As a member of NAMAR (NorthEast Atlanta Metro Association of Realtors), the local Association in Gwinnett, I received this announcement. Maybe they weren't aware of the RPAC's (Realtor Political Action Committee) quiet opposition to the Fair Tax:
" We have no formal position on the tax base and system included in the National Retail Sales Tax (H.R. 25, the Fair Tax), but we are dismayed that the sales tax rate of that model would likely range between 30 - 45% of the price on a tax-exclusive basis." NAR Stance on Tax Reform
Do we really give (it's taken in some states) money to an organization that has such a niave view of a new tax option?
" As we understand many of the consumption tax models that have been presented, the incidence of a retail or transaction tax would generally fall on the purchaser. We are unable to imagine how buyers, sellers or housing markets could bear a 30 - 45% tax burden. We question whether prudent lenders would be willing or able to finance the sales tax cost, as a long-term financing mechanism would almost certainly require mortgages that would exceed the after-tax value of the home. If a home that had been subject to the sales tax were sold before the tax liability had been extinguished (which we believe would be the general rule), the owner would likely realize no cash, as the outstanding tax and mortgage liabilities could easily use up most or all of the proceeds from the sale. Thus, a tax on home purchase is ill-advised." NAR Stance on Tax Reform.There's a convenient FAQ on the Fair Tax website that would have provided this answer: "
"The FairTax has positive effects on residential real estate far beyond this narrow question.
Today's homeowners, if they itemize (and 70 percent do not), pay their interest with post-Social Security/pre-income-tax dollars. They then pay their principal with post-SS/post-income-tax dollars. Those who do not itemize get no advantages at all. Under the FairTax, all homeowners make their entire house payment with pre-tax dollars.
With the FairTax, mortgage interest rates fall by about 25 percent (about 1.75 points) as bank overhead falls; this is a huge savings for consumers. For example, on a 150,000, thirty-year home mortgage at an interest rate of 7.00 percent, the monthly mortgage payment is $999.12 for principal and interest. On that same mortgage at a 5.25 percent interest rate, the monthly payment is $830.01. Over 30 years, the 1.75-percent decrease in interest rates in this instance results in a $60,879 cost savings to the consumer.
Finally, first-time buyers save for that down payment much faster, as savings are not taxed.
Under the FairTax, home ownership is a possibility for many who have never had that option under the income tax system. Lower interest rates, the repeal of the income tax, the repeal of all payroll taxes, and the prebate mean that people have more money to spend and have an increased opportunity to become homeowners."
In any case, I'm glad that at least locally, we support the Fair Tax. I would like to also point out that RPAC supports Johnny Isakson - a supporter of the Fair Tax. Really, folks, do we support the RPAC?
Here's the information on the event if anyone is interested:
NAMAR will host an evening with Neal Boortz at the Performing Arts Center at Gwinnett Center October 18, 2007 Mr. Boortz will be talking about the Fair Tax and how it would affect Real Estate. A General Membership Meeting will be held at 5:30pm followed by a Reception from 6pm - 7pm. Mr. Boortz will begin speaking at 7pm.
Tickets are $30 - $35 for members and $40 for non members. Tickets are selling fast so get your tickets today!
