Posted on 10/19/2006 5:11:50 PM PDT by pigdog
As specified in Congressional bill H.R. 25/S. 25, the FairTax is a proposal to replace the federal personal income tax, corporate income tax, payroll (FICA) tax, capital gains, alternative minimum, self-employment, and estate and gifts taxes with a single-rate federal retail sales tax. The FairTax also provides a prebate to each household based on its demographic composition. The prebate is set to ensure that households pay no taxes net on spending up to the poverty level.
Bill Gale (2005) and the President’s Advisory Panel on Federal Tax Reform (2005) suggest that the effective (tax inclusive) tax rate needed to implement H.R. 25 is far higher than the proposed 23% rate. This study, which builds on Gale’s (2005) analysis, shows that a 23% rate is eminently feasible and suggests why Gale and the Tax Panel reached the opposite conclusion.
This paper begins by projecting the FairTax’s 2007 tax base net of its rebate. Next it calculates the tax rate needed to maintain the real levels of federal and state spending under the FairTax. It then determines if an effective rate of 23% would be sufficient to fund 2007 estimated spending or if not, the amount by which non-Social Security federal expenditures would need to be reduced. Finally, it shows that the FairTax imposes no additional real fiscal burdens on state and local government, notwithstanding the requirement that such governments pay the FairTax when they purchase goods and services.
(Excerpt) Read more at people.bu.edu ...
WEll before you came on these threads I was aware that prices couldn't fall by an amount equal to the FT rate. I realized this in discussions with YN. You had nothing to do with it. Instead, you came here on the pretense that you wanted to learn something and make up your mind about the FairTax. And now, one wonders how you hold a day job because it is your life obsession to berate the fair tax.
The pretention of "wanting to learn" was obviously just that because you have been shown mathmatically just how wrong some of the anti's arguments are. Yet you answer MATH with statements such as "in your dreams" or "you wish".
It doesn't take a rocket scientist or even a Daffy Duck to see that you entered these discussions on a pretense and have been the shrillest voice in opposition to a great idea that the vast majority of Americans have shown a preference for.
What they DID do was evaluate some sales tax of their own concoction, as opponents of the fairtax ALWAYS want to do it seems, and failed to show any of their work in doing so. YOU can call that objective if you want but most realize that is is anything but.
"... there will be an increased burden on state/local governments when they have to add a 30% tax to all their non-educ purchases, salaries and benefits ..."
It's hard to understand whether you intentionally continue to make such pronouncements of absolute nonsense in ignorance of the facts or whether its something else, but the fact is that the gross wages you mention are taxed at 23% rather than "30%" (which does not exist under the FairTax) and I have pointed this out to you many, many times over past threads, asking you to admit your error. Instead you have continued to insist on the "30%" number which is quite incorrect.
Let me say it again, the gross wages of non-educational governmental employees (federal, state, and local) are taxed at 23% of those wages, amounting, in effect, to a 23% excise on those wages.
This is clearly shown in the derivations in the paper where such wages are taxed at the 23% rate and those costs are included in and covered by the revenue neutral 235 tax rate.
The import of this is that if, say, a government body had $100,000 in such wages it would need to pay $23,000 in tax on those wages.
Perhaps you'd like to admit the error you've been insisting on for hundreds of post and perhaps not. If so, just admit you were wrong and I was right about the 23% rate, but if not then disprove the validity of the derivations in the paper.
We all look forward o your answer I'm sure.
"That's what the black market is all about."
That's apparently the "black market" you've never been able to define OR quantify.
"With the income tax all income is not taxable income, disposable income has already been taxed.With a NST all income is taxable, there's no disposable income unless you live in a cave, grow your own food and buy someone elses used crap. "
Both of those statements are demonstrably incorrect.
"... drag $100 through a trailer park and get yourself an economists ..."
... or a home builder.
"... you feel the need to state your opinion of me personally ..."
Since this is a family thread, he really can't do that.
But 'gross' in fairtax lingo means INCLUDING the fairtax. So it is in fact 23% inclusive or 30% exclusive. So it will in fact add 29.87% to all their non-educational purchases including salaries and benefits. Of course the states will save the SS tax on salaries.
"... you can't argue against what I say so you resort to calling me untruthful without basis ..."
IN post #723 I show by "arguing against you" that you are indeed untruthful as I demonstrate your continued untruthfulness on hundreds of posts and request that you admit you're wrong.
"But 'gross' in fairtax lingo means INCLUDING the fairtax. So it is in fact 23% inclusive or 30% exclusive. So it will in fact add 29.87% to all their non-educational purchases including salaries and benefits. Of course the states will save the SS tax on salaries. "
Sorry, but you are wrong also. That's the very contention that all of you FairTax opponents have been making and it is flatly wrong as I said in #723.
You'd better study the formulas in the lead-in paper which clearly show you to be wrong. All the levels of government would save the 7.65% ER FICA portion as you mention, though, as well as that same portion on educational wages so, in fact the effective tax would be less than 23% as you're hinting at.
Interesting but not relevant. That's merely market action at work - not the FairTax.
Just because you say it means squat. Show me in the bill where government salaries are treated different than other 'gross payments'. I have not seen such a distinction pointed out in the bill. The fairtax taxes 'gross payments' and 'gross payments' include the fairtax.
"I think that getting control of this out of control entitlement spending (Social Security, Medicare) before we drive the bus off the demographic cliff is the fiscal challenge facing our generation."
I'd think that most who have looked into the two entitlements would agree and the FairTax gives us a funding mechanism that allows us some time to correct the problems. Probably the more critical one is actually M/C.
For my money, both should be eliminated.
"... The government doesn't send everyone a $6,072 check with the income tax ..."
They don't need to - they've already taken all the tax money from you (and often even more than is needed) up front.
"On these threads, I am told that my double taxation concern is a non-issue since people such as I don't exist and nobody under the present system has enough after-tax savings to bother about. "
Hmmm - I must've missed the posts you refer to. Please give us links to same so we can take a look at them.
"So if a person making $26,400 can buy all his necessities for $26,400 (ti), why does the government send him an additional $6,072? So he can buy $4,675 more than his necessities? "
As has been pointed out to you on this matter repeatedly, the $26,400 is the tax inclusive price paid for spending on "necessities" and the $6,072 (or whatever the prebate might be) is the tax on that amount of spending.
But I thought you knew that...
Both of those statements are demonstrably incorrect.So demonstrate it.
"Meet the new Boss. Same as the old Boss. "
Absolutely not. the old Boss is the IRS we know and love and it now interacts with the direct tax by government directly on the taxpayer.
The FairTax on the other hand is an indirect tax with the government having no direct "hook" to go after the taxpayer.
Under the FairTax, the taxpayer automatically complies with the law when he buys an item and receives a receipt. He then has no further involvement with the tax authorities - which in this case would be the state sales tax authority (not the federal) and the merchant is paid to collect and forward the tax to the state and the state likewise paid to gather the taxes from the merchants and forward them to the feds.
Neither the federal or state government has any further grasp on the taxpayer; they would be monitoring the merchants who have agreed in writing to collect and forward the tax - and be paid to do so. The merchant also has the presumption of innocence on his side unlike the present situation where one must prove he's not guilty to the IRS, the collection agency.
The taxpayer is not involved after the purchase so your cartoon is incorrect
FairTax - untaxed church donations - income, but untaxed.
"the lying tactics of those who are trying to sell it to a gullible population "
Back attcha' - several times over.
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