Response to Kaulbach

In keeping with this fairness theme, I always get the final word.

Kaulbach: Mike Parker, please tell me you have read "The Fair Tax Book." Your letter doesn't seem to indicate that you have. We spend $87 billion to collect taxes. Crime families, prostitutes, drug dealers, thieves and others do not pay taxes. Is that fair?

Reply: To address your point about reading THE BOOK, “Yes, I’ve read da book! I’ve also read War and Peace. Doesn’t make me Russian. Nor does reading ONE book on taxes make anyone a tax expert. Especially a book as flawed as ‘The Fair Tax Book.’

So Mr. Kaulbach, you’re absolutely okay with drug dealers, prostitution, muggers, bank robbery, etc… as long as taxes get collected? It seems you are more worried about money (or something else) than you are concerned about law and order.”

Kaulbach: It is estimated that $20 billion or more escape income taxes by these people. They are not stealing from the government. They are stealing from honest citizens who pay taxes.

Reply: “Now you’re worried about stealing since the money is being taken from you? Wow. Given that the Enron scandal cost us over $35 billion in one lump sum, you’re talking chump change from “prostitutes, drug dealers, thieves, and others. Actually, legal prostitutes, in Nevada, pay taxes. Most large-scale criminal activity results in money laundering through legit business, where taxes are collected as a part of the cleaning. But, again, your theme is not ‘crime and punishment’ or ‘law and order.’ You’re only worried about a lesser standard, your sense of fairness.”

Kaulbach: Under the plan, Ms. Weeks will keep her entire paycheck minus state income tax. Mr. Parker, do you realize that under the plan, there will be no embedded taxes, which currently amount to nearly 23 percent. Thus a new car under would cost almost 23 percent less with all embedded taxes deleted. Add 23 percent federal sales tax and the cost will be about $20,000.

Reply: “Ms. Weeks will not get to keep her paycheck minus state taxes. Whatever her bills are now, according to the book, she will still pay the same amount. Kaulbach, you’re engaging in double speak. If the cost before implementing a ‘FairTax’ is the same as after implementing a ‘FairTax,’ then Ms. Weeks doesn’t get to keep anymore of her paycheck than before. You explain that with your new car example. The cost of the car before and after is still $20,000 in your wacky math. Did you misunderstand what you said? Your math is wacky. If you reduce the price of the car by 23 percent then you must add back 29.9 percent in taxes to have a car that still costs $20,000.

“23 percent of $20,000 is $4,600. Subtracting $4,600 from $20,000 leaves $15,400. Then, 23 percent of $15,400 is $3,542. That would be $18, 942 when tax is added. But, to get back to a $20,000 car, the tax added would have to be $4,600. That’s about 30 percent, the real tax rate being proposed in the book and in your example.

“Further, my original example was a new Toyota. Imports would not see this mystical 23 percent reduction as explained in your favorite book. So, the new Toyota would have that 30 percent tax added to it. Then, the total would be over $26,000.”

I see no reason to believe you, Mr. Kaulbach. Or, your favorite book. I suggest you try reading Playboy. Then, at least you can pretend to be Hugh Hefner and walk around in pajamas all the time.

Please read on for more about your mystical 23 percent embedded tax.