I'll go on the record as a small 'l' libertarian. I'm likely to vote for Libertarian Senatorial Candidate Stan Jones for the Montana Senate seat despite his inability to update his webpage since his failed bid for Governor of Montana, and his largely true but man-off-his-meds sounding rants during debates. The point being I'm not encouraging anyone to vote for the has-been Republican Senator Burns nor am I suggesting that a supporter of Democratic Senatorial Candidate Jon Tester change their vote even though he is clearly distorting Senators Burn's support for the so called Fair Tax.

Instead this blog post is about how someone in the Democratic camp must either have sleep through high school algebra or slept with their high school algebra teacher to pass. (The details are unknown to me but I'm pretty sure sleeping and high school algebra are involved). Like the the "Fair Tax" or hate it; the Democratic camp is not only miss representing the issue but if they had done their math right they could accuse Burns of worse.

In question is the recent Democratic campaign ads claiming that Senator Burns supports a "23% extra [tax] on everything you buy". Lets begin with a short list of the primary distortions just to get them out of the way before we get into the math.

1. While not the worst possible crime it is shady that none of the ads mention the Fair Tax by name, keeping a key piece of information from the audience that might allow them to educate themselves. Since I like to help people educate themselves I encourage you to read the Fair Tax Acts for yourself (there are four versions in '05, '06, Senate and House flavors)
2. I'll make you a bet. Send me a dollar to escrow and if the Fair Tax passes in its original mostly pork free form I'll send you $100.00. Otherwise your buck is mine. Enter as often as you'd like. That's 100 to 1 odds for any Democrats who are struggling with the math.
3. The phrase "everything you buy" is just a filthy lie. "The Fair Tax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed. A rebate makes the effective rate progressive." - fairtax.org. While all retail goods and services are a lot stuff "everything you buy" is either a lie or overt ignorance. (Is the difference significant?)
4. The Fair Tax is designed to be net neutral to government tax revenue and your pocket book. The Fair Tax would: Abolish the IRS, close just about every tax loophole, ensure Social Security and Medicare funding (at least better than the current plan of -uh- wait, there is no plan), make taxes easy to understand, make a taxes easy to file (no more CPA's, 1040s, HR Block, or TurboTax. April 15th becomes just another nice spring day.) eliminate all hidden payroll and business taxes buried in prices, Make it harder for the government to slip new taxes by you, allows American products to compete fairly, reimburses everyone for taxes on spending up to the poverty level, enables retirees to keep their entire pension, enables workers to keep their entire paycheck, abolishes all federal personal taxes, abolishes all gift taxes, abolishes all estate/death taxes, abolishes all capital gains taxes, abolishes all alternative minimum taxes, abolishes all Social Security taxes, abolishes all Medicare taxes, abolishes all self-employment taxes, abolishes all corporate taxes and makes it harder for special interests to build in special tax breaks for themselves. The Fair Tax replaces all that crap with a simple federal sales tax. So if you spend wisely you can essentially decide how much of your own money you get to send to government every year.
5. The Democratic literature also accuses Burn's of supporting the elimination of the coveted mortgage deduction. Well Duh! If your not paying income taxes at all you wont need any deductions.

On to the math!! Yaaay for math!

The claim is that the Fair Tax would add an extra 23% onto prices (which as I already pointed out are not all prices, only some). But that's also wrong. The plan, amusingly enough, adds more than that. It includes 23% in the price. That's Add vs. Include - big difference!! If you add 23% to $100 you get a $123 price tag. But the Fair Tax says that if your ring up a $100 item, a $23.00 portion of that is tax. In other words the $23 would already be included! Which means that the price of the item doesn't go from $100 to $123 like the Dumb-ocrats are saying. The price goes from $77 to $100 (an increase of $23); which is an increase of, $23 divided by $77, or 29.87%. So really the Fair Tax will increase prices 29.87% or $29.87 on top of a $100 item. That's more than 23% or $23 on a $100 item. But those Democrats can't do the math even when it benefits them.

In defense of the Fair Tax there is allot of economic data that suggests that the prices wouldn't actually go up 29.87% or even 23% because the Fair Tax would eliminate the business, payroll, and other taxes baked into the price already.

So my ultimate point (Aside from having some fun at the expense of a major political party) is that politicians aren't to be trusted. They not only lie but are just plain dumb. The only real way to know what the sneakily morons are up too is to read primary sources like actual legislation, or watch primary sources like CSPAN. Ignore the pundits (they're no better), ignore the ads. Its all crap.

But hey, you knew all that anyway; because in highschool you passed algebra.

Labels: lies, math, politics

# posted by Max : 10/28/2006 04:03:00 PM 0 comments