Saturday, June 20, 2009

Once upon a time there....

Was this girl who had four boyfriends.

She loved the 4th boyfriend the most and adorned him with rich robes and treated him to the finest ofdelicacies. She gave him nothing but the very best.

She also loved the 3rd boyfriend very much and was always showing him off to neighboring kingdoms. However, she feared that one day he would leave her for another.

She also loved her 2nd boyfriend. He was her confidant and was always kind, considerate and patient with her. Whenever this girl faced a problem, she could confide in him, and he would help her get through the difficult times.

The girls 1st boyfriend was a very loyal partner and had made great contributions in maintaining her wealth and kingdom. However, she did not love the first boyfriend. Although he loved her deeply, she hardly took notice of him!

One day, the girl fell ill and she knew her time was short. She thought of her luxurious life and wondered, I now have four boyfriends with me, but when I die, I'll be all alone."

Thus, she asked the 4th boyfriend, "I loved you the most, endowed you with the finest clothing and showered great care over you. Now that I'm dying, will you follow me and keep me company?"

"No way!", replied the 4th boyfriend, and he walked away without another word.

His answer cut like a sharp knife right into her heart.

The sad girl then asked the 3rd boyfriend, "I loved you all my life. Now that I'm dying, will you follow me and keep me company?"

"No!", replied the 3rd boyfriend. "Life is too good! When you die, I'm going to marry someone else!"

Her heart sank and turned cold.

She then asked the 2nd boyfriend, "I have always turned to you for help and you've always been there for me. When I die, will you follow me and keep me company?"

"I'm sorry, I can't help you out this time!", replied the 2nd boyfriend. "At the very most, I can only walk with you to your grave."

His answer struck her like a bolt of lightning, and the girl was devastated.

Then a voice called out: "I'll go with you. I'll follow you no matter where you go."

The girl looked up, and there was her first boyfriend. He was very skinny as he suffered from malnutrition and neglect.

Greatly grieved, the girl said, "I should have taken much better care of you when I had the chance!"

In truth, you have 4 boyfriend's in your life:

Your 4th boyfriend is your body. No matter how much time and effort you lavish in making it look good, it will leave you when you die.

Your 3rd boyfriend is your possessions, status and wealth. When you die, it will all go to others.

Your 2nd boyfriend is your family and friends. No matter how much they have been there for you, the furthest they can stay by you is up to the grave.

And your 1st boyfriend is your Soul. Often neglected in pursuit of wealth, power and pleasures of the world.

However, your Soul is the only thing that will follow you where ever you go. Cultivate, strengthen and cherish it now, for it is the only part of you that will follow you to the throne of God and continue with you throughout Eternity.

FairTax in A Minute – What happens to tax-free bonds?

Tax-free bonds are still tax free, though they are now directly competitive with corporate bonds. Under the FairTax, equities, treasuries, bonds, and other investments are all tax free. There is a one-time windfall in non-callable instruments, such as corporate bonds; this windfall also has a positive effect on callable instruments with some time remaining to the call date, including treasuries.

Friday, June 19, 2009

FairTax in A Minute – What happens to the stock market, mutual funds, and retirement funds?

Investors prosper greatly under this plan, since corporations face lower operating costs and individuals have more money to save and invest. The reform significantly enhances the retirement savings and/or retItalicirement spending power of most Americans. The purchase of stocks is considered a purchase for investment purposes and not personal consumption so they are purchased tax free. The service fees charged by the broker, however, are personal consumption and therefore subject to tax.

Thursday, June 18, 2009

Hints from the Internet


Use your hair conditioner to shave your legs. It's cheaper than shaving cream and leaves your legs really smooth. It's also a great way to use up the conditioner you bought but didn't like when you tried it in your hair.
FairTax in A Minute – What happens to interest rates?

First, interest rates drop quickly by approximately one-quarter. Interest rates include compensation to the lender for the tax that they must pay on interest you pay them. That is why taxable bonds bear a higher interest rate than tax-exempt bonds. When the tax on interest is removed, interest rates will drop toward today’s tax-exempt rate.

Second, under the current system, savings and investments are taxed. Under the FairTax, savings and investments are not taxed at all. As Americans save more money, the pool of funds in lending institutions grows. When you add to this the flood of capital currently trapped offshore, we realize a huge increase in the pool of capital, thereby causing the cost of borrowing funds to drop.

Wednesday, June 17, 2009

How Observant Are You?

FairTax in A Minute – What economic changes come at the retail level with the FairTax?

Our baby boom generation has been trained to spend money before inflation eats it up or savings is taxed away. This group, for good or evil, will likely spend their initial pay raise. Others will recognize the advantages of savings and investment. There will be a whole new round of home refinancings. There will likely be a lot of interest in the actual cost of the federal government when consumers see their most recent contribution at the bottom of each retail receipt.

Since the FairTax plan is revenue neutral, the same amount of resources is extracted from the economy as is extracted under current law. These funds are, however, extracted in a less economically damaging way. Every known economic projection shows the economy doing better, often much better, under the FairTax.

Because the economy grows, is more efficient and more productive, that means investment, wages, and consumption are higher than they are under the income tax.

Tuesday, June 16, 2009

Picture of a Perfect Man

Did you really think there was one?????

Note from Kitten: I joke...I really do love men, but I just couldn't resist!
FairTax in A Minute – What do we experience in the transition from the income tax to the FairTax?

Everyone will have to think about taxes in a different way. Income -- what we earn -- no longer has to be documented, measured, and tracked for tax purposes. The only relevant measure of our tax liability is the amount we choose to spend on final, discretionary consumption. Tax-related issues are suddenly a lot simpler and more straightforward than they used to be. The aggravation and anxiety associated with “April 15th ” disappears forever after passage of the FairTax. The FairTax is not new -- most Americans come into contact with sales taxes daily, since 45 states currently use them to collect state revenues. It is easier to switch from an income tax to the FairTax system than it is to switch from gallons to liters, or from feet to meters! Of course, those who depend on the structure and complexity of our current system (e.g., tax lobbyists, tax preparers, and tax shelter promoters) will have to find more productive economic pursuits. However, everyone will have enough advance notice to adjust to the new system.

Job creation booms. Residential real estate booms. Financial services boom. Exports boom. Retail prospers. Farming and ranching prosper. Churches and charities prosper. Civil liberties are enhanced. In short, it is difficult to imagine the far-reaching, positive effects of this change. Though this tax policy is exactly what our Founding Fathers counseled us to do with the Federalist Papers and the Constitution.

Monday, June 15, 2009

FairTax in A Minute – What about value-added taxes (VATs), like they have in Europe and Canada? Are they not consumption taxes?

While VATs are also consumption taxes, and better than income taxes, the FairTax is not a VAT. A VAT works very differently. It taxes every stage of production. It is much more complex and is typically hidden from the retail consumer. Second, in industrialized countries that have a VAT, it coexists with high-rate income tax, payroll, and many other taxes that, in some instances, have led to marginal tax rates as high as 70 percent. Third, all other industrialized countries, except Australia and Japan, have a much larger tax burden than the U.S., which requires higher rates and makes tax administration much more difficult. Lastly, a VAT is a lobbyist’s dream, allowing them to install their loopholes unbeknownst to the purchaser. A retail sales tax, in contrast, is a lobbyist’s nightmare, applied as it is under the bright lights of the retail counter.

FairTax in A Minute – Is there any provision in the FairTax bill to prevent both an income tax and a sales tax?

The short answer is that there is no provision in the FairTax bill (HR 25) that would prevent having a national sales tax and the income tax. However, the FairTax legislation does three things that effectively dismantle the income tax: (1) it abolishes the IRS, (2) it repeals all statutory language having to do with taxing income and payroll (i.e., the Internal Revenue Code), and (3) it eliminates the filing of annual income tax returns to the federal government for over 140 million Americans. The 16th Amendment does not “require” an income tax, it only “allows” one, and the FairTax will have broken that egg in a million pieces. It would be extremely difficult to put that egg “back together again.” Once the FairTax is enacted it would be an extremely daunting task for Congress to make people start filing income tax returns again. There would be a public uproar. Once the American public has experienced the freedom from filing income tax returns it’s hard to imagine them tolerating going back.

Furthermore, the sponsors of the FairTax are totally dedicated to the permanent repeal of the income tax. No current supporter of the FairTax would support the FairTax unless the entire income tax is repealed. There is a separate bill, HJR 16, which repeals the 16th Amendment to the Constitution but it must go through a different adoption process than HR 25. HJR 16 has to be passed by a two-thirds vote of members of both the House and the Senate and be approved (or ratified) by three-fourths of state legislatures (38). We are currently laying the organizational groundwork for this push and have already started the educational process at the state level.

Finally, the reality is that we already have both an income and a type of sales tax today. All of our U.S. produced goods and services are burdened with an “embedded” tax due to the cascading of income and payroll taxes paid by U.S. employers to the U.S. Treasury at every step of production. Of course, these costs are passed on to the ultimate payer, the customer. It’s fair to call these embedded taxes a “sales tax” because we pay it every time we buy any goods or services -- we just don’t see it. The FairTax eliminates these embedded taxes, resulting in a single-rate national sales tax visible to all.

Sunday, June 14, 2009

A burglar broke into a house one night.

He shined his flashlight around, looking for valuables, and when he picked up a CD player to place in his sack, a strange, disembodied voice echoed from the dark saying, "Jesus is watching you."

He nearly jumped out of his skin, clicked his flashlight out, and froze. When he heard nothing more after a bit, he shook his head, promised himself a vacation after the next big score, then clicked the light on and began searching for more valuables.

Just as he pulled the stereo out so he could disconnect the wires, clear as a bell he heard, "Jesus is watching you."

Freaked out, he shone his light around frantically, looking for the source of the voice. Finally, in the corner of the room, his flashlight beam came to rest on a parrot.

“Did you say that?" He hissed at the parrot.

“Yep," the parrot confessed, then squawked, "I'm just trying to warn you."

The burglar relaxed. "Warn me, huh? Who in the world are you?"

"Moses," replied the bird.

"Moses?" the burglar laughed. "What kind of people would name a bird Moses?"
"The kind of people that would name a Rottweiler Jesus."

FairTax in A Minute – I know the FairTax rate is 23 percent when compared to current income and Social Security rate quotes. What is the rate of the sales tax at the retail counter?

30 percent. This issue is often confusing, so we explain more here. When income tax rates are quoted, economists call that a tax-inclusive quote: “I paid 23 percent last year.” For every $100 earned, $23 went to Uncle Sam. Or, “I had to make $130 to have $100 to spend.” That’s a 23-percent tax-inclusive rate.

We choose to compare the FairTax to income taxes, quoting the rate the same way, because the FairTax replaces such taxes. That rate is 23 percent. Sales taxes, on the other hand, are generally quoted tax exclusive: “I bought a $77 shirt and had to pay that same $23 in sales tax." This is a 30-percent sales tax. Or, “I spent a dollar, 77¢ for the product and 23¢ in tax.” This rate, when programmed into a point-of-purchase terminal, is 30 percent.

Note that no matter which way it is quoted, the amount of tax is the same. Under an income tax rate of 23 percent, you have to earn $130 to spend $100. Spend that same $100 under a sales tax, you pay that same tax of $30, and the rate is quoted as 30 percent.

Perhaps the biggest difference between the two is that under the income tax, controlling the amount of tax you pay is a complex nightmare.

Under the FairTax, you may simply choose not to spend, or to spend less.

FairTax in A Minute – Since business purchases are not taxable, how does the FairTax keep individuals from pretending to have a business so they can buy things tax free?

The FairTax has several features that make it difficult and very risky for persons to have a scam business in order to purchase items tax free. First, in order for any person to purchase items tax free for business purposes, the business has to be a registered seller and possess a registered seller certificate issued by the state sales tax authority. Registered sellers are expected to file monthly or quarterly sales tax returns with the state (depending on sales volume). The certificate enables the business to purchase tax free from wholesale vendors, but the vendor must retain a copy of the registration certificate to justify not having collected tax on the sale. When a business purchases items for business use from a retail vendor, they have to pay the tax on the purchase and take a credit against the tax due on their monthly sales tax return. They must keep invoices/receipts to document what they purchased and the amount of the purchase. They might also make note of the purpose of the purchase on the invoice.

Also, as registered sellers, they are subject to the possibility of being audited by the state. During such an audit, they will have to produce the invoices for all the “business purchases” that they did not pay sales tax on and will have to be able to show that they were bona fide business expenses. If they cannot prove this, then they will have to pay the taxes that should have been paid when the items were purchased, plus interest and penalties. The probability of being audited will be much greater than it is under the current system with its over 140 million tax filers. Under the FairTax, there will be less than 20 million businesses that will be filing sales tax returns and thus subject to the possibility of being audited. Thus, the probability of tax cheats getting caught will be much greater than it is today, making tax evasion riskier than it is today. Additionally, while the FairTax has much stronger taxpayer rights than does the current tax system, the FairTax legislation provides for a number of fines and penalties for noncompliance. It also authorizes a mechanism for reporting tax cheats and obtaining a reward. An example would be 1-800-TAX-CHET.

Another potential scam would be to have a “fake” family business in order to buy things for family members tax free. The FairTax has a specific provision to prevent this. Although it does not prohibit businesses from providing taxable property or services as gifts, prizes, rewards, or as remuneration for employment, the gift, reward, etc. is considered to be the conversion of property or services from business use to personal use and is therefore taxable. Likewise, there is a similar provision to prevent abuse of employee discounts. Under the FairTax, employer-provided employee discounts over 20 percent are taxable. The term “employee discount” means an employer’s offer of taxable property or services for sale to its employees or their families for less than the offer of such taxable property or services to the general public. If the employee discount amount exceeds 20 percent of the price to the general public, then the sale of such taxable property or services by the employer to the employee is considered the conversion of property or services to personal use and is subject to tax. The taxable amount is the amount by which the discount exceeds 20 percent of the price to the general public.