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Illogical "National Sales Tax” FairTax.org Proponents Think Middle America Is Stupid! Are We? -RI10

« H E Tabacco :: email
posted Wednesday, 14 September 2005

Illogical "National

 

Sales Tax”


FairTax.org

 

Proponents


Think Middle America


Is Stupid!


Are We? -RI10





Gazalim has a Blog-City platform, in which he self-promotes as  “An Open-minded, Far-sighted, Republican, Mormon, Family-man from Utah”.  Let’s see if he is!

Gazalim just published an Article entitled, “FAIR TAX, ARE WE READY FOR IT?”



Gazelem or Gazalim?
An excerpt:

First of all, I must say, in general, I support the concepts laid out be (I think he means “by”) the Fair Tax people. There are a few things I disagree with, but that isn't really the point of this discussion here. I like the idea of eliminating the Income Tax and shifting the burden from earning to spending. It works for me……

However, I don't think that it will work with the system that we have now. According to the Fair Tax website, in order to have a revenue neutral tax reform, the tax rate would need to be 23%.
http://gazelem.blog-city.com/fair_tax_are_we_ready_for_it.htm



The most important thing I’ve observed about Republicans is how often they euphemize their devious plans to scam the public with euphoric titles such as “No Child Left Behind”, “Patriot Act”, and “Fair Tax” . Whenever a Republican says something, which sounds equitable and “fair”, grab you pocketbook and hold on tight!

Gazalim attempts to focus our attention on that “23%” figure.
(Incidentally, that 23% figure is intended to guarantee that George W. Bush's government gets the same amount of tax under the "Fair Tax" as it would under the current graduated income tax structure. You must know that rich people are not going to propose a revised tax structure, in which they will pay more - they will pay less. So if the total tax the government receives is the same, who do you think will pay more? That's right, Y-O-U! Majoring in mathematics really comes in handy sometimes.)
But that is not where the problem lies. Here is where the problem exists, and no Republican will dare mention it – but I am not a Republican, and I will!

Let’s consider two separate and disparate cases:

First, we have Mr. Have More, who earns an annual salary of $1,000,000.00 (not an extravagant figure for a “have more” these days). For the sake of argument, let’s say Mr. Have More spends $600,000.00 in the calendar year. He pays the “National Sales Tax” on that $600,000.00 only; but the other $400,000.00 he earned is completely tax-free. If we compare his tax liability to what it would have been under our current “Graduated Income Tax”,

23% x $600,000.00 = $138,000.00 under Nat’l Sales Tax
$138,000.00/ $1,000,000.00 = 13.8% "effective tax break even rate" under Graduated Income Tax.

I have not included any allowance for Mr. Have More’s deductions, of which I’m certain he has a lot and an accountant to ensure he doesn’t get cheated. I’m only concerned here with “effective rates”; after all, I’m a blogger, not an accountant. Mr. Have More, under the current Income Tax, should be happy with an effective 13.8% rate.

Now, let’s consider Mr. Average Joe, who earns $30,000.00 annually. I know this will come as a shock to Messieurs Have More and Gazalim, but there are Americans who earn $30,000.00 annually – or even less! But Mr. Average Joe has a family, a mortgage and a son about to enter college. Mr. Average Joe needs more than $30,000.00 this year; so he borrows $10,000.00 from Friendly Bank & Loan Company. He pays the going interest rate, whatever it is currently. Of course it is front loaded with interest. So, for the sake of argument, let’s say it amounts to $500.00 this year (Home Equity Loan @5% for 10 years = $482 interest in 1st year).

Raise your hands if you've ever spent more than you made in a given year! Come on, you know who you are!

But back to Gazalim’s “National Sales Tax”. Mr. Average Joe spends, in the calendar year, the $30,000.00 he earns + the $10,000.00 he borrows/spends + the $500.00 interest he pays. He earned $30,000.00, but pays sales tax on $40,500.00. Yes, interest would be considered a purchase under Gazalim’s Tax, and is taxable.

23% x $40,500.00 = $9,315.00
$9,315.00/$30,000.00 = 31.1% "effective tax break even rate" under current Graduated Tax system.

13.8% effective tax rate for Mr. Have More and
31.1% effective tax rate for Mr. Average Joe? Whoooaaaaahhhhh! What’s going on here?

Now you see why rich people, like Steve Forbes and Gazalim, want a National Sales Tax aka “Fair Tax” or a "Flat Tax", which has the same built-in traps for Mr. Average Joe. The question is, “fair to whom?” Certainly not to Mr. Average Joe! Mr. Have More loves it – he makes out like a bandit.

Remember this, Mr. & Ms. Average Joe: anytime a rich man wants to change the tax structure, you already know 2 things:

1- he does not like things the way they are, in spite of all his deductibles, and

2- he’s not trying to make things better for you! He’s attempting to help himself and scam you!

I, of course, have assumed that Gazalim is rich? But he must be! After all, he will make out like a bandit if he is; and a National Sales Tax or “Fair Tax” will decimate an “Average Joe”. However, there is another possibility: that Gazalim is NOT rich. In which case, he is a fool. I await his response so we can all know whether Gazalim is a fool or a hypocrite.

Aside to Gazalim: Thank you for visiting the Tabacco profile; I might never have read your Article on the “Fair Tax” if you hadn’t. How’s the weather in Utah?




T.A.B.A.C.C.O. (Truth About Business And Congressional Crimes Organization)

tags:                        


comments (6)


1. Gazelem left...
Wednesday, 14 September 2005 5:36 pm

Your response is so laughable. I don't even know where to begin. But I have consulted with Mr. Have More, even though he only make 6 figures compared to my 8 figures. And after we both had a good chuckle. We decided to start with your numbers.

Why does only the Mr. Average Joe pay interest. Even with my 8-figure salary I am paying over $2000 dollars in interest on my multi-million dollar home. Don't forget the interest that I am paying on my Porche Carrera GT. That's about $500 too. Then you assume that tax is paid on interest. It never has been and if you had read the fairtax.org information you would have known that interest is not taxed. So, your numbers are completely skewed and biased.

Speaking of not having read anything (like my article on the fair tax, it's a pretty good read, you really should look at it, be forwarned there is a typo in there and as you are a better proofreader than a number cruncher that might bother you). If you would have read more on the fair tax concept you would have learned that there is a certain level of income that isn't taxed at all. Although they don't give an exact number, I can make a stab that it will be about $25000 that isn't taxed. I am probably being to conservative with that number because I am sure it is probably higher.

So, with that in mind, Mr. Average Joe would have only paid $3450, if he had had to borrow as much as you claim he did. That's 11.5% in taxes. Which is less than the 13.8% tax that you attributed to my millionaire freind, Mr. Have More.

However, you forgot to take into account what Mr. Have More did with his extra $400,000 that he didn't spend. Assuming Mr. Have More works for someone else and can't hire more employees who he could pay more. (If he did Mr. Average Joe probably got a $5000+ raise, thus eliminate half of the interest he paid this last year.) But Mr. Have More (like me) works for another person. So, he decides to invest the $400,000 dollars in the stock market. That just created 3 more jobs, or offered up 10 more pay raises. This new money is also spent and thus, Mr. Have More is indirectly taxed, but will be rewarded when he cashes out his stock.

But more than Mr. Have More's benefit, we as a society benefit, because there are less jobless and more services for all of us to enjoy and use.

The most important thing to note, however, is that the article of mine you so graciously criticized is a direct critism of the Fair Tax. I criticize it because it keeps the current tax system revenue nuetral. I think that government provided services need to be reduced. The article calls for a reduction in tax burden before we start talking about moves to a fair tax. Perhaps you would enjoy reading it.

Oh, and the name is spelled Gazelem (pronounced Gä-zā'lĭm, that's Gah-ZEY-lim if you are phonetically challenged).


2. Tabacco left...
Thursday, 15 September 2005 12:25 pm :: http://tabacco.blog-city.com/

Tabacco’s Immediate Reply to Gazalim:

You aren't laughing! You are trying to "save face". This is not a complete answer. I will answer you in full later on after I've finished my dinner. But I had to respond to this:

"If you would have read more on the fair tax concept you would have learned that there is a certain level of income that isn't taxed at all. Although they don't give an exact number, I can make a stab that it will be about $25000 that isn't taxed. I am probably being to conservative with that number because I am sure it is probably higher."

That, my friend, is ridiculous - and I will show you why. If you go to the store for a carton of milk at $2.00, the only way you can pay tax is right on the spot. And if you think everyone in America is going to keep every receipt for $2.00 for every container of milk, so they can get a refund from Uncle Sam come tax time, then you are not as bright as you think you are. After all, isn't the "Fair Tax" supposed to put tax specialists out of business?

No, you're not laughing. Right now your blood pressure is probably up 20 points. You bit off more than you can chew this time. Not all liberals are ignorant, despite the best efforts of conservative politicians. Thanks for the proofreading compliment. But I'm very comfortable with my statistical abilities. As I said, I'm not an accountant; but I did major in mathematics and I studied syllogistic reasoning (something, which escaped your collegiate attention - see my Article, "Sherlock Holmes & Deductive Reasoning: How to Become a Brilliant Detective! I"). I will get back to you this evening after I view your "Non Answers", evasions and "excuses". If you disagreed with my figures, you should have demonstrated by giving similar examples; but you didn't. As to what expenses occur for Mr. Have More, that is irrelevant since he can spend his $600,000.00 any way he wants and still invest $400,000.00 untaxed. Most people, in America, would love to be in his position. I don't envy you, trying to prove "your point". I couldn't do it; I don't think anyone could without using trickery. (And I can disprove any invalid syllogisms, you inject into the dialogue, logically. I try to be explicit and definite. To say, "you are full of it" is insufficient. That would only result in a "my daddy can beat your daddy" dialogue. I appeal to reason. You appeal to authority and to emotions. We will let the people judge whether they should look out for their own good or that of Mr. Have More. If Mr. Have More is selfish; I can understand that, even if I don't approve. I don't expect to change his mind - I'll leave that to his God. It's these Middle Americans and poor people, who vote Republican for peripheral reasons that I want to reach. These are natural Democrats, who will only vote Republican if they are deceived - and boy have they been deceived! Information will change that.

Now, my dinner is cold! See you and Mr. Have More later. Please tell the good man that his plate is full enough. It's time for the rest of us to eat!

Tabacco "Knowledge is Power"


3. Tabacco left...
Thursday, 15 September 2005 1:35 pm :: http://tabacco.blog-city.com/

Tabacco’s Final Reply to Rumpelstiltskin:

First, if you are against the “Fair Tax”, allow me to remind you that the title of your Article is, “FAIR TAX, ARE WE READY FOR IT?”. An excerpt from your Article, which I previously quoted in my Article above:

“First of all, I must say, in general, I support the concepts laid out be (I think he means “by”) the Fair Tax people. There are a few things I disagree with, but that isn't really the point of this discussion here. I like the idea of eliminating the Income Tax and shifting the burden from earning to spending. It works for me……”.

There is no point in writing an article about the “Fair Tax” unless you have an opinion; and obviously you like the idea. You are being disingenuous again.

Mr. Average Joe, whose salary was $30,000 last year, is more likely to have his job outsourced by one of your “friends” than he is to have gotten a 17% raise – you really have no idea how the “other half” lives – do you? All rich Republicans live in “ivory towers”, don’t they?

I won’t even bother to debate the equity loan interest with you; after all it amounts to only $500.00.

As for your idea,

“I think that government provided services need to be reduced. The article calls for a reduction in tax burden before we start talking about moves to a fair tax.”

You would suggest that. A better idea is for you and Mr. Have More to give back your Bush Tax Cuts. I think 95% of America would agree with that.

For your information: A $2 Million mortgage for 30 years @5% = $10,736 monthly.

The point, which seems to have escaped Gazelim, is that Mr. Have More makes enough money annually so that he doesn’t have to take out a loan to send his son to college. Therefore to include his home equity loan interest, as I did for Mr. Average Joe, would be an exercise in futility – Mr. Have More didn’t need a home equity loan. Mr. Have More spent $600,000 of his $1,000,000 income last year, including $128,832 on his mortgage. Did I mention that was principal + interest, not just interest. Incidentally, I never bothered to detail Mr. Average Joe’s mortgage payments, just the $10,000 equity loan he took out to send his son to college. If either Gazelem or Mr. Have More is looking for sympathy here, he won’t find it. (Aside to Readers: Don’t you love it when rich people squirm and squeal like pigs in slop.)

Finally, Mr. Whatever-Your-Name-Is, if you are going to write a blog, you should at least know more than most of your readers. You should try to educate them, not just patronize, propagandize and brainwash them. Also take a course in basic English grammar and syntax. A course in logic, I know, would be asking too much. The truth is that you neither know how dangerous your “Fair Tax” would be to people, who live on the edge, nor do you care. I suggest you reread my Article to see the truth, not that "I think $25,000 cutoff" - Give me a break. That's nonsense!

I am not a rich Republican; I work for a living. I also publish this blog. So unless you have something relevant, intelligent and grammatical to say, I bid you and Mr. Have More “adieu”.

- Tabacco

PS Let me insert 1 of the 3 notes I placed on your blog for my Readers. My numbers are going up drastically - I think some of your Readers have left your sinking blog.

Gazelem, Please Answer This One Question:

If 100 pies must be made for the bakery; you make 50 and I make 50, there’s your 100. But if you only make 40, I must make 60 to add up to the 100 pies requires.

If your 23% figure is meant to insure that the government gets their same share of the tax dollar under your “Fair Tax” as they would under the Graduated Income Tax, and the rich are going to pay less money in tax, then who pays more? Men from Mars? You are so smart, and I would so like to know the answer to this question. Please honor me with your education, intellect and wisdom and set me straight in this matter. I await your answer.

Tabacco http://tabacco.blog-city.com/ http://tabacco.myblogsite.com/

PS I am still working on my blog reply. Your answer to my question will expedite it immensely. Who knows, maybe tonight is the night I become a Republican.

Oh, what the h..., I may as well print all three notes. After all, they are on your blog anyway:

Gazelem wrote above: “T.A.B.A.C.C.O. attempts to criticize my view on the Fair Tax but it appears that he didn't even bother to read what I had to (“right”?). And as you know, I sure love playing with numbers. He gets his numbers wrong too. I probably made the carnal mistake of actually replying to his (“mistakings”?), but they aren't appearing on his site. So, I have chosen to reproduce them here:”

Gazelem: Where did you learn English? Please tell me what college you attended. I wish to advise my friends and blog Readers not to send their offspring to that seat of higher learning. You don’t w-r-i-t-e like one who has an 8-figure income, unless the 8-figures are $000,000.00. You know, Readers of Gazelem, I couldn’t make this stuff up. If this guy is advising you on politics and finance, you are in deep trouble. It’s a good thing I came along. -Tabacco

More pot shots:

“Illiteracy Strikes The Republican Party!”

Gazelem made this comment, More humor for the rest of my readers. Thank you. I am sure that they are looking forward to your further (“antecdotes”?). I will chose to give you the last word, I am sure that you will better prove my point with your comments than I could. comment added :: 14th September 2005, 16:59 GMT-07

Tabacco responds (in stitches): I think you mean “anecdotes”. You know you really should use your “Spell Check”. I am embarrassed for you.

-Tabacco

http://tabacco.blog-city.com/ http://tabacco.myblogsite.com/

PS If any of you Readers realize what a dumbo the “righter” of this blog is, come on over to the Left for some intelligent give-and-take. Uh ba-bia-Uh-ba-bia, that’s all folks!


4. Tabacco left...
Wednesday, 21 September 2005 7:43 pm :: http://tabacco.blog-city.com/

Tabacco just emailed 'AMERICANS FOR FAIR TAXATION', one of Gazalem's primary sources for this new attack on Middle America. I have challenged this organization to an honest debate on the merits of their so-called "Fair Tax".

The content of that email is as follows:

AMERICANS FOR FAIR TAXATION http://www.fairtax.org/

Please go to http://tabacco.blog-city.com/illogical_national_sales_tax_proponents_think_ middle_america.htm to read my blog Post about the “Fair Tax”. I think you will find it very interesting.

A tax, predicated on spending, will hit the “little guy” like a ton of bricks. The “little guy” spends whatever he makes – as close to 100% of his income as possible (and often more than 100%). The rich have discretionary income and rarely spend more than they make. In a given year, they might spend as little as 5-10% of their income and invest the rest.

A “Fair Tax” is only “fair” to the rich. There is no way that everybody can win – that’s a fallacious fantasy, cooked up by the rich to scam the rest of us. I will continue to expose your disingenuous, hypocritical attempts to squeeze Middle America.

Any change in the tax system, proposed by the rich, will always benefit the rich – and necessarily, hurt everybody else. The Federal government must continue to take their share. Less paid by you automatically means more paid by us. Mathematics insists on this immutable fact.

Read my Article, then reply with facts and figures to convince Tabacco and his Readers that a “Fair Tax” is fair – I challenge you. If you fail to reply, that failure, along with this email to you, will appear in a future blog Post.

I await an intelligent reply.

An ambiguous, emotional appeal, based on the concept that “the current Federal tax system is broken” and that the “Fair Tax” is the only viable solution, will be met with the contempt and derision it deserves.

America deserves the “WHOLE TRUTH”, not emotional and illogical propaganda.

-Tabacco (Truth About Business And Congressional Crimes Organization) http://tabacco.blog-city.com/


5. Tabacco left...
Wednesday, 21 September 2005 8:47 pm :: http://tabacco.blog-city.com/

Think About This, America:

4 years under George W. Bush were unbearable.

8 years under George W. Bush will drive us up the wall.

12 years under Republican rule might just foment a French-style Revolution with guillotines and all the other accoutrements. In the end, we may all raise our glasses and toast George W., the next-to-last Republican President, who was the straw that broke the camel's back.

Unbearable suffering can have a salutary effect on us all.

-Tabacco's Thought For Today


6. Tabacco left...
Saturday, 8 October 2005 3:28 pm :: http://tabacco.blog-city.com/

Open Memo to Gazelem:

On September 21, 2005, I wrote an email to AMERICANS FOR FAIR TAXATION, challenging them to a debate on the merits of the "Fair Tax", which is nothing but another way to bilk Middle America.

Today, October 8, 2005, 17 days later and still no reply. I wonder why! No I don't. I know why. Because they recognize the accuracy of my assessments, and decided that ignoring me was superior to confronting me in print and being shown up for their "Americans For Unfair Taxation".

To Gazelem I say "What happened? Why don't your fiscal heroes defend their position? I am resending my email of 9/21/05 together with this Addendum." I am amused by their cowardice. I will not go away. I intend to watch carefully for any mention of a "Fair Tax" or "National Sales Tax" or a "Flat Tax". Tabacco is now the self-proclaimed "Watchdog" on "Unfair Tax Advantage For The Rich". Tabacco will be waiting and watching - Count on it!

- Tabacco