Posted: 21 May 2008 12:50 pm
Post Subject: Re: Go to your website...Rebutting Bartlett Read Article
Karen, you wrote:
As I suspected, you have no real answer to Bruce Bartlett's arguments, except to say he's wrong.
Which of Bartlett’s arguments have not been rebutted sufficiently. Some quick research will show that it has been widely disproved. You can begin by going to the Wikipedia entry for Bartlett under “Current Work”. I will make a quick list of the first three and do as many as you want in future posts.
1. The FairTax was allegedly designed by Scientologists. This is utter nonsense. One of the original proponents of what would become the FairTax was Leo Linbeck. He recently wrote: The FairTax was developed many years ago, totally independently of any other proposal, group or movement. It is a product of more than $20 million of advanced economic research, as well as detailed conversations with citizens as to their preferences defining the best possible national tax system. Many groups and individuals have agitated to replace the deeply flawed income tax system, including, apparently, the Church of Scientology. As a founder of Americans For Fair Taxation, I can state categorically, however, that Scientology played no role in the founding, research or crafting of the legislation giving expression to the FairTax.
2. Bartlett’s second point was one of the first instances where someone made the claim that FairTax.org was being deceitful by stating the inclusive 23% rate instead of the 30% rate. That took me and many other FairTaxers by surprise because most of us knew the difference and never imagined someone could think the way we used it deceptive. Throughout the FairTax documentation, you will see the 30% number used when discussing how much will be added to the pretax price of any individual item and the 23% number used when discussing the total liability of an individual. A one-dollar widget will ring up as $1.30 at the register, but the inclusive 23% is the only way that makes sense to talk about a person’s total tax liability. If you have $1000 to spend and spend it all on new goods and services, you will pay $230 (23%) in taxes as you buy $770 worth of goods. Since the Bartlett hit piece, I’ve seen countless people say that when you spend $1000, you’ll pay $300 in taxes. To do so would mean you would have had to start with $1300. This shows not deceit on the part of FairTax.org, but a misunderstanding of a relatively simple fact of mathematics.
3. His next point is that if the Feds buy a $1,000,000 tank, the manufacturer will add $300,000 FairTax to the cost of the tank. In part he is correct on this point. What he doesn’t tell you but knows full well is when we buy tanks under today’s system, there is enough built into the cost of the tank to pay every employee’s payroll and income taxes, and the corporation's corporate taxes, and the corporation’s costs of complying with the current system. In the first two instances, the Federal treasury is already doing exactly what Mr. Bartlett claims will be a new phenomenon under the FairTax. The money paid to the corporation and then collected back as payroll taxes and corporate taxes are already an accounting trick—a necessary one to accurately account for money spent and collected. Might federal spending go up some as a result of the migration to the FairTax? Very likely. But certainly not by the full 30% he disingenuously claims.
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