Also, if you haven’t seen it yet, swoop by your local video store and pick up a copy of I.O.U.S.A.  An excellent documentary on the incredible amounts of debt undertaken by our federal government.

Anyone have more information on this guy?

As this article on a market-based health care reform alternative points out, one of the main causes of our current health care debacle is, you guessed it, income tax laws.  Back in the day, the IRS decided that income earned in the form of health insurance should not be taxed.  This provided an incentive for businesses to provide lavish health packages to workers.  From this point forward, health insurance was linked to employment.  No job = no insurance.  As the article explains, this has contributed significantly to many of the problems currently associated with the US Health Care System.

Under the FairTax there would be no income tax, and thus, employers would have less incentive to provide expensive health insurance packages to workers.  This would increase the market for individual insurance packages, which would no doubt be more custom-tailored to each individuals health needs, which would in turn drive down prices in the private insurance market. 

It truly is amazing what kind of repurcussions tax policy has on the day to day lives of Americans.

To all of you who started reading our blog and watched it quickly drop off - WE’RE SORRY!!!

To anyone interested in learning more about the FairTax that we didn’t help - WE’RE SORRY!!!

You know what they say about excuses:  They’re contageous.  A few FFTB.org team members got bogged down with work and personal lives and next thing you know we hadn’t posted a single blog regarding the FairTax in almost 6 months.

We can’t say it enough - WE’RE SORRY!!

But all of that ends today.  We are so sick and tired of the current state of the political world that it’s time to stop spectating and start acting.  FreeFairTaxBook.org is back.

Stay tuned for more exciting updates and informative posts about the FairTax…

We really want to grow this blog into one of the premier FairTax blogs on the net.  The more people who read, hopefully the more they will be interested in the FairTax, which is kinda the point.  So I was searching around the net the other day for ways to increase blog traffic and I came across this site which basically specializes in increasing web traffic to your blog.  I quickly found this post about how to make $100/month from your blog.  I’m not sure if we’re going to use the blog to try to make money (who knows if the sponsors we will receive from Google AdSense will share our FairTax ideals) but it’s always a possibility if we get strapped for cash.

Do any of you bloggers out there have any pointers for us blogging newbies?

Please donate today!

-Steve

With that being said…

Even though we are not fans of the current tax system, we still need to get them done every year by April 15^th. This year, I used a website that was recommended to me called TaxAct.com, and now I am recommending it to all of you.

TaxAct has a similar setup to TurboTax. It asks you simple questions and basically walks you through your return. It is easy to follow and tells you exactly which documents to pull information from for each part of the return. It also allows you to go back and review your old answers and update anything that needs to be updated. Also, you can sign out at any time and when you sign back in, it takes you back to where you left off.

Once your Federal Q&A is done, it will move onto State Q&A, if you happen to need to file for states. Unfortunately, I had to file multiple states, but the question and answer process made it very easy and bearable to complete.

There are a few different levels of the program that you can use, ranging from a Free Edition, including free federal filing with $13.95 filing per state, to the Ultimate Edition, which is $16.95 for federal filing and free for states. The Ultimate Edition has some extra tools thrown in to help with itemized deductions and other more complicated features.

Just imagine, if the FairTax were to become a reality, we would not have to worry about filing anything. There would be no paying accountants for completing your return, no paying for programs such as TaxAct or TurboTax, and April 15^th would be just another spring day.

For the record, FreeFairTaxBook.org has absolutely no affiliation with TaxAct.com or any other tax preperation website for that matter.

He had the nerve to inform her that the FairTax ‘isn’t fair’ and ‘would never work’.  And the income tax is fair how?  And yeah, I’m sure 16,000 pages of ever-evolving contradictions is much simpler to follow than a simple, unchanging flat tax on all retail sales of new goods…

The enemy KNOWS the FairTax movement is growing stronger by the day, and they are very, very scared by it.  And you know what?  If I were them, I would be too.

In liberty,

Steve

FreeFairTaxBook.org

-FreeFairTaxBook.org

Really quickly though I just want to point out how ridiculous it is to rush into this new bill.  It’s further proof that nothing changes between the two ‘drastically different’ political parties which currently monopolize the American political spectrum.  Not even 3 months ago, leaders on both sides of the aisle were complaining about how quickly the TARP was rushed into existence and now the exact same sense of impending doom is being used to get the ’stimulus’ package passed before anyone has had a chance to really think about it.  But I digress…

Back to the point of this post: The $15,000 tax credit for new home buyers.  First off let me start by saying that I am not currently a homeowner but have been planning on purchasing a home in the next year or so, once prices hit rock bottom.  Even though this new part of the bill will personally benefit me, I still can’t see how the stupidity of this idea has gone unseen by the members of congress.  Here’s why:

The ‘housing bubble’ formed for a variety of reasons, one of which was the irresponsibility of home buyers.  With widespread access to easy credit, many individuals and families purchased their share of the American dream over-leveraged and underfunded.  Along with corporate irresponsibility, this combination led to a flood of new demand for housing, shooting prices skyward and causing home builders to pump out more and more supply.  As reality set in, unqualified mortgage holders began to default causing banks to tighten credit and cutting the demand for housing almost overnight.  Before long house prices were falling like a brick and the bubble had burst.

The people who should have the nation’s sympathy are not the people who lost their houses to foreclosure (they knowingly took on the risk of home ownership; if they had bought a house which they could actually afford they would not have had a problem) but the millions of people retired or retiring shortly who have had a large part of their savings significantly reduced due to the greed and irresponsibility of others.  Many retirees rely on home equity loans and reverse mortgages to support themselves and have now lost much of that borrowing power due to no fault of their own.

So what does this have to do with the stimulus plan or the FairTax for that matter?  One word:  Incentive.  Low interest rates set forth by the Federal Reserve along with liberal lending standards imposed by banks lead to an incentive for people who otherwise would not be able to afford a home to take the plunge into home ownership.  By doing this, demand for housing increased, but more importantly was increased artificially. Nothing really changed about the finances of the people who used sub-prime mortgages to buy a house.  Their income didn’t go up.  The price of houses didn’t come down.  They didn’t all discover a dead rich uncle at the same time and fall into a giant inheritance.  Incentives to over-leverage themselves were simply put into place by actions of the federal government and corporations who thought they could outsmart the market.

Like artificial breasts, artificial demand does not last forever; on the contrary, it creates bubbles which compound the problems created by it.  Markets have a way of adjusting to an equilibrium or homeostasis and when artificial supply or demand is injected, at some point the market has to correct itself and trend the opposite way of the injection.

Do you see where I’m going with this…..

A $15,000 tax credit for new home buyers is yet another way to create artificial demand.  Currently, home prices are falling and will only stop when there are enough buyers in the market who can afford and want to purchase the available supply of homes. A $15,000 tax credit is like injecting a steroid into the market.  Sure, in the short run the demand for homes will rise, but what will happen after the tax credit goes away?  Demand will start to fall again to it’s natural state, and all of the homes purchased when the credit was in effect (whose prices were inflated by the extra demand added by the tax credit) will start to devalue again.  The only solution would be to make the tax credit permanent which would cost the government close to $30 billion per year, all to keep the price of homes artificially high.

The point is, when the government plays with the laws of supply and demand everybody loses in the long run.  And what do you suppose is the tool the government uses more than anything to modify supply and demand?  You guessed it, the current personal and corporate income tax system.

Under a FairTax financed government, this interference would not be possible.  All products and services would be treated equally and it would not be up to the government to determine which industry’s win or lose or which citizens benefit or suffer based on the tax code.

I realize that was a somewhat long stretch to link the stimulus plan to the FairTax, but the underlying notion of government interfering in markets is one of the weakest notions of the current tax system and conversely one of the strongest of the FairTax.  When markets perform efficiently everyone benefits.  When the government distorts markets, THEY decide who benefits.  Which sounds better to you?

In Liberty,

Steve

FreeFairTaxBook.org

The question this brings to my mind is this: If the people in Washington who make the laws aren’t complying with the tax code, how can they expect the average American to do so?  If the tax code is so complex that those writing the laws are unable to follow them, there is no chance I, the average taxpaying American will be able to do so.  This, among numerous other reasons, is why we need the FairTax.  The FairTax will eliminate all guesswork from the tax code.  Further, it will eliminate all loopholes so that everyone, from the suits in Washington to your next-door-neighbor, can no longer exploit the tax system.  It will put everyone on a fair and level playing field.  What more can you ask for in a tax system?

Incase you haven’t heard about these appointees, I’ll sum it up here for you.

• • Nancy Killefer, nominee for deputy director of management at the Office of Management and Budget and chief performance officer, withdrew her name for consideration for the post on Tuesday, February 3^rd amid allegations of minor tax evasion.
  • Timothy Geithner, Treasury Secretary (the office that oversees the IRS), admitted to failing to pay more than $34,000 in self-employment taxes from 2001 to 2004.  This was caught during a 2006 audit.  Geithner claims this was unintentional.
  • Tom Daschle, nominated for Health and Human Services Secretary, withdrew his name for consideration on Tuesday as well.  Daschle failed to pay taxes on a car and driver provided by a friend (Read: Lobbyist) as well as $80,000 in consulting fees (Read: Lobbying) he collected after leaving the Senate.  He has filed amended returns and has paid more than $140,000 in back taxes and interest for 2005 – 2007.  Daschle also claims his violation was accidental.

And to think, all of these ‘accidents’ could have been avoided if we simply changed the way the government funds itself.

In Liberty,

Tom

FreeFairTaxBook.org