The cynical view of Rush Limbaugh on the FairTax

Dear FairTaxers,

Sadly, Rush may be right on this one.

As with entitlements, the politicians use the tax system to extort your vote. And, as with entitlements, we may be to a point of no return. That is to say that there may be more voters who are benefiting (or who are not affected) from the current tax system than there are those that are paying into it.

The FairTax will make these same people pay their share. So why would they support something that is going to take money out of their pocket that wasn’t taken out before?

The vision of democracy that our founding fathers had has somehow gotten turned inside out in the last 100 years. From my point of view, this is largely due to the Federal tax systems (Income, FICA, and Medicare). The unprecedented expansion of the Federal government during this period has occurred principally because of the ability to levy more taxes than ever before, and thus controlling the political and economic focus of the it’s constituents (we, the people) through a tangled web of tax incentives and entitlements. There is something fundamentally wrong with this concept. The federal government should be a puppet of the people, not the other way around.

And don’t think that a government that invented PSYOPS (http://en.wikipedia.org/wiki/Psyops ) is beyond using similar tools or methods to sustain the status quo, or to achieve the support of a political objective that may be perceived as favorable to the narcissistic bureaucracy that the system sustains.

The income tax system has created a class war that is bubbling just below the surface of our society. Our representatives have somehow kept it in check without allowing it to erupt into something ugly, like national unrest or riots. For the most part, their constituents are placated or somatized by the infusions of entitlements or tax incentives. And like a drug habit, it will be extremely painful to rid ourselves of these dependencies.

As citizens, it is our duty to maintain a diligence against this type of tyranny. I just hope that it’s no too late. Make no mistake; we have a very tough row to hoe.


Best Regards

Robert Nathan

The federal tax snowball from hell

Dear Fair Taxers

I just have to post something about this.

The snowball effect of the federal tax burden is significant. Let me
give you an example that I think everyone can relate to.

I am in the construction business. The common denominator in the
costs of most all the goods and services used in our business is
labor. The cost of energy is related to some degree, but even this
is driven by the cost of labor in that the cost of a barrel of oil,
while it may be driven by supply and demand, is largely related to
how much man power it takes to get that barrel of oil out of the
ground and into the market.

As a contractor, I see the impact of taxes and tax compliance as one
of the single major factors in determining the cost of doing
business. Profit is a negligible cost (most large contractors
consider their year to have been a good one if they net 1% after
taxes). However, since the overhead and profit are usually figured
as a percentage of cost, the tax on labor is marked up further by
the percentage of overhead and profit that is estmated for a project.

When a contractor figures a job, he estimates what the labor will
cost and then marks this up with the cost of the tax burden. This
subtotal is marked up again by adding a factor for profit and
overhead. The overhead percentage is normally based on historical
costs, and will include the cost of tax compliance.

Then there is the tiered effect of the construction process. One of
the first things that I learned in this business is that you cannot
beat a man at his trade. In other words, don't try to make
a "widget" unless you have experience at it because the "widget"
makers who do have this experience, can make a "widget" a lot
cheaper and quicker.

As a result of this concept, the industry is highly specialized, and
each component in a building may have three or four tiers
of "widget" makers involved in the delivery process. Each one of
these widget makers is paying taxes on labor, tax compliance and tax
on income. There is also the cost of tax avoidance, which a company
has to pay in order to stay competitive.

At each tier of the fabrication process, the "widget" maker will
pass these costs on to the next tier, who in turn marks it up with
his tax burden and compliance costs, adding the cost of his portion
of the "widget" to the final assembly, and so on.

So consider that the cost of all this tax impact is being marked up
by each tier and passed along to the next tier. The numbers start
becoming significant.

Now consider that the general contractor is not even the final tier
in this process. If our company delivers a building to an owner, who
then in turn leases the space out to a retailer, the owner ads his
own federal tax related costs to the snowball in terms of the rental
cost to the retailer. The retailer finally passes these costs, as
well as his own tax burden costs, on to the consumer.

Think about this the next time you go into a retail store to buy
something. My guess is that the federal tax impact on the final
delivery of goods and services that are produced domestically may be
as high as 50% in some cases. So if you think that federal taxes
only affect your take home pay, you have been cleverly disillusioned
by the system.

The fact of the matter is this; we are also taxed indirectly by the
federal government on the money that we spend.

It's a grand scheme of smoke and mirrors.

Best Regards

Robert Nathan


--- In txfairtax@yahoogroups.com, "apboth" wrote:
>
> I was discussing the Fair Tax with a co-worker yesterday and I was
> explaining that with the elimination of corporate income taxes,
that
> the price of goods would be lowered due to market competition.
His
> question was, what if the company is already paying little or no
tax
> due to tax shelters or off-shore companies? Well, I didn't have a
> good answer.
>
> Can any of you help me out with this?
>








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