Letter to the Editor: We need a 10% “Tithe” Tax!

This letter to the editor is in response to Sam Graves’s 4/15 column, “It’s time to abolish the IRS.”

“Abolishing the IRS” is a deceptive emotional appeal – AND it is NOT really “abolished” –see below.

The Fair Tax® (FT) is a Progressive Scam – we need a 10% “Tithe” Tax!

I am a retired lifetime tax consulting professional (JD, LLM in Taxation, CPA, co-author of a 3 volume tax treatise, lecturer), with no financial stake in ANY tax system. This only a brief summary – for supporting details, call Stephen C. Eldridge tel. 423-532-7337. Website: http://sceldridge.wix.com/sceldridge

FT trumpets that it is MORE Progressive (more welfare) – see http://bit.ly/1uym1pB

Of prime importance, the Prebate is NOT a real refund of FT paid, as it appears to be. It is a $600B NEW ENTITLEMENT, which would have all Americans receiving a substantial monthly federal check – a very bad idea for those of us who are not Socialists. It is financially and politically unwise to create yet another huge entitlement that will only increase in the future.

FT (Prebate) would have the poor make no contribution to the federal budget, pay nothing even for their personal SS/Medicare benefits, AND give them a large tax welfare check. FT (Prebate) extends tax welfare to the non-working poor – and also takes the next Progressive Cloward-Piven step towards giving SS/Medicare to all regardless of work, by removing the tax “penalty” for reporting SS Wages, thereby “inviting” the fraudulent reporting of SS Wages (as also noted by other authors).

The Prebate is apparently calculated to merely repay the poor for any FT they pay, but actually would pay them far MORE than any FT they might pay, by “assuming” the poor spend more than the underlying HHS Poverty Guidelines and also by “assuming” they will pay FT on all of their purchases, (but they WON’T) – see http://bit.ly/1xBkWLZ (1/21/15)

Some FT’ers today still market the original FT lie that we would get a large raise from the elimination of the Income Tax AND with FT, prices would remain the same as today’s – but that just cannot be true. FT is merely supposed to change the method of paying the same total dollars of tax we pay today, so that if you get a big raise, prices must go up by the same total dollar amount (except for a minor amount for savings in compliance costs) . Retail prices would rise by nearly the full 30%. Even the AFFT, and an economist it engaged, admits that prices would rise substantially, but prices would rise even higher than they admit – see http://bit.ly/1ELKVqb

FT results in a 40-70% in-your-face sales tax that would spark a taxpayer revolt destroying our retail-sales-sensitive economy. That 40% is the sum of 30% (not 23%) FT, plus (e.g.) 10% S/L sales tax.

That 70% is the increased rate needed at a sample 30% FT evasion rate (the FT incredibly assumes zero evasion, zero intentional reduction in spending and zero migration from new to used goods).

On top of that 40-70% tax, FT also hides another appx. 15+% in taxes (but FT’ers deceptively say “the FT is fully transparent – just look at your receipt and you will see all of the FT you will pay”). 1) FT’s 30% rate is really 42+%; the 12+% is hidden by having fed + S/L govts pay FT (which is likely unconstitutional) – ultimately, they must get that money from you. 2) The fed budget will rise for a) higher SS benefits for large SS & federal pension COLA’s caused by FT’s nearly 30% price increase, and for b) fraudulent new SS benefits “invited” by FT’s removal of the “tax penalty” for reporting SS Wages (as noted by other independent authors ). Used property is advertised as exempt from FT, but that may be a cruel hoax, because of the practical difficulty of establishing that the buyer has met the requirements that FT was paid AND that none of 3 listed credits against the FT were claimed.

FT’s new IRS (i.e., STAA) may well be far more invasive than today’s IRS – the buyer is liable to pay FT and receive/show a receipt – STAA may well audit consumers – see Sec 101(d). Also we may well have to file an “Annual FT Summary”. See Myth that the FT “Abolishes the IRS” at http://bit.ly/1xqIOTQ

As also noted by Cato Institute (see http://bit.ly/1vNxnq3 ), FT leaves us more vulnerable to winding up with both a NEW Income Tax and FT. Congress would surely repeal FT’s laughable Sunset Clause and (with the 16th Amendment surely still firmly in place)would use the excuse of the large revenue shortfall from evasion/avoidance, to enact a new Income Tax which I believe is Congress’ true ultimate objective – i.e., to be able to grab even more of our money to redistribute to those who will vote for them and contribute to their campaigns.

Seniors would start to pay for SS/Medicare again and some would pay a 2nd-3rd tax on their earnings. Many middle class seniors would pay more FT than they would have paid in Income Tax and many would lose purchasing power because of 1) the nearly 30% price increase, and 2) the higher S/L & federal taxes required because they must pay FT and can only get those funds from us, and 3) higher federal taxes due to nearly 30% higher SS & federal pension COLA’s and fraudulent SS benefits.

FT promises grand economic benefits which are all entirely unpredictable – mere Hype & Change. FT employs marketing hype and hyperbole, making countless undeliverable claims.

We need a Flat Income Tax; No Deductions, No Exemptions, No Credits and a 10% rate, with business income taxed to shareholders on a very simple basis (i.e., no corporate income tax) – See H.R. 1040 (which has been included in Paul Ryan’s new budget), but with changes as noted here – IRS is neutered, 1 page tax filing, everyone pays, more evolutionary. Let your representatives in Congress know that this is what you want. See http:// bit.ly/1nYMxI6 OR see http://media.wix.com/ugd/acdb03_15f02bfdf41f4c078fbada6dfd57eb5b.docx?dn=%223%20Flat%20Tax%20Plans%207-22-14.docx%22