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Liberalism: Why think when you can “feel”?

Another compelling reason for eliminating the income tax

By now, most of you know that I am a proponent of the Fair Tax. Here’s yet another reason why, courtesy of Neal Boortz:

PITY THE FOOL

The fool I’m referring to here is the poor sap from New York who caught that Barry Bonds home run ball in San Francisco earlier this week. The ball is reputed to be worth in the neighborhood of a half-million dollars.

Here’s the rub. Accountants certainly aren’t in agreement on this, but some are saying that this character owes the IRS about $200,000.

Think about it. If someone gives you a car worth $500,000, you must include that car as income on your tax return. The extra income shoves you into a higher bracket, and you’re going to fork over at least $200,000. Well, what’s the big difference between someone giving you a half-million dollar car and a half-million dollar baseball?

New York tax lawyer John Barrie says: “It’s an expensive catch. Once he took possession of the ball and it was his ball, it was income to him based on its value as of yesterday.”

Some tax experts say that no, you don’t have to pay the tax until you actually sell the ball. Sell, that’s not the way it would work for the car, so why would the government treat that ball any differently?

Isn’t this just grand? Our wonderful tax system at work. Does anyone out there have any suggestions as to how we might change things?

Yeah, I have a suggestion: FAIR freakin’ TAX!

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August 9, 2007 - Posted by | Fair Tax, taxes

4 Comments »

  1. Hmmm. That is a brain bender….

    I’m more of a Flat Tax proponent, but that’s neither here nor there.

    Fair Tax, Flat Tax or current tax structure, the crux of the problem still remains in at what point the ball is given it’s monetary value.

    Looking over current IRS code, I conclude that the ball comes under the category of “Gifts and Inheritance”. It certainly is not earned wages or gambling winnings. The other category it might fit into is “Prizes and Awards” (such as winning a car, in the above example), but these require some kind of action on the part of the winner to enter the contest or proceeding. Attending the game itself is not entering a contest or proceeding, as there was no guarantee the record breaking ball would be hit at that game.

    Drawing on the conclusion that the ball is a “gift” or “inheritance”, IRS code specifies that property you receive as a gift, bequest, or inheritance is not included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you. Therefore, the value of the ball is set at the time of sale.

    Have I missed something?

    Comment by Henry | August 9, 2007

  2. The Flat Tax is essentially what was done in 1986, and it just ballooned right back and became an even more complex mess than what it ever was. I believe the current federal tax code is up to 60,000 pages/ 7 million words.

    In Neal Boortz and Congressman Linder’s book (The Fair Tax Book) it references an experiment that was done when the same tax information was given to numerous(I can’t recall the exact number) different accountants and they all came back with a different answer.

    The Fair Tax is the answer. If you are not familiar with it, you should read Boortz’s book or go to fairtax.org . They have invested over $20 million in research and 75 of the top economists in the country are backing it. While 64 Congressmen, (including Linder) are co-sponsoring it. The next proposal is the Flat Tax which has a whopping 4 co-sponsors.

    The current system is like an automobile that has been totalled. It doesn’t need new tires and shocks, it needs to be scrapped and we need a new one to replace it.

    Comment by KevinVA | August 9, 2007

  3. The 16th amendment needs to be repealed as well. Otherwise we run the risk of being stuck with a federal income tax and a national retail sales tax. That would be ugly.

    Comment by KevinVA | August 9, 2007

  4. you’re right on both KVA, and it’s easy to say “we’ll never get that done”…but we CAN’T have a democrat in office if we want to get the Fair Tax enacted and we need the candidate who is committed to it…Huckabee…hes solidifies the religious conservatives in the general, HUGE, he gets the same independents(in other words, has flexible enough views on immigration for example) or many more than Romney or Guiliani(some of them women who might not like their social policies and vote for a woman)and has worked with a state legislature that vastly outnumbered republicans and still accomplished alot…yes, i know everyone sees THAT STUPID OUT OF CONTEXT VIDEO OF HIM ON TAXES, but the truth is he is our best hope to keep the White House Republican

    Comment by ben | December 3, 2007


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