Posted on 09/03/2006 5:18:40 AM PDT by Man50D
The economy, friend, is doing well because THIS TAX SYSTEM had a tiny little cut.
If making this system go partially away gives that kind of benefit, then let's make it go ALL AWAY and get a great benefit.
Those who support this system SUPPORT HillaryCare. HillaryCare wouldn't be possible without this idiotic system.
I never said any different. I am using the keep 100% of your paycheck as the starting point for my analysis and seeing what happens after that.
BUSINESS COSTS: So your number for cost savings is 8%. Mine is 10-15%. You can't know the actual cost savings to all businesses at once. The sole proprietor who would have to spend thousands a year on life insurance to protect his estate, the widely held corp. that buys section 29 tax credits. The whole entrenched system is so wacky it's impossible.
I've explained exactly where my 7-8% in detail was derived, your 10-15% guess is unsupported. Of course mine is an estimate, but it is based on actual numbers. You are grossly misrepresenting the difficulty in assessing the present situation.
PRICES: You can't assume that switching tax methods is infaltionary. I showed you the numbers a long time ago and all you did was tell me I was a liar:
Even under your best case guess of 15% cost reductions, and assuming that is all passed through as a price cut, that would mean a $100 item would now be $110.50. And at your 10% price cut level the item is $117. They cost $100 now. That is inflationary.
GOVERNMENT EXPENSES: Since the government currently taxes the wages it pays, how would you have those wages taxed under a fair tax? Why would the government have to raise more revenue when the consumption tax would come right back to them anyway. This is one of your lamest arguments and you keep bringing it up. And this business about SS payments going to the moon under Rob's scenario is just as bogus. As I showed you in the previous example (and other times) there is no inflation component without an increase in the money stock. But then again, you know much more than Milton Friedman.
The fact that government employees are taxed now on their wages is irrelevant. Under the FairTax, a govt employee making $50,000 will get to take home his complete $50,000. Right now, the government has to pay 7.65% FICA on that money. So the total cost (not including benefits which will also be taxed) for the employee right now is $53,825. If we assume that the govt wil keep the employer half of FICA, under the FairTax they would write a check to the employee each year for $50,000, plus they would write a check to the government for $14,935 to pay the FairTax (at the 29.87% level). This $14,935 is counted in the revenue neutral calculation of the 23% inclusive FairTax rate as tax revenue, and the $50,000 salary is included in the taxable base. So, the fact that the government is paying itself doesn't negate the need for them to collect the money. So, what now costs the government $53,825 would cost $64,395 under the FairTax, this is a 19.6% increase in the cost of govt salaries.
FAIR TAX RATE: One can only get to your incredible conclusion by accepting your ludicrous assumptions to begin with. No one in their right mind accepts them except you.
My "ludicrous" assumptions are that
1) the government having to pay FairTax will mean the government will cost more than if they didn't pay the FairTax,
2) that if things drop in price, then the amount of FairTax collected during the purchase will be reduced in proportion to the price drop, and
3) that there will be some level of avoidance and some evasion with a 30-40-50% FairTax exclusive rate. Some of this will take the form of buying used, some will be to fix rather than buy new, some will be barter, some will be overseas purchases, some will be black market purchases...
These are not ludicrous, they are common sense. What is ludicrous is that the FairTax math ignores all three obvious assumptions.
SAVED MONEY: Again, there is no devaluation of purchasing power EXCEPT in some instances of saved after tax money and only then in circumstances that must include: purchases over and above the poverty line, purchases over and above the net savings on investment earnings, and purchases on new items.
So only people who buy new items and buy them in quantities above the poverty line with after-tax saved money will see a reduction in the value of their money. I agree that people spending below the poverty line and those who only buy used items (who also don't have after-tax savings most likely) will not be harmed due to the socialist prebate.
I have said before that since the MAJORITY of saved money is pre-tax and that it will be so benefited that perhaps those with after tax savings should be compensated early on.
Yeah, and I showed you a study which showed that the vast majority of net worth savings (wealth) in this country is NOT held in tax-deferred accounts, and that the number is not the MAJORITY as you state but is more like 20%. The other 80% is in after-tax savings including home equity. Here is the link to the study again: Net Worth and Asset Ownership of Households: 1998 and 2000
First of all, no one says it's utopia. Taxes are vile things anyway. Secondly, every point you make is overflowing with wild assumption, exagerration, and implausibilities that only a fool could buy into. You have this strange way of presenting your numbers as facts when they aren't. They are ASSumptions. How you derived at them is an excercise in disneyland as well.
As shown again (above), my posts are NOT overflowing with wild assumptions, exaggerations, etc. You are confusing me with someone else, most likely one of your FairTaxer buddies. They are the ones throwing around unsupported claims. My posts are backed up with numbers and always have been.
You posted your vicious attack at 09/01/2006 10:50:29 PM EDT, I replied to it in #31 at 5:45 am. If you had asked for your post to be removed at 10:45 pm when you posted it, then how was I able to respond to it at 5:45am? Have you ever tried to respond to a post that the mods have removed? You can't respond to it.
So, the fact that my post #31 responds to your #29 at 5:45 am proves that it was still there in the morning, and that I saw it. Of course since I Freepmailed you the entire message in case you forgot you had sent it the night before also proves that I saw it, but you can always deny that I ever sent you a Freepmail, even though you responded back via Freepmail.
As I said before, I did you a favor to have that post removed, you should be thanking me rather than making up a story.
WOW! What an excellent description of the current tax code!
Read HR25 and enlighten yourself.
It is one thing to be wrong and then corrected. It is another thing to be wrong and corrected and then not admit it. At that point you are just a liar. Fairtax has a couple of those.
You are far too kind.
Start with 3 "very rich" guys on a self-declared "jihad" against the IRS, and a few million in "seed money" and guess what....
It's not hard to see how a carefully crafted and coordinated psychological campaign of spreading fear and using anecdotal horrors, along with the promises of "free money" as a cure, seek to convince the average "Joe 6-Pack" that the SS and Gestapo is among us, and it's name is the IRS.
And worship the monthly entitlement check?
With 100% of their paycheck...
The NRST entitlement promoters tout the claim that their scheme is "revenue neutral" and not a cut.
Only by taxing the item, then taxing the tax, then taxing the tax on the tax, then taxing the tax on the tax on the tax...You mean the part where it says the tax is "23% of the gross payments" (not the price)?
WOW! What an excellent description of the current tax code!
Read HR25 and enlighten yourself.
You don't know there are usually taxes in a gross payment?
A new, $600 billion entitlement, what's not to like?
According to the President's tax panel, the poor will benefit and the rich will benefit; the question is, how long can the middle continue to carry those two groups before their backs break?
It amazes me that people rise to the FairTax bait without much concern for the thinly disguised hook.
The scheme promises the employee 100% of his paycheck, but can't define what that 100% is. The scheme promises prices will fall because hidden taxes will be removed, but can't say by how much, or even what taxes. The schemers point to Texas as an example of a successful economy based on a sales tax while ignoring the myriad of other hidden taxes, and fees Texas collects. In 2004, Texas collected $15.4 billion in sales taxes and had total tax collection of $27.9 billion; total revenues for the state were $62 billion, with $21.9 billion coming from the Federal government. Sales taxes represented about 25% of the total revenue for the state in 2004.
It is clear that sales taxes are an important part of the state of Texas' budget, but is far and away not the whole story, or even half the fiscal story. Texas gets more money from the Federal government than it collects in sales taxes
More than just less than a 100% of what I would like, the FairTax is a "pig in a poke".
Oh my, pigdog isn't going to like that at all!
All that sounds mighty familiar, eh?
You miss the point. Your claim was that the economy is so frick-frackin wonderful because of this dynamite tax system that we have. You are the first ever that I've heard to maintain such a thing.
This economy is great because they CUT some of this abomination.
I could care less whether the NRST is your or someone else's favorite. I care that there are those who think we're living in tax paradise with the system that we've got right now.
King George could do better than this!
Mexico is more of a tax paradise than the US, how is that working out? Even conservative economists suggest their tax collections are too low.
It really is annoying, but countries with high taxes also seem to be the countries with a higher standard of living. As taxes go, we are at the low end for the first world nations.
Certainly there is room for improvement, but the US is hardly the tax h*ll some think it is.
Strawman.
King George could do better than this!
Your admiration for foreign despots and crackpot entitlement scemes is noted.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.