With this heated election approaching faster than one could imagine, we thought it would be a time to throw the FT BB into the debates to see where each of our respective candidates reside in these matters.

We have grown fast and have expanded further than Terry and I anticipated in such a short time, which should prove to be interesting as we will hopefully see. Since we have members of numerous states, and numerous districts of the House of Representatives, let us see where the incumbents and their challengers reside when it comes to the Fair Tax.

This is where Terry and I ask for a small Homework assignment, but Terry and I will be participating, as well…..

What we shall do is send a letter to each of the respective campaigns for the district you reside asking them how they feel in regards to the Fair Tax. It can be something as simple as an e-mail, and you can tell them that the Fair Tax BlogBurst will be curious to see their answers….that way, when we hear back from them, we can all report for our readers where these individual candidates stand. We have provided a form letter below, so feel free to borrow this letter and use it/modify it for your convenience. Readers of the FT BB, we encourage you to do the very same and send either Terry or I an e-mail and let us know what they have to say.

This should prove interesting, and should prove to be informative for voters, as well.

Good Luck!

Here is a valuable resource to look up the individual e-mail addresses of your Representatives. 

Sample letter to Congress:  The Fair Tax Act, a nonpartisan bill (rewrite this to be your letter)

[Date]

The Honorable [First and Last name of congressman or senator]
United States [House of Representatives or Senate]
Washington, D.C. 20510

Re: The FairTax replaces the current tax system.

Dear [Congressman or Senator Last name]:

The Fair Tax Act, a nonpartisan bill sponsored by Representative John Linder (GA) and Senator Saxby Chambliss (GA), removes the burden of the income tax and other federal income-based taxes.

The current tax system is incomprehensible. It is beyond reform. It simply has to go.

The Fair Tax Act replaces the current tax system with a national consumption tax that:

• Allows Americans to keep 100 percent of their paychecks, pensions, and Social Security payments.
• Provides a prepaid, monthly rebate for every registered household.
• Allows families to save more for home ownership, education, and retirement.
• Raises the same amount of money for the federal government.
• Makes American products more competitive overseas.

I urge you to heed the vast majority of voters who will surely support you if you are seen as responsible for passage of this historical tax reform measure.

As a constituent, I would like to know where you stand on the FairTax.

Sincerely,

Your Constituent
[Name]
[Address]
[City, State ZIP]
[Phone number]

Some way, some how, I find these numbers somewhat unbelieveable.

From Breitbart,

A controversial new study contends nearly 655,000 Iraqis have died because of the war, suggesting a far higher death toll than other estimates.

The timing of the survey’s release, just a few weeks before the U.S. congressional elections, led one expert to call it “politics.”

In the new study, researchers attempt to calculate how many more Iraqis have died since March 2003 than one would expect without the war. Their conclusion, based on interviews of households and not a body count, is that about 600,000 died from violence, mostly gunfire. They also found a small increase in deaths from other causes like heart disease and cancer.

“Deaths are occurring in Iraq now at a rate more than three times that from before the invasion of March 2003,” Dr. Gilbert Burnham, lead author of the study, said in a statement.

The study by Burnham, of the Johns Hopkins Bloomberg School of Public Health, and others is to be published Thursday on the Web site of The Lancet, a medical journal.

An accurate count of Iraqi deaths has been difficult to obtain, but one respected group puts its rough estimate at closer to 50,000. And at least one expert was skeptical of the new findings.

“They’re almost certainly way too high,” said Anthony Cordesman of the Center for Strategic & International Studies in Washington. He criticized the way the estimate was derived and noted that the results were released shortly before the Nov. 7 election.

“This is not analysis, this is politics,” Cordesman said.

by TD of The Right Track

As I see it, the main problem with the Income Tax is that it is virtually impossible to enforce completely and fairly. Compliance with the Income Tax depends on taxpayer truthfulness, which generally is motivated either by a) good character, or b) fear of an IRS audit. With the FairTax, the tax is collected when the money is spent, from everyone, with greatly reduced opportunities for non-compliance by the public.

For instance, what about the criminal element in our country? Have you ever heard of the Mafia? Or the drug dealer? Do you think that these people report 100% of their income? Of course not! They get out of paying a huge percentage of their actual tax bill by the simple expedient of not reporting all of their income. But these same individuals still have to pay utility bills, purchase prescription drugs, visit doctors, and buy food. And if they believe in the “high life” of new cars, fancy clothes and jewelry, and new homes, they’re going to pay more than “Joe Six-pack” who chooses to drive a used car, or purchase a home that’s not brand new.

And it’s not just individuals who are managing to avoid paying taxes these days. Everyone in America has heard of the rush to move American companies “offshore”, whether in whole or in part. Think about it — have you ever seen an American-flagged commercial vessel? Oh sure, we’ve got our warships, but what about commercial boats that carry cargo or cruise passengers? Most of these are flying the flag of Liberia or Panama — low-tax nations.

In the mid-1950s, about 33% of all income taxes collected were paid by American corporations. Today that number is down to approximately 10%. From “The FairTax Book” by Boortz and Linder:

“That plunge is a major factor in our recent soaring deficits. Indeed, international corporations are essentially “voluntary” taxpayers today, paying only that amount in taxes that they believe will avoid attracting embarrassing news coverage. These corporations believe that our draconian tax structures make their actions necessary. The OFCs [offshore financial centers, or banks - TD] make their plans feasible” [Emphasis added - TD]

Boortz and Linder make the point that if we eliminated all taxes on capital and labor, (which the FairTax does), the United States would become the world’s tax haven.

We have the most stable economy, the most liquid and trusted markets, and the highest rates of labor productivity in the world — and the trillions of dollars in those OFCs would flow back home to the United States for the very reason they found themselves offshore to start with.

And we’re not just talking about American businesses coming home, we’re talking about wooing corporations based in other countries into America. Think of the economic benefits! More productivity, lower unemployment, higher wages, and all occurring within a tax system that allows you at least partly to choose whether to pay taxes! Buy it new, pay a tax, buy it used and don’t!

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.

TD

by Jonathan Garner of Publius Rendezvous

It has been interesting lately to observe just what the critics of the Fair Tax have to say. Lately, much of what has been said has centered around percentages. Clever as it may be to confuse people with cleverly worded assertions that tend to fool the average American when it comes to these issues. If anyone in the audience is similar to me, it takes focused attention lest my eyes glaze over at the thought of following someone’s lessons involving percentages, statistics and numbers in general.

Succinctly, what has been asserted that I have seen generally resembles something such as this: (http://www.jpfo.org/fairtax.htm)

Remember, even the proponents admit they’d need a 23 percent tax rate to fund the current size of the federal government. However, they are starting out their new “fair” tax system with highly deceptive language.

H.R. 25, Section 101(b)(1) states “FOR 2005- In the calendar year 2005, the rate of tax is 23 percent of the gross payments for the taxable property or service.” Note the phrase “of the gross payment.”

Here’s how it works: You buy a candy bar for a total price, including tax, of $1.30. One dollar of that price pays for the candy bar; $.30 goes to the federal government.

One dollar purchase + $.30 in tax sounds like 30 percent to you and me (and to every state that currently has a sales tax). But the “FairTaxers” don’t calculate it that way. They say: $1.30 total price. $.30 = 23 percent of $1.30, therefore the tax is 23 percent.

Many critics have pointed out that this is a deceptive way to calculate a sales tax. AFT rebuts the critics by saying (we paraphrase for simplicity), “If you made $1.30 in income and paid $.30 of it in tax, you’d call it a 23 percent tax rate.” The 23 percent figure is what AFT refers to as the “tax inclusive” rate.

But a sales tax is not an income tax, and when we see national sales tax advocates and uncritical journalists promoting the 23 percent figure without giving the underlying explanation, we can only think that some very thick wool is being pulled over people’s eyes.

But, as we shall see, there is yet again another major study that has been conducted that definitively illustrates the merit of the Fair Tax. As has been reported by The Fair Tax Blog (http://www.fairtaxblog.com/20061002/kotlikoff-study-23-fairtax-revenue-neutral/), Boston University Economics Professor Laurence Kotlikoff’s much-anticipated study of the necessary revenue-neutral rate for the FairTax has been published and released. Terry and I will refrain from reproducing the entire study, but peruse through the abstract below to see just how much the supporters already know!

As specified in Congressional bill H.R. 25/S. 25, the FairTax is a proposal to replace the federal personal income tax, corporate income tax, payroll (FICA) tax, capital gains, alternative minimum, self-employment, and estate and gifts taxes with a single-rate federal retail sales tax. The FairTax also provides a prebate to each household based on its demographic composition. The prebate is set to ensure that households pay no taxes net on spending up to the poverty level.

Bill Gale (2005) and the President’s Advisory Panel on Federal Tax Reform (2005) suggest that the effective (tax inclusive) tax rate needed to implement H.R. 25 is far higher than the proposed 23% rate. This study, which builds on Gale’s (2005) analysis, shows that a 23% rate is eminently feasible and suggests why Gale and the Tax Panel reached the opposite conclusion.

This paper begins by projecting the FairTax’s 2007 tax base net of its rebate. Next it calculates the tax rate needed to maintain the real levels of federal and state spending under the FairTax. It then determines if an effective rate of 23% would be sufficient to fund 2007 estimated spending or if not, the amount by which non-Social Security federal expenditures would need to be reduced. Finally, it shows that the FairTax imposes no additional real fiscal burdens on state and local government, notwithstanding the requirement that such governments pay the FairTax when they purchase goods and services.

Implementing the FairTax rate of 23% would produce $2,586 billion in federal tax revenues which is $358 billion more than the $2,228 billion in tax revenues generated by the taxes it repeals. Adjusting the base for the prebate and the administrative credit paid to businesses and states for collecting the tax results in a net tax base of $9,355 billion. In 2007, spending at current levels is projected to be $3,285 billion. Revenues from the FairTax at a 23% tax rate, plus other federal revenues, are estimated to yield $3,209 billion which is $76 billion less than current CBO spending projections for 2007. The $76 billion amounts to only 2.73% of non-Social Security spending ($2,177 - $2,101). This is a remarkably small adjustment when set against the more than 30% rise in the real value of these expenditures since 2000.

Ensuring real revenue neutrality at the federal level, given the net base of $9,355 billion, implies a rate of 23.82% on a tax-inclusive basis and 31.27% on a tax-exclusive basis. These and other calculations presented here ignore a) general equilibrium feedback (supply-side and demand-side) effects that could significantly raise the FairTax base (see, for example, Kotlikoff and Jokisch, 2005), b) the possibility that tax evasion would exceed the considerable amount automatically incorporated here via the use of NIPA data, which undercount consumption expenditures due to evasion under the current tax system, and c) the roughly $1 trillion real capital gain the federal government would secure on its outstanding nominal debt, were consumer prices to rise by the full amount of the FairTax.

The FairTax redistributes real purchasing power from state and local governments to their state and local income-tax taxpayers. It does so by reducing factor prices relative to consumer prices and, thereby, reducing the real value (measured at consumer prices) of state and local income tax payments, which are assessed on factor incomes (namely, factor supplies times factor prices).

Gale (2005) and the Tax Panel (2005) recognized this loss in real state and local government revenues in claiming that these governments need to be compensated for having to pay the FairTax. But what they apparently missed is that this loss to these governments is exactly offset by a gain to their taxpayers.

Were state and local governments to maintain their real income tax collections - the assumption made here - by increasing their tax rates appropriately, their taxpayers’ real tax burdens would remain unchanged and there would be no need for the federal government to compensate state and local governments for having to pay the FairTax on their purchases. The second is that H.R. 25 does not preclude state and local governments from levying their sales taxes on the FairTax-inclusive price of consumer goods and services. This produces significantly more revenue compared to levying their sales taxes on producer prices.

Moreover, Gale (2005) and the Tax Panel (2005) arrived at a higher tax rate because they did not estimate the FairTax rate, but instead estimated a sales tax of their own design which had a substantially narrower base.

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.

From BBC News,

A Turkish airliner flying from Tirana to Istanbul has been hijacked and flown to Brindisi in southern Italy, media in Turkey and Greece report.

It sent out an SOS twice in Greek airspace, and both Greece and Italy scrambled fighter jets to escort it before it landed in Brindisi.

The Turkish Airlines plane is carrying at least 107 passengers.

Unconfirmed reports say there are two hijackers and they are protesting about the Pope’s planned visit to Turkey.

According to Turkey’s private television channel NTV, the two hijackers, who oppose Pope Benedict’s visit scheduled for November, are ready to surrender.

A Greek defence official who speak to Reuters said the plane had entered Greek air space at 1758 (1458 GMT) and four Greek fighters took off to escort it.

The Italian air force in turn sent up two F-16s to intercept the plane and reportedly force it to land in Brindisi.