Fair Tax

I kind of fading from. You're a throwback well I'd like to make them feel kind of like out of the proud of the topography -- that -- of the deal the the current tax system we have in this country I think everybody knows is corrupted by too many pages too many loopholes too much complexity. Taxes should be very simple thing. You need it should happen automatically I think the only ones who disagree with you quite frankly the accountants gals love Bob -- lawyers to have to do a lot of litigation tax lawyers and accountants and everybody else just pulls a hero which is while the way -- And you just say c'mon this is ridiculous so this movement is out there called fair tax which is based I think on -- sales tax and very Hinckley runs out of the Massachusetts chapter. All of the national movement are welcome to WRQ thanks for being here. No Killian and Mike on -- ago. On their Cox tried again thank style all that's in her affect our effort is -- fair tax is. Has been around for a few years it's based on -- 23%. Sales tax that the concept.

Exactly it's been around fourteen years started guy in Texas after lengthy research by a bunch of businessmen are really Fed up with. You know what is a very cumbersome -- Tory tax code which is you know -- this crippling the American growth engine are set that up a little bit what exactly is the problem. Well the problem is. From the point of view of you know on American advocate it would take confidence in myself -- into growth of America I'm into the American family. You know being able to live out their dreams. As our ancestors all have you know have come over here. What's happened is you know we have World War II era -- fiscal Tory tax code what does that mean when you say confessed to are well. When I get my check every week the government actually gets it first in the confiscate what they want. -- they send me the ballots right and it's time out worms right. No one gets a check -- an -- government showing Iraq 28% to 34% of whatever the percentages of the moment I had any idea -- else it was developed and will work to to fund World War II. And it was seen as a temporary tax code. By Milton Friedman and others that actually develop that as a temporary fix to funneled to -- and ideas are gonna go back to you know more normalized tax code which would have -- what what what was what was before world fortunately you at the end of the year you'd. You bureau to check -- attack. Well what -- like this already -- your system got the old system was a lot better be -- the visible. Act of writing out the check when you look and say this government is costing me how much you have most of the relative ease visible. In theoretically painless we'll take a little -- tweak you don't even notice it by the end of the year. -- it's that -- it's a slight of hand if you think about the average American says that he only fifty grand a year will they really don't -- you -- probably thirty something show and so but you get used that -- smaller and you forget about it but if you do you have the -- check every week to the government I think people would be outraged.

Absolutely and and I think yes sales tax works the same way because you're buying something that costs under boxing you've got to add on. Okay so into your system now costs 123 dollars not the hundred dollar thing under fair tax. A lot of people find that appalling the idea that there -- be such a huge sales tax and they think that would hinder their ability to buy and would cause them to buy fewer things.

Well couple things on that regard first of all. Because you have your whole paycheck at the end we don't know anyone -- would like to get the whole paycheck in the week especially you know middle class America where the paycheck is you know. You often check to check so getting your whole second in deciding. How to consume in deciding -- pay taxes. Is a big plus for share. This 23% sales tax federal sales tax would replace. What taxes that our listeners. And Todd and I knew and everybody else a pain right now here's -- it's really really good. It replaces all taxes so inheritance taxes so the American farmer whose constant pressure because when guys are going up in when they to a transition from generation generation to pay tax on that. In very often lose the foreign. It all fight it taxes so the middle class which gets hammered with Mike withholding taxes to 250%. That all goes away. All in years where it it's really good I think the Obama administration -- take a look at this because. This tax code is -- jobs engine and the reason it's a jobs engine is because this eliminates the corporate income tax. And I think for too long we've been bashing corporations in America but the reality is. If we beat up an American corporation is a multinational waiting to step it sells those and it's so right now what we do in America as we tax everything that we export. But everyone else it's importing to America all these countries have wised up in the untaxed everything they import to us. And so -- you heard Obama talk about yesterday with Geithner about how to make you know a little more level playing field. But the reality is when you get rid of corporate tax to get rid of employment taxes you get rid of income taxes. Which you'll freeze up the American family to have a lot more time.

And this is then based on only on consumption and so you know my wife and I Don on ID I'm paying any taxes until we go out and buy something yes -- be a 23. Percent add on to that and that's how the federal government. Would find its operation yet Barry imagine that this of this this idea got its -- is Genesis Donna Texas with some businessmen is this what Texas has for a state. Tax policy over these people Texas businessmen who went to their congressional delegation and said -- really should do this on the national.

Resolve national all of that this was in its seen that our tax code is crippling America. Because -- need -- basic numbers six billion hours a year Americans spent comply. The average. A small business in America which makes 90% of business you know spends 382 dollars a year complying to the tax code for every hundred dollars million. -- things like. That are really a governor on the on the jobs growth engine if you think back in history. Which is a great -- intent for everyone. Immigrants came over year at the turn of the century had a lot of opportunity as America was growing and they could start businesses you know Irish Jewish you know he'll pick. A nation McCain here and succeeded. They didn't have the cumbersome. Like on hiring someone now I have to get in the business of filing compliance all things that really slows down innovation.

Larry Hinckley is well -- WRK a state director for Americans are fair taxation. And the proposal is a getting rid of all the federal taxes right that we pay currently yes and it just converting into a simple sales tax. What are they. The pickups in terms of money that may not be collected currently. Under the the tax system we have because of black markets are other ways that people avoid taxation is that significant he gets mentioned a lot.

Huge it's estimated up to 40% of our economy is the cash economy. And if you think about it you know first of all there's a proven a number called the tax gap the average American pays little -- thousand -- a year demand. American family in taxes. That is an overcame -- 2000 dollars because of non compliance people that don't pay taxes so you know right away there's a tax break. But secondly. The cash economy. Is hurting every part. Of American culture -- unions for example unions are competing against cash labor. These are mean how many times have you heard you know -- floor for just gaining captioning. A lot of folks operate in the cash economy and you don't like it or not they're required to pay taxes but they don't which just puts a burden on the -- you captions that he EU eliminated that dishonesty and capture -- blast revenue because everybody has to consume a lot of -- of what do you do about us from Massachusetts without sales tax we claim we have a progressive sales tax because we exempt food yeah we exempt clothing was the basic necessities are exempted at least to a certain extent. Do you have those type of exemptions are built into this fair tax proposal yes and in fact -- there's it's very progressive because of the exemption on all every single taxpayer gets up what's called -- predate every month from the government. It covers them on the cost of goods up to the poverty lines of their family of four other poverty lines around 27000 dollars you get a TV every month. Of 23%.

This is where I get a little shaky on the whole thing makes me nervous but because I it all sounds simple and beautiful until this but the government would send every taxpayer check every month. For what they if they were making the poverty level amount of money. They would be spending in the marketplace and and how much is that figure is it based on is a 100% of their earnings. Do you take a 100% of their earnings and then say. We're gonna. Rebate 23% of whatever would be spent.

On food you guess -- just. Take the demographic that -- in single family for whatever in the -- poverty line for that Democrat right get a check based on that yet but then how's that check amount extrapolated going to be 23% of the poverty line right all right so you don't pay any taxes on your first 47000 dollars of consumption if -- OK so a 100% of their earnings up to the poverty levels is -- and that is to make sure that. That it did -- people. Are left tax free essentially yes you know -- and the whole thing is is lowering the marginal tax rate of the working. Family you know and also making it fair that everyone and -- policy yesterday. Although I disagree with the actual facts he said you know its obligations of citizenship to pay taxes well right now only half of Americans that work -- Taxes so. You were at a tipping point where. Eventually you know as our forefathers said when people figure they can vote themselves treasury. It's over yeah and you don't have to look at our deficits to to to -- to -- you're getting a new dangerous point in terms of those making the decisions on taxation not being victims of their own. Decisions very Hinckley is I guess he is the state spokesman for the -- attacks coalition Perry -- carry in the bosses and invite some calls and on this gently out all your conversation was six point 72666868. -- taken calls on this Perry and curious who is carrying the ball on this. In congress who is street in a penalty the judge well. It's a guy. From named John -- from Georgia kicked off on an annual reports -- radio hosts national radio this is a big fan behind -- he's actually two books called the fair tax those are the two primary movers behind it you know that's the good news the bad news the bad news is they're Republicans. Which means Democrats have would have -- of it -- you'll get a Democrat on for another few Dan -- is on board from Oklahoma but not as it's really it's weighted towards Republicans which is unfortunate because this is really bipartisan. You know let's.

Nonpartisan it's about taking -- something is clearly disaster our current tax code. And it but there really politicians will resist this I think because right now they can play all kinds of games and use the tax system as a way to reward certain groups of people right yet.

Our tax code is designed to pick winners and losers they can -- an industry and decided on taxes you know versus another industry that you know. They may not be in favor via a bit Barry one last question or write to the calls the 23%. Numbers designed to do what kind of a doll up the Dalai. Match with all the other taxes that you say would be abolished Social Security income tax estate tax so one gift tax all that stuff would be abolished you're just trying to get to the dollar level. Right quality it's based on what it costs to run -- government now and there's 100 there's a lock on houses law. In the US government is only -- able to collect nineteen and a half percent of proceeds. You know it's of GDP since. Will -- it. -- hasn't changed and no matter what the tax rates are the other percent of GDP -- that the federal government -- is always the -- in nineteen -- proven its -- mean there's there's this political when you say it's a law aren't as it it's this is just this this -- substitute while it -- an awful -- it's a lot of economics is that -- San -- developed it and it's proven true so evil and marginal tax rate was 90%. It was a misnomer deacon tax rich get us out of this problem it doesn't work they just rich people stop working because we're taxing labor right now.

It's so itself adjusts and that's what the premise is that no matter what you do with the tax code people will become less productive if if -- raising taxes too much whatever it always comes out in nineteen and a half percent it -- is that it's an honest look at. That's fascinating and ago 617266. T six -- India Mike in -- NW RQ would -- Hinckley from fair tax I'm Mike.

I guess they thought Mike would do great good morning good morning my uncle but yet still one of the work right here well. Their taxes per year regret as quick as. Essentially flat so the thing -- for -- what. Instead of having people who -- making. -- eight million dollar some more. They're -- great on the 7000 dollar level where 30000 a level -- a.

Seven minutes it's a fair system in which you get to decide what your taxes are going to be based on how much you you spend it went from a session yeah.

In one sense yes you could say that in the other -- that -- art that tax structuring what we're saying they are out. And at -- on May get a month or not are worn looking under a hundred about.

What about would have but anyway I asked Barry about food and clothing and he described the rebate doesn't that convinced you that the has been an effort made. By Barry and his and his allies on this to our address -- concern.

So it'll read out the it'll -- god or any page article on -- then I mean look after the 94. It here ever -- more real proponent of that. And chill out going to make over 400 million dollars on the com it it basically hacks -- really -- people that guy's sneaking in here. In here you know 58000. -- is what they're doing now let --

Let's hear the answer -- Michael glad we got a challenging caller right off the -- you you up to that -- pretty want to leave now -- I -- I can -- I'm really gonna defer to hit you know Larry -- who is the head of economics at Boston University there's also a number of economist -- They have done study after study on this and -- published articles in The Wall Street Journal and the Boston Globe. That both actually debunks that myth in said that this actually you know rich people will pay more because they consume. You know ritual stop contributing to Social Security assembly 5000 a year that. Goes away others would. There's if he's laid out pretty well a few articles I would suggest you go to fair tax -- org and read the articles are so a study of the numbers indicates that it would not do what Mike said actually you we would be getting more people lot of -- here's more money out of rich people if I. Was rich and I had ten million dollars I would put it all in tax free municipal bonds and in live on that interest and pay no taxes. Zero under today's think we tax labor we do not tax wealth. This taxes health.

Okay 61726666. You'd have Barry -- from fair tax -- and take your calls for the rest of the hour coming up on 680 WRKO.

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This is Lorraine -- you're listening to veterans forum like Tom Penner and Todd finds her. And stay tuned for my show coming up at night right here on Boston talk station that's AM 680 WRK out.

Six AB WRKO Thomas Todd Barry Hinckley is here he runs fair tax for Massachusetts. And we're talking about why -- taxes a way to go we've got to dump the system we have right now. The Ben berry was just talking about the number people working in the tax industry right now and and that may that may be why there's so much resistance to change.

While lobbies -- huge obviously accountants. Lawyers stuff. Profit lobbyists profit from the tax -- today. But you know if you if you talk about the American family is a great way to look at America because that is why were here to be. To be in the live in the pursuit of happiness. American families spent six billion hours a year complying. I mentioned that earlier but that's two point eight million employees between in the spread across wasting.

When it's time on assist in the produces nothing. It's yeah it's -- I meant -- I may disagree a little bit with the characterization of the tax code is progressing as complex as convoluted as it is. Not sure that it's a waste of time on that and I'm nuts and the Berry's idea here is is is is to be tossed out. Many of the provisions in the tax code our reflection that people will modify the behavior based upon Texas which I think in the end might may be the most compelling argument. But the housing production off fall the protection of certain historic sites so off for environmental. Reasons in the like. People will put a twist into the tax code because it will induce a certain behavior Arnold modifies -- NBA or they think -- my rectified -- never does but does nothing changes and the RN and then once once a little industry builds up around.

Eric I don't June morning. They act like one out there and it started one that they want an awful lot packed I don't like the idea this is not a lot I started -- But you know accommodation of the spirit back and lowering taxes. You know -- restart and I thank and you know -- I think it's the great thing overall you know reduce the opposite. And you don't want to get cut off my -- but for the sort -- today but I -- hear -- earlier that somebody mentioned. I don't or was but stop them up payment a little concerned with. On the fact that the body has not taken out of the eight check. Good like pay quarterly article I was.

Side it's not an income tax. The proposal is to move to a sales tax you pay it every time -- about something else like you do now exactly be up a point of purchase the point of purchase I think could be the best way to consider. If you'd get your your Jamaican 2000 -- going to get a 2000 dollar check at the end of the week but -- form state taxes -- yet again the -- did the thinking is that states would roll this potentially as well because the cost compliance is massive when you're enforcing. -- point of purchase you know if you're the IRS it's the simplest way away what's -- a 130 million taxpayers or you know a lot fewer businesses that are already in the business of collecting it anyway six point 72666. Seats -- we're going in New Hampshire next good morning went.

Good morning guys are and probably -- story eight sales taxes but I love this stacked and I'll tell you why it. You know just gives. A guy like me who make under a 100000 dollars and I would argue the point against the gentleman that called earlier you know America we have to. Get over the fact that some people are rich some people -- middle class. So what about care somebody makes I hope everybody makes and million dollars a year whatever. It might be but for me I'm going to make you know under a 100000 dollars and what I like about the fact is that. Now the drug dealers the tax cheats and me everybody else is involved in illegal endeavors our -- what I'm paying when. You know they go by the flat screen TV.

Always knew this might ruin the bowling industry what do you think ha --

Ha ha ha -- how -- I think this but superb example of you know the difference between myself. And some guy that does make million dollar Ernesto well by the blank because. What it does it. You have more money in your paycheck and I guess what I am most concerned about it you know with all due respect to the last caller who called -- in thought he was. You know about restarting about quarterly taxes and so what I'm afraid that the American public. Just isn't ready to embrace something. It's radical and understand. That this tax comes out every time you know you go by you know what -- theater some but I just don't think people unfortunately -- going to. Get over the fact that their payment point 3%. -- and it's unfortunate and I think. We need more people coming up with creative ideas like -- of this system we have.

Yeah and that's really what people need to understand it's it's you know I think he. You'd you would trade our tax system for waterboarding. I think this is this is a big national torture that we have it's -- taxes every you know of the color documents in the cash economy mentions kind of ingested drugs do you know of the drug dealers and everybody else who really aren't playing by the rules. Barry what's your take on what this may or may not do. In and around jobs Barack Obama is presenting himself -- wanting to save or create two to three million jobs so on and so forth code in your mind would this. Fair tax. Have an effect on the creation of jobs well we we know from.

Basic you know economics that it takes investment create jobs investment is money. And money has cost so how we attract dollars the US is really key. And they in the fair tax what it does is it because it on taxes corporation's American becomes the largest tax haven in the world. In any American should want American corporations to be the most competitive in the world. So if you put your corporations which many of us work for an competitive situation. Lot of multinationals need to study 800 multinationals in the present at the fair tax to them and edu and said they would move their headquarters here within three months. And so -- those headquarters comes jobs so this a way to attract capital for free instead of going to China and borrowing it for half percent to run America. In new invest in you know the bailout package that would for just borrow money from China to build America right now in other countries. In this would actually attract cash for free to create jobs and that is a boot.

While that sounds pretty exciting senators up buying it but I don't know I'm think I'm I'm I'm thinking it through because it's it is interesting -- you -- get a BO uses some of the large multinationals to come. I want to make sure that I let that not only me but the listeners understand as well. For this 23%. Say federal sales tax we abolish income tax the tax the little people -- Corporate federal corporate taxes Social Security give tax everything else is gone gone crazy -- had thrown in the waste basket 23%. Federal sales tax whenever right -- anything yet. While all the glory of that simplicity Democrats -- so good to go down amid Milton Friedman. Is famously quoted saying. Corporations do not pay taxes they collect them they build the cost of all the taxes is that and to update page into what they sell you in the cost of goods will go down.

You've got to find a way to sell Democrats on this and in order to do that I think you need to replace the demonization of wealth and in the attack -- the you know them don't class warfare thing that they depend on electorally and and that's what I think you have to figure out for them is the new marketing scheme that will allow them to survive this effectively if we have the fair tax system.

While the facts are you the facts are that this is better for working families they won't pay much less taxes annual list you know they can -- if you haven't of that month. You cut your consumption. And you pay you are more salt you pay your mortgage in pretax dollars you pay for your kids' education pretax dollars and what's been written sounds glorious dug in -- NWR kill Barry Hinckley is here from fair tax hike.

A very different dog from our way and a half. Mike Mike gotta look over in Israel they live in the country where there's a value added tax which I'm guessing -- probably the same atmosphere attacked.

Now it's actually not that that's a sales tax system that that it expands the well the UK attacks -- level yet alteration of the good and generally they'll take a fair value added tax like to do UK UK is the worst of both worlds -- and about two weeks and months there. And they have. You know income tax it's up to 50% in the value added tax so you've got two weeks a month when you -- upon. Happy life -- I'm trying to do my job without a trade deficit that could opt out.

I mean that -- as sound like a wonderful deal but I mean like like is said my daughter looked over and Israel we told you come over -- would very little close. You know. By the suitcases here I appreciate buying jeans for twenty politician could take them back to Israel from 400 dollar.

Holy -- know what's love all of the B team and how much is it -- you know. Yeah lol what percentage are they being charged. A cut editing it. Comparing a micro economy like Israel to the US is really apples and oranges but no but the key is that this would be replacing the income tax so this in nobody's life is gonna cost more except people make a ton of money in -- out -- spending a ton of money Grammy.

You know wealth is often aggregated. At the top people that -- older -- life you know accrue wealth. What happens is they stopped working because we tax labor they stop paying taxes so you know it is proven that you know someone in their last twenty years a light spends a lot more than someone in the -- first -- years of life because they have cash and also have a timeline they hold a ton of money and -- people definitely going to the tax exempt communities in the other the other investment you mentioned. And yet they never stop consuming -- about 6172666. -- more of your calls coming up on 680 WR KL.

This is Lorraine -- you're listening to veterans forum like Tom Finneran and Todd finds her. And stay tuned for my show coming up at night right here on Boston talk station that's AM 680 WRKO.

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