting the same social and
economic agendas that they themselves have authored, designed, and implemented (via their political influence), for the rest of us. Through propaganda that they promote in the news media, and though spin on advertising for the goods that we are sold, we are driven to a corner of somatic complacency.

Our freedom seems to have become somewhat of an illusion. I am currently doing some deep soul searching, asking myself what I am willing to sacrifice in aiding an end to this enslavement for ourselves and future generations.

Robert Nathan

Taxing of Capital Income

Dear Fair Taxers

I read with some interest the discussion on the Tax Policy Center web
page about the taxing of "Capital Income", the link to this being
posted by Mr. Jim Schutt. This is an interesting topic and something
that I think may warrant some discussion here.

By Capital Income, I take it to mean Capital Gains. In real estate,
capital gains are those gains that may or may not be realized after
one holds a property for several years and sells it. The Capital Gain
is the difference between the selling price and the purchase price of
the property. It is also known as appreciation. I suppose in the
world of corporations, this equates to profit, or return on
investment. For the purposes of this discussion, I will limit myself
to the real estate side, because that is what I am most familiar with.

Somewhere during the history of the income tax, our government
representatives decided that capital gains on real estate should be
considered as income and should be taxed accordingly. While I don't
know the exact history of this, it most likely occurred during an
administration where there were huge deficits being run up, and
another source of revenue had to be had to offset the excess spending.

At face value, if one believes that the taxing of income is a
legitimate thing for the Federal Government to do, it appears that
this is a reasonable idea, the taxing of Capital Gains. However, one
must question why there was appreciation on the property in the first
place. It's all a matter of semantics, or what words that one uses.
The words; capital gains, appreciation and inflation are closely
related. Excess government spending causes inflation, so the idea of
taxing inflation is a bit like a penalty for trying to be frugal in
protecting the value of money that you previously earned and for
which tax was paid (tax on top of tax).

It's also a tax on the economy, because these gains are going to be
plowed back into the system in one form or another. Taking the
inflated dollars out of the economy serves no purpose except to
justify the excessive government spending. Now, I admit that I am no
economist. My background is in the field of Architecture, which makes
me somewhat of a pragmatist. As such, none of this income tax
Architecture makes a lick of sense to me.

Forgive me for being so long winded here, but this issue is another
one of my income tax pet peeves, and just another reason why I
support the FairTax.

Best Regards,

Robert Nathan

Letter on the X-tax

Dear Mr, Hassett

This is a reply to your statement about the so-called X-tax: "The X-tax is a brilliant redesign of the famous flat tax that delivers most of the economic benefit of the tax, while allowing policy makers to maintain the progressivity currently in the code."

This notion of progessivity is another word for big brother controlling the economic behavior of it's citizenry. I am a free man, sir, and vehemently resent the intrusion of the Federal government into my personal finances.

For this reason, I support the FairTax. It frees us from the leash that the government has on us by taxing us only on what we spend, not what we make. In this way, those who do not participate in the income tax system (except by virtue that the cost of the tax system is imbedded in the cost of domestically produced goods and services), will now be required to pay tax in the same manner as the rest of us
(I'm speaking of those who participate in the under ground economy).

The notion of some that the FairTax may be regressive is brought on by it's transparency. The income tax is regressive as it is non-transparent. It targets middle-income earners, while taxing lower income earners who can afford to be taxed the least of all. Further, because the cost of the tax is included in the goods and services that are consumed, the wage earners are in effect taxed twice, once
on their wages and twice when they spend their wages on domestic items. This insidiously hidden double tax mechanism, in my view, is the only reason why it has been tolerated for so long by America.

The FairTax releases the Federal government's burden on lower wage earners by 1) Giving them a prebate for the tax paid on necessities and 2) releasing them from the FICA tax that is taken out of their wages.

I strongly recommend that you visit the FairTax website and study the proposal at www.fairtax.org

Very Truly Yours

Robert L. Nathan Jr.

Communist Manefasto and Income Tax

Carolyn,

No one is better at crowd control than the administrators of a Communist country.

Would it surprise you if I told you that the passage of a progressive income tax was one of the main tenets of the Communist Manifesto as written by Karl Marx (See http://en.wikipedia.org/wiki/The_Communist_Manifesto )? It even gets more interesting when you dig deeper and discover who funded Mr. Marx and the Bolshevik revolution.

Best Regards

Robert Nathan

Delay resignation and FairTax

Dear Fair Taxers

I have just finished rereading the book "None Dare Call it Conspiracy" that was published in the early 70's. I don't consider myself a conspiracy nut, but with the recent rise in popularity of the FairTax (largely due to Boortz's and Linder's book), I have to wonder if the indictment today of Tom Delay might somehow be connected. Granted the man is quite outspoken, and this campaign contribution issue has been hanging over his head for some time, but the timing of this is just too
perfect to be coincidental. Will Linder be next?

Those of you who don't know what I'm talking about, I strongly reccomend the book mentioed above. It will give you a different slant on how and why the Income Tax amendment was passed, and why it is so important that the FairTax replace it.

Robert Nathan

The hidden regressive nature of the income tax

After reading the report about the regressive nature of the FairTax, I felt compelled to submit a few comments on this subject.

The Fairfax, in my way of thinking, is much less regressive than the income tax. The regressive nature of the FairTax is just more transparent than the Income Tax, so it`s an easier target for those that oppose it. This is because the regressive nature of the income tax is hidden in the compliance costs as well as the way it's
administered.

Any middle class or lower class person who has ever made the effort to take advantage of the loopholes that are afforded the wealthy will quickly discover that the cost of doing g so is prohibitive in terms of the risk of audit and associated accounting/attorney costs. If one is persistent, you may be able to prevail, but your ultimate tax savings will be wiped out by the cost of making your case. I have
first hand experience at this.

Further if a large percentage of the population starts taking advantage of these loopholes, congress changes the rules. I saw this happen in the early eighties disguised as "tax simplification".

You can be assured that a wealthy person facing an IRS audit feels much more comfortable than a person with limited resources. I have never been able to see the balance here, a sole individual competing with the entire resources of a federal bureaucracy. The intimidation factor increases exponentially as one's available resources diminish.

So if one considers 1) the Prebate and 2) the fact that the poor are not taxed on their wages (FICA), and 3) that there is less and equitable compliance cost, the FairTax is far and above less regressive than the income tax.

I conclude with one final thought about the income tax. Based on what I have read, I have a strong suspicion that the Enron debacle (and other incidents of corporate financial scandal), besides being brought on by greed, had the income tax code as a complicit catalyst at the root of it's cause. This is fourth potential example of the hidden regressive nature of the income tax, as this type of scandal costs us
all, over and above our tax cost. I'm wondering if this will ever be revealed, or if we will continue to blindly follow the pied piper.

Big Daddy Government

Dear FairTaxers

This was indeed a great post.

I had a good chuckle with the image of Uncle Sam, "big daddy government", dolling out an allowance to his lowly constituents. Then I got to thinking about how my dad actually let me actually keep all of my paper route money, presumably to teach me some fiscal responsibility. And then I got mad again because this Uncle Sam guy
isn't even related to me and he surely doesn't seem to have any sense of fiscal responsibility, yet he wants my money before I even have a chance to spend it.

So then I got to thinking about these guys who wrote the constitution and founded the country, Jefferson, Franklin, Washington; and I tried to conger up an image of these noble gentlemen filling out their tax returns. It was just too painful and I must admit that the thought of it brought a tear to my eye.

Best Regards

Robert Nathan

Senator Cornyn's position on the tax issue.

Dear Senator,

I read a response that you wrote to a fair tax supporter on one of the FairTax organizations websites, and it has become obvious to me that you are missing the whole point to the FairTax movement. Your statement, "I believe our current tax system is unnecessarily complex and needs to be reformed. Thus, I support efforts to simplify the tax code by decreasing the number of tax rates and rate adjustments",
leads me to believe that you are in favor of keeping the 16th amendment in place and fix it by putting a bandade on it. This is what lawmakers have been doing for the past 1oo years and, simply stated; IT AIN'T WORKIN'.

This is totally unacceptable from our point of view. The 16th amendment is a travesty of American politics. In it's simple, unelaborated wording, it robbed the states and individuals of many of the basic rights that were passed to us by the forefathers of our country. It dismisses the citizens right to privacy, a right that was so apparent to the forefathers that it was only implied in the Bill
of Rights.

I can see where a bureaucrat would want to keep this in place. It's a source of immense power and influence. It gives corporations a reason to lavishly reward lawmakers such as you for the tweaking of the tax law at the common taxpayers expense.

Any legislation that does not include the repeal of the sixteenth amendment will not be supported by the FairTax group. We will see it as only a temporary fix to the legislative branches addiction of constantly passing law that is only self serving in the sense that it buys votes and corporate support rather than servicing the citizens and protecting their rights.

Best Regards

Robert Nathan

Homebuilders and federal tax

Bob,

I work for a large construction firm, but I can see where a home builder might have some concern about the FairTax. At one level, the home builder thinks that he is enjoying an exemption from payroll taxes, because most of the labor involved in building a home is contract labor.

It's a misconception on his part to think that these "contract" employees don't file quarterly estimated tax reports and ultimately pay into the income tax and social security funds just like a corporation would do for a full time non-contract employee. So in this sense, the tax cost is still embedded in his cost, with all the
same profit and overhead markups that are passed on at different tiers, just like a large construction company. It's just not quite as transparent.

Another interesting note is that one of the founders of the FairTax movement owns a large construction firm in Houston that has been around for quite some time and has been very successful. It's not likely that someone will be able to furnish a convincing argument that the same business principals used in a large successful
construction firm wouldn't apply at the smaller scale of a home builder.

Robert Nathan

Embedded taxes in construction costs

John

I saw your posting on this subject, and while I'm sure that you will get many responses I thought I would offer you my perspective as a full time contractor.

When you buy a new home in today's income tax market, you are paying tax that is embedded in the payrolls of everyone that works on the project, from the carpenter that frames the house, to the mill operator that cuts the lumber from the felled trees, to the timber cutter that felled the tree and drug it out of the forest to the mill.

This income tax is marked up with profit at the various levels of production, which further inflates your final cost.

Under the FairTax method, the tax would be paid at the final point of sale, as the builder would be exempt from paying the tax on the products that are incorporated into the new home. The tax is paid at the final point of sale only once, by the consumer, not the producer (the builder collects the tax and forwards it to the collection agency). I forsee that the Fairtax would be applied to the final bill,
like sales tax currently is applied on consumer goods, so that it would not be marked up with overhead and profit percentages, like the current income tax is. More savings.

I'm sure that if you take a few minutes to digest this concept, that you will come to the same conclusion that I have, and that is the undeniable fact that the FairTax is just plain simple as it unburdens the means of production so that the consumer is the ultimate winner.

Best Regards

Robert Nathan

Hidden Benifit

It occured to me the other day that there is a hidden benifit to the FairTax that I have not seen or heard discussed. Because the FairTax is not placed on used goods that are offered for resale, this feature inherently encourages recycling and conservation of natural resources, including energy.

Robert Nathan

Dr. Carl S. Milsted, Jr. Article

Dear Group,

I'd like to comment on the article referenced in:

Message: 3
Date: Mon, 16 May 2005 23:14:29 -0000
From: "chugalugalug75150"
Subject: I'd like to hear some commentary on this

http://www.freeliberal.com/archives/001053.html

Why is it the liberal's default position to tax the rich? I am not rich, but I know this: I never got a decent paying job from a poor man.

And on a middle class salary, I never paid wages to anyone with the exception of people who I hire to take care of my meager real estate investments, which this guy wants to add another tax to.

I do agree, however, that the current tax system tends to force people to hold their investments longer than the optimum time in order to avoid paying capital gains tax. My meager real estate portfolio is proof of that. I have property that I've held onto for over 20 years because of this, not to mention the hassle and expense of going out and finding another tax shelter, and paying someone to justify the new shelter to the tax bureaucracy.

Robert L. Nathan

Corraling the middle class

I read the article that came out Saturday about the so called Unlimited Savings Allowance, and in my humble opinion, if it doesn't abolish the IRS or prevent
special interest groups from influencing the tax code, it is just more of the same old hooey that Washington uses to keep the middle class corraled with the burden
of carrying the tax load.

The issue is fairness.

What's fair about a system that allows special interest groups the ability to influence Congress for it's own benefit at the expense of the Middle Class?

What's fair about a system that is so complex and convoluted that a person with a Masters Degree from a renowned Texas University has to hire someone that he
can ill afford, to complete his tax form?

What's fair about a system that places the entire weight and resources of a federal bureaucracy at odds with a sole individual in the face of an audit?

What's fair about a system that affords this federal bureaucracy all kinds of latitude in making mistakes when enforcing the tax code, but none for the taxpayer
when mistakes are made?

What's fair about a system that allows for the IRS to mistaken the identity of a taxpayer, then proceed to ruin his credit, lien his property and steal money
from his bank account, effectively forcing the individual into poverty status, and then with not so much as an apology for this mistake? This happened to me and I’m still suffering the consequences fifteen years later.

If I sound like I’ve made the income tax issue too personal, please excuse me. It IS personal. What could be more personal than taxing personal income and invading the personal privacy of ones finances? What is the most fought over issue among spouses? What is it that allows us to achieve and fulfill basic human needs? And why does the federal government, in the collection of these income taxes, fail so miserably in
recognizing and accommodating the human condition? If this is not a personal issue, then please explain to me why it is not.

The time has come for change, and in my humble opinion, nothing less than the total dissolution of personal income taxes will be acceptable.

Opposition to tax reform

This is a comment regarding an Email from lobofox on
sources of opposition.

Besides the devout liberals opposing Fairtax, I
believe there will be a lot of special interest groups
who lobby for tweaking of the current code to their
benefit. Some of these groups have had their snout in
the pubic trough for so long, that it will be
difficult to wean them.

Similarly, politicians (Democrats and Republicans
alike) are somewhat addicted to the favors and
influence exerted by these groups. The tweaking of the
tax code, for these individuals, can be compared to a
strong narcotic. They are not going to be able to give
it up cold turkey without some strong side effects.

Treadmill

People who lean toward socialist ideology rarely can grasp the simple concept of supply and demand. The promoting of government mandated entitlement programs
will eventually wreck us.

Today I got an E-mail from our corporate office indicating that the cap on wages taxed for social security has been raised once again. When I started
contributing to this program in 1970, the cap was just above my salary. At that time I thought that I would someday be above the cap with a little hard work and
promotions.

The cap is still just out of my reach forty years later. I feel like the mule tied to a cart chasing a carrot. Further, I fully anticipate that any supplemental retirement income that I may have in place when I retire (401K, IRA, real estate investment income), will be used to supplement or replace any social security benefits that I would be allowed if I could retire today.

This same principal has been used to keep the middle class in its place by tinkering with the income tax code. I've noticed that when I start taking advantage
of a tax deduction that is allowed by the wealthy, it gets taken away or the bar gets raised. Or even worse, I get audited and wind up spending thousands of dollars on lawyers or accountants.

I'm tired of being on this treadmill. There is no incentive to keep pulling the cart except to make a living.