Posted on 12/15/2005 10:33:58 AM PST by Eaglewatcher
Ask a person how much of their income went to paying taxes under the FairTax and they will give you the tax inclusive percentage.Ask a person how much of their income went to paying taxes under the FairTax and they'll rightly call you a delusional fool, there is no "Fairtax".
Nor did anyone say that they did. Please spend some time on the FairTax website to determine that for yourself instead of just guesing about it - or taking the misinformation put out by FairTax opponents who, after all, have their own ax to grind.
For the ones you cite:
Tax (inclusive) (exclusive) Fair Tax 23% ....29.87% Payroll: FICA 6.2%.... 6.61% Payroll: Medicare 1.45% ....1.47% Income Tax 10%-35% ...11.11% - 53.85%
Read 'em and weep!!
Did you also tell tham that to compare a tax such as the FairTax to the Income tTax it replaces that using the same basis (tax inclusive) is required???
In fact, that's why the rate is used in the bill as tax inclusive. Those Congresspersons ain't too smart, you know.
lol. Duuuuhhhhh!
I told you in another reply that the fair tax page has the explanation spelled out completely and has ALWAYS had it there. You chose to ignore me and still post this bs. I hope your students aren't subject to such deviance. Of course, they can't be, they are studying math. One can't refute that can they?
lol. Duuuuhhhhh!This bit of idiocy from the same clown who, using examples, argued there is.
The FairTaxers do, however, calculate sales tax in a manner inconsistent with the way everyone else does it. Why? Because the number comes out smaller. It's marketing.
That's an idiotic statement: in replacing an income tax with a sales tax, people will appreciate the magnitude of the resulting sales tax much more readily if it's calculated in the same fashion as all other sales taxes.
On the contrary, the tax is routinely referred to as a 23% tax, with a FAQ explaining why that's a legitimate way to describe a 30% sales tax. If they were truly "both the same", then the FairTaxers would describe their proposed tax in terms compatible with existing sales taxes, which is more readily understood. Since I assume they're not stupid, I conclude that they made this choice consciously.
BTW, when you finish taking a logic course, you will know that I never assumed 23% was quoted for marketing reasons: instead I concluded it. The assumption was one you already granted: sales taxes are always calculated exclusively, therefore stating them in a novel way must be done for a reason. Observing further that 23 < 30, I conclude that they consciously picked the calculation that sounded smaller.
Your logic is then faulty, because you have reached an invalid conclusion. In fact, it is the opposite conclusion that is correct: those who insist on using the tax-exclusive rate are doing so to make the tax look larger.
The NRST rate is quoted in tax-inclusive terms specifically so that it can be correspondingly compared to income and payroll taxes on an equal footing. For example, I earn $100, of that I pay $20 in taxes and $80 for goods and services. What is my tax rate? Is it 20% of $100 or 25% of $80? Both are correct, but which one is useful in context?
Let's try to compare the NRST (at the 23% tax-incluive and 29.87% tax-exclusive rates) to a 17% flat income tax. Of course, that flat income tax doesn't include 7.65% payroll taxes, so let's add that in for a total of 24.65%.
So, which one NRST rate is the best one to use for comparison? If I use the tax-inclusive rate (23%), I can easily see that I can buy $77 worth of goods for each $100 that I spend. As a direct comparison, I can buy $75.35 worth of goods under the flat tax with that some $100 pre-tax money. I was able to figure out those numbers using the same calculation for each: pretax money times ( 100% minus the tax-inclusive rate ).
If I use the tax-exclusive rate (29.87%), however, when I ask the question of how much goods and services I can buy with my pre-tax $100, I have to use an entirely different equation: pretax money divided by ( 100% plus the tax inclusive rate ).
In the first case, the rates can be compared on the same footing -- an apples-to-apples comparison. In the second, since I have to use different means of calculating the same answer, I have an apples-to-oranges comparison.
But, you may say, isn't it just a case of how I chose to frame the question? Of course it is -- but the question as I framed it is what the average person wants to know: I've got $X, how much stuff can I get for that after taxes are taken out?
The honest fact is, it is the NRST opponents who insist on using the tax-exclsuive rate in order to scare people into thinking the rate is higher than it is. Take our example again -- using an honest head-to-head comparison, the NRST rate (23%) is actually lower that the flat tax plus payroll taxes (24.65%), and the example shows that after-tax money follows these numbers. However, those more interested in the flat tax use the tax-exclusive number (29.87%) to make the NRST look larger than the flat tax plus payroll taxes.
In fact, that's why the rate is used in the bill as tax inclusive. Those Congresspersons ain't too smart, you know.Actually you aren't too smart. Show me where it's written a business has to charge the consumer 29.87% sales tax.
The reason the wording of the bill is "23% of the gross payments" (tax inclusive) is because it doesn't dictate what the sales tax rate is any more than it dictates what a business should charge.
It wasn't written for the consumer because the consumer doesn't remit the tax. The wording is to instruct the business to remit "23% OF the/ir gross payments" which would have to be "tax inclusive"...In fact "gross payments" would be everything "inclusive".
State sales tax laws are also written for the business not the consumer. But state laws dictate a business impose a tax ON a purchase then remit that amount instead of a tax "23% OF the gross payments".
Sorry, but that doesn't wash. There's only one way that sales tax is calculated. Deviation from that method was done for a reason.
There are two problems with that. First, the consumer is the one who will be expected to vote for or otherwise support the FairTax, so informing them is the highest priority. Second, "hiding" the tax in the sticker price is very bad on many levels. If you'd like to see why, look no further than the gas pump. Gas stations are blamed for "price gouging", when in reality it's the politicians who should be lynched for "tax gouging."
I see. Absolutely no discussion of the merits of my presentation, just a reassertion that your flawed premise is correct.
The problem lies in that you are getting stuck on the term "sales tax". The NRST is intended as a replacement for federal taxes, so instead of trying to express it like something it isn't (a state sales tax), you need to express it like something it is (a federal tax). You're trying to compare it to the wrong thing.
Discussion will go smoother when you learn the difference between a premise and a conclusion. Meanwhile, "hype" doesn't sink the FairTax proposal, but yes, you are correct: you won't convince me that their chosen method of expressing the tax wasn't picked for marketing purposes. I've told you why, and you've offered nothing to alter my conclusion. Repeating ad nauseam that income taxes are calculated inclusively won't help: I already replied that sales taxes are always calculated exclusively.
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