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 ...
"Get it? "Oh, absolutely ... got it!!
You merely dream up a fanciful scenario that no one has been able to show in any sort of economic study. In fact every real economic study made on the FairTax shows it to help most taxpayers, greatly expand the economy, and boost the level of individual savings and investment.
But of course YOU know better!!! Got it!!!
"You couldn't be more wrong about my financial situation or my tax burden."
Hey trooper, you're the one blubbering about your tax burden - not me. I think its just fine you'll either have to pay tax on your consumption (rather than hiding it by some quirk in the income tax) or change your habits to be less of a big spender. Go cry in your own milk.
Exactly what I said. "For business purposes" means items purchased for INTERMEDIATE AND EXPORT SALES, not for normal operations. A preist salary under the fairtax is TAXABLE. If you pay a preist $30,000, the church will need to remit $9,000 additional to the fairytax collector. Something you have denied over and over.
I have a question about the transition.
All my life, I saved, say, $1000/yr of after-tax money for my retirement. With a marginal income tax rate of, say, 20%, that means I had to earn $1250 pretax to save each $1000 after tax each year for forty years.
All of a sudden, however, the switch to a "Fair Tax" turns that money back into pretax money; when I spend it, I pay another 20+% of it to the government. The "Fair Tax" turns out to be a Double Tax of my retirement savings. That, to put it mildly, is an extremely unpleasant surprise.
Can someone tell my why that's "Fair"?
I needn't say more since your entire tirade was blown apart by my response and you don't realize it.
... Seems you haven't been able to look at the lead-in study either. Try it ... you won't like it.
Let's clarify. So you think if a Church normal expenses like if a church buys pews or what a chuch pays a priest, those type of expenses are not taxed under the fairtax. Yes or no?
You are the one blubbering not me, and I'll be happy to see further reduction in marginal income tax rates, elimination of the corporate income tax and death taxes, and entitlement reform. But the FairTax plan is unproven, and will never become the law of the mand because it is based on wishful thinking and faulty math/economics.
And you continue to insinuate that I am somehow shirking my current tax liabilities, as well as that I am some sort of big spender which is all a total crock. And you have no basis for these statements which are just another personal attack on me.
Actually, i have read it and understand it. You seem to have the ability to cut and paste things, but have no understanding of what they actually say. Keep drinking the kool-aid.
"If you pay a preist [sic] $30,000, the church will need to remit $9,000 additional to the fairytax [sic]collector. "
Also wildly incorrect. You're getting further and further out to sea with these sorts of charges.
If you think that's correct, then post the exact wording from the link I gave that supports this - or from the bill itself.
The Fairtax is actually 29.87% when expressed as a normal sales tax. Buy a $100 coat from your savings, you pay $129.87. Since domestic-produced goods prices might come down a bit (I estimate as much as 8%), today's $100 coat would be $92 shelf price, and then you add the 29.87% tax and the coat costs $119.48. If the coat is made overseas, then the savings will be less and the coat will likely cost more.
So, the day before the FairTax is enacted your savings buy you the coat for $100. The day after those same savings will buy the same coat but it will take $119.48.
But they will put every American on the dole at the same time, so you get a monthly welfare check (they call it a prebate) that is yours whether or not you buy any taxable items, and regardless of the amount of FairTax you pay. This wonderful new entitlement program will ba larger on Day 1 than social security or medicare.
The other surprise is that the FairTax rate will actually be a lot higher because people will react to such a high sales tax rate by curtailing their consumption of taxed goods in many ways.
And as a bonus!!!...
Since state and local governments also pay the 29.87% on every one of their non-education purchases, salaries and employment beenfits, they'll be needing to raise your state and local taxes to come up with the new tax dollars they need to send to the FedGov.
Sounds great, doesn't it?
I posted all the words from the bill, and according to it an expense like a pew or a preist salary does not meet any of the criteria for tax exemption since it is does not have anything to do with an intermediate sale. Also the wording in your link does not address that either. It wisely avoids the subject since it is trying to spin the fairytax lies. The specific example in your link:
In other words, purchases for business purposes are tax exempt and sales to consumers are taxable, e.g., a church selling Bibles. The church pays no tax when it purchases the Bibles but it must collect sales tax when it sells the Bibles. The church is likewise responsible for remitting the tax to the state sales tax authority.
Yes, purchases made for resale are tax-exmept. Purchases for final consumption, like a pew or a minister's salary, are absolutely taxed under the fairtax.
Nor am I "insinuating" you're skirting taxes - you state that yourself by bragging about how well you do in not being taxed. The big spender information comes from you also. After all, any information you put out about yourself on these threads becomes public knowledge.
Well, see, you get the prebate and as long as you keep your spending around poverty level and buy used stuff, you should be better off than you would have been under the income tax and you'll get your SS benefits tax free.
We all know too, that we baby boomers are nothing but a pack of trouble, paying into SS for decades and then expecting to collect benefits upon retirement - bankrupting the country. So you, and me should be happy to endure our double taxation. Its the least we can do to make up for the trouble we've caused by being born in a big bunch instead of spreading our births out like decent folk.
If you have assets held outside of tax deferred accounts what do they consist of?
Mutual funds? They probably have long term appreciation which will be taxed when you cash them. Under a NRST you save.
Interest accounts at a bank? The interest will no longer be taxable to you. They'll turn into muni bonds overnight but with a higher rate of interest.
Stocks? Hopefully they are highly appreciated. If so your capital gain liability will disappear. You save.
Corporate bonds? The interest becomes tax free. You save.
Muni's? Since their yields will adjust upward to match corporate bonds you may lose some pricipal value if you sell before maturity. You could lose.
What about your accounts that are in tax deferred vehicles? Do you have any IRA's, SEP's, 401(k)'s, 403(b)'s, etc? All of them will benefit greatly under the law as it is currently written.
So you see that in almost all cases there is some benefit. Now as far as how much that will offset the new tax the question becomes much more complicated. In that instance you have to take into account the pre-bate, your buying habits etc.
Funny, I've read Rob's posts on many threads and never gleaned that information from them.
I have never said that.
The big spender information comes from you also.
Also a crock. Never said that.
If you can't prove that I said these things then you should ask that your posts be removed.
And you are nothing but a series of personal attacks-- that's why you have been suspended numerous times, told to knock it off by the Mods and JimRob, and get so many posts yanked including one in the last few hours. You should stick to the issue and leave the personal attacks out of it.
It's more tiresome for me to have to listen to your constant lies about me in your attacks.
Funny, all this talk about how the fairtax removes embedded tax. By charging tax to nonpersons like State and local government and charities, the fairtax is actually embedded in those items now. You must pay the state and local taxes and you must give your favority chairity or church more to accomplish the same thing. People pay taxes, not entities.
The mods aren't stupid-- they can tell when a complaint is valid and when it isn't. And you attack people personally as a matter of habit. That's why you get suspended, that's why your posts get pulled.
Look in the mirror, you are the one responsible for the crap you spew. Can you honestly say that you think you have generated more momentum on FR for the FairTax in the past couple of years? You are the worst proponent that the plan could possibly have.
"The FairTax taxes non-profits’ sales of goods and services to individuals and their purchases of goods and services that are not sold on to individuals, including capital goods."
If you pay a preist $30,000, the church will need to remit $9,000 additional to the fairytax collector. Something you have denied over and over.Actually, wages of nonprofits are specifically exempt.
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