Posted on 10/19/2006 5:11:50 PM PDT by pigdog
No, foolish one, I'm talking about all the income tax funds siphoned off to pay for a myriad of things ... that was all tax money ... surely you knew that???
Wrong. The value of the rebate is to ensure that necessity level spending is not taxed. Here's an example.
Suppose a family of four has necessities that cost them 26,400.
When they buy those necessites, 23% will be tax. Hence 6072 of that 26400 is tax. (23% of 26400=6072).
Golly! the nrst rebate for family of four is..... 6072! Wow!
But necessities should be tax free- so the rebate is paid in advance. Nothing hard about that.
"Nothing hard about that. "
Oh, but there is when you have an agenda that requires misstating as much as possible.
I'm still waiting for the opponents to acknowledge that non-educational gross government wages are taxed at 23%,
Do you think that the FairTax would be paid at closing? I do. And I doubt that the mortgage company would be willing to cover that, as they want the owner to put in some actual equity in the house.
If the FairTax ever passes, after a few short years of experience, taxpayers will be clamoring for the old income tax, or flat tax.
Before screwing up the entire country with this pie-in-the-sky tax scheme, try it out in some pilot state, see what happens in real life, rather than your pipe dream. I'll bet there would be a victim volunteer state. See if the population moves out, or moves in. See if economic activity increases, or becomes seriously gummed up. See the disappearing tax base.
What, you say people will go to a black market (or a neighboring state - even though made illegal) to buy stuff? Of course they will - just what would happen if this travesty were to be enacted for the entire US. And it would grow a whole new mob enterprise, much bigger than booze or drugs - and everybody but a few goody two shoes would participate. Perfect use for the new trans-US highway.
Under a NRST you keep all of your income. How does one buy a house that has a 23% sales tax?
YOUR PURCHASING POWER STAYS THE SAME EVEN UNDER THE MOST CONSERVATIVE ANALYSIS. Under every situation that you can imagine, there is probably an increase in purchasing power under a NRST. This isn't rocket science. You are still in the same boat after a NRST as before. Your objections are not valid.
I make: 100,000 dollars.
I pay: 25,000 dollars in taxes.
I have left: 75,000 dollars.
UNDER A NRST:
I make 100,000 dollars.
I know I will have to pay a sales tax on all items above the basics.
So my 100,000 dollars only has the purchasing power of 75,000 dollars.
How does that diminish my ability to buy a house - or anything - for that matter?
I don't have to earn but 321,176 in order to buy the house. My effective tax rate is 15%. If I earn 321,176 AND pay my 15% tax, I'm left with 273,000. Magical to you, simple to most.
Do you think that the FairTax would be paid at closing?
Yes. It will be financed like any other cost. Just like today's tax costs - they're financed in the mortgage.
try it out in some pilot state,
You mean like the states that fund themselves from sales taxes already? Texas and Florida come to mind... two of the mightiest economies around.
I think the Island on Tonga might be a good place to start
I'm sorry, it was that third glass of wine (the Mel Gibson excuse). I truely appreciate your argument and discussion.
If I were Daddy Warbucks, I wouldn't care - I probably would not be able to spend all I had. As it is, I'm quite in the middle class, and have managed to accumulate that which may cover my expenses, and some frills, for the rest of my life. Sock it with a new 30% tax, and no, I'm afraid that it will not let me have many frills, at least not in this country with the "FairTax".
I'm trying to get some cogent information from you so we can see how much BS is included with all of your whining about paying taxes.
I'm sorry, my particular circumstance is none of your business, nor would I put it up on a discussion board.
So far you've offered no valid information that I can see so I'll not bother further.
I never asked you to bother with my particular circumstance, just the general class of individual that has significant after tax savings, and who recognizes that the FairTax will suddenly and sharply, reduce the real-world utility of this class of assets in this country.
Another issue. How would foreigners be treated under the FairTax, would they have to pay it? Would they be able to apply for a rebate, as for the VAT in European countries. Or would their holdings of US bonds or dollars be suddenly worth significantly less in terms of real assets they could acquire with their holdings? (Similar to the effect of sudden currency devaluations under Bretton Woods) If the latter, they I can see a fantastic run on US bonds if their intelligence sees reasonable chance of enactment.
I will pay 15% (tax inclusive). That is my effective rate.
THe only possible way to pay the marginal rate would be to spend 100% of everything on taxables AND refuse to accept the rebate.
So let's see - you say that ALL federal transfers must be reduced but that federal transfers must be increased... HMMM!No. I said "the value of all government transfers, including the FairTax prebate, would be reduced by the amount of the FairTax" thus "you have to increase the nominal amount of the transfer to keep the same real value."
Seems like a disconnect there somewhere since you've shot yourself in the foot by contradicting in one part what you said in another.There is no disconnect. You just don't comprehend what I'm saying.
The alpha term can be zero in which case there is no indexing at all but in any event your claim of "all government transfers being reduced" is wishful thinking on your part.Oy! It's obvious this is way beyond your capabilities. You have not comprehension of "real" values.
An item with $100 price tag costs me $133 (I have a 25% effective fed tax rate) due to the costs you ignore.
You are actually putting forth that the nrst will reduce purchasing power but that the income tax doesn't. That's not very good.
I'd personally prefer 10% or less. Have these idiots cut SPENDING for a change!
I've have a settlement in a personal injury suit that gave me a tax-free structured settlement annuity. These things will be greatly affected by the "FairTax" - and I suppose that there are lots of people similarly situated.
I've also got lots of non-discresionary expenses that are favorably treated in the current tax law, that are disregarded by the "FairTax", but were enacted through years of experience with trying to make the income tax fairer to people in special situations. Got lots of medical expenses - ok, deduct them from you income. What's wrong with that? You want to keep the taxpayer alive, right? If only to prick his piggy bank.
Suppose a family of four has necessities that cost them 26,400. When they buy those necessites, 23% will be tax. Hence 6072 of that 26400 is tax. (23% of 26400=6072).If their necessities cost $26,400, they weren't met because they only got $20,328 worth of stuff. Looks like they need to spend their prebate to try and get some more of their necessities (but they still won't make it).
Lets not confuse the issue, an item that costs $100 costs $100 in current income. Lets change that to units of labor. If I'm willing to pay 10 units of $10 per hour labor for something now. I'm likely willing to pay 10 units of labor, and unlikely to pay 11 units - at whatever compensation rubber-ruler unit at some other time. So the $100 needs adjustment in terms of economic unit expended effort, not in terms of the rubber-ruler units you propose.
Prices are established in terms of the economic unit's efforts to obtain their (or its) desires, not in terms of your rubber units of dollars or euros or rupee or pesos. Give me, and economic unit, or others in a like situation 10x the dollars, and all prices or all desireable goods will gravitate quickly to 10x the rubber-rulered price. But now if my desire is burdened with a 30% tax. Well, if I'm paid 30% more, who cares. But I'm not, I'm paid maybe 15-25% more, about the effective tax rate of the middle class. So I cannot/will not buy. Economy screwed - right?
So, good luck with your offer of $321,176 for a house that will trade for $354,900.
Tut, tut, your are engaging in personal attacks!
Someone suggested Belize. I haven't investigated properly yet, but may be good advice.
Naw, the guy will go out and buy Ripple, or Old Crow with the prebate.
I would think that with interest rates falling due to the FairTax there would be an appreciation of bond prices, but I'm not close enough to that market to predict. Perhaps groanup could better assess that.
I can understand your concern for financial confidentiality. If you'd like to get a real assessment on how you would fare under the FairTax you could send the particulars to me by Private Mail and any information disclosed to me would be kept strictly confidential providing you reciprocate in the same confidentiality in communications from me.
If you don't wish to do so - no harm, no foul. I think you may be misgauging the impact the FairTax would have on you however and that's the reason I make the offer.
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