Monday, January 07, 2008

The Foul Tax and Mr. Obama

The original concept was for this post to be about either the fair tax or Barack Obama. The more I think, the more similarities I see between the two.
I can start with Mr. O. With his rock star looks and charisma, and the fact that he is not Hillary, his train seems unstoppable. It would be a symbolic moment if a dark skinned man were elected President, even if he is not the descendent of slaves. Yes, he has always been opposed to the War in Babylon.
Maybe he is just a photogenic front man, without any substance. The same could be said of Ronald Reagan, and America really didn't do too badly under him. Just who is pulling the strings on this puppet with star quality?
My main question with the man is how is he going to deal with the military machine. We now have an agreement with the Iraqi Government. This treaty that isn't a treaty has our troops supporting the Iraqi Government, in exchange for first access to the vast oil riches in Mesopotamia. What is the Junior Senator from Illinois going to do about that?
There is also the matter of this video. Do women really dance out of his mouth?

An Obama Presidency is a great idea, with some serious questions about the implementation. Which brings us to the Fair Tax. (We are awaiting a call from the Umpire whether it is fair or foul, or maybe a sacrifice bunt).
Nobody likes the I.R.S. Calls to do away with it will always find an audience. Maybe the Fair Tax will be enacted, and maybe it will do all that it's supporters claim.
I suspect it is a good idea, with serious questions about the implementation. And no, I have not read the book.

1- I only have so much time to read, and I prefer to read fiction. OK, some of you say the Fair Tax book is fiction.
2- I don't trust the men who wrote it. One of them is a radio whiner who says every day, in effect, Don't believe anything I say unless your own experience goes along with it. The other is a Republican congressman. I suspect that neither of them really believes in the Fair Tax, but know a good gimmick when they see one.
3- I am aware of the power of rhetoric, sophistry, and the clever word processor. (See Mr. Obama above). You can make grand arguments in favor of a lot of things that are not completely true.

I hear a lot about the Fair Tax on the Whiners radio show. It seems like the more I hear, the more I don't like.
Here is an example from today. The concept of the Foul Tax is that a thirty percent sales tax would replace the income tax, and other Federal Taxes. (I know there is more than that, before you start to say, "Read the Book". For today’s illustration, that nutshell is sufficient)
As our example, lets say that we have a book selling for Ten Dollars. The book was written by a bald headed radio whiner, and says rude things about Liberals. Now, on the surface, with the Fair Tax, the book would cost thirteen dollars, that is, the cost of the book plus the thirty percent tax.
Today’s whine was about embedded taxes. According to the whiner, there are embedded taxes in the ten dollars. These are the corporate taxes paid by the publisher, and other taxes that are passed along to the consumer as part of the ten dollar price. I understand this concept, and realize that this is a big reason why many American goods are not competitive in the marketplace.
But then the whiner said something that I simply don't believe. He said that once the embedded taxes were removed, the cost of the book would go down. This cost would go down so far that the book would still sell for ten dollars, even with a thirty percent tax markup.
One, who is to say the publisher would not just keep a bit of those taxes in the form of added profits? Are the embedded taxes enough to lower the price so that a thirty percent markup wouldn't matter?
I am not an economist. Maybe the book has answers to this, and maybe they are not just clever words.
Chanting "Read the Book" only goes so far.

Labels: , ,


Anonymous Anonymous said...

OK, so the millionaire and the Wallmart worker both pay 30% or whatever. The millionaire spends several times more on purchases over the year, but most of his money is reinvested in stocks,real estate, foreign companies etc. The worker must spend all of her money to "put food on her family". The tax burden shifts dramatically to the worker. To correct this obvious flaw a "prebate" is proposed. This is awarded based on income. Therefore - THE FAIR TAX IS AN INCOME TAX! Once the congress writes the rules and establishes a burocracy(sp?) to administer it, it will grow in complexity(what counts as income? Are there shelters?, etc.) untill it is little different than the I.R.S. It's an infantile fantasy of the rich.
In the book example the "hidden taxes" go away - What are they replaced with? The govt. still needs the money. The sales tax will have to be raised to pay for it - no? Therefore the book would have to sell for 13 dollars - right?
It is so distressing that people who are capable of working and driving are incapable of using independent objective reasoning in their political thinking. The rich do not want to make an extra place at the table for these poor wannabe fools that think they'll join the rich man's club some day.
Steve Mickler

3:19 PM  
Blogger chamblee54 said...

Thanks for stopping by.
The concept of replacing a tax on income with a tax on consumption may yet prove to be workable. However, the details need to be better worked out than the current version. The working of our economy is at stake.
On a lighter you ever get the sense from this election that the entire thing is a really bad miniseries? Life is bad fiction.

7:18 PM  
Blogger . said...

Alright, I passed by your blog, and I read about how you see fair tax. The problem is, as the tax code works NOW, the Income tax IS a consumption tax. Companies are consuming your labor, to make or sell or support their products. And that is an inclusive tax TO THEM when they paying gross pay to you. and they have to then pass that cost on through the products in order to keep the cycle going. You see it as an EXCLUSIVE tax because in your pockets go TAKEHOME PAY. Employers COULD figure out what the taxes would be on a GROSS PAY to then calculate what would be the promised price. but to them their total payout would be HIGHER, even though what would be your take home pay, now ends up being the promised gross, with a tack on of all the taxes. So that would be an Inclusive to you.

Now an consumption tax put at the point of sale of said product, however taxes the product itself AFTER THE LABOR WAS PUT INTO IT. And so the Taxes are put onto finished product. not necessarily put onto the labor.

12:13 PM  

Post a Comment

Links to this post:

Create a Link

<< Home