Posted on 10/10/2006 8:59:26 AM PDT by cryptical
The only thing the employer saves is a 39 cent stamp and the time it takes their computer to fill out the tax formsSorry not even the price of the stamp let alone the tax forms would be saved AND the stamp would be 51 cents not 39 cents (39 cents + 30% tax).
`SEC. 903. WAGES TO BE REPORTED TO SOCIAL SECURITY ADMINISTRATION.
It would certainly be difficult to hire an employee for a job that required his onsite presence and specific hours as a contractor.That (independence) is one of the things IRS considers when defining an employee VS contractor.
I have both worked under contract for someone else (hourly) and hired contractors to work for me (hourly).
and complicated.
Who said anything about accounting?
Is it not a fact that the FairTax creates rules regarding what economic activities are taxable? Will those rules be backed by legal consequences for braking those rules?
The FairTax proposes to change the rules, that's all.
The total debt has more than doubled in the past 5 years; do you think that's a good thing?
And when a majority aren't paying any taxes and a minority is paying them all...then what?
The FairTax, through the miracle of the prebate, doesn't change that.
Actually the FairTax makes it worse. FairTax supporters seem to focus solely on the progressivity of the income tax when making their "a majority aren't paying any taxes" claim as socialismisinsidious does here. When considering the COMBINED Federal tax burden, even the bottom quintile (under $15K income) pays a combined effective Federal tax rate of 6%. Under the FairTax, the bottom quintile will have a NEGATIVE combined effective tax rate.
While the Personal Income Tax is highly progressive, it only accounts for about 40% of Federal tax revenues. All other Federal taxes (60% of Federal tax revenues) are largely flat taxes (complained to be "regressive" by the socialistic left wing.) In fact, the FairTax is a MORE PROGRESSIVE tax than the combination of Federal Taxes today. It eliminates the progressivity "normalizing" effects of the flat payroll, excise, corporate, and estate/gift taxes. This increase in progressivity is one if the key advertized features of the FairTax ... though they don't actually say it that way ;-)
He who will not be named has repeatedly asked for information on what tax plans people like and he goes unanswered or poorly answered. That leads most to believe that the status quo is favored and the status quo is the income tax/IRS.You're right, the "status quo" is favored (at least by me) over the idiocy of the Fairtax untill something better comes along.
You might find this difficult to understand but none of us that oppose the Fairtax, that I know of, write tax laws, we do however recognize a bad plan once we've studied it.
40 some states have sales taxes that actually work and they're nothing like the Fairtax model, yet "The Fairtax" is the only answer?...BS.
The lead-in article contains a noticeable amount of distorted fact if not outright misinformation and is intentionally misleading in many of its statements.
This author (an accounting instructor in a FL junior college) continually rails against the FairTax is this manner but reading this rebuttal will offer a more balanced and realistic perspective of the FairTax and its effects and benefits
"Research just released (and supported by the AFT) by Kotlikoff using projected 2007 data and every possible positive assumption about the FairTax found that the 23% rate was not revenue neutral."
Misleading comments on several accounts:
1) Although AFFT might indeed LIKE the Kotlikoff/Suffolk study there is no indication that it was "supported by AFFT" as you claim .
2) Additionally the study does NOT make "every possible positive assumption" about the FairTax at all but merely some reasonable ones in line with known information and experience.
3) The paper - contrary to your assertion that the 23% rate was "not revenue neutral" - shows that the 23% rate is, indeed, very much in the running as the revenue neutral rate ... on any of several counts. For one thing, the study is a static analysis which by definition favors the status quo tax system. For another Congress could very easily decide to alter spending slightly to drop the calculated 23.82% rate to 23% or could merely retain spending at 2006 levels to do the same thing or could notice that a dynamic analysis would show that a 23% rate is actually higher than required to be revenue neutral.
In fact I even pointed out to you that the study shows that the realistic view of its revenue neutral rate is as it says:
"In practice, therefore, it would probably be possible to implement the FairTax at the 23% rate without any reduction in federal spending."
The fact that you chose to misinterpret the word "probably" to be something like "possibly" or "perhaps" does not alter the fact that "probably" means (per Merriam-Webster Online):
"insofar as seems reasonably true, factual, or to be expected : without much doubt "
So we see that the paper is really saying that without much doubt the 23% rate will be workable as a revenue neutral rate even under static analysis.
For another Congress could very easily decide to alter spending slightly to drop the calculated 23.82% rate to 23% or could merely retain spending at 2006 levels to do the same thing or could notice that a dynamic analysis would show that a 23% rate is actually higher than required to be revenue neutral.At least it appears you are admitting that this silly talk of a ~19% revenue neutral FairTax rate is wrong. Baby steps...
"If you want to lower your tax burden (hidden or otherwise) you first need to lower government spending. The method of collection is secondary. "
Lowering government spending may or may not by itself lower the taxpayers' tax burden but is certainly not the only way to lower it - nor is it necessarily a prerequisite needing to be done first. Spending could certainly remain constant (or even increase) and by broadening the tax base the individual taxpayer's burden could easily decrease.
And these things are certainly influenced by the collection method - the FairTax in the case under discussion which greatly broadens the tax base - so pretending that the "method of collection is secondary" is misleading at best; it is central to the matter.
As we have noted in earlier threads your judgment of the potential decrease in prices is not an accepted one with FairTax supporters, but in any event it is not the prices that are the key thing but consumer purchasing power. Under the FairTax there have been many examples of comparative purchasing power of an individual taxpayers position with respect to purchasing power under the income tax and that same taxpayers position under the FairTax. In almost every case, the FairTax raises the purchasing power of the taxpayer when compared to the income tax ... and it does so by lowering the tax burden (while government spending is not reduced).
That's not to say that government spending should not be reduced - certainly it should - but the cart needn't be placed before the horse. Let's get the tax law positioned to help the taxpayer and then work diligently on our "elected representatives" to stop "eating out our substance" as the forefathers would say.
For another Congress could very easily decide to alter spending slightly to drop the calculated 23.82% rate to 23% or could merely retain spending at 2006 levels to do the same thing or could notice that a dynamic analysis would show that a 23% rate is actually higher than required to be revenue neutral.Uh huh and after the first year the unelected bureaucrats at Social Security could implement their new congressional taxing power and raise the rate to 25 or even 30% without a vote from congress.
Or pigdogs could fly.
Is that a "personal attack", perhaps???
"At least it appears you are admitting that this silly talk of a ~19% revenue neutral FairTax rate is wrong. Baby steps..."
"Admitting ..."??? Not at all, I believe you've misread what the Kotilkoff/Suffolk paper actually indicates. It certainly indicates the revenue neutral rate would most likely be lower than the 23% rate when a reasonable dynamic analysis is done ... more like giant steps to a respectable tax system for this century.
"Uh huh and after the first year the unelected bureaucrats at Social Security could implement their new congressional taxing power and raise the rate to 25 or even 30% without a vote from congress."
Oddly enough (even though it's been repeatedly pointed out to you that your mythical "unelected bureaucrats" have no taxing power under the FairTax) they can merely specify the requirements under Social Security laws to ensure the legally required funding of same from tax revenue much as they do now. That's part of the S/S laws.
It does make a nice scare tactic on your part, though, for those who don't stop to consider what is involved.
It certainly indicates the revenue neutral rate would most likely be lower than the 23% rate when a reasonable dynamic analysis is doneNot untill "in practice" is defined.
That's part of the S/S laws.No it isn't.
"... hidden taxes like corporate taxes are a small portion of federal taxes ..."
We've all been over this ground many times but I'd point out to you that "corporate taxes" are not the only hidden tax component. The statement should at the least be broadened to include "business taxes" and in fact should also include tax costs and not merely taxes per se.
I'm sorry to see that you don't understand what the term "in practice" means. Perhaps someone can help you out.
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.