National Sales Tax - Revisited - Reviewed by CNN

[Greg Meyer]

Probably not goona like this if you are in favor... But, here is CNN Money's take on the idea... An idea they say could be a 40-50% TAX RATE...
http://money.cnn.com/2004/08/11/news/economy/election_tax/index.htm

 

[Rich Stern]

Nice, fluffy piece. It's ripe with b.s. in an attempt to politicize the issue, rather than discuss its merits and demerits.



No one aspect of the proposed change is explored in a meaningful way. The sound bites describe all kinds of fear scenarios without substantial back up.



The article mentions paying tax more than a dozen times. Not once does it clarify that people would retain their entire paycheck. Golly, one would think they'd like that point to be clear to the readers who are unfamiliar with the Fair Tax proposal.



This is exactly the kind of slanted, trash journalism I expect will accompany every major debate about a national sales tax. Too bad. Once again, the American people won't consider facts. Just propaganda from places like CNN.



Thanks for posting the link...but "reviewed" is not a fair charactization. "Spun" is more like it.



P.S. The accompanying poll shows 64% in favor/36% against for a national sales tax replacing federal income tax. Based on 7000+ votes as I write this. Sounds like the people want a change.

 

[Michael Snow]

Okay, here's a concern I have.



CompanyA and CompanyB both make widgets. CompanyA is a big company, has their widgets in every major store and a distribution channel as wide as my ego . CompanyB is a small upstart but with the same basic product. The "fair tax" sets in and now CompanyB can produce their widgets for 75 cents instead of 1 dollar. CompanyA can do the same, but their supply channel is filled with 1 dollar widgets. No one will buy CompanyA's widgets because CompanyB's widgets are 3/4 the price. CompanyA's supply channel remains saturated with goods that won't move.



This almost makes be believe there can be no "slash/cut" but rather a phased-in approach over say 5 years. If the corporations don't pass the savings to the public, obviously the "cost of living" has gone up considerably. However, living in "the new economy" where most everything is a commodity with near instantaneous price changes and new competitors that will undercut the competition, hopefully this won't occur.



Next, let's talk about "the basics". Rich indicated that there was a dollar figure on the necessities of life.. For round numbers, 20k. If the national sales tax is 30%, rather than a tax return, would the government just mail everyone a check at the end of the year for $6000 (30% of 20k) and no paperwork at all? Simply "if you have a valid SSN, here's $6k"?

 

[Greg Meyer]

Here's the whole Batlett article...
http://www.nationalreview.com/nrof_bartlett/bartlett200408090847.asp

 

[Greg Meyer]

Here is another extensive argument against the proposal...



No spin or scare tactics just factual presentation and argument...
http://www.devvy.com/pdf/against_nst.pdf

 

[Greg Meyer]

Okay... for real... here IS a longer analysis of both sides....
http://economics.about.com/cs/taxpolicy/a/fairtax.htm

 

[TrepMan]

Snow - Actualy if you read at www.fairtax.org you'll find out that the rebate for poverty level works like:



How does the rebate work? All valid Social Security cardholders who are U.S. residents receive a monthly rebate equivalent to the FairTax paid on essential goods and services, also known as the poverty level expenditures. The rebate is paid in advance, in equal installments each month. The size of the rebate is determined by the Department of Health & Human Services

 

[Rich Stern]

I think Bruce Bartlett is the dumb one. He's either misinformed or spinning.



<I>An unstated assumption is that the 23 percent rate proposed by Linder is comparable to existing state and local sales taxes, where the tax comes on top of the purchase price. Thus, a 5 percent sales tax on a $1 purchase comes to $1.05.



But that

 

[Rich Stern]

<I>Here is another extensive argument against the proposal...



No spin or scare tactics just factual presentation and argument...</I>



Greg, really now. First of all, this paper is published by a lobbyist group, The National Commodity and Barter Association. To describe it as without spin is ridiculous. Second, it relies soley on a history lesson and a political philosophy for it's justification, with no modern ecomics cited to support the argument. And third, since barter activity is part of this lobby group's mission, it advocates a tax system that exempts barter from taxation, which neither the current tax system or the proposed fair tax do. To their credit, the paper is a a bullseye for its consituents.



It's spin in a tweed jacket. Looks nice, but still spin.

 

[Michael Snow]

Okay, so if I go to buy a pack of gum for $1. Does the $1 include tax already or does the register add 23 cents to the purchase price?

 

[Greg Meyer]

Rich the second "no spin" was tongue in cheek....



And, I would call lots of what I have read in favor "spin" also...

 

[Rich Stern]

OK, Greg, I got it on the second one. Thought you were serious.



The third (about.com) article is far more balanced and poses reasonable questions.



I agree: Spin goes in both directions. Makes it hard to have a reasonable discussion.

 

[Greg Meyer]

Spin makes having reasonable "listening/reading" almost impossible...