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Archive for Friday, August 20, 2010

Congressional candidates spar over possibility of ‘Fair Tax’

August 20, 2010

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The issue of the so-called “Fair Tax” erupted Friday in the 3rd U.S. House District race between Republican Kevin Yoder and Democrat Stephene Moore.

Yoder of Overland Parks says he doesn’t support the “Fair Tax” proposal, but the Kansas Democratic Party posted a video on youtube that shows a “Fair Tax” official saying that Yoder personally told him that he did support the proposal.

The “Fair Tax” is a plan to eliminate federal personal and corporate income taxes and replace them with a 23 percent national sales tax.

In the video, John Collett, a director with Americans for Fair Taxation, said Yoder told him that he will sponsor the “Fair Tax” measure if elected. Collett added that Yoder didn’t want to make the “Fair Tax” a campaign issue because he would have to spend money to fight attacks from Moore on the issue.

Moore of Lenexa opposes the “Fair Tax” and her campaign issued a statement saying that Yoder was trying to hide from voters his support of it.

Opponents of the measure say the “Fair Tax” wouldn’t be fair but would hurt middle-income families. In Kansas, they say, middle-income families would see their taxes increase by $2,369 per year, while the wealthiest 1 percent in the country would see their taxes cut by $225,000.

In response to Moore’s statement, Yoder issued a statement saying that the “Fair Tax” movement was the product of frustration with the tax code. “While I do support thorough reforms to our broken tax code, I have never supported the Fair Tax. Even more importantly, I don’t trust Washington to do away with the income tax which is the fundamental principle of the Fair Tax,” he said.

Yoder’s campaign said Collett was mistaken when he said Yoder supported the “Fair Tax.” A telephone message left with Collett was not immediately returned.

The 3rd District includes eastern Douglas, Johnson and Wyandotte counties.

Comments

mr_right_wing 4 years, 4 months ago

Fair tax Easy tax Logical tax Simple tax

Words that I don't think will ever go together in this country. We can still dream though...

Orwell 4 years, 4 months ago

The so-called "fair tax" would shift the tax burden substantially toward the middle-and lower-income population, and away from the wealthiest few. If that's what you really want to accomplish, have the honesty to say so.

scott3460 4 years, 4 months ago

The right wingers have been doing it for the last 30 years. Nothing new there. The real surprise is the stupidity of the dupes that keep voting them in to office to do it.

Jwyatt 4 years, 4 months ago

The Fair Tax REMOVES the tax burden from the poor. Every month, they, along with everyone else, will receive a check from the Government equal to the amount of sales tax they pay on spending up to the level of poverty.

jaywalker 4 years, 4 months ago

Whaaaaat? The Fair Tax is just that; fair across the board. It shifts the burden? No, it means everyone pays the same tax. And since the wealthy spend oooooodles more than the rest of us on every day niceties, travel, luxury.............they'd get taxed more than everyone else. Still.
Not only that, but it's the ONLY way to get this country out of the self-defeating credit system we have. Only a very small percentage of Americans actually live within their means, with responsibility and their eyes on the future. Instituting the Fair Tax would put an end to this destructive behavior.

Jwyatt 4 years, 4 months ago

You ALREADY ARE paying the same tax on essentials like food. Embedded taxes have raised the cost of everything we buy. The Fair Tax simply removes those taxes and replaces them with a VISIBLE sales tax.

The difference? Most people don't know they are paying hidden taxes on food now. Under the Fair Tax, people will at least be able to see what tax they are paying.

jaywalker 4 years, 4 months ago

It would not "punish" anyone. It would force people to live within their means. I know that's inconcievable to a lot of people, but it would be the best solution to the monstrous debt nearly everyone holds. Other countries are just struggling to survive day by day; here we have an enormous percentage of people who are in debt; cars, homes, credit cards, cell phones, financing everything from sofas to tv's to tools. A hundred dollars of groceries would cost 123.. Oh dear. If you can't afford that then you don't need every member of the family carrying a cell phone, or you don't need cable tv, or you need a cheaper car, or you can cut back on electricity, movies, dining out.
It makes sense.

jaywalker 4 years, 4 months ago

Huh? You don't know me from Adam, pal, quit pretending. And all Americans would be given the same treatment, or is that inconvenient for you?

jaywalker 4 years, 4 months ago

"You mean those less fortunate don't you?"

Um, .....nooo. I mean 'people', as in THOSE living outside their means. As to the concentration camps 'thing'......what's the matter with you? Creating a society where you can't force your children and the rest of the country into a debt they can't possibly repay is the equivalent of putting people in concentration camps?? I weep for those close to you ,ed.

notajayhawk 4 years, 4 months ago

The country finds your feelings mutual.

Practicality 4 years, 4 months ago

A flat tax would make me happier than bozo would be if he got to eat dinner with Castro, Gueverra, and Karl Marx.

Jwyatt 4 years, 4 months ago

The Fair Tax IS a flat tax. Its a single rate that everyone pays once their spending exceeds the level of poverty.

conservative 4 years, 4 months ago

A national sales tax makes perfect sense. Elliminate the irs and all loopholes. Exempt neccessities like food, clothing, and medicine. If you don't make enough money to buy anything that isn't essential then you don't pay any taxes. If you want to cut how much you pay in taxes then don't buy luxuries.

average 4 years, 4 months ago

From a green perspective, I say go for it.

A consumption tax would give advantages to things like shoe repair and auto repair (Hey, Cuba) over buying new ones. And repair can quickly go toward under-the-radar skills barter. "Repair my mower, I'll babysit your kid, and we'll both avoid the 35%+ FairTax". Right now, there isn't much incentive for the lower-earning half of the population to go under-the-table. 9% state sales tax, yes, but since they don't pay federal income tax, there isn't an imputed income tax to avoid.

From the consume-consume-consume economy-as-we-know-it, it'd be a wrecking ball. Which is why groups like the National Chamber of Commerce are strongly against it, and why it's never going to happen. But, from a green perspective, rock on.

chugalugalug 4 years, 4 months ago

PLEASE CONSIDER THIS ALSO:

22% of the price of all that you buy currently is tax / tax compliance cost. When that cost goes away (under the Fair Tax) the price of your $1.00 item (purchased at Wal-Mart, for example) drops in price to 78 cents (without damaging WAL-MART's profit margin).

1.23 X 78 cents = 96 cents.

Seeeeeeeeeeeeeeee!!!! Even with the 23% Fair Tax added on, your originally $1.00 item is now 4 cents cheaper.

The "out-of-pocket" cost of living , under the Fair Tax , will be no more than it is now.

Under the Fair Tax there are NO LOSERS, only winners, the difference being that some win BIGGER!!!! than others due to their increased FRUGALITY.

Best Regards, John Paul McDaniel

Go to: www.fairtax.org

Mike Wasikowski 4 years, 4 months ago

The quoted 23% tax rate is tax-inclusive so that it lines up with how we calculate income taxes currently. Your above calculations are using 23% as a tax-exclusive rate. The actual FairTax tax-exclusive rate is 30%. So if your 22% tax compliance cost is correct (I have no idea personally), then that $1.00 item pre-FairTax drops in price to 78 cents pre-tax and will actually cost $1.01 after the FairTax, give or take some tenths of a penny. You' really should check your numbers a little better.

pittstatebb 4 years, 4 months ago

I know that I am being cynical, but I really doubt Walmart is going to drop their prices. I do think that Walmart is going to make 18 cents more in profit for every dollar they sell (using your example). That is the modus operendi of business in the publically traded world we live in. So in my scenario the item that used to cost $1 plus my 8.5% sales tax will now cost $1 plus my 23% sales tax.

notajayhawk 4 years, 4 months ago

While that may be true of many corporations, I doubt Wal-mart will be one of them. Sam built his empire on the simple principle that cutting the profit margin to a minimal level would make him more money through increased volume.

And it looks like that philosophy may have worked.

scottgreene 4 years, 4 months ago

The Income Tax system does not work and has many many problems.

It is over 70,000 pages long and those pages are then backed up by countless Revenue Rulings written to explain those 70,000 pages, followed by case after case after case in Tax Court where citizens and businesses hire lawyers to argue about what is taxable at what rates, what is deductible at what rates, what is deductible in certain circumstances and what is not deductible in other circumstances.

Certain actions get taxed at one percentage while other actions gets taxed at another percentage.
And these percentages are constantly changing.
It goes on and on and on and on.
And YOU are responsible for knowing it ALL. If not, you are penalized at usurious penalty and interest rates.

Members of Congress and the current Administration can’t even follow the Income Tax code.
Treasury Secretary Geithner did not know how to correctly fill out his personal Income Tax return and now Congressman Rangel (who writes Income Tax policy) does not know how to correctly fill out his personal Income Tax return.

And today if you talk to the government officials in charge of the Income Tax, it is next to impossible to get a consistent answer to the exact same Income Tax question.
They don’t even know.

Why would anyone be in support of such a system that is based on “maybes” or “it depends” that only gets worse year after year after year?

Imagine how many more thousands of pages and Revenue Rulings to explain those pages plus additional Tax Court cases there is going to be in another 10 years

The Income Tax system is loaded with problems.
It NEVER improves. It only gets more complicated, confusing, paper intensive and mind numbing. It needs to be replaced now.

The only argument that should be occurring between these 2 congressional candidates is what our country’s new tax system should be.

notajayhawk 4 years, 4 months ago

"And YOU are responsible for knowing it ALL."

Not entirely true. You are only responsible for knowing (or hiring someone reputable who knows) the parts that apply to you. Can't think of too many ways any individual or business entity that all 70,000 pages of the code apply to.

Everything else you said was right on the mark, though, speaking as a former ATE for the IRS.

average 4 years, 4 months ago

"Take a nice vacation? It's not $6k to go to Disney, it's $9k."

It would certainly make taking vacations to Mexico, Canada, or further abroad a lot more appealing. It would also, presumably, make vacationing in Canada or elsewhere look a fair bit better to the people who currently visit the US.

Jwyatt 4 years, 4 months ago

Wrong. The Fair Tax rate is 23%, not 30-40% as you say. Prices however, stay about the same as they are now even with the Fair Tax added in. This is because our current system embeds taxes into products and services before they reach the stores. The Fair Tax removes those taxes. Under the Fair Tax, a car that costs $30K under our current system will still cost $30K because the embedded taxes are removed before the Fair Tax is added in.

Also, under the Fair Tax, there are ZERO payroll taxes. This means that you DON'T pay Income/fica/futa taxes. Nor do you pay any other tax. The only tax you pay is at the retail counter and it funds our Government just as now, which includes Social Security. One tax, no hassles.

Jwyatt 4 years, 4 months ago

The states and cities ALREADY charge a sales tax. You'll continue to fund them as normal. Also, the 23% figure INCLUDES a built in compensation for local governments as a collection fee.

All taxes, hidden and otherwise, disappear, and are replaced by a single VISIBLE tax. Its no more complicated than that.

Under the Fair Tax, prices remain about the same so consumption will go on as normal. FICA and FUTA would be elimitated by the Fair Tax as would EVERY OTHER KIND OF TAX. The revenues currently generated by those taxes would be covered by the Fair Tax.

Finally, I don't think you are going to fool anyone by telling them they can't see the sales tax they pay at the register,,,every time I go to the store, I'm aware that I'm going to pay the sticker price, plus tax.

If a politician suddenly wants to lower or raise the sales tax rate, I REALLY don't think its just going to slip the public's notice as you suggest.

How STUPID do you think the people reading this are?

Centerville 4 years, 4 months ago

The compelling aspect of the Fair Tax is that I could have more control over how much tax I pay, as I have control over what I purchase.
The compelling aspect of the Flat Tax is that it would be immune, at least for a time, to Democrat at RINO social engineering.

average 4 years, 4 months ago

Arguably the largest social engineering that would be affected by a move to pure consumption-based taxing would be to treat capital gains (indirectly, as they are spent) the same as ordinary income.

Since the lowering and elimination of capital gains taxes has been an overarching GOP dream for decades, they're not actually giving this much more than lip-service.

TPowell78 4 years, 4 months ago

I don't know much about the FairTax, but why would he say one thing on the radio and then this guy says he actually supports it? Where's the video that the article references?

beatrice 4 years, 4 months ago

Interesting idea, as the tax code is way too complicated now. Simplifying without endless loopholes and exceptions would be a good thing. It is something worth discussing.

Is that 23% plus the city and state taxes? If adding state tax, that pushes it above 30% in most states. Or do the states get a cut of the 23%?

So how would this affect non-profits? Would they have a special code to use to not have to pay, or get money back at the end of the year? What other loopholes will there be? What about buying luxury items overseas -- will there be an import tarrif to prevent the wealthy from buying their yachts in Canada before parking them in Rhode Island? Would this help or hurt general spending, and is that good or bad for the economy?

Will there still be deductions for mortgage interest, and if not, what would that do to the housing industry? Could eliminating such a deduction on individual taxes be legal?

Since I live below my means and prefer to save than spend on stuff I don't need, I would probably benefit from such a plan. However, I have no idea how it would or wouldn't benefit the nation. It seems like there could be some very serious repercussions.

Itsalwayssunny 4 years, 4 months ago

Yoder is not for the fair tax !!!!! all the evidence says that he is not ! Here is a response that fair tax KC sent out:

JOHN COLLET -- Fairtax KC "To All Concerned Americans Regardless of Political Persuasion.

I misunderstood KS 3rd Republican Candidate Kevin Yoder's position on the FairTax and for that I sincerely apologize. To clarify, I understand Mr Yoder has not made a decision on the FairTax and I respectfully accept that position. "

Even he say kevin is not for the fair tax, and if this still doesnt make a point here is an excerpt that the yoder campaign sent out:

Overland Park –Republican Congressional nominee Kevin Yoder commented today on tax reform and specifically the Fair Tax, a proposal which would replace the national income tax with a sales tax.

“I believe Americans are frustrated,” said Kevin Yoder. “Every year they are forced to navigate a complex and burdensome tax code and every year they see more of their hard earned dollars going to a government that isn't working for them. Movements such as the Fair Tax are born from this frustration. While I do support thorough reforms to our broken tax code, I do not support the Fair Tax. Even more importantly, I don’t trust Washington to do away with the income tax which is the fundamental principle of the Fair Tax.”

“What I do support is a thorough restructuring of our tax laws that works for American families and American businesses. The current system is too complex and leaves American families and business owners frustrated. Complex and cumbersome deductions, exemptions and credits often don't work for middle America and for small businesses,” said Kevin Yoder.

“In the state legislature Yoder stood firmly against a 1% sales tax increase that was supported by Democrats across the board,” said Yoder’s Campaign Manager, Travis Smith. “On the other hand, Stephene Moore has virtually guaranteed to voters that if she is elected to Congress she would support a whole host of new taxes: Cap and Trade, Obamacare, more bailouts at taxpayer expense, and the expiration of the Republican tax cuts, also known as the largest single tax increase in our Nation’s history. In addition, she still has yet to tell voters if she will vote for Nancy Pelosi as Speaker of the House.”

What more evidence do you want that yoder is NOT for the fair tax. This should be a fair election for the people and the information should be relevant not just something made up. From what I have been reading the Yoder campaign has challenged moore to a debate this is a reasonable and even necessary request; however, moore has not accepted to me this seems a little shady. Let the people have a debate. This election is too big for the candidates to not talk. I think we can all agree to a debate !

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