SInce you are prepaying the FairTax, in effect they are "withholding" the tax and yu apply for a refund.
It will be intrusive because these beauracrats will have every single transaction for every single business in America to examine and potentially analyze/audit. Much more intrusive than the present system.
For Joe Sixpack all of this is no big deal. For a business, where you are expecting them to save money in compliance costs, I don't see the savings or the additional freedom.
"If a business went to Home Depot and bought some goods from Home Depot they would pay the tax at Home Depot which sells to both consumers and businesses. And they would keep their receipts and they'd use the value of those receipts as a credit against paying the tax in the future. So they would not be taxed and we would not ask the Home Depot to make the decision whether or not to raise the tax from them. Any business-to-business transfer will not be taxed at all."Rep. John Linder
Testimony before the Ways & Means Committee
July 28, 2005
After I do my expense reports for the month, someone will need to provide the paperwork on every transaction (including whatever documentation they are going to require to substantiate the purchase) in a massive database and send that off to the government to get the refund.
I assume you don't mean expense report in the normal sense of tallying expenses to submit for reimbursement or deduction from taxes. With the NRST there are no deductions so you won't be keeping an expense report as such. What you will be keeping, and I assume you already are, are the receipts for all the NEW or RETAIL goods and services you use in your business. Don't you keep that now in addition to mileage, depreciation, meals, entertainment, travel, etc.? Aren't you already doing all that you say the NRST will require of you? If not, how do you keep your books? How do you know whether you are making money? How do you pay your taxes now?
As far as the massive data base necessary for this, this being something requiring much less than you do now, you must be bigger than Wal-Mart.
With the NRST all you do is take the receipts you have for the taxed expenditures, notice the tax that is already figured and printed neatly on the receipt and labeled as the sales tax, add the taxes paid, and submit a form to the government for rebate. You do much, much, more than that now.
It will be intrusive because these bureaucrats will have every single transaction for every single business in America to examine and potentially analyze/audit. Much more intrusive than the present system.
What do you have to keep now? What do you have to report now? Do you report interest you earn on savings, even checking, accounts? Does the bank send the IRS a 1099 with all your pertinent data on it? Do you report what interest you paid on your house and to whom you paid it? Does the mortgage company report the same to the government? Do you tell them when you bought your car, how much you paid, how much you drive it for business and how much is just commuting to work and back and how much is for personal use, do you write down your mileage every morning and again when you return? Do you note what you did that day so that you can properly account for your mileage?
That is just a very small part of a myriad of things you are required by law to do under the present system. Own any business property? Are you an active or passive investor? What about the expenses and depreciation on that?
It seems to me that simply keeping receipts for the retail items and services you use for your business is child's play compared to that.
For Joe Sixpack all of this is no big deal. For a business, where you are expecting them to save money in compliance costs, I don't see the savings or the additional freedom.
It is hard for me to consider this to be anything other than argument for arguments sake rather than a serious discussion. If I have once again failed to see something please point it out to me.