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To: AaronInCarolina
I think there are a lot of hidden taxes beyond hidden corporate taxes.

While you may indeed THINK that (and while some -- like FairTax shills -- want you to believe that) it simply is not the case. ALL Federal taxes, embedded or not, wind up as Federal Tax Revenue. That number is easy to find; any report on the Federal Budget will provide the data for any year you choose.

As shown in Post #23 the combination of Personal Income Tax and FICA taxes represents about 80% of all Federal Tax Revenue ... and is growing as a consequence of the rise in Social Security funding/spending.

It is near impossible to know just how much of the cost of a good is inflated ...

Actually, it's not all that hard to figure it out. Data is available to anyone who wants to look that lays out what the components of the aggregate price level are ... taxes, labor, capital, profits, interest, etc. To summarize such analysys, which has been repeated countless times on these threads, Corporate Taxes represent less than 2% of the price of goods. The Employer part of FICA tax represents about 4% of the price of goods. Costs of compliance with the Tax Code represent about 1% to 2% of the costs of goods. In total, if ALL Corporate taxes, ALL Employer paid FICA taxes, and ALL compliance cost savings are returned to the Consumer through price reductions, price can only adjust, AT MOST, about 7.5% (before the addition of the 30% FairTax.) In reality, some portion of these sums will likely remain in price to be put to other business uses.

...due to the need to make a profit by each contributor to the production of a product, which is affected by taxation at each stage.

Actually you have the cause and effect backwards. The "need to make a profit" is not affected by taxation. Taxes are affected by profit: small profit, small tax. Large profit, large tax. The need to make a profit is what drives businesses to lower costs. The market drives prices. What's left over from the two is profit ... and a portion of profit is peeled off as tax ... just like your wages. Your wages are not "inflated" due to your need to have income; taxes affect the cost of labor in the same way they affect the cost of goods.

If you want to lower your tax burden (hidden or otherwise) you first need to lower government spending. The method of collection is secondary.

38 posted on 10/10/2006 10:53:59 AM PDT by Dimples
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To: Dimples
If you want to lower your tax burden (hidden or otherwise) you first need to lower government spending. The method of collection is secondary.

No argument from at all on reducing government spending. You're preaching to the choir there. I still believe that if consumers had to face a 25%-30% consumption tax on purchases (which by the way would be more evenly distributed across the electorate rather than forcing a small group of people to bear a disproportionate burden as it occurs now) they would be more aware of just how much the government is spending and since more people will bear this burden, more people will be less docile about letting the government get away with it.

As long as we can force a group of people, who in total have little voting power to reject it, to bear a disproportionate amount of the federal tax burden, the masses who currently largely escape the effects of government overspending are content with the status-quo. They may not be so content if they have to pay 25%-30% for each purchase.
46 posted on 10/10/2006 11:36:22 AM PDT by AaronInCarolina
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To: Dimples
"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.

232 posted on 10/16/2006 7:37:52 AM PDT by pigdog
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To: Dimples

"If you want to lower your tax burden (hidden or otherwise) you first need to lower government spending. The method of collection is secondary."

And if you want to lower compliance costs (hidden or otherwise), you do something about the 60,000+ page monstrosity that comprises our current tax system.


544 posted on 10/24/2006 5:17:21 AM PDT by phil_will1 (My posts are in no way limited or restricted by previously expressed SQL opinions)
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