Part 1:
I appreciate Mr. Lower’s topic, however I oppose the flat tax but for far different reasons.

Today, more than 140 of our trading partners have implemented VAT tax systems. The result is that international trade is NOT a level playing field for US Companies and that is what Candidate Romney is making reference to in his speeches.

A value added tax (VAT) is a form of consumption tax.

From the perspective of the buyer, it is a tax on the purchase price.

From that of the seller, it is a tax only on the "value added" to a product, material or service, from an accounting view, by the sellers stage in the end products manufacture or distribution.

The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes he had previously paid on the inputs.

The "value added" to a product by a business is the sale price charged to its customer, minus the cost of materials and other taxable inputs.

Part 2:
A VAT is like a sales tax in that ultimately only the end consumer is taxed. It differs from the sales tax in that, with the latter, the tax is collected and remitted to the government only once, at the point of purchase by the end consumer.

With the VAT, collections, remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products from another business.

Most US import tariffs have dropped tremendously in the last 40 years, but virtually all our trading partners have replaced their tariffs with VATs, reflecting taxes they place on their own goods AND on our exports to them.

The playing field is simply not level for the US because not only can foreign companies lower the commercial value of their commodities by withdrawing the tax liability when they export their commodities but the VAT tariff is added to US goods at the point of importation into foreign countries.

These variations create the potential for double taxation (where the VAT is taxed by the importing countries) and no taxation (where the VAT is not taxed by the exporting country).

For example, when the United States ships a $20,000 car to Germany, a 19 percent VAT is imposed at the border, or about $3,800. The delivered price rises to $23,800. The effect is the same as a tariff, which is why we call these VAT tariffs. VAT tariffs are legal under the WTO.

Mike, I appreciate your effort and thank you for stating facts. You do however need to consider that you are talking WAY over the heads of the electorate majority. George Wilson being a fine example.

As much as I personally would love to have it implemented, it will never happen in the United States. We live in a nation where anyone is allowed to vote in Presidential elections regardless that it isn't a constitutional right. We are living today with proof that if you hand out to those not willing to put in, they will be Democrat voters for life. We stand no chance of convincing these brainless, blood suckers that a consumption tax is in their best interest.

When you have the majority thinking the way George Wilson does and SERIOUSLY believing that government should be involved in our every bowel movement , it's game over. We are so close to having the majority suck off the minority and when we reach that tipping point, there will be no turning back.

Fair Tax? Sorry to say, never going to happen.

So what happens to the Social Security and Medicare taxes that all of us have already paid in? Your "flat tax" has zero merit, in that it punishes the poor because they pay a larger percentage of their income on consumption.

Total waste of time!!!

Not that the average person really understands the concept of the VAT tax, but just the threat by Romney of leveling the playing field and the South China Provences of Fujian & Guangdong ahave announced the implementing of VAT reforms that eventually will allow our products to be more competative both domestically and in China.

http://fairtaxgoofy.blogspot.com/

Yes, I know it's a blog, but it provides useful information as to what the "fairtax" is trying to sneak by the average person....

If we are interested in JOBs and keeping & expanding business in America the advantage of VAT is directly related to international Law where by the WTO allows exporting countries to reduce the invoice value of the commodity they ship out of their country by the accumulated value of the VAT tax but an exporter may not do likewise for sales tax.

The comments on this thread are bringing out the lack of education on the issue.

1. It is not a flat tax. The flat tax leaves in place the entire income tax structure, which will still be used for granting favors and trying to manipulate behavior.

2. It is far superior to a VAT. A VAT hides the majority of the tax burden in the price of the final product. Wherever implemented it has been used to raise taxes in stealth mode. Conversely, the Fair Tax makes the entire burden of government visible at point of sale. Exports are tax-free, making US products 22% more competitive in world markets.

3. BStein's comment above indicates that he is not aware that all products currently carry an average of 22% embedded tax, covering all of the income and other taxes the producers and distributors paid in making and delivering the products. Those embedded taxes will very rapidly be taken out of the products due to competitive pressure, offsetting the point-of-sale consumption tax. After the initial 6-months-to-a-year the resulting prices should be roughly the same.

4. As for "killing the economy", I would refer you to the Kotlikoff study of its potential impacts at http://www.fairtax.org/PDF/FairTax-NTJ-Final-042407.pdf, which predicts that "....the FairTax will precipitate a very major increase in the U.S. capital stock...prevent what would otherwise be a doubling to the highly regressive payroll tax..."

Mike,

What makes you think that in a market economy any corporation is going to lower prices on goods just because the items will have a reduced "embedded tax" ?
If all producers deem that is necessary to keep prices stagnant, they will stay stagnant.
Also you did not bring up my major sticking points.
1. What happens to payroll taxes already paid?
2. Medical expenses will go up precipidously.
3. States and municipalities land up getting the tax burden put on them, i.e. real estate and local sales taxes will go up greatly.
4. A constitutional amendment would need to be made so that the Federal Government would be able to tax states and municipalities, this isn't going to happen.

You like everyone else pushing this "fairtax" are trying to put one over on us all...

I have been watching and reading about the "FAIR TAX" for many years and would like to see it come as a way of life for us.

Those opposing it are the rich who know how to sneak under the radar with their games.

I understand that you are only taxed on "non-essential" products. That means food (for example) is not taxed.

Having a higher tax on items such as boats and cars (for example) still would be a savings if you compare it to your income tax held now. Those people buying 10 cars to store in their garage are the ones who will fight this tax but then again, they can afford it.

I now see those who oppose it and fully understand why. :)

The "FAIR TAX" is the best way to rebuild our econony and that which we owe as a nation.

Mike, I'm sorry your statement is misleading and speaks only to an export. Please recognize that for every export there is a comparable import elsewhere in the global marketplace we must compete in.
You stated that "exports are tax-free, making US products 22% more competitive in world markets". I’m sorry but you are missing the reality that while the export is reduced in value regardless of which tax exists, it’s what happens when imported into the foreign country. The imported commodity is subject to a VAT tariff which the WTO allows.
As a general rule, imported goods are liable to VAT and customs' duties at the point of arrival in the country. Revenue Customs will collect both the VAT and the duty before the goods will be released. VAT is charged on imports at the same rate that applies to the sale of similar goods in the state.
The foreign countries commodities are reduced by the VAT and US goods are subject to the VAT in that same country. That is known as a double tax.

Mike is great at polishing turds, but the Fair Tax still smells. There are too many problems with the "Fair Tax" which make it completely Unfair! For instance:

1. 47% of Americans don't pay income tax because they simply don't make enough money. They $0 discretionary income as they spend every dollar to survive. Under the FT model, they'd begin paying 27% on every dollar they make and spend.
2. The top 20% spend a fraction of what they make and as such, would pay a tax on a fraction of what they make. A person making $20M but spending $1M to survive would pay $270K in taxes (i.e. 1.35% or their income).
3. Everyone who has saved money and previously paid taxes on their savings (think elderly and those 35-60+) will pay tax again when they spend the money.
4. Everyone who purchases anything on credit (car, house, boat, braces, etc) will be borrowing money to pay tax whereas under the current system, they borrow today, earn tomorrow and pay tax tomorrow.
5. Currently there is a huge tax gap created by underreporting of business income. That will continue and likely increase under the "fair tax" as businesses will have additional incentives to underreport their sales in order to keep the federal & state sales taxes collect from their customers.
6. The multi-millionaires & billionaires who currently have unrecognized & untaxed gains will receive a pass -- i.e. not pay tax on their gains. And since they'll never spend their Mils & Bils, they'll never pay.

Mike, you're once again showing your bias and ignorance. The 47% aren't the bums and dead beats you claim they are. Many are elderly and have already paid their fair share. Many are hard working Americans who support this country through serving in the military or other low paying jobs but also pay other taxes besides income taxes.

In your fair tax model, the richest Americans become the true dead beats. The poor will part the highest effective tax rate while the richest will part the lowest. Out neither makes sense nor is it fair.

You make an eloquent argument but when a reasonable person looks at it, your fair tax is a scam, a regressive shifting of the tax burden, and is in fact a pile of garbage being sold the American public.

Here's Bruce Bartlett's take on the National Sales Tax aka as the "Fair Tax". I generally trust his judgement. Bartlett was one of Reagan's top economic advisors. http://taxprof.typepad.com/taxprof_blog/files/bartlett_fair_tax.pdf

Mike,
Please elaborate on your point “our exporters' goods carry BOTH the embedded tax from the US and the import VAT in the purchasing country".

You appear to be making my point for me.

When a foreign country which only has the "Value Added Tax" the VAT in lieu of a sales tax, is allowed by the World Trade Orginization, the WTO, to deduct the value of the VAT from their exporters invoices on exports how does that make US good competitive as you noted in an earlier statement.

I am convinced that while you might understand the basic concept of the Value Added Tax, that you simply do not appreciate how 140 foreign countries are able to use that tax structure to their advantage (against the US) in international trade to make their commodities cheaper than American goods resulting in the loss of jobs in the United States.

1) It is Socialist propoganda that the FT is unfair to the poor because it is not Progressive.IF poor people had to pay some tax, THAT would be fair - the REpublic cannot survive when 1/2 the people pay no tax, but have the right to vote.

2) The poor do not pay FT - They receive a bigger tax welfare check then they d today (in total RTC's tofay are $125M, while the FT's Prebate is almost $500B).
The Prebate grossly overpays the poor and will give many more "poor" a large NET tax check. This is substantiated with more details about the Prebate that are understandable only with deeper research (I have done that research and can explain them).

3) the Ft itself has a number of additional hidden taxes, over and above the 30% add-on sales tax (not 23%).

1) It is Socialist propaganda that it is unfair to tax the poor. Our Republic cannot survive when 1/2 the people pay no tax, yet they can vote.

2) the poor not only pay no FT, an enlarged class of "poor" receive even more tax welfare than they do today (i.e.RTC's -$125B, Prebate - $500B, even though a small portion is paid to the non-poor).The amount of this overpayment is grossly artifically exacerbated. I can explain by analysis of the Prebate.

3) The FT itself has a number of hidden taxes in addition to the 30% (not 23%) add-on sales tax; a) more State taxes as the States must pay FT, b) more federal tax as the fed must pay FT, c) more federal tax to pay for the FT's guaranteed SS COLA, d) more fed/State tax due to "cascading".

Re: Mike Lowry's comment # 4 of Oct 26;

In response to the valid criticism that the FT would destroy (our 70%-retail-sales-sensitive) economy you cite larry Kotlikoff's rosy "prediction" of great economic benefits.

With all due respect to economists, they can predict nothing that is anywhere near insurrable (John Maynard Keynes, no less told us that givt spending will grow an economy). The rosy claims of those paid by AFFT (Kotlikoff) are trusted or relied upon only by those who are naive.

Re: Jack S Oct 27

If you study the Prebate and its underlying tables and the materials underlying those tables, you will learn that the Prebate goes way beyond making the poor whole for any FT they would pay.

By everal means, the rebate artificially, grossly overpays any FT they might pay, resulting in a greatly exacerbated welfare check ($500B v today's $125B RTC's).
This may be fine with Marxists, but not for some of us.

Re: Jack S Oct 27

With all due respect, those of us who has spent a lot of time researching and analyzing the FT, believe Boortz's books to be "comic books". They are nothing but hge pies of hot air ans sales malarky. It would take several volumes to explain the falacy of each pijnt Boortz trie to make.

In the end, al that hot air cannot hide the FT's fatal flaws from diligent preofessional analysis. I am trying to post a 2 page Executive summary on this site.

Mike, your Oct 26 post demonstrates just how little you know about the Fairtax scheme. First, you don't really understand a VAT. A Vat is just the same as a sales tax except it is collected at the various stages of production in small chunks, whereas a retail sales tax is collected all at once at the retail cash register. Both collect exactly the same amount of revenue at the same rate. And that rate can be shown on the consumer receipt in both cases. The VAT, in use in over 140 nations world wide has domonstrated significantly lower evasion rates at the higher sales tax rate. This is due to the self policing nature of the collection process for a VAT. Check it out.

Second, you are guilty of supporting the long discredited Fairtax "free lunch" myth. Yes, Jorgenson found that taxes averaged 22% of business costs, but you don't seem to realize that 65% of those tax costs were employee income tax and payroll contributions. Unless you believe that your tax withholding amounts will all go to the employer for maximum cost reduction, then the best businesses can do is reduce costs by an average of 10%, and after adding the 30% sales tax, retail prices will rise by 17% on average. There is no free lunch!

Mike,

I invite you and the other commenters on this blog to join the conc=verstion on my Blog, Reforming our Tax System.

To ALL,

I invite you to move to the new blog, Reforming our Tax System

Hank, It is nice to hear from someone who actually understands what a VAT (Value Added Tax) is.
Every other industrial country in the world uses it so there must be some merit in this system and I am convinence it gives those countries products a signifiant advantage in foreign trade simply because the VAT is deducted from the Invoice Value when they export their commodities to the US.
Stephen, put a link to your blog here or tell us what catagory it is under.

Lee..."Every other industrial county in the world uses it" isn't a sound argument for VAT. If this is your logical argument, then you must support the following logical arguments...

Every other industrial country in the world...
1. Has government run socialized medicine
2. Spends less than 90 billion on its national defense

...it gives those counties a significant advantage.

You cannot cherry-pick one aspect from a country's society declare it's good for the USA without also embracing that country's ENTIRE societal values, tax code and policy-making.

To CLUBFV:

Your comment grossly understates the Prebates effect. It does not merely compensate the poor for any FT they pay. It goes much further and stealthily gives them greater cash welfare chcks that far exceed any FT hey might pay.

until I can learn how to link to it (or get it expanded to this Roswell Patch), please go to th Loganville-Grayson Patch to find Reforming our Tax System and start with my pdf 2 page Exec Summary.

Also at L-G is a discussion of the FT under a blog Fiscal Cliff where I explained to Michael Dirks moe details on exactly how FT accomplishes its stealth welfare expansion.

Mike, Lee, Stephen...I need answers quick, and I mean real quick. How much did you pay in sales tax last year? How much did you pay in income tax?

Obviously, I don't really care how much you paid, however, I bet you can determine fairly quickly how much you paid in income tax but have no idea as to how much you paid in sales taxes. Nobody does! That's one of the biggest flaws in the VAT and FairTax schemes...They're hidden taxes and that is a good reason not to support them.

The biggest reason that VAT & FairTax shouldn't be supported is that VAT and FairTax are only applied to consumption of goods and services. As such, those who consume their entire paycheck or worse, incur debt, solely to exist pay VAT or FairTax at or above the tax rate while those who are able to save, pay VAT or FairTax below the tax rate.

For the lucky few (Bill Gates, Warren Buffet, Mitt Romney, the Donald, and other million/billionaires), their tax rates would be virtually nil and yet, they reap all of the benefits of our society, infrastructure, military, etc. They become the proverbial "dead-beats". How ironic, millionaires and billionaires want to become dead-beats...the same people the Republican despise.

Re: Mike Lowry's comment of 9:01 on Feb 11

Mike says "the BEAUTY of the FT is that it maakes taxes transparent".

That BEAUTY turns into an ugly BEAST of an in-your-face 38-68% sales tax that will cause people to spit blood.

There are less incendiary ways to achieve transprency.

Stephen...Just because someone doesn't like regressive taxes such as VAT and the "Fair Tax" doesn't make them a "tax and spend", "soak the rich" socialist. Less labelling and name calling is needed if we're ever to make a move to fixing the budget and tax system.

FWIW...I do better than most and I'm willing to pay my fair share and I'm willing to pay more. If you were a CPA you understand that any sales tax is a regressive tax that impacts the bottom group more than the other groups. You also know that the bottom group pays taxes, just not every tax like the income tax. They pay plenty of taxes on every dollar they earn, and their effective tax rate can exceed the effective tax rate of Gates, Trump and others.

Another key aspect that you know is that the ultra-rich haven't paid taxes on the majority of their wealth and may never pay taxes on that wealth. Ever heard of unrealized capital gains? Yeah, thought you had. Ever heard of dynasty trusts? Yeah, thought you had. You know that the rhetoric about the over-taxed rich is BS and that effective tax rates on the ultra-rich isn't that high!

CPAs are supposed to have integrity...but per your post, you're no longer a CPA.

Stephen...Again, you're referring to me as someone who wants to "punish the rich" however that is not my position. My position is, and has always been, that everyone should pay their fair share. It's just that you and I have different interpretations as to what the fair share is.

You appear to define "fair share" in terms of total dollars paid in federal taxes. I prefer to define "fair share" in terms of percent of income paid. These are two vastly different concepts. The rich do pay more dollars in taxes but the poor and middle often pay a greater percentage of their income, a greater percentage of their discretionary income in taxes, and a greater percentage of their net worth in taxes.

You argue that the rich pay "the lion's share of all taxes" as evidence that the rich pay too much. However, you fail to point out that the rich also control virtually all of the discretionary income as well as most of the financial wealth in this country. If you compare the financial wealth and discretionary income percentages of the top 1% to the percentage of tax dollars paid by them, you'll see that the wealth and income percentages exceed the tax percentage. Do the comparison and you'll see that the rich are not overtaxed.

You argue that I'm in favor of wealth distribution, but that is incorrect. Wealth distribution is taking from one group to give to another. I haven't called for that. Instead, I've called for those who benefit most to pay the most.

In respect to wealth distribution, the greatest wealth distribution is Social Security and Medicare. These two programs take from the young and gives to the old. These programs are taxes which the working class pays on every dollar earned and yet, you give them zero credit for their contribution to these programs. The working class pays 7.65% of their earned income for these taxes, plus the additional employer portion that would otherwise be their wages. Combined, it could be argued that they're paying 15.3% of their gross income. This percentage would equate to 30%, 50%, or even 100%+ of their taxable income or discretionary income. With this tax alone, most of the poor and middle class are paying more than the rich.

Stephen...my comment regarding your "integrity" was based upon the fact that you are a financial professional. As a former CPA, you have a better than average understanding of the tax code and understand the concepts of dollars vs. percentages and income vs. discretionary income. And yet, you ignore the fundamental fact that percentage of discretionary income is the key tax metric. By doing so, you show your bias, but then again, so do I.

I just expect CPA's, past and present, to represent the facts and not use buzz words such as: socialism, marxism, enslave, handout dependency, class warfare and wealth distribution in an attempt to argue that the rich are overtaxed.

Stephen...with your condo analysis you appear to be saying that there should be an equal fee that all Americans should pay to be a citizen. This fe is to cover the"common costs". However, your condo CAM analysis is flaws in that you assume everyone has the same size condo and the same number of condos. They don't. As such your condo argument would actually call for the rich to pay more.

To expand on you condo scenario...taxes pay for the common good. One aspect of the common good is a strong and stable economy. In that respect taxes fund programs that insure the economy won't crash and if it does crash, that we recover. Taxes are a form of insurance and like all insurance, the greater the insured assets, the more you pay.

SS/Medicare...there is no current benefit to those that pay these taxes. All they receive is a promise that there may be benefits in the future...unless the Republicans successfully kill the programs or gut them. These taxes pay for the current common good of the current retirees/elderly. You lose this argument.

In not tying discretionary wealth to taxes but discretionary income. Businesses pay tax on their net income after their reasonable or not so reasonable costs to exist. People on the otherhand pay taxes on what they make less allowed deductions which often are less than their reasonable costs to exist.

I've just uploaded a PDF at the request of Stephen Eldridge as his computer was having difficulty getting it to load.

Stephen...You seem to be changing your position in your condo/tax analogy. First you stated that everyone should be billed equally. Now, you're saying that people should be billed based upon size and usage. Our tax system is based upon size and usage as in, the more you make, the more you pay and the more you make the more you've benefited and used the U.S. infrastructure.

Your perspective as to our country (which is a Constitutional Republic with a Democrat form of Government) is out of line with the thinking of Constitutional scholars and the American people. You state that the government is ONLY supposed to provide for our defense/ military and little else. However, you are wrong as there are very few limits as to the federal govt's power under the Constitution. But even so, the mere responsibility of defending the USA includes providing for a strong/sound economy since a strong economy pays for the military and will allow us defend ourselves.

For a supposedly educated individual who has had coursework in macro & micro economics, history, social sciences, along with accounting, business and law, your knowledge is extremely limited. The USA is not a socialist country. We're not Marxists. And we haven't diverged from the Constitution.

The Constitution is not an all-encompassing document. Instead, it is a framework and a guiding set of principles that our founders wrote. Just because something isn't included in the Constitution doesn't mean a right or a duty doesn't exist. The right or duty is implied and interpreted by the Congress, President and ultimately, the Supreme Court.

Getting back to taxes...As a former CPA, you know your comments regarding business vs. individual taxes is full of holes. You state that businesses should pay tax only on its net profits after deducting all expenses required to earn that income. However, businesses often expense items that aren't REQUIRED to generate income such as: corp jets, luxury offices, business vacation/retreats, and more. Businesses also use accelerated methods of expensing fixed assets and as such, expense them before generating income. This flies in the face of accounting 101.

You argue that individuals aren't entitled to deductions since their expenses don't generate income. However, that is wrong (again!). Individuals do incur expenses that allow them to earn income...A car is needed to get to work, can't go to work naked, many need child care, have to have a place to live to go to work, etc. These are the things that the standard deduction and personal exemption are supposed to be for. However, the standard deduction and personal exemption aren't sufficient to cover reasonable living expenses.

You concluded that my “rationale would lead to individuals paying tax on their salaries, with little or no deductions.” Once again, you’re wrong. My argument is that most individual are overtaxed in that the government doesn’t allow sufficient deductions to cover the reasonable costs of living and working in the US.

Frank,

I have replied to your 3 sets of comments some twice, but they seem to disppear.
I will have to talk to Support.

Stephen...You and I will never agree on much and I'll again point out some of the fallacies in your arguments:

1. Military spending/taxes - you assert that everyone should pay equally for national defense and benefits equally. And yet, much of our national defense dollars are spent overseas where 95-ish percent of Americans never travel. Much of our national defense dollars are spent safe-guarding assets and people engaged in international commerce. But your argument is that each individual should pay equally?
2. Obamacare - Really? The justices did rule that the Gov't can't force you to purchase insurance, but they did rule that the Gov't can implement a fee (a tax as declare by a conservative justice). We can have a lengthy debate on health insurance if you like.
3. I'm a Marxist? Get real! Just because someone has views to the left of your ultra-conservative dogma doesn't make them a Marxist.
4. Tax Deductions - you're mixing issues as they relate to tax deductions. You're correct that businesses and individual are entitled to all legally allowed tax deductions. That's not my point. My point is that not all legally allowed tax deductions should be legal. Likewise, not all expenses currently prohibited should be prohibited. For instance,you know that most corp jets are very loosely affiliated with a true business purpose, yet fully deductible. You know that individuals incur legitimate expenses to earn income which are denied.

Stephen...You're ultra-conservative talking-point idiocy was grossly apparent in your closing reply. Specifically, you refer to 50% of people who pay no income taxes but receive welfare checks.

On these points, you're WRONG. Roughly 47% of people pay no income tax but do in fact pay taxes...sales, state income, gasoline, and payroll taxes. Many of these people are retirees who have already paid taxes and are living on their retirement savings. The majority of the rest are the working poor who simply don't make enough money to survive let alone to pay federal income taxes.

Stephen…You consider my views very far left and I consider your views extremely far right. You consider yourself a Constitutionalist just as I consider myself a Constitutionalist. We have different interpretations of the Constitution. Having ultra-conservative views doesn’t mean you’re any more correct than myself or others.

You and other attorneys are entitled to your view of Obamacare and Chief Justice Robert’s opinion. However, Roberts is a Justice of the Supreme Court and his opinion trumps yours. Many attorneys that believe that the decision was accurate and that the dissenting justices – Scalia, Thomas, and Alito – did so for political or ideological reasons.

Taxes...Stephen, I have extensive tax knowledge as well as business knowledge. I handle mergers & acquisitions and business planning for high net worth individuals. Many of my clients have corporate jets and most use the planes for business purposes but mostly for pleasure. There is no “liberal agenda” but merely informed personal observation.

The poor and taxes…Again, you’re bashing of the working poor and seniors living on retirement income is unbelievable. The working poor pay taxes, just not Fed Inc Tax. Seniors living on their savings have of already paid their fair share. You declare that they contribute nothing and yet, the working poor are paying your SS and Medicare benefits. Nice!

If you're drawing SS & Medicare, you're a hypocrite and a Socialist.

Let's leave the rhetoric behind and look at financial and tax facts of the working poor.

Consider a married two-wage earner couple with 2 young children and combined gross wages of $50K. This family pays $3,825 of FICA tax, but receives zero current benefit. This family has living expenses and pays $12K for shelter, $8K for food, $10K for childcare, $5K for health insurance, $5K for gas, $1K for car insurance, and $5K for car pymt. In total, they have to spend $46,000 to live/work plus the $3,825 of FICA tax for a total of $49,825. As such they're left with $175 for all other expenses and income taxes. Federal income tax will be $569 so they're now in the hole by $394.

My argument is that people should pay taxes based upon reasonable discretionary income. In this scenario, their discretionary income was $175 and yet they are paying income tax of $569. That's an effective tax rate of 325% not to mention FICA taxes; include FICA and the effective tax rate becomes 2511%.

There you go again Comrade Marx, you want people to pay taxes based upon their NEEEDS with the balance being paid by those with additional MEANS.

Your view is that the Constitution guarantees OUTCOMES while we believe that it guarantees FREEDOM TO FLY not OUTCOMES., Everyone must pay his fair share of the maintenence and we are all free to fly as far and high as ur investments, energies, talents etc take us. It is incomplrehensible to me that you consider yourself a Constitutinalist while you believe in a outcome based approach. Forfive me Frank, but I believe that you delude yourself in order to clothe your Marxist views in Constitutinal-sounding words.

The fact your guy pays SS and gets no current benefits (he does - disabiliity insurance coversage) he merely "pre-pays" for his eventual benefit its somewhat like life or LTC insurance.