Oh come on now, you wouldn't want them to do anything simple would you? Besides, if they didn't have the tax code to tinker with all the time they might actually have time to do something else. Like maybe SECURE OUR BORDERS?
The so-called "Fair Tax", or sales tax, has been a disaster in Europe. The Flat Tax has been a resounding success everywhere it's been tried (Ireland and Russia are two examples).
Why should we even consider a tax method that has flopped everywhere instead of one that has succeeded?
Oh come on now, you wouldn't want them to do anything simple would you? Besides, if they didn't have the tax code to tinker with all the time they might actually have time to do something else. Like maybe SECURE OUR BORDERS?
Um, because of their mind-numbingly stupid propaganda?
That is because that was a Value Added Tax (VAT, taxed at every stage of production) in Europe, while Fair Tax is a National Retail Sales Taxed (taxed only once during the sale of the finished product from seller to buyer/consumer).
How is the failed sales tax in Europe different from what is being presented here in the US?
Link to the Boortz/Linder book.
Be prepared to be inundated by the "fair" (sic) tax Kool-Aid drinkers. They don't get what a creator of the black market economy that abomination is.
The so-called "Fair Tax", or sales tax, has been a disaster in Europe.
There is no "FairTax" system in Europe nor has there ever been. European nations have combinations of income taxes & VATs levied on business purchases passed through to the end retail customer and Income taxes.
The FairTax in a National Retail Sales tax paid only on products purchased for final consumption, not on business purchases as the VATs of Europe are.
Furthermore the FairTax repeals all federal income, SS/Medicare and Gift/Estate taxes, totally unlike any system in Europe.
Don't know where you got your information but the FairTax looks nothing at all like the tax systems in Europe, including their supposed Flat Tax which is a VAT with a progressive wage tax component, generally retaining retaining corporate income taxes as well a payroll taxes much like SS/Medicare taxes here.
Why should we even consider a tax method that has flopped everywhere instead of one that has succeeded?
Perhaps you will point out this country in which a retail sales tax only tax system has flopped.
I can point out several in which business purchase taxes (VATs) coupled with income & payroll taxes are flopping along with whole economies throughout Europe.
The Flat Tax has been a resounding success everywhere it's been tried (Ireland and Russia are two examples).
You mean the Russian flat tax on individual with its 17% VAT on businesses coupled with 30%+ excess profits taxes, tripled gasoline excise taxes, and extremely regressive payroll taxes to pay for its social welfare programs?
Do you mean the Russian 17% VAT on business with individual flat tax, who its economists are recommending and working to replace with pure retail sales tax to get rid of the excess burden on their industries to better compete with European markets?
MOSCOW - VAT may be abolished two years from now and be replaced with a sales tax in Russia. The news came from Arkadiy Dvorkovich, chief of the presidential administration experts department, telling reporters that officials were studying the policy switch and its consequences.
“Obviously, this would be impossible in 2006, but it could be introduced beginning in 2007,” he said, adding that a sales tax of ten to fifteen percent should be introduced along with VAT’s disappearance.
The Flat Tax has been a resounding success everywhere it's been tried (Ireland and Russia are two examples).
Do you mean the same Ireland that now has also implement a 17% VAT on its busineses along with its employer remitted 15% PAYE tax on wages as it seeks to enter the European Union with its glorious successes?
http://www.finance.gov.ie/viewdoc.asp?fn=/documents/Publications/tsg/tsg9828.htm
Tax Compliance
Office of the Revenue Commissioners, Dublin Castle.
***3. THE BLACK ECONOMY
3.1 Size and Nature of Irregular Economy
It has not proved possible to design a model which is capable of computing the extent of black economy activity with any level of certainty. Two recently reported estimates of the size of the Irish black economy differ significantly. An article in The Economist of May 3 1997 estimated the size of the Irish Shadow Economy (as a percentage of the 1994 Official GNP) at 15.3%: an article in Summer 1997 Irish Banking Review estimated the size of the Black Economy in Ireland in 1995 at 10.7%. The wide difference in these estimates confirms the view of Gabriel Fagan that "from a methodological point of view, it is evident that all of the available techniques for estimating the magnitude of the black economy suffer from significant limitations". All countries have this problem. In some other countries the size of the black economy is put at 20% of GNP or higher. A paper prepared by the EU Commission put the size of our black economy in the region of 5-10% of GDP, with figures for other member States going as high as 35%.
3.2 Revenue generally see two dimensions to black economy activity
- people whose activities remain wholly undetected and
- people who are on record for tax purposes but do not declare the full extent of their activities and income.
The Flat Tax has been a resounding success everywhere it's been tried (Ireland and Russia are two examples).
Do you mean the same Flat Tax that has been touted by politicians in the country, that is the same wage tax coupled with a subtraction method VAT to replace our current income tax system while leaving the 15.3% SS/Medicare tax in place?
You now, just one step from the credit/voucher VAT with flat wage tax plus payroll taxes of the EU?
http://www.taxfoundation.org/foundationmessage03-00.html
"Under the WTO definition of the term, a sales tax is an indirect tax, as is an European-style VAT. The economic equivalence of an European-style VAT and a subtraction-method VAT is well-established. A subtraction-method VAT is essentially identical to a business income tax except that all purchases of plant and equipment may be expensed, rather than depreciated as under current U.S. law."
Issue: What Is the Best Way to Collect a Value Added Tax?
A value-added tax (VAT) generally is a tax imposed and collected on the value added at every stage in the production and distribution process of a good or service. Although a VAT may be computed in any of several ways, the amount of value added generally can be thought of as the difference between the value of sales and purchases of a business. (e.g. Revenues - Costs = Taxable Business Income)
***
Subtraction-Method VAT. Under the subtraction method, value added is measured as the difference between a business's taxable sales and its purchases of taxable goods and services from other businesses. At the end of the reporting period, a rate of tax is applied to this difference in order to determine the tax liability. The subtraction method is similar to the credit-invoice method in that both methods measure value added by comparing sales to purchases that have borne the tax.
***
The subtraction method differs from the credit-invoice method principally in that the tax rate is applied to a net amount of value added (sales less purchases) rather than to gross sales with credits for tax on gross purchases. A business's tax liability under the credit-invoice method relies on the business's sales records and purchase invoices, while the tax liability under the subtraction method may rely on records that the taxpayer maintains for income tax or financial accounting purposes.
You are aware are you not the flat tax is a VAT with an wage tax. None other than the father of the flat tax, Robert Hall of Stanford University (along with Alvin Rabushka), in his 1995 Ways and Means Committee testimony said, "The Hall-Rabushka flat tax is a value-added tax."
Which was pointed out again in additional hearings in April of 2000:
http://waysandmeans.house.gov/fullcomm/106cong/4-11-00/4-11kotl.htm
"Robert Hall, one of the originators of the proposal(Flat Tax), who describes his Flat Tax as, effectively, a Value Added Tax. A value added tax taxes output less investment (because firms get to deduct their investment.)"
"The Flat Tax differs from a VAT in only two respects. First, it asks workers, rather than firm managers, to mail in the check for the tax payment on that portion of output paid to them as wages. Second, it provides a subsidy to workers with low wages."
The Flat Tax; Chapter 3, by Robert Hall and Alvin Rabushka
| In our system, all income is classified as either business income or wages (including salaries and retirement benefits). The system is airtight. Taxes on both types of income are equal. The wage tax has features to make the overall system progressive. Both taxes have postcard forms. The low tax rate of 19 percent is enough to match the revenue of the federal tax system as it existed in 1993, the last full year of data available as we write. Here is the logic of our system, stripped to basics: We want to tax consumption. The public does one of two things with its income—spends it or invests it. We can measure consumption as income minus investment. A really simple tax would just have each firm pay tax on the total amount of income generated by the firm less that firm’s investment in plant and equipment. The value-added tax works just that way. But a value-added tax is unfair because it is not progressive. That’s why we break the tax in two. The firm pays tax on all the income generated at the firm except the income paid to its workers. The workers pay tax on what they earn, and the tax they pay is progressive. To measure the total amount of income generated at a business, the best approach is to take the total receipts of the firm over the year and subtract the payments the firm has made to its workers and suppliers. This approach guarantees a comprehensive tax base. The successful value-added taxes in Europe work this way. The base for the business tax is the following: Total revenue from sales of goods and services less purchases of inputs from other firms less wages, salaries, and pensions paid to workers less purchases of plant and equipment The other piece is the wage tax. Each family pays 19 percent of its wage, salary, and pension income over a family allowance (the allowance makes the system progressive). The base for the compensation tax is total wages, salaries, and retirement benefits less the total amount of family allowances. |
FLAT TAX, VAT TAX, ANYTHING BUT THAT TAX; Duke Law Magazine, Spring 96:
Forgive me if I'm wrong, but wasn't our very own income tax system origianlly supposed to be a "flat tax"?