As for the fair tax, it like our existing tax system will be a lobbyist’s dream as they all will soo realize that exemptions on certain commodities and special prebates-rebate-credits are still possible for the right price.

It matters not which tax system we have until our representatives do more than simply take a pledges to not raise taxes.

We need to vote for only those representatives who not only pledge not to raise taxes, but who also pledge never to vote for a bill that would deny any person, regardless of status, equal taxation under the law by varying rates, providing rebates, or credits, or by any other means, except that taxation may be suspended for persons who have no means of support whatsoever.

I’m not advocating increased partisanship, or kneejerk naysaying as the Democrats have done for 8 years, HOWEVER; I won’t stand for expecting that side of the isle to “play nice” and us rolling over or bending over for them on issues you KNOW we care about.
And one for me is being allowed to partcicpate in the process. House or Senate rules that preclude GOP debate on anything will not be tolerated, especially after deliberate efforts were made by the GOP to include them at all costs in the past.
You folks have to fight. We’ll put the word out where you need it, bypass the MSM.
@erickbrockway

not that i think that is a bad thing

If you want to remove disincentives to investment there’s an easier way.
1. Dramatically reduce or eliminate tax on business.
2. Eliminate the capital gains tax.
3. Eliminate the death tax.

No, but a lot of their suppliers will, from US Steel to Firestone to the hundreds of other companies that are supplying parts, outsourced labor and other services. The embedded cost taxes for those companies is part of that 22% figure. Besides as I said, not every industry, not even every company is going to change its prices equally. That’s not the point. The point is that, net-net, we won’t have higher prices.

“Congress wants to incent[ivize] automobile sales they will simply modify the FT by reducing it by 5% for the automobile industry.”

They already do this when they give tax credits for things like tankless water heaters and high-efficiency ceiling fans. Again, at least with the FairTax, we see it on the front end.

“If you want to have a point that pretty much nobody will argue with, try eliminating the cost of compliance. It’s a big number and it absolutely will go away virtually 100% with relatively insignificant offsets.”

Now THAT is something I can agree with. Unfortunately, income taxes are just susceptible to the forces you describe (if not more so) as the FairTax.

Again, the point of the FT is to remove dis-incentives to investment, not create Utopia.

Bottom line, 22% may be an OK number for “embedded taxes” across the board (I have absolutely no idea), but on an industry by industry basis it is not. And that’s where Congress will step in (well one of the opportunities anyway) and mess with the end tax rate by industry category. Congress wants to incent automobile sales they will simply modify the FT by reducing it by 5% for the automobile industry.

As long as there is power to throw around and money to spread around, Congress will do it. And if you want to include language in the legislation that bars them from doing the above, the bill won’t get 20 votes in the House and will have 90+ holds on it in the Senate.

Oh, and if you’re needing an educated, well-informed and well armed electorate, the Fair Tax is dead meat from the get-go.

If you want to have a point that pretty much nobody will argue with, try eliminating the cost of compliance. It’s a big number and it absolutely will go away virtually 100% with relatively insignificant offsets.

The FairTax reduces the number of possible failure points from about 145 million (number of taxpayers) to about 1.11 million retail locations.

It’s one helluva lot easier (and cheaper) to monitor 1.11 million stores than 145 million people.

Besides, I have no problem with barter. Accepting money is simply a barter for unspecified goods and services, anyway…

It’s basic economics, and your oil comparison is a perfect example.

The price of a barrel of oil dropped from $147 per barrel to about $40 per barrel. Now, the oil companies could have simply kept all the prices up and made much larger profit margins on far-less expensive raw materials.

But they didn’t.

Why?

Competition.

Exxon-Mobil could have kept selling gas at $4.00 per gallon, but when Shell and BP drop their price, Exxon can hardly sell a drop.

The same thing happens with the FairTax.

You remove the cost of all embedded taxes in a product (approximately 22% of all products and services right now) and these same competitive forces drive prices down. The FairTax replaces the taxes on the expense end instead of the income end. Prices will change, sure, but that doesn’t mean that we’ll be spending more for what we buy. Some prices will go up. Others will drop. Still more prices will stay just the same, but in the end, we’ll be spending the same amount of money.

Now, we’ve covered how the FairTax does not increase overall prices, and I’ve already covered how it creates a huge incentive to invest.

And let’s be clear: Spending is nice, but it only leads to economic growth because it allows for more investment. Spending on its own is just consumption. If government does nothing else, it exemplifies how we can spend-spend-spend without creating wealth…

“…it’s not guarantee that congress critters won’t continue to spend money like my ex-wife.”

Very true, and no one who knows anything about the FairTax ever claims that it would. That’s the responsibility of an educated, well-informed (and well armed) electorate…

Rep. Cantor, let’s not let anyone forget that we’re in this current mess because of BAD regulation. Specifically, the overreaction to Enron that gave us Fair Value or “mark-to-market” accounting rules. Look at three major shocks to the economy over the past year – Bear, Fan and Fred, and Lehman. In each case, the collapse was caused by an arcane accounting rule which required them to artificially de-value their book assets based on the perceived “market” for illiquid assets. I mean, let’s face it – CDS and mortgage backed CDOs aren’t bought and sold on a daily basis, so how can you establish a “market value?”

Add that with no transparency to CDS and the lack of an uptick rule and you’ve got a recipe for a bear raid. By the way, both BS and LB were cash-flow positive when they went down (same with AIG). What does that tell you?

My point: before you spend however many Trillions of our money you plan to spend why don’t you get rid of dumb regulations that don’t make sense and see if that helps the situation?

Look about one-third of the way down the page… One of my posts from ’06…

You can’t create wealth if nobody will buy your products, or will only buy necessities at the lowest possible price to reduce their spending. This in turn will cause companies to eliminate jobs, etc., etc.

The FairTax simply isn’t a method to eliminate normal business cycles, and as you already agreed, it’s not guarantee that congress critters won’t continue to spend money like my ex-wife.

FDR first won the Presidency on repealing Prohibition, which was almost as unpopular as the IRS. Give you any ideas?

Unfortunately, it seems many of my old posts were lost in the prolonged inactivity…

Since we must consume to survive, we must always spend. There is no such absolute compulsion to invest or create.

Here’s why evoking the name of Ronaldus Maximus affords our friends on the left an instantaneous attack response or the need to cower in the corner: They are absolutely wrong in their ideas for everything economic, national defense and other matters.