Part of the FairTax Week on eFIPO.com

I really don’t know what is worse: Paying taxes or the agony and time doing taxes? Remember yesterday’s post about how FairTax will end up saving businesses money by taking out compliance costs? Tonight we will discuss how much money and time people devote to tax compliance.

In 2005 the estimate time it took for the average American to complete their taxes was 27 hours- which is a full day just to complete forms. FUN FUN eh? You might also be one of those lucky Americans that have enough money to pay an accountant or a tax advisor to do it for you. Just having to deal with all the questions is time consuming enough.

“For several years, the Tax Foundation has calculated the cost of complying with the increasingly complicated federal tax code. They estimate that in 2002 individuals, businesses, and nonprofits spent 5.8 billion hours complying with the tax code- an effort that cost an estimated $194 billion.” The FairTax book p.43. Does this statement shock you or what?

When you think of all the compliance costs businesses face you can definitely see why FairTax would be a time and money saver. Businesses can spend their time and money doing the things they do best: make money and fuel the economy and consumers can get back to do what they do best: spend money and fuel the economy.

“Since 1954, the number of words in our tax code has increased by nearly 500 percent. And that’s just the increase in the code. The number of words in the IRA regulations has increased by 939 percent.” The FairTax book p.47.  The FairTax Act has 132 total pages compared to the more than 50,000 pages of tax code laws and regulations currently in effect. You ever hear the phrase taxes can kill you? Seriously, if the tax code and regulation books were to fall on you, you could die.

It is estimated that about 500 billion dollars is paid on yearly basis to comply with taxes. That is 500 billion dollars that the economy could use for much better things then tax compliance. Help America grow and get learn how the FairTax could change your life. Buy the FairTax book and visit the FairTax site.

To learn more about this subject head over to SpeckBlog, eFIPO.com, and FairTax.org

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Part of the FairTax Week on eFIPO.com

You ever wonder how much tax you’re paying for products? You might be thinking to yourself that it’s just the tax that you pay at the register. I wish! Unfortunately, you pay taxes every single time something gets pushed through the supply chain. So from the raw material to the end product, you end up paying hidden taxes every single time it gets to a new company in the chain.

Example (summarized from the FairTax book p.52)

We will use a loaf of bread as an example to demonstrate how embedded taxes are in every product we buy. First comes the seed producer, followed by the farmer who buys the seed to plant the wheat. The seed producer is a taxpayer, and the taxes are included in the price he charges his customers to purchase the seed. The farmer also purchases fertilizer, irrigation equipment, fuel for his tractors, and labor. All of these costs have taxes associated within the products too.

This is just for the seeds! Imagine all the taxes that are thrown together before you make yourself that sandwich. But trust me the example that I introduced makes up about 5% of the total supply chain. There are plenty of other simple taxes that we didn�t cover such as: utility costs, Social Security, rent, and Medicare. So when you pick up that loaf of bread and bring it to the counter you are about to pay tax on a product that has already been taxed a hundred times.

This is the reason why taking out embedded taxes would be extremely beneficial to the customer and the business. If we were to pay taxes just when we purchase the bread, it removes a lot of compliance costs that the producer no longer has to take care of. The FairTax introduces a 23% sales tax on everything. So when you take out the embedded taxes and then add the 23% sales tax products will roughly cost about the same. But again, when you think of the compliance costs that businesses will no longer have to pay, prices will inevitably go down.

Here are some articles you should read on why the American tax system is so confusing. Articles are presented by Free Money Finance.

The Problem with the U.S. Tax System

Best of Free Money Finance: Tax Posts

Good discussion post about FairTax at AllFinancialMatters- Anyone Read “The Fair Tax”�

To learn more about this subject head over to SpeckBlog, eFIPO.com, and FairTax.org

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Part of the FairTax Week on eFIPO.com

Are corporate taxes for real?

Yes, corporate taxes are a reality. The myth is just how they are paid. A corporation is out to do one thing. Make money. Taxes hinder their way to make a profit, so they thought of “creative” ways to still make a profit and not really pay any taxes.

“There is only one entity in this country that actually pays taxes, and that entity is the individual.”- Neal Boortz & John Linder

Example (summarized from the FairTax book p.32-33)

The fictional company, FairTax Inc., makes widgets costing $100,000 each. The 50 employees make two hundred widgets per year. FairTax Inc.’s takes in a revenue of $20million a year and the cost associated with the product cost 18million. That leaves the company with a profit of 2 million.

Let’s just say the federal government comes along with a tax increase of 5%. This means FairTax Inc. will owe an additional $100,000 in federal taxes. Now where do you think the company gets this extra money? Here are possibilities that happen in real life.

• 1. It could pay the money out of the 2 million in profits, which will damage the return the shareholders have in the company. If they use profit money, the dividend check the shareholders receive will be decreased. This scenario makes the shareholders pay the taxes, not the corporation.

• 2. Jump the widget price to cover the $100,000 in taxes. If the company can accomplish this feat, they are golden! So instead of the corporation paying the taxes they raise the prices and let the consumer take the tax burden.

• 3. My personal favorite. Let’s cut costs! What does this mean? Fire workers or turn your product to crap. That’s a sure way to compete in the global marketplace right? Wrong.

See corporate taxes are for real they are just siphoned from individuals. “Only individuals create wealth. Only individuals retain wealth. Only individuals can have their wealth seized by the government in the form of taxes.“

To learn more about this subject head over to SpeckBlog, eFIPO.com, and FairTax.org

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Part of the FairTax Week on eFIPO.com

Wouldn’t it be nice to look at your paycheck and see a whole dollar amount with no taxes removed? No more Social Security, Medicare deductions or any other random taxes. Does this sound appealing to you? Well way back in the day we had a system like that, but then came the ugly word INCOME TAX. AHHH!!! Everyone run to the hills the Income Tax monster is going to get you. Hmm� I can see Stephen King writing a novel about this idea. I quoted it first so I want some money for thinking about the idea!

Income taxes were started around the Civil War days when Congress passed a bill assessing a 3% income tax on everyone earning $600 to $10,000 a year. When the war passed, the people expressed their hatred towards income tax and terminated the bill and went back taxing tobacco and alcohol. But politicians saw that money coming in and they wanted more. How do you get a bill passed that everyone hates? Pass legislation when the country is on the ruins and kick it while its down.

During the Panic of 1893 politicians went to work trying to write up a new income tax bill. They called it “An Act to reduce taxation, to provide revenue for the government, and for other purposes.” Quite clever don’t you think? This new act taxed Americans with a 2% tax on everyone making more that $4,000 a year. The other good part of this bill was the fact that all government officials would be exempt from this tax. President Grover Cleveland decided not to sign it because he thought it was unconstitutional (which it was) and the Supreme Court also agreed which repealed the bill.

Can you see a pattern developing? Politicians really wanted that tax revenue so they could fund programs that they were personally involved in. After a few Democrats in Washington pushed for an amendment permitting the income tax, a flood of tax revenue went to the government. They were even allowed to add hidden taxes if it was for the good of the government and its people. Who decided what was good for the people? It was the wealthy politicians of course. They knew exactly what everyone wanted�!?

This is how the system was built. Eventually, something that was unconstitutional became part of our daily lives. Now we are no longer able to take 100% of our paycheck and spend it on the things we see fit. We have another ugly word called the withholding monster. It’s the sequel to the “Income Tax monster.” Man I should be writing in Hollywood!

To learn more about this subject head over to SpeckBlog and FairTax.org

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Want more money and your investments to grow tax free forever? What could the FairTax do for you? Well this is straight out of the book “The FairTax Book” by authors Neal Boortz and John Linder. I’ve highlighted the ones that I feel are extremely important for the younger generation.

• We start collecting 100 percent of our earnings in every paycheck.-Kinda.

• We all get virtual raises, since payroll taxes are no longer siphoned from our checks.

• We all start receiving monthly prebates equal to the amount of consumption tax we would be expected to pay on life’s basic necessities.

• We all start saving and investing without any tax consequences.

• The prices of consumer goods and services remain essentially the same, with the removal of the embedded taxes compensating for the added consumption tax.

• American businesses return operations to their home turf.

• The richest Americans bring their money back home where it helps fuel the economy.

• Those operating in the underground and shadow economies finally start paying taxes.

• You hear the unmistakable voice of the IRA agent who audited you three years ago asking if you’d like fries with that.

Now I know how amazing some of those changes might sound, but could it really happen? Yes it can! With more and more people educating themselves and taking an active position on our current tax system, this reform could happen. I love America and want to keep our economy and our country strong and I truly feel like this will be the savior of our nation.

I will be spending most of the week discussing how the FairTax will be enormously important for the future of America. If you would like more information please visit the website and sign the petition and email your Congressman or Congresswoman.

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