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About Jerry Bowyer

Columnist National Review Online and TechCentralStation.com, Author of The Bush Boom, Founder of Verity Forecasting, Chief Economist for Benchmark Financial Network.

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Jerry Bowyer

Author, Entrepreneur, Financial Writer, Talk Show Host, Speaker

Thursday, February 07, 2008

Okay, Fairtaxers is General Motors a hobby?

Here’s my rough and very partial list of questions which remain unanswered by the fairtax faction:

Since there is already some degree of cheating and complexity in presently existing sales taxes at the state level and in other countries, why would that problem not increase in a situation in which all our taxing is focused on sales, especially since a national sales tax would have much higher rates than our local sales taxes do?

How in the world do you expect to amend the constitution, which is extremely difficult to do, in order to promote a tax which shifts burden onto groups such as retailers, pubs and restaurants which have great grassroots contact and are geographically well distributed?

Related point, how do you think another well distributed interest group will respond when it becomes widely known that the fairtax would force churches to tax their sales of Bibles?

That’s right, you read correctly. I took your advice and made another visit to www.fairtax.org where I read this sentence tucked away toward the end of the section on not-for-profit companies:

“Also, the sale of Bibles by a church is taxable.”

Do you honestly think that you can skip over something like 1,000 years of legal wrangling about state taxation of churches without so much as a peep out of the churches? Good luck with that.

How is it fair to tax, not only a purchase, but a substantial portion of the interest cost associated with that purchase? That’s right, houses, cars, anything purchased on credit would tax a portion of the interest, not just the sales price.

While you ponder those, here’s another:

Is General Motors a hobby? You see, the fairtax exempts businesses from taxation associated with their business activity. Of course that creates all sorts of opportunities for avoidance. Can I declare the time I spend painting my house last fall a business and deduct the paint? Can I form a catering service and cater my own parties. The fairtaxers tied to close that loophole by saying that if your business doesn’t make money in at least two of the last three years, it would be classified as a hobby, and lose it’s exemption. GM has lost money for the last three years, therefore it is a hobby and would not be exempt under the fair tax. How about all the tech companies which ran losses for years before breaking even, Amazon, Yahoo, Google, etc. Hobby, hobby, hobby and hobby.

That’s right, just when you’re in the hungry years, startup phase of a rough business environment, the fairtax hands you a massive tax hike. How fair does that sound to you?

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Most Recent User Comments
ih2005
2/11/2008 2:27 AM
Gov. Huckabee's advocacy of the FairTax ( http://snipr.com/irsgone ) is the single most important policy position in this election. Research findings explain why: http://snipr.com/fairtaxslate
Fairtax
2/8/2008 12:24 AM
Hi Jerry, I read your article and I really need to ask, are you serious or was it done tung and cheek. Next time you at Fairtax.org looking for tuck away secrets of the Fairtax, LOL. Please be sure to check the embedded taxes which are currently in the cost of every Bible you buy today. Now and I am a Christian, but I did not know I server a King who loves me so much to bring across your Laugh Out Loud silly logic. In my 35 years of paying taxes, I have never once thought of deducting the cost of my own Bible. Really, it makes my ribs hurt to think of such thought. Now I guess a Pastor could justify deducting a Bibles, they are the tools of his trade. With the Fairtax in place, 22% of the cost of those Bibles are embedded tax which he pays today would be removed, making to cost of sending Bibles overseas 22% cheaper. New Free Bibles have a 30% tax rate under the Fairtax, which works out to $0.00 last time I checked LOL. Keep me posted, I can not wait for your next be scoop! I love You!
pbgiv
2/7/2008 3:10 PM
Also, a huge amount of US wealth, trillions, will be repatriated when it is no longer subject to Capital Gains, Death Tax, Income Tax, AMT, etc. etc... Tremendous US wealth that is currently benefitting others and NOT us!

Oh, and how about the business and jobs that will flood TO the US when companies are not taxed, free of payroll taxes and don't have to bother with any withholding? What major company WON'T move significant operations here? We may just even see a rebirth of manufacturing in the US!

Further, I'm thrilled that illegal aliens will not only be paying taxes, but be paying more than legal citizens! (Due to not receiving the prebate.)

The only reasons to not love the FairTax is being deceived about it, not understanding it, or having a vested interest in retention and perpetuation of some form of our current system.

Read a piece that gives BOTH sides of it - don't get a one-sided praise or attack; get the facts and truth: http://en.wikipedia.org/wiki/FairTax