President Obama wants to raise the minimum wage from $7.25 to $9 over the next three years. That’s a 24 percent increase. A better solution is to pass the FairTax (HR25/S122).
Today’s minimum wage earns $15,080 a year. Subtract $1,154 for FICA (Social Security and Medicare at 7.65 percent) and $533 of Federal tax due. Ignoring state income tax, the take home pay is $13,393.
Pass the FairTax and the minimum wage earner brings home the full $15,080. They get an additional $2,505 as a reimbursement for the tax paid on the basic necessities. That’s $17,585 take home — a 31 percent raise in one year.
Yes, the FairTax is a 23 percent national retail sales tax on new goods and services. According to the experts, the price of every U.S. produced product we buy is 22 percent more expensive because companies embed the cost of the tax they pay in the price of their products, thereby passing the cost of corporate tax on to the consumer.
Under the FairTax, the prices for products produced in the U.S. should drop an average of 15 to 18 percent at the wholesale level, because the embedded tax is removed. Add back in the 23 percent national retail sales tax and retail prices only go up 5 to 8 percent.
So, increase the minimum wage 24 percent over the next three years and hurt small businesses or pass the FairTax and create millions of new jobs.
Which would you choose?
James R. Donnell
Categorized | Letters to the editor
FairTax a better solution for everyone
Posted on01 March 2013.
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NO! A fair tax is NOT better for everyone. It is better for the already wealthy. Why do you think it is they that are pushing this idiotic idea? Take for instance a person who makes 30 grand per year. EVERY SINGLE DOLLAR they make goes back into the economy. So if they go to the store and spend $100.00 bucks, then under your idea, they would have to spend another 23 bucks. How much is that as a percentage of their income? Now take someone like Mitt Romney. He makes 20 million per year. Maybe he spends 2 million dollars. The other 18 MILLION DOLLARS goes into a Cayman Island bank account. And doesn’t help our economy one single bit. Couple that withe the fact that his army of lawyers makes it possible for him to pay absolutely NOTHING in taxes. How is that fair? The Fair tax is anything but fair. It would hurt the poor, the working poor, and the middle class, while benefitting the wealthy. I could supply you with articles written by economists much better at explaining why this is a monumentally bad idea if you want me too.
ahem… Romney lost, find another whipping boy.
What has that got to do with what I said? Is that all you got?
Sadly mrribbert you are wrong, misinformed and misguided. First, as I pointed out in my letter, prices would NOT rise 23% as you suggest. Second, the poor and middle class are helped tremendously by the pre-bate as that is a much higher percentage of their income than someone like Mitt Romney or other wealthy individuals. Your point of taxes as a percentage of income is moot. First, we shouldn’t be taxing income as it discourages people from working. That is truly idiotic. Second, money not spent is typically invested thereby creating jobs. If we passed the FairTax there would be no reason to hide money off shore and that money could be put to work here.
What is it about eliminating the payroll tax, taxing drug dealers and prostitutes, stopping corporations and rich people from manipulating our tax code through campaign contributions and creating 16 million new jobs that you don’t like?
There is one assumption in your argument that I do not believe would happen. That is that the seller of the goods, the corporation, would lower its price for the so called “embedded tax”. You expect this from the same people that now sell us 48 ounces of ice cream instead of 64 just so that they would not appear to be “raising the price”. The motivation of the corporation is to maximize profits, and if it has the opportunity to make an extra buck it will.
One more question. If a corporation is a “person”, does that make every person owning corporate stock a slaveowner?
Take a look at the detail attached to Mitten’s tax return. For someone that claims that China is cheating, he sure made a lot of money buying and selling securities of Chinese corporations.
Give me an example of another country in the world that has this type of taxation and then we can discuss whether or not it is a viable system. Show me someplace where it has worked.
Weeddigger – Many corporations have signed pledges to lower the prices of their products if the FairTax were passed. In addition, competitive market pressure would force the others to do the same. If you could buy essentially the same product at a lower cost, which one would you choose?
Corporations are not people, the are fictitious entities ultimately owned by people.
With respect to giving you another country that has done this, there are none. And WE DON’T WANT TO BE THE SECOND country to lower our corporate tax to zero. There are many states who do not have income taxes and they are doing VERY well attracting businesses and individuals to live there. Look at the flood of businesses leaving California for Texas for a simple example.
“There are many states who do not have income taxes and they are doing VERY well attracting businesses and individuals to live there.”
LOL like Nevada ??
“Corporations are not people, they are fictitious entities ultimately owned by people.”
Really? You better tell that to the USSC because they ruled otherwise.
“Second, money not spent is typically invested thereby creating jobs. If we passed the FairTax there would be no reason to hide money off shore and that money could be put to work here.”
Are you still believing that myth? If that were true, then we would be swimming in jobs right now because they (wealthy) have been saying that for the past 30+ years.
If you want to create jobs, then you start with our insane trade policies.
Like I said, the Fairtax is anything but fair, and is a VERY BAD idea. It is the brainchild of the wealthy. Another way that they can screw America and laugh all the way to the bank, because fools like you have bought into their nonsense and are doing their bidding. Nice job puppet.
I have a lot of experience with Fairtax, being an early supporter of the fraud. Yes, its a fraud.
Read the fine print — closely. Very closely. Yes, they do tax personal retail sales. That’s fine. But thats just the start. All cancer victims are taxed — no exception whatsoever. All cancer surgery, chemo, rehab is taxed — and remember these words, without exception “the person using or consuming” the good or service is liabl for the tax.
And read the fine print. Their own instructions on how to “Interpret” their legislation, says they tax all “consumption” (not sales only) without exception.
They also tax all city government “consumption” of wage and pension “expenditures”. Dallas Texas, for example, (as all cities) would be taxed 23% of every dollar of wage, pension or “fairmarket value” of any consideration “expended”.
In fact, all “non-educational” expenditures by all cities are taxed. Dallas Texas would owe over 50 million (far over) as a TAX to the fed government. That’s not even possible, yet it’s in the fine print tricks.
Fairtax fine print even says — slyly – we(they) ASSUME all cities will raise taxes rates to pay it.How much are these massive taxes on city government? The taxes that they will have to “raise their tax rates” to pay? Over 600 billion.
And that is just cities. All states too. All counties too. All library systems too.ALl prison systems, everything. The only exception is “educational” expenditures. SO operate a prison, court system, highway system, police or fire department, that’s taxed. The wages — taxed. They operational expenditures — taxed. The pensions -taxed.
This was all shown, politely, by President Bush Tax Advisory Panel.
Read the fine print more closely — ignore the hustle, read the fine print.
And remember –Fairtax leaders knew every word they said — every one — was distortion if not outright lie.
Google Fairtax fine print tricks, or just read the fine print very closely.
The only “fair” tax is one that applies equally to everyone. Rich and poor, they all get the benefits of living in this country. Pick a number. 15%, 25%, whatever, pick a number, and every retail transaction gets hit except for food and medical care. No pet industries. Food, water, and medical care are required for life, so they get tax free. But everything else gets taxed.
There is also the idea of a 2% transaction tax. This applies the purchase of all new goods, wholesale and retail. Again, the only tax that is fair applies equally the same to everyone. We all breath the same air, we all are protected by the same military. We all get the same government. So we all pay the same.