Area417

Politically Incorrect Item Of The Day

  Enough said.

Fair Tax Blogburst For August 30, 2006

by Julie of Degree of Madness

Follow-up on last week's Blogburst about the outside collection agencies the IRS is employing to collect delinquent taxes.

On August 23, this was the headline: IRS Warns Against Phony Debt Collectors.

The IRS warned taxpayers Wednesday not to be duped by scammers posing as private debt collectors the agency has hired to chase unpaid tax debts.

The program isn't even in place yet and concerns are already being raised, and not just by this Blogburst writer.

The Internal Revenue Service designed the debt collection program to minimize that risk "because we know what it's like out there with regard to identity theft nowadays," said Brady Bennett, IRS Director of Collections.

The IRS designed the program to minimize the risk. Well that's comforting. The IRS is looking out for you.

And this article addresses something I wasn't sure about and that is whether the private collection agencies would have access to social security numbers. They will.

The IRS plans to give the collection agencies basic identifying and account information about the chosen taxpayers, including their names, addresses and Social Security numbers. The agencies do not have access to tax returns.

Also from the article:

Identity thieves have posed as IRS agents in "phishing" schemes that use the tax agency's logo to lure victims. The e-mail schemes are designed to dupe taxpayers into revealing personal financial information.

The IRS does not communicate with taxpayers through e-mail, and it will not e-mail taxpayers about debts turned over to private collectors. The IRS also does not ask taxpayers for any passwords or PIN numbers that would allow the agency to access bank or credit card accounts.

Bennett also cautioned taxpayers chosen for the debt collection effort to make any check or money order payable to the U.S. Treasury, not a private company, and to send the money to the IRS. The collection agencies have been told to provide addresses to the taxpayers they contact.

This is all well and good but the IRS cautioning taxpayers via articles such as this probably won't be very widely read. Is the IRS planning to contact taxpayers directly to advise them of this program? I've not received anything from them. And from the first line of the article, "The IRS warned taxpayers", how did they warn them? By telling the AP?

I read some of the comments last week on blogs that posted the Blogburst. One commenter responded to the statement I made about our tax information being private by suggesting that since the government knows our tax information it is not private. Good point, but that doesn't mean I want them passing it out to employees of private companies. And if we had the Fair Tax the government would know much less about our private financial information. KnightHawk at PoliPundit had some really good responses to some of the questions raised. There were some good questions raised and worth a look.

Now on to this week's blogburst.

Our representatives in Congress are finally getting the message that Americans are "fed up" with the current tax code. The question is, how do we fix it?

I contacted my (Alabama) Senators and Representative in Washington to let them know of my support for the Fair Tax. Three letters, three different responses. Congressman Spencer Bachus (6th district) is a co-sponsor of the Fair Tax Act of 2005, H.R. 25. Good news. Senator Jeff Sessions has not endorsed any specific proposal for reform, but does agree something has to be done about the tax code. From his letter: "Most taxpayers that I talk to are not only fed up with the complexity of the tax code, but the enormous tax burden that has been placed on them." Senator Richard Shelby supports "a flat tax, as opposed to a national sales tax". I wanted to address Senator Shelby's position because I believe his concerns about the Fair Tax are probably shared by many on Capitol Hill.

From his letter:

I support a flat tax, as opposed to a national sales tax, because I believe that the flat tax encourages savings in a more effective manner without leaving the federal budget vulnerable to fluctuations in our economy. Under a flat tax, government revenues would not fluctuate as severely because of changes in the economy as they would with a national sales tax. This is the same problem that many state budgets are facing today because they depend too much on sales taxes.

I'm not really sure about the "encourages savings in a more effective manner", but his concern about the fluctuations in the economy is interesting. In other words, if our economy slows down the government should not have to slow down. Changes, I'm assuming he means negative changes, in the economy would surely affect the taxpayer but he would get no relief from Uncle Sam. While the taxpayer's personal economy fluctuates (downward), the government keeps right on spending. To me, this would be a good argument for the Fair Tax. If the American taxpayer had to cut back and budget better, why not the federal government? But according to a study by American Farm Bureau, #9 in the Fair Tax FAQ, consumption is a more reliable source of revenue anyway.

Is consumption a reliable source of revenue? Yes, in fact, consumption is a more stable source of revenue than income. A recent study by American Farm Bureau economist Ross Korves shows the FairTax base is less variable than the income tax base. Why? Because during difficult times due to loss of a job or an inability to work, people may not have as much income, or may have no income at all. They borrow funds or use savings. They may not have earnings, but they still continue to consume.

Another argument from Senator Shelby:

Additionally, a flat tax better protects poor and low-income Americans because they are not forced to overpay taxes through their daily purchases, and then wait until the end of the month for a rebate check, as many national sales tax plans have proposed. These Americans need this money immediately to pay their bills and meet their needs. Under my proposal, the "Tax Simplification Act," low-income Americans would not have to pay for these distortions in the first place because of a personal deduction that would apply to all Americans.

The Fair Tax proposes a "prebate", paid at the beginning of the month. And low-income Americans would have the same advantage as everyone else, no deductions from their paychecks for federal withholding or social security and Medicare. This is important. Even if the low-income American has no federal tax withheld, the social security and Medicare taxes will still be deducted under the Flat Tax. Currently it is 7.65% and everyone pays the same regardless of income bracket.

Please follow this link for Senator Shelby's proposal for a flat tax. It certainly would be better than the current system, but it doesn't get rid of the IRS, it does not eliminate the corporate tax which is a huge plus for the Fair Tax, and it doesn't get rid of the social security and Medicare tax. The Fair Tax does.

The FairTax Blogburst is jointly produced by Terry of The Right Track Blog and Jonathan of Publius Rendezvous. If you would like to host the weekly postings on your blog, please e-mail Terry. You will be added to our mailing list and blogroll.

 

Someone Call The ACLU!

Torture alert! World Net Daily is reporting that U.S. Marines are making Saddam Hussein watch the South Park episode where Saddam is portrayed as Satan's lover.

That according to Trey Parker and Matt Stone, the creators of the animated series, who spoke at the Edinburgh International Television Festival.

Parker and Stone say U.S. Marines are making the ousted Iraqi dictator watch the episode "repeatedly."

Expect those morons at the United Nations to call this a war crime when they get wind of it.

Speak Out Springfield! Public Forum On Springfield City Audit

The Greene County Libertarian Party has scheduled a public forum for interested citizens to provide their concerns to be submitted to the State Auditor's office.  On Saturday, August 26th, our first forum will begin at 7:00 p.m. in the Frisco room at the Library Station.  Audit suggestions can also be phoned in to the G.C.L.P. at (417) 300-9148 or by e-mail at auditinfo@intergate.com

(The Library Station is located at 2535 N Kansas Expressway, Springfield, Missouri)

Show up and let your voice be heard!

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Press Release
 
For immediate release – August 16, 2006

Springfield Libertarians Move Forward on City Audit

The official certification of petition signatures for the Springfield
city audit brings about the next phase: Getting some clear answers as
to the true financial health of the third-largest city in Missouri.
 
"We're glad this part is done, and that we had more than enough
signatures to make the cut", said Keith L. Rodgers, Chairman of the
Greene County Libertarian Party. "The accountability and fiscal
responsibility of Springfield's financial health need to be addressed,
especially in light of the ongoing investigation of missing City
funds. This is the culmination of a long-visualized effort, and now
the job should be left to the State Auditor's office and the local
police investigators."

The originator of the audit effort, former Congressional and City
Council candidate, Doug Burlison, said,"To date, the largest municipal audit in
Missouri's history, will commence in September due to the hard work of a
diverse coaliton of area citizens. The Libertarian principle that the
government should be held accountable is well on it's way to becoming a reality
in Springfield.  Those who have opposed this at every step of the way, now seem
to be trying to hijack the effort by spending additional taxpayer dollars and
hiring their own examiners to investigate themselves.  Our challenge is to
remain steadfast in our quest for an open and honest city administration."
 
Rodgers said that the city should stand back and let the State Auditor
and the local police do their jobs, and not do internal auditing as
suggested by the City Manager, Bob Cumley. "Those who complained that
Springfield could not justify the spending on the State audit, are now falling
all over themselves to cooperate. Those who claimed this was a waste of funds,
will now have to admit it will more than pay for itself. We're all about
accountability, and this city sorely needs to be held accountable when it comes
to how its citizens' tax money is handled and spent." 

Long Time No Posts?

Obviously it has been some time since I last posted anything (with the exception of posting Fair Tax Blogbursts written by members of that group, bless their hard-working little souls.)

Let's just say I'm back to as-normal-as-I'll-ever-be and will once again be posting, as I hate to disappoint my reader. Yes, that would be singular:)

Fair Tax Blogburst For August 23, 2006

by Julie of Degree of Madness

If you owe back taxes to the federal government, the next call asking you to pay may come not from an Internal Revenue Service officer, but from a private debt collector.

Within two weeks, the I.R.S. will turn over data on 12,500 taxpayers — each of whom owes $25,000 or less in back taxes — to three collection agencies. Larger debtors will continue to be pursued by I.R.S. officers. (link)

So now, private firms will have access to our tax information, or at minimum how much you (may or may not) owe to Uncle Sam. Our tax information is private. Or it was up until now.

Within two weeks, the I.R.S. will turn over data on 12,500 taxpayers — each of whom owes $25,000 or less in back taxes — to three collection agencies. Larger debtors will continue to be pursued by I.R.S. officers. (my emphasis).

And the IRS isn't too particular about the business ethics of the firms they select to receive our tax data:

One of the three companies selected by the I.R.S. is a law firm in Austin, Tex., where a former partner, Juan Peña, admitted in 2002 that he paid bribes to win a collection contract from the city of San Antonio. He went to jail for the crime.

Last month the same law firm, Linebarger Goggan Blair & Sampson, was again in the news. One of its competitors, Municipal Services Bureau, also of Austin, sued Brownsville,Tex., charging that the city improperly gave the Linebarger firm a collections contract that it suggested was influenced by campaign contributions to two city commissioners.

And how will these debt collectors be paid? They will receive 25% of what they collect. Whether or not the tax bill is accurate or actually owed at all (the IRS is in a league of its own when it comes to mistakes, errors and general incompetence), will not be the concern of these collectors.

And the privacy issue is not insignificant. It's not clear whether these firms will be given the taxpayer social security number, but:

Private collectors will have authority to set up installment payment agreements, and gather financial information about those targeted, presumably to assess their ability to pay or to locate assets that might be attached.

Private collectors will have the authority to gather our personal financial information. Authority handed over to them by the federal government. Most everyone is aware of the aggressive, heavy-handed methods of collections agencies. I guess a partnership with the IRS just makes sense. A marriage made in heaven, so to speak.

The federal government already has too much access to our private financial information. And the ability of the IRS to audit at will, with no constraints or accountability is something we should not tolerate. And should not be forced to tolerate. And now private firms can get in on the action. And profit from it. At our expense.

There are so many good reasons to support the Fair Tax. Preventing the IRS from giving our private financial information to outside firms is just one more.

With the Fair Tax, the IRS will be abolished. No other tax plan under consideration abolishes the IRS. This is important. The IRS operates under the "guilty until proven innocent" theory. And however unjust that may be, that's the way it is. It will never change. The IRS has power that most politicians only dream about. And IRS abuses are legend. And most of the abuses never make the headlines. They are relatively small in nature but very significant to those involved.

The convoluted tax code is an outrage. The enforcer is an even greater outrage. Leave your Constitutional rights at the door when the IRS shows up, 'cause you no longer have any. The IRS has virtually free will to demand access to every single detail of your financial life. With no probable cause.

Some things just can't be reformed. Our tax code is one of them. The IRS is another. With the Fair Tax, we will all pay our fair share, but we won't have to give up our privacy, or our sanity, to do it.

The FairTax Blogburst is jointly produced by Terry of The Right Track Blog and Jonathan of Publius Rendezvous. If you would like to host the weekly postings on your blog, please e-mail Terry. You will be added to our mailing list and blogroll.

Fair Tax Blogburst for Aug. 8, 2006

by TD of The Right Track

More and more, I am hearing of people advocating for the FairTax in print, speeches, symposia, television, and radio. I've gathered a few of the more recent articles and provided links and a summary below each link. I've also quoted from several of the articles. Seems like support for the FairTax is pretty diverse!

Economic outlook: Georgia No. 1 in U.S. -

July 16, 2006

Georgia's economic outlook is rosier than that of any other state in the nation, according to a new study by the father of supply-side economics.
Arthur Laffer, an influential adviser to former President Ronald Reagan, put  Georgia
at the top of his annual comparative ranking of state economies, a seven-category analysis that primarily focuses on tax and fiscal policy. That's up from fifth place in 2005 and a marked improvement from a No. 24 finish in 2002.

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...Laffer suggested the state might want to shift more of the tax burden to sales from property or income, an idea popular among state Republican lawmakers, who are currently examining the possibilities. Even without such a shift, he advocated expanding the sales tax to encompass food and services in exchange for a lower rate.

"You want to tax those factors the most that can escape the least ... and in the least damaging fashion," Laffer said. "The broader the base, the lower the rate, the better the tax."

Perdue agreed that the state might do well to adopt a more consumption-focused tax system, perhaps after the fashion of the FairTax proposed by U.S. Rep. John Linder, a Republican who represents parts of north metro Atlanta.

GOP debate for Hefley's post,

July 18, 2006

Candidates in Colorado support the FairTax:

"We need to get rid of the IRS," said candidate Jeff Crank. "We've got to allow people in the free market to make choices, choose whether they want to pay taxes."

Some Republicans also voiced support for the proposed "FairTax" that would replace all income, payroll, capital gains and inheritance taxes with a 23 percent sales tax on new goods. All five Republicans also favored abolishing the inheritance tax.

Tax and Spend,

July 27, 2006

Congressional candidates in Arizona were asked about taxes and spending:

Frank Antenori, the former Green Beret now working for Raytheon, says the Bush tax cuts have resulted in "money pouring into the treasury."

He says establishing an income tax was a big mistake.

"The Founding Fathers knew that imposing an income tax would bring this country down," he says. "We screwed up with the 16th Amendment when we allowed the federal government the ability to levy taxes on personal income."

Antenori favors a national sales tax and tariffs, which he says "would be far less regressive than income taxes."

He likewise says the estate tax should be repealed because "you should only pay taxes while you're alive."

Gravel: 'Let the people decide',

July 27, 2006

2008 Democrat and Presidential hopeful Mike Gravel supports the FairTax:

Another of Mr. Gravel’s major campaign points is the value of implementing the so-called FairTax. Essentially, the FairTax system calls for the abolishment of all federal taxes, including income taxes, with revenue being replaced by a higher sales tax, likely between 20% and 30%.

Mr. Gravel said the prices of most goods would remain fairly constant, since companies, no longer burdened with federal taxes, could set their prices 20% to 30% lower.

“In the end, after a year’s transition, you’re not paying any more in taxes than you were before,” he said. “That’s to keep it revenue-neutral.”

For poor and middle class families, Mr. Gravel supports the idea of the government sending monthly cash-flow checks.

“Then, you go get your paycheck, and there are no federal deductions,” he said. “Now, that’s pretty good.”
...
“We will turn this country from the largest economic unit in the world to the largest tax haven in the world,” he said. “Money will flow in. Investments will flow in, investments to do things, and that will create jobs.

“You’re talking about leading the entire world on an economic thrust forward,” he added.

Liberal Idealist Gives Fair Tax Big Thumbs Up,

July 28, 2006

Ron Deval, a humanist, peace activist, and political agnostic strongly supports the FairTax:

Reliably left on most issues, Deval is nonetheless passionate about a tax revolution whose growing army is populated largely by conservatives and libertarians. Describing himself as an "advocate of things that favor humanity," Deval is, in short, a Fair Tax maniac.

Encouragingly, the Land O' Lakes man is not just another guy with an opinion and a couple of Web sites. He can navigate a spread sheet.

After about 20 years designing programs that helped wealthy clients of Northwestern Mutual in Milwaukee and Tampa pass inheritances to their heirs, Deval, 53, became a real estate agent and tax preparer - two professions keenly opposed to seeing the current system, with its designed-in winners and losers, scrapped.

"If all taxpayers knew about the benefits" of the Fair Tax, a proposed national sales tax designed to replace America's current complicated, cumbersome and anti-competitive tax code, "it would pass in a heartbeat," Deval says.

Read the entire article, it will be well worth your time.

TD

The FairTax Blogburst is jointly produced by Terry of The Right Track Blog and Jonathan of Publius Rendezvous. If you would like to host the weekly postings on your blog, please e-mail Terry. You will be added to our mailing list and blogroll.

Fair Tax Blogburst For August 2, 2006

by TD of The Right Track
with special thanks to KnightHawk of Your Two Sense

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Laurence J. Kotlikoff has written an article published by the Federal Reserve Bank of St. Louis Review in which he predicted bankruptcy for the United States -- unless serious reforms are put in place to raise revenue or cut spending.

While it's hard to agree with all of Kotlikoff's conclusions, one in particular is worth examining. According to Kotlikoff, his proposed policies would put America on track to eliminate the nation's "enormous fiscal gap" and avert bankruptcy.

Here's a summary of his plan (page 12 of the PDF file linked above):

The three proposals I recommend cover taxes, Social Security, and healthcare and are interconnected and interdependent. In particular, tax reform provides the funding needed to finance Social Security and healthcare reform. It also ensures that the rich and middle class elderly pay their fair share in resolving our fiscal gap.

And what of the proposed tax reform? What form would it take? Apparently, Kotlikoff likes the FairTax:

The plan here is to replace the personal income tax, the corporate income tax, the payroll (FICA) tax, and the estate and gift tax with a federal retail sales tax plus a rebate. The rebate would be paid monthly to households, based on the household’s demographic composition, and would be equal to the sales taxes paid, on average, by households at the federal poverty line with the same demographics.

The proposed sales tax has three highly progressive elements. First, thanks to the rebate, poor households would pay no sales taxes in net terms. Second, the reform would eliminate the highly regressive FICA tax, which is levied only on the first $90,000 of earnings. Third, the sales tax would effectively tax wealth as well as wages, because when the rich spent their wealth and when workers spent their wages, they would both pay sales taxes.

The single, flat-rate sales tax would pay for all federal expenditures. The tax would be highly transparent and efficient. It would save hundreds of billions of dollars in tax compliance costs. And it would either reduce or significantly reduce effective marginal taxes facing most Americans when they work and save.

The sales tax would also enhance generational equity by asking rich and middle class older Americans to pay taxes when they spend their wealth. The poor elderly, living on Social Security, would end up better off. They would receive the sales tax rebate even though the purchasing power of their Social Security benefits would remain unchanged (thanks to the automatic adjustment to the consumer price index that would raise their Social Security benefits to account for the increase in the retail-price level).

The sales tax would be levied on all final consumption goods and services and would be set at 33 percent—high enough to cover the costs of this “New New Deal’s” Social Security and healthcare reforms as well as meet the government’s other spending needs. On a tax-inclusive basis, this is a 25 percent tax rate, which is a lower or much lower marginal rate than most workers pay on their labor supply. The marginal tax on saving under the sales tax would be zero, which is dramatically lower than the effective rate now facing most savers.

While Kotlikoff's tax-inclusive rate is a couple of percentage points higher than that currently being proposed in the House and Senate Bills, the method is identical.

The arguments for the FairTax just keep coming in. That's because the FairTax is the best thing for America with regard to serious tax reform.

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Just an FYI, KnightHawk also published the results of a ballot initiative on the FairTax from three metropolitan Atlanta counties. The question was only on the Republican ballot (aren't Dems for the FairTax?), and only in the three Atlanta-area counties, and it was non-binding. It was meant to gauge reaction to the FairTax. The results:

Gwinnett County:
Total Votes: 35,755
Yes - 31,068. 86.9% / No - 4,687 13.1%

Cobb County:
Total votes: 39,458
Yes - 33,598. 85.15% / No - 5,860. 14.85%

Fayette County:
Total votes: 11,517
Yes - 9,828. 85.33% / No - 1,689. 14.67%

An average of 85.79% of the voters in these three counties favor the FairTax! Senators? Representatives? Are you listening? Don't make us shout!

The FairTax Blogburst is jointly produced by Terry of The Right Track Blog and Jonathan of Publius Rendezvous. If you would like to host the weekly postings on your blog, please e-mail Terry. You will be added to our mailing list and blogroll.