Radio & TV Talk

By PrettyPlease

February 11, 2008 1:07 PM | Link to this

Hey Rodney - when you’re picking up a copy of Boortz’s new book, how ‘bout getting a copy for Jay Bookman too? If you read Jay’s editorials about the Fair Tax, it’s painfully obviously he doesn’t know the facts. For example, Jay always insists that the Fair Tax would impose a 30 percent national sales tax, when in fact, Boortz and Linder clearly, over and over again, state the sales tax would be 23 percent. Oh well - even if you did buy Jay a copy, something tells me he would not read it. Boortz has challenged Jay several times to come on his show and explain his AJC editorials, but Jay won’t - probably because he knows he’s plain wrong and he’s too proud to correct his columns and admit to his errors.

By DOA

February 11, 2008 1:20 PM | Link to this

Rodney do you really think that the Bull is the reason the giving may be down, not gas at $3/gallon, record foreclosure rates and a struggling economy? Step away from the CC kool-aid and grab yourself a cup of reality! RODNEY RESPONDS: The Kicks fundraiser dropped from $1.2 mil in 2006 to $735K in 2007. This could not have been just the economy. In fact, the economy wasn’t as bad off in February 2007 as it is now. I give them credit for holding their own vs. 2007 given that the economy has slowed down in recent months. But note that last year, the Bull arrived in December 2006. There has to have been a correlation though obviously, you can’t prove it scientifically. Last year, giving did NOT drop at WSB-AM or Star 94 and both stations do very similar fundraisers.

By Jana

February 11, 2008 4:05 PM | Link to this

I think DOA is a little mad at his current situation, isn’t he…… But Kudos for that radio station and what they did, regardless of the amount raised. It was still more than they had the day before.

By Simon

February 12, 2008 9:26 AM | Link to this

People who believe the Fair Tax would work are absolute morons!! By the way, you do know don’t you that the Fair Tax was initially conceived by the Church of Scientology just to get rid of their long-time enemy the IRS. Now, though, it’s promoted exclusively by millionaires (Boortz, Linder) who want to continue shifting more and more of the tax burden onto the middle class. So all you stupid sheep can keep screaming “FAIR TAX!! FAIR TAX!!” for the rest of your lives, but it’ll never happen!

By Walter Heitman

February 13, 2008 10:45 AM | Link to this

Any time someone questions or castigates the FairTax SCHEME s/he is told to “read the book” and treated as if they are too stupid to understand this “infallible” SCHEME.

At the risk of offending (if possible) the FairTax SCHEME zealots who are either not intelligent enough or too naive to challenge the inconsistencies and loopholes of the FairTax SCHEME, I will post a few of the problems that I, as a layman, have found with the SCHEME. Possibly the zealots themselves are too blinded by self interests to admit the fallacies and weaknesses of the SCHEME. I will point out some of the more obvious problems with the FairTax SCHEME. Before opening your to mouth trying refute my statements I would suggest you read “the worthless book” … . and reread … . and reread until you BEGIN to understand it. Remember this SCHEME is a THEORY, never before tried anywhere, there are many unexplored and undisclosed intricacies to this SCHEME. When you have questions of your own you will know that you BEGIN to understand the SCHEME and its implications. Any one who can read this THEORY of taxation and not have serious questions is not playing with a full deck.

The law as written has so many intentional or unintentional, ambiguous, incorrect assumptions and outright lies that boortz/Simpson(as in Homer) has had to write a book explaining the proposed law then write a second book explaining the impreciseness of the act and his first book and now has written a third book attempting to explain the second book. Here’s a hint for boortz/Simpson, if you tell the truth the first time you don’t have to keep trying to explain a lie. If you still have questions after reading and rereading the third book by boortz/Simpson don’t be dismayed he will soon write a fourth book explaining book 1, 2, and 3 because he is still trying to cover the lies and deceptions of the proposed act and the first three books.

One critic of the SCHEME wrote:

“One other huge complaint that I have with this law is the quality of it’s composition. It is, by far, the poorest written piece of legislation that I have ever seen, As I pointed out last night in one exchange when discussing the taxability of insurance payouts, one section implies that they are not taxable as long as the taxes were paid on the premiums and another referenced section implies that they are taxable. It is written such that a regulator can pretty much interpret most of it any way they want. This has to have been done intentionally.”

One SCHEME zealot response was “The legislation was written by two tax attorneys who realize that God-willing, life insurance policies “mature” long after they’re written. Contracts can span decades. If the premium isn’t taxed, then the payout should be. If the premium has been taxed, thereby reducing the amount of death benefit purchased, then the payout shouldn’t be.”

Shouldn’t this same logic be applied to savings? If the savings was taxed by the income tax system then it should be exempt from the point of sale boortz/Simpson tax.

boortz/Simpson in his first attempt at an explaination of the of the tax on page 169 of “the (worthless) book” under the Chapter titled “Questions and Objections”. The question was to the effect that the individual was living on retirement income on which he had previously paid taxes and why should he have to pay yet another round of taxes on that income as he spent it during his retirement.

The answer from boortz/Simpson was that, unfortunately they (retirees) were not getting “as good a deal” as current workers. That retired people fell in the same category as anyone who had saved money previously and was now ready to spend it. He said that there was nothing they could do to alleviate the fact that you were going to pay taxes on income that was already ravaged by taxes, but you would benefit from the (non existent) 22% reduction in prices and the pre-bate.

If exemptions can be made for insurance benefits why can they not be made for savings?

The answer is simple, there are $70 trillion dollars in retirement savings of one kind or another in this country a 23-40% tax on this amount is $16 to 28 trillion dollars that the tax and spenders see as a jump start on their SCHEME. When that is gone they will be looking for some other thrifty person or group to raid to continue their spendthrift ideas. A good example is the SS fund. Here was a large accumulation of savings. LBJs Great Society stole the SS reserve fund and look where that has left the SS system.

FairTax is a misnomer National Consumption tax would be more descriptive

The name is a complete misnomer it does NOT represent the proposal. Mountain Rose said “Pick a descriptive name, instead of choosing one that sounds suspiciously like they are trying to put lipstick on a pig.”

Poor people usually have to spend all of their income on daily living expenses. At the end of the month they have nothing left over to save. They would pay the 23-40% tax on their entire income exclusive of the preBAIT sums. Compare this to rich people who only have to spend a small percentage of their income on living expenses. This means that lower income people will be paying taxes on 100% of their income while the rich would only be paying taxes on a fraction of their income. A flat tax of 10-15% would tax rich and poor alike rather than tax the poor at 23-40% and the rich at a much lower rate … . possibly even at 5-8% or less.

The preBAIT is just that … BAIT

All purchases of new items under the SCHEME will be taxed. The preBAIT is just that, it is a BAIT to try to buy the support of those on the dole to get a larger portion of your earned income. Since everything new is taxed all that means necessities are also taxed. To pacify those on the dole the SCHEME promises to preBAIT the taxes on all purchases up to the poverty level.

The preBAIT is based on the poverty level declared by the government. If the government declares that $24,000 per year is the poverty level for your size family you will get a preBAIT of $7200 per year payable in monthly payments of $600. (based on a 30% exclusive tax)

There are several problems with this proposal. First, if the government decides it wants more of your money to keep, it will freeze the official poverty level, thereby effectively raising the taxes on everyone. Second, the WIC (women, infants and children) program bases its benefits on 185% of the poverty level. That tells me that the poverty level does not cover the basics needed to sustain. Third. $7200. THATS BIG BAIT. IT’s also your money.

Black market argument assumes an unending supply of goods will be available to supply said ‘Black Market.’ Where or where are they going to come from?”

Over the Internet, obviously. Products purchased from websites located in Canada, Mexico, and elsewhere.

Example: Just two months ago, I logged onto EBay.com and purchased an item from a private seller in Australia. Go ahead, tell me how you would collect the FairTax on it!!!

What the FairTax a huge does is create incentive for retailers to set up shop in foreign countries and sell their products via Internet websites to Americans.

You don’t think that will happen? The Internet porn industry is already a multibillion dollar worldwide industry. All of which is illegal, and underground. The FBI is engaged in a constant game of “whack-a-mole” trying to shut down child porn sites, which spring up in another country as soon as they get shut down in one country.

And that’s what will happen with the FairTax. You’ll be sending Government agents all over the world to demand that those foreign websites pay the FairTax whenever they sell to American consumers. Good luck with that.

Death Tax

Another deception perpetrated by boortz/Simpson is the claim that it will eliminate the “death” tax. The following is a statement from a estate planning attorney … . “The federal government imposes an estate tax on all citizens and residents of the United States. It imposes no inheritance tax. Every estate gets an estate tax deduction for all property received by the deceased’s spouse, as well as a $2 million standard exemption for all other property. Thus, many middle class Americans will owe no federal estate tax.”

That’s a $4,000,000 exemption *for a married couple. Few of us has assets beyond $4,000,000. That means for all practical purposes *there is no Death tax for most of the middle class. boortz /Simpson tax is going to eliminate something that is not there to begin with. BRAVO … With proper estate planning there will be NO estate tax for any inheritance of any size. Stop to think once … . How much tax has t kennedy paid on the 100s of millions he inherited over the years.

But the FairTax SCHEME will impose a 23-40% tax on any thing spent from this estate as opposed to no tax now. In other words the FairTax SCHEME imposes a tax on Death it does not eliminate it for most of us.

Real Estate Avoidance

The FairTax SCHEME imposes a 23-40% tax on new construction sold for owner occupancy. There is no tax on used real estate or on new construction intended for investment. BOY talk about loopholes … . where do you start.

Situation 1: Lets say Tom and Jim are brothers and they both want to purchase a new home for $200,000 plus the FairTax SCHEME tax of $60,000 to $80,000. The taxes put the home out of reach of both of them. But being enterprising young men they decide they will use the investment loophole. Tom will buy the house Jim desires and rent it to Jim for 30% less than the payments on the house. Jim in turn will buy the house that Tom desires and rent it to Tom for 30% less than the payments on the house. Because the houses will be used as an investment they do not have to pay the Huge 23-40% boortz/Simpson tax. After a period of 5 years both Tom and Jim can show that the house is being rented at a loss and can divest themselves of a poor investment. Tom sells the house that Jim is living in to Jim as a used house and Jim does not pay any tax on it. Jim sells the house Tom is living in to Tom as a used house and Jim does not pay any tax on it. It is necessary to pay 30% less in rent than the payment on the house because this convoluted boortz/Simpson tax hits the renters with a 30% tax on the rent.

Situation 2: Larry wants to obtain a mountain retreat. He purchases a 400 sq ft summer cabin in the mountains and since it is used he pays no taxes on it. Then he proceeds to remodel the cabin to suit his desires and ends up with a McMansion with all sorts of amenities. Don’t laugh it was done in the mid 60’s in Santa Cruz, Ca. Look up what happened in Santa Cruz County when they gave the 18 year old the vote. Prices of tool sheds and chickencoops skyrocketed when building permits were limited or denied, existing buildings were worth thier weight in gold.

Situation 3: Jack is a developer, he has a model house, he uses the same model house for 20 years and decides to sell it. Is it a used house? It has 20 years of wear and tear. Or must he collect the 23-40% boortz/Simpson tax on this 20yr old relic that needs remodeling and refurbishing?

Situation 4: Barry wants to build a McEdwards size house. He purchases 10 acres No boortz/Simpson tax (all land is used) and build a very modest 2 bedroom home on the land and pays taxes on the New home. He moves in or rents it out for a short time. He then proceeds to remodel the home to his desired 40,000 foot McEdwards home with no more taxes.

Many more examples of avoiding the boortz /Simpson tax could be cited but they would only prove the same thing … . there are big holes in the original FairTax SCHEME.

EMBEDDED TAX DECEPTION

That brings up another discrepancy in the boortz/Simpson tax.

From pg 169 of The FairTax Book: “the items you purchase with your already taxed retirement savings will be about 22% less expensive than they were before the FairTax.”

One of bootz/Simpson tax selling points is that when the FairTax SCHEME is passed the 22% embedded tax will be removed and prices will come down 22% so that when the boortz/Simpson tax is added the price will remain about the same. Confusing ain’t it.

Once you are confused the deception comes in. The 22% embedded tax is an average, it is not 22% on everything and therefore the 22% embedded tax cannot be removed from everything. In reality the embedded tax can only be removed from those items which have an embedded tax and then only to the extent that the embedded tax is reflected in the final price of the object. A $10000 piece of jewelry with an imbedded tax of 50% will have the price reduced to $5000 and when sold it will have the SCHEME tax of 23% added to make the final price $6150. Sounds good so far.

But I buy very little expensive jewelry. Like many of you I buy mostly from WalMart, Sears, Target, Kmart, Albertsons, A&P and local stores because they are the only ones who have what I use most. If you look at the items in these stores, the TVs, the Stereos, the kitchen appliances, mostly are imported. NO embedded tax. Likewise the food we eat. Much of the beef comes from Brazil, Australia, Canada, the lamb from New Zealand the produce from SA or Mexico. None of these imported items have embedded taxes that can be removed by the SCHEME, Therefore the $500 TV from Japan will cost $500 plus the SCHEME tax of 23% or $650.

The luxury jewelry buyer gets a price reduction of 38.5% and the TV buyer has a price increase of 23%. That’s fair in boortz/Simpson speak.

Averaging is the currency of Socialism.

So what you are saying is, if hard goods has an imbedded tax of 70% and Food has an imbedded tax of 10% the guy who buys a Cadillac with a 70% imbedded tax gets a 70% reduction in the price of his Cadillac while the guy who is trying to stretch his dollar on necessities only gets a 10% break in the price of the reduction of goods?

Lets see $100 worth of food gets a 10% price reduction due to removal of imbedded taxes. That makes the food cost $90. Then a 23% FairTax SCHEME tax of $20.07 is added. That makes the $100 worth of food now cost $110.07, according to my 7th grade math. Explain to me how that an advantage ?? ? ? ?

Next, the buyer of the item with a 70% imbedded tax gets a price reduction of 70% making the price of his $10000 piece of jewelry or clothing or Cadillac a real bargain at $3000. Add a FairTax SCHEME tax/Homer Simpson Tax of 23% brings the total cost to $3690.

I can’t really grasp the fairness of adding 10.7% to the food cost and reducing the cost of luxuries 271% … … . . Averaging … DOH

This FairTax SCHEME will be an auditors nightmare.

The retailer will have to be constantly audited to be sure s/he is not selling things without the tax. The retailer/wholesaler will have to be constantly audited to be sure his products are going for consumption or resale. Someone brought up the example of the production of steel products. Where do you add the tax. The iron ore that miner brings up is most certainly new. Is it taxed at this point? It goes to the smelter. Is it taxed at this point? As pig iron it can go to the steel manufacturer or to the foundry to be cast into finished or raw castings. Is it taxed at this point? The raw castings are then sent to a finisher for further manufacturing or maybe to a hobby shop . Is it taxed at this point?

Pimps and Drugs

There are two problems with this theory. First: Right now the pimp or drug dealer has to launder the ill gotten gains in some manner and this frequently is where the leads come from to actually apprehend the pimp or unlicensed pharmacist. With the boortz/Simpson tax there is no accounting for any sums that you might be spending or how you obtained them.

If pimps and drug dealers are avoiding the law now it will not be any challenge to avoid a simple tax law.

Rich avoidance

Rich have tax avoidance methods not available to the plebeian

Those that think the FairTax SCHEME is fair are living in LaLa land. There are so many ways that the rich can avoid the tax is not even debatable. All you have to do is go back a very short time in history.

In the early 70’s congress in its infinite wisdom decided the rich were not paying thier fair share of taxes on yachts so they put a luxury tax on them. Result: yacht buyers went offshore to buy yachts. Many yacht builders went out of business, those that stayed established offshore sales which avoided the confiscatory taxes, others moved out of the country altogether. The tax was finally repealed after the country lost many of the businesses overseas. They still have not returned.

Then there is the true example of buying a Mercedes in the Early 50’s. Because of the very high import tariffs on cars, You could go to the local Mercedes dealer and buy a car to take delivery in Europe. You paid the dealer who arranged for a car to be delivered to you from the factory with left hand drive. You then vacationed in Europe driving the car for two weeks at prepaid hotels, returned the car to the dealer who then prepared it for export to the US. Since it was now a used car any tariff on it was very low. This could all be done for the same price as a car delivered to you in the US new from a dealer. There is no reason the rich would not do the same thing with a 30% consumption tax. 30% on a $60000 car is $18000 … That would finance a nice European vacation.

I also have visions of floating malls (converted ocean liners) off the coast of the country with big neon signs saying TAX FREE ZONE. If Europeans can come here to do their shopping because of the difference in the value of the dollar think what the wealthy would do for a 30% discount, they would do all their personal shopping outside the country. Those without easy access to the offshore floating malls could go to tax free indian reservations. (The precedent has been set with tobacco)

One critic of the SCHEME wrote:

“One other huge complaint that I have with this law is the quality of it’s composition. It is, by far, the poorest written piece of legislation that I have ever seen, As I pointed out … . when discussing the taxability of insurance payouts, one section implies that they are not taxable as long as the taxes were paid on the premiums and another referenced section implies that they are taxable. It is written such that a regulator can pretty much interpret most of it any way they want. This has to have been done intentionally.”

A SCHEME zealot responded “The legislation was written by two tax attorneys who realize that God-willing, life insurance policies “mature” long after they’re written. Contracts can span decades. If the premium isn’t taxed, then the payout should be. If the premium has been taxed, thereby reducing the amount of death benefit purchased, then the payout shouldn’t be.”

Shouldn’t this same logic be applied to savings? If the savings was taxed by the income tax system then it should be exempt from the point of sale boortz/Simpson tax.

boortz/Simpson in his first attempt at an explanation of the of the tax on page 169 of “the (worthless) book” under the Chapter titled “Questions and Objections”. The question was to the effect that the individual was living on retirement income on which he had previously paid taxes and why should he have to pay yet another round of taxes on that income as he spent it during his retirement.

The answer from boortz/Simpson was that, unfortunately they (retirees) were not getting “as good a deal” as current workers. That retired people fell in the same category as anyone who had saved money previously and was now ready to spend it. He said that there was nothing they could do to alleviate the fact that you were going to pay taxes on income that was already ravaged by taxes, but you would benefit from the (non existent) 22% reduction in prices and the pre-bate.

If exemptions can be written into the act for insurance benefits why cannot the same exemptions be made for savings?

I have five possible solutions to end the double taxation dilemma… . .

One alternative could be: *Phase out the income tax… * Make the consumption tax optional. The Fair Tax Scheme would be mandatory for anyone born/starting employment after the date of inception. Anyone else who has ever filed a tax return has the option of continuing with the income tax option, or switching to the sales tax option, but you can never switch from sales tax option to income tax option.

People who continued paying income taxes would have to have some form of ID that could be used at point-of-sale to exempt them from the sales tax.

A second alternative could be: An asset debit tax card. Conduct an audit of all a savers assets, it can easily be done. It is currently done upon the death of the taxpayer to calculate the estate death taxes. For most people it would take: a year end bank statement, an investment statement, an county assessors statement and lenders statements. The total of the assets, minus the debts, is then credited to an asset debit card and given to the taxpayer, When a purchase is made the taxpayer pays for the sale and in lieu of the sales tax, gives the clerk the asset debit card and the amount of the sale is deducted from the payers asset total. When the asset total on the tax debit card reaches zero the buyer then pays the normal sales tax. Any asset appreciation from the date of the inception audit would be subject to the so called “Fair Tax Scheme” … … . .

A third suggestion is to make all people over 68 exempt from the FairTax SCHEME..

A fourth suggestion, just have the government donate a 30% bonus to each and every savings account or investment of any kind. That should be easy to do, right?

A fifth suggestion the person spending any savings of any kind will just report it to the Government and his monthly stipend will be increased by 30% of the savings spent.

Social Security DeJa VU

Here’s where the repeat of the Social Security fund raid by LBJ comes in.

There are $70 trillion dollars in tax paid retirement savings of one kind or another in this country a 23-40% tax on this amount is $16 to 28 trillion dollars that the tax and spenders see as a jump start on their SCHEME. When that is gone they will be looking for some other thrifty person or group to raid to continue their spendthrift ideas. A good example is the SS fund. Here was a large accumulation of savings. LBJs Great Society stole the SS reserve fund and look where that has left the SS system.

Remember when you made payments on your house you did it with after tax money. Any savings you have in your home (equity) will be subject to the boortz/Simpson tax when the home is sold and you elect to spend the money.

Another question, what do retail stores do with inventory that was purchased prior to the Fair Tax? Do I get a refund from Uncle Sam for $1 million I have in inventory? Or do I go out of business paying the tax twice ,once to the manufacturer and again to the government? I know, its only a transitional thing, and eventually, my manufacturers will (might) pass along whatever savings that they get by not paying fed corp taxes, but what am I to do untill then?? Old Whig Much retirement savings being spent today was earned prior to any tax shelters for savings. Tax was paid on it and it was earned at a different rate.

Once upon a time; Union scale wages were around $2.75 per hour. A pair of Levies cost $3.50 Some people scrimped and saved a $1 here and there. Today that same pair of Levies cost $50 and wages have rose to match inflation. Money earned at $2.75 per hour has already taken a hard hit from inflation. I guess some people feel stealing 35% of what value remains is fair.

By paulie

February 13, 2008 11:55 AM | Link to this

Wow. That is a lot of typing.

By Walter

February 14, 2008 9:45 PM | Link to this

Pauli

Yes it is a lot of typing If you read it you can see that there is a lot of problems with the FairTax SCHEME

I am not defending the current income tax system but to substitute this untried theory on the word of a man who is obviously lying and attempting to conceal the real facts of the proposal is foolish.

Any theory is open to question and should be subject to revision but the proponents of this THEORY refuse to even consider that there are problems with it.