Posted on 02/11/2006 8:54:52 AM PST by Eaglewatcher
It is the free market system that controls the price of goods. When the taxes are lifted some one will reduce the price in order to capture more market share, then all the rest will have to follow.
Under the fair tax, ttems bought for business use are not taxed at the time of purchase, but must be tracked and taxed if and when they are converted to a non-business use. Items bought for home improvements are taxed.
Gee, how did I take a wild guess and believe that you'd be sure to post your misleading vanity thread here once again. That's been thoroughly thrashed before and there's nothing "exposed" as ou claim.
But will business see those savings? If most taxes are currently paid by individuals, won't it be the individuals who see these savings and pocket the money? How are businesses going to cut prices on savings that they don't see?
That is why Money Magazine picked it up and verified it, LOL.
Common defense is one thing and taxes placed on goods coming from other countries into the U.S. could cover that.
As for the "nation's debts" and "general welfare", I'll take a page out of the book of the seperation of church and state crowd and turn it 180 degrees. Charity is the realm of the church and the state has NO BUSINESS being in the charity business. That would include individual welfare, corporate welfare, farm subsidies, foreign aid, etc. Get the government out of the charity business and the nation's debt disappears.
If individual states want to provide charity that would be up to the individual state and we would be free to move to the state with like minded Americans and no longer be the victims of extortion.
P.S. I, too, was there during Tet. Halfway between Vung Tau and Cat Lo.
Nam Vet
But producers do not pay the lions share of taxes, the individuals do. So all those payroll taxes will go into the pockets of the individuals not the producers. The way they get to 23% embedded taxes is to include ALL federal taxes including those paid by workers. So on one hand the fair taxers will tell you that prices will come down 23% because the taxes are eliminated. But they will also tell you that your take home pay will go up because the tax is eliminated. Unfortunately the savings can not both go towards reducing the price and towards increasing take home pay. The reality is that most of the money will go into the pocket of the worker, and the producer will not see much savings. Take home pay will go up, but so will prices once a 30% sales tax is added.
Oh, really??? How will they do this massive "buy illegally"???
And the small amount that the illegal economy pays in hidden tax right now represents a tiny part of what they would pay under the FairTax where they'll pay 23% on taxable purchases. At present the hidden (embedded) taxes represent - per the lead-in article - abvout 20% of prices. If so, then on a $100 purchase, the hidden tax component is $20 and the tax on that would be $20 x 0.25 = $5 at most (and you Squirrels claim there is no embedded tax, remember) where with the Fair Tax it would be $100 x 0.23 = $23.00.
As can be seen, that's quite a difference in favor of the FairTax ... not at all "the same" as you state. And let's not forget that this illegal income was most probably not taxed to begin with - much comes from various types of theft.
Ummm, that was the drugs and prostitution he was referring to. Does the fair tax somehow capture tax on those transactions? Not unless drug dealers and prostitutes decide to report their illegal earnings.
And the small amount that the illegal economy pays in hidden tax right now represents a tiny part of what they would pay under the FairTax where they'll pay 23% on taxable purchases.
So there are not 23% embedded taxes in the price of goods today????? I wish you guys would get your assumptions straight, my head is spinning from all this.
Common defense is one thing and taxes placed on goods coming from other countries into the U.S. could cover that.
As for the "nation's debts" and "general welfare", I'll take a page out of the book of the seperation of church and state crowd and turn it 180 degrees.
Actually both your objections are covered by the founders and authors of the Constititution, Most certaily "charity" is not the issue of "general welfare of the United States;" in the Constitution. That phrase relates to the costs attendant to the proper excercise of the enumerated powers of Congress, not charity to individuals.
As regards your appeal to tax imports as well as the use of the term "general welfare" in the taxing clause I bring your attention to Federalist 41:
In a more remote stage, the imports may consist in a considerable part of raw materials, which will be wrought into articles for exportation, and will, therefore, require rather the encouragement of bounties, than to be loaded with discouraging duties. A system of government, meant for duration, ought to contemplate these revolutions, and be able to accommodate itself to them. Some, who have not denied the necessity of the power of taxation, have grounded a very fierce attack against the Constitution, on the language in which it is defined. It has been urged and echoed, that the power "to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States,'' amounts to an unlimited commission to exercise every power which may be alleged to be necessary for the common defense or general welfare. No stronger proof could be given of the distress under which these writers labor for objections, than their stooping to such a misconstruction. Had no other enumeration or definition of the powers of the Congress been found in the Constitution, than the general expressions just cited, the authors of the objection might have had some color for it; though it would have been difficult to find a reason for so awkward a form of describing an authority to legislate in all possible cases. A power to destroy the freedom of the press, the trial by jury, or even to regulate the course of descents, or the forms of conveyances, must be very singularly expressed by the terms "to raise money for the general welfare.
''But what color can the objection have, when a specification of the objects alluded to by these general terms immediately follows, and is not even separated by a longer pause than a semicolon? If the different parts of the same instrument ought to be so expounded, as to give meaning to every part which will bear it, shall one part of the same sentence be excluded altogether from a share in the meaning; and shall the more doubtful and indefinite terms be retained in their full extent, and the clear and precise expressions be denied any signification whatsoever? For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars.
The one significant advantage that the fair tax does is to tax imported goods and eliminate the tax on exports. The result will be that imports prices will go up significantly and our exports will be much cheaper. This will have a positive impact on our trade balance. However that is one thing fair taxers don't harp on, instead they try to sell it as some kind of windfall where everyone ends up with more money in their pocket and prices come down. That is not how it will work.
If individual states want to provide charity that would be up to the individual state and we would be free to move to the state with like minded Americans and no longer be the victims of extortion.
Agreed, now how do you propose we get there from where we are today?
I see a national retail sales tax as part of the solution:
23%........... Effective total federal tax rate with respect to gross expenditure for consumption:
15% ..... rate if Social Security and Medicare were eliminated
14% .......... rate if Nat'l Endowment for the Arts were eliminated
12%........ rate if Dept. of Education were eliminated
10%.......... rate if welfare & foreign aid were eliminated
etc.
So lets look at what what it would take to fund those functions clearly authorized under Article I Section 8 of the Constitution, in current dollars:
http://w3.access.gpo.gov/usbudget/fy2001/guide02.html#Spending
- $334 Billion --- Defense & Military related expenditure
- $ 31 Billion ---- Administration of Justice
- $ 16 Billion ---- General Government
- $199 Billion ---- Interest on the Debt
=========================
$580 Billion ---- Total
Institute an across the board, Flat rate, single stage National Retail Sales Tax, which taxes all imports and domestic products with the same rate.
Replacing all current federal tax law with a retail sales tax would be 23% on new goods and services paid and receipted at the retail register. No hidden tax, no exceptions, exemptions everyone participates.
Such a tax acts in a natural manner to encourage the elimination of excess government functions through visibility of burden among all constituencies of the electorate.
The total federal government budget would move from $2,000 billions towards something less than $580 billions calculated.
The across the board federal tax rate on new goods and services would decline towards less than 6.7%.
As tax rate on sales decreases the economic burden on retail items, the sales volumes and growth in the economy would be tremendous allowing even further reductions in tax rates below that less than 6.7% theoretic level.
That is what I perceive as the ultimate achievements possible under a National Retail Sales Tax structured in the manner of the revenue bill H.R.25. Simple common sense applied to the principal of TANSTAAFEL,( no free lunch, everyone participates in paying their way in proportion to the benefit the extract from their consumption.) encourages the natural change in attitudes required of the electorate as regards the burden of government largess in their lives.
- It is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income
Hmmmmmm....... It's do able, with time and effort, once the blinders are removed from the electorate.
It is no more my plan than the income tax is your plan. I support the nrst, you support the income tax. However, it is stupid to call it "my" plan.
Secondly, the savings do get to the business.
WHile retail consumption includes the tax, all of the supplies in the chain of production are not taxed.
So a baker's flour, ovens, power bill, copier lease, etc will all be less expensive by about 22%. It is easy to generalize this to all links in the chain of production. That's one way the savings get to the business. THere are others.
If Business owner do not see all these savings from the elimination of the tax, they have no way to pass it on to the consumer.
But business owners do see the savings. That's why they must pass them on to stay in business.
According to the Fair Tax expert, that will only happen if employees take a pay cut in the amount of taxes they currently pay. Now you can put up smoke and mirrors and claim otherwise, but the expert that the FairTax organization paid to do their research says otherwise. No matter how you try to add it up, unless you include the payroll taxes paid by individuals, businesses come no where close to seeing 22% savings. But this has been explained to you many many many times before.
Your head must be spinning from something else, AR. I identified I was using the assessment of the lead-in thread (which was almost 23% - I was trying not to burn out my calculator).
No one except those of you who love straw men has ever claimed the FairTax taxes illegal transactions. In fact, the FairTax website clearly states just the opposite, so you may as well stop misstating things (no matter how much it hurts).
THanks for the reply.
Did you know that things purchased for business use have no tax on them? That's one of the ways business will see savings. The stuff they buy for their business is not taxed - those items will fall in price due to the elimination of existing taxes and tax costs that are in prices today.
THe examples you gave certainly hold true. Those who spend on consumption will pay tax. THose who do not spend on consumption but instead choose to save or invest will not.
The exception is with the poor folks. You indicated their burden would "skyrocket". Well, unfortunately it won't. Those who spend below the poverty level have negative tax rates. THose who spend AT the poverty level will have zero tax rate. THose who spend above the poverty level will have an effective rate that increases as spending increases to a maximum marginal 23%. You can find examples here of effective rates. THe rate is dependent on poverty level due to a rebate (which I think is too high.)
THat being said, there are few who spend below the poverty level. Even homeless people with no jobs spend enough to eat - somehow. People gotta eat dontcha know.
No - you are omitting tax costs, as usual. You're the strawman expert.
We have a Constitution for a reason and it is the law of the land. We are not ruled by the Federalist Papers. If the founding fathers had wanted us to be ruled by the Federalist Papers, they would have voted them to be the law of the land. They would have never passed, thus compromises were made because not all citizens agreed with the Federalists.
I am tired of people holding up the Federalist papers as law. Should we give the same amount of weight in the writings of the Anti-Federalists who feared that the executive branch would usurp too much power? If it hadn't been for the Anti-Federalists, we wouldn't have the Bill of Rights. And the law clearly states that any power not expressly given to the Feds is reserved for the States, yet this is violated on a daily basis.
In quoting Article 1, Section 8 ...
Powers Delegated to Congress
The Congress shall have Power
1. To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States;
... you left off an important part ...
BUT all Duties, Imposts and Excises shall be uniform throughout the United States.
Clearly this has been violated again and again making such taxes unconstitutional. Not even mentioning the fact that both the Federalists and the Anti-Federalists alike would have been up in arms for adding an excise tax to telephone service to pay for the Spanish American War which continues to this very day! I may be wrong but weren't the debts for the Spanish American War paid off long ago?
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